Empirical Analysis of the Federal Circuit's Claim Construction Trends

BERKELEY TECHNOLOGY LAW JOURNAL

VOLUME 16 NUMBER 3 FALL 2001

TABLE OF CONTENTS

ARTICLES

FORESEEABILITY IN PATENT LAW ...... 1045 By Matthew J. Conigliaro, Andrew C. Greenberg, and Mark A. Lemley

EMPIRICAL ANALYSIS OF THE FEDERAL CIRCUIT'S CLAIM CONSTRUCTION TRENDS .... 1075 By Christian A. Chu

CLONES, BONES AND TWILIGHT ZONES: PROTECTING THE DIGITAL PERSONA OF THE QUICK, THE DEAD AND THE IMAGINARY ...... 1165 By Joseph J. Beard

LINK LAW REVISITED: INTERNET LINKING LAW AT FIVE YEARS ...... 1273 By Mark Sableman

Is THERE A THERE THERE? TOWARD GREATER CERTAINTY FOR INTERNET JURISD ICTION ...... 1345 By Michael A. Geist FORESEEABILITY IN PATENT LAW By MatthewJ. Conigliarot Andrew C. Greenbeqj and Mark A. Lemle /

ABSTRACT In the Festo decision, the Federal Circuit significantly changed the scope of the doctrine of equivalents in patent law. The doctrine of prosecution history estoppel precludes a patent owner from claiming during litigation to own ground given up during patent prosecution. Under the old rule, called the "flexible bar," estoppel was based on a multi-factor test and would apply only if the patentee had no choice but to amend its claims in the way it did. Festo replaced the flexible bar with an "absolute bar," under which virtually any amendment to a patent precludes resort to the doctrine of equivalents for that claim element. The Supreme Court is now considering whether the flexible or absolute bar is the right rule. We believe there is middle ground in this debate that has been ignored by both parties. Whether prosecution history estoppel applies to any given amendment should depend on the reasonably foreseeable effect of that amendment. Normally, patentees will understand that they are surrendering coverage by amending their patent claims, and so a rule precluding them from reclaiming that ground makes sense. But in some cases the absolute bar will produce unexpected and unintended results. We argue that the application of estoppel should turn on whether the limiting effect of the language with respect to an accused device would have been foreseeable to a reasonable patentee at the time of the amendment. This "foreseeable" bar better balances the competing policies of strong protection for pioneering inventors and notice to improvers who wish to design around a patent.

© 2001 Matthew J. Conigliaro, Andrew C. Greenberg and Mark A. Lemley. t Deputy Solicitor General, State of Florida. t Principal, Carlton Fields, P.A. * Professor of Law, Boalt Hall, University of California at Berkeley; of counsel, Keker & Van Nest LLP. This article is adapted from an amicus brief filed by two of the authors on behalf of the Institute of Electrical and Electronics Engineers (the "IEEE") in Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (en banc), cert. granted, 121 S.Ct. 2519 (U.S. Jun. 18, 2001) (No. 00-1543). However, the IEEE has not participated in the writing of this article and is not responsible for its contents. Similarly, Professor Lemley did not participate in the filing of the brief and is not responsible for its contents. We emphasize that the opinions expressed herein are our own and not necessarily those of our employers or clients. We would like to thank John Clark, Annette James, Douglas McDonald, and Chris Smart for their assistance in the preparation of this article; and Rose Hagan, Lee Hollaar, Peter Menell, and Jay Thomas for comments on an earlier draft. BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045

TABLE OF CONTENTS I. IN TR O D U C TIO N ...... 1046 II. SCIENTIFIC PROGRESS IS NOT ADEQUATELY PROMOTED UNDER EITHER THE ABSOLUTE BAR OR FLEXIBLE BAR ...... 1049 A. Inventors Contribute to Progress through Both Pioneering Inventions and Technological Im provem ents ...... 1049 B. Patent Law Should Balance its Protective and Notice Functions and Thereby Promote Progress through Both Pioneering Inventions and Technological Improvem ents ...... 1053 C. Neither the Absolute Bar nor the Flexible Bar Approach to Prosecution History Estoppel Achieves the Appropriate Balance ...... 1059 1. Problems with the Flexible Bar ...... 1060 2. Problems with the Absolute Bar ...... 1061 III. THE FORESEEABILITY BAR: PROSECUTION HISTORY ESTOPPEL SHOULD BE APPLIED ONLY WHEN THE LIMITING EFFECT OF AN AMENDMENT WITH RESPECT TO AN ACCUSED DEVICE WOULD HAVE BEEN FORESEEABLE AT THE TIME OF THE AMENDMENT ...... 1064 A. The Foreseeable Bar Rule is Consistent with Patent Policies and Precedent in O ther Areas ...... 1065 B. The Foreseeable Bar Rule Overcomes the Failings of the Absolute Bar and the Flexible B ar ...... 1069 IV . C O N C LU SIO N ...... 1074

I. INTRODUCTION The patent laws are designed to promote the progress of the "useful Arts."' Congress sought to achieve this constitutional end by providing both effective protection to inventors and adequate notice to the public. Its goal was to strike an appropriate balance between two competing goals: giving adequate economic incentives to pioneering inventors while ensur- who followed-and the public as a whole-could ing that the improvers 2 make effective use of inventions. Both policies are implicated by recent cases involving the doctrine of equivalents in patent law. The scope of a patent is determined by its claims, the written definition of the invention.3 But patent law has long permitted patentees to expand the scope of the patent grant beyond the lit-

1. U.S. CONST. art. I § 8, cl. 8. 2. As Lord Mansfield put it in England at the time: [W]e must take care to guard against two extremes equally prejudicial; the one, that men of ability, who have employed their time for the service of the community, may not be deprived of their just merits, and the reward of their ingenuity and labor; the other, that the world may not be deprived of improvements, nor the progress of the arts be retarded. Sayre v. Moore, 102 Eng. Rep. 139, 140 (1785) (Lord Mansfield, C.J.). 3. Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996). 2001] FORESEEABILITY IN PATENT LAW 1047 eral reach of the patent claims in certain circumstances. Under the doctrine of equivalents, a patent owner may prevent another from making a device that does not literally infringe on the patent, but which differs only insub- stantially from the patented invention. Were it otherwise, the Supreme Court explained in Graver Tank, patentees would effectively lose all protection for their inventions because it is often trivial to avoid the literal terms of a patent.4 The doctrine of equivalents therefore enhances the strength of a patent by giving the courts the flexibility to expand the patent's scope beyond that of its literal terms. Such expansion comes at a cost, however. In particular, as the Su- preme Court recognized in Warner-Jenkinson, broad application of the doctrine of equivalents threatens to undermine the notice function of patents by preventing the public from being able to determine the scope of a patent ex ante.5 In Warner-Jenkinson, the Court restricted the reach of the doctrine of equivalents by applying another judicially created doctrine, prosecution history estoppel. Prosecution history estoppel prevents patentees from relying on the doctrine of equivalents to broaden their patents in ways that are inconsistent with the amendments or arguments they made to the United States Patent and Trademark Office ("PTO") during patent prosecution.7 However, broad application of prosecution history estoppel is costly as well. While prosecution history estoppel is consistent with the notice function, its liberal use threatens to make patent protection ineffective, rendering it a "hollow and useless thing" 8 by providing later imitators with a roadmap to avoiding infringement in nearly every case. The Federal Circuit has struggled to strike the right balance between the broad protection offered to patentees by application of the doctrine of equivalents and the public's right to notice of the bounds of a patent. To date, the court has not succeeded. Rather, it has oscillated between two different approaches to prosecution history estoppel. Until 2000, the overwhelming majority of Federal Circuit decisions applied a flexible bar that, under certain circumstances, permitted patentees to expand their patents under the doctrine of equivalents notwithstanding the representations

4. Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 607 (1950) ("Outright and forthright duplication is a dull and very rare type of infringement. To prohibit no other would place the inventor at the mercy of verbalism and would be subordi- nating substance to form. It would deprive him of the benefit of his invention ....). 5. Wamer-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29 (1997). 6. Id at 30-34. 7. Id. 8. Graver Tank, 339 U.S. at 607. 1048 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 they made to the PTO during prosecution. 9 In Festo, however, the Federal Circuit reversed course, deciding en banc that a complete or "absolute bar" should preclude patentees from relying on the doctrine of equivalents as to any claim element that was added or amended during prosecution.1° As to those claim elements, only literal infringement is now actionable. Neither approach defines a workable and just framework for balancing patents' protective and notice functions. The absolute bar improperly treats the notice function as paramount, severely diluting necessary patent protections and disproportionately encouraging minor variations or mere copies over genuine technological improvement and more fundamental, pioneering innovations. The flexible bar, on the other hand, heightens the protective function in a manner that sacrifices much of the notice function, resulting in uncertainty regarding the scope of a patent and thus discourag- ing incremental innovation through technological improvements. The flexible bar also weakens prosecution history estoppel dramatically. Under neither rule is scientific progress well served. We believe there is a middle ground in this debate, one thus far ignored by advocates of both the flexible and absolute bars. The Federal Circuit need not have resorted to Festo's absolute bar to cure the deficien- cies of the flexible bar. We suggest instead that the Supreme Court use the Festo case now before it to adopt what we call a "foreseeable bar." Under this approach, the doctrine of equivalents should apply, notwithstanding a limiting amendment or argument during a patent's prosecution, unless the limiting effect of the language with respect to an accused device would have been foreseeable to a reasonable patentee at the time of the amendment. Such a rule is supported by case law from the Supreme Court and the Federal Circuit, and presents the best means of effectuating patents' protective and notice functions to promote all forms of progress, including both pioneering inventions and technological improvements. Unlike the flexible and absolute bars, the foreseeable bar is workable. It would be comprehensible to patent professionals and readily applied and

9. See, e.g., Hughes Aircraft Co. v. United States, 140 F.3d 1470 (Fed. Cir. 1998); Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449 (Fed. Cir. 1998); Modine Mfg. Co. v. U.S. Int'l Trade Comm'n, 75 F.3d 1545 (Fed. Cir. 1996); Dixie USA, Inc. v. Infab Corp., 927 F.2d 584 (Fed. Cir. 1991); Black & Decker, Inc. v. Hoover Serv. Ctr., 886 F.2d 1285 (Fed. Cir. 1989); Envtl. Instruments, Inc. v. Sutron Corp., 877 F.2d 1561 (Fed. Cir. 1989); LaBounty Mfg., Inc. v. U.S. Int'l Trade Comm'n, 867 F.2d 1572 (Fed. Cir. 1989); Sun Studs, Inc. v. ATA Equip. Leasing, Inc., 872 F.2d 978 (Fed. Cir. 1989); Hughes Air- craft Co. v. United States, 717 F.2d 1351 (Fed. Cir. 1983). 10. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (en banc), cert. granted, 121 S.Ct. 2519 (U.S. Jun. 18, 2001) (No. 00-1543). 20011 FORESEEABILITY IN PATENT LAW 1049 reviewed by the judiciary. The foreseeable bar also avoids the most extreme examples of injustice associated with the flexible and absolute bars. The foreseeable bar best serves the policies underlying the Patent Clause and the Patent Act by most fully promoting progress of the useful arts. Our discussion is divided into two principal parts. In Part 11, we discuss the nature of scientific progress, which requires encouraging both pioneering innovations and improvements on existing ideas. We explain why neither the absolute bar of Festo nor the flexible bar that preceded it effectively serves these purposes. In Part IT, we discuss our proposed alternative and explain why it is both workable and fair.

II. SCIENTIFIC PROGRESS IS NOT ADEQUATELY PROMOTED UNDER EITHER THE ABSOLUTE BAR OR FLEXIBLE BAR The Patent Clause broadly directs that the Congress shall have the power to "promote the Progress of... useful Arts, by securing for limited Times to ...Inventors the exclusive Right to their ...Discoveries." ' 11 Crafting a statutory scheme to achieve this objective is the work of Con- gress, while enforcing that scheme in the manner that best comports with congressional intent and constitutional purpose is the obligation of the judiciary.12 To be effective, such a scheme must provide both effective protection for patentees and effective notice to the public. The flexible bar and the absolute bar each give one goal primacy over the other. Neither approach considers how innovation actually works. As a result, neither adequately fulfills the purposes embodied in both the Patent Clause and the Patent Act, which encourage both technological improvements and pioneering inventions through the careful balance of patents' protective and notice functions. A. Inventors Contribute to Progress through Both Pioneering Inventions and Technological Improvements The chief aim of the Patent Clause is to promote the public welfare by encouraging advancements in knowledge.' 3 Innovation generally takes one of two basic forms: pioneering inventions and technological improve-

11. U.S. CONST. art. I, § 8, cl. 8. 12. Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 5-6 (1966). 13. See Mazer v. Stein, 347 U.S. 201, 219 (1954) (noting that rewarding intellectual property owners encourages inventive efforts and hence is the "best way to advance public welfare"). BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 ments of earlier inventions. Patent law must encourage both types of innovation, each of which is critical to the continued advancement of science and, thus, the public good. A pioneering invention is something that performs a function never before performed-"a wholly novel device, or one of such novelty and importance as to mark a distinct step in the progress of the art ....,,14 By comparison, technological improvements are useful, though often minor, advances over the previously existing technology. However, even minor changes to prior art may be nonobvious before an invention is disclosed and may fundamentally change how an invention is used. The most useful and novel inventions may be merely progressive steps that in turn rely upon other inventions.15 This is particularly likely in certain industries, notably computer software, in which1 6 virtually all new products are developed by improving existing ones. Technological improvements may be the result of independent discoveries or intentional efforts to design around, and thereby avoid infringing, the claims of a patent. In either case, progress is served through innovation. Unlike copyists, who merely mimic a device and add nothing to the public body of knowledge, those who invent new devices by intentionally designing around a patent nonetheless advance the public welfare and ful- 17 fill the purpose of the Patent Clause.

14. Westinghouse v. Boyden Power Brake Co., 170 U.S. 537, 562 (1898). 15. See HENRY PETROSKI, THE EVOLUTION OF USEFUL THINGS 45 (1992) (citing examples). 16. For a detailed discussion of how the cumulative nature of software innovation affects optimal doctrine of equivalents policy, see James Bessen & Eric Maskin, Sequen- tial Innovation, Patents, and Imitation (1999) (working paper, on file with authors); Julie E. Cohen & Mark A. Lemley, Patent Scope and Innovation in the Software Industry, 89 CALIF. L. REV. 1 (2001). See also Mark A. Lemley & David W. O'Brien, Encouraging Software Reuse, 49 STAN. L. REV. 255 (1997); Peter S. Menell, An Analysis of the Scope of Copyright Protectionfor Application Programs,41 STAN. L. REV. 1045 (1989); Pam- ela Samuelson et al., A Manifesto Concerning the Legal Protection of Computer Pro- grams, 94 COLUM. L. REV. 2308 (1994). 17. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 36 (1997) (contrasting "the intentional copyist making minor changes to lower the risk of legal action" with "the incremental innovator designing around the claims, yet seeking to capture as much as is permissible of the patented advance"); see also Slimfold Mfg. Co. v. Kinkead Indus., Inc., 932 F.2d 1453, 1457 (Fed. Cir. 1991) (Rich, J.) ("Designing around patents is, in fact, one of the ways in which the patent system works to the advantage of the public in promoting progress in the useful arts, its constitutional purpose."); State Indus. v. A.O. Smith Corp., 751 F.2d 1226, 1236 (Fed. Cir. 1985) ("One of the benefits of a patent system is its so-called 'negative incentive' to 'design around' a competitor's products, even when they are patented, thus bringing a steady flow of innovations to the marketplace."); Craig Allen Nard, A Theory of Claim Interpretation, 14 HARV. J.L. & TECH. 1, 20011 FORESEEABILITY IN PATENT LAW

40-41 (2000) ("The practice of designing-around extant patents creates viable substitutes and advances, resulting in competition among patented technologies. The public clearly benefits from such activity.") (citations omitted). Closely related to the economic benefits of design-arounds are the economic benefits of reverse engineering. Most of the discussion on this topic has taken place in the context of software copyright, where courts and commentators overwhelmingly favor reverse engineering as a useful tool. E.g., Sony Computer Entm't, Inc. v. Connectix Corp., 203 F.3d 596 (9th Cir. 2000); Alcatel U.S.A., Inc. v. DGI Techs., Inc., 166 F.3d 772 (5th Cir. 1999); Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1539 n.18 (lth Cir. 1996); DSC Communications Corp. v. DGI Techs., Inc., 81 F.3d 597, 601 (5th Cir. 1996); Lotus Dev. Corp. v. Borland Int'l, Inc., 49 F.3d 807, 817-18 (1st Cir. 1995) (Boudin, J., concurring); Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832, 843- 44 (Fed. Cir. 1992); Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1527-28 (9th Cir. 1992); Vault Corp. v. Quaid Software Ltd., 847 F.2d 255, 270 (5th Cir. 1988); Mitel, Inc. v. Iqtel, Inc., 896 F. Supp. 1050 (D. Colo. 1995), affid on other grounds, 124 F.3d 1366 (10th Cir. 1997); JONATHAN BAND & MASANOBU KATOH, INTERFACES ON TRIAL: IN- TELLECTUAL PROPERTY AND INTEROPERABILrTY IN THE GLOBAL SOFTWARE INDUSTRY 167-226 (1995); Julie E. Cohen, Reverse Engineering and the Rise of Electronic Vigilan- tism: Intellectual Property Implications of "Lock-Out" Programs, 68 S. CAL. L. REV. 1091 (1995); Lawrence D. Graham & Richard 0. Zerbe, Jr., Economically Efficient Treatment of Computer Software: Reverse Engineering, Protection, and Disclosure, 22 RUTGERS COMPUTER & TECH. L.J. 61 (1996); Dennis S. Karjala, Copyright Protection of Computer Software, Reverse Engineering, and Professor Miller, 19 U. DAYTON L. REV. 975, 1016-18 (1994); Maureen A. O'Rourke, Drawing the Boundary Between Copyright and Contract: Copyright Preemption of Software License Terms, 45 DUKE L.J. 479, 534 (1995); David A. Rice, Sega and Beyond: A Beacon for Fair Use Analysis... At Least as Far As It Goes, 19 U. DAYTON L. REV. 1131, 1168 (1994); Pamela Samuelson, Fair Use for Computer Programsand Other Copyrightable Works in Digital Form: The Im- plications of Sony, Galoob and Sega, 1 J. INTELL. PROP. L. 49 (1993); Tyler G. Newby, Note, What's FairHere is not FairEverywhere: Does the American Fair Use Doctrine Violate InternationalCopyright Law?, 51 STAN. L. REV. 1633, 1657-58 (1999); Timothy Teter, Note, Merger and the Machines: An Analysis of the Pro-Compatibility Trend in Computer Software Copyright Cases, 45 STAN. L. REV. 1061 (1993) (arguing that the value of computer programs depends on interoperability). Some courts and commentators have argued against reverse engineering. E.g., Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3d Cir. 1983); Digital Communications Assocs., Inc. v. Softklone Distrib. Corp., 659 F. Supp. 449 (N.D. Ga. 1987); Anthony L. Clapes, Confessions of an Amicus Curiae: Technophobia, Law and Creativity in the Digital Arts, 19 U. DAYTON L. REV. 903 (1994) (contending that there should be no right to reverse engineer software); Arthur R. Miller, Copyright Protection for Computer Programs, Databases,and Computer-Generated Works: Is Anything New Since CONTU?, 106 HARv. L. REV. 977 (1993) (same). Cf. DSC Communications Corp. v. Pulse Communications, Inc., 170 F.3d 1354 (Fed. Cir. 1999) (acknowledging the right to reverse engineer for some purposes, but holding it unjustified in this case); Pamela Samuelson & Suzanne Scotchmer, The Law and Economics of Reverse Engineering, YALE L.J. (forthcoming 2002). available at http://www.sims.berkeley.edu/-pam/- papers/l&e%20reveng3.pdf (last visited Nov. 29, 2001) (suggesting that reverse engineering should be legal when it promotes interoperability but not when it permits free riding). 1052 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045

Although pioneering inventions and technological improvements both rely to some extent on prior discoveries, 18 they differ dramatically in their frequency. Pioneering inventions rely on unprecedented, breakthrough discoveries, which are uncommon. It is only the rare invention that strikes out in a sufficiently uncharted direction to qualify as a wholly novel device. Thus, in numerical terms, progress largely takes the form of technological improvements. 19 Technological improvements may derive from either pioneering inventions or prior technological improvements. When a pioneering invention leads the way into a new art, technological improvements often follow in a flurry, as inventors seek to maximize the pioneering device's utility. It is this flurry of minor innovations that places technological improvements on par with their more revolutionary counterparts, though the social contribution of a single technological improvement may on occasion rival that of pioneering inventions. Generally, pioneering advances provide great leaps in society's collective progress, while technological improvements provide

In the patent context, there is some discussion of reverse engineering as well. The Supreme Court has noted its value as a font for innovation. See TrafFix Devices, Inc. v. Mktg. Displays, Inc., 121 S.Ct. 1255, 1260 (2001) ("[C]opying is not always discouraged or disfavored by the laws which preserve our competitive economy. Allowing competitors to copy will have salutary effects in many instances. 'Reverse engineering of chemical and mechanical articles in the public domain often leads to significant advances in technology."') (quoting Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 160 (1989)). For arguments explicitly supporting the creation of a reverse engineering right in patent law, see Cohen & Lemley, supra note 16, at 21-37, and Maureen A. O'Rourke, Toward a Doctrine of Fair Use in Patent Law, 100 COLUM. L. REv. 1177 (2000). 18. Ultimately, whether deemed pioneering inventions or technological improvements, all innovations build upon information already known to the public. All inventors have the fortune of standing on the shoulders of the proverbial giants who preceded them. See Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 446 n.28, 477-78 (1984) (noting, in copyright case, that each person builds on the work of predecessors); Suzanne Scotchmer, Standing on the Shoulders of Giants: Cumulative Research and the Patent Law, 5 J. ECON. PERSP. 29 (1991). As Justice Story explained well over a century ago, "in literature, in science and in art, there are, and can be, few, if any, things, which, in an abstract sense, are strictly new and original throughout." Emerson v. Davies, 8 F. Cas. 615, 619 (C.C.D. Mass. 1845). Cf. JAMES BOYLE, SHAMANS, SOFTWARE, AND SPLEENS (1996) (arguing that society systematically understates the extent to which creators borrow from preexisting works). 19. See In re Nelson, 280 F.2d 172, 182 (C.C.P.A. 1960) (Rich, J.) ("progress is made as the result of both the big and the little contributions, mostly the latter. We get... a 'major scientific breakthrough'-only at rare intervals. The seemingly little advances are the bread and butter of progress and sometimes turn out to be of much greater importance than at first thought."). 20011 FORESEEABILITY IN PATENT LAW 1053 the multitudes of incremental steps necessary to realize the full potential of major as well as minor discoveries.2 ° B. Patent Law Should Balance its Protective and Notice Functions and Thereby Promote Progress through Both Pioneering Inventions and Technological Improvements The law must encourage both pioneering inventions and technological improvements, to the exclusion of neither. This bedrock principle should guide the courts in interpreting the patent laws to promote the progress of the "useful Arts." The difficulty is that the stronger the rights the law grants to pioneering inventors, the more difficult it becomes for others to improve on those pioneering inventions. Giving pioneering inventors total control over any21 work in the field puts them in the position of coordinating innovation. But there is powerful evidence that many diverse competitors, rather than one central decision-maker, are best situated to improve on an existing technology. 22 As a result, economists and legal scholars generally suggest

20. See, e.g., RICHARD R. NELSON & SIDNEY G. WINTER, AN EVOLUTIONARY THE- ORY OF ECONOMIC CHANGE 130 (1982); ANNALEE SAXENIAN, REGIONAL ADVANTAGE: CULTURE AND COMPETITION IN SILICON VALLEY AND ROUTE 128 (1994); Nathan Rosenberg, Factors Affecting the Diffusion of Technology, 10 EXPLORATIONS IN ECON. HIST. 3 (1972); Carol Habor, Electronic Breakthroughs: Big Picture Eludes Many, Elec- tronic News, Jun. 13, 1994, at 46 (detailing numerous examples of fundamental inventions that the inventor himself did not fully appreciate). Among the inventors who did not recognize the potential of their ideas are Marconi, who expected the radio to be used only for point-to-point communications rather than mass broadcast; the inventors of the transistor, who anticipated its use in hearing aids; and the inventors of the VCR, who anticipated it would only be used by television stations. Id. Relying only on pioneering inventors to commercialize their technologies may miss many useful improvements and applications, as it would have done in these cases. 21. The classic argument cited in favor of monopolists coordinating innovation is JOSEPH A. SCHUMPETER, CAPITALISM, SOCIALISM, AND DEMOCRACY 106 (1st ed. 1942). For an application to patent law, see F. Scott Kieff, Property Rights and Property Rules for Commercializing Inventions, 85 MINN. L. REV. 697 (2001); Edmund W. Kitch, The Nature and Function of the Patent System, 20 J.L. & ECON. 265 (1977). Cf Suzanne Scotchmer, Protecting Early Innovators: Should Second-Generation Products Be Pat- entable?, 27 RAND J. ECON. 322 (1996) (suggesting that incentives be weighted towards pioneers). The theory is that monopolists will have the resources to devote to research and development, and the fact that they can control all possible research in a field ex ante will encourage them to invent efficiently. 22. In the specific context of intellectual property, the canonical reply is Robert P. Merges & Richard R. Nelson, On the Complex Economics of PatentScope, 90 COLUM. L. REV. 839 (1990). In the economic literature, see Kenneth J. Arrow, Economic Welfare and the Allocation of Resources for Invention, in THE RATE AND DIRECTION OF INVEN- TIVE ACTIVITY 609, 620 (Nat'l Bureau of Econ. Research ed., 1962), reprinted in 5 KEN- 1054 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 that the best way to encourage innovation is to balance the rights granted to pioneers and improvers, rather than allocate all rights to pioneers. 2 3 This

NETH J. ARROW, COLLECTED PAPERS OF KENNETH J. ARROW: PRODUCTION AND CAPI- TAL 104, 115 (1985). See also MORTON I. KAMIEN & NANCY L. SCHWARTZ, MARKET STRUCTURE AND INNOVATION (1982); F.M. SCHERER & DAVID ROSS, INDUSTRIAL MAR- KET STRUCTURE AND ECONOMIC PERFORMANCE 660 (3d ed. 1990) (criticizing Schum- peter's "less cautious" followers for advocating monopoly to promote innovation); Mark A. Lemley & Lawrence Lessig, The End of End-to-End: Preserving the Architecture of the Internet in the Broadband Era, 48 UCLA L. REv. 925, 960-62 (2001) (arguing that the Internet was as innovative as it was because its architecture required competition rather than monopoly bottlenecks); Howard A. Shelanski, Competition and Innovation in U.S. Telecomm. 16-17 (Sept. 5, 2000) (unpublished manuscript, on file with authors) (finding that competition was a greater spur to innovation than monopoly in ten empirical studies in the telecommunications industry). 23. There are at least three strands to this argument. First, for a variety of reasons, society cannot rely on pioneers to efficiently license to improvers the right to compete with them. See Rebecca S. Eisenberg, Patents and the Progress of Science: Exclusive Rights and Experimental Use, 56 U. CHI. L. REV. 1017, 1072-73 (1989) ("The risk that the parties will be unable to agree on terms for a license is greatest when subsequent re- searchers want to use prior inventions to make further progress in the same field in competition with the patent holder, especially if the research threatens to render the patented invention technologically obsolete."); Mark A. Lemley, The Economics of Improvement in Intellectual Property Law, 75 TEx. L. REv. 989, 1048-72 (1997) (offering a variety of reasons why granting exclusive control to pioneers is inefficient); Robert P. Merges, In- tellectual Property Rights and BargainingBreakdown: The Case of Blocking Patents, 62 TENN. L. REv. 75 (1994) [hereinafter Merges, Intellectual Property]; Merges & Nelson, supra note 22. Second, positive "spillovers" from innovation that cannot be appropriated by the innovator actually contribute to further innovation. See, e.g., Wesley M. Cohen & David A. Levinthal, Innovation and Learning: The Two Faces of R&D, 99 ECON. J. 569 (1989); Zvi Griliches, The Search for R&D Spillovers, 94 SCAND. J. ECON. S29 (1992); Richard C. Levin, Appropriability, R&D Spending, and Technological Performance, 78 AM. ECON. REv. 424, 427 (1988); Richard Schmalensee, R and D Cooperation and Competition: Comments and Discussion, 1990 BROOKINGS PAPERS ON ECON. ACTIVITY 194, 195-96 (1990); Cf Scotchmer, supra note 21 (noting difficulties in the optimal allocation of rights between pioneers and improvers). Third, granting strong intellectual property rights encourages rent-seeking, which may dissipate the social value of the property rights themselves. In the patent context, giving too strong a right to first inventors would encourage wasteful patent races. See, e.g., Jennifer F. Reinganum, The Timing of Innovation: Research, Development, and Diffusion, 1 HANDBOOK OF INDUS. ORG. 850 (Richard Schmalensee & Robert Willig eds. 1989); Robert P. Merges, Rent Control in the Patent District: Observations on the Grady-Alexander Thesis, 78 VA. L. REv. 359 (1992). Cf Mark F. Grady & Jay I. Alexander, Patent Law and Rent Dissipation, 78 VA. L. REv. 305 (1992). Of course, the operative word here is "balance." Pioneering inventors will emerge only if there are sufficient incentives for them to invent. Too great a division of rights can impede effective use of technologies. See Michael A. Heller & Rebecca S. Eisenberg, Can Patents Deter Innovation? The Anticommons in Biomedical Research, 280 SCI. 698 (1998). The fact that the law must also encourage competition to improve 20011 FORESEEABILITY IN PATENT LAW 1055 is but one aspect of a larger theme in intellectual property law, which in all of its dimensions attempts to balance creators' rights to control their creations and society's 24 right to use those 2creations.5 Patent law has a number of vehicles for achieving this balance. such pioneering inventions means that the law must take care to allocate rights between the parties. See Nard, supra note 17, 36-40. For discussions of how to optimize that allocation, see, e.g., John H. Barton, Patents and Antitrust: A Rethinking in Light of Patent Breadth and Sequential Innova- tion, 65 ANTITRUST L.J. 449, 453 (1997), Howard F. Chang, Patent Scope, Antitrust Pol- icy, and Cumulative Innovation, 26 RAND J. ECON. 34 (1995), and Jerry R. Green & Suz- anne Scotchmer, On the Division of Profit in Sequential Innovation, 26 RAND J. ECON. 20 (1995). 24. This effort at balance is a constant theme in Supreme Court intellectual property cases and the discussions of commentators. See, e.g., Graham v. John Deere Co. of Kan- sas City, 383 U.S. 1, 9 (1966) ("The patent monopoly was not designed to secure to the inventor his natural right in his discoveries. Rather, it was a reward, an inducement, to bring forth new knowledge."); Mazer v. Stein, 347 U.S. 201, 219 (1954) ("The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare .... "); see also Fogerty v. Fantasy, Inc., 510 U.S. 517, 524 (1994) ("The primary objective of the Copyright Act is to encourage the production of original literary, artistic, and musical expression for the good of the public."); Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 349-50 (1991) (stating that the "primary objective of copyright" is to promote public welfare); Stewart v. Abend, 495 U.S. 207, 224-25 (1990) (noting the Copyright Act's "balance between the artist's right to control the work ... and the public's need for access"); Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 167 (1989) (noting the "careful balance between public right and private monopoly to promote certain creative activity"); Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429 (1984) (stating that the limited monopoly conferred by the Copyright Act "is intended to motivate creative activity of authors and inventors ... and to allow the public access to the products of their genius after the limited period of exclusive control has expired"); Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975) (noting that "private motivation must ultimately serve the cause of promoting broad public availability of literature, music, and other arts"); Goldstein v. California, 412 U.S. 546, 559 (1973) (discussing Congress's ability to provide for the "free and unrestricted distribution of a writing" if required by the national interest); Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932) ("The sole interest of the United States and the primary object in conferring the monopoly lie in the general benefits derived by the public from the labors of the authors.") (quoted in United States v. Paramount Pic- tures, 334 U.S. 131, 158 (1948)). For commentators' discussions, see, e.g., 1 PAUL GoLDsTEIN, COPYRIGHT § 1.14, 1: 40 (2d ed. 1995); L. RAY PATTERSON & STANLEY W. LINDBERG, THE NATURE OF COPYRIGHT 120-22 (1991); Cohen, supra note 13, at 1198; Karjala, Federal Preemption of Shrinkwrap and On-Line Licenses, 22 U. DAYTON L. REV. 511 (1997); Mark A. Lemley, Romantic Authorship and the Rhetoric of Property, 75 TEx. L. REV. 873 (1997); Pierre N. Leval & Lewis Liman, Are Copyrightsfor Authors or Their Children?, 39 J. COPYRIGHT SOC'Y 1, 11 (1991); Jessica Litman, The Public Domain, 39 EMORY L.J. 965, 967- 68 (1990); Peter S. Menell, An Analysis of the Scope 1056 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045

In the context of the doctrine of equivalents, the law best promotes progress by the careful balancing of dynamic protection for the patentee and clear notice to the public of what products will infringe the patent. Each of these patent functions is fundamental, and it is only by their har- monious interplay that patent law can2 6encourage both technological improvements and pioneering inventions. The protective function of a patent-the constitutionally mandated right of its holder to exclude all others from practicing the invention for a limited time-is the principal feature of the patent system. 27 In a market economy, the lure of obtaining a monopoly on a commercially profitable invention induces research, development, and, ultimately, progress in the form of new knowledge. 28 The Patent Act offers this inducement by expressly prohibiting persons other than the patentee from making, using, or 29 selling a patented device. The notice function of a patent requires inventors to provide a full and clear description of the invention, an enabling disclosure, and the "best mode" of carrying out the invention so that it may be made and used by any person skilled in the art.30 Patents thus inform the public of the precise nature of the protected subject matter, placing that knowledge in the public domain, subject only to the limited intrusion of the patentee's exclusivity right.3' Concomitantly, patents notify the public of what subject matter is not claimed, and therefore provide guideposts to subsequent improvers as

of Copyright Protectionfor Application Programs,41 STAN. L. REv. 1045, 1082 (1989); Margaret Jane Radin, Property Evolving in Cyberspace, 15 J.L. & COM. 509, 515 (1996). These are only a few of the innumerable citations on this point. 25. Thus, the broad rights conferred in 35 U.S.C. § 271 (1994); the ability to obtain a broadening reissue, 35 U.S.C. § 251 (1994); the pioneering patents rule, see John R. Thomas, The Question Concerning Patent Law and Pioneer Inventions, 10 HIGH TECH. L.J. 35 (1995); and the doctrine of equivalents itself all serve to benefit pioneering inventors. The blocking patents rule, see Robert P. Merges, Intellectual Property supra note 23; the reverse doctrine of equivalents, see Westinghouse v. Boyden Power Brake Co., 170 U.S. 537, 562 (1898); Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565 (Fed. Cir. 1991); the fact that patents expire after twenty years, 35 U.S.C. § 154 (1994); and the ability to design around patents all serve to protect improvers. 26. See, e.g., Craig Allen Nard, Certainty, Fence-Building, and the Useful Arts, 74 IND. L.J. 759 (1999) (arguing that patent law must balance what the author calls "proprietary certainty"--our protective function-and "competitive certainty"--our notice function.). 27. Bloomer v. McQuewan, 55 U.S. (14 How.) 539, 549 (1852). 28. See Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470, 480 (1974). 29. 35 U.S.C. § 271(a) (1994). 30. 35 U.S.C. § 112 (1994); Kewanee Oil Co., 416 U.S. at 480-81. 31. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 150-51 (1989). 2001] FORESEEABILITY IN PATENT LAW to what will and will not infringe.32 Thus, patent disclosure enriches the public domain through a useful description of the invention, and patent claims provide subsequent inventors with a description of the subject matter that lies within the exclusive possession of the patent holder. The protective and notice functions of patents exist in some tension. The scope of the patent is defined by its claims.33 A competing inventor can avoid literal infringement by developing a new device that distin- guishes the patented invention through slight modifications to avoid the language of the claims. Because the language of claims can never per- fectly describe an invention or anticipate all the ways in which it might be modified,34 effective patent protection often requires claims to be read more broadly than their literal language would permit. Such a broad reading prevents insubstantial modifications from escaping a patent's scope of exclusivity. At the same time, however, the notice function requires claims to be read in a manner narrow enough to give meaningful effect to the limiting nature of the patentee's chosen language. These respective ends are achieved, or at least furthered, by two competing, judicially-created doctrines: the doctrine of equivalents and prosecution history estoppel. First recognized by the Supreme Court in Winans v. Denmead,35 and expounded upon by the Court in Graver Tank & Manufacturing Co. v. Linde Air Products Co.,36 the doctrine of equivalents provides that a product or process that does not literally infringe on a patented device may be found to infringe if the accused device is deemed the equivalent of the patented device. The concept of equivalence protects a patent's value by enlarging the patent's scope to encompass devices whose variations from the patent's literal language are insubstantial. The Court recently reaffirmed the validity of the doctrine of equivalents in Warner-Jenkinson Co. v. Hilton Davis Chemical Co.3 7 At the same time, the Court sought to cabin the doctrine's reach by limiting its application to each element of a claim, rather than to the invention as a whole. 38 The Court also acknowl-

32. McClain v. Ortmayer, 141 U.S. 419, 424 (1891) ("The object of the patent law in requiring the patentee to [distinctly claim an invention] is not only to secure to him all to which he is entitled, but to apprise the public of what is still left open to them."); Hoganas AB v. Dresser Indus., 9 F.3d 948, 951 (Fed. Cir. 1993) (claims "put[] competitors on notice of the scope of the claimed invention."). 33. Markman v. Westview Instruments, Inc., 517 U.S. 370, 373 (1996). 34. See, e.g., Nard, supra note 17. 35. 56 U.S. 330 (1853). 36. 339 U.S. 605 (1950). 37. 520 U.S. 17 (1997). 38. Id. at 29-30. The Federal Circuit had adopted this rule ten years earlier in Penn- walt Corp. v. Durand-Wayland, Inc., 833 F.2d 931 (Fed. Cir. 1987) (en banc). 1058 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 edged that the doctrine of equivalents, when applied broadly, conflicts 39 with patents' notice function. Prosecution history estoppel limits the doctrine of equivalents by preventing a patentee from arguing equivalence with respect to subject matter the patentee surrendered during prosecution of the patent. 40 The doctrine of prosecution history estoppel ensures that, to the extent possible, patents mean what they say. It prohibits patentees from obtaining a patent by representing to the PTO that the patent's scope is narrow, and then arguing otherwise to a court. Prosecution history estoppel is consistent with the notice function of patents because it allows third parties to rely on the public record of the patent prosecution to determine a patent's scope and eliminates the patentee's41 ability to rely on the doctrine of equivalents to expand that scope. Application of the doctrine of equivalents and prosecution history estoppel directly affects the incentives and disincentives to innovate. When the balance is tilted toward the protective function, patentees receive exclusivity beyond the literal language of their patents' claims, but improvers have less notice of an existing patent's scope. The resulting uncertainty discourages technological improvements because the outer margins of a patent's claims remain undefined, and the risk of infringing through a device that falls outside a patent's literal claims but within their substantial equivalents is not quantifiable.42 On the other hand, when the balance tilts too far toward the notice function, the reverse problem occurs. A patent's scope is so well defined in connection with the literal language of its claims that the patentee lacks protection from insubstantial modifications that amount to little more than a fraud on the patent. The incentive to advance knowledge only slightly, if

39. Id. at 29 ("There can be no denying that the doctrine of equivalents, when applied broadly, conflicts with the definitional and public-notice functions of the statutory claiming requirement."). 40. Id. at 30-31 (1997); Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126, 135- 37 (1942). 41. Cf White v. Dunbar, 119 U.S. 47, 51 (1886) (patent claims may not be treated "like a nose of wax which may be turned and twisted in any direction"). For a challenge to the idea that prosecution histories provide any effective public notice, see John R. Thomas, On Preparatory Texts and Proprietary Technologies: The Place of Prosecution Histories in Patent Claim Interpretation,47 UCLA L. REv. 183, 200-04 (1999). 42. See Lemley, supra note 23 (warning that an overbroad doctrine of equivalents can stifle improvement); Merges & Nelson, supra note 22 (same); cf Nard, supra note 17 (arguing that patents must be interpreted with an eye towards defining their limits for the benefit of subsequent improvers). 20011 FORESEEABILITY IN PATENT LAW at all, becomes great, given the heightened certainty that modestly modified devices will not infringe. At the same time, the value of pioneering inventions, and the incentive to produce them, are substantially diminished by would-be inventors' concerns that their rights will be immediately diluted in the marketplace by competitors who have made, at best, insubstantial changes and, at worst, mere copies. In sum, enforcing the doctrine of equivalents and prosecution history estoppel in a manner that balances patents' protective and notice functions is the optimal means of promoting the progress of the useful arts. Only through a careful balance of these functions will the law encourage innovation by both pioneering inventors and technological improvers. C. Neither the Absolute Bar nor the Flexible Bar Approach to Prosecution History Estoppel Achieves the Appropriate Balance The Federal Circuit in Festo substantially modified the law regarding the application of prosecution history estoppel.43 In doing so, the Federal Circuit overruled a series of its own cases, dating back to Hughes Aircraft Co. v. United States,44 which had established a flexible bar approach to prosecution history estoppel. The Supreme Court granted certiorari in Festo, and the case is pending at this writing. The majority and dissents in Festo voiced divergent views regarding the appropriate scope of patent rights and the correct application of prosecution history estoppel, views now echoed by the parties and amici in the Supreme Court. Those supporting the decision argued that the pre-Festo rules for prosecution history estoppel under Hughes and its progeny effectively provided no notice to the public, creating broad patent protection unworkable in light of the realities of modem litigation practice.45 Those supporting the prior rule believe that the manner of applying prosecution history estoppel under Festo is even more problematic in light of the realities of modem invention and patent prosecution practice. 46 Both sides have a point. Neither rule balances patents' protective and notice functions, and so each rule interferes with incentives to innovate. In the sections that follow, we explore these defects in detail.

43. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (en banc), cert. granted, 121 S.Ct. 2519 (U.S. Jun. 18, 2001) (No. 00-1543). 44. 717 F.2d 1351 (Fed. Cir. 1983). 45. Festo, 234 F.3d at 575-78. 46. See, e.g., id. at 618-19 (Michel, J., concurring in part and dissenting in part). 1060 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045

1. Problems with the Flexible Bar The Federal Circuit in Hughes acknowledged that circuit court decisions predating the Federal Circuit's establishment took differing views on what range of equivalents, if any, would be available to a patentee where prosecution history estoppel applied.47 Hughes held that patentees who are estopped to assert infringement based on subject matter surrendered by amendment during prosecution may still claim some range of equivalents for that subject matter, with the48 available spectrum of equivalents ranging "from great to small to zero." Hughes is emblematic of what came to be known as the flexible bar approach to prosecution history estoppel. Under this approach, the nature and purpose of amendments made during patent prosecution are examined to determine the exact subject matter that the patentee needed to surrender. Equivalents outside the surrendered material remain available to the patentee. The flexible bar suffers from a fundamental lack of precision. Its essential quality-flexibility-has made it resistant to any clear formulation that would permit a competitor to predict as to exactly what subject matter has been surrendered by an amendment or a series of amendments during prosecution. Making this point in Festo, the Federal Circuit majority gave an example of a claim that originally recited a value of "less than twenty" and, in light of a rejection over prior art disclosing a value of fifteen, was amended to recite a value of "less than five.",49 There is no means by which an inventor wishing to use values of five and a half, ten or fourteen could ascertain whether the patentee surrendered those potential equivalents. The precise range of equivalents encompassed by the patent, and thus not available for practice by the public, will remain uncertain until litigation settles the matter. Accordingly, the flexible bar defeats the notice function of patents by denying the public and would-be inventors reasonably clear notice of a patent's scope. This in turn threatens innovation. Indeed, incremental innovation in the form of technological advancements is particularly discouraged, since few inventors can be expected to take an unquantifiable risk of being sued for infringement. The flexible bar thus results in what the Supreme Court has previously referred to as a "zone of uncertainty which enterprise and experimentation may enter only at the risk of in-

47. Hughes Aircraft Co. v. United States, 717 F.2d 1351, 1362 (Fed. Cir. 1983). 48. Id. at 1363. 49. 234 F.3d at 577. 20011 FORESEEABILITY IN PATENT LAW fringement claims ... [and which] discourage[s] invention only a little less than unequivocal foreclosure of the field."50 There are other problems with the flexible bar approach as well. Most notably, by focusing on what the court ultimately decides is unpatentable, Hughes made the doctrine of prosecution history estoppel superfluous. It is well established in patent law that patentees cannot expand their claims under the doctrine of equivalents to cover inventions they could not have patented in the first place. For example, if an accused device would have been obvious in view of the prior art, the patent cannot cover that device, for doing so would mean that the patent itself was obvious.51 Thus, it adds little, if anything, to existing law for prosecution history estoppel to hold that an amended patent claim cannot be expanded to cover the prior art; that was already true without the doctrine of prosecution history estoppel. The flexible bar rule, then, not only gives insufficient notice to the public, but insufficient credence to the principle of estoppel. The estoppel doctrine should focus on whether the patentee's conduct during prosecution foreclosed some forms of protection, whether or not the patentee could legally have received that protection. 2. Problems with the Absolute Bar In Festo, a majority of the Federal Circuit's judges determined that the problems associated with the flexible bar were too great for that rule to remain law. 53 Festo instead adopted an "absolute bar" approach to prose-

50. Markman v. Westview Instruments, Inc., 517 U.S. 370, 390 (1996) (quoting Union Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236 (1942)). 51. See, e.g., Streamfeeder, LLC. v. Sure-Feed Sys., Inc., 175 F.3d 974, 982 (Fed. Cir. 1999); Wilson Sporting Goods Co. v. David Geoffrey & Assocs., 904 F.2d 677 (Fed. Cir. 1990); Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861 (Fed. Cir. 1985). 52. See, e.g., Hughes Aircraft Co. v. United States, 140 F.3d 1470 (Fed. Cir. 1998); Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449 (Fed. Cir. 1998). Thus, the flexible bar approach is internally inconsistent, since the cases adopting that rule acknowledge that estoppel is appropriate, while applying estoppel only in circumstances in which the doctrine of equivalents would not apply even in the absence of estoppel. As a result, under the flexible bar the doctrine of estoppel is superfluous. See Prodyne Enters., Inc. v. Julie Pomerantz, Inc., 743 F.2d 1581, 1583 (Fed. Cir. 1984). 53. The Federal Circuit had issued a decision reaching a similar result shortly after Hughes was decided. Kinzenbaw v. Deere & Co., 741 F.2d 383 (Fed. Cir. 1984). The decision in that case, however, made no mention of overruling Hughes, and the flexible bar of Hughes became the dominant line of Federal Circuit authority until Festo. Because it changed the prevailing law, Festo has been criticized for reducing the effective scope of existing patents and unfairly disrupting existing commercial relations. In his partial dissent, Judge Michel suggested that a "grandfathering" provision should be made for existing patents that contain amended claim limitations and were introduced before the 1062 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 cution history estoppel. Under this approach, no range of equivalents is available to a patentee with respect to any claim element to which prosecution history estoppel applies. Thus, where a limiting amendment to a claim triggers prosecution history estoppel, the patentee may pursue an infringement action only when the accused device infringes on the literal terms of that element of the patent's claims. The absolute bar's purpose is to undo the chilling effect on innovation created by the flexible bar. The Federal Circuit's hope is that under the absolute bar, the undefined zone surrounding the literal terms of a narrowed claim will disappear, and technological advancements in this zone will no longer go undeveloped for fear of litigation.54 Additionally, newfound certainty regarding the scope of prosecution history estoppel should stimulate productive advances through improvements on and designs around patented technology. Indisputably, the absolute bar promotes the notice function of patents. It is equally clear, however, that the absolute bar substantially compro- mises patents' protective function. The doctrine of equivalents is necessary to protect inventors from insubstantial modifications to patented devices that amount to little more than fraud on the patent.55 By denying patentees who amend their claims during prosecution the power to prevent infringement accomplished by minor variations from the amended language, the court jettisons a basic protection historically afforded 6patentees in favor of better informing the public of a patent's literal scope. 5 This retooling of fundamental patent law concepts tips the balance between patents' protective and notice functions too far in the latter's favor. The PTO regularly rejects patent applications when they are initially filed. If those applicants are to succeed at all, they must either amend their claims to narrow them or argue that the claims are already narrow enough that amendment is unnecessary. To hold that one who amends a claim while successfully prosecuting a patent loses all protection against even minor variations on the narrowed claim effectively eviscerates the patent in many cases. This is particularly so because of the broad reading the

absolute bar could have been foreseen. Festo, 234 F.3d at 618-19 (Michel, J., concurring in part and dissenting in part). 54. Festo, 234 F.3d at 577. 55. See, e.g., Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997); Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605 (1950); Winans v. Den- mead, 56 U.S. (15 How.) 330 (1854). 56. See also Craig Allen Nard, Process Considerationsin the Age of Markman and Mantras, 2001 U. ILL. L. REv. 355 (2001) (describing uniformity and certainty as having been elevated to the status of "mantras" by recent patent cases). 20011 FORESEEABILITY IN PATENT LAW

Federal Circuit and other courts have given Festo in subsequent deci- 57 sions. Festo thus grossly disturbs the balance between patents' protective and notice functions and, as a result, distorts the patent system's incentives to innovate. The absolute bar encourages copyists to replicate a patented device, making otherwise meaningless modifications to the extent necessary to avoid the literal language of the device's amended claims. Judge Mi- chel, in his partial dissent in Festo, declared this procedure to be a blueprint for lawful copying of patented material.58 The absolute bar also threatens to eliminate the incentive to produce socially valuable pioneering inventions. Any amendment to a pioneering invention's patent claims that relates to the device's patentability will prohibit the pioneering inventor from later using the doctrine of equivalents to protect her invention against an accused infringer. By their nature, however, pioneering inventions open whole new avenues of progress, and it is along such avenues that the opportunity to make insubstantial modifications from a patent's literal language is greatest. Denying pioneering inventors the benefits of the doctrine of equivalents may render wasted the investment expended to produce such inventions. This won't happen in all cases; patents are only one reason why inventors invent. 59 But the absolute bar will reduce the incentives available from patents, which will reduce innovation to some extent. Finally, under the absolute bar approach, all patented devices, whether pioneering inventions or technological improvements, are subject to lawful copying to the extent that after-invented technology allows a copyist to substitute a new technology for a claimed technology and thereby avoid a

57. See, e.g., Lockheed Martin Corp. v. Space Sys./Loral, Inc., 249 F.3d 1314, 1325 (Fed. Cir. 2001) (applying Festo bar to entire claim element, even though the claim element was only amended in one respect); Mycogen Plant Sci., Inc. v. Monsanto Co., 261 F.3d 1345 (Fed. Cir. 2001) (holding that Festo applies where limitation from dependent claim is included in independent claim); Pioneer Magnetics, Inc. v. Micro Linear Corp., 238 F.3d 1341, 1345 (Fed. Cir. 2001) (holding that inadvertent narrowing still triggers Festo bar); Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120 (Fed. Cir. 2000) (holding Festo bar applies to multiple patents deriving from the same application); Control Res. Inc. v. Delta Elecs. Inc., 133 F. Supp. 2d 121 (D. Mass. 2001) (holding that claim amendment entirely bars doctrine of equivalents as to an element, even if the purpose of the amendment was to surrender only part of the range). 58. 234 F.3d at 616-17 (Michel, J., dissenting in part). 59. See, e.g., Wesley M. Cohen et al., Protecting Their IntellectualAssets: Appro- priability Conditions and Why U.S. Manufacturing Firms Patent (or Not) (Nat'l Bureau of Econ. Research, Working Paper No. W7552, 2000); Richard C. Levin et al., Appropriatingthe Returns from IndustrialResearch and Development, 1987 BROOKINGS PAPERS ON ECON. AcTIvrry 783 (1987). BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 patent claim's literal language. As Judge Rader pointed out in his partial dissent in Festo, this permits a patent's protection to be wholly defeated by the introduction of an item that functionally serves as an element of a narrowed claim but that does not come within the claim's literal language.6 1 The application of the Festo rule to later-developed technology is particularly disturbing, since in all likelihood the patentee had no intention of giving up ground that did not even exist at the time the amendment was made. In sum, both the flexible bar and the absolute bar approaches to prosecution history estoppel fail to balance patents' protective and notice functions. To encourage both pioneering inventions and technological improvements, a middle ground is needed. We propose such an approach in the following section.

III. THE FORESEEABILITY BAR: PROSECUTION HISTORY ESTOPPEL SHOULD BE APPLIED ONLY WHEN THE LIMITING EFFECT OF AN AMENDMENT WITH RESPECT TO AN ACCUSED DEVICE WOULD HAVE BEEN FORESEEABLE AT THE TIME OF THE AMENDMENT The concept of prosecution history estoppel is based on the equitable concept of an implied promise. The patentee is agreeing to narrow the scope of her claims in exchange for the grant of a patent, and should not be permitted to avoid that agreement by later claiming to own what she abandoned during prosecution. Sometimes the consequences of that implied promise are clear.62 In other cases, however, the patentee's "bargain" turns out to have unexpected consequences because of later-developed technologies or even unanticipated judicial interpretations of claim language.63 We think the equitable principle of estoppel and the economics of

60. Indeed, there is a well-developed body of patent law applying patents to cover later-developed technologies. See, e.g., Hughes Aircraft Co. v. United States, 717 F.2d 1351 (Fed. Cir. 1983); Laser Alignment, Inc. v. Woodruff & Sons, Inc., 491 F.2d 866 (7th Cir. 1974); see also Texas Instruments, Inc. v. U.S. Int'l Trade Comm'n, 805 F.2d 1558 (Fed. Cir. 1986) (acknowledging the principle but finding no infringement in the case before it). 61. 234 F.3d at 619-20 (Rader, J., dissenting in part). 62. An obvious example is Warner-Jenkinsonitself, where the addition of the claim language "at a pH from approximately 6.0 to 9.0" made it quite clear what ground the patentee was giving up. 520 U.S. 17, 22 (1997). 63. Hughes may be an example of a case involving later-developed technology, since the accused device used technology (microprocessors installed on board a satellite) that did not exist at the time of the patented invention. See Hughes, 717 F.2d at 1351. 20011 FORESEEABILITY IN PATENT LAW 1065 innovation are both well served by distinguishing these cases. Doing so provides us with a rule that is neither "absolute" nor so "flexible" as to be meaningless: the doctrine of equivalents should be permitted to apply to amended claim language unless the limiting effect of the amended language with respect to an accused device would have been foreseeable at the time of the amendment. Applied objectively, from the perspective of a reasonable person skilled in the art, this "foreseeable bar" applies principles that are readily, if not commonly, understood by both the public and the judiciary. Most importantly, the foreseeable bar rule provides both broader protection to the inventor than that provided by the absolute bar and more meaningful notice to the public than that provided by the flexible bar. The foreseeable bar thus better promotes innovation through pioneering inventions and technological improvements and, thereby, best promotes progress of the useful arts. A. The Foreseeable Bar Rule is Consistent with Patent Policies and Precedent in Other Areas Foreseeability is a well-understood and traditional jurisprudential device that courts employ to circumscribe legal principles in a manner that is flexible, and yet objective and reasonably determinate. For example, courts often use foreseeability to determine the existence of a common law duty of care in torts 64 or as a measure to limit the scope of damages in civil contract actions. 65 The Federal Circuit has also used foreseeability as a means to measure damages in patent infringement cases.6 6 Of more direct relevance to estoppel, the contract doctrine of promissory estoppel requires proof that a promisor should reasonably have foreseen that his promise would induce reliance by the person to whom the promise was made. 67 Similarly, courts have used foreseeability to measure whether a

64. E.g., Palsgraf v. Long Island R.R., 162 N.E. 99 (N.Y. 1928) (Cardozo, J.); see, e.g., Peter F. Lake, Common Law Duty in Negligence Law, 34 SAN DIEGO L. REv. 1053 (1997) (contrasting elements of modem no-duty rules among the states). For discussions of the efficiency of the foreseeability rule in tort law, see ROBERT COOTER & THOMAS ULEN, LAW AND ECONOMICS 367-69 (1st ed. 1988), A. MITCHELL POLINSKY, AN INTRO- DUCTION TO LAW AND ECONOMICS 39-51 (2d ed. 1989), Mark Grady, A New Positive Economic Theory of Negligence, 92 YALE L.J. 799 (1983), and Richard A. Posner, A The- ory of Negligence, 1 J. LEGAL STUD. 29 (1972). 65. Hadley v. Baxendale, 156 Eng. Rep. 145 (1854) (holding that consequential damages in contract were appropriate). 66. Rite-Hite Corp. v. Kelley Co., 56 F.3d 1538 (Fed. Cir. 1995) (en banc). 67. RESTATEMENT (SECOND) OF CONTRACTS § 90 (1981). 1066 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045

defendant's offensive use of collateral estoppel is fair. 68 Thus, courts may draw upon long-established principles for guidance in determining whether a particular limiting effect of an amendment during patent prosecution was foreseeable at the time the patentee made the limitation. The use of foreseeability is rooted in the case law of both the Supreme Court and the Federal Circuit. Foreseeability has already played a recognized role in effectuating patents' protective and notice functions in other patent doctrines. 69 Indeed, a foreseeable bar approach may harmonize cases from both courts limiting application of the doctrine of equivalents by inquiring into what the patentee knew or should have known he was giving up. In Kinzenbaw v. Deere & Co., 70 the Federal Circuit relied on its prior decision in Hughes and the Supreme Court's decision in Graver Tank to conclude that the "doctrine of equivalents is designed to protect inventors from unscrupulous copyists ... and unanticipated equivalents.",71 Thus, the Federal Circuit held, a patent applicant is not required to anticipate "all future developments which enable the practice of [each limitation of] his invention in substantially the same way.' 72 Turning to the facts before the court, Kinzenbaw found that the claimed variation was neither copied nor unanticipated, and the court held that prosecution history estoppel barred the patentee from relying on the doctrine of equivalents.73 Kinzenbaw plainly suggested that if the particular limiting effect created by the patentee's amendments to the patent's claim language had been unforeseeable, the doctrine of equivalents would still have been available to the patentee. 74 Accordingly, Kinzenbaw relied squarely on foreseeability principles. Sage Products, Inc. v. Devon Industries also took a foreseeability approach to the doctrine of equivalents, albeit outside the context of prosecution history estoppel.75 There, following the Supreme Court's command

68. Parklane Hosiery Co. v. Shore, 439 U.S. 322, 330 (1979) ("If a defendant in the first action is sued for small or nominal damages, he may have little incentive to defend vigorously, particularly if future suits are not foreseeable."). 69. Courts have, however, applied a test analogous to foreseeability: whether a competitor would be "reasonably entitled to conclude, from the prosecution history, that the applicant gave up" particular subject matter in order to obtain a patent. Haynes Int'l, Inc. v. Jessop Steel Co., 8 F.3d 1573, 1578, 1578 n.4 (Fed. Cir. 1993). 70. 741 F.2d 383 (Fed. Cir. 1984). 71. Id. at 389 (emphasis added). 72. Id. (quoting Hughes Aircraft Co. v. United States, 717 F.2d 1351, 1362 (Fed. Cir. 1983)). 73. Id. at 389. 74. Kinzenbaw v. Deere & Co., 741 F.2d 383 (Fed. Cir. 1984). 75. 126 F.3d 1420 (Fed. Cir. 1997). 20011 FORESEEABILITY IN PATENT LAW 1067 that "[t]he limits of a patent must be known,"76 the Federal Circuit held that, "as between the patentee who had a clear opportunity to negotiate broader claims but did not do so, and the public at large, it is the patentee who must bear the cost of its failure to seek protection for [a] foreseeable alteration of its claimed structure." 77 Sage Products specifically held that a patentee may not use the doctrine of equivalents to reach a foreseeable modification to a claimed innovation.7 8 The court observed that allowing the doctrine of equivalents to encompass foreseeable variations to claims would create a "zone of uncertainty, into which competitors tread only at their peril.",79 A similar analysis may also provide a guiding principle for the controversial doctrine of dedication to the public domain, which is based on competing conceptions of the protective and notice similarly 80 functions. A foreseeability approach is also consistent with the Supreme Court's prosecution history estoppel cases. In Exhibit Supply," the Court held that a patentee who selected limiting language to amend a claim while prosecuting the patent had thereby "recognized and emphasized the difference" between the original claim and the amended claim and thus "proclaimed his abandonment of all that is embraced in that difference." 82 The Court made no suggestion that the patentee's abandonment extended to equivalents that could not reasonably be foreseen. To the contrary, the Court's language suggested that the patentee specifically abandoned, equivalents that should reasonably have been recognized when the patentee made the

76. Markman v. Westview Instruments, Inc., 517 U.S. 370, 390 (1996). 77. Sage Prods., Inc., 126 F.3d at 1425 (emphasis added). 78. Id. at 1425. 79. Id. For an early discussion recognizing foreseeability as a new principle in patent law, see Andrew C. Greenberg & Jeffrey R. Kuester, The "Palsgraffing" of Patent Law: Foreseeability and the Doctrine of Equivalents, INTELL. PROP. TODAY 17 (June 1998). See also Darius C. Gambino & Richard A. Paikoff, A New Weapon for Alleged Infringers?: "PatentDrafter Estoppel" Explored, 10 FED. CIR. B.J. 469 (2001). 80. Subject matter that was disclosed in a patent but not claimed is deemed to have been affirmatively dedicated to the public. The rationale for this is that the patentee provided such information to the public without seeking claims to cover it, and the patentee should not be permitted to later withdraw the information from the public domain by use of the doctrine of equivalents or by reissue. See Miller v. Brass Co., 104 U.S. 350, 352 (1881) (applications for reissue). Compare Maxwell v. J. Baker, Inc., 86 F.3d 1098 (Fed. Cir. 1996) (holding that disclosed but unclaimed inventions are dedicated to the public domain) with YBM Magnex, Inc. v. Int'l Trade Comm'n, 145 F.3d 1317, 1322 (Fed. Cir. 1998) (rejecting doctrine of dedication to the public domain). The Federal Circuit recently agreed to resolve this conflict en banc. See Johnson & Johnson Assocs. v. R.E. Serv. Co., 238 F.3d 1347 (Fed. Cir. 2001) (en banc). 81. Exhibit Supply Co. v. Ace Patents Corp., 315 U.S. 126 (1942). 82. Id. at 136-37. BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 limiting amendment. 83 Similarly, in Warner-Jenkinson,84 where the Court reaffirmed the application of the doctrine of prosecution history estoppel, the change the patentee made had obviously foreseeable effects, and the Court had no occasion to 85 discuss the application of estoppel in the absence of foreseeability. In Festo, the Federal Circuit relied extensively on the need for foreseeability with respect to the scope of equivalents available to a patent's claims when the court held that limiting amendments based on patentability cannot be expanded beyond their literal language through the doctrine of equivalents. The en banc court emphasized that the flexible bar of Hughes made it "virtually impossible" to "predict[] with any degree of certainty the scope of surrender that will be found when prosecution history estoppel applies." 87 But Festo relied only on the policy of foreseeability and did not inquire into the foreseeable effects of the specific amendments in the case before it. Indeed, the rule adopted in Festo will likely deter any such inquiry, since the court's analysis would bar any application of the doctrine of equivalents once the claim element has been amended, whether or not the patentee should have understood the effect of the amendment. In sum, foreseeability is a well-established concept in modem law that is consistent with the basic patent functions of protection and notice. The concept also has antecedents in the doctrine of equivalents, as the Federal Circuit expressly used foreseeability for this purpose in Kinzenbaw and Sage Products, and the decisions in Hughes, Festo, and Exhibit Supply may reasonably be viewed as efforts to limit the doctrine of equivalents in accordance with basic principles of foreseeability. Accordingly, the use of foreseeability to limit application 88 of the doctrine of equivalents is consistent with existing case law.

83. Id. 84. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997). 85. The amendment added language "at a pH from approximately 6.0 to 9.0," which clearly excludes pHs well outside that range. Id. at 22. 86. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 574-75 (Fed. Cir. 2000) (en banc), cert. granted, 121 S.Ct. 2519 (U.S. Jun. 18, 2001) (No. 00- 1543). 87. Id. at 575. 88. In addition to the cases discussed above, a number of district courts have followed a foreseeability approach to the doctrine of equivalents. See, e.g., Knopik v. Amoco Corp., 96 F. Supp. 2d 892 (D. Minn. 2000); Kustom Signals, Inc. v. Applied Concepts, Inc., 52 F. Supp. 2d 1260 (D. Kan. 1999). 20011 FORESEEABILITY IN PATENT LAW 1069

B. The Foreseeable Bar Rule Overcomes the Failings of the Absolute Bar and the Flexible Bar Under our proposed foreseeable bar, a court will apply the doctrine of equivalents notwithstanding a claim amendment unless the limiting effect of the amended language with respect to an accused device would have been foreseeable at the time of the amendment to a reasonable person skilled in the art. This foreseeable bar is not only fair, but also overcomes the considerable failings of both the flexible and the absolute bars, and thus best satisfies the fundamental constitutional policy of promoting the useful arts. The foreseeable bar avoids each parade of horribles posited by respective opponents of the flexible bar and the absolute bar, while at the same time advancing the aims of both groups. To begin, application of the foreseeable bar is eminently fair. Where the limiting effect of an amendment with respect to an accused device should have been foreseen by a person reasonably skilled in the art, the law should not permit the patentee to ignore that effect by utilizing the doctrine of equivalents to expand a patent's claims to encompass subject matter that the patentee abandoned during prosecution. Instead, the patentee should be estopped from asserting equivalence. To do otherwise would at best reward bad claim drafting; at worst, it would give patentees perverse incentives to amend their claims freely to secure a patent and then make inconsistent arguments to the courts in infringement cases. On the other hand, where the limiting effect of an amendment's language with respect to an accused device could not have been objectively foreseen at the time of the amendment-perhaps because the significance of the limitation was obfuscated by the "subtlety of language or complexity of the technology, [or a] subsequent change in the state of the art, such as later-developed technology" 8 9-refusing to apply the doctrine of equivalents unfairly deprives the patentee of protection that the Supreme Court has repeatedly deemed essential to a meaningful right of exclusivity under the patent system. To impose a consequence on a patentee based ostensibly on the intent underlying the patentee's actions, but where those actions do not reasonably support any such intent, is the antithesis of fairness. The foreseeable bar also overcomes the substantial failings of the absolute bar. As shown in Part II.C, supra, the absolute bar is unworkable and inimical to innovation because it permits competitors to use subject matter that effectively works a fraud on a patent. Wherever a patentability- based amendment is made to an element of a claim, the absolute bar en-

89. Sage Prods., Inc. v. Devon Indus., 126 F.3d 1420, 1425 (Fed. Cir. 1997). 1070 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 courages competitors to make trivial changes to avoid the patent, and the creation of pioneering innovations is correspondingly discouraged. Under the foreseeable bar, these harsh consequences are largely avoided. The foreseeable bar prohibits use of the doctrine of equivalents only where the objective inference to be drawn from the patentee's acts shows that the equivalent subject matter in the infringing device was in fact abandoned during the patent's prosecution, thus opening the door to competitors' lawful use of that subject matter. The foreseeable bar does not discourage pioneering innovation, and it does not disproportionately encourage trivial changes, because the foreseeable bar permits the doctrine of equivalents to remain available to patentees even if a patent's claims are amended for reasons related to patentability. The only circumstance in which a patentee will be subject to estoppel is where it would be clear to a reasonable patentee that an amendment gives up particular ground. Significantly, the foreseeable bar also permits ready and fair resolution of the effect of after-arising technology. In Festo, Judge Rader's dissent specifically criticized the absolute bar by noting that it permits competitors to "have unfettered license to appropriate all patented technology [that used] out-dated terms" in the face of subsequently developed technology.90 The foreseeable bar permits patent protection when insubstantial changes are made using after-invented technology that could not have been foreseen at the time of an amendment. Further, the foreseeable bar permits patent protection where an accused infringer exploits subtleties of language or the inherent complexity of a technology to avoid the literal language of a patent's claims in a way that could not reasonably have been anticipated when the claim was amended. In those cases too, the foreseeable effect of the limiting language should govern. An example of such a case may be Lockheed Martin Corp. v. Space Systems/Loral, Inc.91 There, the original patent claim involved a method of orienting a satellite using a wheel whose rotation "varied sinusoidally" around an axis as the satellite deviated from an equato- rial orbit.92 In response to prior art rejections, the claim was limited to sinusoidal variations with the same frequency as the orbital frequency of the

90. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 619 (Fed. Cir. 2000) (en banc), cert granted, 121 S.Ct. 2519 (U.S. Jun. 18, 2001) (No. 00- 1543) (Rader, J., concurring in part and dissenting in part) (noting that the terms "cath- ode" and "anode" for vacuum-tube instruments gave way to "collectors" and "emitters" after the invention of the transistor). 91. 249 F.3d 1314 (Fed. Cir. 2001). 92. "Sinusoidal" means in the shape of a sine wave. 2001] FORESEEABILITY IN PATENT LAW 1071 satellite.93 The accused satellite did not literalll infringe because the nature of the variation was not quite sinusoidal. 9 The Federal Circuit held that the patentee could have no range of equivalents for the entire phrase, since the phrase had been changed to add the orbital frequency limitation.95 We think the result in this case would be different under the foreseeable bar. Lockheed could not reasonably have foreseen that an amendment related to orbital frequency would bar it from using the doctrine of equivalents to expand the definition of "sinusoidally," a term that was present in the original patent claim. Lockheed is an example of a case in which the patentee made an amendment intended to disclaim a totally different type of change than the one the defendant made. It seems inequitable to apply the absolute bar to such a case, as the court ultimately did.96 In his partial dissent in Festo, Judge Michel raised concerns that the absolute bar provided a blueprint for lawful copying of patented material.9 7 The foreseeable bar addresses this concern to the extent that the limiting effect of an amendment with respect to an accused device was not foreseeable. Where foreseeability is found, the patentee is deemed to have intended to abandon that particular equivalent, and thus neither patent law nor equity is offended by the competitor's use of the equivalent subject matter or by the application of prosecution history estoppel to the patentee. bar avoids not only the failings of the ab- Importantly, the foreseeable 98 solute bar but also the failings of the flexible bar. As discussed above, the flexible bar is problematic because the public cannot reasonably predict the outcome of its application in a particular case. As a result, the flexible bar discourages incremental innovations in the form of technological improvements. The foreseeable bar eliminates these concerns by eliminating the flexible bar's unbounded and broad-ranging inquiry, and replacing it with a straightforward and measurably more predictable foreseeability test. Returning to the example used by the majority in Festo, where a claim for "less than twenty" is amended to "less than five" in view of prior art disclosing a value of fifteen, the reasonable person skilled in this particular art would readily foresee that equivalency to devices using a value over five was abandoned by the limiting amendment. An objective view of the meaning and effect of the patent language would permit a court to deter-

93. Lockheed Martin, 249 F.3d at 1326. 94. Id. 95. Id. at 1327. 96. Id. 97. 234 F.3d at 616-17 (Michel, J., concurring in part and dissenting in part). 98. See supra Part II.C. 1072 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045 mine, as a matter of law, that prosecution history estoppel barred the patentee's infringement claim against an alleged infringer who used a value of five and a half. Because the foreseeability test is objective-it asks what a reasonable person in the patentee's position would have understood an amendment's language to mean-it does not require proof of the inventor's state of mind. Rather, it draws on concepts with which patent courts are intimately familiar, like what the person having ordinary skill in the art would understand. Because the inquiry is objective and relates to the equitable principle of estoppel, it is just as amenable as the absolute bar to application by a court without the need for a jury trial. The test is necessarily fact- specific, but no more so than many other patent doctrines. It may facilitate appellate courts acting as managers of the law rather than revisitors of fact.99 This is important, since one significant effect of Festo is to shift the1 ° power to decide many patent infringement cases from juries to judges. The foreseeable bar will not undo this shift. By comparison, as the Festo majority complained, the flexible bar calls for a pliable examination of a series of extraneous factors. Under the flexible bar of Hughes, to determine the scope of equivalents remaining after the amendment, a judge must not only consider claim construction, but also the panoply of issues relating to a study of prosecution history, validity in view of the prior art cited and of record, and the totality of the circumstances under which the patentee amended the application. The judge must then formulate that scope of equivalents and then either apply it to the accused device or relate it to a jury through an instruction that, like the claims themselves, may be constrained by the limitations of language in conveying the inventive idea. On appeal, the reviewing court must revisit all of the factors considered below and may well view their totality differently than the trial judge. As a result, in each case the ultimate resolution of the estoppel question will remain uncertain until the appeal is concluded. Under the flexible bar, an inventor wishing to improve a device through a technological innovation that was arguably an equivalent to the

99. See William C. Rooklidge & Mathew F. Weil, JudicialHyperactivity: The Fed- eral Circuit's Discomfort with its Appellate Role, 15 BERKELEY TECH. L.J. 725 (2000) (arguing that the Federal Circuit is insufficiently deferential to district court factfinding). Cf Mark D. Janis, Patent Law in the Age of the Invisible Supreme Court, 2001 U. ILL. L. REv. 387, 408-09 (2001) (suggesting such a role for the Supreme Court in patent cases). 100. This shift in turn is part of a broader trend in patent law towards greater decision-making by judges. See, e.g., Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc). 2001] FORESEEABILITY IN PATENT LAW 1073 amendment's literal language cannot predict whether a court will apply prosecution history estoppel to the patentee or permit a jury trial on equivalence. Lawful innovations may never reach fruition because the uncertainty of the existing patent's scope presents too great a litigation risk. This result is inconsistent with promoting progress, and is unnecessary in light of the more predictable foreseeable bar alternative. Thus, while the foreseeable bar is not a bright-line rule like the absolute bar, it provides a concise test that is both flexible and readily comprehensible to both the public and the courts. The foreseeable bar is therefore more consistent than the flexible bar with the Supreme Court's mandate that prosecution history estoppel be an "objective" inquiry. 101 The foreseeable bar asks the trial judge only whether the limiting effect of an amendment as applied to exclude an accused device from literal infringement was foreseeable at the time of the amendment. Unlike the flexible bar, the foreseeable bar is more focused, restricting the inquiry to a particular limiting effect of particular claim language with respect to a particular accused device. The bases for the trial judge's conclusion can be readily articulated in an opinion, which in turn can be reviewed as a matter of law by an appellate court. Ultimately, the foreseeable bar is more equitable than the absolute bar and more certain than the flexible bar. Thus, as a matter of policy, the foreseeable bar presents the best means of promoting progress of the useful arts. Of course, there will be disputes in particular cases about whether the limiting effect of a particular amendment should have been foreseeable. However, the foreseeable bar is amenable to case-by-case development by the courts to ensure equity and compliance with the purposes of the patent system. In sharp contrast, the bright-line rule of Festo all but forecloses the opportunity for further refinement where its results prove unjust. Simi- larly, despite twenty years of case-by-case development, the flexible bar has remained sufficiently unmoored to firm principles that it has never overcome its unpredictable and inequitable nature. Thus, unlike the absolute and flexible bars, a foreseeable bar would facilitate the capacity of district courts to "best ...implement procedural improvements to promote 10 2 certainty, consistency, and reviewability to this area of the law."

101. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 36 (1997). 102. Id. at 39 n.8. 1074 BERKELEY TECHNOLOGY LAW JOURNAL [Vol. 16:1045

IV. CONCLUSION The courts should interpret the Patent Act to promote the innovation and dissemination of new technologies to the public benefit. With respect to prosecution history estoppel, both the absolute bar and the flexible bar fail to meet this interpretive goal. Unlike the absolute and flexible bars, the proposed foreseeable bar is easily grasped and applied, assures both equity and predictability, and is consistent with patent law policies and case law. It is the best alternative available to the courts to harmonize the conflicting, but critical, policies of protection and notice, and it best promotes both pioneering inventions and technological improvements. EMPIRICAL ANALYSIS OF THE FEDERAL CIRCUIT’S CLAIM CONSTRUCTION TRENDS By Christian A. Chu†

ABSTRACT

As a result of Markman v. Westview Instruments, Inc. and Cybor Corp. v. FAS Technologies, Inc., claim construction is an issue of law reviewed de novo by the Federal Circuit. That approach promised greater certainty and predictability in patent litigation. Yet, criticisms have mounted that patent litigation remains unpredictable, partly because there is no certainty as to claim scope until the Federal Circuit ultimately rules. Unfortunately, these criticisms frequently rely on old statistics or isolated anecdotes. To examine the effects of the de novo review standard, the author conducted an empirical study that systematically examined recent Fed- eral Circuit decisions and applied statistical methods to analyze trends in the court of appeals’ claim construction jurisprudence. This study reveals an increasing trend in claim construction modifications and claim interpretation-based reversals since Cybor Corp.’s reaffirmation of the de novo review standard. Underscoring the effects of the de novo standard, this study further indicates a strong correlation between the type of judgment reviewed by the Federal Circuit and the likelihood of reversal and claim construction modification. This increase in claim construction modification and reversal cannot be solely blamed on the standard of review, since a case’s precedential status or the inclusion of a means-plus- function claim statistically affects its rate of reversal. By contrast, other factors like the particular panel hearing the case or the district from

© 2001 Christian A. Chu. † J.D., 2001, University of California at Berkeley, School of Law (Boalt Hall); B.A., 1997, Harvard University. Mr. Chu is clerking during the 2001-2002 term for the Hon. Marilyn Huff, Chief Judge of the U.S. District Court for the Southern District of Califor- nia. He plans to clerk during the 2002-2003 term for the Hon. Raymond Clevenger III, U.S. Court of Appeals for the Federal Circuit. He is deeply grateful to Professor Mark Lemley for insightful comments on earlier drafts and thoughtful advice during the preparation of this study. He also thanks Kurtis MacFerrin, Timothy Pham, Jennifer Polse, Timothy A. Porter, Frank Porcelli, and Jason Schultz for their editorial suggestions and thoughtful comments on earlier drafts of this article. Mr. Chu emphasizes that the opinions and mistakes in this article are his alone, and do not reflect the views of the judges for whom—or the courts for which—he will be clerking.

which a case is appealed do not appear to influence the outcome of the appeal. Even on appeal and with the de novo standard at its disposition, the Federal Circuit tends to expressly review claim construction less often for invalidity challenges than for infringement appeals. Given these results, the hopes for greater predictability and certainty remain a tantalizing dream.

TABLE OF CONTENTS I. INTRODUCTION ...... 4 II. BACKGROUND ...... 6 A. Patent Litigation before Markman...... 6 B. Markman v. Westview Instruments, Inc...... 7 C. Uncertainties in the Wake of Markman...... 10 D. Cybor Corp. v. FAS Technologies, Inc...... 13 III. METHODOLOGY ...... 17 A. Population ...... 17 B. Data Collected...... 19 C. Use of the Population for Statistical Testing...... 20 D. Limitations of the Study...... 22 IV. RESULTS...... 22 A. Although the Federal Circuit has in the Aggregate Reversed Fewer Cases Based on Claim Construction than before 1998, there is a Trend Showing an Increase in Claim Construction Modification and Claim Interpretation- Based Reversal Since Cybor Corp...... 23 1. Appellate Reversal: All Issues...... 24 2. Appellate Reversal: Claim Construction Issues...... 27 3. Significance...... 33 B. The De novo Standard Could Explain the Relationship between the Type of Judgment Appealed and the Likelihood of Reversal and Claim Construction Modifications by the Federal Circuit ...... 34 1. Appealed Judgments: All Issues...... 35 2. Appealed Judgments: Claim Construction...... 39 3. Implications...... 41 C. The Identity of the Judge Issuing the Written Decision does not Seem to Impact the Likelihood of Reversal or Claim Construction Modification...... 42 1. Impact of Authorship: All Issues ...... 42 2. Impact of Authorship: Claim Construction ...... 47 3. Implications...... 48 D. The Particular Tribunal from which a Case Originates does not Predictably Affect the Outcome of the Appeal ...... 50 1. Reversal Rates: All Issues ...... 50 2. “More Active” Tribunal Reversal Rates: All Issues ...... 53 3. “More Active” Tribunal Reversal Rates: Claim Construction ...... 55 E. The Federal Circuit Reversed and Changed More Claim Constructions in Precedential Decisions than in Nonprecedential Cases ...... 57 1. Precedential Decisions and Reversal Rates: All Issues ...... 58 2. Precedential Decisions and Reversal Rates: Claim Construction ...... 59

F. The Inclusion of a Means-Plus-Function Issue Affects the Likelihood of Reversal and Claim Construction Modifications...... 61 1. Means-Plus-Function Claims and Reversal: All Issues ...... 61 2. Means-Plus-Function Claims and Reversal: Claim Construction ...... 62 3. Implications...... 63 G. Although the Federal Circuit Expressly Construes Claims in Most Infringement Cases, it does not do so for a Substantial Proportion of Invalidity Reviews...... 66 1. Frequency of Claim Construction Reviews: All Issues ...... 67 2. Frequency of Claim Construction Reviews: Invalidity v. Infringement .. 71 V. CONCLUSION...... 73 VI. APPENDIX A: EXTRAPOLATING A MORE COMPLETE PICTURE OF CLAIM CONSTRUCTION-BASED REVERSALS BY INCLUDING SUMMARY AFFIRMANCES IN THE ANALYSIS ...... 74 VII. APPENDIX B: TABLES & DATA...... 78 1. Table A-1: Rate of Case Disposition Over Time...... 78 2. Table A-2: Rate of Change in Claim Construction ...... 80 3. Table A-3: Rate of Claim Elements Interpretation Changed Per Month ...... 81 4. Table B-1: Types of Judgment Appealed to the Federal Circuit (excluding summary affirmances) ...... 82 5. Table B-2: Disposition of Certain Types of Judgments Being Appealed...... 82 6. Table B-3: Percentage of Change in Claim Construction by Type of Judgment Reviewed...... 83 7. Table C-1: Number of Cases Authored Per Judge, and Percentage of Claim Construction Changes & Reversals Per Authoring Judge ...... 84 8. Table C-2: Disposition of Cases Per Authoring Judge ...... 85 9. Table C-3: Number of Dissenting Cases Per Judge...... 85 10. Table D-1: Number of Cases Appealed Per District Court...... 86 11. Table D-2: Reversal Rate in the “More Active” and “Less Active” Tribunals ...... 88 12. Table D-3: Reversal Rate in the “More Active” Lower Tribunals ...... 88 13. Table D-4: Percentage of Claim Construction Changes and Related Reversal in Appeals from the “Most Active” Lower Tribunals...... 89 14. Table E-1: Disposition of Cases Per Precedential Status of Case...... 89 15. Table E-2: Rate of Claim Construction Changes & Related Reversal Based on the Precedential Status of Decision...... 90 16. Table F-1: Disposition of Case Based on whether it Contains a Means-Plus-Function Claim ...... 90 17. Table F-2: Percentage of Claim Construction Changes Based on whether Case Contained a Means-Plus-Function Claim...... 91 18. Table G-1: Frequency of Claim Construction...... 91 19. Table G-2: Frequency of Issues Considered on Appeal...... 92 20. Table G-3: Percentage of Claim Construction Changes based on Frequency of Issues...... 92 21. Table App-1: Rate of Claim Construction-Based Reversals, Including ALL Summary Affirmances...... 93 22. Table App-2: Rate of Change in Claim Construction, Including Summary Affirmances ...... 94

I. INTRODUCTION

The object of our study, then, is prediction, the prediction of the incidence of the public force through the instrumentality of the courts . . . . The primary rights and duties with which jurisprudence busies itself again are nothing but prophecies.1 Patents have become staples of modern commercial endeavors. Yet, asserting patent rights involves significant risk and uncertainty. Despite the substantial cost of patent litigation,2 the parties and their attorneys often choose litigation rather than settlement because they cannot accurately assess their rights and obligations under the patent-in-suit.3 In Markman v. Westview Instruments, Inc.,4 the Court of Appeals for the Federal Circuit (“Federal Circuit”) tackled a portion of this unpredictability problem by transferring responsibility for claim construction from the jury to the trial judge.5 The Markman approach promised greater reli- ability, certainty, and predictability.6 In the views of some judges and commentators, the Federal Circuit subsequently weakened Markman’s promises when it reaffirmed its power to review claim construction de novo.7 Since then, criticisms have mounted that patent litigation remains as unpredictable as before Mark-

1. THE HONORABLE OLIVER WENDELL HOLMES, THE PATH OF THE LAW (1897), reprinted in 78 B.U. L. REV. 699, 699 (1998). 2. See Josh Lerner, Patenting in the Shadow of Competitors, 38 J.L. & ECON. 463, 470-71 (1995) (discussing the costs of patent litigations). 3. See Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1475 n.15 (Fed. Cir. 1998) (en banc) (Rader, J., dissenting) (“Three variables affect the settlement calculus of each party to litigation: p, the probability of the plaintiff obtaining damages; J, the expected value of a judgment for the plaintiff; and c, the cost of litigation. See RICHARD A. POSNER, THE FEDERAL COURTS: CHALLENGE AND REFORM 89-94 (1996). If p x J (pJ) exceeds c, then plaintiff will sue. The plaintiff values the case at pJ - c. If the defendant agrees on the values assigned to the variables, the suit will cost him pJ - c. This rough model poses an interesting question. Because the costs of litigation invariably exceed the costs of settlement, why do not all cases settle? Chief Judge Posner answers: “Uncertainty as to outcome is the key to the settlement rate . . . .” Id. at 90. This uncertainty leads each party to overestimate its chance of prevailing. Accordingly, each party will assign different values to the variables, most notably p, thereby diminishing the likelihood of settlement.” 4. 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996). 5. Id. at 979. 6. See infra note 39 and accompanying text. 7. See Cybor Corp., 138 F.3d at 1476 (Rader, J., dissenting); Luke L. Dauchot, The Federal Circuit’s De Novo Review of Patent Claim Construction: A Need for a More Balanced Approach, 18 INTELL. PROP. L. NEWSL. 1 (1999).

man, partly because there is no certainty as to the scope of the claims until the Federal Circuit ultimately rules.8 These criticisms of Markman often stand on a shaky foundation of old statistics or isolated anecdotes. To provide more tangible evidence on this issue, the present empirical study systematically examined recent Federal Circuit decisions as they relate to claim constructions, and applied statistical methods to analyze trends in the court of appeals’ claim construction jurisprudence. Part II discusses the issues and cases leading to the Federal Circuit’s decision in Cybor Corp. v. FAS Technologies, Inc. Part III describes the methodology used in this study’s analysis. Part IV provides the results from such analysis, and discusses the implications of these results. Specifically, Part IV.A shows an increasing trend in claim construction modifications and claim interpretation-based reversals since Cybor Corp. Part IV.B indicates a strong correlation between the type of judgment reviewed by the Federal Circuit and the likelihood of reversal and claim construction modification. Part IV.C examines the panel-dependency hypothesis and shows that the identity of the Federal Circuit judge who authors the majority decision does not appear to influence the outcome of the appeal. Part IV.D demonstrates that, although the Federal Circuit tended to reverse fewer cases appealed from districts with larger patent dockets during the time covered by this study, there is no conclusive link between the particular tribunal from which a case originates and the likelihood of reversal or claim construction modification. Part IV.E demonstrates that the precedential status of a case correlates with the probability of reversal and claim construction modification. Part IV.F suggests that cases requiring a review of means-plus-function claims have a higher probability of reversal and claim modification. Finally, Part IV.G indicates that, contrary to its precedent, the Federal Circuit tends to expressly review claim construction less often for invalidity challenges than for infringement appeals.

8. See Ted D. Lee & Michelle Evans, The Charade: Trying a Patent Case to All “Three”Juries, 8 TEX. INTELL. PROP. L.J. 1, 11-20 (1999) (arguing that, while trying his case to the traditional jury and the judge, a patent litigator must also prepare the record for appeal because the Federal Circuit “became a second jury by substituting its opinion for the jury verdict.”); Douglas D. Salyers, The Paper Side of Jury Litigation in Patent Cases—Don’t Become Just Another Statistic in The Federal Circuit, 572 PLI/PAT 557, 566-88 (1999) (discussing the possible errors in trying patent cases, including the uncertainty of claim construction).

II. BACKGROUND

[I]n societies like ours the command of the public force is in- trusted to the judges in certain cases, and the whole power of the state will be put forth, if necessary, to carry out their judgments and decrees. People want to know under what circumstances and how far they will run the risk of coming against what is so much stronger than themselves, and hence it becomes a business to find out when this danger is to be feared.9

A. Patent Litigation before Markman Before 1982, the federal judiciary’s inability to adjudicate patent law issues in a consistent manner begat uncertainty and led parties to expensive forum-shopping among the regional circuits.10 To remedy this problem, Congress created the Federal Circuit and transferred exclusive appellate jurisdiction over patent cases to the new court.11 Since its inception, the Federal Circuit has worked to fulfill its mandate to unify and clarify patent law.12 Yet, by the early 1990’s, the Federal Circuit continued to struggle with the unpredictability that often characterized patent litigation.13 The commentators and Federal Circuit judges alike often attributed the uncertainty problem to the trial courts’ failure to properly define the scope of the patent claims in jury trials. As Judge Michel explained:

In the jury verdict appeals I have reviewed, I cannot recall even one in which the trial judge defined the literal scope of the claim for the jury in clear, comprehensive, and mandatory instructions, despite the fact that this seems to be the duty strongly implied in

9. HOLMES, supra note 1, at 699. 10. COMMISION ON REVISION OF THE FEDERAL COURT APPELLATE SYSTEM, STRUC- TURE AND INTERNAL PROCEDURES: RECOMMENDATIONS FOR CHANGE at 5-8, 15 (1975), reprinted in 67 F.R.D. 195, 209-12, 220 (1975). 11. See Federal Courts Improvement Act of 1982, Pub. L. 97-164, 96 Stat. 25 (1982) (codified at 28 U.S.C. § 1295(a)(1)(1994)); see also H. R. REP. No. 97-312, at 22- 23 (1981) (“A single court of appeals for patent cases will promote certainty where it is lacking to a significant degree and will reduce, if not eliminate, the forum-shopping that now occurs.”). 12. See Martin J. Adelman, The New World of Patents Created by the Court of Ap- peals for the Federal Circuit, 20 U. MICH. J.L. REFORM. 979, 987-88 (1987). 13. The Honorable Paul R. Michel, The Challenge Ahead: Increasing Predictability in Federal Circuit Jurisprudence for the New Century, 43 AM. U. L. REV. 1231, 1232-45 (1994).

our precedent. Instead, judges routinely delegate the tasks of claim construction, as well as infringement findings, to the jury. . . . When the court delegates both construction and infringement to the jury’s discretion, the jury is free to do almost anything it wishes.14 This uncertainty led to predictions of dire consequences. Uncertain litigation outcomes could inhibit the disclosure of inventions in public patent documents or the filing of patent applications in the first instance.15 Similarly, competitors uncertain about their potential liability may opt not to market new products.16 In both cases, the public ultimately would be harmed by the lack of predictability.17 The uncertainty problem had to be addressed. B. Markman v. Westview Instruments, Inc. In Markman v. Westview Instruments, Inc. (“Markman I”),18 the Fed- eral Circuit seized the opportunity to resolve inconsistency in its precedent and foster predictability in patent law by making the construction of patent claims a question of law to be decided by a judge.19 In the majority opinion, the Federal Circuit provided three reasons for that holding. First, because the construction of written instruments lies within the exclusive province of the court, a patent’s scope and meaning is uniquely suited for determination by a judge rather than a jury.20 Second, because a patent’s scope can have serious consequences in infringement suits, the judge stands as the superior actor to determine the scope of the rights granted by the government in the form of a patent.21 Third, a patentee’s competitors should be able to ascertain the scope of the patent claims with a reasonable degree of certainty.22 With the aid of established rules of construction, competitors should be able to understand the scope of a patent claim by analyzing the patent

14. Id. at 1238-39 (footnotes omitted). 15. Id. at 1241. 16. Id. 17. Id. at 1242. 18. 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996). 19. Id. at 979 (“We therefore settle inconsistencies in our precedent and hold that in a case tried to a jury, the court has the power and obligation to construe as a matter of law the meaning of language used in the patent claim.”). 20. Id. at 978. 21. Id. 22. Id.

and its prosecution history.23 Judges trained in the law should reach similar results when applying the same established rules of construction.24 More importantly, because the courts would construe the claims as a matter of law, those interpretations would be reviewable de novo by the Fed- eral Circuit.25 Therefore, the Federal Circuit held that “the court has the power and obligation to construe as a matter of law the meaning of language used in the patent claim.”26 The accompanying concurring and dissenting opinions sharply criticized the Markman I majority. Judge Mayer warned that the decision was tantamount to ejecting juries from infringement cases, since deciding the scope of the patent claims often disposed of the litigation.27 From his perspective, the majority opinion directly violated the Seventh Amendment.28 Echoing Judge Mayer’s argument, Judge Newman argued that jury trial was crucial in patent infringement cases because of their intensive factual basis.29 By eliminating juries from infringement cases, the majority had imposed new and uncertain procedures on trial judges.30 Sounding a dire warning for the judicial system, the dissent thus cautioned appellate courts against the temptation to redefine questions of fact into questions of law as a means to impose the court’s policy view.31 On appeal in Markman II,32 the Supreme Court unanimously held that the construction of a patent, including terms of art within a claim, resided exclusively within the province of the court.33 After employing its traditional Seventh Amendment test with no clear result,34 the Supreme Court relied on policy arguments of uniformity and predictability to support the

23. Id. at 978-79. 24. Id. 25. Id. (“Because claim construction is a matter of law, the construction given the claims is reviewed de novo on appeal.”). 26. Id. 27. Id. at 991-992 (Mayer, J., concurring). 28. Id. at 992-996 (Mayer, J., concurring). 29. Id. at 999 (Newman, J., dissenting). 30. Id. 31. Id. at 1008. 32. Markman v. Westview Instruments, Inc., 517 U.S. 370 (1996) [hereinafter “Markman II”]. 33. Id. at 391. The issue on appeal was “whether the interpretation of a so-called patent claim . . . is a matter of law reserved entirely for the court, or subject to a Seventh Amendment guarantee that a jury will determine the meaning of any disputed term of art about which expert testimony is offered.” Id. at 372. 34. Id. at 376-78.

view that claim construction was a matter of law.35 Although not expressly adopting the arguments advanced by the Federal Circuit majority, the Court concluded that a judge was the superior judicial actor because of his training in the exegesis of written instruments and because such trained ability took priority over the need for community standards and factual findings provided by juries.36 More importantly, the Court emphasized the need for uniformity and predictability in patent cases, indicating that juries would inject too much uncertainty in the patent infringement process.37 Although it found that claim construction was an issue of law reserved for judges, the Supreme Court did not decide which standard of review would apply in appeals of patent infringement cases.38 In the wake of Markman II, some commentators have extolled the policies underlying the decision. In the words of one commentator:

The Supreme Court and Federal Circuit majority opinions in Markman indicate that uniformity of interpretation and the need for competitors [sic] to understand the scope of a patent are valid policy reasons for allocating claim construction to judges. The Markman decision, which is based in part on those policies, is likely to make the scope of patent claims more predictable. As a result of Markman, when patent attorneys and their clients consider the patents of other parties, they will be able to rely upon the patent and its prosecution file history to construe patent claims with greater assurance that, if litigation occurs, the claims will not be interpreted in a different way because of expert testimony or confusion of a jury.39 Thus, Markman II promised a more uniform and predictable patent world. In that world, competitors could properly assess the scope of a patent and adjust their business plans accordingly, district courts would act predictably according to strict guidelines, and a single court of appeals would ensure consistency in claim interpretations. But, that world was not yet meant to be.

35. Id. at 384-91. 36. Id. at 388-90. 37. Id. at 390-91. 38. See generally Markman II, 517 U.S. at 376-91. 39. John B. Pegram, Markman and its Implications, 78 J. PAT. & TRADEMARK OFF. SOC’Y 560, 565 (1996).

C. Uncertainties in the Wake of Markman In the wake of Markman II, the Federal Circuit quickly asserted its authority to review claim interpretations de novo.40 As the court stated, its law required “independent determination of the construction of the claims, as a matter of law, unencumbered by the trial process.”41 Thus, the Federal Circuit generally reviewed claim constructions appeals under the de novo standard, doing so independently and without deference to the trial judge’s determination.42 Beneath that veneer of authority grew the seeds of discontent, as some judges interpreted Markman II differently.43 The first disagreement appeared in Metaullics Systems Co. v. Cooper, where a Federal Circuit panel dismissed an appeal based on a district court’s denial of a preliminary injunction because the record relevant to claim interpretation was not fully developed.44 Ignoring the de novo review standard espoused in Markman I, the majority, composed of Judges Mayer and Rader, deferred to the trial court’s claim interpretation by applying the “clearly erroneous” review standard.45 In his dissent, Judge Lourie reminded the majority that the en banc ruling in Markman I subjected claim interpretation to a de novo standard of review and that Federal Circuit law precluded a merits panel from modifying the settled law.46

40. See, e.g.,Tanabe Seiyaku Co. v. Int’l Trade Comm’n, 109 F.3d 726, 731 (Fed. Cir. 1997) (“The proper construction of a claim . . . is solely a matter of law, over which on appeal we exercise complete and independent review.”); Minco, Inc. v. Combustion Eng’g, Inc., 95 F.3d 1109, 1115 (Fed. Cir. 1996) (stating that “[t]his court reviews without deference the district court’s conclusion that the reexamined claims remained identical in scope.”). 41. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 72 F.3d 857, 863 (Fed. Cir. 1995), vacated and remanded on other grounds, 520 U.S. 1111 (1997). 42. E.g., Alpex Computer Corp. v. Nintendo Co., 102 F.3d 1214, 1218 (Fed. Cir. 1996); Insituform Techs., Inc. v. Cat Contracting, Inc., 99 F.3d 1098, 1105 (Fed. Cir. 1996); Gen. Am. Transp.Corp. v. Cyro-Trans, Inc., 93 F.3d 766, 769 (Fed. Cir. 1996). 43. See Donald R. Dunner & Howard A. Kwon, Cybor Corp. v. FAS Technologies: The Final Say on Appellate Review of Claim Construction?, 80 J. PAT. & TRADEMARK OFF. SOC’Y 481, 484 (1998). 44. 100 F.3d 938, 939 (Fed. Cir. 1996). 45. Id. (“[W]e may be required to defer to a trial court’s factual findings. Where a district court makes findings of fact as a part of claim construction, we may not set them aside absent clear error.”). 46. Id. at 940 (Lourie, J., dissenting in part) (arguing that “the analyses and holdings of our in banc court might preclude a subsequent panel before which the issue properly is raised from holding that fact questions exist in claim construction that require deference to the district court”).

The internal disagreement over the standard of review authorized in Markman II intensified in subsequent cases. Advocating appellate restraint, Judge Rader’s dissent in J.T. Eaton & Co. v. Atlantic Paste & Glue Co.47 strongly objected to the court’s de novo approach:

This decision stands as a monument at the troubled intersection between legal and factual analyses in this court’s post-Markman jurisprudence. That claims must be construed by the court does not divorce the interpretive process from a host of inherently factual subsidiary matters, such as how one skilled in the art would understand claim terms and prosecution history statements. . . . This court’s role in reviewing claim meanings discerned by the district courts calls for modesty and restraint—born not of timid- ity, but of recognition of the limits inherent in appellate review. When an appellate court arrives at a novel claim interpretation after nearly twenty years of prosecution and litigation, it is in- adequately equipped to test its new and unprecedented reading against the views of those skilled in the art. I believe the court today has overstepped the boundaries of effective appellate review.48 Putting this vision of appellate restraint to practice, Judge Rader— joined by Judge Mayer—deferred to the trial court’s consideration of extrinsic evidence in construing the patent claims at issue in Eastman Kodak Co. v. Goodyear Tire & Rubber Co.49 The Eastman Kodak dissent accused the majority of quoting Markman II out of context and deplored the majority’s misapplication of the law.50 Echoing Judge Rader in Eastman Kodak,

47. 106 F.3d 1563 (Fed. Cir. 1997). 48. Id. at 1577 (Rader, J., dissenting) (citations omitted). 49. 114 F.3d 1547 (Fed. Cir. 1997). The court found that: Upon review of the entire record, and recognizing both the trial court’s “trained ability to evaluate [expert] testimony in relation to the overall structure of the patent” and the trial court’s “better position to ascertain whether an expert’s proposed definition fully comports with the specification and claims,” this court sustains the trial court’s claim interpretation. Id. at 1555-56 (quoting Markman II, 517 U.S. at 390) (brackets in original). 50. Id. at 1563. In his partial dissent, Judge Lourie noted: As the majority opinion states, quoting from the Supreme Court’s Markman opinion, this interpretation is based upon “the trial court’s ‘trained ability to evaluate [expert] testimony’ . . . and . . . ‘better position to ascertain whether an expert’s proposed definition fully comports with the specification and claims.’” This language, while directed to the differences between judge and jury in Markman, is inapplicable here

Judge Mayer’s concurrence in Serrano v. Telular Corp.51 stressed that the court of appeal should give due deference to the trial court’s factual findings in claim interpretation.52 The situation escalated soon afterward. Dissenting from a denial of a petition for en banc rehearing in CVI/Beta Ventures, Inc. v. Tura LP,53 Judge Mayer emphasized that by not adopting the opinion in Markman I54 the Supreme Court did not indicate that the Federal Circuit could review a district court’s claim construction factual findings de novo.55 In other

because the trial court’s “trained ability” and “better position” to evaluate witnesses are irrelevant when reading the specification is what counts. The appellate court is equally well situated to read the specification. Id. (Lourie, J., dissenting in part) (quoting Markman II, 517 U.S. at 390) (brackets in original). 51. 111 F.3d 1578 (Fed. Cir. 1997). 52. Id. at 1586. Judge Mayer noted: According to the Supreme Court, claim construction is a matter for the judge, and not the jury. . . . As such, if the claim construction does not require the resolution of disputed material facts, it may be treated as a matter of law and so reviewed by this court. However, where material facts are disputed, claim construction requires resolution of both questions of fact and questions of law, . . . and this court may be required to give due deference to the trial court’s factual findings. Id. (Mayer, J., concurring) (citations omitted). 53. 112 F.3d 1146 (Fed. Cir. 1997), reh’g denied, 120 F.3d 1260, 1261 (Fed. Cir. 1997). 54. Although the Supreme Court affirmed the Federal Circuit’s judgment, it did not adopt the Federal Circuit’s reasoning or opinion. See Markman II, 517 U.S. at 370. 55. CVI/Beta Ventures, 120 F.3d at 1261. In his dissent, Judge Mayer noted: In affirming the judgment of infringement in Markman v. Westview In- struments, Inc., the Supreme Court chose not to reaffirm this court’s majority opinion. Instead, it divided the responsibilities for claim construction between actors according to well-established principles. The Court gave the trial judge the task of interpreting the scope of the patent by examining the claims, the specification, the prosecution history, and extrinsic evidence. To the trial level fact finder, the Supreme Court left the task of evaluating extrinsic evidence to determine the scope and content of prior art and what a claim term would mean to one of ordinary skill in that art. To the appellate court, the Court allocated a much narrower task, reviewing the district court’s claim construction. The Supreme Court in no way suggested that, where the district court found facts about the prior art or the skill and understanding of an artisan, the appellate panel could disregard these findings upon de novo review. In- stead it called for the trial court and the appellate court each to work within its own field of expertise and with its own procedures. Id. (Mayer, J., dissenting) (citations omitted).

words, he argued that factual findings underlying a question of law should receive their proper measure of deference.56 According to him, “[s]ave to augment the power of our court, no rational basis exists to deviate from every other area of appellate review, in which we examine the factual findings of a district court only for clear error.”57 Judge Mayer’s subsequent concurrence in Fromson v. Anitec Printing Plates, Inc.58 went a step further by asserting that the panel had affirmed the district court’s claim interpretation under the clear error standard of review.59 As he clarified:

This case could readily and probably would have come out differently if we were free, as some of our cases suggest, to decide the issue anew as a matter purely of law. The court’s opinion, which I fully join, demonstrates that the surest way to maintain consistency and certainty in patent cases is for us to rely on the trial court’s fact finding expertise and the record it makes and considers. We do a disservice if we go off on a definitional in- quest of our own.60 The seeds of discontent had indeed bloomed. D. Cybor Corp. v. FAS Technologies, Inc. To resolve the conflict in its precedent regarding the standard of appellate review applicable to claim construction,61 the Federal Circuit, acting sua sponte, ordered an en banc rehearing in Cybor Corp. v. FAS Techs.,

56. Id. at 1262. Judge Mayer also noted: Between the two, where we must review determinations of law that are informed by the resolution of factual disputes, we must separate the two and give each its proper measure of respect. When we do otherwise, we deviate from the proper, normal and accepted order of our judicial duties, we are not consonant with logic, circumstance, known fact and other standards, our actions are improper, and if these were but guidelines instead of binding rules, we would be breaching etiquette and decorum. Id. (footnotes omitted). 57. Id. 58. 132 F.3d 1437, 1447 (Fed. Cir. 1997). 59. Id. at 1448 (affirming “as a matter of law based on the facts he found from conflicting evidence, which are not clearly erroneous”). 60. Id. 61. As discussed in Part II.C supra, the conflict focused on the use of the clearly erroneous standard by some panels of the Federal Circuit, despite the adoption of the “de novo” standard in Markman I. See supra notes 45-46 and accompanying text.

Inc.62 Writing for the majority, Judge Archer reaffirmed that the Federal Circuit would review claim construction de novo.63 The majority supported its decision by explaining that the Supreme Court in Markman II left undisturbed the Markman I holding that claim construction would be reviewed de novo on appeal.64 As it explained, “the Supreme Court endorsed this court’s role in providing national uniformity to the construction of a patent claim, a role that would be impeded if we were bound to give deference to a trial judge’s asserted factual determinations incident to claim construction.”65 Therefore, the majority explicitly overruled post- Markman II opinions that granted deference to the lower court’s claim interpretation.66 This decision prompted a plethora of concurring and dissenting opinions. In his concurrence, Judge Plager claimed that the en banc decision merely put to rest any remaining doubts about the proper standard of review for claim construction.67 Optimistically, he explained that Cybor

62. 138 F.3d 1448, 1451 (Fed. Cir. 1998) (en banc). Commentators have speculated that this extraordinary action was “likely prompted by an opinion circulated internally by the original Cybor panel that supported, and possibly expanded on, the views previously set forth by Judges Mayer and Rader on the deference due in reviewing a trial court’s claim construction.” Dunner & Kwon, supra note 43 at 490. 63. Cybor Corp., 138 F.3d at 1451. The majority found: We affirm the district court’s judgment in its entirety. In so doing, we conclude that the Supreme Court’s unanimous affirmance in Markman v. Westview Instruments, Inc., of our in banc judgment in that case fully supports our conclusion that claim construction, as a purely legal issue, is subject to de novo review on appeal. Id. (citations omitted). 64. Id. at 1455-56. 65. Id. at 1455. 66. Id. at 1456. The majority held: Thus, we conclude that the standard of review in Markman I, as discussed above, was not changed by the Supreme Court’s decision in Markman II, and we therefore reaffirm that, as a purely legal question, we review claim construction de novo on appeal including any allegedly fact-based questions relating to claim construction. Accordingly, we today disavow any language in previous opinions of this court that holds, purports to hold, states, or suggests anything to the contrary. Id. (citations omitted). 67. Id. at 1462. Judge Plager noted: This otherwise unremarkable case was taken in banc for the sole purpose of laying to rest any residual doubts about how, in claim construction, the verbalizations surrounding the familiar “fact-law” dichotomy should be understood. I join the court’s opinion and judgment, elimi-

Corp. would bring further simplicity, clarity, and predictability to the patent litigation process:

The decision today should help institute a simplified and clarified method by which both trial and appellate courts address claim construction issues, pursuant to the rules established in this court’s Markman I opinion. Our purpose is to improve the process of patent infringement litigation for the benefit of patentees and their competitors, and ultimately the public. Whether this approach to patent litigation will in the long run prove beneficial remains to be seen. There is every reason to believe it will, and certainly to believe it is better than what we had.68 Also concurring, Judge Bryson tried to reassure litigants that the Fed- eral Circuit would not disregard the work of the lower court.69 Although Judge Mayer filed an opinion concurring in the judgment, he sharply dis- sented with the majority’s reasoning and accused it of profoundly misap- prehending Markman II.70 He joined Judge Newman’s dissent in blaming the de novo standard for the failure of Markman I to bring uniformity and stability to the application of patent law.71

nating the unnecessary obfuscation that seems to have emerged since our decision in Markman v. Westview Instruments, Inc. Id. (Plager, J., concurring) (citations omitted). 68. Id. at 1463. 69. Id. Judge Bryson noted: I think it important to note that our adoption of the rule that claim construction is an issue of law does not mean that we intend to disregard the work done by district courts in claim construction or that we will give no weight to a district court’s conclusion as to claim construction, no matter how the court may have reached that conclusion. Id. (Bryson, J., concurring). 70. Id. (Mayer, J., concurring in the judgment) (“I respectfully disagree with the opinion because it profoundly misapprehends Markman v. Westview Instruments, Inc.”). 71. Judge Newman noted: As this case illustrates, perfection is elusive in the aftermath of the Fed- eral Circuit’s decision in Markman v. Westview Instruments, Inc. The expectation of greater stability in the application of patent law—thus enhancing consistency in result, reducing the cost of litigation, and indeed reducing litigation by diminishing the uncertainties of jury trials— has not been well achieved. Most of the shortfalls between expectation and reality arise from the manner of implementation of our de novo authority for claim interpretation. Id. at 1478-79 (Newman, J., dissenting) (citations omitted). Judge Newman’s dissent went on to state: The second area of disappointed expectations has flowed from the un- expectedly creative de novo claim interpretations that the Federal Cir-

Echoing Judges Newman and Mayer, Judge Rader filed a dissenting opinion in which he expressed practical concerns regarding the adverse impact of the majority’s opinion on patent litigation.72 In particular, he argued that Cybor Corp. would defeat the policy underlying Markman I and diminish the role of the trial judge in construing claims because no certainty would exist until the Federal Circuit had spoken on a particular patent.73 Judge Rader supported his views with specific statistics:

The problem with this plan was in its implementation because as a question of law, claim interpretation is subject to free review by the appellate court. The Federal Circuit, according to its own official 1997 statistics, reversed in whole or in part 53% of the cases from district courts (27% fully reversed; 26% reversed-in- part). Granted this figure deals with all issues in cases with many issues. Nonetheless, one study shows that the plenary standard of review has produced reversal, in whole or in part, of almost 40% of all claim constructions since Markman I.74 He explained the nature of the “study” in a related footnote:

This figure is based on a survey of every patent decision rendered by the Court of Appeals for the Federal Circuit between 5 April 1995 (the date Markman I was decided) and 24 November

cuit has issued in a few cases. This unpredictability in administration of the law of patent claiming has added a sporting element to our bench. It has not only released appellants’ imaginations on appeal, but it will surely add complexity to future trials, as lawyers attempt to guard against the judicial imagination. Id. at 1479. 72. Id. at 1473-78 (Rader, J., dissenting). 73. Id. at 1476. Judge Rader remarked: [T]he current Markman I regime means that the trial court’s early claim interpretation provides no early certainty at all, but only opens the bidding. The meaning of a claim is not certain (and the parties are not prepared to settle) until nearly the last step in the process—decision by the Court of Appeals for the Federal Circuit. To get a certain claim interpretation, parties must go past the district court’s Markman I proceeding, past the entirety of discovery, past the entire trial on the merits, past post trial motions, past briefing and argument to the Federal Cir- cuit—indeed past every step in the entire course of federal litigation, except Supreme Court review. In implementation, a de novo review of claim interpretations has postponed the point of certainty to the end of the litigation process, at which point, of course, every outcome is certain anyway. Id. 74. Id.

1997. A total of 246 patent cases, originating in the Board of Patent Appeals and Interferences (BPAI), the district courts, and the Court of Federal Claims, were evaluated. Of the 246 cases, 141 cases expressly reviewed claim construction issues. Among these 141 decisions, this court reversed, in whole or in part, 54 or 38.3% of all claim constructions. With respect to the district court and Court of Federal Claims cases, the rate of reversal of claim constructions is 47 out of 126 or 37.3%.75 As these figures suggest, Markman I replaced the uncertainties of jury trials with greater judicial ambiguity as patent cases failed to reach resolution until the Federal Circuit finally ruled on the matter. Given the contrary predictions advanced by Judges Plager and Rader, it is unclear what effect, if any, Cybor Corp. has had on the patent litigation process. To ascertain the aftermath of this momentous decision, Part IV of the present study independently assesses the Federal Circuit’s claim construction trends in the approximate two years following Cybor Corp.

III. METHODOLOGY

For the rational study of the law the black-letter man may be the man of the present, but the man of the future is the man of statistics and the master of economics.76

A. Population Because of the inherent constraints in using a grouping of cases in a sample study,77 this study adopted the methodology of a previous empiri-

75. Id. at 1476 n.16. It is important to note that the 141 cases involving an express review of claim construction issues did not include summary affirmances under FED. CIR. R. 36. Because the exclusion of those summary affirmances influences the final outcome of many analyses as shown in Part IV infra, this study has done its best to analyze data— whenever possible—with and without summary affirmances. 76. HOLMES, supra note 1, at 708. 77. John R. Allison & Mark A. Lemley, Empirical Evidence on the Validity of Liti- gated Patents, 26 AIPLA Q.J. 185 (1998). Allison and Lemley note: [W]hen using reported cases as data sources, there are intractable problems with treating the grouping of cases as a representative random sample, regardless of how carefully one has defined the grouping. Al- though it is self-evident that any grouping of cases represents a subset of something larger, i.e., a population of something, it is practically impossible to assure that the grouping is a representative sample, much less a random one.

cal analysis conducted by John Allison and Mark Lemley.78 Thus, this is a population study rather than a sampling study.79 The defined population includes all patent decisions that the Federal Circuit filed between January 1, 1998, and April 30, 2000, and that were available in the “US Court of Appeals Cases - Federal Circuit” LEXIS database.80 The defined population thus contains 502 patent decisions and includes both written opinions and Federal Circuit Rule 36 summary affirmances.81 Differently from the more selective process adopted by Alli- son and Lemley,82 this study includes all cases that fall within the above parameters. Hence, the decisions included in the studied population cover all patent issues, including infringement, validity and inequitable conduct.83 In addition to district court appeals, the population contains appeals from the Board of Patent Appeals & Interferences (“BPAI”) and the Inter- national Trade Commission (“ITC”).84 Finally, the population is defined in

Id. At 194 n.20. 78. See id. at 194-97. 79. In a sampling study, one attempts to extrapolate the characteristics of a very large population by taking representative samples of the population and applying statistical analyses to that sample. For instance, if a population were 10,000 cases, one may take a random sample of 500 cases and analyze that sample to determine the trends in the population. In contrast, a population study avoids the uncertainty and margin of error inherent in any attempt to extrapolate the characteristics of a population through sampling. A population study selects the general parameters of a well-defined and circum- spect population, and includes every case within that definition. See id. at 194 n.20 (explaining the advantages of a population study over a sampling study in analyzing legal cases). 80. This study assumes that the “US Court of Appeals Cases - Federal Circuit” database on the online LEXIS service contains all decisions filed within that time period (including written opinions and summary affirmance orders). The database description states that it covers and includes all Federal Circuit cases since October 1982. 81. A search in the LEXIS database within these given dates resulted in all Federal Circuit opinions filed within that time period, including patent cases, merit protection board reviews, veteran affairs issues, and government contract disputes. This author reviewed each of these cases to screen patent cases from non-patent cases for inclusion in this study’s population. 82. For comparison purposes, Allison and Lemley excluded from their population decisions on issues such as unenforceability due to misuse, inequitable conduct, estoppel, or the like. 83. This inclusive approach is particularly important for the analysis and discussion presented in Part IV.G infra. 84. It is true that the proceedings in these agencies are procedurally different from litigations in district courts. Allison and Lemley, supra note 77, at 195 n.23-24. Their inclusion in the analysis is, however, essential to obtain a complete perspective of the Federal Circuit’s practices. In any event, the number of these decisions in the studied population is relatively small.

terms of individual decisions, not cases or patents.85 Therefore, the study population included all decisions relating to a particular case—even when there was more than one decision in a particular case86—as long as those decisions fell within the parameters described above. B. Data Collected This study collected the following data, to the extent that the information was relevant and discernable from the court’s opinion:87

Case Data. Case name, docket number, filing date of decision, tribunal or agency appealed from, judgment/order being appealed,88 case disposition,89 precedential status.90

Judge Data. Judges on panel, author of the opinion, author of concurring or dissenting opinions. Claim Construction. Number of claims addressed and/or construed, all claims issues addressed,91 other issues addressed by

85. This definition differs from Allison and Lemley’s definition of their population in terms of individual patents, rather than cases or decisions. See id. at 196. The choice of definition necessarily reflects the focus of an empirical study. Allison & Lemley focused on the ultimate validity of a particular patent, while the current study attempts to understand the Federal Circuit’s practices and trends in the court’s decisions. 86. Although Allison and Lemley chose only to report final decisions because they were focusing on the ultimate validity of a particular patent, this study attempted to understand the Federal Circuit’s practices and trends. In any event, the inclusion of these multiple decisions did not affect the analysis for two reasons. First, the Federal Circuit addresses different issues in each of these decisions. Compare SunTiger Inc. v. Scientific Research Funding Group, 189 F.3d 1327 (Fed. Cir. 1999) (deciding issues of priority, collateral estoppel and infringement), with SunTiger Inc. v. Scientific Research Funding Group, No. 98-1418, 1999 U.S. App. LEXIS 8584 (Fed. Cir. May 6, 1999) (addressing issues of invalidity under § 102(b) and inequitable conduct). Second, the number of multiple decisions in the same case is very small, and is thus unlikely to affect the validity of the analysis. 87. In a very small number of cases, some data were unavailable from the Federal Circuit opinion. Whenever possible, the missing data was collected from the lower tribunal’s opinion. 88. E.g., summary judgment, jury/judgment as a matter of law, other ruling, procedural ruling, bench judgment, preliminary injunction, or appeal from the Board of Patent Appeals and Interferences. 89. E.g., affirmed, reversed/remanded, affirmed in part and reversed in part, dismissed, mandamus/order/certified question petition granted, mandamus/order/certified question petition denied. 90. E.g., precedential, nonprecedential, or summary affirmance.

the Federal Circuit in that decision,92 whether the Federal Circuit made any change to the lower tribunal’s claim construction,93 whether such changes were outcome determinative, whether claims reviewed involved an issue related to means-plus- function claims.94 One important caveat is pertinent here. Because this study purported to expand on Judge Rader’s study in Cybor Corp., it adopted Judge Rader’s approach to collecting claim construction information. This study thus defined claim construction review as any instance in which the Federal Cir- cuit expressly reviewed the lower tribunal’s claim interpretation.95 Al- though arbitrary, this definition was necessary to maintain consistency for comparison purposes. This specific definition necessarily impacted all categories relating to claim construction and constricted the number of cases in which the Federal Circuit has “reviewed” claim construction. In other words, because this methodological definition requires that claim constructions explicitly appear in the court’s opinions, cases implicitly construing claims and summary affirmances would be excluded from the subset of cases where the court has “reviewed” claim constructions. Part IV infra will discuss these results in more depth. C. Use of the Population for Statistical Testing As Allison and Lemley effectively showed in their study, a population can be used both to generate descriptive data statistics and perform statistical testing.96 As they explain, “one can perform hypothesis testing and prediction from a population by treating the population as a subset of a

91. E.g., infringement, invalidity, procedural, infringement and invalidity, and not applicable. 92. E.g., infringement, invalidity, inequitable conduct, and other issues. The “other issues” category includes issues such as antitrust, damages, willfulness, and procedural issues. 93. This was accomplished by comparing the Federal Circuit’s interpretation of the claim element with the construction adopted by the lower tribunal. Thus, even a minor change in wording would be tabulated as a “change.” 94. All issues related to means-plus-function claims were noted, regardless of whether the Federal Circuit concluded that the claim(s) at issue was/were subject to 35 U.S.C. § 112(6). The reader should refer to Part IV.F, infra, for an explanation of the reasons this study collected data on means-plus-function claims. 95. Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1476 n.16 (Fed. Cir. 1998) (en banc) (Rader, J., dissenting) (“This figure is based on a survey of every patent decision rendered by the Court of Appeals for the Federal Circuit between 5 April 1995 (the date Markman I was decided) and 24 November 1997. . . . Of the 246 cases, 141 cases expressly reviewed claim construction issues.”) (emphasis added). 96. Allison & Lemley, supra note 77, at 201-02.

‘superpopulation’—in this case the hypothetical population of all past and future . . . decisions—without pretense that the data set is a representative sample of that superpopulation.”97 This study relied on this approach for many of its key conclusions.98 Although the scope of a population study could be arbitrarily determined,99 it was important to ascertain methodically how many decisions should be included in this study. To do so, this study relied on a formula that was developed for statistical sampling and that aimed to include, at a 95% confidence level, the population means.100 Taking the claim construction issue as a binomial proportion (i.e., whether or not the Federal Circuit expressly construed claims in the decision), this study applied the formula for determining N, the requisite population size of binomial proportions.101 To get the largest possible N,102 the probability of success was set at 0.5. Plugging in numbers for a 95% confidence level and setting the margin of error at 5%, N is equal to 384. In other words, the study had to include at least 384 cases where the Federal Circuit could have construed claims, and thus the 384 cases must be written opinions and necessarily exclude summary affirmance decisions. To reach a number that exceeds the value of N being 384, this study analyzed all cases decided by the Federal Circuit from January 1998 until the end of April 2000. Of the 502 cases collected, 396 were written opinions. Although this exercise is unnecessary for a population study, it provides a useful guideline in determining the scope of the studied population.

97. Id. at 194 n.20 (citing M.E. Thompson, Superpopulation Models, 9 ENCYCLO- PEDIA OF STATISTICAL SCIENCE 93 (1988)). 98. See Part IV infra. 99. Within the population, all the numbers analyzed are by definition “statistically significant.” See Allison & Lemley, supra note 77, at 201. 100. In this case, it would be the “superpopulation” means. Although the superpopulation is theoretical, the formula used here does not depend on the size or any attribute of the superpopulation. 2 2 101. N=[(Za) (PQ)]/B , where Za is the z-score for the confidence interval, P is the sample proportion, Q is (1-P), and B stands for the margin of error. See SUSAN F. WAG- NER, INTRODUCTION TO STATISTICS 201-02 (1992). 102. By calculating the largest value of N, it was unnecessary to include any attribute of the sampling population—the superpopulation.

D. Limitations of the Study Regardless of how carefully an empirical study is conducted, inherent limitations exist. In brief, even when controlled by objective criteria,103 this study involved a small degree of personal judgment in collecting the data.104 However, it is doubtful that such a factor systematically biased the results reported.105 Second, the nature of the litigation and appeal process inherently limits the scope of this study. It is impossible to control for lawyering skills; personalities and biases of juries; experiences and interests of judges; the issues that the parties choose to raise on appeal; the prosecution history of the patent claims; and the financial resources of the parties.106 Because no data was available on those issues—and because they often defy numerical categorization—they were not collected. For a comprehensive and careful discussion of the pitfalls and constraints in this type of empirical study, the reader should refer to Allison and Lemley’s meticulous article.107

IV. RESULTS

I wish, if I can, to lay down some first principles for the study of this body of dogma or systematized prediction which we call the law, for men who want to use it as the instrument of their business to enable them to prophesy in their turn, and, as bearing

103. For instance, in tabulating data on claim construction changes, this study attempted to control such events by comparing the Federal Circuit’s interpretation with the lower tribunal’s. 104. This author acknowledges that others might disagree with his judgment in any given case, but he does not believe that his evaluation of the cases in this study is biased in any systematic way. He has retained the complete dataset and MS Excel calculation worksheets, and will make them available upon request. 105. Some practitioners have mistakenly assumed that this study contains methodological biases because it does not include summary affirmances in some instances. The author emphasizes that he included summary affirmances under FEDERAL CIRCUIT RULE 36 in the analysis whenever possible. In some instances, the inclusion of those cases was not statistically proper, and this study addressed such problem in Appendix A below by extrapolating the effects of those cases. Therefore, the author believes that no systematic bias affects this study’s data. 106. Allison and Lemley have suggested that most of the variables that determine invalidity were factors not easily amenable to measurements. See Allison & Lemley, supra note 77, at 250-51. It is likely that the same principle applies here. 107. See Allison & Lemley, supra note 77, at 202-05.

upon the study, I wish to point out an ideal which as yet our law has not attained.108 The analysis contained in this section will describe the results and discuss the implications of the following criteria: (A) reversal and claim construction changes over time, (B) effects of the type of judgment being appealed, (C) panel-dependency problem, (D) influence of the tribunal from which the case is being appealed, (E) correlation with the precedential nature of decision, (F) impact of including a means-plus-function claim in an appeal, and (G) issues for which the Federal Circuit expressly reviewed claim construction. A. Although the Federal Circuit has in the Aggregate Reversed Fewer Cases Based on Claim Construction than before 1998, there is a Trend Showing an Increase in Claim Construction Modification and Claim Interpretation-Based Reversal Since Cybor Corp. In Markman I, the Federal Circuit stated that the construction of patent claims starts with the claim language, as interpreted in light of the specification and the prosecution history.109 Since 1995, it has invoked and applied that approach consistently and reliably.110 As lower tribunals adopted this approach, the Federal Circuit believed that they would “arrive at the true and consistent scope of the patent owner’s rights to be given legal effect.”111 Over time, claim construction should thus become more predictable and consistent, thereby reducing reversible errors in claim construction.

108. HOLMES, supra note 1, at 700. 109. Markman v. Westview Instruments, Inc., 52 F.3d 967, 979-80 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996). 110. See, e.g., Optical Disc Corp. v. Del Mar Avionics, 208 F.3d 1324, 1333-35 (Fed. Cir. 2000); Hill-Rom Co. v. Kinetic Concepts, Inc., 209 F.3d 1337, 1340 (Fed. Cir. 2000); K-2 Corp. v. Salomon S.A., 191 F.3d 1356, 1362-63 (Fed. Cir. 1999); Suntiger, Inc. v. Scientific Research Funding Group, 189 F.3d 1327, 1334-36 (Fed. Cir. 1999); EMI Group N. Am. v. Intel Corp., 157 F.3d 887, 891-92 (Fed. Cir. 1998); Bai v. L & L Wings, 160 F.3d 1350, 1353-54 (Fed. Cir. 1998); Ekchian v. Home Depot, Inc., 104 F.3d 1299, 1302 (Fed. Cir. 1997); Lockwood v. Am. Airlines, 107 F.3d 1565, 1572-73 (Fed. Cir. 1997); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1581-82 (Fed. Cir 1996); Cole v. Kimberly-Clark Corp., 102 F.3d 524, 528 (Fed. Cir. 1996). 111. Markman I, 52 F.3d at 979.

1. Appellate Reversal: All Issues To ascertain whether Markman I has achieved its goals, this study first examined the Federal Circuit’s reversal rate of lower court judgments by analyzing the court’s written opinions112 issued over a period of twenty- eight months. This initial reversal rate analysis encompasses all issues in patent cases reviewed by the Federal Circuit; it is not limited to just claim construction reviews. Once normalized,113 the result of this analysis appears in Table A-1 in Appendix B and graphically in Figure A-1 below.

Figure A-1

Judgment Reversal on All Issues Over Time (Data Excludes Summary Affirmances) 100% Percentage of cases 80% partially reversed 60%

40% Percentage 20% of cases fully 0% reversed Percentage of written opinions ep-99 ep-98 Jul-99 Jul-98 Jan-00 Jan-99 Jan-98 Mar-00 Mar-99 Mar-98 Nov-99 Nov-98 S S May-99 May-98

112. By limiting this initial reversal rate analysis to the Federal Circuit’s written opinions, this study did not include Rule 36 summary affirmances in the dataset of Figure A-1. One of this study’s goals was to scrutinize the rate of change in claim construction in light of the rate of reversal on all issues. See infra note 120 and accompanying text. To accurately do so, it is imperative to compare data from the same dataset. The dataset used in analyzing the rate of change in claim construction must necessarily exclude Rule 36 summary affirmances because, by definition, the Federal Circuit did not “expressly” review the claim constructions in those cases. That is why this study chose to limit this initial reversal rate analysis to the 396 written opinions in this population. However, for the sake of completeness, this study has also analyzed the rate of reversal using the entire population dataset, including Rule 36 summary affirmances. See infra Figure A-2 and accompanying text. 113. Because the court may issue a large number of patent cases in a particular month and very few in another month, the data was normalized, for comparison purposes, by dividing the number of cases the Federal Circuit reversed in full or in part (or the number of cases they affirmed) by the total number of cases the court decided in that month. The denominator necessarily excluded dispositions involving petitions to appeal, for mandamus, or certified questions since these decisions do not review any judgments, but rather lie within the procedural requirements of the court’s rules or within the discretion of the Federal Circuit.

To determine whether there is any trend in the Federal Circuit’s reversal rate over time, a trend line based on the least-squares line method is superimposed over Figure A-1 and shown as a black solid line. Although regression analysis is inapplicable here,114 the line of best fit can suggest whether a correlation relationship should be studied and can also indicate where the average reversal rate lies.115 Although the trend line fails to indicate any correlation between the passage of time and the reversal rate, it nonetheless suggests that the Federal Circuit has remained surprisingly consistent in its reversal rate over time. In fact, the reversal rate hovers around 50%—to be exact, 47.3%—echoing the 53% reversal rate cited by Judge Rader in Cybor Corp.116 In other words, regardless of the issues appealed, a litigant has virtually as much chance of having his case reversed as having it affirmed. As Judge Rader warned:

A reversal rate in this range reverses more than the work of numerous trial courts; it also reverses the benefits of Markman I. In fact, this reversal rate, hovering near 50%, is the worst possible. Even a rate that was much higher would provide greater certainty. Instead, the current Markman I regime means that the trial court’s early claim interpretation provides no early certainty at all, but only opens the bidding. The meaning of a claim is not certain (and the parties are not prepared to settle) until nearly the last step in the process—decision by the Court of Appeals for the Federal Circuit. At first blush, this seems like the worst of both worlds. Knowing such statistics, the losing party is unlikely to settle without appeal, especially when it has one chance in two of winning. However, the data depicted in Figure A-1 only focuses on written opinions and excludes summary affirmance decisions. In this study’s dataset, one-fifth of all patent decisions (106 of 502 decisions) were summary affirmances. After analyzing all 502 cases—written opinions and summary affirmances—the picture changes substantially, as shown in Table A-1 in Appendix B and Figure A-2 below.

114. Linear regression analyzes the relationship between two sets of purely numerical data. See WAGNER, supra note 101, at 293. Hypothesis testing using linear regression is problematic where one set of data is non-numerical (such as months and years, or types of judgment). See id. at 308-10. 115. See id. at 307. 116. Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1476 (Fed. Cir. 1998) (en banc) (Rader, J., dissenting).

Figure A-2

Judgment Reversal on All Issues Over Time (Data Includes Summary Affirmances) 100% Percentage 80% of cases partially cases 60% reversed

age of 40% Percentage rcent

e 20% of cases P fully reversed 0% 9 8 9 9 - - p p Jul-99 Jul-98 Jan-00 Jan-99 Jan-98 Mar-00 Mar-99 Mar-98 Nov-99 Nov-98 Se Se May-99 May-98

Although adding summary affirmance decisions did not affect the slope of the trend line, it decreased the average reversal rate over this time period. This result is logical since Federal Circuit Rule 36 allows the merit panel to affirm without opinion,117 and the inclusion of those decisions necessarily reduces the overall reversal rate. Once all patent decisions are taken into account, the average reversal rate drops to 36.6% of all cases. Thus, there was only slightly more than one chance in three that the Fed- eral Circuit would reverse the lower court’s judgment. However, this rate remains higher than recently released statistics showing a 20-30% reversal rate in patent cases.118 Although the source of this difference is unclear, it is possible that the official statistics include all cases reviewed by the Fed- eral Circuit—including appeals from the Merit Protection System Board—

117. Federal Circuit Rule 36 provides that: The court may enter a judgment of affirmance without opinion, citing this rule, when it determines that any of the following conditions exist and an opinion would have no precedential value: (a) the judgment, decision or order of the trial court appealed from is based on findings that are not clearly erroneous; (b) the evidence supporting the jury’s verdict is sufficient; (c) the record supports summary judgment, directed verdict, or judgment on the pleadings; . . . (e) a judgment or decision has been entered without an error of law. FED. CIR. R. 36. 118. The Honorable Paul R. Michel, The Court of Appeals for the Federal Circuit Must Evolve to Meet the Challenges Ahead, 48 AM. U. L. REV. 1177, 1192 (1999) (“In actuality only twenty percent to thirty percent of appeals result in reversals.”). Unfortu- nately, Judge Michel did not specify whether those statistics focus exclusively on patents or whether they encompass all cases heard by the court.

while this study focuses on patent cases. Regardless of which statistic is correct, the probability of settlement remains remote. As Judge Michel explained:

even in cases where the chance of reversal might fall within the range of twenty-five percent to fifty percent, the large stakes typically attending cases in areas such as patents, public contracts, takings, and international trade will seem to justify the expense of time and money in seeing the appellate process through to its conclusion. The odds are supported by the fact that parties have already spent ninety percent or more of the total cost of the litigation and, therefore, to spend another five percent to ten percent to conclude the appeal process seems justified.119 In other words, the promises of pre-trial predictability and expedient patent litigation seem to remain a tantalizing dream. 2. Appellate Reversal: Claim Construction Issues The reversal trend does not tell the whole story of claim construction because the Federal Circuit often reversed cases for reasons independent of claim construction.120 To fully understand the effects of Markman, one must focus on the trend in claim construction changes. Using the 396 cases with available written opinions,121 this study ascertained the number of cases per month in which the court changed at least one claim interpretation, and normalized that number for easier comparison over time.122 In addition, this study further determined whether a change in claim construction by the Federal Circuit led to a change in the disposition of that

119. Id. (footnotes omitted). 120. See, e.g., Genentech, Inc. v. Regents of the Univ. of Cal., 143 F.3d 1446 (Fed. Cir. 1998) (deciding case based on analysis of the 11th Amendment to the Constitution). 121. This approach excludes all 106 summary affirmances because the methodology’s focus on express claim construction requires the availability of a written opinion. However, to address some practitioners’ interests in a more inclusive perspective, this study attempted to estimate the effect of summary affirmances on the rate of claim construction changes and claim interpretation-based reversals. This estimation is presented in Appendix A infra. 122. This normalization is necessary since the court may issue a large number of patent cases in a particular month and very few in another month. As part of the normalization, this study ascertained the percentage of cases for any given month where the court changed any claim construction. To do so, this study divided the number of such cases by the total number of cases in that month where the court expressly reviewed claim construction. The denominator, the total number of cases where a written opinion was available, was not used because many of those cases deal with issues (such as inequitable conduct or procedures) that do not call for claim construction.

particular decision. Table A-2 in Appendix B summarizes this data and Figure A-3 below provides a visual depiction of the rate of change in claim construction.

Figure A-3

Percentage of Cases with Any Change in Claim Construction

h 100% on review

i 80% uct r 60% opinions wit 40% age of 20% rcent e 0% P 9 8 9 9 express claim const - - p p Jul-99 Jul-98 Jan-00 Jan-99 Jan-98 Mar-00 Mar-99 Mar-98 Nov-99 Nov-98 Se Se May-99 May-98

As with the reversal rate, the percentage of cases in which the Federal Circuit changed at least one claim construction fluctuated from month to month. To determine whether a trend is evident over time, a line generated based on a least-square analysis was superimposed on Figure A-3. The trend line’s ascending slope suggests a gradual increase in the number of cases in which the Federal Circuit modified the appealed claim interpretations. To determine the strength of the possible correlation, this study relied on the Pearson’s product moment coefficient of correlation.123 The calculated value of the correlation coefficient was +0.344421, indicating a small but possibly significant correlation between the passage of time and the rate of claim construction change by the Federal Circuit. Of course, the trend line’s suggestion may have occurred by mere statistical chance. To

123. The Pearson’s product moment coefficient (r)—also known as the coefficient of correlation—is a quantitative measure of the strength of correlation between two interval- level variables. It is thus well-suited to correlate the independent variables representing the percentage of claim construction cases with the independent variable representing the passage of time. The coefficient r can take values from -1.0 and +1.0, where the sign of r indicates whether the correlation is inverse or direct. The absolute value of r indicates the strength of the correlation, or how close the array of data points is to a straight line. In other words, the closer the correlation is to 1, the stronger the linear trend and the association between the data points. Where r is equal to 0, there is no linear relationship. See JEFFREY JARRETT & ARTHUR KRAFT, STATISTICAL ANALYSIS FOR DECISION MAKING 385-86 (1989).

determine whether this trend is statistically significant or merely an artifice, the following hypothesis was tested: 124

Hypothesis A-1: There is no correlation between the passage of time and the rate of change in claim construction by the Federal Circuit. The significance t of this correlation coefficient was +1.87067.125 The critical value of t with 28 independent variables, at a 95% level of significance in a one-tail test, is +1.706.126 Because the significance t of the correlation coefficient is greater than the critical value (+1.87067 > +1.706),127 the null hypothesis above can be rejected. In sum, in the twenty-eight month period since the beginning of 1998, the number of cases per month in which the Federal Circuit has modified some claim construction has tended to increase. Because of the definition of “a change in claim construction” adopted by this study, Figure A-3 contains some cases where the Federal Circuit changed the lower court’s claim construction without changing the outcome of the case.128 To better understand the effect of a change in claim construction on the outcome of a case, this study examined the absolute percentage of cases where claim construction changes were outcome dispositive and provided that result in Table A-2 in Appendix B. Figure A-4 below provides a visual depiction of that result.

Figure A-4

124. See id. at 386-87 (discussing hypothesis-testing procedure to determine whether the null hypothesis that r=0 can be safely rejected, thereby indicating a linear relationship between the variables tested). 125. The formula used to determine the significance t of r is: t = [r (n-2)½] / [(1-r2) ½]. In that formula, n is the number of variables, (n-2) is the degree of freedom, and r is the correlation coefficient. Id. at 387. 126. Id. at 682-83 (indicating, in Table E, the critical value of t given a predetermined degree of freedom and a desired significance level). 127. In other words, the significance t value falls within the region of rejection of the statistical distribution. Id. at 387. 128. E.g., NFA Corp. v. Asheboro Elastics Corp., No. 98-1579, 2000 U.S. App. LEXIS 68, at *9 (Fed. Cir. Jan. 5, 2000); Zelinski v. Brunswick Corp., 185 F.3d 1311, 1316 (Fed. Cir. 1999); Mas-Hamilton Group v. Lagard, Inc., 156 F.3d 1206, 1215 (Fed. Cir. 1998).

Percentage of Cases with Claim Construction Changes that Were Outcome Dispositive h 100% on i

uct 80% r 60% opinions wit 40% review

age of 20%

rcent 0% e express claim const P p-99 p-98 e e Jul-99 Jul-98 Jan-00 Jan-99 Jan-98 Mar-00 Mar-99 Mar-98 Nov-99 Nov-98 S S May-99 May-98

The superimposed trend line, generated from a least-square analysis, suggests an upward trend in the rate of outcome dispositive changes in claim construction as time passes. The slope of the trend line in Figure A- 4 is similar to the line in Figure A-3, partly because the average claim construction-based reversal rate hovered around 70% of the cases in which the court has changed any claim interpretation. Again, it was necessary to assess the possibility that this trend lies within the margin of error. Thus, this null hypothesis was tested:

Hypothesis A-2: There is no correlation between the passage of time and the rate of outcome dispositive claim construction changes. The Pearson’s correlation coefficient for this dataset is +0.33428, and the significance t is +1.8705067.129 When compared to the critical value of t for a 95% confidence level in a one-tail test (tc= +1.706), it is possible to reject the null hypothesis because t > tc (i.e., +1.8705067 > +1.706). Within the studied period, the passage of time was correlated to an increase in the number of cases in which a change in claim construction was outcome dispositive. Despite the continued trend, a look at the aggregate data reveals a counter-intuitive result. Of the 179 cases that involved an express review of claim construction, the Federal Circuit modified claim interpretations in

129. One practitioner who reviewed this data expressed concerns that the significance t for the outcome dispositive subset is very similar to the one for claim construction changes. This is just a coincidental result of the formula used to calculate the value of t. It is clear that both datasets are quite different given the different values of the Pearson’s correlation coefficient for each set.

78 cases, or 44% of the total, during the twenty-eight months covered by this study. Further, 53 out of these 78 cases (68%) were reversed on the basis of claim construction. In sum, the Federal Circuit reversed 29.6% of cases involving an express review of claim construction. This 29.6% figure is lower than the 37.3% rate of claim construction reversal cited by Judge Rader in Cybor Corp.130 This is a small but significant decrease. It suggests that in the aggregate, the Federal Circuit has reversed fewer cases based on claim construction in the period after Cybor Corp. than before. Judge Rader’s higher rate of reversal figure may arise from the confusion that occurred in the aftermath of Markman I, as the Federal Circuit pro- gressively imposed its new claim interpretation framework. Many of the cases that the court of appeals reviewed from 1995 to 1997 necessarily included cases decided before Markman I or before the lower courts fully understood and espoused the new regime. By the time this study examined the Federal Circuit’s practices, most of the appealed cases were decided at the trial court level well after Markman I and II. This theory could perhaps explain the small decrease relative to the pre-Cybor Corp. period. It cannot, however, fully explain the increase over time in the rate of claim construction changes.131 To obtain a complete picture of how the Federal Circuit deals with claim construction, this study addressed one remaining problem: in any given case involving an express claim construction examination, the Fed- eral Circuit seldom reviewed a single element of a patent.132 Rather, its review often involved more than one claim element, claim, or patent. Hence, Figures A-3 and A-4 could present a distorted picture, especially where the court only changed one claim element but affirmed the construction of the remaining claims or claim elements in dispute. To control for this possible bias, this study also tabulated and analyzed the normalized number of claim elements whose construction was changed by the

130. Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1476 n.16 (Fed. Cir. 1998) (en banc) (Rader, J., dissenting). 131. An alternative explanation may rest in the fact that, as the Federal Circuit feels freer to change appealed claim constructions, it may pay more attention to harmless error in order to avoid an unduly high reversal rate. Although attractive, this explanation remains a mere speculation without knowing the inner workings of the court and its judges’ thought processes. 132. The term “element” refers to a claim construction term in dispute before the court.

Federal Circuit.133 Table A-3 contains this result and Figure A-5 graphs that dataset over time.

Figure A-5

Percentage of Changed Claim Constructions Elements 100%

reviewed 80% s

60%

element 40%

20% age of

0% rcent e P ep-99 ep-98 Jul-99 Jul-98 Jan-00 Jan-99 Jan-98 Mar-00 Mar-99 Mar-98 Nov-99 Nov-98 S S May-99 May-98

The superimposed trend line in Figure A-5 shows that Figures A-3 and A-4 were not statistical aberrations: the Federal Circuit tended to change more claim construction elements over time. To ensure the statistical significance of this trend, this study tested the following hypothesis.

Hypothesis A-3: There is no correlation between the passage of time and the number of claim construction elements modified by the Federal Circuit. The Pearson’s correlation coefficient for this dataset is +0.42526, and the significance t is +2.3958. Compared to the critical value of t for a 95% confidence level in a one-tail test (tc= +1.706), the null hypothesis can be rejected because 2.3958 is greater than 1.706. In sum, the average number of claim elements modified by the Federal Circuit during the twenty-eight months covered by this study increases over time. Therefore, the trends in Figure A-3 and A-4 are not abnormalities, but reflect a consistent inclination over time.

133. This study calculated the normalized number of claim elements by dividing, for each case, the number of changed claim elements by the total number of claim elements in dispute before the court. Then, for each month, the resulting percentages were aver- aged and presented in Table A-3 in Appendix B.

3. Significance There are at least three possible explanations for this interesting result. First, the lower tribunals have not yet fully adopted the Markman regime. This explanation is unlikely because over two years elapsed between the Markman decisions and the beginning of the period covered by this study. In those two years, lower tribunals and the patent bar should have accepted and implemented the Markman rules. By the year 2000, there should have been few cases in which the trial judge failed to apply Mark- man’s dictates.134 Second, the lower tribunals may have continued to erroneously construe patent claims. Perhaps the difficulty generally associated with technology and the arcane rules of claim construction may have dampened Markman’s promised uniform application by trial judges. If this explanation were truly the reason for the observed trends, trial counsels need to better explain the technology to generalist judges. The Federal Circuit must also endeavor to simplify and harmonize patent law so that lower courts can easily understand and apply the law to the facts of their cases. The last possible explanation for this trend is more ominous: the Fed- eral Circuit’s de novo standard may have led to an activist court that is more willing to disregard the lower tribunals’ constructions in favor of its own interpretation of the disputed claims. As appealing as this theory may be, it necessarily stands on shaky ground because it assumes that correlation equals causation. One must consider that the Federal Circuit carefully reviewed and explained its approach to claim construction in virtually all the written opinions analyzed in this study. This is particularly important, given that each case comes before the court with its own merits and record. In addition, this explanation ignores other intangible factors, such as the skills of the litigants’ counsels or the quality of each litigated patent. All that this study can safely say is that it is impossible to ascertain definitively which of these explanations, if any,135 can substantiate the ascend-

134. In fact, only one case in this study echoed the pre-Markman practice. See Rivera-Davila v. Asset Conservation, Inc., No. 98-1075, 2000 U.S. App. LEXIS 479, at *11 (Fed. Cir. Jan. 12, 2000) (“The district court did not construe the disputed claim language before sending the infringement and damages issues to the jury.”). 135. A practitioner suggested that there are simpler possible answers, including the possibility that: (1) the Federal Circuit misinterpreted the claims, (2) the district court misinterpreted the claims, or (3) there were two or more reasonable claim interpretations and the Federal Circuit adopted a reasonable claim interpretation different from the district court’s. The author acknowledges the validity of these possibilities, but lacks the necessary analytic tools to determine the influence of these possible explanations.

ing trends depicted in this section. Only time will tell whether this trend continues.136 B. The De novo Standard Could Explain the Relationship between the Type of Judgment Appealed and the Likelihood of Reversal and Claim Construction Modifications by the Federal Circuit “[T]o decide what the claims mean is nearly always to decide the case.”137 In the wake of the Markman decisions, claim construction and all factual determinations relating to claim construction involve solely questions of law and lie within the court’s exclusive province.138 Thus, lower tribunals can resolve infringement and invalidity disputes without full trials by simply resorting to summary judgments. In other words, “the trial arena loses some of its luster as the center stage of the dispute resolution drama.”139 This shift away from the trial as the centerpiece of patent litigation seems to have already occurred. As Judge Michel recently explained:

Theoretically, the only cases in need of trial would be those in which either the structure and operation of the accused device are unclear based on the summary judgment affidavits or deposi- tions, or where there is a close question about whether the terms of the claim are met by the features of the accused device or steps in the accused process, literally or equivalently.

I predict that an increasing portion of patent infringement cases will be resolved on summary judgment. It is conceivable, for example, that in as many as one-quarter of the cases, literal infringement could be decided as a matter of law. In another quarter, perhaps, equivalent infringement could be decided as a matter of law. In yet another quarter, both forms of infringement could be eliminated as legally incorrect. As a result, only one- fourth of infringement cases would require trial on both types of

136. Recent personnel change may also affect the slope of this trend. First, Judge Rich passed away in mid-1999. Second, the Senate confirmed Judges Linn and Dyk. Fi- nally, Judge Plager took senior status in December 2000. Although no one judge is likely to affect the trend, this substantial change in court personnel might have a nontrivial effect. 137. Markman v. Westview Instruments, Inc., 52 F.3d 967, 989 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (1996) (Mayer, J., concurring). 138. See id. at 989. 139. Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1477 (Fed. Cir. 1998) (en banc) (Rader, J., dissenting).

infringement, while another fourth would require no trial at all.140 Based on the data collected and analyzed in this section, it appears that Judge Michel’s prediction has already become true. 1. Appealed Judgments: All Issues To examine this prediction, this study analyzed all types of judgments and orders reviewed by the Federal Circuit from the beginning of 1998 to April 2000. The analysis in this sub-section covers all issues reviewed by the Federal Circuit, and is not limited to claim construction reviews. For practical reasons, this section grouped together judgments as a matter of law (“JMOLs”) and jury findings. In analyzing the court’s written opinions, it was often difficult to determine whether the Federal Circuit was reviewing a jury’s verdict or a post-verdict motion for a judgment as a matter of law to reverse that verdict. For this reason, and to avoid intro- ducing any bias, this study grouped together jury verdicts and JMOLs. The results are presented in Table B-1 and illustrated in Figure B-1 below.141

Figure B-1

140. Michel, supra note 118, at 1188-89. 141. The data considered here excludes summary affirmances because those cases are decided without a written opinion and thus without a means to determine the type of judgment being appealed. Hence, the universe of cases for Table B-1 and Figure B-1 consists of cases with a written opinion. In addition, because six cases involved both summary judgments and judgment as a matter of law, those cases were credited to each of the two categories. This approach expanded the universe of written opinions to 402 rather than 396 cases. Because of the small number, this minor double-counting should not have affected the significance of the final results.

PI 3% BPAI (9%) Bench Summary Types of Judgment trials judgment Appealed to the Fed- (13%) (41%) Procedural eral Circuit (on All rulings Issues) (18%) Jury trial Other or JMOL ruling (1%) (15%)

As Figure B-1 illustrates, a substantial number of cases—166 cases or 41% of available written opinions—came to the Federal Circuit from summary judgment, while close to a third of the cases (109 cases or 28%) were fully tried either by a jury or a judge. Close to one-fifth of cases (71 cases or 18%) reached the court as a result of lower court procedural rulings. Appeals from the Board of Patent Appeals and Interferences only composed 9% (36 decisions) of the written opinions issued by the court, while preliminary injunction appeals constituted 3% (14 opinions) of the Federal Circuit patent decisions. Interestingly, as shown in Table B-2 in Appendix B, the Federal Cir- cuit’s affirmance rate of these types of judgments did not differ substantially.142 The court affirmed 52% of summary judgments (84 of 161 cases), while affirming jury and bench trials 45% (25 of 56 cases) and 56% (28 of 50 cases) respectively. It affirmed 57% of preliminary injunctions (8 of 14 cases) and agreed with the BPAI in 56% of cases (19 out of 34 cases). To determine the significance of these results and to decide whether any predictive value exists in this data, this study tested the following hypothesis:

142. The results in Table B-2 do not take into account dispositions involving petitions to appeal, for mandamus, or certified questions since these decisions do not review any judgments, but rather rest within the procedural requirements of the court’s rules or within the discretion of the Federal Circuit. These petitions do not readily fall within our existing categories (e.g., affirmed or reversed). Table B-1 and Figure B-1 included these discretionary decisions in order to provide a complete picture of this study’s population. This is why the denominators in Figures B-1 and B-2 differ slightly. Even if they were included in the analysis of Table B-2 by forcing their disposition in the existing categories, the results would not differ substantially.

Hypothesis B-1: There is no difference in the likelihood that the Federal Circuit will affirm or reverse the lower court if the judgment being appealed is a summary judgment, jury finding or JMOL, bench trial, preliminary injunction, or a decision from the BPAI. The chi-square test143 p-value was 0.00082.144 This null hypothesis can thus be rejected with 99% confidence. In other words, the type of judgment appealed can predict the likelihood of reversal or affirmance by the Federal Circuit. The prediction from the chi-square test is logical in light of the different standards of review that the Federal Circuit applies. At one end of this spectrum, the Federal Circuit reviews summary judgments de novo without deference to the lower court.145 By contrast, the court gives more deference to trial determinations: a bench trial’s fact-findings are reviewed

143. A chi-square test examines the variances in the distribution of a population’s data. WAGNER, supra note 101, at 275. This statistical tool is particularly useful in analyzing relationships between enumerative—i.e., nonquantitative—sets of data, such as the number of blue-eyed and brown-eyed individuals within a population. Id. at 274. The accepted formula for chi-square testing is: Χ2= Σ[(n-E) 2 / E]; with “n” being the actual experimental data and “E” representing the expected value of “n.” Id. at 277. 144. In their recent empirical study, John Allison and Mark Lemley provided an explanation of the p-value. See Allison & Lemley, supra note 77, at 204 n.54. For the convenience of the reader, Allison and Lemley’s explanation is reproduced here: The p-value is a measure of the confidence with which a hypothesis can be rejected. Hypotheses in our study are generally in the null form. The null hypothesis posits “no difference” or “no relationship.” If the null hypothesis is rejected, then one can state with confidence that there is a difference or a relationship. A rejection of the null hypothesis with a p- value of .01 means that such rejection can be made with 99% confidence; a rejection with a p-value of .05 or less means that such rejection can be made with 95% confidence; a rejection with a p-value of .10 or less means that such rejection can be made with 90% confidence. P-values less than .05 are viewed as an indication that the null hypothesis can be rejected with sufficient confidence and that any differences or relationships are statistically significant. Depending on several factors, one may view p-values up to .10 as supporting rejection with statistical significance. However, one should always view p-values greater than .10 for the null hypothesis as showing that any observed differences or relationships are not statistically significant. Id. 145. See, e.g., Augustine Med., Inc. v. Progressive Dynamics, Inc., 194 F.3d 1367, 1370 (Fed. Cir. 1999) (“On appeal, we review a grant of summary judgment de novo in which we view all evidence, make all reasonable inferences, and resolve all factual disputes in favor of the nonmovant, reapplying the standards of review used below.”).

under the clearly erroneous standard,146 while juries’ factual determinations are subject to the more deferential test of substantial evidence.147 Re- ceiving the most deference, preliminary injunction decisions are reviewed under the abuse of discretion standard.148 An abuse of discretion occurs when a court makes a clear error of judgment in weighing relevant factors or exercises its discretion based upon an error of law or clearly erroneous factual findings.149 In sum, the differing levels of deference given to particular categories of judgments should logically affect the probability of affirmance. This simple explanation is incomplete however. Given this spectrum of deference, it is logical and expected that the court would more frequently affirm cases involving deferential standards of review. For example, jury trial reviews should receive more deference and affirmances than summary judgments. In practice, the data does not demonstrate significant distinctions between these categories of cases: the Federal Circuit affirmed 52% of appealed summary judgments compared to only 45% of jury determinations. To find a better explanation, one must examine the Federal Circuit’s application of the de novo standard to claim construction. Under Cybor Corp., claim construction is a question of law. The de novo standard thus applies and eliminates any requirement for deference. Where claim construction is an issue on appeal, the traditional review standards applicable to a particular case becomes superfluous and subordinated to the effect of the de novo standard. Consequently, when the court of appeals reviews claim construction, it is free to substitute its own judgment for that of the lower court. This reason may explain why the affirmance rate of bench trials (56%) so closely matches that of preliminary injunctions (57%).

146. See, e.g., Winner Int’l Royalty Corp. v. Wang, 202 F.3d 1340, 1344-45 (Fed. Cir. 2000) (“We review the district court’s factual findings for clear error and its conclusions of law de novo, as with any bench trial.”). 147. See, e.g., Tronzo v. Biomet, Inc., 156 F.3d 1154, 1157 (Fed. Cir. 1998) (“[W]e will reverse a denial of a motion for JMOL only if the jury’s factual determinations are not supported by substantial evidence or the legal conclusions implied from the verdict cannot be supported in law by those findings.”). 148. See, e.g., Sofamor Danek Group, Inc. v. DePuy-Motech, Inc., 74 F.3d 1216, 1219 (Fed. Cir. 1996) (“The grant of a preliminary injunction is within the trial court’s discretion.”). 149. See, e.g., Novo Nordisk of N. Am. v. Genentech, Inc., 77 F.3d 1364, 1367 (Fed. Cir. 1996) (“An abuse of discretion may be established by showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings.”).

2. Appealed Judgments: Claim Construction To further explore the possibility that the de novo standard of review renders superfluous the traditional standard applicable to a particular category of judgments, this study ascertained the percentage of cases in which the Federal Circuit changed a lower tribunal’s claim construction, and the proportion of cases where such change was outcome dispositive. The results provided in Table B-3 and Figure B-3 depict the percentage of cases with changes in claim constructions and cases where the change in claim construction led to a reversal.

Figure B-3

Percentage of Cases with Any Change in Claim Construction and Cases Where a Claim Construction Change was Outcome Dispositive, by Type of Judgment Appealed 100% Percentage of cases with any change in h express 80% claim construction

on review 60% ucit r 40% Percentage of opinions wit opinions where claim 20% construction change age of N/A is outcome

claim const dispositive 0% rcent e P BPAI Trials Bench JMOL rulings judgment Summary Procedural injunctions Jury trial or Preliminary

As Figure B-3 shows, the Federal Circuit has changed the lower court’s claim construction in 51% of summary judgment cases involving an express review of claim interpretation (52 out of 102 cases), 32% of cases involving jury or JMOL rulings (11 out of 34 cases), and 40% of bench trial decisions (12 out of 30 bench trials). The remaining three categories—procedural rulings, preliminary injunctions and administrative appeals from BPAI—involved far fewer cases in which the Federal Circuit expressly reviewed claim construction. The court changed the BPAI’s claim construction in only 2 of 9 cases expressly involving claim construction,150 and modified the lower court’s claim interpretation in only one preliminary injunction decision (1 out of 6 cases). Finally, the Federal Cir- cuit did not modify the lower tribunal’s claim constructions in either of the two procedural cases involving an express review of claim construction.151

150. In some cases, the BPAI must construe the rejected claim in order to decide whether that claim should be allowed. See, e.g., In re Dance, 160 F.3d 1339, 1344 (Fed. Cir. 1998) (reviewing and rejecting the BPAI’s construction of the claim element “bul- bous head” in a patent application directed to a catheter). Although such express claim constructions by the BPAI are rare, they nonetheless exist and are thus included in this study. 151. See Kolmes v. World Elastic Corp., No. 97-1587, 1998 U.S. App. LEXIS 9407 (Fed. Cir. May 6, 1998) (reviewing the district court’s claim construction and infringement findings to decide whether the trial court’s ruling of contempt was proper); Additive Controls & Measurement Sys., Inc. v. Flowdata, Inc., 154 F.3d 1345 (Fed. Cir. 1998) (reviewing claim construction in appeal of contempt finding).

For the judgments that the court reviewed more frequently, the Federal Circuit reversed a substantial percentage of those cases that involved a change in claim interpretation: 70% of summary judgments, 64% of jury or JMOL rulings, and 67% of bench trials. In other words, once the Fed- eral Circuit expressly reviewed and modified the lower court’s claim construction, there was over a two-thirds chance that the court would reverse based on an erroneous claim interpretation. To determine whether any predictive value exists in this data, the following hypothesis was tested:

Hypothesis B-2: There is no difference in the likelihood that the Federal Circuit will modify the lower court’s claim construction if the judgment being appealed is a summary judgment, jury finding or JMOL, bench trial, preliminary injunction, or a decision from the BPAI. The chi-square test p-value was 0.0721. Although the hypothesis cannot be rejected with 95% confidence, it can be rejected with 90% confidence. Thus, the type of judgment appealed can weakly predict the likelihood that the Federal Circuit would modify the lower court’s claim construction. 3. Implications From the above data, it is clear that claim construction review plays a significant role in the likelihood of reversal. In fact, the analysis of this data indicates that there is over a two-thirds chance of reversal once a claim construction is modified by the court of appeals. This probability is roughly constant, regardless of whether the appealed judgment was a summary judgment, a bench ruling or a jury verdict. The explanation for this similarity in reversal rates must rest on the main constant in the review of claim constructions for each type of judgment: the de novo standard of review. One potential conclusion is that the de novo review standard affects the reversal rates of the different types of judgments. The extent of that effect remains unclear.

C. The Identity of the Judge Issuing the Written Decision does not Seem to Impact the Likelihood of Reversal or Claim Construction Modification Recently, Judge Michel acknowledged that practitioners often complained about a “panel dependency” problem.152 As he explained, “practitioners, particularly in the patent field, often maintain that the outcome, as well as the rationale of court decisions, are strongly reflective of the identity of the three judges [on the panel].”153 Although he dismissed those complaints as exaggerated,154 a recent empirical study suggests that, for particular issues, the identity of the majority opinion author can influence the outcome of a particular case.155 Could the identity of the judges on a panel also affect the rate at which the court modifies the lower court’s claim construction? 1. Impact of Authorship: All Issues To provide a better basic understanding of the Federal Circuit’s authorship practices, Table C-1 in Appendix B and Figure C-1 below present the number of majority opinions authored by each judge during the period covered by this study.

Figure C-1

152. See Michel, supra note 118, at 1191 (“The problem most frequently mentioned by practitioners is known as ‘panel-dependency.’ Panel dependency is the belief that the result in a case is a function of the membership of the three-judge panel.”). 153. Id. 154. Id. (“I believe that these complaints are exaggerated. By informal monitoring, I estimate that in ninety percent of the cases the result would be the same with any combination of three judges from among the court’s present complement of ten judges in full- time service.”). 155. John R. Allison & Mark A. Lemley, How Federal Circuit Judges Vote in Patent Validity Cases, 27 FLA. ST. U. L. REV. 745, 757 (2000) (showing that whoever writes the majority opinion is related to whether the court finds the patent valid).

Number of Cases Authored by Each Judge 70 154 60

50 opinions

y 41 40 38 38 40 33 27 29 28 30 26 24 majorit

20 14

10 6 2 1 1 Number of 0 a h t s i r hall ager Rich c ja cher l r Sm Mayer Rader S Lourie Michel P Bryson A Ga r curiam Newman e Friedman Visiting J. Clevenger P

As Figure C-1 indicates, most Federal Circuit judges authored 25 to 40 patent cases over the twenty-eight months covered by this study, with an average of twenty-five opinions per judge.156 At one end of the spectrum are senior judges Friedman, Smith, and Archer who authored 2, 1, and 6 patent cases respectively. At the other end, judges Lourie, Michel, Rader, and Newman respectively authored 41, 40, 38, and 38 patent cases. One active judge bucked the trend: Chief Judge Mayer authored only 14 patent decisions, about a third of the number written by Judge Lourie. Moreover, the late Judge Rich authored 33 cases before he passed away in mid-1999. From the trend between early 1998 and mid-1999, it is likely that he would have authored many more opinions had he lived through the entire period covered by this study. Finally, a large number of cases were per curiam decisions, principally the 106 summary affirmance decisions included in this study.157 Further, the percentage of opinions per judge that either fully or partially reversed the lower court’s ruling is illustrated in Table C-2 in Appendix B and Figure C-2.

Figure C-2

156. This average does not account for the per curiam cases and the case decided by the visiting judge. 157. In this particular section, per curiam cases are included in the analyses depicted by Figures C-1 to C-3.

Number of Reversing Decisions Authored by Each Judge 100%

80% Percentage of opinions

y cases partially 60% reversed hored majorit 40% aut

age of 20% Percentage of cases fully

rcent reversed

e 0% P a h t s i r hall ager Rich c ja cher l r Sm Rader Mayer S Lourie Michel P Bryson A Ga r curiam Newman e Friedman Clevenger P

The rate of reversal for most Federal Circuit judges hovers around 50 to 60% for all issues, with differing proportions of fully and partially reversed for each judge.158 Besides Judges Friedman and Smith whose few majority opinions translate into disproportionately high percentages in Figure C-2, three exceptions of low reversal rates stand out from this trend. Judge Archer reversed only a third of the opinions he authored. Chief Judge Mayer reversed only a quarter of his opinions. Moreover, when the court issued a per curiam opinion, it likely affirmed the lower tribunal’s judgment.159 To determine whether any predictive value exists in this data, this study tested:

Hypothesis C-1: There is no difference in the likelihood that the Federal Circuit will affirm the district court when Judges Ga- jarsa, Lourie, Schall, Friedman, Smith, Archer, Rich, Mayer, Plager, Michel, Newman, Clevenger, Rader, or Bryson writes the majority’s opinion. The chi-square test p-value was 0.38. As the experimental p-value was greater than a p-value for a 95% confidence level, it is not possible to predict confidently that the Federal Circuit would rule differently in affirming the lower tribunal depending on the identity of the judge who authors the majority opinion.

158. In examining Figure F-2, one should discount the data for Judges Friedman and Smith since they authored too few cases for their results to be meaningful. 159. This is somewhat of a circular statement. The source of the per curiam opinions dictates this result because most of them come from summary affirmance decisions.

Another necessary inquiry was the level of disagreement between judges, as reflected in filings of dissenting opinions. Many cases demonstrated that Federal Circuit judges have strong, independent, and often conflicting perspectives on the development of patent law.160 However, the apparent dissonance is less than one would expect, as illustrated in Ta- ble C-3 and Figure C-3.

160. See, e.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (en banc), cert. granted, 121 S.Ct. 2519 (U.S. Jun. 18, 2001) (No. 00- 1543) (including two concurrences and four lengthy partial dissents); Cybor Corp. v. FAS Techs. Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc) (including three concurrences and two dissents); Hilton-Davis Chem. Co. v. Warner-Jenkinson Co., 62 F.3d 1512 (Fed. Cir. 1995) (en banc), rev’d on other grounds, 520 U.S. 17 (1997) (including, in addition to the per curiam opinion, one concurrence and three dissents).

Figure C-3

Number of Dissents Per Judge

iled 12 11 11 10 9 8 7 6 ing opinions f 6 5 5 5 4

dissent 3 2 2 2 1 11 1 1 0 a h t s i Number of r hall cher ager Rich c ja l r Sm Rader Mayer S Lourie Michel P A Bryson Ga Newman Friedman Clevenger

Dissenting opinions were filed in only a tiny fraction of all patent cases. In this small subset of patent cases, Judge Newman filed more dissents than any of her colleagues. Judges Mayer, Lourie, and Rader wrote roughly half as many dissents as Judge Newman. The remaining judges shown in Figure C-3—Judges Gajarsa, Smith, Rich, Michel, Clevenger, and Bryson—filed one to two dissenting opinions during the entire twenty-eight months. Some, like Judges Archer, Schall, Friedman, and Plager, did not dissent at all during that period.161 In fact, only 35 (7%) dissenting opinions were filed out of 502 cases, meaning that 93% of cases were decided with all the judges on the panel joining in the majority opinion or filing concurrences. As surprising as this result may seem, it agrees with recent statistics cited by Judge Michel.162 Thus, dissent within the circuit is rare. But occasional disagreements still exist and are often necessary to further the evolution of the patent law. As Judge Newman elegantly commented, “the occasional ‘percolation’ of divergent views illustrates the vigor of the ju-

161. However, judges often publish “additional views,” rather than expressing dissents or concurrences. See, e.g., Dawn Equip. Co. v. Kentucky Farms, 140 F.3d 1009, 1018-23 (Fed. Cir. 1998) (including additional views opinions by Judges Plager, New- man and Michel). For purpose of this tabulation, this study classified those “additional views” as concurrences rather than dissents. 162. See Michel, supra note 118, at 1191 (“This estimate is similar to the statistic that approximately ninety percent of the time the panels rule unanimously, meaning that dissents are found in fewer than one out of every ten cases.”)

dicial search for truth, the sometimes indirect progress toward the justice and fairness that animate the law.”163 2. Impact of Authorship: Claim Construction Although some Federal Circuit judges authored more patent opinions than their colleagues, the court appears remarkably unified in its rulings and its rate of reversal. The question remains whether this unified front conceals any tendency to modify the lower tribunal’s claim construction. Using the data in Table C-1, Figure C-4 provides the answer to that query.

Figure C-4

Percentage of Cases with Any Change in Claim Construction and Cases where a Claim Construction Change Was Outcome Dispositive, by Judge Authoring Majority Opinion 100% 90% Percentage of hored t cases where u 80% claim 70% construction 60% was changed inions A

p 50% O 40% 30% Percentage of age of 20% cases where a change in claim 10% rcent construction e

P 0% was outcome a h t s

i determinative r hall ager Rich c ja cher l r Sm Rader Mayer S Lourie Michel P Bryson A Ga r curiam Newman e Friedman Visiting J. Clevenger P

Besides Senior Judge Smith, whose only case resulted in a change in claim construction and thus accounted for the disproportionate 100% reversal rate, the rate of change in claim interpretation for each judge hovers around 40 to 50%. Three judges stand out with relatively higher rates of claim construction changes: Judges Rich (59%), Michel (56%), and Rader (56%). On the other end of the spectrum, the opinions signed by Judges Lourie and Archer changed the lower court’s claim construction much less frequently (27% and 33% respectively). So, does the identity of the author of the majority opinion affect the rate of claim construction modification? To determine the predictive value of this data, this study tested:

163. The Honorable Pauline Newman, The Federal Circuit: Judicial Stability or Judicial Activism, 42 AM. U. L. REV. 683, 683 (1993).

Hypothesis C-2: There is no difference in the likelihood that the Federal Circuit will modify a lower court’s claim construction when Judges Gajarsa, Lourie, Schall, Friedman, Smith, Archer, Rich, Mayer, Plager, Michel, Newman, Clevenger, Rader, or Bryson writes the majority opinion. The chi-square test p-value was 0.8187. Since the experimental p- value exceeded the p-value for a 95% confidence level, this study cannot confidently predict the likelihood of claim construction modification based on the identity of the judge authoring the majority opinion. In cases where the opinion changed a claim construction, the court was extremely likely to reverse. Judges Archer and Mayer reversed 100% of cases in which they modified the lower tribunal’s claim constructions. The opinions authored by most other Federal Circuit judges changing claim construction reversed over two-thirds of such cases. Notably, three judges—Lourie, Rader and Bryson—filed majority opinions that overturned at least 80% of cases that involved a change in the lower court’s claim construction. 3. Implications In sum, claim construction review may not suffer from a panel dependency problem. Despite large variances in claim construction change rates among Federal Circuit judges, the chi-square test indicates that the author of an opinion does not predictably affect the outcome of a claim construction. Since the opinion’s author must collaborate with his or her colleagues on the panel, it is logical to suppose that the membership of the three-judge panel has little impact on the rate of claim construction changes.164 Judge Michel was perhaps correct in stating that the perceived problem of panel dependency was symptomatic of the general inability of

164. Although the analysis in this section has focused on authorship of opinions, that parameter has been a weak surrogate for membership on a merit panel. No appellate judge works in a vacuum. To garner the necessary vote to remain in the majority, the authoring judge must collaborate with the other judges on the panel. The final opinion signed by the authoring judge must reflect the outcome desired by the other members of the majority on all appealed issues, including claim construction. Logic thus suggests that the authorship of an opinion should be related to the membership of the panel. Given this presumed relationship, the lack of correlation between authorship and claim construction changes would also mean that the presence of a judge on a merit panel would not relate to claim construction changes. Although logical, this conclusion does not necessarily flow from the dataset or the chi-square test.

attorneys to predict the outcome of a particular case.165 This indeterminacy places a substantial burden on our patent litigation system. As Judge Mi- chel explained:

The central problem is that neither litigants nor litigators can avoid, much less terminate, the litigation process because the resulting indeterminacy will mean unpredictability. First, until a panel of the Court of Appeals for the Federal Circuit decides the case, no one can know the correct outcome, and the trial court result will not be seen as acceptable. As a result, cases will be settled less often before the institution of proceedings, (i.e., the filing of a complaint). Second, between the filing of a complaint and the commencement of the trial or significant pretrial eviden- tiary hearings, such as those regarding proper claim construction in a patent case, the incentive to settle the case usually will be insufficient. Finally, the result on summary judgment, or even on mid-trial or post-trial judgment as a matter of law (“JMOL”), will not be accepted by the losing party without appeal because the chances of reversal are seen as at least fifty percent.166 As Judge Rader had predicted over three years ago, “a de novo review of claim interpretation has postponed the point of certainty to the end of the litigation process, at which point, of course, every outcome is certain anyway.”167 Short of an unlikely Congressional or Supreme Court inter- vention, only the Federal Circuit can effectively address this problem.168 Although it is beyond the scope of this discussion to endorse any specific approach, a member of the court has suggested a possible solution. Judge Bryson has argued that the Federal Circuit could grant greater deference to the lower tribunal’s claim construction on issues where the dis-

165. See Michel, supra note 118, at 1191 (“I believe that the complaint regarding panel dependency may be symptomatic of broader ills, such as, ‘indeterminacy’ or ‘unpredictability.’ If most of the time-seasoned practitioners cannot predict the outcome of a given set of facts on an issue such as equivalent infringement, then a serious problem arises.”). 166. Id. at 1191-92. 167. Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1476 (Fed. Cir. 1998) (en banc) (Rader, J., dissenting). 168. See Louis Kaplow, The Patent-Antitrust Intersection: A Reappraisal, 97 HARV. L. REV. 1813, 1819 (1984) (noting that “our patent policymaker, Congress, is noted for inaction and has not changed the patent life in over a century”); see also Nicolas Oet- tinger, Note, In re Independent Service Organizations Antitrust Litigation, 16 BERKELEY TECH. L.J. 323, 335-38 (2001) (discussing the reasons why the Supreme Court grants few writs of certiorari in patent cases decided by the Federal Circuit and tends to affirm those that it reviews).

trict court has superior access to pertinent tools, such as a credibility judgment between two competing expert witnesses.169 Many practitioners and law professors undoubtedly have their own ideas of how to solve this problem. Regardless of the approach, the pervasive symptoms of litigation uncertainty continue to plague the patent system. Hopefully the Federal Circuit will choose to tackle this issue.170 D. The Particular Tribunal from which a Case Originates does not Predictably Affect the Outcome of the Appeal The de novo review standard forces parties to “go past the district court’s Markman I proceeding, past the entirety of discovery, past the entire trial on the merits, past post trial motions, past briefing and argument to the Federal Circuit . . . .”171 Logically though, not all appeals should come before the court of appeals with the same chance of being affirmed. A lower court judge without much experience in patent litigation may misapply the arcane rules of claim construction, and therefore doom the appeal to certain reversal. On the other hand, claim construction by a trial judge with substantial patent experience—such as the judges in the Dis- trict of Delaware or the Northern District of California—should theoretically increase the prospect of affirmance at the circuit level. Given the judges’ divergent patent experiences and the fact that litigants have appealed approximately fifty percent of patent cases to the Federal Circuit in recent years,172 correctly choosing the forum to originally litigate the case could greatly influence the ultimate outcome of the case. To assist patent counsels, this study examined how forum choice affects the outcome of an appeal. 1. Reversal Rates: All Issues Before addressing the choice of forum, this section will provide a brief overview of the tribunals included in this study’s population. During the period covered by this study, the Federal Circuit heard appeals from sixty-

169. See Cybor Corp,.138 F.3d at 1463 (Bryson, J., concurring). 170. In a recent en banc decision, the Federal Circuit has attempted to foster more certainty in the patent litigation system by creating a “complete bar” to equivalency where prosecution history estoppel applies to a claim element. See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 569-78 (Fed. Cir. 2000) (en banc), cert. granted, 121 S.Ct. 2519 (2001) (No. 00-1543). 171. Cybor Corp., 138 F.3d at 1476 (Rader, J., dissenting). 172. See Michel, supra note 118, at 1193 (“In the patent cases, the percentage in recent times has hovered at approximately fifty percent, perhaps due in part to the large damage awards that typically are given.”).

six out of the ninety-four district courts in the United States, in addition to appeals from the BPAI, the ITC, the Court of Federal Claims (“CFC”), and cases on remand from the Supreme Court. Table D-1 in Appendix B lists the tribunals originating the appeal and the number of such cases. In examining the effects of forum choice, the first inquiry is whether the Federal Circuit is more likely to reverse a case appealed from a forum that hears a substantial number of patent cases. To address this question, this study divided the population’s appellate cases into two categories based on whether the cases originated from a “more active” tribunal or a “less active” forum.173 The “more active tribunal” group included district courts from which the Federal Circuit reviewed more than ten cases during the studied period. These “more active” district courts were the Central District of California (C.D. Cal.), the District of Delaware (D. Del.), the District of Massachusetts (D. Mass.), the District of Minnesota (D. Minn.), the District of New Jersey (D.N.J.), the Eastern District of Michigan (E.D. Mich.), the Eastern District of Virginia (E.D. Va.), the Northern District of California (N.D. Cal.), the Northern District of Illinois (N.D. Ill.), the Southern District of Florida (S.D. Fla.), and the Southern District of New York (S.D.N.Y.).174 In addition, the “more active” tribunal group com- prised appeals from the BPAI, the CFC, and the ITC.175 Together, these tribunals originated close to two-thirds of the appeals to the Federal Cir- cuit during the period covered by this study. The “less active” courts include all the district courts not mentioned above. The comparison between the “more active” and “less active” groups was as expected. As shown in Table D-2 in Appendix B and Figure D-1 below, the “more active” tribunals were less likely to be reversed than the “less active” courts.

173. This particular calculation included summary affirmances under Federal Circuit Rule 36. 174. This list of active district courts agrees with Allison and Lemley’s list of the most active jurisdictions for patent litigation from 1989-1996. See Allison & Lemley, supra note 77, at 246-47. 175. Although the Federal Circuit heard fewer than 10 cases from either the CFC (9 cases) or the ITC (7 cases), those two tribunals were included in the “more active” group because of the specialized nature of the cases heard by those forums. The CFC has jurisdiction over patent litigation brought against the U.S. government, while the ITC provides a special forum to litigate patent claims affecting imports of non-U.S. goods. It is assumed that those specialized jurisdictions would provide those tribunals with more experience with patent cases.

Figure D-1

Percentage of Cases from "More Active" or "Less Active" Tribunals that Were Reversed In Part or Fully 100%

80% Percentage of cases partially reversed all cases 60%

age of 40% 19% Percentage of rcent 18% cases fully

e 20%

P reversed 16% 22%

(including summary affirmances) 0% More Active Tribunals Less Active Courts

As shown in Figure D-1, the Federal Circuit reversed more cases appealed from a “less active” court (41% of cases) than cases originating from a “more active” tribunal (34% of cases).176 Although small, the difference in reversal rate is nontrivial. A look at some of the cases originating from these “less active” courts underscores this point. For instance, the only case appealed from the Northern District of Alabama was vacated on appeal.177 Both cases from the Eastern District of Louisiana were reversed.178 Similarly, three out of four cases originating from the Western District of Michigan resulted in a reversal in full or in part.179 To determine whether choosing a “more active” over a “less active” forum will affect the likelihood of affirmance, this study tested:

Hypothesis D-1: There is no difference in the likelihood that the Federal Circuit will reverse a case appealed from either a “more active” or “less active” forum. The chi-square test p-value was 0.451806. Because it was greater than a p-value of 0.05 for a 95% confidence level, this study cannot safely reject this hypothesis and, therefore, cannot predict with confidence that the

176. This analysis includes summary affirmances under FEDERAL CIRCUIT RULE 36. 177. Intergraph Corp. v. Intel Corp., 195 F.3d 1346 (Fed. Cir. 1999). 178. Hockerson-Halberstadt, Inc. v. Converse Inc., 183 F.3d 1369 (Fed. Cir. 1999); Laitram Corp. v. NEC Corp., 163 F.3d 1342 (Fed. Cir. 1998). 179. Bickerstaff v. Dr. Shrink, Inc., No. 99-1091, 1999 U.S. App. LEXIS 21601 (Fed. Cir. Sept. 3, 1999); Lencco Racing Co. v. Jolliffe, No. 99-1074, 1999 U.S. App. LEXIS 14239 (Fed. Cir. Jun. 29, 1999); Donnelly Corp. v. Gentex Corp., No. 97-1391, 1998 U.S. App. LEXIS 22382 (Fed. Cir. Sept. 11, 1998).

district court from which the case originated would affect the court of appeals’ likelihood of reversal. 2. “More Active” Tribunal Reversal Rates: All Issues Choosing forums that are less experienced in patent law is often a matter of tactical choice for a litigant attempting to gain the home-field advantage. Where such advantage does not exist, should litigants seek a forum with more patent experience? To address that question, this study attempted to gain a better understanding of the individual tribunals included in the “more active” category. When the aggregate statistics presented in Figure D-1 are more closely examined, it is apparent that some lower tribunals are reversed more often than others. As shown in Table D-3 in Ap- pendix B and Figures D-2 (including summary affirmances) and D-3 (excluding summary affirmances) below, the reversal rates for each lower tribunal differed widely, regardless of whether summary affirmances were included. Figure D-2

Reversal Rate of "More Active" Tribunals (Including Summary Affirmance) 100% Percentage 80% of cases

cases reversed in 60% part

age of 40% Percentage

rcent 20% of cases e

P reversed in 0% full

l. l. . . . . l. . a .J. a ll. Y PAI FC ss inn ITC . I B C a .N Va Fla DN . C . De D Mich . C .D S .D D . M . M .D. .D N .D. C D D .D. E N S E

Figure D-3

Reversal Rate of "More Active" Tribunals (Excluding Summary Affirmance) 100% Percentage 80% of cases en opinions

t reversed in 60% part writ 40% Percentage 20% age of of cases 0% reversed in rcent . .

e full P ITC CFC BPAI Minn. SDNY D.N.J. D. Del. N.D. Ill. D. E.D. Va S.D. Fla D. Mass. C.D. Cal. N.D. Cal. E.D. Mich.

Except for the BPAI, the addition of summary affirmance decisions did not drastically affect the rate at which the Federal Circuit affirmed the lower court’s judgment. At one end of the spectrum, the court of appeals reversed only about 20% of patent cases originating from the Court of Federal Claims,180 and the Northern District of California. At the other end, the Federal Circuit reversed almost 60% of cases from the District of Delaware181 and the Southern District of Florida. To determine whether choosing any of these particular forums will affect the likelihood of affirmance, this study tested:

Hypothesis D-2: There is no difference in the likelihood that the Federal Circuit will affirm a case appealed from the C.D. Cal.,

180. This number agrees with the 21% reversal rate of CFC’s decisions that the Fed- eral Circuit’s official statistics listed for the 1999 calendar year. REPORTS OF THE PRO- CEEDINGS OF THE JUDICIAL CONFERENCE OF THE UNITED STATES, Table B-8, at 125 (1999). 181. This high reversal rate for the District of Delaware is surprising given the Dis- trict’s reputation as “one of the nation’s premier trial courts for the resolution of major patent disputes.” See William J. Marsden, Delaware District is Top Choice for Patent Disputes, NAT’L L.J., Mar. 27, 2000, at C3. The appellate reversal statistics may not tell the whole story. During the twenty-eight months covered by this study, the Federal Cir- cuit only reviewed fifteen cases appealed from the District of Delaware. In contrast, nearly 100 patent cases were filed in that district in 1998, and over 150 intellectual property cases were on the court’s docket at the end of 1999. Id. These facts suggest that the court of appeals may review only a small subset of cases from that district—perhaps those cases which the litigants believe have a greater probability of reversal on appeal.

D. Del., D. Mass., D. Minn., D.N.J., E.D. Mich., E.D. Va., ITC, N.D. Cal., N.D. Ill., S.D. Fla., and S.D.N.Y.182 The chi-square test p-value was 0.249193. Since the experimental p- value was greater than a p-value for a 95% confidence level, this study cannot predict with accuracy the likelihood that the Federal Circuit will affirm a case appealed from these districts. 3. “More Active” Tribunal Reversal Rates: Claim Construction The next question is whether the trial forum affects the Federal Cir- cuit’s rate of change in claim constructions. If a change occurred, this study further ascertained the percentage of such cases where the change was outcome dispositive. Table D-4 in Appendix B and Figure D-4 below examine this issue.

Figure D-4

Percentage of Cases with Any Change in Claim Constructions and Cases Where A Claim Construction Change is Outcome Dispositive, in More Active Courts

h 100% Percentage of cases where claim on review

i 80% construction was uct

r changed 60% opinions wit

40%

age of Percentage of 20% N/A N/A cases where a rcent change in claim e 0% P construction was . . .

a outcome ch express claim const i ITC Va Fl CFC .

DNY determinative . BPAI M Minn. S D.N.J. . D. Del. N.D. Ill. D. E.D S.D D. Mass. N.D. Cal. C.D. Cal. E.D

Figure D-4 presents a very different picture from Figures D-2 and D-3. Except for the Northern District of Illinois and the District of New Jersey, the Federal Circuit modified the lower court’s claim construction in a relatively small fraction of appealed cases. For instance, the Federal Circuit modified claim constructions in only 22% of cases from the District of Delaware and 11% from the District of Massachusetts. The court of appeals did not modify any claim construction when it expressly reviewed

182. This hypothesis omitted the CFC and BPAI because the BPAI does not try patent infringement cases while the CFC jurisdiction is restricted to claims against the United States government.

claim interpretation in cases appealed from the Court of Federal Claims or the Southern District of New York. However, the disadvantage to this low rate of claim interpretation change is that, once the court has changed a claim construction, such modification will lead to an extremely high rate of reversal. This happened in the Central District of California, the Eastern District of Virginia, the District of Massachusetts, the International Trade Commission, the District of Delaware, and the District of Minnesota.183 In light of these results, this study tested for predictive purposes:

Hypothesis D-3: There is no difference in the likelihood that the Federal Circuit will change some claim construction in a case appealed from the C.D. Cal., D. Del., D. Mass., D. Minn., D.N.J., E.D. Mich., E.D. Va., ITC, N.D. Cal., N.D. Ill., S.D. Fla., and S.D.N.Y. For this hypothesis, the chi-square test p-value was 0.40. Because it was greater than a p-value of 0.05 for a 95% confidence level, this study cannot safely reject this hypothesis and, therefore, cannot predict with confidence that the district court from which the case originated affects the likelihood that the Federal Circuit would change the lower court’s claim construction. Although it is not appropriate to rely on those statistics prospectively, one interesting aspect should be noted. The average claim construction- related reversal rate184 for the “more active” tribunal is 19.7%,185 which is lower than the average overall reversal rate of 34%.186 Although surprising, this lower reversal rate seemingly supports the theory that claim construction by a trial judge with substantial patent experience may decrease the prospect of reversal on appeal. Perhaps there is some truth in the notion that experience does matter. It is not necessarily wise to choose a trial forum with an eye to the likelihood of being affirmed on appeal. Although the data from this study suggest that the Federal Circuit’s reversal rate and the claim construction modification rate differ among districts, these results cannot confidently

183. The danger of extrapolating from this figure, however, is that most of those 100% reversal rates are based on a small number of cases where claim constructions were changed (e.g., one case in Colorado, Minnesota, Massachusetts, Eastern District of Penn- sylvania, and the ITC). 184. This relates to cases where a claim construction change is outcome dispositive. 185. This number was obtained by averaging the percentage of cases where a change in claim construction was outcome determinative. See Figure D-4 supra and Table D-4 infra. 186. See Figure D-1 supra and accompanying text.

predict that the court of appeals will follow the same pattern prospectively. The best lesson, perhaps, is that litigants should consider this data, but not rely on past results to inform their forum selection. E. The Federal Circuit Reversed and Changed More Claim Constructions in Precedential Decisions than in Nonprecedential Cases Some members of the patent bar have speculated that the Federal Cir- cuit uses nonprecedential opinions in difficult cases.187 Like many other circuits, the Federal Circuit’s Rules differentiate between the types of decisions that the court issues.188 As Judge Michel explained:

the court disposes of almost a third of its cases by summary affirmance (i.e., without opinion) under Federal Circuit Rule 36. Second, the court disposes of another one-third of its cases under Rule 47.6 by “non-precedential” decision (i.e., a public opinion explaining the reasoning of the court but usually only in abbrevi- ated form). These opinions, however, cannot be cited as precedent.189 In other words, only one-third of decisions issued by the court are “precedential.” However, the Federal Circuit seems to spend more time writing patent opinions than other types of decisions. Of the 502 patent cases included in this study, 191 (38%) decisions were precedential, 205 (41%) were nonprecedential under Federal Circuit Rule 47.6, and 106 (21%) were summary affirmances under Federal Circuit Rule 36. Thus, a substantial number of cases are issued as nonprecedential rulings, with a smaller proportion published as “precedential.” On first inspection, the greater number of nonprecedential decisions might bolster the criticism that the Federal Circuit uses nonprecedential opinions in difficult cases.

187. See Michel, supra note 118, at 1187 (“Indeed, their use [of nonprecedential decisions] is often criticized, although sometimes because of misunderstanding. For example, members of the specialty bars complain informally at conferences. Some speculate that the court uses nonprecedential opinions in difficult cases.”). Although Judge Michel did not define what he meant by “difficult cases,” this study supposes that the term refers to cases with complicated legal questions and/or awkward facts. 188. See FED. CIR. R. 36, 47.6. 189. See Michel, supra note 118, at 1186-87.

1. Precedential Decisions and Reversal Rates: All Issues To test for this possibility, this study looked at the reversal rate of cases in each of these three categories. Table E-1 in Appendix B and Fig- ure E-1 below illustrate the results.

Figure E-1

Reversal Rate of Cases By The Precedential Nature of Decisions 100% Percentage 80% of cases partly cases 60% reversed

age of 40% 28% Percentage

rcent 17% of cases

e 20%

P N/A fully 28% 16% reversed 0% Precedential Non-precedential Summary cases affirmance

As Figure E-1 shows, the Federal Circuit reversed more precedential cases than nonprecedential cases in this study.190 The court fully reversed 28% (52 of 191 cases) of precedential opinions and partially reversed an equal proportion (53 of 191 cases). As for the nonprecedential opinions, the Federal Circuit fully reversed 16% (32 of 205 cases) and partially reversed 17% (34 out of 205 decisions) of those decisions. Of course, summary affirmances by their nature are not reversals. To determine whether any predictive value exists in these data, this study tested:

190. It is logical to assume that appellate courts are more likely to reverse cases with difficult issues of law or awkward facts since there is more room for the trial court to commit reversible error. See Guy Goldberg & Gena Bunn, Balancing Fairness & Final- ity: A Comprehensive Review of the Texas Death Penalty, 5 TEX. REV. L. & POL. 49, 80 n.139 (2000) (noting, in the context of Texas death penalty cases, that “cases with more complicated legal issues are the ones that get published and are more likely to contain issues that require reversal”).

Hypothesis E-1: There is no difference in the likelihood that the Federal Circuit will affirm or reverse the lower court if the decision is precedential or nonprecedential.191 The chi-square test p-value was 0.00549. This null hypothesis can thus be rejected with 99% confidence. Therefore, whether a decision is precedential or nonprecedential relates to the likelihood of reversal by the Fed- eral Circuit. Assuming that difficult cases are more likely to be reversed, Figure E- 1 indicates that the members of the patent bar erred in speculating that the Federal Circuit used nonprecedential opinions in difficult cases. As indicated by the high rate of reversal of precedential decisions, it seems that more difficult cases are issued as precedential opinions. In practice, this assumption has both strengths and weaknesses. On one hand, where a troublesome case has the potential to engender “bad law,” the court may choose to resolve it as a nonprecedential ruling under Rules 36 or 47.6. On the other hand, the vote of only one panel member is sufficient to make a case precedential, thus indicating a strong presumption against nonprecedential status.192 To avoid undue speculation, this study only concludes that appellate reversals occur more often in precedential than nonprecedential rulings. 2. Precedential Decisions and Reversal Rates: Claim Construction Since there is a relationship between the precedential status of the Federal Circuit’s written decisions and the rate of reversal, it is possible that certain classes of opinions have higher rates of claim construction changes. Table E-2 and Figure E-2 illustrate the result of this inquiry.

Figure E-2

191. This calculation omitted procedural decisions involving issues such as writs of mandamus because their inclusion would substantially distort the chi-square test and they are of less interest to practitioners. 192. See Michel, supra note 118, at 1187.

Percentage of Cases with Any Change in Claim Constructions and Cases Where Claim Construction Change Was Outcome Dispositive, by Precedential Nature of Case 100% Percentage of h cases with any 80% change in claim on review i construction uct r 60% 49% opinions wit 37% Percentage of 40% 36% cases where a age of 23% claim construction change was rcent 20% e outcome P dispositive express claim const 0% Precedential Nonprecedential

As Figure E-2 illustrates, the Federal Circuit changed the lower court’s claim construction in close to half of the precedential cases (44 of 90 opinions). Of those cases, almost three-quarters were reversed. The court showed more restraint in nonprecedential decisions. Only 37% (33 of 89 decisions) of the nonprecedential cases were subject to any change in claim construction, 61% of which were reversed. This study then tested:

Hypothesis E-2: There is no difference in the likelihood that the Federal Circuit will modify the lower court’s claim construction if the decision is precedential or nonprecedential. The chi-square test p-value was 0.11052. It is thus inappropriate to reject the null hypothesis and to conclude that a relation exists between precedential opinions and the likelihood the court would modify the lower court’s claim construction. Nonetheless, the data indicates that the Federal Circuit has changed outcome dispositive claim constructions more often in precedential cases during the period covered by this study. It is possible that, within the studied population, the higher reversal rate of precedential cases may be caused by the higher rate of change in claim constructions. Whether this notion applies beyond the current dataset, this study cannot say.

F. The Inclusion of a Means-Plus-Function Issue Affects the Likelihood of Reversal and Claim Construction Modifications Unpredictability could also arise from the complexity of the case law. In the field of claim construction, arcane rules193 govern the interpretation and application of means-plus-function claims under 35 U.S.C. § 112(6) (“112(6)”).194 If the complexity of the law affects the rate of reversal and claim construction change, the Federal Circuit should correct means-plus- function claim interpretation more often than normal claims. 1. Means-Plus-Function Claims and Reversal: All Issues To evaluate this possibility, this study first determined the Federal Cir- cuit’s reversal rate in cases raising at least one issue relating to a 112(6) claim.195 Those results are provided in Table F-1 in Appendix B and Fig- ure F-1 below. Figure F-1

Percentage of Cases Reversed In Part or Fully Based on Whether They Contain Means-Plus-Function Claims 100%

80% Percentage of n opinions

e cases partially t 60% reversed 40% writ 40% 17% 22%

age of 20% 24% 16% 20% Percentage of cases fully rcent

e 0% reversed P Cases with no claim Cases including Cases only including construction means-plus-function normal claim claim issues construction issues

193. See Patrick J. Flinn, Claim Construction Trends in the Federal Circuit, 572 PLI/PAT 317, 336-44 (1999) (discussing rules governing 112(6) jurisprudence). 194. Title 35 U.S.C. § 112(6) provides that a claim element could be expressed as a “means or step for performing a specified function.” 35 U.S.C. § 112(6) (1994). This provision eliminates the need to recite structural terms that may be unnecessarily cumber- some or inadequate to describe an element of a claim, but requires that the patent specification describe some structure that performs the specified function. See id; see also Val- mont Indus., Inc. v. Reinke Mfg. Co., Inc., 983 F.2d 1039, 1041-42 (Fed. Cir. 1993) (explaining the history and limiting effect of 35 U.S.C. § 112(6)). 195. This section only analyzed written opinions because summary affirmance cases lack the discussion necessary to ascertain whether they included a means-plus-function claim construction issue.

The Federal Circuit reversed 56% of cases (32 out of 57) that included means-plus-function claim issues. This proportion is substantially greater than in cases with no means-plus-function claim interpretation or cases without any claim construction. In those categories, only about 41 to 42% of cases were reversed. For predictive purposes, this study tested:

Hypothesis F-1: Appealed cases containing means-plus-function claims are not more likely to be reversed. The chi-square test p-value was 0.05, which matches the accepted p- value for a 95% confidence level. Therefore, it is possible to reject the null hypothesis and predict that whether an appealed case contains means-plus- function claims relates to its likelihood of being reversed by the Federal Circuit. However, it is also possible that a factor unrelated to claim construction led to those reversals. To eliminate that possibility, it is necessary to examine whether a claim construction modification was correlated to those reversals. 2. Means-Plus-Function Claims and Reversal: Claim Construction Table F-2 in Appendix B and Figure F-2 illustrate the rates at which the Federal Circuit changed the lower court’s claim constructions in cases with means-plus-function claims.

Figure F-2

Percentage of Cases with Any Change in Claim Constructions and Cases Where a Claim Construction Change Was Outcome Dispositive, By Presence of 112(6) Claim 100%

Percentage of h

on cases where i 80% claim uct r construction 60% 55% was changed opinions wit 39% 37% 40%

age of 25% Percentage of cases where a

rcent 20% change in claim e express claim const

P construction was outcome 0% determinative Cases including means-plus- Cases only including normal function claim construction claim construction issues

The Federal Circuit modified claim interpretation in 55% of cases that included means-plus-function claims (31 out of 56 cases),196 while cases with normal claims (42 out of 114 cases) were modified only 37% of the time. The proportion of cases in which a claim construction change was outcome determinative stood at 39% and 25% respectively. To determine whether any predictive value exists in this data, this study then tested:

Hypothesis F-2: The Federal Circuit is not more likely to change a claim construction in appealed cases containing means- plus-function claims. The chi-square test p-value was 0.072. This p-value indicates that the null hypothesis may be rejected with 90% confidence, but not at a 95% confidence level. Therefore, the presence of a means-plus-function claim is a weak predictor that the Federal Circuit will change at least one claim interpretation in a particular case. 3. Implications Hence, an appellant dealing with a patent containing a means-plus- function claim has a good chance of success on appeal because the Federal Circuit is more likely to reverse and to change the interpretation of claim terms in such cases. Yet, why should cases containing 112(6) claims be subject to a more stringent treatment? The de novo standard of review cannot solely account for this discrepancy since it applies to cases with and without means-plus-function claims. A likely answer is that the arcane rules of 112(6) case law add substantial complexity to this area of patent law and thus increase the chance of reversible errors. Although the Federal Circuit has made great strides in developing the law applicable to 112(6) claims,197 substantial ambiguity remains. For example, the court has adopted a test to determine when a claim is subject to

196. The number of opinions here differs from the previous page (56 cases here compared to 57 cases in the previous page) because one opinion included in the previous page’s data dealt with a means-plus-function claim without construing it. See Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259 (Fed. Cir. 1999) (finding that the district court’s infringement analysis and determination of equivalence misconstrued Federal Circuit precedent in Chiuminatta Concrete Concepts, Inc. v. Cardinal Industries, Inc., 145 F.3d 1303 (Fed. Cir. 1998)). In Odetics, the Federal Circuit discussed claim constructions but only to reiterate its construction from an earlier appeal. See Odetics, 185 F.3d at 1259. 197. See Flinn, supra note 193, at 336-44 (discussing recent developments in the Federal Circuit’s 112(6) jurisprudence).

the special 112(6) rules:198 If the word “means” appears in a claim element in combination with a function, the court will presume that 112(6) rules apply to that claim.199 That presumption is rebuttable upon showing that the claim itself recites sufficient structure or material for performing the claimed function.200 Conversely, a claim element without the word “means” would not fall within the ambit of 112(6), unless it invokes purely functional terms without any recital of specific structure or material for performing that function.201 Although simple in formulation, the rule is harder to apply. In Mas-Hamilton Group v. LaGard Inc.,202 the court found that the claim term “lever moving element” was a means-plus- function element because it was described in term of its function, not its mechanical structure.203 However, in Al-Site Corp. v. VSI, Int’l,204 the Federal Circuit concluded that the term “eyeglass hanger member” fell outside the scope of 112(6) because the claim recited sufficient structure.205 The presence of sufficient structure appears to remain in the eye of the beholder. Deciding what constitutes a disclosed or equivalent structure can present a substantial challenge to lower courts wrestling with the complexity of the law. In B. Braun Medical, Inc. v. Abbott Laboratories,206 the court held that a “corresponding structure” must clearly link or associate that structure to the function recited in the claim, and must be specific enough to meet the definiteness requirement of section 112.207 As simple as the rule sounds, what constitutes a “clear link” remains ambiguous. For example, the B. Braun court ruled that merely mentioning another embodiment of the disputed function was an insufficient link.208 Thus, what constitutes “clear linking” remains to be determined.

198. Greenberg v. Ethicon Endo-Surgery, Inc., 91 F.3d 1580, 1583 (Fed. Cir. 1996). 199. See id.; see also Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1320 (Fed. Cir. 1999). 200. York Prods., Inc. v. Central Tractor Farm & Family Ctr., 99 F.3d 1568, 1574 (Fed. Cir. 1996); Cole v. Kimberly-Clark Corp., 102 F.3d 524, 530-31 (Fed. Cir. 1996). 201. Personalized Media Communications, Inc. v. Int’l Trade Comm’n, 161 F.3d 696, 704 (Fed. Cir. 1998) 202. 156 F.3d 1206 (Fed. Cir. 1998). 203. Id. at 1213-15. 204. 174 F.3d 1308 (Fed. Cir. 1999). 205. Id. at 1318-19. 206. 124 F.3d 1419 (Fed. Cir. 1997). 207. Id. at 1424. 208. Id.

Moreover, the ambiguous overlap of equivalence under 112(6) and the doctrine of equivalents has added to the complexity of construing means- plus-function claims.209 In Chiuminatta Concrete Concepts, Inc. v. Cardi- nal Industries, Inc.,210 the Federal Circuit clarified that a lack of literal infringement under 112(6) may preclude a finding of equivalence under the doctrine of equivalents,211 depending on whether the equivalent relies on a technology known at the time the patent issued.212 Although the Federal Circuit reached an appropriate balance between preserving the doctrine of equivalents for the patentee and providing sufficient notice to competitors,213 it also added substantial complexity to an already difficult area of law. Even if the 112(6) rules are reasonably clear to Federal Circuit judges and members of the patent bar, those canons may appear bewildering and perplexing to generalist trial court judges. In addition to those complex rules, whether the disputed claim falls within the scope of 112(6) is reviewed by the Federal Circuit de novo. Since Markman I,214 the Federal Circuit has carefully avoided deciding whether 112(6) equivalence is a question of law or fact.215 However, the

209. These two doctrines are related but different. See, e.g., Endress + Hauser, Inc. v. Hawk Measurement Sys. Pty. Ltd., 122 F.3d 1040, 1043 (Fed. Cir. 1997): Though it is well understood that ‘equivalents’ under § 112 P 6 is a different concept from ‘equivalents’ under the judicially created doctrine of equivalents, the district judge correctly recognized that the statutorily required construction under § 112 P 6 must proceed on a limitation- by-limitation basis, not dissimilar to the analysis under the doctrine of equivalents. 210. 145 F.3d 1303 (Fed. Cir. 1998). 211. Id. at 1310 (“Thus, a finding of a lack of literal infringement for lack of equivalent structure under a means-plus-function limitation may preclude a finding of equivalence under the doctrine of equivalents.”). 212. Id. at 1311 (“[W]here the equivalence issue does not involve later-developed technologies, but rather involves technology that predates the invention itself . . . a finding of nonequivalence for § 112, P 6, purposes should preclude a contrary finding under the doctrine of equivalents.”). 213. See Jason Schultz, Note, Chiuminatta Concrete Concepts Inc. v. Cardinal Indus- tries, Inc. & Dawn Equipment Co. v. Kentucky Farms, Inc., 14 BERKELEY TECH. L.J. 173, 185-90 (1999) (discussing the policies advanced by the Federal Circuit’s holding in Chi- uminatta). 214. Markman v. Westview Instruments, Inc., 52 F.3d 967, 977 n.8 (Fed. Cir. 1995) (en banc), aff’d, 517 U.S. 370 (“As that issue is not before us today, we express no opinion on the issue of whether a determination of equivalents under § 112, para. 6 is a question of law or fact.”). 215. See Chiuminatta, 145 F.3d 1303 at 1309; Cybor Corp. v. FAS Techs., 138 F.3d 1448, 1457 n.7 (Fed. Cir. 1998) (en banc).

court has unequivocally held that a determination of whether claim language invokes 112(6) is a claim construction issue reviewed de novo as a matter of law.216 Thus, the resolution of a 112(6) question will not be final until the Federal Circuit rules on it. In sum, the complexity of the case law compounds the existing unpredictability arising from the de novo standard. If Markman I aimed to foster predictability and certainty, the area of means-plus-function case law stands as a remarkable disappointment. G. Although the Federal Circuit Expressly Construes Claims in Most Infringement Cases, it does not do so for a Substantial Proportion of Invalidity Reviews In Markman I, the Federal Circuit ruled that “the court has the power and obligation to construe as a matter of law the meaning of language used in the patent claim.”217 Since then the Federal Circuit has vigorously applied that decree218 both to infringement analyses219 and to invalidity chal-

216. Rodime v. Seagate Tech., Inc., 174 F.3d 1294, 1302 (Fed. Cir. 1999) (“Whether certain claim language invokes 35 U.S.C. § 112, P(6) is an exercise in claim construction and is therefore a question of law . . . .”); Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206, 1211 (Fed. Cir. 1998) (“A determination of corresponding structure, therefore, is a determination of the meaning of the ‘means’ term in the claim and is thus also a matter of claim construction.”). 217. Markman I, 52 F.3d at 979. 218. E.g., Digital Biometrics v. Identix, Inc., 149 F.3d 1335, 1343 (Fed. Cir. 1998); Festo Corp. v. Shoketsu Kizoku Kogyo Kabushiki Co., 72 F.3d 857, 863 (Fed. Cir. 1995) vacated and remanded on other grounds, 520 U.S. 1111 (1997) (stating that the Federal Circuit’s law requires an “independent determination of the construction of the claims, as a matter of law, unencumbered by the trial process.”). 219. See, e.g., K-2 Corp. v. Salomon S.A., 191 F.3d 1356, 1362 (Fed. Cir. 1999) (“An infringement analysis is a two-step process in which the court first determines, as a matter of law, the correct claim scope, and then compares the properly construed claim to the accused device to determine, as a matter of fact, whether all of the claim limitations are present in the accused device, either literally or by a substantial equivalent.”); see also Renishaw PLC v. Marposs Societa’ Per Azioni, 158 F.3d 1243, 1247-48 (Fed. Cir. 1998); General Mills, Inc. v. Hunt-Wesson, Inc., 103 F.3d 978, 981 (Fed. Cir. 1997); Young Dental Mfg. Co. v. Q3 Special Prods., Inc., 112 F.3d 1137, 1141 (Fed. Cir. 1997).

lenges.220 Despite this requirement, many cases involving invalidity appeals lack any express claim construction.221 1. Frequency of Claim Construction Reviews: All Issues This study undertook to determine, within the studied population, how often the Federal Circuit has refrained from expressly construing the claims-in-suit in an invalidity challenge.222 In particular, this study aimed to quantify the percentage of cases in which claim construction addressed infringement only, invalidity only, or invalidity and infringement issues. Table G-1 in Appendix B provides this result, which is depicted in Figure G-1 below. Figure G-1

Invalidity and infringement (5.5%) Percentage of Cases in which the Federal Cir- Invalidity cuit’s Express Claim only (18%) Construction Addressed Only Infringement, Only Infringement Invalidity, or Both Inva- only (76.5%) lidity and Infringement Issues

Figure G-1 shows that, in an overwhelming number of opinions expressly reviewing claim construction (137 out of 179 cases, or 76.5%), the Federal Circuit only construed the claims in the infringement context. In a

220. See, e.g., SIBIA Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349, 1355 (Fed. Cir. 2000) (“[T]he first step in any invalidity analysis is claim construction, an issue of law that this court reviews de novo.”); Rockwell Int’l Corp. v. United States, 147 F.3d 1358, 1362 (Fed.Cir.1998) (“The first step in any invalidity . . . analysis is claim construction.”). 221. See, e.g., Mitsubishi Elec. Corp. v. Ampex Corp., 190 F.3d 1300 (Fed. Cir. 1999); Brasseler, U.S.A. L.L.P. v. Stryker Sales Corp., 182 F.3d 888 (Fed. Cir. 1999); In re Dembiczak, 175 F.3d 994 (Fed. Cir. 1999); Monarch Knitting Mach. Corp. v. Sulzer Morat GmbH, 139 F.3d 877 (Fed. Cir. 1997). 222. In general, litigants may challenge the validity of a patent under 35 U.S.C. §§ 101 (patentable subject matter and utility), 102 (anticipation and statutory bars), 103 (obviousness), and 112 (required disclosure). See ROBERT P. MERGES ET AL., INTELLEC- TUAL PROPERTY IN THE NEW TECHNOLOGICAL AGE 131 (2d ed. 2000).

smaller fraction of such cases, the court’s claim interpretation exclusively involved invalidity issues (32 cases, or 18%). Of the 32 cases involving invalidity issues, only nine came from the BPAI while the rest originated from district courts. Interestingly, barely 5.5% of cases involved claims construction expressly focusing on both infringement and invalidity issues. These results raise the possibility that this study’s population contained a disproportionate number of infringement issues relative to invalidity decisions. To control for this possibility, this study also analyzed all issues addressed in each opinion. In particular, those tabulated issues included infringement, invalidity, inequitable conduct, and others such as antitrust or procedural rulings. The result appears in Table G-2 in Appen- dix B below.

Table G-2

Issues considered by the Number of Percentage of Federal Circuit cases cases infringement only 77 19% invalidity only 69 17% inequitable conduct only 4 1% other only (e.g., antitrust, procedural) 123 31% infringement & invalidity 20 5% infringement & inequitable conduct 2 1% infringement & other 42 11% invalidity & inequitable conduct 5 1% invalidity & other 13 3% inequitable conduct & other 8 2% infringement, invalidity, & inequitable conduct 6 2% infringement, invalidity & other 17 4% infringement, inequitable conduct & other 2 1% invalidity, inequitable conduct & other 2 1% invalidity, infringement, inequitable conduct, & other 6 2% Total 396 100%

Table G-2 indicates that 43% of written opinions (172 out of 396) involved infringement issues, 35% of cases (138 out of 396) dealt with invalidity challenges, 9% of cases (35 out of 396) addressed inequitable conduct problems, and 54% of cases (213 of 396) included at least one other issue such as antitrust or procedural questions.223 Two facts are apparent from this data. First, the Federal Circuit expressly construed patent claims in an overwhelming 85% of all infringement opinions.224 The remaining 15% lacking any claim construction is generally attributable to instances where the court had construed claims in a previous decision.225 Second, the court failed to expressly construe the patent claims in most invalidity cases. In fact, it expressly construed the claims in only 30% of written opinions involving invalidity challenges.226 After discounting the nine cases appealed from the BPAI and the ITC,227 only 22% of invalidity cases appealed from district courts benefited from an express claim construction by the Federal Circuit. In sum, the results portrayed in Figure G-1 illustrate the issues covered by the Federal Cir- cuit’s claim construction. These results suggest that the Federal Circuit may not have complied with the letter of the law decided in Markman I. Since that decision, the court has repeated the tenet that the first step in any invalidity or infringement analysis must be claim construction.228 Yet, when it comes to apply-

223. Because many cases included more than one type of tabulated issue, there were inevitable overlaps in the summaries of the different issues reviewed by the Federal Cir- cuit. 224. This number was obtained as follows: the total number of infringement cases where the court construed claims, 147 cases (137 cases whose claim construction issue focused only on infringement, and 10 cases with both infringement and invalidity), was divided by the total number of written opinions involving infringement issues, i.e.,172 possible cases. The resulting 85% of infringement cases include: (a) decisions whose claim construction only involved infringement, and (b) decisions involving both infringement and invalidity issues. 225. See, e.g., Kamyr, Inc. v. Clement, No. 98-1557, 1999 U.S. App. LEXIS 30706 (Fed. Cir. Nov. 29, 1999); Bradshaw v. Igloo Prods. Corp., No. 98-1157, 1998 U.S. App. LEXIS 23347 (Fed. Cir. Sept. 18, 1998). 226. This number was obtained as follows: the total number of infringement cases where the court construed claims, 42 cases (32 cases with invalidity only and 10 cases with infringement and invalidity) was divided by the total number of written opinions involving invalidity issues, i.e., 138 possible cases. 227. Eleven cases involving invalidity issues were appealed from the BPAI (9 cases) and the ITC (2 cases) during the period covered by the study. 228. See, e.g., Rockwell Int’l Corp. v. United States, 147 F.3d 1358, 1362 (Fed. Cir. 1998) (“The first step in any invalidity or infringement analysis is claim construction.”).

ing that precept, the court has only complied with part of that rule. As the data above indicate, in general, the Federal Circuit expressly reviewed the lower court’s claim constructions in opinions involving an infringement allegation, but failed to do so for invalidity decisions. Claim construction, however, is an integral part of an invalidity inquiry,229 especially on issues relating to anticipation under 35 U.S.C. § 102(a),230 on-sale bar under 35 U.S.C. § 102(b),231 obviousness under 35 U.S.C. § 103,232 or enablement under 35 U.S.C. § 112.233 Although it is impossible to know definitively, a possible explanation for this practice are prudential concerns favoring judicial economy in deciding cases. If the court can dispose of an invalidity issue based on the facts of the case, there is no need to expend considerable judicial time and resources construing patent claims. By doing so, the court need not reach an issue that is unnecessary to the disposition of the case on its merits. In contrast, infringement cases require an interpretation of the claim’s scope before determining whether the accused device or action falls within the ambit of the claim.234 Alternatively, this practice may be based on the litigation strategies of the parties’ attorneys. For instance, if the attorneys base their invalidity contentions on the facts of the case, the Federal Cir- cuit may prudentially choose to limit its decision to those factual under-

229. See, e.g., Beachcombers Int’l, Inc., v. WildeWood Creative Prods., Inc., 31 F.3d 1154, 1160 (Fed. Cir. 1994). The court Noted: MacCarthy argues that the trial court erred in denying its motion for JMOL on the anticipation and obviousness questions. We begin with the language of the claims. The first step involves the proper interpretation of the claims. The second step involves determining whether the limitations of the claims as properly interpreted are met by the prior art, and in particular by Bennett’s ODYLIC device. Id. 230. See, e.g., Union Oil Co. v. Atlantic Richfield Co., 208 F.3d 989, 995 (Fed. Cir. 2000) (“The first step in any invalidity . . . analysis is claim construction.”); Atlas Powder Co. v. IRECO, Inc., 190 F.3d 1342, 1346 (Fed. Cir. 1999) (“The first task of this court on appeal is to construe independently the disputed claim term.”). 231. See, e.g., STX, LLC v. Brine, Inc., 211 F.3d 588, 591 (Fed. Cir. 2000) (construing disputed claim’s preamble to decide a § 102(b) on-sale bar issue). 232. See, e.g., Rockwell Int’l Corp. v. United States, 147 F.3d 1358, 1362 (Fed. Cir. 1998); In re Dance, 160 F.3d 1339, 1344-45 (Fed. Cir. 1998) (construing claims in affirming BPAI’s obviousness rejection). 233. See, e.g., Nat’l Recovery Techs. Inc. v. Magnetic Separation Sys., Inc., 166 F.3d 1190, 1194-95 (Fed. Cir. 1999) (construing claims in deciding whether a claim was enabled under § 112(1). 234. See, e.g., Rodime PLC v. Seagate Tech., Inc., 174 F.3d 1294, 1302 (Fed. Cir. 1999).

pinnings instead of focusing on claim construction. Although further study is required to elucidate the underlying reasons for this practice, these theories may explain the disparity in the Federal Circuit’s approach to reviewing claim interpretations. Regardless of the reasons underlying this practice, the express construction of the litigated claims is imperative to adequately fulfill the public notice requirement of patents. Once the court has delineated the metes and bounds of a disputed, but valid, patent the patentee’s competitors can assess their options. By deferring the construction of the claims until such interpretation becomes relevant, the Federal Circuit only postpones often inevitable decisions, wastes substantial resources at the trial court level, and forces new defendants to bear the expenses of litigation merely because the contours of that patent remain undetermined. For the sake of public notice and overall judicial efficiency, the court should expressly construe all pertinent claims in the context of an invalidity challenge.235 2. Frequency of Claim Construction Reviews: Invalidity v. Infringement Knowing that the Federal Circuit selectively construed the claims, the remaining step was to determine whether the particular issue—such as infringement or invalidity—influenced the rate at which the Federal Circuit changed lower tribunals’ claim constructions. If a change occurred, it was imperative to ascertain whether the modification was outcome dispositive. Table G-3 and Figure G-3 present this result.

235. A practitioner commented that this argument asked the Federal Circuit to provide an “advisory opinion.” By clearly construing the claims, the court would not provide any “advisory opinion” per se. An issue involving an advisory opinion arises when [1] a federal court answers an inquiry from a coordinate branch of the federal government about the legality of some contemplated conduct, see Muskrat v. United States, 219 U.S. 346 (1911); [2] there is no adversity between the parties seeking a resolution of a concrete and bona fide dispute, see United States v. Johnson, 319 U.S. 302 (1943); or [3] a federal court’s decision is liable to be overturned by one of the coordinate branches, see Plaut v. Spendthrift Farms, Inc., 514 U.S. 211 (1995). Here, the Federal Circuit neither answers an inquiry from a coordinate branch nor risks having its decision overturned by Congress or the Executive branch. In addition, the court would construe the claims in a bona fide infringement suit brought by adverse parties. Finally, this practice may advance some of the public policies underlying the Supreme Court’s opinion in Cardinal Chemi- cal Co. v. Morton International, Inc., 508 U.S. 83, 99-102 (1993) (discussing the importance of preserving the litigant’s desire to preserve the value of its judgment, the public’s strong interests in the finality of judgments in patent litigation and in resolving the patent’s validity, and the patentee’s interests in having the validity issue correctly adjudi- cated and in avoiding the loss of its patent’s practical value).

Figure G-3

Percentage of Cases with Any Change in Claim Constructions and Cases Where a Claim Construction Change Was Outcome

Dispositive, by Issue Presented h on i 100% Percentage of cases uct r where claim 80% construction was changed 60% 45% 50% opinions wit 40% 30% 31%

review 40% 22% ge of Percentage of cases a 20% where a change in claim construction rcent 0% e was outcome

P Cases with only Cases with only Cases with both an express claim const determinative infringement invalidity infringement and invalidity

Figure G-3 indicates that the court modified the lower court’s claim interpretation in almost half of all cases (62 out of 137 cases, or 45%) where the claim construction review only focused on infringement issues. How- ever, a little more than one-third of decisions (10 out of 32 cases, or 31%) concerned with invalidity issues underwent any claim construction change on appeal. Finally, the court modified the claim interpretation in exactly half of the decisions (50%, or 5 out 10 cases) where the claim construction involved both invalidity and infringement issues. To determine whether this result bears any predictive value, this study tested:

Hypothesis G-1: There is no difference in the likelihood that the Federal Circuit will modify the lower court’s claim construction when the issues on appeal consist of infringement only, invalidity only, and invalidity and infringement. The chi-square test p-value was 0.4603. Since the experimental p- value was greater than a p-value for a 95% confidence level, this study cannot predict with confidence that the Federal Circuit would decide differently based on which issue was included in the appeal. In the minority of infringement and invalidity cases where the Federal Circuit modified a claim construction, it usually reversed the trial court’s judgment. When the claim construction issue exclusively focused on infringement, the court reversed two-thirds (41 of 62 cases, or 66%) of the decisions. In other words, a litigant whose case only involved an infringement issue had a 34% chance that the Federal Circuit would reverse the case on the basis of erroneous claim constructions. By contrast, once the court changed the claims’ meanings in a case where the only claim construction dispute centered on invalidity, there was a 70% chance of re-

versal. Finally, where the appealed claim construction issues involved both infringement and invalidity, the court reversed a staggering 80% of those cases. In sum, a litigant who wisely chose the issues he appealed could have increased his chances of success during the period covered by this study.

V. CONCLUSION Based on a systematic examination of Federal Circuit decisions since early 1998 and the application of statistical methods, this study offers counter-intuitive results. Although the Federal Circuit has in aggregate reversed a smaller proportion of cases based on claim construction than before 1998, there is a trend showing an increase in claim construction modifications and claim interpretation-based reversals since Cybor Corp. This is the outcome that Judge Rader had warned against in his dissent. Underscoring this point is the fact that the de novo standard could explain the relationship between the type of judgment appealed and the likelihood of reversal and claim construction modification. In addition, some negative data, although not linking the review standard to the reversals or changes in interpretation, narrows the list of possible causes for the increase in claim construction modifications and related reversals. Indeed, the particular tribunal from which a case originates does not seem to affect the likelihood of reversal or claim construction modification, nor does the identity of the Federal Circuit judge who authors the majority decision appear to influence the outcome of the appeal. Of course, it is inappropriate to blame the standard of review for everything. For example, the relationship between the probability of reversal and whether a case is precedential has little relevance to any standard of review. Furthermore, other factors also contribute to the higher rates of reversal and claim construction change. As the discussion on means-plus-function claims indicates, the complexity of the law may bear part of the blame. Finally, if the Federal Circuit wishes to provide more predictability and clarity, it should practice what it preaches, and expressly construe the claims in invalidity challenges in the same proportion as for infringement reviews. In sum, the goal of greater predictability and certainty remains a tantalizing dream. Perhaps Justice Holmes summarized it best when he said, “[s]o in the broadest sense it is true that the law is a logical development, like everything else. . . . But certainty generally is illusion, and repose is not the destiny of man.”236

236. HOLMES, supra note 1, at 705.

VI. APPENDIX A: EXTRAPOLATING A MORE COMPLETE PICTURE OF CLAIM CONSTRUCTION-BASED REVERSALS BY INCLUDING SUMMARY AFFIRMANCES IN THE ANALYSIS

Several practitioners shared their concerns that the methodology used in analyzing claim construction issues may not provide a complete picture because the approach only focuses on written opinions while excluding summary affirmances. Indeed, summary affirmance orders constituted 106 cases, or 21%, of the studied population.237 Because at least some of the summary affirmance decisions must involve claim interpretation, the exclusion of these rulings may lead to an overcount of claim construction changes and reversals in this study. By their nature, summary affirmance decisions provide no detail as to the Federal Circuit’s reasoning and no information about claim construction.238 Unfortunately, there is no efficient approach for determining the prevalence of claim construction issues in these summary affirmance decisions. Given the one-line order that is common to summary affirmance rulings, such determination cannot rely on the Federal Circuit’s decision itself. Relying on an analysis of the lower tribunals’ opinion in these summary affirmances is not feasible either. A random or systematic sampling of these lower tribunals’ decisions is difficult because the LEXIS system does not contain all of those opinions. Hence, any sampling attempt would inevitably encounter a situation where the desired lower court’s opinion is not available. Either ignoring or including that particular case would inevitably flaw the analysis. The same problem would plague any attempt at conceptualizing such analysis as a “population study;” those lower courts’ opinions would still be missing. Although it is possible to request those missing slip opinions from the individual tribunals around the country, such approach would be logistically difficult and unduly burdensome.

237. See Part IV.E supra. 238. In other words, by their very nature, summary affirmances do not involve any express claim construction review, since there is no expressed discussion of the issues involved in the case.

However, it is possible to ascertain a range within which the actual number of claim construction-based reversals would fall.239 On one end of the spectrum, Figure A-4 above presents the analysis that excludes summary affirmances. On the other end, Table App-1 in Appendix B and Fig- ure App-1 below include all summary affirmances.240

Figure App-1

Percentage of Cases (including All Summary Affirmances) with Any Outcome-Dispositive Change in Claim Constructions 100%

80%

60%

40% affirmances 20%

0% Percentage of opinions with express claim construction review, & summary ep-99 ep-98 Jul-99 Jul-98 Jan-00 Jan-99 Jan-98 Mar-00 Mar-99 Mar-98 Nov-99 Nov-98 S S May-99 May-98

To determine whether there is a pattern over time, a trend line generated based on a least-square analysis was superimposed on Figure App-1. As in Figure A-4, the trend line’s ascending slope suggests that, over time, there is an increase in the total number of cases with outcome-dispositive changes in claim construction. The calculated value of the correlation coefficient was +0.27047, suggesting a small correlation between the passage of time and this inclusive rate of claim construction-based reversal by the Federal Circuit. To determine whether this trend is statistically significant or merely an artifice, the following hypothesis was tested:

Hypothesis App-1: There is no correlation between the passage of time and the rate of reversal based on change in claim construction (data including all summary affirmances) by the Fed- eral Circuit.

239. The author is indebted to Professor Lemley for the design of this elegant ex- trapolation approach. 240. Figure App-1 takes the same number of cases with changed claim constructions as in Figure A-4, but adds the summary affirmance decisions to the denominator. Be- cause the number of summary affirmances differs from month-to-month, the resulting graph will inevitably differ from Figure A-4.

The significance t of this correlation coefficient was +1.4325. The critical value of t with 28 independent variables, at a 95% level of significance in a one-tail test, is +1.706. Because the significance t of the correlation coefficient is smaller than the critical value (+1.4325< +1.706), the null hypothesis above cannot safely be rejected. Although the trend in Figure App-1 is inconclusive, Figures A-4 and App-1 provide a range within which the true percentage of claim interpretation-based reversals must reside. One nonstatistical approach for esti- mating this true percentage is to postulate that there is the same percentage of claim construction issues in the 106 summary affirmance decisions as in the larger population of written opinions.241 Given that 179 out of 396 opinions involved an express claim construction review, this postulated approach suggests that 45% of summary affirmances must also include such review. Out of that 45%, a smaller proportion involved a change in claim construction and an even smaller number resulted in claim interpretation-based reversals. Table App-2 in Appendix B provides this extrapo- lated data. Once the effects of summary affirmances are estimated and included in the analysis, the data indicates that the Federal Circuit changes claim interpretations in an average of 35% of all cases. This average is nine percent lower than the 44% reported in Part IV.A.2 supra.242 Looking at claim-construction reversal rates, Table App-2 indicates that the Federal Circuit reversed 24% of cases involving claim construction reviews. Sur- prisingly, this is a mere five percent difference compared to the 29.6% average reported above.243 Figure App-2 depicts the percentage of reversals based on claim constructions over the twenty-eight months in this study.

Figure App-2

241. This statement may not necessarily be accurate because summary affirmances may have more pro se cases where at least one of the parties lacked the requisite skills to present his case, or may involve more jurisdictional or procedural matters than in the population of written opinions. 242. The 35% average includes summary affirmances and written opinions, while the 44% average arises from an analysis of just written opinions. 243. See Part IV.A.2 supra.

Percentage of Cases (Including Summary Affirmances) That Were Outcome Dispositive h on

i 100% uct r 80%

60% opinions wit summary rmances

i 40% f af age of 20% review & rcent

e 0% express claim const P 9 8 9 9 - - p p Jul-99 Jul-98 Jan-00 Jan-99 Jan-98 Mar-00 Mar-99 Mar-98 Nov-99 Nov-98 Se Se May-99 May-98

As in Figures A-4 and App-1, the superimposed trend line suggests an upward inclination in the rate of outcome dispositive changes in claim construction as time passes. Again, it was necessary to assess the possibility that this trend may be within the margin of error. Thus, this null hypothesis was tested:

Hypothesis App-2: There is no correlation between the passage of time and the rate of outcome dispositive claim construction changes (including summary affirmances). The Pearson’s correlation coefficient for this dataset is +0.356476, and the significance t is +1.9454879. When compared to the critical value of t for a 95% confidence level in a one-tail test (tc= +1.706), it is possible to reject the null hypothesis because t> tc (i.e., +1.9454876> +1.706). In sum, within the studied period and when summary affirmances are included in the analysis, the passage of time was correlated to an increase in the number of cases in which a change in claim construction was outcome dispositive. A methodological caveat is imperative here. The data presented in Ta- ble App-2 and Figure App-2 departed from the normal statistical methodology because there was no simple way for determining the requisite proportion of summary affirmance cases that involved claim construction- based reversals. For the data and analysis in this Appendix, this study adopted a nonstandard and nonstatistical approach in order to approximate the true percentage ofclaim construction-based reversals. Therefore, Table App-2 and Figure App-2 are only “educated guesses.” The true answer lies within the range provided by Figures A-4 and App-1. Nonetheless, the estimated data still indicates an ascending trend in claim construction changes and claim interpretation-based reversals over time, with averages that are still too high for comfort.

VII. APPENDIX B: TABLES & DATA 1. Table A-1: Rate of Case Disposition Over Time

Including Summary Excluding Summary Affirmances Affirmances % % % % month & % % rev tot % % rev tot year affd revd part revd affd revd part revd Jan-98 63% 19% 19% 38% 57% 21% 21% 43% Feb-98 79% 14% 7% 21% 50% 33% 17% 50% Mar-98 64% 27% 9% 36% 58% 32% 11% 42% Apr-98 61% 22% 17% 39% 36% 36% 27% 64% May-98 42% 42% 17% 58% 36% 45% 18% 64% Jun-98 57% 14% 29% 43% 57% 14% 29% 43% Jul-98 47% 27% 27% 53% 38% 31% 31% 62% Aug-98 50% 11% 39% 50% 44% 13% 44% 56% Sep-98 63% 11% 26% 37% 61% 11% 28% 39% Oct-98 85% 0% 15% 15% 80% 0% 20% 20% Nov-98 88% 0% 13% 13% 80% 0% 20% 20% Dec-98 63% 19% 19% 38% 50% 25% 25% 50% Jan-99 76% 12% 12% 24% 69% 15% 15% 31% Feb-99 92% 8% 0% 8% 87% 13% 0% 13% 7 1 1 2 5 2 2 4 Mar-99 9% 1% 1% 1% 6% 2% 2% 4% 4 3 2 5 3 3 3 6 Apr-99 1% 2% 7% 9% 5% 5% 0% 5% 6 2 1 3 2 5 2 7 May-99 5% 4% 2% 5% 5% 0% 5% 5% 3 1 5 6 2 1 6 7 Jun-99 8% 3% 0% 3% 3% 5% 2% 7% 5 3 1 5 5 3 1 5 Jul-99 0% 5% 5% 0% 0% 5% 5% 0%

5 3 1 4 4 3 1 5 Aug-99 5% 0% 5% 5% 7% 5% 8% 3% 5 2 1 4 5 2 1 4 Sep-99 6% 8% 7% 4% 6% 8% 7% 4% 7 1 2 3 5 1 2 4 Oct-99 0% 0% 0% 0% 7% 4% 9% 3% 7 1 1 2 5 2 2 4 Nov-99 1% 4% 4% 9% 6% 2% 2% 4% 5 2 1 4 4 3 2 5 Dec-99 8% 5% 7% 2% 4% 3% 2% 6% 8 0 1 1 7 0 2 2 Jan-00 2% % 8% 8% 8% % 2% 2% 5 1 3 4 3 1 4 6 Feb-00 3% 3% 3% 7% 6% 8% 5% 4% 7 1 1 2 6 2 1 3 Mar-00 4% 6% 1% 6% 2% 3% 5% 8% 5 1 2 4 4 2 3 5 Apr-00 6% 7% 8% 4% 7% 0% 3% 3%

2. Table A-2: Rate of Change in Claim Construction

Absolute percentage of cases month & Rate of change in where claim construction change year claim constructions was outcome dispositive Jan-98 22% 22% Feb-98 0% N/A Mar-98 14% 14% Apr-98 50% 25% May-98 67% 33% Jun-98 25% 25% Jul-98 71% 43% Aug-98 38% 25% Sep-98 44% 11% Oct-98 25% 13% Nov-98 40% 20% Dec-98 50% 50% Jan-99 57% 29% Feb-99 33% 0% Mar-99 40% 40% Apr-99 33% 33% May-99 75% 25% Jun-99 45% 36% Jul-99 70% 60% Aug-99 29% 14% Sep-99 42% 33% Oct-99 50% 50% Nov-99 67% 67% Dec-99 60% 60% Jan-00 67% 33% Feb-00 43% 14% Mar-00 29% 29% Apr-00 40% 30% Total 44% 30%

3. Table A-3: Rate of Claim Elements Interpretation Changed Per Month month & year # of claims # changed average in that time Jan-98 13 2 22.2% Feb-98 1 0 0.0% Mar-98 10 1 14.3% Apr-98 9 3 37.5% May-98 12 5 41.7% Jun-98 7 2 25.0% Jul-98 14 7 54.8% Aug-98 14 4 25.0% Sep-98 16 4 37.0% Oct-98 17 4 21.9% Nov-98 9 3 30.0% Dec-98 9 4 43.8% Jan-99 12 6 55.6% Feb-99 9 4 58.3% Mar-99 12 6 45.3% Apr-99 8 3 50.0% May-99 5 3 75.0% Jun-99 21 10 55.5% Jul-99 16 11 71.7% Aug-99 13 2 28.6% Sep-99 17 6 37.5% Oct-99 10 4 26.7% Nov-99 6 3 38.9% Dec-99 9 3 50.0% Jan-00 3 2 66.7% Feb-00 12 3 28.6% Mar-00 13 6 42.9% Apr-00 12 5 40.0%

4. Table B-1: Types of Judgment Appealed to the Federal Circuit (excluding summary affirmances)

Types of judgment Cases decided % of total being appealed in this category Summary Judgment 166 41% Jury trials and judgments as a matter of law (“JMOL”) 58 15% Other types of rulings (e.g., on remand from the Supreme Court) 6 1% Procedural rulings 71 18% Bench trials 51 13% Preliminary injunctions 14 3% Appeals from the Board of Patent Appeals and Interferences 36 9% Total 402* 100%

* Because six cases involved both an appeal from Summary Judgment and JMOL, both categories were credited with those six cases.

5. Table B-2: Disposition of Certain Types of Judgments Being Appealed

% Fully Rev’d Rev’d in part or Types of judgment Aff’d Rev’d in part completely Summary Judgments 53% 24% 23% 47% Jury trial or JMOLs 45% 16% 39% 54% Other ruling 50% 25% 25% 50% Procedural ruling 53% 26% 21% 47% Bench Trial 56% 16% 28% 44% Preliminary Injunction 57% 36% 7% 43% BPAI 56% 35% 9% 44%

6. Table B-3: Percentage of Change in Claim Construction by Type of Judgment Reviewed

% of total opinions where claim Rate of change Number of cases construction Types of in claim where claim is change is out- judgment constructions changed come dispositive Summary Judgments 51% 52 36% Jury trials or JMOLs 32% 11 21% Other Rulings* 100%* 1 100%* Procedural Rulings** 0%** 0 N/A* Bench Trials 40% 12 27% Preliminary injunctions 14% 1 0% BPAI 22% 2 11%

* Because of the small number of cases in this category (only one case involved claim construction), the statistics here are disproportionate and unrepresentative. ** Because of the small number of cases in this category, the statistics here are disproportionate and unrepresentative.

7. Table C-1: Number of Cases Authored Per Judge, and Percentage of Claim Construction Changes & Reversals Per Authoring Judge

% of total opinions % of cases where a change in # of where claim claim construction cases construction was outcome Opinion author authored was changed determinative Arthur Gajarsa 26 42% 25% Alan Lourie 41 27% 23% Alvin Schall 27 47% 20% Daniel Friedman 2 0% 0% Edward Smith 1 100% 100% Glen Archer 6 33% 33% Giles Rich 33 59% 41% Haldane Mayer 14 50% 50% Jay Plager 24 45% 27% Per curiam 154 29% 19% Paul Michel 40 56% 31% Pauline Newman 38 43% 29% Raymond Clevenger III 29 42% 25% Randall Rader 38 56% 44% Visiting Judge 1 0% 0% William Bryson 28 33% 27%

8. Table C-2: Disposition of Cases Per Authoring Judge

% of % of cases % of cases Opinion author cases aff’d fully rev’d partially rev’d Arthur Gajarsa 54% 29% 17% Alan Lourie 50% 19% 31% Alvin Schall 40% 16% 44% Daniel Friedman 0% 50% 50% Edward Smith 0% 0% 100% Glen Archer 67% 17% 17% Giles Rich 48% 33% 19% Haldane Mayer 80% 20% 0% Jay Plager 55% 23% 23% Per curiam 91% 5% 4% Paul Michel 49% 22% 30% Pauline Newman 56% 28% 17% Raymond Clevenger III 48% 41% 11% Randall Rader 41% 15% 44% William Bryson 52% 20% 28%

9. Table C-3: Number of Dissenting Cases Per Judge

Dissenting Judge # of dissents filed Arthur Gajarsa 1 Alan Lourie 5 Edward Smith 1 Giles Rich 1 Haldane Mayer 6 Paul Michel 1 Pauline Newman 11 Raymond Clevenger III 2 Randall Rader 5 William Bryson 2

10. Table D-1: Number of Cases Appealed Per District Court

Tribunal originating appeal # of cases heard BPAI 60 CDCA 34 CFC 9 DAZ 2 DCO 10 DCT 4 DDC 7 DDE 15 DKS 3 DMA 19 DMD 5 DMN 13 DNE 2 DNH 4 DNJ 18 DNV 4 DOR 2 DPR 1 DRI 1 DSC 2 DUT 4 DWY 1 EDCA 1 EDKY 1 EDLA 2 EDMI 14 EDMO 6 EDNC 1 EDNY 9 EDPA 5 EDTN 1

EDTX 2 EDVA 15 EDWI 4 ITC 7 MDFL 2 MDNC 1 MDPA 1 MDTN 1 NDAL 1 NDCA 33 NDFL 2 NDGA 7 NDIA 2 NDIL 28 NDIN 2 NDNY 3 NDOH 8 NDOK 1 NDTX 6 NDWV 3 On remand from S.Ct. 3 SDCA 7 SDFL 21 SDGA 1 SDIA 1 SDIN 2 SDNY 21 SDOH 7 SDTX 9 WDLA 1 WDMI 4 WDMO 1 WDNC 2 WDNY 4 WDPA 4

WDTX 2 WDVA 5 WDWA 7 WDWI 7 Unknown 4

11. Table D-2: Reversal Rate in the “More Active” and “Less Active” Tribunals % rev’d in full % rev’d in part More Active Tribunals 16% 18% Less Active Courts 22% 19%

12. Table D-3: Reversal Rate in the “More Active” Lower Tribunals Including Summary Excluding Summary Affirmance Affirmance District court and other % rev’d % rev’d % rev’d % rev’d tribunals in full in part in full in part BPAI 21% 5% 35% 9% CDCA 15% 27% 18% 32% CFC 0% 11% 0% 17% DCO 0% 33% 0% 60% DDE 21% 36% 23% 38% DMA 6% 33% 7% 40% DMN 17% 25% 22% 33% DNJ 7% 21% 8% 25% EDMI 14% 21% 17% 25% EDVA 7% 33% 8% 38% ITC 14% 29% 14% 29% NDCA 10% 7% 14% 10% NDIL 30% 11% 42% 16% SDFL 24% 24% 29% 29% SDNY 13% 13% 20% 20%

13. Table D-4: Percentage of Claim Construction Changes and Related Reversal in Appeals from the “Most Active” Lower Tribunals

% of cases where a % of cases where change in claim District court and claim construction construction was other tribunals was changed outcome determinative BPAI 22% 11% CDCA 38% 38% CFC 0% 0% DDE 22% 22% DMA 11% 11% DMN 17% 17% DNJ 50% 25% EDMI 20% 0% EDVA 40% 40% ITC 20% 20% NDCA 40% 10% NDIL 70% 60% SDFL 33% 22% SDNY 0% 0%

14. Table E-1: Disposition of Cases Per Precedential Status of Case % of other decisions (e.g., man- % % Total % damus, % fully partly of certified aff’d rev’d rev’d reversal question) Precedential 41% 28% 28% 56% 3% Nonprecedential 52% 16% 17% 33% 15% Summary affirmance 100% 0% 0% 0% 0%

15. Table E-2: Rate of Claim Construction Changes & Related Reversal Based on the Precedential Status of Decision

% of cases where claim con- Rate of change in struction change is claim constructions outcome dispositive Precedential 49% 36% Nonprecedential 37% 23% Summary affirmance N/A N/A

16. Table F-1: Disposition of Case Based on whether it Contains a Means-Plus-Function Claim

Total % of % of cases cases % of cases partially partially or Type of claims % aff’d fully rev’d rev’d fully rev’d Cases with no claim construction 43% 24% 17% 40% Cases including means-plus- function claim construction 43% 16% 41% 57% Cases only including normal claim 58% 20% 22% 42%

17. Table F-2: Percentage of Claim Construction Changes Based on whether Case Contained a Means-Plus-Function Claim

% of cases where a change in claim % of cases where construction was claim construction outcome Types of claims was changed determinative Cases including means-plus- function claim construction 56% 39% Cases only including normal claim 37% 25%

18. Table G-1: Frequency of Claim Construction Claim construction issues # of claims % of all claim construed constructions Infringement only 137 76.5% Invalidity only 32 18% Both Infringement and invalid- 10 5.5% ity Total 179 100%

19. Table G-2: Frequency of Issues Considered on Appeal

Issues considered by the Federal Circuit # of cases % of cases Infringement only 77 19% Invalidity only 69 17% Inequitable conduct only 4 1% Other (e.g., antitrust, procedural) 123 31% Infringement and invalidity 20 5% Infringement and inequitable conduct 2 1% Infringement and other 42 11% Invalidity and inequitable conduct 5 1% Invalidity and other 13 3% Inequitable conduct and other 8 2% Infringement, invalidity, and inequitable conduct 6 2% Infringement, invalidity and other 17 4% Infringement, inequitable conduct and other 2 1% Invalidity, inequitable conduct and other 2 1% Invalidity, infringement, inequitable conduct, and other 6 2% Total 396 100%

20. Table G-3: Percentage of Claim Construction Changes Based on Frequency of Issues % of cases where a % of cases where change in claim Claim construction claim construction construction was issues was changed outcome determinative Infringement only 45% 30% Invalidity only 36% 22% Infringement and invalidity 50% 40%

21. Table App-1: Rate of Claim Construction-Based Reversals, Including ALL Summary Affirmances

Absolute % of cases where claim month & year construction change was outcome dispositive Jan-98 18% Feb-98 0% Mar-98 10% Apr-98 9% May-98 29% Jun-98 25% Jul-98 33% Aug-98 20% Sep-98 10% Oct-98 9% Nov-98 9% Dec-98 25% Jan-99 18% Feb-99 0% Mar-99 13% Apr-99 25% May-99 8% Jun-99 29% Jul-99 60% Aug-99 10% Sep-99 33% Oct-99 29% Nov-99 25% Dec-99 38% Jan-00 20% Feb-00 9% Mar-00 15% Apr-00 23% Grand Total 19%

22. Table App-2: Rate of Change in Claim Construction, Including Summary Affirmances Rate of change in Absolute % of cases where claim claim constructions, construction change was outcome month & including summary dispositive (including summary af- year affirmances firmances) Jan-98 20% 20% Feb-98 0% 0% Mar-98 12% 12% Apr-98 33% 16% May-98 61% 31% Jun-98 25% 25% Jul-98 63% 38% Aug-98 33% 22% Sep-98 42% 11% Oct-98 21% 11% Nov-98 28% 14% Dec-98 36% 36% Jan-99 46% 23% Feb-99 22% 0% Mar-99 25% 25% Apr-99 29% 29% May-99 46% 15% Jun-99 40% 32% Jul-99 70% 60% Aug-99 24% 12% Sep-99 42% 33% Oct-99 38% 38% Nov-99 44% 44% Dec-99 48% 48% Jan-00 52% 26% Feb-00 34% 11% Mar-00 21% 21% Apr-00 35% 26% Total 35% 24%

CLONES, BONES AND TWILIGHT ZONES: PROTECTING THE DIGITAL PERSONA OF THE QUICK, THE DEAD AND THE IMAGINARY By Joseph J. Beard†

ABSTRACT This article explores a developing technology—the creation of digital replicas of individuals, both living and dead, as well as the creation of totally imaginary humans. The article examines the various laws, including copyright, sui generis, right of publicity and trademark, that may be employed to prevent the creation, duplication and exploitation of digital replicas of individuals as well as to prevent unauthorized alteration of existing images of a person. With respect to totally imaginary digital humans, the article addresses the issue of whether such virtual humans should be treated like real humans or simply as highly sophisticated forms of animated cartoon characters.

TABLE OF CONTENTS I. INTRODUCTION ...... 2 II. CLONES: DIGITAL REPLICAS OF LIVING INDIVIDUALS ...... 7 A. Preventing the Unauthorized Creation or Duplication of a Digital Clone...... 7 1. Physical Appearance...... 8 a) The Direct Approach ...... 8 i) The Technology...... 8 ii) Copyright...... 12 iii) Sui generis Protection...... 14 iv) Trepass to Chattels ...... 20 v) Contract Law...... 20

© 2001 Joseph J. Beard. † Professor of Law, St. John’s University School of Law. S.J.D., Harvard Univer- sity Law School; L.L.M. (Taxation), Boston University School of Law; J.D., Suffolk University Law School; M.B.A., Babson College; B.S. (Electrical Engineering), Tufts University. This article could not have been completed without the excellent support of my research assistants, all now alums of St. John’s University School of Law: Mary Chang and John R. Keville, Class of 1995; Raymond J. Prybylski, Class of 1997; Guiseppe E. Bellavita and Courtney Rockett, Class of 1998; Michael D. Mumola, Class of 1999; Lawrence Chanice and Brian A. Super, Class of 2001. Excellent support was also provided by William H. Manz of the St. John’s University Library, and Secretarial Services, particularly Michele Coccaro and Dina Graganella. Thank you all.

vi) Summary ...... 22 b) The Indirect Approach...... 22 i) Bust from Life Mask ...... 23 ii) Bust Based on Reference Photographs...... 24 iii) Photogrammetry...... 24 iv) Scan of Look-a-Like...... 26 v) The Law ...... 26 2. Voice Synthesis...... 27 3. Animation...... 30 B. Preventing Unauthorized Performance by a Digital Clone ...... 34 1. Clones of Professional Performers ...... 34 a) Use of the Clone as a Substitute for the Actor...... 34 b) Advertising ...... 35 c) Trade Purpose...... 35 d) Performance...... 38 2. Clones of Public Officials ...... 42 a) Advertising ...... 44 b) Trade Purpose...... 44 c) Performance...... 45 3. Clones of Other Public Figures ...... 45 C. Digital Alteration of an Actor’s Performances in a Film ...... 46 1. Digital Plastic Surgery In Post-Production ...... 47 2. Bette Davis’ Eyes: The Digital Theft of Body Parts...... 50 3. “We’re not in Kansas Anymore”: Digital Insertion into New Works ..... 53 4. The Stalin Strategy: Digital Erasures ...... 61 III. BONES: THE DIGITAL RESURRECTION OF DECEASED CELEBRITIES.... 63 A. The Perils of Prediction...... 63 B. The Post-Mortem Right of Publicity—Alive and Well, Sort of!...... 66 C. “Dancing in the Dark”—The Astaire Celebrity Image Protection Act...... 70 D. “I Would Rather Be Living in Philadelphia”—Whose Law Governs, Anyway? ...... 77 E. As The Crow Flies: A New Direction in Post-Mortem Film Completion ...... 86 IV. TWILIGHT ZONE: THE IMAGINARY ...... 88 A. It’s a Bird! . . . It’s a Plane . . . It’s . . . an IVH! ...... 92 1. The Term of Protection ...... 95 2. The Aspects of Persona Protected...... 97 3. Criteria for Determining if an Infringement has Taken Place ...... 99 4. The Types of Exploitation Requiring Permission...... 101 B. Mr. Potato Head Goes Digital: Maximizing IVH Identifiability...... 103 1. Facial Characteristics...... 104 2. Voice ...... 105 3. Other Physical Characteristics ...... 106 4. Ancillary Identifiers ...... 107 V. CONCLUSION...... 109

I. INTRODUCTION A parallel world peopled with virtual humans! An intriguing concept, the stuff of a Twilight Zone or X-Files episode. But, virtual humans are fact, not fiction.1 They are—real. Virtual humans have, in fact, been among us for some two decades now.2 But, to date, they have been no more than audio-visual marionettes controlled by techno-puppeteers. We all recall the kindly woodcarver Geppetto who wished that his wooden puppet, Pinocchio, would someday become a real boy.3 Geppetto’s wish will likely come true early in the twenty-first century. Research around the globe promises virtual humans who can see,4 speak,5 hear,6 touch and be touched,7 exhibit behavior,8 and think9 just as we do. Like Pinocchio, virtual humans will shed their “strings”—they will be virtually autonomous.

1. The fact that Doonesbury cartoonist Gary Trudeau devoted an episode to an agent suggesting to an actress that she create a digital replica of herself is popular evidence of the reality of virtual humans. See Gary Trudeau, Doonesbury (Jun. 28, 1998). 2. Among the early pioneers in this field is Dr. Norman Badler who began his research in virtual humans in the 1970s. He is the Director of the Center for Human Model- ing and Simulation, Department of Computer Information Science, University of Penn- sylvania. Professor Ken Perlin is also a pioneer in virtual human technology. He won an Academy Award for technical achievement in 1997 for a digital technique known as “Perlin’s Noise.” Professor Perlin who is a director of the Media Research Laboratory at New York University and Athomas Goldberg, founder and chief technology officer of Improv Technologies were awarded a U.S. patent involving virtual human technology. Teresa Riordan, Animated Characters That Can Make Their Own Decisions and Move More Gracefully, N.Y. TIMES, Sept. 10, 2001, at C2. Other academic pioneers are Dr. Daniel Thalman and Dr. Nadia Magnenat Thalman. Commercial pioneers include Jeff Kleiser and Diane Walzac whose special effects company Kleiser Walzac Construction Company owns the registered trademark “Synthespian.” 3. See CARLO COLODI, PINOCCHIO (M.A. Murray trans., 1928). 4. See generally COMPUTER VISION SYSTEMS (Henrik I. Christensen ed., 1999). See also JOSEF PAULI, LEARNING-BASED ROBOT VISION: PRINCIPLES AND APPLICATIONS (2001); Alex (Sandy) Pentland & Tanzeem Choudhury, Face Recognition for Smart En- vironments, 33 COMPUTER No. 2 (2000), at 50. 5. See Sven Wachsmuth et al., Multilevel Integration of Vision and Speech Under- standing Using Bayesian Networks, in COMPUTER VISION SYSTEMS 231 (Henrik I. Chris- tensen ed., 1999). 6. Id. 7. This aspect of virtual human technology is known as haptic simulation. See IEEE VIRTUAL REALITY INTERNATIONAL SYMPOSIUM 363 (1998). 8. NILS J. NILSSON, ARTIFICIAL INTELLIGENCE: A NEW SYNTHESIS (1998); see also Tony Jebara & Alex Pentland, Action Reaction Learning: Automatic Visual Analy- sis and Synthesis of Interactive Behavior, in COMPUTER VISION SYSTEMS 273 (Henrik I. Christensen ed., 1999); Rosalind V. Picard, Synthetic Emotions, in 20 IEEE COMPUTER GRAPHICS & APPLICATIONS No. 1, at 52 (2000); Nuria Oliver et al., A Bayesian Com- puter Vision System for Modeling Human Interactions, in COMPUTER VISION SYSTEMS 251 (Henrik I. Christensen ed., 1999). 9. Claudio Pinhanez & Aaron Bobick, Using Computer Vision to Control a Reac- tive Computer Graphics Character in a Theater Play, in COMPUTER VISION SYSTEMS 66

Who are virtual humans? Virtual humans may be the alter ego of a living person,10 the resurrection of a deceased individual,11 or may simply have their own unique identity.12 Virtual humans, at least those who popu- late film, television and computer screens, are silicon-based and nurtured in the womb of the digital computer. The concept of virtual humans, however, is not limited to the two-dimensional world of film, television and computer screens. They may appear as holographic three-dimensional im- ages13 or in animatronic form. Stationary animatronic “humans” have entertained us at Disney World and at the Cheers theme bar.14 Eventually,

(Henrik I. Christensen ed., 1999); see also Mike Addlesee et al., Implementing a Sentient Computing System, 34 COMPUTER No. 8, at 50 (2001); Alex Pentland, Perceptual Intelli- gence, 43 COMM. OF THE ACM No. 3, at 35 (2000). See generally John David Funge, AI FOR GAMES AND ANIMATION: A COGNITIVE MODELING APPROACH (1999). In a recently patented technology, Professor Ken Perlin and Athomas Goldberg created a system “in which characters can make decisions themselves . . . . The characters are guided by a sort of fuzzy logic. A game designer sets the parameters for a given character—her mood and energy level, for example. But once the parameters are set, the character is free to ‘act.’” Riordan, supra note 2. 10. Numerous motion pictures have used digital replicas of actors, including Mary Elizabeth Mastrantonio in The Abyss (20th Century Fox 1989), Robert Patrick in Termi- nator 2: Judgment Day (Carolco Pictures, Le Studio, Canal+, Lightstorm Entertainment, and Pacific Western 1991) and Jurassic Park (Universal Pictures and Amblin Entertain- ment 1993), Sylvester Stallone in Judge Dredd (Cinergi and Hollywood Pictures 1995), and Denzel Washington in Virtuosity (Paramount Pictures 1995). See Steve Williams & Joe Letteri, Jurassic Park—The Illusion of Life, Silicon Valley SIGGRAPH Meeting (Jan. 25, 1994), http://siliconvalley.siggraph.org/text/MeetingNotes/-ILM.html. 11. Though not technically digital, the images of Bogart, Cagney, Wayne, Astaire and Elvis have been digitally cut out of films made during their lifetime and “pasted” into new scenes—in each case for advertising purposes; but a totally digital Ed Sullivan and W.C. Fields have been created and, as the technology improves, more are sure to follow. In fact, ShinCine intends to use digital technology to “resurrect kung-fu icon Bruce Lee to star in $50 million-budgeted actioner ‘Dragon Warrior.’” The Lazarus Project, VARI- ETY, Nov. 19-25, 2001, at 7. 12. Baby Cha Cha, a totally imaginary digital infant, found celebrity on the Ally McBeal TV show and Kyoko Date (rhymes with “satay”), an imaginary Japanese virtual teen idol and pop singer, has not only received roses but marriage proposals as well! See P. Kane, How to Remake a Star, GUARDIAN INT’L FRI. REV., Jan. 17, 1997, at 1-5. Final Fantasy: The Spirits Within, released in 2001, features very realistic computer-generated human beings. Tekla S. Perry, And the Oscar Goes To . . ., IEEE SPECTRUM, Apr. 2001, at 42. 13. Caren Chester, May the Force/Boss Be With You, in 3-D, N.Y. TIMES, Nov. 5, 2001, at C4. 14. The EXXON World of Energy exhibit and ride at Disney World in Florida includes an animatronic replica of comedienne/actress Ellen De Generes. Animatronic customers at Cheers theme bars were the subject of litigation by Cheers actors George Wendt and John Ratzenberger. See Wendt v. Host Int’l, Inc., 125 F.3d 806 (9th Cir. 1997). advances in robotics will combine with the human façade of animatronics to give us realistic, fully mobile virtual humans.15 In the “Pinocchio-goes- digital,” Steven Spielberg film, A.I. Artificial Intelligence,16 David, the cybertronic boy is played by a real human, Haley Joel Osmont. The day will come when the fictional David of A.I., DATA of Star Trek: The Next Generation and other fictional humanoids will become fact. The major focus of this article, however, will be on the exploitation of virtual humans in film and television. What do virtual humans do? Virtual humans have found steady employment in the entertainment field. Actor Robert Patrick’s digital clone performed as the liquid metal cyborg in Terminator 2: Judgment Day.17 That same clone was later devoured by a digital T-Rex in Jurassic Park.18 The blockbuster Titanic19 was peopled with virtual passengers20 who strode the digital deck of the digital Titanic; digital stunt doubles leapt to their “death” as the mighty ship foundered.21 More recently, in the film, Pearl Harbor, digital sailors perished in fireballs.22 But virtual humans can do more than simply entertain. For example, virtual humans play a significant role in ergonomics. Engineers using computer-aided design (“CAD”) software employ virtual humans in equipment design to optimize the human-machine interface.23 In medicine, virtual replicas of real tumors are presented in the virtual replica of a patient’s skull to facilitate preop-

15. Robots employing vision systems and sharing artificial intelligence are competing in soccer matches. Stephen Cass, Robosoccer, IEEE SPECTRUM, May 2001, at 75. “The ambition of the Robocup organizers is to develop a team of fully autonomous hu- manoid robots that can defeat the human world soccer champions by the year 2050.” Id. at 76. 16. (Amblin Entertainment, DreamWorks SKG, Stanley Kubrick Productions, and Warner Brothers 2001). It is interesting to note that this film released in 2001 was a production of AMBLIN/Stanley Kubrick because the late Stanley Kubrick directed the now classic 2001: A Space Odyssey (Metro-Goldwyn-Mayer 1968). 17. (Carolco Pictures, Le Studio, Canal+, Lightstorm Entertainment, and Pacific Western 1991). 18. (Universal Pictures and Amblin Entertainment 1993). 19. (20th Century Fox, Paramount Pictures, and Lightstorm Entertainment 1997). 20. See 72 CINEFEX 92 (Dec. 1997). 21. See id. at 126. James Cameron, of Titanic fame, has announced plans for a future film entitled Avatar which will feature a virtual actor. See Nigel Andrews, A Grand Illusion, FIN. POST, July 18, 1998, at R3; Paula Parisi, Cameron Angle, WIRED, April 1996, at 133. 22. John Horn, The Road to ‘Pearl Harbor,’ NEWSWEEK, May 14, 2001, at 44, 49. 23. For example, Transom Jack is a biomechanically accurate virtual human who works in virtual environments. See JOHN VINCE, ESSENTIAL VIRTUAL REALITY FAST 121 (1998).

erative planning.24 Medical students palpate virtual tumors in the virtual livers of virtual patients to increase student skill in this important art.25 And, we can fly through the interiors of virtual patients!26 Anti-terrorism experts are trained in virtual environments peopled with virtual hostages and virtual terrorists, to hone the quick response of the trainees.27 Virtual humans may serve as avatars, our personal representatives, on the Inter- net.28 The employment of virtual humans is limited only by our imagination. Inevitably, virtual humans will play ever increasing roles in human affairs. Why do virtual humans need protection? Virtual humans need protection for the same reasons humans do. Humans are protected from involuntary servitude by the Thirteenth Amendment to the Constitution.29 Virtual humans also need protection from involuntary servitude.30 Humans enjoy

24. See Chua Gim Guan et al., Volume-based Tumor Neurosurgery Planning in the Virtual Workbench, PROCEEDINGS, IEEE VIRTUAL REALITY INTERNATIONAL SYMPOSIUM 167 (1998) (The Brigham and Women’s Hospital Department of Radiology Surgical Planning Laboratory is an example of the application of computer graphics in medicine). 25. See Michael Dinsmore et al., Virtual Reality Training Simulation for Palpation of Subsurface Tumors, PROCEEDINGS, IEEE VIRTUAL REALITY ANNUAL INTERNATIONAL SYMPOSIUM 54 (1997). 26. See Lichan Hong et al., Virtual Voyage: Interactive Navigation in the Human Colon, in COMPUTER GRAPHICS PROCEEDINGS (SIGGRAPH 97) 27 (1997). 27. See Dan M. Shawver, Virtual Actors and Avatars in a Flexible User- Determined-Scenario Environment, PROCEEDINGS, IEEE VIRTUAL REALITY ANNUAL INTERNATIONAL SYMPOSIUM 170 (1997). 28. See TOGLA K. ÇAPIN ET AL., AVATARS IN NETWORKED VIRTUAL ENVIRON- MENTS (1999); see also Togla K. Çapin et al., Virtual Human Representation and Com- munication in VLNet, IEEE COMPUTER GRAPHICS & APPLICATIONS No. 17, at 42 (1997); JUSTINE CASSELL et al., EMBODIED CONVERSATIONAL AGENTS (2000); Henry Lieberman, Christopher Fry & Louis Weitzman, Exploring the Web with Reconnaissance Agents, 44 COMM. OF THE ACM 69 (2001). San Francisco-based NativeMinds has patented a software technology called automated virtual representatives (“vReps”). These vReps are intended to conduct customer services, sales and marketing for online businesses, including answering questions from customers. Sabra Chartrand, Software to Provide ‘Personal’ Attention to Online Customers with Services Untouched by a Human, N.Y. TIMES, Aug. 20, 2001, at C8. 29. “Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction.” U.S. CONST. amend. XIII, § 1. 30. As was said in Pavesich v. New England Life Ins. Co., 50 S.E. 68, 79 (Ga. 1904), “[t]he form and features of the plaintiff are his own. The defendant … had no more authority to display them in public for the purpose of advertising the business in which they were engaged than they would have had to compel the plaintiff to place himself upon exhibition for this purpose.” The Pavesich court went on to say that when a protection from libel, false light, invasion of privacy, commercial exploitation, and misassociation with commercial products and services. Virtual humans need similar protection. Where the virtual human is the digital clone of a living individual, presumably that individual will employ laws that protect his or her person to protect the virtual alter ego. Part II of this Article analyzes the effectiveness of these laws. Where the virtual human is the digital resurrection of a deceased person, interested heirs may seek to protect the digital Lazarus, even seeking to protect the resurrection itself. Part III examines the protection of this class of virtual humans. Imaginary virtual humans present novel questions of protection. Should this type of virtual human be treated as a cartoon character, a human being or, to compromise, as a hybrid? Part IV of this Article examines the protection of imaginary virtual humans. The analysis which follows contemplates virtual humans who are realistic-looking; fully dynamic (including autonomous locomotion); and who can see, hear, speak, follow directions and exhibit an ever increasing ability to “think”—the virtual humans of the twenty-first century.

II. CLONES: DIGITAL REPLICAS OF LIVING INDIVIDUALS Part II of this Article addresses the issues raised when a virtual human is the alter ego, or digital “clone,” of a living person. The discussion and analysis focus on three topics: (1) the existence of the virtual human; (2) the exploitation of the virtual human; and (3) the alteration of the virtual human. While the person cloned is probably most concerned about the unauthorized exploitation or alteration of the digital clone, he or she may be concerned about the very existence or duplication of the digital clone as well. A. Preventing the Unauthorized Creation or Duplication of a Digital Clone The preservation of dignity is important to most humans, regardless of their station in life. To some degree, society aids us in the preservation of dignity with libel and privacy laws. Furthermore, in the last half century, a right of publicity has been added to the arsenal of laws protecting us; though, admittedly, its goal may be more to preserve revenues than to maintain dignity. The advent of the computer-generated virtual human has increased the potential for mischief with respect to human dignity. When

person’s features are used without his permission in an advertisement “he is no longer free, and . . . is in reality a slave without hope of freedom.” Id. at 80.

this technology matures, it may be very difficult to distinguish between audio-visual representations of a person and his or her clone. It will, therefore, be critical to the preservation of dignity (and possibly income) to ensure that society has adequate legal safeguards against the unauthorized creation of a digital replica or the unauthorized duplication of a legitimate digital replica. To determine which legal safeguards are effective in preventing unauthorized creation of a clone, it is necessary to consider three aspects of the clone itself: (1) physical appearance; (2) voice synthesis; and (3) animation. 1. Physical Appearance There are two approaches to creating the physical appearance of a digital clone of a person. The most direct is to use a digital device to scan the person “in the flesh.” The second approach is to create a digital model of the person from existing conventional reference material, such as motion pictures, video, photographs or sculptures. a) The Direct Approach i) The Technology The direct approach to creating a virtual human utilizes laser scanners or other recording devices.31 For example, Cyberware™ scanners employ

31. The laser scanner is, in a sense, a descendent of the “profile machine” mentioned in The Posthumous Papers of the Pickwick Club: So I take the privilege of the day, Mary, my dear—as the gen’l’m’n in difficulties did, van he valued out of a Sunday,—to tell you that the first and only time I see you, your likeness was took on my hart in much quicker time and brighter colours than ever a likeness was took by the profeel macheen (wich p’raps you may have heered on Mary my dear) although it does finish a portrait and put the frame and glass on complete, with a hook at the end to hang it up by, and all in two minutes and a quarter. Charles Dickens, The Pickwick Papers 542 (Penguin Classics 1986) (1837). This instrument . . . was adapted from a contrivance invented in 1806 by Charles Schmalcalder. It consisted of a long rod, one end of which was finely tapered, while the other held a sharp, pointed blade. The rod was universally pivoted a few inches from the blade end, and was so placed against sheets of paper mounted on a board that any motion of the rod caused the blade to cut the paper. The sitter took his place at the pointer end of the rod, facing at right angle to it. Beginning with the throat, the operator followed the sitter’s profile with the pointer, and the laser beams to circle the head of the subject, mapping the 360° topography of the subject’s face and head, and converting that topography into digital data.32 Similarly, a Cyberware™ full body scanner maps the contours of the subject’s body.33 Facial expression, such as a smile or a frown, can be digitally captured, for example, by a head-mounted Face Trax™ device which uses pulsed near-infrared illumination and small retro-reflective markers.34 Motion can be captured by optical, harness or other motion de- tection systems such as United Technologies’ Multi Trax™ System.35 Given the level of detail to which one can be replicated, a digital clone dwelling in a computer is a matter of no small concern for its human counterpart. With a little imagination one could conjure up horrific examples of potential misuse. Unless one has assurances against such misuse, it would be foolhardy to submit to digital “cloning.” Actors have been the most visible subjects of digital “cloning.” In The Abyss,36 Mary Elizabeth Mastrantonio was scanned so that the special effects team at George Lucas’ Industrial Light + Magic could create a water pod that would mimic the actress’s face. In Terminator 2: Judgment Day,37 actor Robert Patrick was digitally scanned so that Industrial Light + Magic could create the liquid metal cyborg that challenged Arnold Schwarzenegger’s character. Similarly, in Virtuosity,38 Denzel Washing-

movement of the rod, thus transmitted to the blade end, cut out as many silhouettes as there were sheets of paper beneath the blade. Arthur L. Hayward, The Dickens Encyclopedia 129 (1995). 32. For example, Sylvester Stallone’s head was scanned to create a digital stunt double for the actor in Judge Dredd (Cinergi and Hollywood Pictures 1995). 33. Another example of a 3D-Body laser scanning system is the German company Tecmath’s RAMSIS System which was developed in the course of a research project initiated in 1986 by the German automotive industry. There are non-laser technologies also being employed to create three-dimensional digital replicas of humans and objects. For example British-based Wicks and Wilson Limited markets TriformTM 3D Scanning systems. A series of structured light patterns is projected from the camera onto the object or human to be captured. By analyzing the way in which the pattern of light is distorted by the shape of the object or subject, the x, y, and z coordinates are calculated. Canadian- based Inspeck, Inc. also utilizes light in its 3D Capturor system to capture three- dimensional data. 34. Face Trax™ is a United Technologies system. 35. For a discussion of motion capture, see ALBERTO MENACHE, UNDERSTANDING MOTION CAPTURE FOR COMPUTER ANIMATION AND VIDEO GAMES (2000); see also Ben Delaney, On the Trail of the Shadow Woman: The Mystery of Motion Capture, in IEEE COMPUTER GRAPHICS & APPLICATIONS No. 18, at 14 (1998). 36. (20th Century Fox, Lightstorm Entertainment, and Pacific Western 1989). 37. (Carolco Pictures, Le Studio, Canal+, Lightstorm Entertainment, and Pacific Western 1991). 38. (Paramount Pictures 1995).

ton was scanned to create a digital replica of the star; in Judge Dredd,39 Sylvester Stallone’s face was “stitched” onto the head of a digital stunt double for a close-up. While actors are not the only ones who will be concerned about the unauthorized creation, duplication or exploitation of a digital replica, they are likely to be the first to face these issues. Therefore, an analysis of virtual human technology in Hollywood should prove useful not only in this regard but in other areas involving the technology as well. To fully appreciate the legal implications of virtual human technology in film, one must consider the various rights involved in traditional film. First, the actor is not property;40 he may not be forced to act in a film41 even if he has contracted to do so.42 The actor’s person43 is not copyrightable nor is the actor’s voice.44 But when the actor’s image and voice are captured on film, two sets of rights are involved: (1) the actor’s rights in his or her image45 and performance; and (2) the copyright in the film. The actor will license the use of his or her right of publicity for purposes of that film;46 any re-use for other purposes is subject to the Producers- Screen Actors Guild Agreement if the actor is a member of the Screen Ac-

39. (Cinergi and Hollywood Pictures 1995). 40. Prior to the enactment of the Thirteenth Amendment, certain people, i.e., slaves, were routinely treated as property. See Johnson v. Tompkins, 13 F. Cas. 840, 843 (C.C.E.D. Pa. 1833) (No. 7,416) (treating slaves as property); Harris v. Alexander, 11 F. Cas. 611 (C.C.D. D.C. 1830) (No. 6,113) (same). However, since that time, the notion of treating slaves as property has become abhorrent to our system of justice. See Sutherland v. Mayer, 271 U.S. 272, 294 (1926) (recognizing that persons, by operation of law, cannot be treated as property). 41. See U.S. CONST. amend XIII. 42. No court would issue an injunction requiring the actor to perform even if he so contracted. See Lumley v. Wagner, 1 De G.M. & G. 604, 619 (1852) (stating, “it is true, I have not the means of compelling [Johanna Wagner] to sing”). 43. In Remco Indus., Inc. v. Goldberger Doll Mfg. Co., 141 U.S.P.Q. (BNA) 898, 899 (E.D.N.Y. 1964), the court enjoined the defendant not only from copying the plaintiff’s copyrighted dolls depicting the Beatles, but also from copying the original, the actual features of the Beatles. This is likely an erroneous interpretation of the law, as Pro- fessor Melville Nimmer proposes. In criticizing the court’s issuance of an injunction regarding the original, the actual appearance of the Beatles, Nimmer recalls Justice Holmes now-hoary maxim that one is “free to copy the original” by stating, “[copying the original] might constitute an invasion of privacy or of a right of publicity of the Beatles themselves, but can hardly amount to an infringement of plaintiff’s copyright.” MELVILLE B. NIMMER & DAVID N. NIMMER, 2 NIMMER ON COPYRIGHT § 8.01[C] n.34 (2001). 44. See Midler v. Ford Motor Co., 849 F.2d 460, 462 (9th Cir. 1988). 45. For purposes of discussion here, image includes voice. 46. See Rooney v. Columbia Pictures Indus., 538 F. Supp. 211, 230 (S.D.N.Y. 1982). tors Guild (“S.A.G.”).47 As an actor is typically an employee, the copyright in the motion picture that captures the images and voice of the actor is owned by the employer, the author in a work-for-hire.48 But, again, this does not give the copyright owner carte blanche to make any use of the actor’s images.49 The rights of the actor whose image has been captured in film and the rights of the copyright owner to exploit that filmed image have been well litigated.50 The introduction of the digital clone of an actor, however, takes us into uncharted territory. When the digital replica of an individual is used in a film, a new element is inserted into the legal equation. This involves: (1) the digitally scanned, “wetware”51 actor who, again, is not property; (2) the digital image of the actor which may be property; and (3) the reproduction of the digital image of the “wetware” actor in audiovisual format in the motion picture. If the actor has been scanned to create a digital replica, presumably the actor has done so voluntarily. Thus, the creation of the digital clone was authorized. But that does not necessarily lead to the conclusion that duplication of that digital image is authorized. For example, an actor may have agreed to be digitally cloned for one film and find his digital replica being

47. The Screen Actors Guild Codified Basic Agreement of 1995 for Independent Producers provides: No part of the photography or sound track of a performer shall be used other than in the picture for which he was employed, without separately bargaining with the performer and reaching an agreement regarding such use. The foregoing requirement of separate bargaining hereafter applies to re-use of photography or sound track in other pictures, television, theatrical or other, or the use in any other field or medium. Bar- gaining shall occur prior to the time such re-use is made, but performer may not agree to such re-use at the time of original employment. The foregoing shall apply only if the performer is recognizable and, as to stunts, only if the stunt is identifiable . . . No re-use may be made of nude photography without the performer’s written contract. Screen Actors Guild Codified Basic Agreement of 1995 for Independent Producers, at 64 [hereinafter “Producers-Screen Actors Guild Agreement”] (on file with author). 48. See 17 U.S.C. § 101 (1994) (stating that “a motion picture is one of nine enumerated categories in which the parties may expressly agree in a written instrument signed by them that the work shall be considered a work made for hire”). 49. See supra note 47. 50. See Autry v. Republic Prods., 213 F.2d 667 (9th Cir. 1954); Rogers v. Republic Prods., 213 F.2d 662 (9th Cir. 1954); Rooney v. Columbia Pictures Indus., 538 F. Supp. 211 (S.D.N.Y. 1982); Fleet v. CBS, 58 Cal. Rptr. 2d 645 (Ct. App. 1996). 51. This term is used in virtual human technology to describe a carbon-based human.

duplicated for use in a second film without his knowledge.52 Having agreed to the creation of a digital clone, what rights, if any, does an actor have to control the duplication of that clone? To determine whether an actor, or anyone else for that matter, has a right to control the duplication of an original digital replica, which itself was created with the cooperation and permission of the person, it is necessary to determine whether or not the original digital data is property. As- suming that the data is property, the next questions are: who owns the data and are there any restrictions on the owner’s ability to exploit that data? If the data is not property, are there, nonetheless, some legal restrictions on the unbridled use of that data by those with access to it? ii) Copyright Copyright law may provide adequate protection for the digital data. The fixation requirement is met when it is stored in computer memory. Thus, the only issue is whether the data is considered an original work of authorship.53 Assuming, arguendo, that the original scanned data involves a sufficient level of creativity, then the data would be copyrightable. But who is the author? A film producer might contract with the owner of a scanner to create a digital replica of the actor and the actor would agree to be scanned. The actor is much like the person who asks a professional photographer to have a portrait picture taken. It is the photographer, not the subject, who owns the copyright in the first instance.54 The photographer, not the customer, holds all duplication rights. Similarly, as between the actor and the owner of the scanner, it is the owner of the scanner who would own the copyright in the data. There remains, however, the question of whether the scanner owner, as opposed to the film producer, is the author. If the owner of the scanner is not an employee of the producer and has not signed a work-for-hire agreement, the owner of the scanner would be the copyright owner and could as a matter of copyright law legally reproduce the data in any manner not precluded by the license to the motion picture producer. If the scanner were owned by the film producer, then, of course, the producer,

52. Actor Robert Patrick’s digital replica created for the part of the liquid metal cyborg in Terminator 2: Judgment Day, was later devoured by the digital T-Rex in Juras- sic Park (disproving the old cliché, “[t]here’s no such thing as a free lunch,” as it does not appear that Patrick was paid for the re-use of his digital image). 53. See 17 U.S.C. § 102 (1994). 54. 1 NIMMER, supra note 43, at § 2.08[E][1] (“[I]t is the photographer who constitutes the author . . . the human subject . . . does not succeed to any copyright ownership.). whose employee operated the scanner, would be the author.55 If the scanner were independently owned, the producer could still be the author if the scanner owner and the producer signed a work-for-hire agreement.56 What is obvious from this analysis is that the actor is not the author in any of these scenarios.57 To protect against duplication of his image beyond that necessary to complete the film in question, the actor must either require transfer of the copyright to herself—along with physical surrender of the data fixed in some medium of expression and destruction of all other copies—or, at least, contractually limit the author’s right to reproduce the data to the film for which the scan was made. While I believe scan data will likely be held to be copyrightable, I shall also explore what protection might otherwise be necessary in the absence of copyright. The digital capture of the actor’s static visual data is the equivalent of a three-dimensional photograph or a sculpture. Photographs58 are among the enumerated categories of works protected by copyright. However, works are only protected to the extent they possess some modicum of creativity. Photographs have been held sufficiently creative based on such matters as pose, light, shade, costume, or time of day or type of equipment. In Burrow-Giles Lithographic Co. v. Sarony,59 the reflective pose of Oscar Wilde was an element of copyrightability; similarly, the pose in Gross v. Seligman was deemed creative.60 But, in a typical Cyberware scan, the “pose” is dictated by the necessity of creating an accurate three- dimensional model of the subject; the “author” “poses” the subject in only one way.61 Light and shade can be used to heighten the sense of contour of

55. See 17 U.S.C. § 101 (1994) (“A ‘work made for hire’ is . . . (1) a work prepared by an employee within the scope of his or her employment”); Community For Creativity Non-Violence v. Reid, 490 U.S. 730 (1989). 56. See 17 U.S.C. § 101 (1994) (“A ‘work made for hire’ is . . . (2) a work specially ordered or commissioned for use . . . as a part of a motion picture . . . if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.”). 57. However, if a celebrity has him or herself scanned, the actor may qualify as author. See infra notes 160-66 and accompanying text. 58. 17 U.S.C. § 102(a)(5) (1994) (“pictorial, graphic, and sculptural works”). 59. 111 U.S. 53 (1884). 60. 212 F. 930 (2d Cir. 1914). 61. See Morrissey v. Procter & Gamble, 379 F.2d 675, 678 (1st Cir. 1967) (discussing the “merger doctrine,” under which expression is not protected where there is only one or so few ways of expressing an idea that protection of the expression would effectively accord protection to the idea itself); Cont’l Cas. Co. v. Beardsley, 253 F.2d 702 (2d

the subject’s face in photographs and are elements of copyrightability,62 but the Cyberware scanner is normally not used to capture light and shade. It merely, but precisely, records the three-dimensional points constituting the subject’s features including flesh tones. Costume has been held to be an element in the originality of a photograph;63 in a full body scan, however, the subject is naked and the pose is dictated by the requirements of the full body scanner. Time has been held to be an element of originality in a particular photograph,64 but the particular time a cyber scan is made would not be a creative factor in the mechanical recordation of the topography of the subject. The angle from which a photograph is taken may also be a factor in determining the copyrightability of a photograph,65 but a Cyberware scan encompasses every angle.66 Thus, based on a comparison to the criteria for finding a photograph to be copyrightable, one might conclude that the data representing the static topography of an individual as captured by Cyberware or similar technical processes is not copyrightable.67 Nevertheless, even if the data is not copyrightable, might it be protected under a sui generis statute such as that of the Euro- pean Union? iii) Sui generis Protection The European Union has addressed the issue of protecting uncopy- rightable data that nevertheless has economic value and that has been collected by “the investment of considerable human, technical and financial

Cir. 1958). Note that occasionally a Cyberware™ scan will be used to create special effects as was done for the film, Angels in the Outfield (Caravan Pictures and Walt Disney Pictures 1994). See Cyberware, Pacific Data Images Distorts the Fact for Angels in the Outfield, available at http://www.cyberware.com/news/newsletters/newsletter05.html (last visited Nov. 25, 2001) (“[T]he actors were scanned at Cyberware with different facial expressions.”). This type of scanning is arguably more creative than a straight scan and thus more likely to be held copyrightable. 62. See Burrow-Giles, 111 U.S. at 60 (noting that the selection of costumes, draper- ies, and light rendered the photo copyrightable); see also Gross, 212 F. at 932 (stating that the “pose, light, and shade” made the photo protectable). 63. See Burrow-Giles, 111 U.S. at 60. 64. Time, Inc. v. Bernard Geis Assocs., 293 F. Supp. 130, 143 (S.D.N.Y. 1968). 65. Id. at 142. 66. See 1 NIMMER, supra note 43, at § 2.08[E][2] (noting that a “photograph . . . if a slavish copy, might be said to lack originality because of the predetermined subject matter and angle”). 67. It is true that in Time, 293 F. Supp. at 143, the particular choice of film equipment was considered a creative factor, but that was but one of several factors. I do not believe that choosing one of several methods of creating a digital image by itself would constitute sufficient creativity. resources.”68 The European Union Directive on the Legal Protection of Databases provides sui generis protection for databases.69 The sui generis right in no way derogates from any copyright protection the data otherwise enjoys, but does grant protection, for fifteen years,70 to the maker71 of a database where there has been qualitatively and/or quantitatively a substantial investment in either the obtaining, verification or presentation of the data.72 Before proceeding further, it is necessary to point out that laser scan data may not even qualify for protection under the Directive. Recital 17 provides:

Whereas the term ‘database’ should be understood to include literary, artistic, musical or other collections of work or collections of other material such as texts, sound, images, numbers, facts, and data; whereas it should cover collections of independent works, data or other material which are systematically or methodically arranged and can be individually accessed; whereas this means that a recording on an audiovisual, cinematographic, literary or musical work as such does not fall within the scope of this Directive.73 A scan of a single individual, while it contains significant amounts of data,74 is not a “collection of works” that can be “individually accessed.” However, the excluded works, such as cinematographic, literary or musical works, would typically be creative enough to not need sui generis protection. On the other hand, if scan data of a simple static pose is not sufficiently creative to warrant copyright protection, it will be an orphan if not granted database protection. The balance of this discussion will be predicated on the assumption that the EU Directive will either be modified to

68. The Legal Protection of Databases, European Union Directive 96/9/EC, Mar. 11, 1996 OJ (L 77) 20, available at http://europa.eu.int/eur-lex/en/lif/dat/1996/- en_396L0009.html [hereinafter “EU Directive”]. The Directive provides such protection for a maximum of fifteen years. Id. Art. 10, at 26. 69. Id. Recital 18, at 21. 70. Id. Art. 10, at 26. 71. Id. Art. 4(1), at 25 (defining “author” of the database as the “natural person or group of natural persons who created the base or . . . the legal person designated as the rightholder by legislation of the Member states”). 72. Id. Art. 7(1), at 25. 73. Id. Recital 17, at 21. 74. A head scan contains about a quarter of a million bits of data. CyberwareTM promotional video (on file with author).

encompass laser scan data, or that organizing static data with voice data75 and animation data76 might be deemed a qualifying collection. The balance of the discussion of database protection for scan data is, of course, contingent on the sui generis right applying at all. The sui generis right prohibits the unauthorized extraction77 and/or re- utilization78 of the whole or substantial part—evaluated qualitatively and/or quantitatively—of the contents of the database.79 The right’s protection will extend to makers who are nationals or habitual residents of third countries if such third countries offer comparable protection to databases produced by nationals of a member state or who are habitual residents in the territory of the community.80 Two important exceptions to the database directives are moral rights81 and the computer programs “used in the making or operation of databases made accessible by electronic means.”82 With respect to moral rights, the Preamble to the Directive states:

[w]hereas the moral rights of the natural person who created the database belong to the author and should be exercised according to the legislation of the Member States and the provisions of the Berne Convention for the Protection of Literary and Artistic Works . . . such moral rights remain outside the scope of this Di- rective.83 The identity of the “author” is of profound importance if the digital image of an actor is modified without the actor’s permission. The Article addresses that question later.84 While Europeans will enjoy protection against misuse of their digital data even where copyright protection is inapplicable, the United States has yet to provide similar protection. Since Community For Creative Non- Violence v. Reid,85 the U.S. Congress has considered—and considered— and considered data base protection (recalling one of the opening lines in

75. See infra Part II.A.2. 76. See infra Part II.A.3. 77. EU Directive, supra note 68, at art. 7(5), at 26. 78. Id. 79. Id. Art. 7(1), at 25. 80. Id. Recital 56, at 24. 81. Id. Recital 28, at 22. 82. Id. Art. 1(3), at 24. 83. Id. Recital 28, at 22. 84. See infra Part II.C. 85. 490 U.S. 730 (1989). Casablanca where they wait—and wait—and wait). Database protection bills were introduced in the 104th, 105th and 106th Congresses—none became law. As it turns out, the first bill, introduced in the 104th Congress, provided better protection than the bills in the two subsequent Congresses. In the 104th Congress, Congressman Moorhead introduced a database protection bill similar, but not identical, to the EU sui generis directive: “The Database Investment and Intellectual Property Antipiracy Act of 1996.”86 That bill would have protected the “database owner” from the unauthorized extraction or re-use of all of or a substantial part of the database. The bill defined a “database owner” as the database maker or the natural or juristic person who was the database maker’s successor in interest.87 Generally, the “database maker” would be the person “making a substantial investment, qualitatively or quantitatively, in the collection, assembly, verification, organization and/or presentation of the contents of a database.”88 Thus, the owner of the scanning company producing digital portraits generally would be considered the “database maker.” However, where a database was made pursuant to special order or commission, the person who ordered or commissioned the database would be the “database maker.”89 Thus, when an actor had his or her scan done for personal use, the actor would be the “database maker” and, therefore, the “database owner.” Thus, if the data was covered by a database statute rather than copyright, ownership of the data by the actor commissioning the scan would be unambiguous. If the actor was being scanned at the behest of a film producer, the film producer, as the commissioning party, would be the “database maker” and consequently the “database owner.” The actor, having not commissioned the scan would not be considered a joint database maker90 with the producer, and hence, not a database owner. Again, if the actor had sufficient status, the actor might obtain a transfer of ownership of the data set such that he or she would be the “database owner” as the successor in interest of the “database maker,” subject only to the exploitation of the data in the film for which the data was created. If the producer were unwilling to transfer ownership of the data set, contrac-

86. H.R. 3531, 104th Cong. (1996) [hereinafter “Moorhead Data Bill”]. 87. Moorhead Data Bill, supra note 86, § 2 (defining “database maker”); see also EU Directive, supra note 68, Recital 41, at 23). 88. Moorhead Data Bill, supra note 86, § 2. 89. Id. 90. See id. (stating “where two or more persons qualify as the makers of a database, they are jointly the database maker”).

tual restrictions on re-use of the data would be the next best protection for the actor. This bill would have potentially provided greater protection to the actor than present law does. Moorhead’s bill, however died, with the demise of the 104th Congress. The 105th Congress saw the introduction of a different data protection bill entitled the “Collections of Information Antipiracy Act.”91 It provided protection of data for fifteen years,92 but was not as detailed as the Moor- head Bill, nor was it a close kin to the European sui generis provisions. Of particular significance in this bill was the provision that “nothing in this chapter shall restrict the owner of a particular lawfully made copy of all or part of a collection of information from selling or otherwise dispos- ing of the possession of that copy.”93 Ownership of a “collection of information”—in this case—the scan data, was in the person who invested substantial monetary or other resources in collecting the information.94 Pre- sumably, this would have been either the owner of the scanning equipment or the film producer at whose behest the scan was done. Unless the scan was made for an actor’s personal use, the actor would not be the owner. As the owner would have had the right to sell or otherwise dispose of the copy,95 an actor would have been well advised, if he or she had “clout,” to contractually prohibit such transfer without his or her specific approval. However, the bill in the 105th Congress suffered the same fate as that in the 104th Congress. On January 19, 1999, Congressman Coble introduced the “Collections of Information Antipiracy Act.”96 It proposed a prohibition on misappropriation of “a collection of information gathered, organized, or maintained by another person through the investment of substantial monetary or other resources.”97 This bill was one of the latest attempts to protect data. The Coble Bill would have prohibited misappropriation of:

All or a substantial part measured either quantitatively or qualitatively, of a collection of information gathered, organized or maintained by another person through the investment of substan-

91. S. 2291, 105th Cong. (1998). 92. See id. § 1208(c). 93. Id. § 1203(f). 94. See id. § 1202. 95. See id. § 1203(f). 96. H.R. 354, 106th Cong. (1999). 97. Id. tial monetary or other resources so as to cause harm to the actual or potential market of that other person or a successor in interest.98 Unlike the Moorhead Data Bill, the Coble Bill did not provide specifically for a specially ordered or commissioned database. Presumably the owner of the scanning device is the one who has invested “substantial monetary” resources and is the party, in the first instance, to be protected and not the actor nor the film producer (unless the producer is doing the scanning in-house). The actor, to obtain the injunctive and monetary relief provided in section 1406, would have to qualify as a successor in interest to the person whose “substantial monetary or other resources” were employed to collect the data. Not to be outdone by the Committee on the Judiciary, Congressman Bliley introduced the “Consumer and Investor Access to Information Act of 1999.”99 The Bliley Bill proposed to prohibit the sale or distribution of a database that is a duplicate of a database that was collected and organized by another person if it is sold or distributed in commerce in competition with that other database.100 The bill also provided that “nothing in this title shall restrict the rights of parties freely to enter into licenses or any other contracts with respect to the use of information.”101 As with the Coble Bill it appears that protection would have been afforded to the owner of the scanning device, be it an independent contractor scanning the actor at the behest of the producer or the producer scanning the actor in- house. The bill would not have protected the actor against data duplication to which the actor had not agreed unless the owner of the scanner so agreed in a contract. Virtual human data sets are but a small segment of the data world. And, it may be that the Coble or Bliley Bill would have been better for data protection overall than the European sui generis right or the Moor- head Bill but the property basis of the latter two is better suited to virtual human databases than the former two. It is not clear when, if ever, Congress will pass a data protection act. If such an act is to become law, it is in the acting community’s interest that a

98. H.R. 354, 106th Cong. § 1402 (1999). 99. H.R. 1858, 106th Cong. (1999), which was referred to the Committee on Com- merce. 100. H.R. 1858, 106th Cong. § 102 (1999). 101. Id. § 105(c).

data protection act be crafted along the lines of the European law or the Moorhead Bill rather than the Coble or Bliley Bill. iv) Trepass to Chattels Even if a data protection act does not become law, or if such a law does not cover the scan data discussed here, there is yet another theory of liability. It is possible that unauthorized exploitation of that data is a trespass to chattels, subject to damage and, most importantly, injunctive relief.102 v) Contract Law Members of the Screen Actors Guild may find relief in the Producers- Screen Actors Guild Agreement, which states:

No part of the photography or sound track of a performer shall be used other than in the picture for which he was employed, without separately bargaining with the performer and reaching an agreement regarding such use. The foregoing requirement of separate bargaining hereafter applies to re-use of photography or sound track in other pictures, television, theatrical or other, or the use in any other field or medium. Bargaining shall occur prior to the time such re-use is made, but performer may not agree to such re-use at the time of original employment. The foregoing shall apply only if the performer is recognizable and, as to stunts, only if the stunt is identifiable. . . . No re-use may be made of nude photography without the performer’s written consent.103 That language, broadly interpreted, might include the digital image created by scanning the actor. Thus interpreted, the producer could not use the digital image in a subsequent film, nor presumably license any other producer to use it unless authorized by the performer subsequent to the original employment. However, narrowly construed, the original digital data was, and remains, independent of the photography and soundtrack. Thus, a cautious actor—presuming he or she has the “muscle”—would require an agreement, as a condition to being scanned, that the digital data

102. See Ebay, Inc. v. Bidder’s Edge, Inc., 100 F. Supp. 2d 1058 (N.D. Cal. 2000); Register.com, Inc. v. Verio, Inc., 126 F. Supp. 2d 238 (S.D.N.Y. 2000); cf. Ticketmaster Corp. v. Tickets.com, Inc., No. 99CV7654, 2000 WL 1887522 (C.D. Cal. Aug. 10, 2000) (denying injunction). 103. Producers-Screen Actors Guild Agreement, supra note 47. See Grodin v. Liberty Cable, 664 N.Y.S.2d 276 (App. Div. 1997). be used only for purposes of that particular film and that no other use would be made of the digital image without the performer’s permission.104 Where an actor is not a member of S.A.G. or where the person is not an actor, such contractual restrictions on exploitation of digital data are even more crucial. However, the reality is that contracts with S.A.G. or non- S.A.G. actors may not only not limit the scope of exploitation, but to the contrary, may require the actor to agree to as yet unenvisioned uses.105

104. For example, one contract of an actress with “star power” provides: Producer shall not be entitled to use the results and proceeds of Player’s services hereunder without Player’s consent in any motion picture other than (i) the Picture and/or (ii) “making-of-type” productions and Elec- tronics Press Kits and/or awards show all in accordance with the requirements of the S.A.G. Agreement and this Agreement. The agreement also provides: Producers shall not use any footage from the Picture in which Players appear or any other footage showing Player or any likeness of Player (actual or simulated) in any music video, or any so-called interactive or other computer, video or similar games, or theme parks, rides, shows or attractions without Player’s prior written consent. (citation information unavailable for confidentiality reasons) (agreement on file with author) (emphasis added). 105. As an example, one “loan-out” agreement provides: Lender, Artist and Producer are aware and hereby acknowledge that new rights to the Work may come into being and/or be recognized in the future, under the law and/or in equity [hereinafter “New Exploita- tion Rights”], and Lender and Artist intend to and do hereby grant and convey to Producer any and all such New Exploitation Rights in and to the Work throughout the universe in perpetuity. Lender, Artist and Pro- ducer are also aware and do hereby acknowledge that new (or changed) (1) technology, (2) uses, (3) media, (4) formats, (5) modes of transmission and (6) methods of distribution, dissemination, exhibition or performance [hereinafter “New Exploitation Methods”] are being and will inevitably continue to be developed in the future, which would offer new opportunities for exploiting the Work. Lender and Artist intend and do hereby grant and convey to Producer any and all rights in and to such New Exploitation Methods with respect to the Work throughout the universe in perpetuity. Lender and Artist further hereby agree that it and he or she will not seek (1) to challenge, through the courts, administrative governmental bodies, private organizations, or in any other manner the rights of Producer to exploit the Work by any means whatsoever or (2) to thwart, hinder or subvert the intent of the grants and conveyances to Producer herein and/or the collection by Producer of any proceeds relating to the rights conveyed hereunder. (citation information unavailable for confidentiality reasons) (agreement on file with author).

vi) Summary In sum, personal ownership and exclusive control over one’s digital image provide the optimum protection against misuse of the data. If the individual owns and controls the data, access to the data by a producer might be predicated on the data being subject to restrictions on the use and/or re-use of the data. While the principal focus of this discussion has been on digital clones of actors, private citizens will someday find that they, too, will have to worry about cyber scans. Today, children sit for school photos and fami- lies go to photography studios for a family portrait. The day will come when one can go to a cyber studio and have a scan done, perhaps only of the head or even of the entire person. The digital “sculpture,” when coupled with a voice and a digital animation program, will provide a “walking, talking” replica of the person. The President of Cyberware, Inc., predicted a day when video arcades will provide for a cyber scan of game players so that their images can be integrated into the video game they are playing.106 It does not take great imagination to envision a cyber studio owner selling body parts, particularly heads, to a pornographer who could “graft” amateur faces onto professional bodies to achieve fresh talent.107 Moreover, perhaps, the cyber studio will simply sell digital bodies for use as extras in a film. While libel laws and rights of privacy/publicity statutes offer protection, it would be more prudent to lock the barn door before the horse is stolen. The subject of the scan should insist at the time of contracting that all digital scan data be surrendered to the scanee and that no duplicates be retained by the cyber studio.108 b) The Indirect Approach It is not only those who have been directly scanned who have to worry about digital clones. A digital replica of an individual can be created even without a laser or similar digital scan of that person. With the direct approach, the subject has consented to the original digital clone; but, in the indirect approach, the subject may not even be aware that a digital clone is being created.

106. See CyberwareTM promotional video (on file with author). 107. In his science-fiction novel about a virtual Japanese woman, novelist William Gibson maps the face of one character onto the head of a male porn star. WILLIAM GIB- SON, IDORU 213-17 (1996). 108. The author was told by a representative of the Canadian firm, Inspeck, Inc., that once scan data has been delivered to the customer any other copies are destroyed. See supra note 33. Four techniques lend themselves as alternatives to scanning the individual: (1) create a bust from a life mask impression of the subject; (2) create a bust of the individual from reference photographs or motion picture frames;109 (3) create a digital three-dimensional model using photogrammetry;110 or (4) scan a look-alike and then “tweak” the data to improve the comparison to the individual being simulated, a body double providing realistic scan data for the rest of the simulated human. i) Bust from Life Mask To create a digital replica of the “Godfather of Soul,”111 James Brown, special effects house Digital Domain cast a life mask of the singer, then used the life mask as a mold for creating a bust. The bust was then laser scanned to create a digital replica of Brown’s face and head which was then digitally stitched onto a body double. The digital likeness of Brown would clearly be subject to right of publicity laws as a “likeness;” but would it be protected by copyright? As previously discussed, a human—in this case Brown—is not copyrightable. The life mask is an image of Brown’s face, but does it have the creativity necessary for federal copyright protection, or, does it merely involve “some ‘physical’ as opposed to ‘artistic’ skill?”112 The same question arises with respect to the casting of the bust from the face mask. If the digital scan is itself not copyrightable then either the face mask and/or the bust must enjoy the necessary threshold of creativity if there is to be copyright protection. The answer admits of some difficulty.

109. A film entitled Everything George planned to star the late George Burns. To create George, the producer intended to create a “clay model of Burns’ head which will be scanned into a computer.” HOLLYWOOD REP., Aug. 7, 1997, at 8; see also Bruce Handy, Have Gigabytes, Will Act, TIME, Sept. 1, 1997, at 72. 110. Won-Sook Lee & Nadia Magnenat Thalmann, Head Modelling From Pictures and Morphing in 3D with Image Metamorphosis Based on Triangulation, in MODELING AND MOTION CAPTURE TECHNIQUES FOR VIRTUAL ENVIRONMENTS (Nadia Magnenat Thalmann & Daniel Thalmann eds., 1996). 111. Brown v. Twentieth Century Fox Film Corp., 799 F. Supp. 166, 168 n.2 (D.D.C. 1992) (noting that “the complaint states that plaintiff is “known throughout the world as ‘The Godfather of Soul’”). 112. Dunham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 910 (2d Cir. 1980) (citing L. Batlin and Son, Inc. v. Snyder, 536 F.2d 486, 491 (2d Cir.) (en banc), cert denied, 429 U.S. 857 (1976)); see also, Downing v. Abercrombie & Fitch, 265 F.3d 994, 1004 (9th Cir. 2001). But see Eden Toys, Inc. v. Florelee Undergarment Co., 697 F.2d 27, 35 (2d Cir. 1982) (holding that a portrait that improved upon the original model satisfies a minimal amount of “originality” for copyright).

ii) Bust Based on Reference Photographs A clay bust created by reference to photographs of an individual would likely have sufficient originality to warrant copyright protection as a derivative sculpture.113 The sculptor would, of course, require licenses for the use of any copyrighted reference photographs where the copyrights were owned by third parties.114 The sculptor—or, if the bust is a work made for hire, the employer—will own the copyright in the bust as a derivative work. The digital scan of the bust is protected by copyright even though the digital scan of the person may not be. Why the difference in outcome? A person is not copyrightable, but the bust is. A noncreative digital scan of the person has no copyrightable element but the scan of the bust is a copy of a copyrighted work, the bust, and is therefore protected by copyright to the same extent, even if the scan as such may not be creative. As an alternative to scanning a clay bust, one can employ “digital sculpting.” This method involves direct computer sculpting where the animator studies the photographs and sculpts the computer model using two computer input devices: a six-degree of freedom interactive input device for spatially orienting the digital bust and a two-degree of freedom input device to do the sculpting.115 Digital sculpting requires levels of creativity similar to clay sculpting and should be equally copyrightable as a derivative of the reference photographs. Does the subject of the bust have a right to prevent the creation of the digital bust by either described method? I shall postpone the answer to that question until I address the other two methods of creating a digital model. iii) Photogrammetry Photogrammetry has been used extensively to create three-dimensional models of architectural works from reference photography.116 That same technology can be used to create a digital bust of a person from reference

113. Mazer v. Stein, 347 U.S. 201 (1954). 114. See 17 U.S.C. § 103(a) (1994). 115. Nadia Magnenat Thalmann & Pascal Volino, Sculpting, Clothing and Hairdressing our Virtual Humans, in INTERACTIVE COMPUTER ANIMATION 205 (Nadia Magnenat Thalmann & Daniel Thalmann eds., 1996); see also Ronald H. Perry & Sarah F. Frisken, Kizamu: A System for Sculpting Digital Characters, COMPUTER GRAPHICS PROCEEDINGS (SIGGRAPH 2001) 47 (2001). 116. Paul E. Debevec et al., Modeling and Rendering Architecture from Photo- graphs: A Hybrid Geometry- and Image-based Approach, in COMPUTER GRAPHICS PRO- CEEDINGS (SIGGRAPH 96) 11 (1996). photographs.117 For purposes of this discussion, I shall assume that the copyright in the reference photographs is owned by or properly licensed to those creating a digital bust from the photographs. Assuming that the reference photographs themselves are copyrighted, is the digital bust a protectable derivative work? At first glance, one might conclude the digital bust is protected just as a physical bust would be, as a derivative work. One might argue, however, that calculating a three-dimensional coordinate for a point on the surface of a person’s physiognomy by comparing common points in photographs taken at different angles does not take protectable elements from the reference photographs:

As long as the animator of the digital model does not appropriate any of the protectable elements of the photographs or motion picture frames, or if, at least, there is no substantial similarity with respect to protected elements of the reference works, there is no infringement.

As long as the reanimator uses photogrammetric techniques, he is not attempting to replicate the costuming, pose, lighting, shade, or other protectable elements; rather he is acting much as an anthropologist with a set of calipers, measuring the dimensions of the subject. By comparing identical points on the surface of the actor’s face as portrayed in two photographs taken at different angles, the reanimator is able, with the aid of the computer, to establish a three-dimensional coordinate of the point. He can also establish three-dimensional coordinates of the other points which make up the surface of the subject’s face and head. If nothing more than these reference points are used, then it would be stretching to suggest that a protectable element of the photographs had been appropriated since the pose as such was not copied nor would costume, light, shade, or other elements be appropriated. The most that could be said is that the respective angles of the reference photos were used in the calculation of the three-dimensional coordinates of a particular point on the surface of the actor’s face.118 If the above argument is correct, the digital model would not be a derivative work, having taken no protectable elements of the underlying work. There remains the question of whether the digital model itself is

117. See Thalmann & Volino, supra note 115 at 205. 118. Joseph J. Beard, Casting Call at Forest Lawn: The Digital Resurrection of De- ceased Entertainers—A 21st Century Challenge for Intellectual Property Law, 8 HIGH TECH. L.J. 101, 111 (1993).

copyrightable. If it is not, it is merely a data set and the previous discussion of data protection is applicable. However, one might persuasively argue that the selection of the reference photographs and the particular reference points selected from the photographs at least constitute a copyrightable compilation. iv) Scan of Look-a-Like The final technique for creating a digital model is to use a look-alike. For the reasons previously given, the scan of the look-alike may not be copyrightable. However, the “tweaking” of the data—likely by using photos of the person being simulated—might be sufficiently creative as to warrant copyright protection. v) The Law The subject of the digital model does not have any copyright interest in the digital model, using any of the techniques described above, any more than the typical subject of a photograph has a copyright in the photograph.119 Is there any theory under which the subject can prevent the very creation of the digital model? The subject, of course, has a right of publicity that prevents commercial exploitation of his persona, for example, in advertisements. But, will the right of publicity be a viable tool for preventing creation of the digital model? Some states exclude “works of fine art” from the ambit of the right of publicity120 even where distributed in a limited number of copies,121 although the commercial distribution of busts has

119. See supra note 54. 120. See ETW Corp. v. Jireh Publ’g, Inc., 99 F. Supp. 2d 829, 835 (N.D. Ohio 2000) (“The item at issue is a ‘limited edition;’ a certificate verifies that ‘only 5000 prints [are] available worldwide;’ it appears that the United States Supreme Court would find such expression to fall within the ambit of the First Amendment.”). California exempts a “single and original work of art.” CAL. CIV. CODE § 3344.1(a)(2) (Deering Supp. 2001). Illi- nois exempts “a single and original work of fine art” from its Right of Publicity Act. 765 ILL. COMP. STAT. ANN. 1075/35(b)(1) (West 2000). A Nevada statute states that “[t]he use is in connection with an original work of art except that multiple editions of such a work of art require consent.” NEV. REV. STAT. ANN. 597.790(2)(e) (Michie 1999); see also OHIO REV. CODE ANN. § 2741.09(A)(1)(c) (Anderson 2001) (“[o]riginal works of fine art”); OKLA. STAT. ANN. tit. 12, § 1448(N)(3) (West 1993) (“Single and original works of fine art”); TEX. PROP. CODE ANN. § 26.012(a)(4) (Vernon 2000) (“single and original works of fine art”); WASH. REV. CODE ANN. § 63.60.070(2)(a) (West 2000) (“[s]ingle and original works of fine art, including but not limited to photographic, graphic, and sculptural works of art that are not published in more than five copies”). 121. See Simeonov v. Tiegs, 602 N.Y.S.2d 1014, 1017 (Civ. Ct. 1993) (“Just because [the artist] incidentally intended to sell a limited number of copies of his creation, that been held to be a violation of the celebrity’s right of publicity.122 So, the question is whether the digital bust is more like a work of fine art or more akin to the commercial distribution of busts. Were the digital bust created solely for the purpose of display in singular form, it would be akin to a work of fine art and therefore not subject to the person’s right of publicity. However, if the person who is the subject of the digital bust can demonstrate that it is intended to be used in the production of one or more films it might be argued to be for “trade purposes” and therefore, forbidden. 2. Voice Synthesis Today, sound-alikes provide voices similar to that of the person being imitated. Where a sound-alike has been used in a commercial, the current trend has been to find the imitation to be a violation of the genuine person’s right of publicity123 as well as, possibly, a violation of section 43(a) of the Lanham Act.124 Most states that have codified the right of publicity include “voice” in their statutes.125 Where statutory protection is provided, “voice” has been interpreted to mean actual voice and not mere imitation,126 though in California, complementary common law has been held to protect against imitation.127 Rich Little, among other impressionists, makes his living imitating a variety of celebrities. This type of activity might be considered parody and, therefore protected by the First Amend- ment. On the other hand, when an impressionist limits imitation to one ce- lebrity128 or group129 this may give rise to unfair competition and similar claims.

does not mean that he was acting ‘for the purposes of trade.’”); see also J. THOMAS MCCARTHY, THE RIGHTS OF PUBLICITY AND PRIVACY § 8.8[H] (2000). 122. Martin Luther King Jr. Ctr. for Social Change Inc. v. Am. Heritage Prods., Inc., 296 S.E.2d 697 (Ga. 1982). 123. See Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992), cert denied, 506 U.S. 1080 (1993); Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988). An early use of a sound-alike for a commercial involved President Franklin D. Roosevelt (FDR) in 1938. A cigarette company used an announcer whose voice was “startlingly similar to that of President Roosevelt.” Marion Stevens, Advertiser Rapped For Using Voice Simi- lar to Roosevelt’s, MIAMI HERALD, Nov. 26, 1938, at 10A. FDR apparently took no action. 124. See Waits, 978 F.2d at 1106-12. 125. See CAL. CIV. CODE § 3344(a) (Deering Supp. 2001); IND. CODE ANN. § 32-13- 1-7(2) (West 2000); NEV. REV. STAT. ANN. 597.790(1) (Michie 1999); N.Y. CIV. RIGHTS LAW § 51 (McKinney 1992 & Supp. 2001). 126. See Midler, 849 F.2d at 463. 127. See id. 128. See Estate of Presley v. Russen, 513 F. Supp. 1339 (D.N.J. 1981). The issue of performance by a digital clone is discussed infra Part II.B. 129. See Apple Corps. v. Leber, 229 U.S.P.Q. (BNA) 1015 (Cal. Super. Ct. 1986).

Films have been completed using impressionists. Rich Little imitated James Cagney in his final appearance in a made-for-TV movie, Terrible Joe Moran.130 He also provided the voice for David Niven in his final performance in Curse of the Pink Panther and, ironically provided the voice of Peter Sellers in the same film.131 Ironically, because Peter Sellers himself had once imitated Humphrey Bogart, who had been injured in an ac- cident, in order to complete the film Beat the Devil.132 Presumably, an impressionist could be employed to provide the voice for an unauthorized use of the digital clone of an actor in a film. Where a sound-alike is used in a commercial, however, this is clearly a violation of the right of publicity of the person imitated,133 just as would the use of a look-alike for such a purpose.134 As discussed above, courts have held that a look-alike has a right to exploit his or her “talent.”135 Presumably, a sound-alike would also have a right to exploit that “talent” as well.136 Nevertheless, if a look-alike played the celebrity in a docudrama,137 that may not be a violation of the celebrity’s right of publicity.138 If that is the case, providing a sound-alike voice under the same circumstances may likewise be permissible. Where a sound-alike provides the voice to a digital clone playing a nonbiographical role, I would argue that the performance should clearly be subject to right of publicity laws.139 Voice technology, being explored in the United States and elsewhere, will eventually overtake the legal issues raised by use of sound-a-likes.

130. Peter Travers, James Cagney: A Star for Six Decades, TIME, Apr. 14, 1986, at 147. 131. David Ansen, Send Back the Clowns, NEWSWEEK, Aug. 22, 1983, at 73; Vernon Scott, He’s Always Ready with Vocal Support, THE RECORD, Feb. 12, 1985, at B17. 132. ROGER LEWIS, THE LIFE AND DEATH OF PETER SELLERS 132 (1997). 133. See supra note 123. 134. Onassis v. Christian Dior-New York, Inc., 472 N.Y.S.2d 254 (Sup. Ct. 1984), aff’d, 488 N.Y.S.2d 943 (App. Div. 1985). 135. Id. at 262. 136. The Nevada right of publicity statute specifically exempts “[t]he use in an attempt to portray, imitate, simulate or impersonate a person in a play, magazine article, newspaper article, musical composition, film, or a radio, television or other audio or visual program, except where the use is directly connected with commercial sponsorship.” NEV. REV. STAT. ANN. 597.790(2)(d) (Michie 1999); see also 765 ILL. COMP. STAT. ANN. 1075/35(b)(1) (West 2000); IND. CODE ANN. § 32-13-1-1(c)(1)(C) (West 2000). 137. “The term ‘docudrama’ connotes a type of film or novelization in which real-life events are embellished with fictional dramatic events.” Ruffin-Steinback v. dePasse, 82 F. Supp. 2d 723, 726 n.1 (E.D. Mich. 2000). 138. See Taylor v. NBC, 1994 WL 762226 (Cal. Sup. 1994). 139. See infra Part II.B. ATR Interpreting Telecommunications Research Laboratories in Kyoto, Japan is developing “electronic impersonations-computer systems that can speak in a particular person’s voice.”140 The ATR system, called CHATR, requires one hour of recorded speech of the person to be imitated. The speech is broken down into basic components and then CHATR recon- structs the sounds into new words and sentences spoken not only in the language in which it was originally recorded, but in other languages as well.141 AT&T Labs has created Natural Voices text-to-speech software that some say “raises the specter of voice cloning.”142 Among other research activities in speech communication systems are those being pursued by France Telecom’s research laboratory, I.B.M. Research and Lernout & Hauspie Speech Products. When these systems are perfected, it will be possible to use the person’s actual voice. Unless the individual to be electronically imitated has voluntarily provided a voice sample for analysis, the voice sample will presumably come from motion picture, video sound tracks or from sound recordings. If the reference samples are not in the public domain, copyright ownership or a license will be necessary, since presumably the sounds will be copied from the film or sound recording for analysis. Will a license also be required from the person whose voice is being analyzed? Inasmuch as what is being analyzed is the actual voice of the person, right of publicity statutes protecting voice will literally apply. But the analysis as such is not an advertising purpose. Is it a trade purpose? There does not appear to be any analogy in existing case law on which to draw. At this juncture, it is not being exploited, it is simply being created. If the synthetic voice is used in a commercial, right of publicity statutes protecting voice would apply.143 Suppose however, the voice is used in substitution for the voice of a look-alike, not unlike songs being dubbed for an actress who does not have a singing voice. If the

140. A. Pollack, Sound Bites and Then Some, N.Y. TIMES, BUS. DAY, Apr. 21, 1997, at 1. 141. See id. For the current status of CHATR, see Advanced Telecomm. Research Institute Int’l, Speech Information Processing, at http://results.atr.co.jp/products_e/seika/- chatr.html (last visited Nov. 15, 2001). 142. Lisa Guersney, Software is Called Capable of Copying Any Human Voice, N.Y. TIMES, July 31, 2001, at C1. However, synthetic voices are not without their problems. “Paul,” the computer-synthesized voice of the National Weather Service of the National Oceanic and Atmospheric Administrations (NOAA) has been withdrawn from service. “Paul” was based on the technology of the 1990s. NOAA is currently seeking to replace “Paul” with more up-to-date text-to-speech technology. Joe Haberstroh, ‘Paul’ Was Just Misunderstood, NEWSDAY, July 15, 2001, at A25. 143. See Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988); Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992).

look-alike is portraying the star, not in a fictional role, but as him- or herself, the First Amendment might protect the use. However, if a digital clone is used—coupled with the real, albeit synthesized, voice of the actor—the voice adds a degree of verisimilitude to the words spoken. By way of analogy, a quote from an individual lends a degree of credence that a paraphrase does not.144 While the creator of a docudrama is given some license to write “creatively” to enhance the dramatic effect, if the misquote or totally creative language casts the “speaker” in a false light or is defamatory, the celebrity may have a cause of action.145 Finally, the use of a digital clone and the actor’s recreated voice in a fictional role may be actionable as unfair competition.146 3. Animation There remains the issue of whether dynamic data, facial animation and body movement, are copyrightable. Obviously, in a motion picture, a major component of the copyrightable film is the acting. Actors speak dialogue. The dialogue would presumably be copyrightable, but is not an element of the actor himself. Dialogue unaccompanied by emotion is not acting. Fear, anger, rage and tenderness are what give meaning to dialogue. “No” may be uttered in fear, anguish, anger or love. It is the actor who interprets the word. That said, one’s voice is not copyrightable147 nor is the exercise of one’s facial muscles in creating smiles, snarls or knitted brows. Face Trax™ or similar devices can record a range of facial animations. The data capture of the full range of the subject’s facial muscles, reflective of the range of human emotions in his or her visual sense, would likely not be copyrightable. Were the data copyrightable, the subject might find himself in the same position as an author whose principal character was deemed to be transferred simply because the copyright to a story using the character was transferred. As to the latter, that has not been the law.148 An actor may not be deprived of that which makes him an actor—his ability to create emotion. Thus, the digital data representing facial animation should not be held copyrightable. This conclusion does not, however, lead to the further conclusion that the employment of that data in the telling of

144. See Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 511 (1991) (“[Q]uotations add authority to the statement . . . .”). 145. See Chaplin v. Amador, 93 Cal. App. 358 (Cal. Ct. App. 1928). 146. See id. 147. See Midler, 849 F.2d at 462. 148. See Warner Bros., Inc. v. CBS, 216 F.2d 945 (9th Cir. 1954). the story in a particular film is not an element of the copyrightability of the film. “Motion capture,” or “performance capture,” as S.A.G. prefers,149 is used for real-time animation of cartoon characters, but also can be used off-line to marry motion capture to virtual humans, as was done to create passengers on Titanic’s digital decks. In fact, S.A.G. has taken the position that its members who are used to create the motion or performance are entitled to residuals.150 It is possible that mathematically created dynamics will replace or diminish the use of motion capture. Algorithms, rather than humans, may animate digital clones in the future.151 Computer programs that animate virtual humans will, like other software, be protected by copyright to the extent that it is not purely functional and it has minimally sufficient creativity. Motion capture devices capture the movements of hands, arms, legs and torso while performing activities such as walking, sitting, bending or twisting.152 While choreography is one of the enumerated categories of copyrightable works, the ordinary movement of the subject’s limbs and body are more akin to unprotectable social dance steps than to creative choreography.153 Thus, motion capture data would not be copyrightable to the extent that it reflects ordinary movement. If the dynamics captured are sufficiently creative as to constitute choreography, however, copyright would of course be implicated.154

149. Carolyn Giardina, Motion-Capture Spot Forecast: Gray Clouds Persist, SHOOT, Nov. 7, 1997. Jennifer Pendleton, Motion Sickness, L.A. TIMES, Jan. 12, 1998, at D8. In the film Titanic, the digital replica of the ship was peopled with 515 computer-generated humans created by special effects house Digital Domain. Body doubles, mostly Digital Domain staffers, were used for motion capture sessions. WIRED, Oct. 1998, at 155. 150. See Giardina, supra note 149. 151. PETER RATNER, 3-D HUMAN MODELING AND ANIMATION (1998). 152. See generally ALBERTO MANACHE, UNDERSTANDING MOTION CAPTURE FOR COMPUTER ANIMATION AND VIDEO GAMES (2000). There are a variety of commercial ® motion capture devices available, such as the Polhemus FASTRACK and Ascension Technology Corporation Motion Star® electromagnetic motion tracking systems, SIMEX SIMI® Motion Station DV4 digital camera-based system, and Ascension Corporation LaserBird® optical laser-based system. 153. See H.R. REP. NO. 1476, 94th Cong., at 53-54 (1976), reprinted in 1976 U.S.C.C.A.N. 5666-67 (stating that it is unnecessary to specify that “choreographic works do not include social dance steps and simple routines”); see also Melanie Cook, Comment, Moving to a New Beat: Copyright Protection for Choreographic Works, 24 UCLA L. REV. 1287, 1298-1300 (1977) (discussing social dances and routine steps). 154. See 17 U.S.C. § 102(a)(4) (1994); see also Ahn v. Midway Mfg. Co., 965 F. Supp. 1134, 1138 (N.D. Ill. 1997). The motion-capture of actor Arnold Vosloo by special

Finally, static and dynamic data may not be protectable as a collective work155 since the selection and coordination of the data are mandated by their function, and the creation of the static and dynamic characteristics of the particular actor.156 Thus, the static and dynamic data captured by various recording devices may lack sufficient creativity to warrant copyright protection. If, however, the static and/or dynamic data is copyrightable, it is necessary to determine who the author is, and thereby who the copyright owner is. If the work (i.e., the data) is not a work made for hire, then the human who created the work is the author and owner of the copyright.157 If the work is a work-for-hire, then the employer is the author.158 Clearly, the person whom the data represents is not an author simply because he or she sits for this digital portrait or is the subject of motion capture. This person would no more be the author than the person who sits for a photographic portrait.159 Of course, if the work is a work made for hire and the person scanned is the employer, the person qua employer but not qua subject would be the author. It would be the rare instance that the scanee would be an employer under the first prong of the definition of work made for hire.160 But, if the digital data fits one of the nine categories of works enumerated in the second prong of the definition of a work-for-hire, the scanee will be the author of the digital data provided that a written agreement to that effect is signed by both parties.161

effects house Industrial Light + Magic to create the mummified body of the High Priest Imhotep in the film The Mummy Returns (Universal Pictures 2001) is an example of copyright-protected choreography. 155. See 17 U.S.C. § 101 (1994) (defining “collective work” as “a work . . . in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole”). 156. Feist Publ’ns, Inc. v. Rural Telephone Serv. Co., 499 U.S. 340 (1991). 157. 17 U.S.C. § 201(a) (1994). 158. See 17 U.S.C. § 201(b) (1994). 159. See supra note 54. 160. The scanee relies on the skill of the scanner or motion capture operator, is digitized at the operator’s worksite, does not control the efforts of the digitizer, pays a one- time fee, and does not have the right to assign further projects. See Community for Crea- tive Non-Violence v. Reid, 490 U.S. 730 (1989). 161. See 17 U.S.C. § 101 (1994) (“A ‘work made for hire’ is . . . (2) a work specially ordered or commissioned for use as a contribution . . . as part of a motion picture or other audiovisual work, . . . as a compilation . . . if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire.”). The combination of static and dynamic data might qualify as an audiovisual work,162 particularly in the form of a motion picture163 or a compilation,164 in which case the scanee could insist on a work-for-hire agreement where he is the hiring party. If the data, though copyrightable, is not considered a motion picture or other audiovisual work or a compilation, the data could not be a work made for hire under the second prong of the rule. In that event, the subject of the scan could insist that the contract for scanning services include an agreement that the copyright be transferred to the subject of the scan. In that situation the scanee has the copyright in the data until and unless the termination right is exercised.165 While ownership of the copyright by the subject of the scan is important to the legal control of the data, physical control of the data is no less important. Insuring adequate physical security for digital data must be a priority consideration because of its easy replication and the threat of its instant global dissemination over the Internet. A number of actors, including Marlon Brando,166 have had themselves digitally scanned for personal reasons. The discussion in the preceding paragraphs is of particular relevance to that type of situation. The more typical situation is a film requiring digital images of an actor to create special effects such as in Terminator 2, Virtuosity, Judge Dredd and Titanic. While a data set prepared for an actor for personal reasons might not fit into the motion picture or compilation category for purposes of work made for hire status, where the data is created specifically for use in a motion picture, courts would consider it as much work made for hire as work specially commissioned music for the film.167 Whether the scan was done by a company specializing in such activity or by a film studio, the data can be a work made for hire with the film producer being the employer and, therefore, the owner of the copyright in the

162. See id. (“‘Audiovisual works’ are works that consist of a series of related images which are intrinsically intended to be shown by the use of machines or devices . . . regardless of the nature of the material objects, such as films or tapes, in which the works are embodied.”). 163. See id. (“‘Motion pictures’ are audiovisual works consisting of a series of related images which, when shown in succession, impart an impression of motion, together with accompanying sounds, if any.”). 164. See id. (“A ‘compilation’ is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship.”). 165. See 17 U.S.C. § 203(a) (1994) (stating conditions for termination). 166. See Frederick Rose, Raising the Dead, TORONTO STAR, Mar. 27, 1998, at D1. 167. See Picture Music, Inc. v. Bourne, Inc., 457 F.2d 1213 (2d Cir. 1972).

data. Where does this leave the actor whose digital data is being incorporated in the film? If the actor has sufficient “clout,” he or she may be able to obtain a transfer of the copyright to the data exclusive of the right to exploit the data in the film in question. Presumably the actor would also desire to control the actual data set itself. If the actor cannot obtain a transfer of the copyright in the data set, the next best thing would be covenants by the film producer not to exploit the data set for any purpose other than the film for which it was prepared. Failing specific contractual restrictions, the actor will have to rely on the re-use agreement between producers and the S.A.G.168 B. Preventing Unauthorized Performance by a Digital Clone 1. Clones of Professional Performers a) Use of the Clone as a Substitute for the Actor The preceding section discussed preventing the unauthorized creation or duplication of a digital clone. In all probability, an unauthorized clone will remain undetected until publicly exploited. While the person whose digital clone is being exploited may have an action based on the unauthorized creation or duplication itself, it is useful to consider separately whether the unauthorized exploitation is actionable. In addition, even where a digital clone has been created with the consent of the human in question, exploitation of the clone without the permission, or in excess of permission, by the human must be addressed. The exploitation of the digital clone of a celebrity raises issues virtually identical to those raised when an analog image of the celebrity is used. The resolution of an unlicensed use of a digital clone in a commercial would be no different than if a look- or sound-a-like were used. The use of a digital clone’s image on celebrity memorabilia would also presumably have the same consequences as use of the real image of the celebrity for a “trade purpose.” But, where performance by a digital clone is involved, we enter uncharted waters. There is a common thread to the various types of exploitation, be it advertising, trade purpose or performance: the tension between the right of publicity (including performance right) of the celebrity on the one hand and the First Amendment rights of the unlicensed exploiter on the other. To facilitate analysis, it is convenient to distinguish: (1) advertising ex-

168. See supra note 103 and accompanying text. ploitation, (2) trade purpose exploitation, and (3) performance exploitation. b) Advertising An actor, musician, singer, dancer, model, or sports figure has economic value in the first instance in performing, i.e., in exploiting his or her talent. As celebrities develop public recognition and acclaim, they create a new source of economic value: the value of their public persona. An actor may lend her image and voice to a commercial. A sports figure might endorse footwear. His persona may be exploited in fields totally unrelated to his profession. When a motion picture or stage actor appears in an advertisement, he or she is selected not so much for his or her histrionic skills but rather for his or her celebrity status. The unauthorized use of an individual’s persona for advertising purposes is uniformly prohibited by state right of publicity laws, though these laws vary as to the attributes protected.169 One attribute common to all right of publicity statutes is image. The digital clone of an individual would seem to fit comfortably within the definition of image.170 The use of look-alikes has likewise been found to be actionable either under right of publicity laws171 or section 43(a) of the Lanham Act.172 Presumably, the digital modification of an actor’s image to look like another individual would be actionable as a replication of that individual, or at least as a simulation of that individual, akin to a look-alike.173 c) Trade Purpose Trade purpose cases typically involve static visual images of the celebrity in publications, posters, T-shirts, statuettes and the like. As a practical matter, it is unlikely, though not impossible, that an unlicensed exploiter would use static images of the clone as opposed to images of the celebrity himself. What is more likely is the use of the celebrity’s digital clone as an animated image in a video game, a screen saver or a commercially avail-

169. Indiana appears to provide the broadest protection. See IND. CODE ANN. § 32- 13-1-7 (West 2000) (protecting (1) name, (2) voice, (3) signature, (4) photograph, (5) image, (6) likeness, (7) distinctive appearance, (8) gestures, and (9) mannerisms). 170. In Onassis, 472 N.Y.S.2d 254, a look-alike was held to be a likeness, and in Ali v. Playgirl, Inc., 447 F. Supp. 723 (S.D.N.Y. 1978), a composite photo drawing, “somewhere between representational art and cartoon,” was held to be a likeness. Id. at 726. 171. See, e.g., Onassis, 472 N.Y.S.2d 254. 172. See, e.g., Prudhomme v. Procter & Gamble Co., 800 F. Supp. 390 (E.D. La. 1992); Allen v. Nat’l Video Inc., 610 F. Supp. 612 (S.D.N.Y. 1985). 173. Binns v. Vitagraph Co. of Am., 103 N.E. 1108, 1110 (N.Y. 1913).

able avatar for use on the Internet. These three possible exploitations would, arguably, be a “trade purpose” use. The difficulty in so-called “trade purpose” cases is deciding whether a particular exploitation is merely for trade purpose and therefore subject to the right of publicity or is “speech” insulated from right of publicity claims by the First Amend- ment.174 Where a person’s digital image is used without authority in the creation of advertising, the applicability of the right of publicity is clear.175 Equally clear is the virtual inapplicability of a First Amendment defense.176 Where the exploitation, without authority, of a digital image is for a use other than advertising, the applicability of the right of publicity is less clearly defined and the inapplicability of a First Amendment defense is less certain.177 If the use is deemed to be for the “purpose of trade” then the right of publicity is applicable. A T-shirt with a picture of a celebrity178 has been considered a “purpose of trade,” as has the exploitation of a parody of a corporate logo,179 despite a First Amendment parody defense. Similarly the appearance of name or likeness on bubble gum cards180 and

174. See Beverley v. Choices Women’s Medical Ctr. Inc., 587 N.E.2d 275, 278 (N.Y. 1991) (stating that “[a] picture illustrating an article on a matter of public interest is not considered used for the purposes of trade or advertising . . . unless it has no real relationship to the article”). 175. See, e.g., Onassis, 472 N.Y.S.2d 254. 176. See, e.g., Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988) (rejecting any First Amendment defense). 177. First Amendment concerns limit the applicability of the right of publicity’s “purpose of trade” prong. A person’s right to exploit his name or likeness is trumped by right to make public newsworthy or public interest events. See Stephano v. News Group Publ’ns, Inc., 474 N.E.2d 580, 584 (N.Y. 1984). The “purpose of trade” cases have involved weighing these competing rights. See Titan Sports, Inc. v. Comics World Corp., 870 F.2d 85, 87 (2d Cir. 1989); Lerman v. Flynt Distrib. Co., 745 F.2d 123, 131 (2d Cir. 1984); Gautier v. Pro-Football, Inc., 107 N.E.2d 485 (N.Y. 1952); Brinkley v. Casablan- cas, 438 N.Y.S.2d 1004 (App. Div. 1981). 178. See Titan Sports, Inc., 870 F.2d at 88 (noting that “Comics World could not sta- ple a T-shirt bearing the likeness of a Titan wrestler between magazine covers and claim . . . first amendment protection” for a “wrestling T-shirt magazine”); Comedy III Prods., Inc. v. Gary Saderup, Inc., 80 Cal. Rptr. 2d 464 (Ct. App. 1999) aff’d, 25 Cal. 4th 387 (2001). 179. E.g., Mutual of Omaha Ins. Co. v. Novak, 836 F.2d 397 (8th Cir. 1987). 180. See Haelan Labs, Inc. v. Topps Chewing Gum, Inc., 202 F.2d 866 (2d Cir. 1953) (holding bubble gum cards are a trade purpose). But see Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959, 976 (10th Cir. 1996) (holding that “[l]ittle is to be gained, and much lost, by protecting MLBPA’s right to control the use of its members’ identities in parody trading cards”) (emphasis added). other memorabilia are considered trade purposes. Posters have generally been treated as being solely for purposes of trade,181 with no First Amendment overtones,182 but not always.183 If the use is communicative, it is freighted with First Amendment considerations.184 Stories, whether in print, film or theater have been treated as protected by the First Amendment.185 Presumably, the First Amendment protects the various elements of the story including the action and the dialogue. That brings us to the question of whether the exploitation of the digital image of an actor without that actor’s permission is a “trade purpose” unprotected by the First Amendment, and therefore subject to that actor’s right of publicity; or whether it is an element of free expression. The problem with focusing on the right of publicity is that it deals solely with representations of the person, name, likeness and voice (as reproduced), etc.; it does not deal with the person. Where a representation of the person involves First Amendment considerations, the right of publicity may be inapplicable. Not even the most ardent champions of the First Amendment have argued that a person must perform against their will. Our freedom not to do something is, with rare exception,186 our right. At the same time, we recognize the right of one to earn a living. In fact, there are laws to protect

181. See, e.g., Titan Sports, Inc. v. Comics World Corp., 870 F.2d 85 (2d Cir. 1989); Factors, Etc., Inc. v. Pro-Arts, Inc., 579 F.2d 215 (2d Cir. 1978); Brinkley v. Casablancas, 438 N.Y.S.2d 1004 (App. Div. 1981). 182. See, e.g., Factors, 579 F.2d at 222 (2d Cir. 1978) (rejecting First Amendment argument). 183. See, e.g., Paulsen v. Personality Posters, Inc., 299 N.Y.S.2d 501 (Sup. Ct. 1968) (stating that poster of announced presidential candidate was not a use for purposes of trade). Then, in ETW Corp. v. Jireh Publ’g, Inc., 99 F. Supp. 2d 829 (N.D. Ohio 2000), Tiger Woods “bogied” when his Ohio common law right of publicity claim was trumped by the First Amendment with respect to a 5,000 copy, limited-edition print of a painting of the golfer. Id. at 835. 184. Id.; see also U.S. CONST. amend. I (stating “Congress shall make no law . . . abridging the freedom of speech, or of the press”). 185. Where exploitation complained of is about celebrities, First Amendment considerations predominate. See Matthews v. Wozencraft, 15 F.3d 432 (5th Cir. 1994) (motion picture); Ruffin-Steinback v. dePasse, 82 F. Supp. 2d 723 (E.D. Mich. 2000) (television mini-series); Ann-Margret v. High Society Magazine Inc., 498 F. Supp. 401 (S.D.N.Y. 1980) (magazine); Hicks v. Casablanca Records, 464 F. Supp. 426 (S.D.N.Y. 1978) (motion picture); Seale v. Gramercy Pictures, 949 F. Supp. 331 (E.D. Pa. 1996) (motion picture); Joplin Enters. v. Allen, 795 F. Supp. 349 (W.D. Wash. 1991) (play); Frosch v. Grosset & Dunlop, Inc., 427 N.Y.S.2d 828 (App. Div. 1980) (book). 186. E.g., the obligation to serve in the armed forces pursuant to the draft, appear when summoned by a judge or Congress under a subpoena, or surrender such rights while incarcerated.

against discrimination in employment.187 At the outset, I suggested that one’s digital alter ego was a hybrid of the representation of the person and the person him- or herself. A focus on the representational aspect of digital persona appears to implicate the right of publicity and its protection of the representation of persona. But, if one focuses on the digital replica as the very person, right of performance, as opposed to right of publicity, must be addressed. d) Performance Motion pictures have enjoyed strong First Amendment protection as a communications medium.188 But, as was said in Grant v. Esquire, “the First Amendment does not absolve movie companies . . . from the obligation of paying their help.”189 Motion picture and television actors earn their living principally by performing. They may also earn money from the exploitation of their persona in advertising and other commercial purposes. It would be helpful to distinguish between performance rights and publicity rights even though the former are often considered to be encompassed by the latter. For purposes of this discussion, I shall treat performance as a right separate from the right of publicity. When an actor acts, a singer or musician performs, or a model poses, that person is exploiting his or her professional value as a person. When they lend their name or likeness to an endorsement or to inclusion in a product, it is an exploitation of their publicity value. The right of publicity has been called a property right. But since the Thirteenth Amendment to the Constitution, no human being in this country has been considered property. Thus, when an actor contracts for his or her services as an actor he or she is not selling a property right. In Zacchini v. Scripps-Howard Broadcasting Co., the Supreme Court recognized the distinction between the person and his public persona: “the broadcast of petitioner’s entire performance, unlike the unauthorized use of another’s name for purposes of trade . . . goes to the heart of petitioner’s ability to earn a living as an

187. See Civil Rights Act of 1964, Title VII, 42 U.S.C. § 2000e (1994) (banning employment discrimination based on race, national origin, sex or religion). 188. A half-century ago in Joseph Burstyn, Inc. v. Wilson, 343 U.S. 495 (1952), the Supreme Court concluded that “expression by means of motion pictures is included within the free speech and free press guaranty of the First and Fourteenth Amendments.” Id. at 502; see also Hicks v. Casablanca Records, 464 F. Supp. 426 (S.D.N.Y. 1978) (af- fording First Amendment protection to motion pictures); Dora v. Frontline Video, Inc., 18 Cal. Rptr. 2d 790 (Ct. App. 1993); Donahue v. Warner Bros. Pictures Distrib. Corp., 272 P.2d 177 (Utah 1954) (same). 189. 367 F. Supp. 876, 884 (S.D.N.Y. 1973). entertainer.”190 The Court went on to note that what was involved was not “the appropriation of an entertainer’s reputation to enhance the attractiveness of a commercial product, but the appropriation of the very activity by which the entertainer acquired his reputation in the first place.”191 If the digital clone of an actor were used to create a motion picture or television program without the actor’s permission, would this be a violation of the actor’s performance right? Motion pictures and sound recordings capture the performance of an individual. They are historical records of the individual’s live performance. They are representations of the person but are not the person himself. I have previously suggested that the digital clone of an actor is a combination of a representation of the person and the person himself. When the clone acts in a motion picture, the clone is substituting for the actor. An unauthorized performance may deprive the actor of a professional opportunity and, even worse, may even damage the reputation of the actor because of a poor quality performance by the clone or by the very subject matter of the film. The clone is in competition with the actor. In Chaplin v. Amador, a film, The Racetrack, starred the defendant “Charlie Aplin,” whose garb and performance imitated that of Charlie Chaplin’s “Tramp.”192 In enjoining the performance of the film, the court stated that the imitation deprived Chaplin of patronage that he might otherwise have enjoyed.193 This was held to be unfair competition.194 In Price v. Worldvision Enterprises, Inc.,195 the defendants were enjoined from producing and distributing a television series entitled “Stan ‘n’ Ollie” in which actors Chuck McCann and Jim McGeorge would portray Stan Lau- rel and Oliver Hardy.196 Presumably, the unauthorized use of a digital clone to portray other actors would also constitute unfair competition. Nevertheless, there is language in Onassis v. Christian Dior-New York, Inc.197 which must be considered. In Onassis, the court found that the use

190. 433 U.S. 562, 576 (1977). 191. Id. “Zacchini . . . complained of the appropriation of the economic value of his performance, not the economic value of his identity.” Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959, 973 (10th Cir. 1996). 192. Chaplin v. Amador, 269 P. 544, 545 (Cal. Ct. App. 1928). 193. Id. at 546. 194. Id. 195. 455 F. Supp. 252 (S.D.N.Y. 1978). 196. Larry Harmon, whose corporation, Larry Harmon Pictures Corporation, was a plaintiff in Price, co-produced The All New Adventures of Laurel & Hardy: For Love of Mummy in 1998 starring Bronson Pinchot as Stan Laurel and Gailard Sartain as Oliver Hardy. 197. 472 N.Y.S.2d 254 (Sup. Ct. 1984), aff’d, 488 N.Y.S.2d 943 (App. Div. 1985).

of a look-alike of Jacqueline Onassis in an advertisement was a violation of her rights under N.Y. Civil Rights law.198 The court went on to say, however, that the look-alike, Barbara Reynolds, “may capitalize on the striking resemblance of facial features at parties, television appearances and dramatic events.”199 Presumably, had Miss Reynolds portrayed Ms. Onassis in a docudrama, such portrayal would be protected by the First Amendment.200 Ms. Onassis was not an actress. Had she been so, might the court have more narrowly drawn Miss Reynolds’ right to perform on television? While unauthorized competition from a digital clone is likely to be enjoined when the clone is playing a fictional role, what if the clone is playing the actor himself? Actors have portrayed themselves in films. Audie Murphy portrayed his Medal of Honor exploits in the autobiographical film To Hell and Back.201 Monty Wooley, a real-life friend of Cole Porter, portrayed himself in the highly fictionalized film biography of Porter, Night and Day.202 Of course, in these two and similar films, the actors agreed to perform. The more analogous case is where an actor is portrayed by someone else in a biography. The subjects of unauthorized biographies have been singularly unsuccessful in enjoining publication of works.203 Actress Elizabeth Taylor brought an action to enjoin a broadcast by NBC of an unauthorized biographical film.204 In denying Miss Taylor the injunction, the court, in Taylor v. NBC,205 contrasted earlier cases in which the defendants imitated celebrity performers Charlie Chaplin and Elvis Presley: “[s]urely a dramatic presentation of the life of the plaintiff will not be construed as being actually played by plaintiff . . . .”206 Sherilyn Fenn, who portrayed Miss Taylor in the televised two-part mini-series,

198. N.Y. CIV. RIGHTS LAW §§ 50-51 (McKinney 1992 & Supp. 2001). 199. Onassis, 472 N.Y.S.2d at 262. Ron Smith’s Celebrity-Look-Alike “rents out more than 30,000 celebrity look-alikes.” Al Young, All-new familiar faces, USA TODAY, Apr. 2, 1998, at 2D. 200. U.S. CONST. amend. I. 201. (Universal International Pictures 1955). 202. (Warner Brothers 1946). 203. As powerful as he was, Howard Hughes was unable to stop publication of an unauthorized biography. Rosemont Enters., Inc. v. Random House, Inc., 294 N.Y.S.2d 122 (Sup. Ct.1968), aff’d, 301 N.Y.S.2d 948 (App. Div. 1969). 204. Taylor v. NBC, 1994 WL 762226 (Cal. Sup. 1994). 205. Id.; see also Taylor v. Am. Broad. Co., No. 82 Civ. 6977 (S.D.N.Y. 1982); Mat- thews v. Wozencraft, 15 F.3d 432 (5th Cir. 1994); Whitehead v. Paramount Pictures Corp., 53 F. Supp. 2d 38, 53 (D.C. Cir. 1999) (“There is no tort for invasion of privacy for appropriating the story of another person’s life.”). 206. Taylor, 1994 WL 762226 at *6. Liz: the Elizabeth Taylor Story207 did not particularly resemble Miss Tay- lor, except in the most general way, and no one familiar with the actress would believe that Taylor had played herself. The case may have come out differently if the actress had been a look- alike, since some in the audience might have then believed Taylor played herself. If this were the case, Miss Taylor might have had a Lanham Act section 43(a) claim.208 The Lanham Act has been employed to protect various aspects of persona. There is a degree of overlap between Lanham Act protection and that afforded by rights of privacy and publicity, but in some regard the Lanham Act may be more flexible in the protection it extends. The applicability of section 43(a) to actors was made clear in Smith v. Montoro.209 The use of a look-alike has been held to violate section 43(a),210 as has the use of a sound-alike.211 A photorealistic clone of the actor is even more likely to create consumer confusion than a look-alike (or a sound-alike). However, it should be emphasized that if the film producer includes a prominent announcement in the credits, for example, that a clone is being used, this may eliminate consumer confusion and therefore the applicability of section 43(a) to the actor.212 But, the actor would still be left with his or her performance right claim. Suppose Miss Taylor had been played by a digital clone. Might Tay- lor, in such an instance, invoke her right of performance, as an aspect of the right of publicity? First, it must be remembered that likelihood of con-

207. (NBC 1995). 208. See Lanham Act §43(a), 15 U.S.C. § 1125(a) (1994). 209. 648 F.2d 602(9th Cir. 1981). The court stated: [I]t is clear that appellant, as one in the business of providing his talents for use in the creation of an entertainment product, is uniquely situated to complain of injury resulting from a film distributor’s misidentification of appellant’s contribution to the product. According to one commentator, the “dispositive question” as to a party’s standing to maintain an action under section 43(a) is whether the party “has a reasonable interest to be protected against false advertising” [citation omitted]. The vital interest of actors in receiving accurate credit for their work has already been described. Accordingly, we hold that appellant has standing to sue in federal court based on defendant’s alleged violation of section 43(a). Id. at 608. 210. Allen v. Men’s World Outlet, Inc., 679 F. Supp. 360 (S.D.N.Y. 1988); Allen v. Nat’l Video, Inc., 610 F. Supp. 612 (S.D.N.Y. 1985). 211. Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992). 212. Allen v. Nat’l Video, Inc., 610 F. Supp. 612, 630 (S.D.N.Y. 1985).

fusion is not an aspect of the right of publicity.213 Second, the right of performance aspect of right of publicity, as opposed to advertising or trade purposes, is arguably entitled to protection notwithstanding First Amend- ment claims.214 Finally, while a “living and breathing actor . . . has the right to exploit his or her own face,”215 the digital clone no matter how life-like is not “a living and breathing” actor. Therefore, whatever rights a human look-alike may have cannot be applied to a clone—he, she, or it does not have to put bread on the table. 2. Clones of Public Officials Public officials have often been the subject of film and theater. Presi- dents,216 governors,217 and mayors218 have been portrayed by actors,219 some of whom may have borne some resemblance to the official, perhaps enhanced by makeup. Some officials have portrayed themselves in television programs. Congressman Newt Gingrich appeared as himself in

213. “The right of publicity is considered an intellectual property right. . . . It is a more expansive right than any common law or statutory trademark infringement right because it does not require a showing of likelihood of confusion.” Henley v. Dillard Dep’t Stores, 46 F. Supp. 2d 587, 590 (N.D. Tex. 1999); see also Elvis Presley Enters., Inc. v. Capece, 950 F. Supp. 783, 801 (S.D. Tex. 1996). 214. “[W]e are quite sure that the First and Fourteenth Amendments do not immunize the media when they broadcast a performer’s entire act without his consent.” Zacchini v. Scripps-Howard Broad. Co., 433 U.S. 562, 575 (1977). “Ohio has recognized what may be the strongest case for a ‘right of publicity’ involving, not the appropriation of an entertainer’s reputation to enhance the attractiveness of a commercial product, but the appropriation of the very activity by which the entertainer acquired his reputation in the first place.” Id. at 576. The Supreme Court’s incentive rationale “is obviously more compelling in a right of performance case than in a more typical right of publicity case involving the appropriation of a celebrity’s identity.” Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959, 973 (10th Cir. 1996). 215. Allen, 610 F. Supp. at 623. 216. E.g., Alexander Knox as “Wilson” (WILSON (20th Century Fox 1944)); Ralph Bellamy as F.D.R. in Sunrise at Campobello (Schary Brothers Inc. and Warner Brothers 1960); J.F.K. has been portrayed by Cliff Robertson in PT 109 (Warner Brothers 1963), William Devane in The Missiles of October (Viacom 1974) (ABC television broadcast 1974), and Martin Sheen in Kennedy (Alan Landsburg Productions 1983). 217. E.g., Paul Newman portrayed Louisiana governor Earl Long in Blaze. (A&M Films, Silver Screen Partners IV, and Touchstone Pictures 1989). 218. E.g., Tom Bosley as New York Mayor Fiorello LaGuardia in the musical Fio- rello (1958); Bob Hope as LaGuardia’s predecessor James J. Walker in Beau James (Hope Enters. and Paramount Pictures 1957). 219. Occasionally in a role reversal, actors become public officials, the best example being “The Gipper,” President Ronald Reagan. Countdown to Looking Glass.220 Cheers, based on the now-famous “Bull and Finch” cellar bar in Boston boasted appearances by Speaker of the House Tip O’Neill221 and Chairman of the Joint Chiefs of Staff Admiral William Crowe.222 Some former public officials, including former Senator Bob Dole223 and Tip O’Neill,224 have even appeared in commercials. On the one hand, professional actors portray political figures in, at times highly fictionalized, biographical works. On the other hand, political figures have themselves appeared voluntarily in otherwise fictional works. A new dimension was added with the production of the Academy award- winning fictional film Forrest Gump.225 In this film starring Tom Hanks, director Robert Zemeckis used digital technology to create the illusion that Hank’s character, Forrest Gump, was actually meeting Presidents Ken- nedy, Johnson and Nixon. Actors did not play the Presidents. Instead, Ze- meckis used digital technology and news footage of the three Presidents to create the fictional meetings. Permission to use these images was not sought from the estates of the Presidents. Zemeckis’ next step was to incorporate images of then incumbent President, William Jefferson Clinton, in the fictional film Contact.226 By using existing news footage of the President that fit the fictional events portrayed in the film, Zemeckis created the illusion that Clinton had actually voluntarily participated in the filming.227 The President was not pleased and made that displeasure known to Warner Brothers. Zemeckis defended his unauthorized use of Clinton on the basis that the President was a public figure. Subsequently, President Clinton made “guest” appearances in several episodes of the television series, J.A.G.228 Here we have living politicians involuntarily appearing as themselves in otherwise fictional works. The appearances are, to large degree, as previously re-

220. (HBO television broadcast, 1984). 221. Cheers: No Contest (NBC television broadcast, Feb. 17, 1983). 222. Cheers: Hot Rocks (NBC television broadcast, Mar. 16, 1989). 223. Dole has done Pepsi and Visa Commercials but is perhaps best known for his Viagra advertisements. 224. O’Neill starred in commercials for American Express, Hush Puppies and rose magically out of a suitcase for a commercial for Quality Inns among other “gigs.” 225. (Paramount Pictures 1994). 226. (South Side Amusement Co. and Warner Brothers 1997). 227. Amy Dawes, Hollywood Abducts The President; Clinton’s Image Inserted Into Film, L.A. DAILY NEWS, July 11, 1997, at C5. 228. Belisarius Productions & Paramount. In one episode, the hero, Lieutenant Commander Harmon Rabb, has been falsely accused of maligning President Clinton. Clinton’s image is used to play a role rather than simply being “window dressing.” JAG: Contemptuous Words (CBS television broadcast, Nov. 23, 1999).

corded, though some degree of digital manipulation is possible.229 But, eventually, the limitations imposed by the use of archival footage will be obviated by the use of digital clones. Public officials, no less than actors, may find themselves digitally cloned. What rights, if any, does an official, present or former, have with respect to the exploitation of a digital clone in advertising, trade or film and television performances? a) Advertising Unauthorized commercial or print ads featuring a clone of a present or former government official without that person’s consent would be a violation of the right of publicity under the typical state statute.230 It would also constitute a false attribution under section 43(a) of the Lanham Act.231 Given that a public official is involved, there is a likelihood of First Amendment claims being raised by the advertiser. Though it is true that advertisements have recently been treated more favorably with respect to First Amendment claims than in the past,232 I would suggest that, unless the commercial has a political context, such a defense should fail.233 But what about a political debate? One might envision in the future a commercial for a political campaign in which one candidate debates the clone of his or her opponent. That scenario might well be protected against right of publicity or other claims by the real opponent, based on a First Amend- ment defense, particularly if the opponent were ducking an actual debate! b) Trade Purpose The sale of collector’s plates and busts of various presidents and other political figures is certainly encompassed by the term “trade purpose,” as would be the sale of T-shirts or posters. As was said with respect to actors in Part II.B.1.c, it is unlikely that images of a digital clone, rather than images of the actual public figure, would ever be used for those types of trade purposes. A more likely scenario would be an animated, rather than

229. J.F.K.’s lips were morphed in Forrest Gump to synch with the created dialogue: “[h]e needs to pee.” 230. E.g., CAL. CIV. CODE § 3344 (Deering Supp. 2001). 231. 15 U.S.C. § 1125(a) (1994). 232. See, e.g., Lorillard Tobacco Co. v. Reilly, 121 S. Ct. 2404 (2001). 233. See MCCARTHY, supra note 121, at § 4.23 (A political figure “should have the same scope of rights and remedies as anyone else against the unpermitted use of identity to draw attention to an ordinary commercial advertisement.”). For an example of a political context in which the First Amendment trumped right of publicity, see Stern v. Delphi Internet Servs. Corp., 626 N.Y.S.2d 694 (Sup. Ct. 1995) (“Shock-jock” Howard Stern promoted himself as a candidate for governor of New York.). static, image of the clone, such as one appearing as a character in a video game or as an avatar in the Internet setting. In the event that the clone’s image was used, it would certainly be considered a “likeness”234 of the actual public figure. Such a use would be a violation of the typical right of publicity law unless it is “sufficiently relevant to a matter of public interest to be a form of expression which is constitutionally protected.”235 c) Performance The most likely use of a digital clone (or a digitally altered actor) would be to portray the political figure in a biographical role236 in a docudrama or to add an air of verisimilitude to a fictional, “period” piece.237 When the clone of a living actor is used instead of the actor, that exploitation robs the actor of his performance right as suggested in Part II.B.1.d. Where the clone is of a political figure, there is typically no unfair competition, assuming the political figure was not personally interested in playing the role. If the clone were used to perform a fictional role rather than a biographical role, however, that might be considered as a “trade purpose” not protected by First Amendment considerations since, presumably, the clone was used for its sensational value.238 Assuming the clone is portraying the politician in a biographical role, the only issues that might arise would be if the production cast the politician in a false light or was libel- ous.239 3. Clones of Other Public Figures There are many others besides performers and politicians who come into the public eye, and here I distinguish between a public official and a

234. A look-alike has been held to be a likeness. See Onassis v. Christian Dior-New York, Inc., 472 N.Y.S.2d 254 (Sup. Ct. 1984), aff’d, 488 N.Y.S.2d 943 (App. Div. 1985). 235. Paulsen v. Personality Posters, Inc., 299 N.Y.S.2d 501, 508 (Sup. Ct. 1968). 236. I use the term “biographical role” to include any role in which the clone is portraying the politician as himself or herself rather than as the politician playing a fictional role. E.g., now-U.S. Senator Fred Thompson played himself in the film Marie: A True Story (Viacom 1974), whereas he played the fictional role of Admiral Painter in The Hunt for Red October (Paramount Pictures 1990). 237. This in essence is what was done, not with digital clones, but with digitally altered news clips of the presidents in Forrest Gump (Paramount Pictures 1994). 238. See Eastwood v. Superior Court for L.A. County, 198 Cal. Rptr. 342 (Ct. App. 1983); Ali v. Playgirl, 447 F. Supp. 723 (S.D.N.Y. 1978). 239. See Joseph J. Beard, Will the Reel, er, Real Bill Clinton Please Stand Up, 15 ENT. & SPORTS LAW. 3, 4 (1998).

public figure.240 For some, fame is long-lasting, like that of Charles Lindberg and Neil Armstrong. For others fame is more fleeting. For example, when Monica Lewinsky became a focal point of national and international news, a veritable cottage industry in Monica memorabilia sprang up including cigars with her image on the wrapper, presumably without her permission.241 That particular cottage industry disappeared as quickly as it arrived. Protection against the use of clones in commercials should be as available to public figures as it is to performers and politicians. The same can be said for trade purposes, such as the Monica cigars. With respect to clones or digitally altered actors playing the celebrity, such portrayal, if biographical, would be protected by the First Amendment,242 but subject to false light and libel claims under an “actual malice” standard.243 C. Digital Alteration of an Actor’s Performances in a Film Digital technology will not only create clones of individuals, it may also be used to modify existing images. Imagine Pinocchio’s nose being lengthened,244 even when he is not telling a fib! And suppose that Pinoc- chio found his head being replaced by Charlie McCarthy’s or worse, by Mortimer Snerd!245 Pinocchio might find his eyes or ears or voice being kidnapped for use elsewhere. How can Pinocchio or, for that matter, a Tom Cruise or a Michelle Pfeiffer prevent this type of digital mayhem? We will take a look at each of these problems, starting with digital manipulation of one’s image.

240. E.g., “Dr. King is a public figure who is not a public official.” Martin Luther King, Jr. Center for Social Change, Inc., v. Am. Heritage Prods., Inc., 296 S.E. 2d 697, 703 (Ga. 1982). A commercial, authorized by Dr. King’s family, featuring, in part, a digital replica of Dr. King and, in part, a video of Dr. King himself, created for the French telecommunications company Alcatel, aired on U.S. cable channels in March 2001. Vanessa O’Connell, Alcatel Has a Dream—and a Controversy, WALL ST. J., Mar. 30, 2001, at B5. 241. One London tabloid reported that British supermarket chain TESCO approached Miss Lewinsky in early January 1999 to do an ad for the supermarket’s launch of its Ad- vance detergent tablet. Peter Birkett, Get a Whiter Wash-ington with Monica, SUNDAY PEOPLE, Jan. 17, 1999, at 33. 242. See Benavidez v. Anheuser Busch, Inc., 873 F.2d 102 (5th Cir. 1989). 243. New York Times Co. v. Sullivan, 376 U.S. 254, 283 (1964). 244. British Prime Minister Tony Blair was pictured with a very long nose in a Con- servative Party ad in the run-up to the 2001 election. THE GUARDIAN, May 24, 2001, at 15. 245. For those unfamiliar with Charlie McCarthy and Mortimer Snerd, see GERALD NACHMAN, RAISED ON RADIO 133-38 (1998). 1. Digital Plastic Surgery In Post-Production With the introduction of virtual actors, and with technology approach- ing the ability to digitally manipulate images in a manner which makes them indistinguishable from the real actors, computers are being used to alter an actor’s appearance and, perhaps, performance in the latter stages of editing.246 While perhaps not technically a clone of an actor, it is necessary to consider post-production modification of an actor’s appearance and, possibly, aspects of his performance. “We’ll fix it in post . . . [is] . . . becoming as common on movie sets as the cry ‘Action.’”247 In post- production, it will be possible to lengthen or shorten a nose, move eyes closer or farther apart, and age or “youthen” the appearance of an actor.248 Historically, an actor’s appearance has been enhanced, or at least changed, through the use of makeup, lighting or soapboxes—but this was done with the permission of the actor. In post-production, the actor may not even be aware of change until the film is released. If the actor has “muscle,” he or she can insist on control of any post-production modification of appearance.249 If the actor does not obtain such contractual rights then, absent any future S.A.G. agreement providing such rights generally, an actor would be left to whatever legal remedies might be appropriate.

246. Digital alteration of still photographs is a bellwether of what will happen in the motion picture industry. Actress Mira Sorvino posed as a number of silver-screen stars of yesteryear including Frances Farmer and Lana Turner for Allure magazine. She apparently balked at posing as Joan Crawford axing her rosebushes. Photographer David La Chapelle reportedly used his computer to superimpose Sorvino dressed as Marlene Dietrich in his Crawford tableau, “going so far as to alter her makeup digitally to make it look more Crawfordesque.” Beth Landham Keil & Deborah Mitchell, Intelligencer, NEW YORK, May 19, 1997, at 11; see also Amy M. Spindler, Making the Camera Lie, Digi- tally and Often, N.Y. TIMES, June 17, 1997, at B7. 247. Paul Karon, Filmers Find Salvation in Hidden Effects, VARIETY, June 1-7, 1998, at 13. 248. Post-production digital surgery permitted a singer to shed forty pounds for a music video; a leading man had his calves thickened to make them look more muscular; and, actors have had bald spots digitally covered. Id. “One digital company is reportedly working on inserting Clint Eastwood into a forthcoming studio movie, but as he appeared in his Dirty Harry hey day—current Clint doing the acting, then de-aged in postproduc- tion.” Jeff Dawson, We’re Just Dying to Work with You, SUNDAY TIMES (London), Jan. 7, 2001 (Culture Supp.), at 11. In 1991, Jimmy Cagney, who died in 1986, was digitally made taller so as not to be overshadowed by the live actress sitting next to him in a Diet Coke ad. Michael Quinn, Ghosts in Commercials, TIME, Dec. 23, 1991, at 56. 249. Hollywood attorney Bert Fields is said to demand no digital alteration without the permission of the stars he represents in contract negotiations. The Power List: The 100 Most Powerful People in Hollywood, PREMIERE, May 2000, at 74.

As the Second Circuit has acknowledged, American copyright law “does not recognize moral rights or provide a cause of action for their violation, since the law seeks to vindicate the economic, rather than the personal rights.”250 Moreover, since actor usually would not own the copyright in the motion picture that he stars in, he would not be able to resort to copyright law for relief. Aggrieved thespians have at times been able to successfully sue under section 43(a) of the Lanham Act.251 To successfully sue under section 43(a) of the Lanham Act, a plaintiff has to show: (1) he or she is “any person who believes that he or she is likely to be damaged”; (2) a reasonable interest to be protected; and (3) a belief that the plaintiff has suffered, or is likely to suffer, damage.252 In Gilliam v. Am. Broad. Co., Inc.,253 the famous comedy group, “Monty Python,” sued the ABC television network for the unauthorized editing of two of their programs. The comedy group claimed that excessive editing by the ABC network mutilated their television programs to such an extent as to lose the “iconoclastic verve” typical of the group’s comedy style.254 The court noted that an action under section 43(a) of the Lanham Act was proper because the Act is violated when “a representation of a product, although technically true, creates a false impression of

250. Gilliam v. ABC, 538 F.2d 14, 24 (2d Cir. 1976); see also Lee v. A.R.T. Co., 125 F.3d 580, 582 (7th Cir. 1997) (noting that it is “accepted wisdom that the United States d[oes] not enforce any claim of moral rights”). However, the long standing rule has been eroded with the introduction of 17 U.S.C. § 106A(a)(3)(A) (1994), which gives authors of a “work of visual art” the right to “prevent any intentional distortion, mutilation, or other modification of that work which would be prejudicial to his or her honor or reputation.” A “work of visual art” is “a narrow class of art defined to include paintings, drawings, prints, sculptures, or photographs produced for exhibition purposes, existing in a single copy or limited edition of 200 copies or fewer.” Carter v. Helmsley-Spear, Inc., 71 F.3d 77, 83 (2d Cir. 1995). A “motion picture” is specifically excluded as a “work of visual art.” 17 U.S.C. § 101 (1994) . 251. See 15 U.S.C. § 1125(a) (1994). The statute provides, in relevant part: Any person who, on or in connection with any goods or services . . . uses in commerce . . . any false designation of origin, false or misleading description of fact, or false or misleading representation of fact . . . shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act. Id. 252. See generally 124 A.L.R. Fed. 189 § 2 (1995) (discussing the basic elements of claim under § 43(a) of the Lanham Act). See also Raphael Winick, Intellectual Property, Defamation and the Digital Alternative of Visual Images, 21 COLUM.-VLA J.L. & ARTS, 143, 171-79 (1997). 253. 538 F.2d 14 (2d Cir. 1976). 254. Id. at 18. the product’s origin.”255 In this case, the edited versions of the program would be unequivocally associated with the comedy group, in effect creating a false impression of its origin. The court stated that, when someone attributes a distorted work to the original author, in essence, it is such that “[t]o deform his work is to present him to the public as the creator of a work not his own, and thus makes . . . him subject to criticism for work he has not done.”256 The court further held that section 43(a) of the Lanham Act can be “invoked to prevent misrepresentations that may injure the plaintiff’s business or personal reputation, even when no registered trademark is concerned.”257 Given that the edited program was likely to reflect badly on the comedy group, the court granted relief, holding that the airing of the modified program would injure the group’s business reputation and portray “a mere caricature of their talents.”258 Using this type of analysis, an actor who discovers that the producers have digitally altered his or her image during editing may pursue a section 43(a) claim by alleging that allowing the “performance” of the digital actor would be injurious to the real actor’s reputation and business interest,259would portray “a mere caricature of their talents,”260 and would cause him or her to lose audience appeal, the cornerstone of stardom and the crucial element in an actor’s ability to command a high salary.261 In Smith v. Montoro,262 the Ninth Circuit held that replacing one actor’s name for another in a motion picture amounted to “reverse passing off,” a cognizable claim under section 43(a) of the Lanham Act.263 In Smith, the plaintiff starred in an Italian motion picture, later released in the

255. Id. at 24. 256. Id. (citing Martin A. Reoder, The Doctrine of Moral Right, 53 HARV. L. REV. 554, 569 (1940)). 257. Id. at 24. 258. Id. at 25. 259. See id. 260. Id. 261. See Smith v. Montoro, 648 F.2d 602, 607 (9th Cir. 1981). 262. 648 F.2d 602 (9th Cir. 1981). 263. Id. at 607. “A wrongdoer who removes a person’s name or mark from a product and then sells that product as his own may violate the Lanham Act; such a practice is known as reverse passing off.” Netzer v. Continuity Graphic Assocs., 963 F. Supp. 1308, 1322 (S.D.N.Y. 1997); see also Cafferty v. Scotti Bros. Records, Inc., 969 F. Supp. 193 (S.D.N.Y. 1997) (recording of plaintiff’s live performance packaged and sold as the music of Eddie and the Cruisers, the fictional band in the film of the same name).

United States.264 Prior to the film’s American release, the distributor removed the plaintiff actor’s name from the credits of the movie and substituted the name of another actor.265 The Ninth Circuit recognized that the distributor’s actions damaged the plaintiff actor because an actor’s career is strongly dependent on his or her screen performance and movie credits.266 The court noted that the removal of the plaintiff’s name from the credits resulted in the movie misrepresenting the origin of the performance of the lead actor, which constituted “express reverse passing off,”267 prohibited under section 43(a) of the Lanham Act. Looking at the other side of the coin, motion picture producers and di- rectors could attempt to justify digital editing with critical actors by claiming implied consent.268 A producer would argue that an actor’s acceptance of a role in a motion picture gives the producer an implied right to manipulate the film to achieve the desired result. Just as an actor has no saying on what “takes” end up on the cutting room floor, a director or producer would argue that digital manipulation of the actor’s performance or features may be necessary to achieve the director’s vision. Implied consent would be ascertained from the conduct of the parties and from their contractual relationship. 2. Bette Davis’ Eyes: The Digital Theft of Body Parts Not so many years ago, Bette Davis Eyes was a popular song.269 Bette Davis’ eyes were certainly the most memorable aspect of her physical being apart from her voice. It was the attribute most highlighted in carica-

264. Id. at 603. 265. Id. 266. Id. at 607. 267. Id. The court noted that “express reverse passing off” occurs where “the originator of the misidentified product is involuntarily deprived of the advertising value of its name and of the good will that otherwise would stem from public knowledge of the true source of the satisfactory product.” Id. 268. See Gilliam v. ABC, 538 F.2d 14, 23 (2d Cir. 1976). 269. See KIM CARNES, Bette Davis Eyes, on MISTAKEN IDENTITY (Columbia Records 1975) (written by Jackie DeShannon & Donna Weis). Kim Carnes received a Grammy in 1981 for her recording of the song. For the use of celebrity names in the title of works, see, e.g., Rogers v. Grimaldi, 875 F.2d 994 (2d Cir. 1989). The court noted that “[m]any titles . . . include a well-known name without any overt indication of authorship or endorsement—for example, the hit song “Bette Davis Eyes,” and the recent film “Come Back to the Five and Dime, Jimmy Dean, Jimmy Dean.” Id. at 999). See also Parks v. LaFace Records, 76 F. Supp. 2d 775, 778 (E.D. Mich. 1999) (describing a song entitled “Rosa Parks” with chorus “includ[ing] the words ‘Ah, ha, hush that fuss. Everybody move to the back of the bus’”). tures of her.270 With digital technology, Bette Davis’ eyes or Kirk Doug- las’ chin or Bob Hope’s nose can be digitally transplanted to a virtual actor. Had Mary Shelley written Frankenstein today, the creature might have looked less like a gothic nightmare and more like an agent’s daydream.271 It is possible to steal Bette Davis’ eyes and put them into someone else’s head. In fact, in one scene of the film Titanic, the face of the young Rose Dawson transforms into the weathered visage of her ancient self. Because the shape and color of the eyes of actress Kate Winslet (the young “Rose”) were different from those of Gloria Stuart (the centenarian “Rose”), Direc- tor Jim Cameron had Stuart’s eyes digitally replaced by Winslet’s.272 Of course, this use of an actress’s eyes was done with permission. In contrast, Robert Patrick’s torso and limbs in digital form, first used in Terminator 2: Judgment Day273 to create a liquid metal cyborg, was used again as lunch for a T-Rex in Jurassic Park, apparently without Patrick’s knowledge or permission.274 Actor Robin Williams mused that “[i]t’ll be only a short time before they can punch up my face, give me Brando’s voice and Rob Lowe’s body.”275 Contractual prohibition on “borrowing” body parts or some future guild agreement prohibiting such exploitation would provide some protection against the practice. But absent contractual or guild restrictions, or where third parties are borrowing body parts, an aggrieved individual must look to other legal redress, particularly privacy laws. The pivotal issue in this type of case is whether the plaintiff is “identifiable.” In Cohen v. Herbal Concepts, Inc.,276 the New York Court of Appeals addressed this issue squarely. There, the defendant, a consumer products manufacturer, purchased an unauthorized photograph of the plaintiffs, a mother and daughter, bathing nude in a stream. The picture depicts the two nude persons standing in water a few inches deep, with their backs and

270. See VINCENT SARDI, JR. & THOMAS EDWARD WEST, OFF THE WALL AT SARDI’S 27 (1991). 271. “The man with the Bogart face warmed by blue Robert Redford eyes and just a rippled hint of Schwarzenegger muscle in the shoulders, looks across at the blonde whose Bergman features are set off by the cascading locks of Veronica Lake and a Dietrich highlight on the cheekbones.” Nigel Andrews, A Grand Illusion: Hollywood’s First All- ’synthespian’ Film Will Debut in 2000 With No Real People in It. Who will the Paparazzi Chase?, FIN. POST, July 18, 1998, at R3. 272. See CINEFLEX No. 72, at 105 (Dec. 1997). 273. (Carolco Pictures, Le Studio, Canal+, Lightstorm Entertainment, and Pacific Western 1991). 274. See supra note 52. 275. John C. Tibbets, The Bay Area’s Wild Child, GUEST INFORMANT, 1996-97 San Francisco/South Bay, at 10, 12. 276. 472 N.E.2d 307 (N.Y. 1984).

right sides presented.277 The representation was deemed sufficiently identifiable to amount to the likeness of the mother and daughter under New York’s Civil Rights Law sections 50-51. The court there found that the identifiable features included the hair, bone structure, and posture, and that someone familiar with the persons could identify them from the photo. The court found a lesser use might amount to “likeness” in Cheatham v. Paisano Pubs., Inc.278 There, a T-shirt manufacturer made shirts bearing a photograph of plaintiff’s “backside from her waist to her thighs.”279 The court found this depiction to amount to the “image”280 of plaintiff. In both this case and the Cohen case, the court focused on actual evidence of rec- ognizability. In Cohen, the husband of the older woman in the photo identified the subjects as his wife and daughter; while in Cheatham, the friends of the plaintiff recognized plaintiff from the shirts. The Cheatham court may have best stated the measure of sufficient identifiability when it stated, “if the recognition of Plaintiff’s image is sufficiently clear and sufficiently broad-based, it may be an unlawful appropriation for which Plaintiff could receive damages.”281 Where the identifiability of body parts has been at issue, an invasion of privacy is not always found. In Brauer v. Globe Newspaper Co.,282 a photo of a young boy was taken in conjunction with an article about needy fami- lies at Christmas time. Two years later the newspaper used that same photo in an article about mental retardation. The photograph was a “side view of a six to nine-year-old boy sitting bent over on a stairway in apparent dejection. His face is turned and, with the exception of one ear and the partial outline of the back of his head, none of his features or facial characteristics is visible.”283 In this case, the court found that the depiction was insufficient to amount to a “likeness” within the right of publicity. Again, friends and neighbors recognized the photo as that of the plaintiff, but contrary to the holding in Cohen, the court felt that, “recognition by a small group of intimates, familiar not only with the subject but with the circumstances under which the photograph was taken, falls short of the kind of

277. See id. at 385. 278. 891 F. Supp. 381 (W.D. Ky. 1995). 279. Id. at 387. 280. The court focused on “image” as the element to be protected. See id. 281. Id. 282. 217 N.E.2d 736 (Mass. 1966). 283. Id. at 738. publicity upon which an action for the invasion of privacy . . . would have to be based.”284 The infamous bombing of the Alfred P. Murrah Building in Oklahoma City in 1995 gave rise to a post-mortem right of publicity suit by the par- ent of a victim. The photograph at the heart of the action showed a fireman carrying the body of child. The relevant Oklahoma statute required that, as a condition, the person whose post-mortem right of publicity was claimed had to be readily identifiable in the photograph.285 In finding that the child was not readily identifiable, the court stated, “[h]er face is completely ob- scured. A person viewing the photograph could not provide any sort of description of the child depicted, other than her hair color and approximate size . . . even the child’s family could not identify her as the child in the photograph.”286 As to the plaintiff firefighter, Field, carrying the dead child, the court said:

Most of his face is covered in shadow formed by his helmet. It appears he may have a moustache, but that too may be a shadow. It is clear the firefighter is a white male, but other than that there are no distinguishing qualities or characteristics to the firefighter in the photograph.287 Captions on the photograph identifying the child and the firefighter were not relevant under the statute’s “readily identifiable” standard.288 3. “We’re not in Kansas Anymore”: Digital Insertion into New Works The observation of young Dorothy to her dog Toto that “we’re not in Kansas anymore”289 might be the apt exclamation of anyone who found themselves digitally transported from one motion picture or television film into a later film or video. An early example of this latter use was the clever juxtaposition of actors from prior films with actor Steve Martin in the 1982 film Dead Men Don’t Wear Plaid.290 It has happened to Bogart and

284. Id. at 740. 285. OKLA. STAT. ANN. tit. 12, § 1448 (West 1993) (deceased persons); OKLA. STAT. ANN. tit. 12, § 1449 (West 1993) (living persons). 286. Oklahoma Natural Gas Co. v. Larue, No. 97-6087, 1998 WL 568321, at *9 (10th Cir. Sept. 1, 1998). 287. Id. at *10. 288. Id. at *10. 289. THE WIZARD OF OZ (Metro-Goldwyn-Mayer 1939). 290. (Universal 1982). This 1982 black and white film starring Steve Martin is a send-up of the film noir private eye classics of the 1940s. Clips of films starring Hum-

Cagney,291 Monroe,292 the “Duke,”293 the “King,”294 and Astaire,295 among others, for television commercials. In 1995, Humphrey Bogart was digitally resurrected to play a fictional role in the fictional television episode, Tales from the Crypt: You Mur- derer.296As previously mentioned, in 1997, President Clinton found himself acting in the fictional film Contact.297 The director had digitally extracted the President from existing television news footage and inserted him in various scenes in the film. While the President was portraying himself in Contact, the footage used was taken out of context. So, the Presi- dent while portraying himself did so in a fictionalized way in the film. What rights are implicated in the re-use of the image of the person who is “not in Kansas anymore?” Before addressing those issues, it is appropriate to note that, to the extent the images are extracted from copyrighted works, permission of the copyright owners would be necessary. To the extent a person’s image is used in a commercial or for a trade purpose, the right of publicity and trademark law may be implicated. If the person is living, the right of publicity should protect against unlicensed exploitation;298 and trademark law, particularly section 43(a) of the Lanham Act,

phrey Bogart, Alan Ladd, Charles Laughton, and others were creatively spliced with scenes and dialog of Steve Martin and other live actors. Writing credits went to Carl Reiner, Steve Martin, and George Gipe. Gipe will be remembered as the author of “Nearer to the Dust,” the pro-author/publisher monograph published by Williams & Wil- kins at the time they were suing the U.S. government for copying W& W’s medical journals. Williams & Wilkins Co. v. United States, 455 F.2d 1060 (C.C.P.A. 1972), appeal dismissed, 487 F.2d 1345 (Ct. Cl. 1973), aff’d by an equally divided court, 420 U.S. 376 (1975). 291. Bogart and Cagney appeared together in a Diet Coke television commercial. 292. Monroe appeared in a Chanel commercial as well as in a Christmas 2000 British commercial for Nestle’s “After Six” dinner mints. The latter commercial also featured Albert Einstein, James Dean and Liberace. 293. John Wayne has appeared in a number of commercials for Coors beer. He was also featured without permission of the Wayne family in a British commercial for a Ger- man beer. 294. Elvis appeared in a Pizza Hut commercial. 295. Astaire appeared in Dirt Devil commercials, dancing with the product. 296. (HBO television broadcast, Feb. 15, 1995). This television production was directed by Robert Zemeckis who also directed Forrest Gump (Paramount Pictures 1994) which digitally inserted actor Tom Hanks into scenes with JFK, LBJ and Nixon. See Diane Werts, Here’s Looking at You, Kid, FANFARE, Feb. 12, 1995, at 18. 297. (South Side Amusement Co. and Warner Brothers 1997). This film was directed by—yes, Robert Zemeckis! 298. But see Hoffman v. Capital Cities/ABC, Inc., 255 F.3d 1180(9th Cir. 2001). (reversing the district court’s finding that a digitally altered photograph of Dustin Hoff- man’s head from the film Tootsie put on a male model’s body in a designer gown vio- may also be applicable.299 If the person is deceased, the post-mortem right of publicity will, if in force in the relevant jurisdiction, provide protection within its prescribed term. Even if the post-mortem right of publicity is not available, section 43(a) may provide protection.300 The question of protection where the “repurposing” is to provide a character element for a motion picture or television program, as was the case of Bogart in the Tales from the Crypt episode and Clinton in Contact, is one that admits of some difficulty. Members of S.A.G. are protected to some degree against unauthorized re-use of existing performances by the S.A.G. agreement with producers.301 However, it should be noted the S.A.G. restrictions on re-use apply “only if the performer is recognizable.”302 Actor Robert Patrick’s digital replica starred as liquid metal cyborg T-1000 in Terminator 2: Judgment Day.303 The digital replica was re-used as “lunch-meat” for the digital T-Rex in Jurassic Park.304 But, that scene showed only his body and limbs—not his face. He was thus not “recognizable” and the S.A.G. re-use restriction would not apply. If a film is not a S.A.G.—or analogous guild—governed production, the question arises as to what relief an actor might have against unauthorized re-use of the actor’s performance in a later film. If the re-use were in an obscene film subject to criminal law sanctions,305 libel law might provide relief. Moreover, the mere fact that a viewing public might believe the actor willingly appeared in a pornographic film is in and of itself defamatory.306 Libel law, or perhaps false light, might apply if the quality of

lated Hoffman’s right of publicity, and that the altered photograph did not constitute commercial speech) ; Henley v. Dillard Dep’t Stores, 46 F. Supp. 2d 587 (N.D. Tex. 1999) (finding that an ad using Don Henley’s name was a misappropriation). 299. Allen v. Nat’l Video, Inc., 610 F. Supp. 612 (S.D.N.Y. 1985). 300. Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188 (5th Cir. 1998). 301. See supra note 103 and accompanying text. 302. Id. (emphasis added). 303. See supra note 52. 304. (Universal Pictures and Amblin Entertainment 1993). 305. A number of jurisdictions make it a criminal offense to appear in an obscene film. IND. CODE ANN. § 35-49-3-2 (West 2000); N.C. GEN. STAT. § 14-190.5 (2000); OKLA. STAT. ANN. tit. 21, § 1040.8 (West 2000); S.C. CODE ANN. § 16-15-305 (Law. Co-op. 2000); VA. CODE ANN. § 18.2-382 (Michie 2000). 306. Juxtaposition of a segment of bread commercial featuring plaintiff with videotape of scantily clad couples, apparently engaged in oral sex and vaginal and anal inter- course raised claims of defamation: “Because I find that the adaption is subject to a defamatory interpretation—that Ms. Geary willingly participated in a pornographic video segment . . . I conclude that Ms. Geary has stated a course of action for defamation.” Geary v. Goldstein, 831 F. Supp. 269, 277-78 (S.D.N.Y. 1993), modified, No. 91 Civ. 6222 (KMW), 1991 U.S. Dist. LEXIS 11288, at *6 (S.D.N.Y. 1996). In a subsequent

the reusing film were markedly inferior to the quality of the film from which the extraction was made.307 Relief might also be had under Lanham Act section 43(a) if the role itself were inferior to customary roles, suggesting that the actor’s star power was on the wane.308 Federal trademark law may also provide relief under section 43(a) of the Lanham Act since the performance of the actor is taken out of context.309 It is true that a film in the public domain, as a matter of copyright law, was held not to be protected against unlicensed exploitation under a trademark theory: “[i]f material covered by copyright law has passed into the public domain, it cannot then be protected by the Lanham Act without rendering the Copyright Act a nullity.”310 However, that decision, Comedy III Prods., Inc. v. New Line Cinema311 involved the use of a thirty second film clip from the Three Stooges’ “short” Disorder in the Court,312 playing on a television set in the background of the film The Long Kiss Good-

opinion in the case, the judge revised her holding because she concluded that “most reasonable viewers would understand that the parody was both a composite and a parody.” Geary v. Goldstein, No. 91 Civ. 6222 (KMW), 1996 WL 447776, *2 (S.D.N.Y. Aug. 8, 1996). Presumably had she not found the juxtapostion to be a parody, recognized as such by the viewing audience, her original opinion would have stood. 307. Carroll v. Paramount Pictures Inc., 3 F.R.D. 95 (S.D.N.Y. 1942). Legendary producer Earl Carroll brought an action for libel with respect to a motion picture “A Night at Earl Carroll’s” which film contained the false legend that it had been produced by Carroll. The opinion in Carroll recited Carroll’s complaint that the film “‘was of poor quality and vastly inferior to the plays and motion pictures with which the plaintiff has been associated as producer in the past and reflects adversely on his name, standing and reputation.’” Id. at 96; see also Clevenger v. Baker Voorhis & Co., 168 N.E.2d 643 (N.Y. 1960) (claim of libel for false attribution of revision to author of original work where revision claimed to contain numerous errors). 308. In ascertaining the damages to be awarded to actor Dustin Hoffman for unauthorized use of a digitally modified picture of the actor the court took into consideration the “[s]elf-perception by plaintiff of what impact the commercial use of the Plaintiff’s name and likeness would have on executives in the motion picture industry as being less of a box office draw.” Hoffman v. Capital Cities/ABC, Inc., 33 F. Supp. 2d 867, 872 (C.D. Cal. 1999) (emphasis added), rev’d on other grounds, Nos. 99-55563, 99-55686 (9th Cir. Jul. 6, 2001). And, in Eastwood v. Nat’l Enquirer, Inc., 123 F.3d 1249 (9th Cir. 1997), jury award was supported, in part, because Clint Eastwood fans who read what purported to be an exclusive interview to a tabloid might conclude he “was essentially washed up as a movie star if he was courting publicity in a sensationalist tabloid.” Id. at 1256. 309. Smith v. Montoro, 648 F.2d 602 (9th Cir. 1981); Gilliam v. ABC, 538 F.2d 14 (2d Cir. 1976). 310. Comedy III Prods., Inc. v. New Line Cinema, 200 F.3d 593, 595 (9th Cir. 2000). 311. 200 F.3d 593 (9th Cir. 2000). 312. (Columbia Pictures Corp. 1936). night.313 The Three Stooges were not playing roles in the New Line film. Thus the holding in Comedy III would be inapplicable to a situation where the re-use involves use as a character in the new film.314 The actor might also raise right of publicity and unfair competition claims. These two state law claims, unlike Lanham Act claims, may be subject to the federal copyright pre-emption under Title 17 of the U.S. Code.315 In Fleet v. CBS, Inc.,316 the court held that plaintiff’s California right of publicity claim was preempted by federal copyright law. The plaintiffs had acted in the film White Dragon317 but claimed that they had not been fully paid. They did not raise a copyright claim, but claimed only a violation of section 3344 of the California Civil Code318 and unfair business practices.319 The court focused on the facts that: (1) the actors’ performances were dramatic works; (2) the performances were fixed in a tangible medium of expression, the film; and (3) the actors’ “performances in the film were recorded with their active participation and consent.”320 Accord- ingly, the court concluded that the performance of the actors was governed by copyright law and any right of publicity claims were preempted.321 Clearly, as to the owner of copyright in the original film, the actor’s right of publicity is preempted for that film. But, does it follow that the actor’s right of publicity is preempted as to the unauthorized re-use? A superficial analysis of Fleet might lead to the conclusion that the right of publicity is preempted as to an unauthorized re-use of a previously fixed performance: (1) the actor did authorize the fixation of his performance; and (2) the actor’s performance, whether measured as underlying subject matter or simply as a component of the original film, is a dramatic work protected by copyright.

313. (Forge and New Line Cinema 1996). 314. The same distinction can be made with respect to Brown v. Twentieth Century Fox Corp., 799 F. Supp. 166 (D.C. Cir. 1992), aff’d, 15 F.3d 1159 (D.C. Cir. 1994). In Brown, portions of James Brown’s performance in a program called the Tami Show are shown for a total of twenty-seven seconds in the film, The Commitments. As in Comedy III, the videotape clip is being played on a television set being viewed by the actors in the film, The Commitments; Brown is not playing a role in the film. 315. 17 U.S.C. § 301(a) (1994). 316. 58 Cal. Rptr. 2d 645 (Ct. App. 1996). 317. (White Dragon Prods. release date unknown). 318. CAL. CIV. CODE § 3344 (Deering Supp. 2001). 319. CAL. BUS. & PROF. CODE § 17200 (Deering Supp. 2001). 320. 58 Cal. Rptr. 2d at 650. 321. Id. at 653.

I would, however, suggest that the re-use issue is distinguishable. It is important to note that the court in Fleet distinguished the case before it from Zacchini v. Scripps-Howard,322 based on the fact that “Zacchini had not consented to the taping.”323 The court stated that “a work is fixed in a tangible . . . [medium] of expression for purposes of the Act, only if recorded by or under the authority of the author (17 U.S.C. § 101).”324 It seems likely that the integration of an actor’s performance from an earlier film in the new film is, with respect to the new film, not fixed with the authority of the performer. The Fleet court also went on to state that to determine “whether . . . [a right of publicity] claim is preempted, the creative aspects of the motion picture as a whole must be separated from the creative aspects of the underlying subject matter (the actors’ performances in the film) to determine whether the underlying subject matter is itself copyrightable.”325 It is true, the court went on to note, in the case before it, that the distinction had no import “where the underlying subject matter consists of performances in a film.”326 While the Fleet court held the distinction had no import in the case before it, it must be remembered that the underlying performance was integrated into that film with the active participation and consent of the actors, unlike the situation under discussion. A similar result was reached in Ahn v. Midway Mfg. Co.,327 where choreographed moves of martial arts experts were used to create characters in the arcade video games Mortal Kombat and Mortal Kombat II. The choreography was a copyrightable performance fixed with the permission of the martial arts performers. The court held that, under those circumstances, copyright law preempted the performers’ rights of publicity.328

322. 433 U.S. 562 (1977). 323. 58 Cal. Rptr. 2d at 650. 324. Id. 325. Id. at 652. 326. Id. 327. 965 F. Supp. 1134 (N.D. Ill. 1997). For a related case, see Pesina v. Midway Mfg. Co., 948 F. Supp. 40 (N.D. Ill. 1996). 328. Id. at 1138. For situations in which right of publicity was held not preempted by the Copyright Act see Brown v. Ames, 201 F.3d 654, 657-61 (5th Cir. 2000) (use of name and likeness of performers on cassettes and CDs); Landham v. Lewis Galoob Toys, Inc., 227 F.3d 619, 623 (6th Cir. 2000) (action figure); Wendt v. Host Int’l, Inc., 125 F.3d 806, 810 (9th Cir. 1997) (animatronic robots); Jarvis v. A & M Records, 827 F. Supp. 282, 297 (D.N.J. 1993) (voice); KNB Enters. v. Matthews, 92 Cal. Rptr. 2d 713 (Ct. App. 2000). “In our view a section 3344 claim is preempted under Fleet where an actor or model with no copyright interest in the work seeks to prevent the exclusive copyright holder from displaying the work. We do not believe a section 3344 claim is preempted Fleet and Ahn found the actors’ rights of publicity were preempted because their respective performances were fixed with their permission and were sufficiently creative as to warrant copyright protection. While Hoff- man v. Capital Cities/ABC, Inc.329 involved the use of a photograph of Dustin Hoffman for an advertisement, it is important to note that the district court held that Hoffman’s right of publicity as to his name and likeness was not preempted by copyright law—despite the fact that the photograph was a still from the film Tootsie,330 a frame from Hoffman’s performance.331 It is instructive that the court stated “plaintiff’s right of publicity claims proceed under the theory that Defendant’s computerized manipulation of the Tootsie image and Defendant’s publication of that manipulated image amount to an unauthorized use of the plaintiff’s name and likeness.”332 The court held that “the photographs were manipulated and cannibalized to such an extent that the celebrities were commercially exploited and were robbed of their dignity, professionalism and talent. To be blunt, the celebrities were violated by technology.”333 I would suggest that the digital extraction of actors from one film for insertion in a new film is distinguishable from Fleet and Ahn. Such digital manipulation is subject to the actor’s right of publicity and is not preempted by the copyright in the original film, nor by the copyright in the film into which the extracted image is inserted. If the re-use were by the owner of the copyright in the original film, copyright clearance would be unnecessary. If the re-use is by a third party, clearance from the owner of the copyright in the original film would be necessary. But, I would argue that as between the creator of the new film, be it the copyright owner of the film or a third party, the actor’s permis-

under Fleet, where, as here, the defendant has no legal right to publish the copyrighted works.” Id. at 723. See also Roy Export v. CBS, 672 F.2d 1095 (2d Cir. 1982) for a discussion of preemption. 329. 33 F. Supp. 2d 867 (C.D. Cal. 1999), rev’d on other grounds, Nos. 99-55563, 99-55686 (9th Cir. Jul. 6, 2001). The Ninth Circuit panel stated “we need not address LAM’s argument that Hoffman’s state law claims are preempted by the federal Copyright Act” since the photograph was protected by the First Amendment. Id. n.4. 330. (Columbia Pictures Corp., Delphi, Mirage, and Punch Productions 1982). 331. A single frame captures part of the performance. Horgan v. Macmillan, Inc., 789 F.2d 157 (2d Cir. 1986): “A snapshot of a single moment in a dance sequence may communicate a great deal.” Id. at 163. 332. 33 F. Supp. 2d at 871 (emphasis added), rev’d on other grounds, Nos. 99-55563, 99-55686 (9th Cir. Jul. 6, 2001). 333. 33 F. Supp. 2d at 873 (emphasis added), rev’d on other grounds, Nos. 99-55563, 99-55686 (9th Cir. Jul. 6, 2001). One of the other digitally manipulated celebrities was the late actor, Cary Grant. For Grant, having his head placed on someone else’s body was deja vu. See Grant v. Esquire, 367 F. Supp. 876 (S.D.N.Y. 1973).

sion to re-use would be required as a matter of right of publicity law. True, the actor’s performance is dramatic and copyrightable if fixed with his authority. Thus, as to the re-use of film, as opposed to the original film, the actor’s right of publicity and unfair competition claims are not preempted. If the re-use had been in a television commercial, as has been done with a number of deceased celebrities, the use would be subject to right of publicity law;334 the right of publicity claim would not be preempted by copyright law.335 If copyright would not bar a right of publicity claim for re-use in a copyrighted television commercial there is no justification for pre- empting a right of publicity simply because re-use is in a copyrighted film. As the Fleet court noted, a distinction must be drawn between the individual performance and the work into which it is integrated.336 Finally, it should also be noted that contract limitations may narrow the scope of copyright preemption of the right of publicity. For example, the Seventh Circuit “has suggested that if an employee has contractually limited the media in which his performance may be shown by the employer, should the employer exceed this authority, the employee’s right of publicity claim is not preempted.”337

334. “Such a commercial use of the image of a deceased actor would be a clear violation of the post-mortem right of publicity of the actor, absent a license.” MCCARTHY, supra note 121, at § 8.122; see Grodin v. Liberty Cable, 664 N.Y.S.2d 276 (App. Div. 1997) (Plaintiff had appeared in the film Network shouting “I’m mad as hell and I’m not going to take it anymore.” The scene was used by Liberty Cable in a television commercial). 335. MCCARTHY, supra note 121, at § 11.52 n.22 (“[A]n actor whose filmed performance is used without permission in a television advertisement for toys has a valid state right of publicity claim which is not preempted by copyright law.”). 336. Fleet v. CBS, 58 Cal. Rptr. 2d 645, 652 (Ct. App. 1996). 337. Pesina, 948 F. Supp. at 42 n.3, citing Baltimore Orioles v. Major League Base- ball Players Ass’n, 805 F.2d 663, 679 n.29 (7th Cir. 1986). The court in Baltimore further stated, “The [p]layers also are at liberty to attempt to negotiate a contractual limitation excluding performances before broadcast audiences from the scope of their employment.” Balt. Orioles, Inc. v. Major League Baseball Players Ass’n, 805 F.2d 663, 679 n.29 (7th Cir. 1986); see also McFarland v. Miller, 14 F.3d 912, 923 (3rd Cir. 1994) (noting “The 1936 contract does not seek to convey such publicity right in perpetuity”); Ainsworth v. Century Supply Co., 693 N.E.2d 510, 513 (Ill. 1998) (finding “Plaintiff . . . alleged that TCI used footage from the instructional video in which plaintiff appeared in creating the television commercial . . . Plaintiff has sufficiently pleaded an appropriation claim”). 4. The Stalin Strategy: Digital Erasures Joseph Stalin had a reputation for “eliminating” enemies. But, he also “erased” them from photographs.338 He made an art form out of deleting enemies from photographs using that era’s now-crude technology. Today, digital technology provides a more sophisticated method of eliminating individuals and replacing them. In the twentieth anniversary, dramatically revised, reissue of Star Wars,339 Han Solo is confronted by Jabba the Hutt. This scene was not in the original release of the film. The scene, though filmed, wound up on the cutting room floor because of time and fiscal constraints. In the original scene, a portly human actor played the part opposite a then very young Harrison Ford as Han Solo. Now, two decades later, an older Harrison Ford could not be refilmed to appear in the deleted scene with Jabba the Hutt, a nonhuman character first seen in Star Wars: Episode VI - Return of the Jedi.340 Instead, the digital wizards at Lucas’ Industrial Light + Magic “erased” the human actor from the “out take” and substituted the animal-like Jabba the Hutt.341 Director Phillip Noyce mused about the possibility of Bogart being de- capitated in Casablanca342 and a George Clooney look-alike being a head transplant.343 Far fetched? Far from it! As previously noted, to complete The Crow344 after the tragic death of Brandon Lee, a filmed image of his head was transplanted onto a stunt double. At the Fourth Annual John Huston Awards, his daughter Angelica Huston said: “[I]f an actor became box office anathema, might the owner of a film or films starring the actor replace the actor digitally, perhaps only the head, and worse, perhaps the whole person.” Had this technology been available during the “Red Scare”

338. See generally DAVID KING, THE COMMISSAR VANISHES (1997). It is ironic that the famous photograph of Churchill, Roosevelt and Stalin at Yalta was digitally modified to show a young lady in shorts leaning over Stalin’s left shoulder in an advertisement. WIRED, May 1997, at 66-67. 339. (LucasFilms 1997). 340. (LucasFilm Ltd. 1983). 341. Peter Stack, ‘Star Wars’ Trilogy Returns to the Big Screen After 20 Years, S.F. CHRON., Jan. 26, 1997, at 27. 342. (Warner Brothers 1942). 343. Paula Parisi, Playing it Again, HOLLYWOOD REP., Feb. 12, 1996, at S-1, S-2. At the 1997 Academy Awards ceremony, M.C. Billy Crystal was superimposed in a number of that year’s films including Fargo. Keith Marder, It’s Crystal Clear: Oscars Belong to Billy, L.A. DAILY NEWS, Mar. 26, 1997, at C6. 344. (Crowvision, Edward R. Pressman Film Corp., Entertainment Media Investment Corp., and Jeff Most Productions 1994).

days, might blacklisted stars, who were unable to find new roles, find to their horror that they no longer even existed on film? Or, supposing that an actor is accused of a heinous crime, even though not convicted—Fatty Ar- buckle in the 1920s, or O. J. Simpson in the 1990s—could he stop the owner of films in which he starred from substituting another actor? At present, the cost of such digital removals might be prohibitive, but with time . . . . In Zelig,345 Woody Allen appears with luminaries of another day such as William Randolph Hearst and Fannie Brice. Whose place did Allen take? In 1991, a Diet Coke television commercial resurrected the late Jimmy Cagney to pour the product for a very alive actress. The scene in which Cagney originally appeared was taken from the 1939 film, The Roaring Twenties,346 where Cagney was pouring champagne for actress Gladys George, as speakeasy owner Panama Smith. Special effects house R. Greenberg Associates digitally replaced Gladys George with the actress in the commercial. In Forrest Gump,347 Tom Hanks appears to be talking to JFK, LBJ and Nixon. And, he appears seated next to John Lennon while being interviewed by talk-show host Dick Cavett. Hanks, as Gump, was virtually sitting in someone’s lap, the person who was really seated next to Lennon—Yoko Ono! In 1997, an episode of Suddenly Susan,348 starring Brooke Shields, has the actress inserted into a scene with Errol Flynn in the 1938 film The Adventures of Robin Hood.349 She digitally replaced the original actress, Olivia De Havilland as Maid Marian. Does an actor, or for that matter, any person who has been captured in film have a right to demand that the film in which they appear not be altered in a way in which they disappear from frames of a film which are otherwise preserved? If one’s image is used without permission, right of publicity, copyright or libel law might provide redress depending on the situation. Where a use of persona involves advertising or trade purpose, the right of publicity has been successfully invoked by any number of celebrities, including: a race

345. (Orion Pictures Corp. 1983). This 1983 film, written and directed by Woody Allen and starring Allen and Mia Farrow, wove film clips of such long dead celebrities as Fanny Brice, Billy Rose, Tom Mix, and Charlie Chaplin into scenes in the film about Leonard Zelig (Allen), the human chameleon. The technical elements integrating Allen and the vintage film clips were undertaken by R. Greenberg Associates. 346. (Warner Brothers 1939). 347. (Paramount Pictures 1994). 348. (NBC television broadcast, Sept. 22, 1997). 349. (First National Pictures, Inc. and Warner Brothers 1938). car driver,350 a singer/actress,351 a talk show host,352 a game show host- ess,353 and a football player.354 Trademark and unfair competition law have protected a producer/actor,355 “The King,”356a chef357 and a singer,358 among others. But, in every instance cited, it was the use—not the nonuse—that was at issue. Right of publicity laws address the unauthorized use of a person’s image. Such laws do not address nonuse. Thus, it would appear right of publicity laws provide no succor to the person whose image has been erased. However, section 43(a) of the Lanham Act may provide relief. Failure to identify359 has been held actionable, as has been misidentification360 and alteration of a program.361 And, courts have suggested that cuts to a film that constituted “mutilation”362 or an “emasculation”363 might well be actionable.

III. BONES: THE DIGITAL RESURRECTION OF DECEASED CELEBRITIES A. The Perils of Prediction After winning the 2001 Masters golf tournament, Tiger Woods was asked “If you were to meet Bobby Jones in the clubhouse what would you say to him?”364 After a pause and a smile, Woods replied, “Wow. Well

350. Motschenbacher v. R. J. Reynolds Tobacco Co., 498 F.2d 821 (9th Cir. 1974). 351. Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988). 352. Carson v. Here’s Johnny Portable Toilets, Inc., 698 F.2d 831 (6th Cir. 1983). 353. White v. Samsung Elecs. Am., Inc., 971 F.2d 1395 (9th Cir. 1992). 354. Hirsch v. S.C. Johnson & Sons, Inc., 280 N.W.2d 129 (Wis. 1979). 355. Allen v. Nat’l Video, Inc., 610 F. Supp. 612 (S.D.N.Y. 1985). 356. Estate of Presley v. Russen, 513 F. Supp. 1339 (D.N.J. 1981). 357. Prudhomme v. Procter & Gamble Co., 800 F. Supp. 390 (E.D. La. 1992). 358. Waits v. Frito-Lay, Inc., 978 F.2d 1093 (9th Cir. 1992). 359. Lamothe v. Atlantic Recording Corp., 847 F.2d 1403 (9th Cir. 1988). 360. Smith v. Montoro, 648 F.2d 602 (9th Cir. 1981). 361. Gilliam v. ABC, 538 F.2d 14 (2d Cir. 1976). 362. Preminger v. Columbia Pictures Corp., 267 N.Y.S.2d 594, 603 (Sup. Ct. 1966), aff’d, 269 N.Y.S.2d 913 (App. Div.), aff’d, 219 N.E.2d 431 (N.Y. 1966). 363. See, e.g., Autry v. Republic Prods., 213 F.2d 667, 670 (9th Cir. 1954), cert. denied, 348 U.S. 858 (1954) (“As to the question of the appellees’ emasculating the pictures, we have attempted to leave that question open, to be properly presented when and if the occasion arises . . . .”). 364. Dave Anderson, With Stakes Raised, Woods Draws a Straight, N.Y. TIMES, Apr. 9, 2001, at D1.

how did he come back is what I want to know.”365 That question, or at least a variation of it, was anticipated almost a decade ago by Steve Wil- liams,366 then employed by George Lucas’ special effects house, Industrial Light + Magic. Williams predicted “[a]ctors who died 50 years ago will be starring next to contemporary actors.”367 Today’s efforts to resurrect the dead, or at least visual images of the dead for entertainment purposes, date back at least to the days following the French Revolution. Belgian illu- sionist Étienne-Gaspard Robertson entertained Parisian audiences with his Fantasmagorie, using slides projected on smoke above a coffin to make the dead appear to rise.368 And, in the nineteenth century, the dramatiza- tion of Charles Dickens’ Christmas story, The Haunted Man, at the Thea- tre Royal, New Adelphi included a ghost created by the reflection of an actor, below the stage, on a sheet of glass on the stage.369 Today, digital technology has replaced the smoke and mirrors of yesteryear. But, the digital reanimation of the deceased, particularly celebrities, raises a host of legal issues. I have previously addressed the copyright issues raised by the creation of a digital replica of a deceased performer and the various other legal theories that might be relevant to preventing unauthorized exploitation of a digital doppelganger, including the post-mortem right of publicity, trademark and related rights and moral rights.370 I shall not separately discuss the copyright issues implicated in the creation of a digital replica of a deceased celebrity. If a digital clone is created from a scan of the celebrity while alive, the discussion of copyright protection in Part II (direct method)371 is applicable. If the creation of the clone was post-mortem, the

365. Id. 366. Williams was a 1995 OscarTM nominee for his work in the Jim Carrey film, The Mask. (Dark Horse Entertainment and New Line Cinema 1994). 367. Richard Corliss, They Put the ILM in Film, TIME, Apr. 13, 1992, at 68-69. 368. London’s Museum of the Moving Image devoted an exhibition area to Robert- son’s Fantasmagorie. The museum is closed for the foreseeable future. 369. The Great Spectral Illusion was invented by Mr. H. Dirck and was perfected by a Professor J.H. Pepper and became known as Pepper’s Ghost. The apparition “was achieved by a sheet of glass, invisible to the audience, set at an angle on the stage above a concealed trap. When the ‘ghost’ stood in the trap and was illuminated by a strong light . . . the eerily realistic figure seemed to be actually on stage.” PETER HAINING, CHARLES DICKENS’ CHRISTMAS GHOST STORIES 19 (1992). Today Pepper’s Ghost lives on in the digital technology studios of Pepper’s Ghost Productions Ltd., appropriately located in England at http://www.pgstudio.com. 370. See generally, Beard, supra note 118. 371. See infra Part II.A.1(a). discussion in Part II (indirect method)372 and analysis in Casting Call373 would be relevant. I shall, however, update the discussion of the post- mortem right of publicity to take into account post-1993 statutes and decisions, and in particular address the conflict of laws issues only briefly al- luded to in Casting Call.374 “When will this Lazarusian technology be upon us?” I asked rhetori- cally in Casting Call.375 I answered with a quote from the owner of Café Americain, Bogart’s Rick Blaine: “Maybe not today, maybe not tomorrow but soon . . . .”376 That answer illustrates the perils of prediction. With the benefit of hindsight, I perhaps should have answered the question with one of Blaine’s less definitive statements: “I never make plans that far ahead.”377 It is true that we continue to see commercials starring deceased actors: Marilyn Monroe for Chanel, Fred Astaire for Dirt Devil, John Wayne for Coors, Elvis for Pizza Hut. In England, Monroe, Einstein, James Dean and Liberace gathered to sell Nestle’s “After Eight” mints and Steve McQueen drives a Ford Puma. But these commercials, as clever as they are, depend on the digital manipulation of films made during the lifetime of the now- deceased celebrities. There have been digital replicas of W.C. Fields,378 Ed Sullivan379 and Marlene Dietrich,380 but they would not be mistaken for films of the actual celebrities. Fully autonomous, realistic replicas of de-

372. See infra Part II.A.1(b). 373. See Beard, supra note 118, at 107-44. 374. See id. at 169-170. 375. See id. at 104. 376. CASABLANCA (Warner Brothers 1942). 377. Id. 378. W.C. Fields was created by Virtual Celebrity Productions as a real-time, interactive digital celebrity. An actor behind the screen—á la the Wizard of Oz—would respond to audience questions. The actor’s facial movement was digitally tracked as were his gestures. The project was discontinued when no market was found for exploitation. 379. “The Virtual Ed Sullivan Show” was the brainchild of UPN CEO Dan Valen- tine. “The computer-generated Sullivan was accomplished by wiring comedian John Byner in an electrode-covered body suit which recorded his gestures and transmitted them to the animated host. Byner . . . also provided the voice.” Daniel M. Kimmel, View- ers Can Get a Double Dose of Ed Sullivan, BOSTON HERALD, May 18, 1998, at 36. The program aired on UPN on May 18, 1998. Digital Domain combined digitally manipulated images of TV impresario Ed Sullivan from his program, The Ed Sullivan Show, with the voice of an impressionist to create commercials for Mercedes-Benz in 1997. In life, Sul- livan drove a Lincoln, his sponsor’s product. 380. Karen Kaplan, Old Actors Never Die; They Just Get Digitized, L.A. TIMES, Aug. 9, 1999, at C1.

ceased celebrities will not be with us “soon” but it is only a matter of time and money, and so, I repeat my exhortation in Casting Call, it is still “not too soon to begin a discussion of the legal issues raised by reanimation.”381 Part III.B will provide a brief survey of the current state of the post- mortem right of publicity in the United States. That review will be followed, in Part III.C, with an analysis of the interplay between the Califor- nia Legislature and the federal courts’ interpretation of California’s post- mortem right of publicity. The lessons to be learned reach well beyond California’s borders. Part III.D will focus on choice of law issues with a particular focus on Indiana and Nevada. Finally, in Part III.E, the issues of film completion where a principal actor has died, exemplified most recently by the death of Oliver Reed while filming Gladiator,382 will be examined. B. The Post-Mortem Right of Publicity—Alive and Well, Sort of! The number of states recognizing a post-mortem right of publicity has grown since the publication of Casting Call in 1993, but many states have yet to address the issue of a post-mortem right of publicity by statute or common law.383 Some states have enacted statutes creating a post-mortem right of publicity,384 while other states have a common law post-mortem right of publicity,385 in addition to statutory protection in some instances.386 New York,387 Ohio,388 and Wisconsin389 have been held not to

381. Beard, supra note 118, at 106. 382. (DreamWorks SKG, Scott Free Productions, and Universal Pictures 2000). 383. Alabama, Michigan, Oregon, Pennsylvania, and Vermont are examples of such states. 384. See CAL. CIV. CODE § 3344.1 (Deering Supp. 2001); FLA. STAT. ANN. § 540.08(1) (West 1997 & Supp. 2001); 765 ILL. COMP. STAT. ANN. 1075/30(b) (West 2000); IND. CODE ANN. § 32-13-1-8 (WEST 2000); KY. REV. STAT. ANN. § 391.170 (Mi- chie 1999); NEB. REV. STAT. ANN. § 20-202 (Michie 1997); NEV. REV. STAT. ANN. 597.790 (Michie 1999); OHIO REV. CODE ANN. § 2741.02 (Anderson 2000); OKLA. STAT. ANN. tit. 12, § 1448 (West 1993); TENN. CODE ANN. § 47-25-1104 (2000); TEX. PROP. CODE ANN. § 26.012 (Vernon 2000); VA. CODE ANN. § 8.01-40 (Michie 2000); WASH. REV. CODE ANN. § 63.60.040 (West 2000). 385. California (to the extent Lugosi v. Universal Pictures, 603 P.2d 425 (Cal. 1979) provides such a common law right), Connecticut, Georgia, New Jersey, Tennessee, and Utah are the states with common law protection. 386. California (Lugosi v. Universal Pictures, 603 P.2d 425 (Cal. 1979)) and Tennes- see (State ex rel. Elvis Presley Mem’l Found. v. Crowell, 733 S.W.2d 89 (Tenn. Ct. App. 1987)) are two such states. 387. See Pirone v. MacMillan, Inc., 894 F.2d 579 (2d Cir. 1990). protect a post-mortem right of publicity. The Ohio legislature, however, recently enacted a statutory post-mortem right of publicity for domiciliaries or residents who died on or after January 1, 1998.390 The term of protection is not uniform in those states that have adopted statutory protection for deceased celebrities ranging from as few as ten years to indefinite.391 Where the protection has been a matter of common law, the term has not been defined,392 though it has been suggested that a post-mortem term equal to that granted to authors under copyright law might be appropriate.393 Not only does the term of protection vary from state to state, but the scope of statutes varies as to the attributes of persona protected, with Indiana being the most generous.394 Where common law rights of public-

388. See Reeves v. United Artists, 572 F. Supp. 1231 (N.D. Ohio 1983), aff’d, 765 F.2d 79 (6th Cir. 1985). 389. See Hagen v. Dahmer, 38 U.S.P.Q.2d (BNA) 1146 (E.D. Wis. 1995). 390. See OHIO REV. CODE ANN. § 2741.03 (Anderson 2000). 391. See CAL. CIV. CODE § 3344.1(g) (Deering Supp. 2001) (70 years); FLA. STAT. ANN. § 540.08(4) (West 1997 & Supp. 2001) (40 years); 765 ILL. COMP. STAT. ANN. 1075/30(b) (WEST 2000) (50 years); IND. CODE ANN. § 32-13-1-8 (West 2000) (100 years); KY. REV. STAT. ANN. § 5391.170 (Michie 1999) (50 years); NEB. REV. STAT. ANN. § 20-208 (Michie 1997) (indefinite); NEV. REV. STAT. ANN. 597.790(1) (Michie 1999) (50 years); OHIO REV. CODE ANN. § 2741.02(A) (Anderson 2000) (60 years); OKLA. STAT. ANN. tit. 12, § 1448(G) (West 1993) (100 years); TENN. CODE ANN. § 47- 25-1104 (2000) (10 years); TEX. PROP. CODE ANN. § 26.012(d) (Vernon 2000) (50 years); VA. CODE ANN. § 8.01-40(B) (Michie 2000) (20 years); WASH. REV. CODE ANN. § 63.60.040 (West 2000) (10 years for “individuals” and 75 years for “personalities”). 392. “Since we are not directly faced with the issue of whether there should be a dur- ational limit on the right of publicity after it is inherited, we will not decide this question.” Estate of Presley v. Russen, 513 F. Supp. 1339, 1355 (D.N.J. 1981). 393. “The court suggests that a length of time should be set by the New Jersey State legislature. The Federal Copyright Act, 17 U.S.C. § 302, 305 provides guidelines which may be informative in this situation.” Id. at 1355. “The Copyright Act . . . provides that copyright in new works shall be recognized during the author’s life and for fifty years thereafter . . . . That period represents a reasonable evaluation of the period necessary to effect the policies underlying the right of publicity. Therefore, I would hold that the right of publicity should be recognized during the subject’s life and for 50 years thereafter.” Lugosi v. Universal Pictures, 603 P.2d 425, 446-47 (Cal. 1979) (Bird, C.J., dissenting) 394. See CAL. CIV. CODE § 3344.1 (Deering Supp. 2001) (name, voice, signature, photograph, and likeness); FLA. STAT. ANN. § 540.08 (West 1997 & Supp. 2001) (name, photograph, likeness, and portrait); 765 ILL. COMP. STAT. ANN. 1075/5 (West 2000) (name, voice, signature, photograph, image, and likeness); IND. CODE ANN. § 32-13-1-7 (West 2000) (name, voice, signature, photograph, image, likeness, distinctive appearance, gestures, and mannerisms); KY. REV. STAT. ANN. § 391.170 (Michie 1999) (name and likeness); NEB. REV. STAT. ANN. § 20-202 (Michie 1997) (name, picture, portrait, personality, and other likeness); NEV. REV. STAT. ANN. 597.790 (Michie 1999) (name, voice, signature, photograph, and likeness); OHIO REV. CODE ANN. § 2741.01(A) (Ander- son 2000) (name, voice, signature, photograph, image, likeness, and distinctive appear-

ity exist, they can be more elastic in the aspects of persona that will be protected.395 “Likeness” has proven to be a very flexible term. As the term is used in both post-mortem right of publicity statutes and statutes protecting the living, decisions under both types of statutes are equally instructive. A look-alike has been held to be a “likeness” of a celebrity.396 A composite photo-drawing “somewhere between representational art and a cartoon” has been held to be a likeness.397 Even an animatronic figure may be a likeness.398 When it comes to protecting “voice,” however, statutes may be limited only to replication and not imitation of a celebrity. The Ninth Circuit has held that California Civil Code section 3344 protection of “voice” does not extend to protection against a sound-alike but that the California common law right of publicity would protect against it.399 There is a significant question as to whether deceased celebrities are protected against voice imitation under California law. California Civil Code section 3344.1 protects against an unauthorized exploitation of the deceased celebrities “voice.” To be consistent with Midler, a court would be forced to conclude that section 3344.1 does not protect against a sound-alike. Unless there is a common law post-mortem right of publicity in California, voice imitation of a deceased celebrity is not actionable, at least under California law. While Lugosi v. Universal Pictures,400 was not a model of clarity it certainly raises serious doubt as to whether a future decision would find such a common law right existed.401 However, it may

ance); OKLA. STAT. ANN. tit. 12, § 1448 (West 1993) (name, voice, signature, photograph, and likeness); TEX. PROP. CODE ANN. § 26.012 (Vernon 2000) (name, voice, signature, photograph, and likeness); VA. CODE ANN. § 8.01-40 (Michie 2000) (name, portrait, and picture); WASH. REV. CODE ANN. § 63.60.010 (West 2000) (name, voice, signature, photograph, and likeness). 395. White v. Samsung Elecs. Am., Inc., 971 F.2d 1395 (9th Cir. 1992). A robot wearing a blond wig and white dress was held not to be a likeness under California Civil Code section 3344 but was protected by California common law right of publicity. Id. at 1397. 396. Prudhomme v. Procter & Gamble Co., 800 F. Supp. 390 (E.D. La. 1992); Onas- sis v. Christian Dior-New York, Inc., 472 N.Y.S.2d 254 (Sup. Ct. 1984), aff’d, 488 N.Y.S.2d 943 (App. Div. 1985). 397. Ali v. Playgirl, Inc., 447 F. Supp. 723 (S.D.N.Y. 1978). 398. Wendt v. Host Int’l., Inc., 125 F.3d 806 (9th Cir. 1997). 399. See Midler v. Ford Motor Co., 849 F.2d 460, 463 (9th Cir. 1988). 400. 603 P.2d 425 (Cal. 1979). 401. No less an authority than the plaintiff in Lugosi, Bela G. Lugosi, son of the late star and an attorney who represents the estates of a number of deceased celebrities, including his father’s co-star Boris Karloff, has stated that “the common law right descends only where (and possibly only to the extent that) the celebrity exploited the right during ultimately be possible to dispense with a sound-alike if the promise of AT&T Labs’ Natural Voices or similar products live up to expectations. AT&T Labs have been quoted as saying that the software can “bring the voices of long-dead celebrities back to life” by using archival recordings from film sound tracks or phonorecords to create a voice database.402 New York, did not protect “voice” for most of the life of its right of publicity statute, N.Y. Civil Code sections 50-51.”403 Finally, in 1995, New York added voice to the aspects of persona protected by the statute. Curiously, while the legislature amended section 51 to include voice, it did not revise section 50 in that regard.404 New York decided almost two decades ago that there was no common law right of publicity, though it left the question of right of publicity protection for the dead unanswered.405 The Second Circuit has concluded that, contrary to its earlier views, the right of publicity is protected only by statute and that—as the statute only applies to the living—there is no post-mortem protection in New York.406 Two observations arise: (1) if the relevant law is that of New York, protection will likely extend only to replication and not imitation of a living celebrity’s voice; and (2) of course, no protection whatsoever is available to deceased celebrities.

his or her lifetime.” Bela Lugosi, California Expands the Statutory Right of Publicity for Deceased Celebrities While Its Courts are Examining the First Amendment Limitations of that Statute, 10 DEPAUL-LCA J. ART & ENT. L. & POL’Y 259, 263 (2000)(citing Lugosi v. Universal Pictures, 603 P.2d 425, 818-22, 824 (Cal. 1979)). For Lugosi’s involvement with The Three Stooges, see Ted Fishman, The Three Stooges Meet the Son of Dracula, 68 GQ No. 12, Dec. 1998, at 180. 402. Lisa Guersney, Software is Called Capable of Copying Any Human Voice, N.Y. TIMES, July 31, 2001, at A1. 403. See Lahr v. Adell Chem. Co., 300 F.2d 256 (1st Cir. 1962); Tin Pan Apple, Inc. v. Miller Brewing Co., 737 F. Supp. 826 (S.D.N.Y. 1990); Maxwell v. N.W. Ayer, Inc., 605 N.Y.S.2d 174, 176 (Sup. Ct. 1993). 404. There is proposed legislation in New York the “Personal Privacy Act of 2001” which would add “voice” to section 50 to make it consistent with section 51. Notably, the bill does not include a post-mortem right of publicity. 405. Stephano v. News Group Publ’ns, Inc., 474 N.E.2d 580 (N.Y. 1984): “In view of the fact that the plaintiff is asserting his own right of publicity we need not consider whether the statute would also control assignment, transfer or descent of publicity rights.” Id. at 584 n.2 (emphasis added). 406. Pirone v. MacMillan, Inc., 894 F.2d 579, 586 (2d Cir. 1990). The court in this case added that the Stephano case created uncertainty as to whether New York’s statutory remedy preempts an heir’s common law right of publicity claim, but [it] believe[d] recognition of such a right will have to await either clarification from the Court of Appeals or action by the New York legislature, which has thus far declined to amend the statute to make a right of publicity descendible. See id. at 586 n.6.

C. “Dancing in the Dark”—The Astaire Celebrity Image Protection Act In the film Bandwagon,407 Fred Astaire danced to the song Dancing in the Dark.408 The song seems an apt description of the drafting of Califor- nia’s post-mortem right of publicity statute409 and the interpretation of the statute by the courts. Most notable among the judicial interpretations are the decisions by the Ninth Circuit and the Federal District Court for the Central District of California in Astaire v. Best Film & Video Corp.410 and the various decisions in the actions brought by the Estate of Diana, Prin- cess of Wales against the Franklin Mint Company.411 Following the adverse decisions in Lugosi v. Universal Pictures412 and Gugliemi v. Spelling-Goldberg Productions413 with respect to a post- mortem right of publicity, the estates of a number of deceased celebrities, including the family of John Wayne,414 lobbied the California legislation to enact a right of publicity for the deceased. The proposed legislation went through several revisions but was finally enacted as California Civil Code section 990 in 1984.415 Of particular relevance to this discussion are the activities exempted from the protection granted by section 990:

(n) This section shall not apply to the use of a deceased personality’s name, voice, signature, photograph, or likeness, in any of the following instances:

407. (Metro-Goldwyn-Mayer 1953). 408. (Arthur Schwartz & Howard Dietz, 1931). 409. See CAL. CIV. CODE § 3344.1 (Deering Supp. 2001) (replacing CAL. CIV. CODE § 990 (Deering 1990)). 410. 116 F.3d 1297 (9th Cir. 1997). 411. Diana Princess of Wales Mem’l Fund v. Franklin Mint Co., 216 F.3d 1082 (9th Cir. 1999) (Cairns II); Cairns v. Franklin Mint Co., 120 F. Supp. 2d 880 (C.D. Cal. 2000) (Cairns III); Cairns v. Franklin Mint Co., 24 F. Supp. 2d 1013 (C.D. Cal. 1998) (Cairns I). 412. 603 P.2d 425 (Cal. 1979). 413. 603 P.2d 454 (Cal. 1979). 414. One example of the egregious unauthorized exploitation of celebrity was a greeting card featuring John Wayne wearing lip rouge. The sentiment inside was “It’s such a Bitch being Butch!” The card bore the legend © 1983. Another unauthorized card featured a caricature of actress Joan Crawford with the legend “I never laid a fucking hand on those kids!” 415. 1984 Cal. Stat. 1704 § 1. (1) a play, book, magazine, newspaper, musical composition, film, radio or television program, other than an advertisement . . . .416 This exemption reflected the concerns of the American Civil Liberties Union and the Writers Guild of America about the possible chilling effect a post-mortem right of publicity would have on the ability of authors to write about celebrities. But, the response of the legislature was overly broad. Marshall McLuhan had once boldly claimed that “[t]he Medium is the Message.”417 The California legislature must have believed McLuhan because the section 990 exemption focused on the medium—book, magazine, film, etc.—and not the message—biographies, docudrama’s, fictional accounts, etc. In a sense, the California Legislature “threw the baby out with the bath water” in responding to First Amendment concerns. This was borne out, unfortunately, in Astaire v. Best Film & Video Corp.418 In Astaire, Fred Astaire’s widow claimed that the use of clips of Fred Astaire from two public domain films, Second Chorus419 and Royal Wed- ding420 violated section 990. The district court had, in finding for Mrs. Astaire, held that Best’s use of the Astaire film clips was not exempt under section 990(n).421 The Ninth Circuit disagreed. In reversing the district court, the Ninth Circuit traced the legislative history of Senate Bill 613 and reached the conclusion that the “[l]egislature demonstrated an intent to adopt a broader exemption that was not limited to constitutionally protected uses.”422 Unfortunately, the Ninth Circuit’s own analysis suggests that its conclusion as to the breadth of the exemption was flawed. The court referred to the June 12, 1984 introduction of a proposed section 990(n) amendment to the bill:

Nothing in this section shall be construed to derogate from any rights protected by constitutional guarantees of freedom of speech or freedom of the press, such as the right to use a deceased personality’s name, voice, signature, photograph, or likeness in a play, book, magazine, newspaper, film, television program, or similar medium of expression, to the extent the use is

416. CAL. CIV. CODE § 990(n) (Deering 1990) (emphasis added). 417. MARSHALL MCLUHAN, UNDERSTANDING MEDIA 7-21 (1964). 418. 116 F.3d 1297 (9th Cir. 1997). 419. (Astor Pictures Corp. and Paramount Pictures 1940). 420. (Loew’s, Inc. and Metro-Goldwyn-Mayer 1951). 421. Astaire, 116 F.3d at 1300. 422. Id. at 1303.

protected by the constitutional guarantees of freedom of speech or freedom of the press.423 Next it cited to a staff report that analyzed the draft language as being superfluous: “[I]rrespective of this stated intent, a defendant who has used a person’s name, voice, etc. without authorization, may assert a First Amendment privilege.”424 The court then noted, “[s]hortly thereafter section 990(n) was amended to its current version, which does not contain the language explicitly limiting the scope of its exemption to constitutionally protected uses.”425 The court went on to state, “[t]he Legislature’s removal of the language ‘to the extent the use is protected by the constitutional guarantees of freedom of speech or freedom of the press’ from Senate Bill 613 is a telling clue as to the Legislature’s intent.”426 The court then, concluded, “[b]y deleting this language, the Legislature demonstrated an intent to adopt a broader exemption that was not limited to constitutionally protected uses.”427 Having itself characterized the staff report as criticizing the original language “for being superfluous,” the court somehow treated the excise of the language as not merely removing the superfluous but of somehow indicating a “broader exemption.” Its interpretation of the Legis- lature’s reaction to the staff report is troubling to say the least. Having lost in Astaire, Mrs. Astaire, joined by the S.A.G., lobbied for an amendment to section 990 to address what they thought was an incorrect interpretation of the California Legislature’s intent as to the scope of the exemption. Section 990 was amended and renumbered as section 3344.1 in 1999.428 Section 3344.1(a)(2) provides:

For purposes of this subdivision, a play, book, magazine, newspaper, musical composition, audiovisual work, radio or television program, single and original work of art, work of political or newsworthy value, or an advertisement or commercial announcement for any to these works, shall not be considered a product, article or merchandise, good, or service if it is fictional

423. Astaire, 116 F.3d at 1303 (citing S. 613, 1983-84 Reg. Sess. (Cal. 1989) (amended Jun. 12, 1989)). 424. Id. (quoting Staff of Assembly Comm. On Judiciary, Report on S. 613, 1983-84 Reg. Sess. 6 (amended Jun. 12, 1984). 425. Id. 426. Id. 427. Id. (emphasis added). 428. CAL. CIV. CODE § 990 (Deering 1990); CAL. CIV. CODE § 3344.1 (Deering Supp. 2001). or nonfictional entertainment, or a dramatic, literary, or musical work.429 While section 3344.1(a)(2) narrows the types of exploitation exempted from its purview as opposed to the broad exemption provided by section 990(n) at least as interpreted by the Ninth Circuit in Astaire, it is not clear that Mrs. Astaire would have fared any better under section 3344.1(a)(2) than she actually did under section 990(n)(1). Arguably, the dance instruction video in Astaire including the clips from Second Chorus and Royal Wedding would qualify for exemption as nonfictional entertainment. But, if the loss in Astaire accomplished nothing else, it did lead to an exemption that focused on the message and not the medium. The Astaire decision clearly influenced the Legislature to craft more narrowly the exceptions to the applicability of the post-mortem publicity statute, but Astaire was not the only deceased celebrity to play a role in the revision of section 990. Princess Diana also played a role. Princess Diana, or more properly, her estate, was the plaintiff in Cairns I.430 California law provided a post-mortem right of publicity; the United Kingdom did not. As the uses to which Franklin Mint put the name and image of Princess Diana, dolls, sculptures, commemorative plates, etc., were trade purposes,431 the estate would have been successful in its publicity claim if California law applied, but not if British law applied. The district court, applying California choice of law rules, as the forum state, held that, though California normally resolves conflict of laws questions through a “governmental interest” analysis with respect to personal property, Cali- fornia Civil Code section 946 controlled.432 That section dictates that “[i]f there is no law to the contrary, in the place where the personal property is situated, it is deemed to follow the person of its owner, and is governed by the law of his domicile.”433 The court concluded that, as section 990 did “not constitute law to the contrary”434 even if California and not the United Kingdom was “the situs of the property, the law of Great Britain

429. Astaire Celebrity Protection Act, 1999 Cal. Stat. 3344.1(a)(2) (emphasis added). 430. Cairns v. Franklin Mint Co., 24 F. Supp. 2d 1013, 1021 (C.D. Cal. 1998). 431. For the latest California high court decision on trade purpose, see Comedy III Prods. v. Gary Saderup, Inc., No. S076061 (Cal. Apr. 30, 2001), available at http://www.courtinfo.ca.gov/opinions. 432. Cairns, 24 F. Supp. 2d at 1029. 433. CAL. CIV. CODE § 946 (Deering 1990). 434. Cairns, 24 F. Supp. 2d at 1027.

would control because no California law provides that the law of the decedents domicile should not apply.”435 In Cairns I, the district court stated that “[a]lthough there is no indication in section 990 that the legislature intended to limit the post-mortem right of publicity to California domiciliaries, the statute clearly identifies the right as a property right and section 946 governs choice of law questions involving personal property.”436 The court then went on to state that the existing statutory scheme permitted only California domiciliaries to devise a right of publicity to their heirs under section 990.437 In dicta, however the court said that perhaps the statutory scheme also permits “domiciliaries of other states that recognize a right of publicity to devise a right of publicity to their heirs under section 990.”438 Presumably, the judge would have limited the scope of that dicta to states that did not merely have a right of publicity but a right that was also descendible. While the language is dicta, it certainly appeared to undercut the holding that non-domiciliaries were not eligible for protection under section 990. In responding to Cairns I, Senate Bill 209, which also addressed the Astaire issue, was drafted to include a provision making its rules applicable to non-domiciliaries as well as to celebrities domiciled in California at the time of their death:

A plaintiff has standing to bring an action pursuant to this section if any of the acts giving rise to an action occurred in this state, whether or not the decedent was a domiciliary of this state at the time of death.439 However, the legislature amended Senate Bill 209 to read:

This section shall apply to the adjudication of liability and the imposition of any damages or other remedies in cases in which the liability, damages, and other remedies arise from acts occurring directly in this state.440

435. Id. at 1028. 436. Id. at 1029. 437. Id. 438. Id. 439. S. 209 § (o), 1999-2000 Reg. Sess. (Cal. 1999) (amended Mar. 3, 1999). Section (o) of S. 209, as originally introduced on January 20, 1999, mistakenly referred to the domicile of the plaintiff rather than the domicile of the decedent. 440. S. 209 § (n), 1999-2000 Reg. Sess. (Cal. 1999) (amended Jun. 29, 1999). The legislature made the change to “comply with the U.S. Supreme Court’s pronouncement in BMW of North America v. Gore441 and to eliminate unnecessary references to ‘standing and jurisdiction.’”442 The Assembly Committee on the judiciary emphasized, that despite the re- wording, the section was still intended “not . . . [to limit] the bill’s applicability to heirs of celebrities who were domiciliaries of California at the time of death.”443 The Ninth Circuit appeared to agree with that assessment. In Cairns II, the Ninth Circuit agreed with the district court that section 990 did not constitute a law to the contrary with respect to the applicability of section 946.444 To reinforce this conclusion, the Ninth Circuit referred to the soon-to-be effective amendment to section 990: “[T]he California legislature has amended Section 990, effective January 1, 2000, to expressly include a provision that expands coverage of the statute to heirs of celebrities who were not domiciliaries of California at the time of death.”445 However, the Ninth Circuit subsequently amended its ruling to delete the words “choice of law,” but did not delete dicta that the revision of the post-mortem statute “expands coverage of the statute to heirs of celebrities who were not domiciliaries of California at the time of death.”446 In Cairns III, the district court, stating it was not bound by the Ninth Cir- cuit dicta in Cairns II, held that the provision of section 3344.1(n) “is not a choice of law provision.”447 The court concluded that California Civil Code section 946 applied, and as the law of Great Britain did not recognize post-mortem right of publicity, no right was violated in California. In Astaire, as discussed above, the Ninth Circuit referred to the Staff of the Assembly Committee on the Judiciary Report on Senate Bill 613 (as amended June 12, 1984) as supporting the court’s interpretation of the purpose of the deletion of the language “to the extent the use is protected by the constitutional guaranties of freedom of speech or freedom of the press” from Senate Bill 613 on July 3, 1984.448 In contrast to Astaire, in Cairns III, the district court ignored the California Assembly Committee on the Judiciary Analysis of Senate Bill 209 (as amended March 3, 1999) that suggested that subsection (n) like the previous subsection (o) was in-

441. 517 U.S. 559 (1996). 442. California Assembly Comm. On Judiciary, Analysis of Senate Bill No. 209, 1999-2000 Reg. Sess. 19 (amended Mar. 3, 1999). 443. Id. 444. Cairns v. Franklin Mint Co., 216 F.3d 1082 (9th Cir. 1999). 445. Id. 446. Cairns v. Franklin Mint Co., 120 F. Supp. 2d 880, 886 (C.D. Cal. 2000). 447. Id. 448. Astaire v. Best Film & Video Corp., 116 F.3d 1297, 1303 (9th Cir. 1997).

tended to overturn Cairns I. In doing so, the district court said that it gave “little weight to legislative history predating the amendment to the statute which occurred on June 29, 1999.449 Second, both the Ninth Circuit in Astaire450 and the district court in Cairns III, held that letters or statements from the bill’s authors and statements of aides as evidence of intent could not be considered.451 Yet, the district court in Cairns III referred to a letter from a number of professors to Assembly Member Kuehl expressing, among other things, concern with the territorial reach of subsection (o). The district court stated that “it appears that the letter influenced the final language in the bill.”452 The court appeared to give weight to a letter from professors while disregarding legislative history and declarations from legislative aides. Apart from the argument that the legislature’s intent to include non- domiciliaries can be divined from the Assembly analysis, there is an additional argument why section 3344.1 should be interpreted as applying regardless of the domicile of the decedent. Subsection (n) states that it applies to “acts occurring directly in this state.” There is no comparable language in section 3344. Yet, in a section 3344 action by a living celebrity in a California court, the California court could only properly address acts occurring in the state. The same would be true for an action brought by the estate of a deceased celebrity. Given that section 3344 does not contain the language of section 3344.1(a), and if the language of section 3344.1(n) is not to be treated as surplusage, it certainly may be interpreted—consistent with the conclusion of the Assembly Committee on the Judiciary—that the substitution of subsection (n) for (o) was not intended to limit the bill’s applicability to celebrities who were domiciliaries of California at the time of death. The federal courts have interpreted the legislation; whether they have done so correctly is another matter. The decisions are on appeal to the Ninth Circuit and it is unclear what the court will decide.

449. Cairns, 120 F. Supp. 2d at 884-85. 450. 116 F.3d at 1302. 451. Cairns, 120 F. Supp. 2d at 886. 452. Id. D. “I Would Rather Be Living in Philadelphia”—Whose Law Governs, Anyway? Contrary to popular myth, the plaque on W.C. Fields’ crypt does not say “I would rather be living in Philadelphia.”453 But, where you live, or more to the point, where you are domiciled when you die, may be of great significance. There is no federal right of publicity and no likelihood of enactment of such legislation in the near term.454 Thus, the existence and terms of such a right are a matter of state law. While the issue of which state’s law will apply in connection with a living celebrity is obviously important,455 the issue is particularly critical with respect to a post-mortem right of publicity claim. For states that have a post-mortem right of publicity, there is variance among those states as to the duration of the right456 and as to the aspects of persona covered.457 If, (1) the plaintiff beneficiary of a “post- mortem right of publicity” lives in the same state as the defendant; (2) the “tort” occurs solely in that state; and (3) the deceased celebrity was domiciled in that state at the time of death, the law of that state clearly would apply. But, which state’s law applies becomes a major issue if plaintiff beneficiary and defendant are not located in the same state, the “tort” took place in another jurisdiction, or the deceased were domiciled in another state. If all courts and legislatures were to apply uniform rules in determining the existence and scope of a post mortem right of publicity, that would be one thing; unfortunately, uniformity is sorely missing, as the following paragraphs will illustrate. The Second Circuit has consistently held that the existence of a post- mortem right of publicity is to be determined by the laws of the jurisdiction in which the celebrity was domiciled at the date of death,458 as has the

453. The epitaph “Here Lies W.C. Fields I Would Rather Be Living In Philadelphia” first appeared in A Group of Artists Write Their Own Epitaphs, VANITY FAIR, June 1923, at 50-51. The plaque on Fields’ crypt in Forest Lawn simply reads “W.C. Fields, 1880- 1946.” 454. Both the International Trademark Association and the American Bar Associa- tion have labored on a proposed federal right of publicity but so far it does not seem either organization has reached a consensus on the matter. 455. See, e.g., Lahr v. Adell Chem. Co., 300 F.2d 256 (1st Cir. 1962); Page v. Some- thing Weird Video, 908 F. Supp. 714 (C.D. Cal. 1995). 456. See supra note 391. 457. See supra note 394. 458. See, e.g., Groucho Marx Prods. Inc., v. Day & Night Co., 689 F.2d 317, 320 (2d Cir. 1982). (“Though the conduct alleged to impair plaintiffs’ rights occurred in New York, the existence of their rights must be determined under the law of California.”).

New York Court of Appeals.459 Most recently, California’s revised post- mortem right of publicity statute has been interpreted as determining the status of a post-mortem right of publicity, or lack thereof, under the laws of the jurisdiction where the celebrity was domiciled at the date of death.460 Presumably, these jurisdictions would find that James Cagney, who died domiciled in New York, has no post-mortem right of publicity under New York law461 though his persona would be protected to the extent of trademarks and, presumably, section 43(a) of the Lanham Act. The Federal District Court for New Jersey determined that Elvis Presley enjoyed a post-mortem right of publicity under New Jersey law, the situs of the tort.462 The same court later applied New Jersey law with respect to “Spanky” McFarland but in that case McFarland was alive when the tort was committed in New Jersey.463 So, the issue was not really one of the existence of a post-mortem right of publicity under New Jersey law, but rather whether an action for breach of McFarland’s right of publicity during his lifetime survived his death, which the court held it did.464 An- other Federal District Court of New Jersey decision involved a determination of whether the law of New Jersey, the law of Nevada, or the law of Louisiana should govern the determination of whether or not Louis Prima enjoyed a post-mortem right of publicity.465 Prima’s widow resided in New Jersey, and the defendant’s principal place of business was in Flor- ida. The late Prima’s will was probated in Nevada where he was domiciled from 1954 to 1978. However, shortly before his death, he was relocated to a hospital in Louisiana, the state of his birth. The determination was important because Nevada—by statute—and New Jersey—by common law—provided a post-mortem right of publicity, whereas Louisiana did not.466 The court decided that the Louisiana contact was miniscule.467 Hav- ing determined that there was no conflict between New Jersey law and

459. Southeast Bank, N.A. v. Lawrence, 489 N.E.2d 744 (N.Y. 1985). 460. See Cairns v. Franklin Mint Co., 120 F. Supp. 2d 880, 883-86 (C.D. Cal. 2000). 461. See N.Y. CIV. RIGHTS LAW §§ 50-51 (McKinney 1992 & Supp. 2001). 462. See Estate of Presley v. Russen, 513 F. Supp. 1339, 1354-55 (D.N.J. 1981). 463. See McFarland v. Miller, 14 F.3d 912, 914 (3d Cir. 1994). This was not the only time McFarland sued. See McFarland v. E & K Corp., 18 U.S.P.Q.2d (BNA) 1246 (D. Minn. 1991) (bar known as “Spanky’s Saloon” selling hats and T-shirts with name and image of “Spanky”). 464. See McFarland, 14 F.3d at 917-18. 465. See Prima v. Darden Rests., Inc., 78 F. Supp. 2d 337, 344-48 (D.N.J. 2000). 466. See id. at 345-46. 467. See id. at 347. Nevada law, the court applied the law of the former state, New Jersey, since the plaintiff, Prima’s widow, was domiciled in New Jersey. The Eleventh Circuit has also recognized the problem of determining which state’s law to apply in post-mortem right of publicity cases:

It is not clear whether the locus of the injury would be the location of the plaintiff or instead the situs of the allegedly tortious conduct. To complicate matters, the right of publicity has been treated in some jurisdictions as a property right, and some courts accordingly have used choice-of-law rules applicable to personal property.468 The Eleventh Circuit chose to treat the action as involving personal property akin to a right of publicity, but invoked Alabama law, not because the deceased was domiciled in Alabama at the time of his death, but rather because the widow was so domiciled at the time she brought the action.469 To further complicate matters, Nevada and Indiana provide post- mortem right of publicity protection with respect to exploitation within the state regardless of the domicile of the decedent at the time of death.470 As previously discussed, the California legislature, in the process of revising Civil Rights section 990, had at one point in the deliberative process included a provision similar to that of Indiana and Nevada: “if any acts giving rise to the action occurred in this state, whether or not the decedent was a domiciliary of this state at the time of death.”471 That provision was subsequently deleted and replaced.472 However, as previously noted, the federal district court found that the revision, as enacted, did not expand coverage to decedents not domiciled in California at the date of death but, rather, the law of the place of such domicile was determinative of the existence of a post-mortem right of publicity.473 The preceding discussion reveals three approaches to the issue of which law determines the status of a post-mortem right of publicity: (1) the domicile of the celebrity at the time of death, the approach of the Sec-

468. Allison v. Vintage Sports Plaques, 136 F.3d 1443, 1445 n.6 (11th Cir. 1998). 469. See id. 470. See IND. CODE ANN. § 32-13-1-1 (West 2000); NEV. REV. STAT. ANN. 597.780 (Michie 1999). 471. See S. 209, 1999-2000 Reg. Sess. (Cal. 1999) (amended Mar. 3, 1999). 472. See CAL. CIV. CODE § 3344.1(n) (Deering Supp. 2001) (“This section shall apply to the adjudication of liability and the imposition of any damages or other remedies in cases in which the liability, damages, and other remedies arise from acts occurring directly in this state.”). 473. See Cairns v. Franklin Mint Co., 120 F. Supp. 2d 880, 883-86 (C.D. Cal. 2000).

ond Circuit474 and the Federal District Court for the Central District of California;475 (2) the situs of the tort, the statutory approach of Nevada476 and Indiana,477 and the tack taken by the Federal District Court for New Jersey in Estate of Presley v. Russen;478 and (3) the domicile of the plaintiff, the holding in Prima v. Darden Restaurants, Inc.479 and Allison v. Vintage Sports Plaques.480 Until there is a federal right of publicity, those taking a post-mortem right of publicity license need to be mindful of the inconsistent approaches taken to the validity, scope, and duration of the underlying rights. For those representing a deceased celebrity who died domiciled in a state that does not provide a post mortem right of publicity, federally registered trademarks provide a degree of protection, but are limited to the mark itself. Section 43(a) of the Lanham Act provides more flexible coverage and has been invoked successfully by both living and deceased celebrities.481 Of particular note is the fact that, with the possible exceptions of Ne- braska482 and Tennessee,483 statutory rights of publicity are for a finite term; Lanham Act section 43(a) is indefinite in duration, though admittedly limited by the likelihood of confusion test.484 In addition to possible Lanham Act protection, the language of the Indiana and Nevada statutes would be a source of protection for celebrities who died in a state that does not provide a post-mortem right of publicity. But are these statutes subject to the claim of being an unconstitutional burden on interstate commerce? Indiana and Nevada are the only two states to statutorily mandate that the post-mortem right of publicity apply to unlicensed exploitation in their respective states regardless of the celebrity’s domicile at the date of

474. See, e.g., Groucho Marx Prods., Inc. v. Day & Night Co., 689 F.2d 317 (2d Cir. 1982). 475. See Cairns, 120 F. Supp. 2d at 883-86. 476. See NEV. REV. STAT. ANN. 597.790 (Michie 1999). 477. See IND. CODE ANN. § 32-13-1-8 (West 2000). 478. See 513 F. Supp. 1339 (D.N.J. 1981). 479. See 78 F. Supp. 2d 337 (D.N.J. 2000). 480. See 136 F.3d 1443 (11th Cir. 1998). 481. See, e.g., Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188 (5th Cir. 1998) (Elvis Presley); Prudhomme v. Procter & Gamble, 800 F. Supp. 390 (E.D. La. 1992) (Chef Prudhomme); Allen v. Nat’l Video, 610 F. Supp. 612 (S.D.N.Y. 1985) (Woody Allen); and Estate of Presley v. Russen, 513 F. Supp. 1339 (D.N.J. 1981). 482. See NEB. REV. STAT. ANN. § 20-208 (Michie 1997). 483. See TENN. CODE ANN. § 47-25-1104 (2000) (allowing ten year term and indefinite extension with continuous use). 484. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 769 (1992). death.485 Thus, the Indiana statute would provide post-mortem protection for celebrities domiciled in New York or Wisconsin at the time of death notwithstanding that neither of those states provide post-mortem protection. And, it would provide protection for 100 years after death against unlicensed exploitation in Indiana even if the domicile of the deceased provided for a lesser time.486 It would also protect against unlicensed exploitation of “distinctive appearance,” “gestures,” and “mannerisms,” even if they were not among the characteristics of persona protected in the domiciliary state. It is the advertising industry and its customers and those who manufacturer and/or market celebrity memorabilia who are the ones that are potentially burdened by the Indiana statute. A person seeking to exploit the deceased celebrity’s persona nationwide is faced with three choices: (1) pay those owning the Indiana rights in the deceased celebrity’s persona; (2) “blackout” Indiana; or (3) simply violate the Indiana statute. If the licensing fee is nominal, paying it may, as a business matter, be the appropriate decision. “Blacking out,” an ad, for example, while, perhaps, technically feasible, does not appear to be a commercially acceptable alternative. If the person elects not to choose either alternative (1) or (2), what are the ramifications of violating the Indiana statute? Consider the following hypothetical: The producer of an over-the- counter weight loss product decides to launch a national television campaign in 2004 using silent screen star “Fatty” Arbuckle as its “poster boy” and, further, decides not to obtain a license from Arbuckle’s successors in interest.487 Roscoe Conkling Arbuckle died in New York on June 29, 1933. The two jurisdictions that might arguably have been Arbuckle’s domicile at the date of his death would be New York (where he was residing, at least for the moment, when he died) or California, where he spent his professional career. As previously noted, New York does not provide post-mortem

485. NEV. REV. STAT. ANN. 597.790.1 (Michie 1999); IND. CODE ANN. § 32-13-1- 1(a) (West 2000). 486. E.g., CAL. CIV. CODE § 3344.1(g) (Deering Supp. 2001) (70 years); FLA. STAT. ANN. § 540.08(4) (West 1997 & Supp. 2001) (40 years); 765 ILL. COMP. STAT. ANN. 1075/30(b) (WEST 2000) (50 years). 487. There is, in fact, a chain of Arbuckle restaurants in England with Arbuckle’s pictures on the walls and Arbuckle T-shirts for sale. England does not provide post- mortem right of publicity protection. See Cairns v. Franklin Mint Co., 120 F. Supp. 2d 880 (C.D. Cal. 2000). See generally, STUART ODERMAN, ROSCOE “FATTY” ARBUCKLE: A BIOGRAPHY OF THE SILENT FILM COMEDIAN, 1887-1933 (1994); DAVID A. YALLOP, THE DAY THE LAUGHING STOPPED: THE TRUE STORY OF FATTY ARBUCKLE (1976).

right of publicity protection. California would provide protection for Ar- buckle assuming California law applied, but only until 2003, seventy years after his death.488 By contrast, if Indiana law applies, Arbuckle is protected against unauthorized exploitation in Indiana until 2033.489 Assuming that Arbuckle was survived by persons entitled to succeed to his right of publicity,490 the unauthorized exploitation of Arbuckle’s name,491 photograph492 or likeness493 for a commercial purpose494 would be actionable.495 Advertising is a use for a “commercial purpose.”496 Assume that the successors in interest to Arbuckle’s right of publicity bring an action for violation of the Indiana right of publicity in a federal district court in Indiana. The advertiser might challenge the constitutionality of the jurisdiction provisions of the Indiana statute and/or claim that the protection of a non-domiciliary deceased celebrity is a proscribed burden on interstate commerce. The federal district court in Indiana must first inquire whether there is jurisdiction as to a non-Indiana defendant. That involves a two-step process: (1) does the Indiana statute provide for jurisdiction over nonresidents; and (2) is the exercise of jurisdiction consistent with the due process requirements of the Fourteenth Amendment?497 The Indiana right of publicity statute provides that “[a] person who . . . knowingly causes advertising or promotional material created or used in violation of section 8 of this chapter498 to be published, distributed, exhib- ited, or disseminated within Indiana; submits to the jurisdiction of the Indiana courts.”499 Thus, the first prong of the two-part test is satisfied:

488. See CAL. CIV. CODE § 3344.1(g) (Deering Supp. 2001). 489. See IND. CODE ANN. § 32-13-1-8 (West 2000). Although Nevada also protects non-domiciliaries, it does so only for fifty years and Arbuckle would not be protected today in Nevada. NEV. REV. STAT. ANN. 597.790(1) (Michie 1999). 490. See IND. CODE ANN. § 32-13-1-16 (West 2000); cf. IND. CODE ANN. § 32-13-1- 19 (West 2001) (stating that if there is no such individual, the rights terminate). 491. IND. CODE ANN. § 32-13-1-1(3)(A) (West 2000). 492. IND. CODE ANN. § 32-13-1-1(3)(D) (West 2000). 493. IND. CODE ANN. § 32-13-1-1(3)(F) (West 2000). 494. IND. CODE ANN. § 32-13-1-2 (West 2000). 495. IND. CODE ANN. § 32-13-1-8(a) (West 2000). 496. IND. CODE ANN. § 32-13-1-2(2) (West 2000). 497. See Anderson v. Sportmart, Inc., 57 F. Supp. 2d 651 (N.D. Ind. 1999). 498. Section 8(a) of the Indiana Code states: “A person may not use an aspect of a personality’s right of publicity for a commercial purpose during the personality’s lifetime or for one hundred (100) years after the date of the personality’s death without having obtained previous written consent . . . .” IND. CODE ANN. § 32-13-1-8(a) (West 2000). 499. IND. CODE ANN. § 32-13-1-9 (West 2000). the statute specifically provides for jurisdiction. But does the application of the statute to an out-of-state defendant violate due process? Jurisdiction may either be “general jurisdiction”500 or “specific jurisdiction.”501 In as much as the offending TV advertising is itself the subject of the suit, “specific jurisdiction” seems applicable and is, arguably, consistent with the due process requirements.502 It should be noted that local and national TV and cable services, even if amenable to process, are not subject to injunctive relief503 even though the advertiser itself might be. Assuming that Indiana jurisdiction with respect to a national advertiser does not offend the due process provision, does the statute nonetheless run afoul of the Commerce Clause? In the recent case, Santa Fe National Tobacco Co. v Spitzer,504 the court stated:

The Commerce Clause is more than an affirmative grant of power to Congress. . . . [T]he Commerce Clause has a negative sweep as well. In what commentators have come to term its “negative” or “dormant” aspect, the Commerce Clause restricts the individual states’ interference with the flow of interstate commerce in two ways. It prohibits discrimination aimed directly at interstate commerce . . . and it bars state regulations that, although facially nondiscriminatory, unduly burden interstate commerce.505 Thus, the question becomes, does the Indiana right of publicity statute dis- criminate against interstate commerce, i.e., does it favor Indiana entities

500. “General jurisdiction” over a defendant exists if the defendant has continuous and systematic contacts with the forum, even though those contacts have no relation to the underlying controversy. See, e.g., Protective Ins. Co. v. Cody, 882 F. Supp. 782 (S.D. Ind. 1995). 501. “Specific jurisdiction” is present if the defendant has contacts from which the cause of action arises, and which constitutes at least the minimum level of contact with the forum that allows the exercise of jurisdiction to be reasonable. See, e.g., Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984); Gallent v. Courtaulds Packaging Co., 4 F. Supp. 2d 825 (S.D. Ind. 1998). 502. See Creech v. Roberts, 908 F.2d 75 (6th Cir. 1990); Creswell v. Walt Disney Prods., 677 F. Supp. 284 (M.D. Pa. 1987). But see Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984); Decker v. Circus Circus Hotel, 49 F. Supp. 2d 793 (D.N.J. 1999). 503. See IND. CODE ANN. § 32-13-1-13 (West 2000). 504. Nos. 00 Civ. 7274 (LAP), 00 Civ. 7750 (LAP), 2001 WL 636441 (S.D.N.Y. Jun. 8, 2001). 505. Id. at *10 (citation omitted).

and persons as against those not Indiana-based or, if not, does it unduly burden interstate commerce? First, it should be observed that the Indiana statute treats celebrities not domiciled in Indiana at the time of death identically to those who were. And, non-Indiana exploiters of deceased celebrity persona are not treated any differently than Indiana-based exploiters. Indianapolis-based Curtis Management Group (“CMG”) represents a number of deceased icons including Ingrid Bergman, Marilyn Monroe and James Dean.506 Obviously the 100 year term, the broad range of aspects of persona protected and the fact that the deceased celebrity’s last domicile is irrelevant is certainly a significant plus for CMG, but, the statute is not anti-competitive. Roger Richman Agency, Inc. and Global Icons LLC, both based in California, represent a variety of deceased celebrities.507 They and others in that business are as able as CMG to avail themselves of the Indiana right of publicity statute. Thus, there is no resident/nonresident based discrimination in the Indiana statute.508 But the statute might still be unconstitutional if it is a burden on interstate commerce. Pike v. Bruce Church, Inc.509 articulates the test as to whether a statute is a burden on interstate commerce:

Where the statue regulates even-handedly to effectuate a legitimate local public interest, and its effects on interstate commerce are only incidental, it will be upheld unless the burden imposed on such commerce is clearly excessive in relation to the putative local benefits. If a legitimate local purpose is found then the

506. James Dean was the subject of a docudrama, James Dean, that aired Sunday, Aug. 5, 2001, on the TNT cable channel. Whether CMG received any payments with respect to any aspect of the program or the Citadel Press book, James Dean: Behind the Scene, is not known by the author. 507. The Roger Richman Agency, Inc. represents, among others, John Wayne, Albert Einstein and Steve McQueen. Richman recently was victorious in Japan with respect to nullification of an unauthorized trademark, einstein. John A. Tessensohn & Shusaku Ya- mamoto, Names of Deceased, Famous are Protected in Japan, 15 WORLD INTELL. PROP. REP. No. 7, at 10 (2001). Global Icons includes Marlene Dietrich, Vincent Price, Bing Crosby and Clark Gable among its clients. 508. Indeed, the Supreme Court has upheld an Indiana statute that imposes additional expenses on takeover bidders (whether in-state or out-of-state) regardless of the fact that the burden falls most often upon out-of-state entities attempting hostile takeovers of Indi- ana corporations. CTS Corp. v. Dynamics Corp. of America, 481 U.S. 69 (1987) (“The fact that the burden of a state regulation falls on some interstate companies does not, by itself, establish a claim of discrimination against interstate commerce.”) (quoting Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 126 (1978)). 509. 397 U.S. 137 (1970). question becomes one of degree. And the extent of the burden that will be tolerated will of course depend on the nature of the local interest involved, and on whether it could be promoted as well with a lesser impact on interstate activities.510 The question is whether protecting non-domiciliary celebrities effectuates a legitimate local public interest. What is the “local benefit” which is to be balanced against the burden on commerce? Where a particular state’s statute of limitations is longer than that of any other jurisdiction, there is a legitimate local public interest and a local benefit: resident plaintiffs are given a longer time in which to bring a claim.511 But is there a legitimate Indiana public interest in extending its right of publicity to non-Indiana deceased celebrities? In analyzing the Indiana statute, it is worth noting that, in addition to section 32-13-1-1(a) providing that the chapter applies “regardless of a person’s domicile,” section 32-13-1-16(6) provides for descendability of the right by intestate succession according to the laws of the state adminis- tering the estate “regardless of whether the state recognizes the property rights set forth” in the Indiana statute. This clearly indicates Indiana’s recognition that it may be protecting a deceased celebrity even where the late celebrity’s domicile state chooses not to at all or chooses a term of protection less than 100 years. Certainly Indiana has a legitimate public interest in protecting the personality rights of residents of Indiana and to extend that protection to nonresidents as well, whether the right of personality is considered a personal right or a property right. And, as a number of other states have done, Indi- ana has a right to statutorily create a property right in the persona of deceased celebrities domiciled in Indiana at the date of death. But, in extending its right of publicity to deceased nonresidents, Indiana has in effect created a property right which may be at odds with the domicile state. This adds an additional complexity to an already jumbled array of statutory and common law post-mortem right of publicity provisions. There is an argument that Indiana does have a legitimate local public interest. Where post-mortem protection has been unavailable, unlicensed exploitation has led to any number of tasteless and, to say the least, disre-

510. Id. at 142 (citation omitted). 511. See Keeton v. Hustler Magazine, Inc., 465 U.S. 770 (1984). That nonresidents may also be able to avail themselves of the longer statute of limitations does not change the conclusion that the longer statute of limitations is not a burden on commerce.

spectful celebrity memorabilia.512 It was in part, a reaction to this type of memorabilia that led California to create a post-mortem right of publicity.513 Indiana could argue that not tolerating such exploitation— regardless of the deceased celebrity’s domicile—does serve a legitimate local public interest. Until such time as a court addresses the constitutionality of the Indi- ana—or the Nevada—statute with respect to the protection of deceased non-domiciliary celebrities, I leave the reader to his or her own conclusion. E. As The Crow Flies: A New Direction in Post-Mortem Film Completion When Brandon Lee was killed by an improperly loaded prop gun, he joined the melancholy list of actors who died before completing a film. In days gone by stand-ins and other stratagems were used to complete the film. In the 1930s, for example, Jean Harlow died suddenly of uremic poi- soning in the middle of filming Saratoga.514 MGM decided to finish the picture by having a prudently lit double interact with Clark Gable.515 In the 1940s, Robert Walker died of a heart attack in the midst of filming My Son John.516 In that instance, the studio was able to re-use footage from the deceased actor’s previous film, Alfred Hitchcock’s Strangers on a Train.517 Today, digital technology would permit even more sophisticated use of prior films to complete the post-mortem film.518 When Brandon Lee

512. See, e.g., Martin Luther King, Jr. Center for Social Change, Inc. v. Am. Heritage Prods., Inc., 296 S.E.2d 697 (Ga. 1982). Dr. King’s family has “a right to prevent the exploitation of his likeness in a manner they consider unflattering and unfitting.” Id. at 706. 513. Attorney Roger Richman, a pioneer in the post-mortem right of publicity, displayed to the California legislators an array of tasteless items of unauthorized celebrity memorabilia including a card with a vial of liquid with the legend “Let Elvis’ [sic] per- spiration be your inspiration” and a sex toy featuring the head of President Ronald Reagan at its tip. See Michael Neill & Johnny Dodd, On the Job: Buried Treasures, PEO- PLE, Nov. 17, 1997, at 202. 514. Stephen Schaefer, H’wood Tries to Ca$h In When Stars Die, BOSTON HERALD, Oct. 5, 1997, at 45. SARATOGA (Metro-Goldwyn-Mayer 1937). 515. Id. 516. Id. MY SON JOHN (Paramount Pictures 1952). 517. Id. STRANGERS ON A TRAIN (Warner Brothers 1951). 518. See IN THE LINE OF FIRE (Castle Rock Entertainment and Columbia Pictures Corp. 1993). Clint Eastwood is shown in Dallas with President Kennedy. An early clip was lifted from Dirty Harry (The Malpaso Co. and Warner Brothers 1971) complete with 1960s hairdo and coat lapels to digitally create his image. See id. died before filming of The Crow519 was complete, digital technology resurrected Lee to complete the film. One critical scene was constructed using digitally modified out-takes from an earlier scene. In the final scene, Lee’s head was digitally placed on the body of a double. More recently, the popular HBO program The Sopranos used similar technology to resurrect the late Nancy Marchand to play her character Livia Soprano “to speak her final corrosive words to her son, Tony” before she dies.520 In the future, it might be possible to use footage from earlier films, digitally alter them and complete the present film.521 It may also be possible to reconstruct a totally digital model by using earlier films and photogrammetry. Also, cast insurance companies may require stars to be scanned as a hedge against the star’s death at a point where reshooting the film with a new star would be more expensive than completing the film with the late star’s digital clone.522 Post-mortem use of an actor’s image ensures that the star’s last performance will make it to the screen. In such an instance, the post-mortem use of the deceased star’s digital image would implicate the applicable post-mortem right of publicity statute; the producer might be well advised to obtain an inter-vivos assignment of the post-mortem right of publicity for the sole purpose of completing the film. Such an agreement would not

519. (Crowvision, Edward R. Pressman Film Corp., Entertainment Media Investment Corp., and Jeff Most Productions 1994). 520. Andrew Geller, Hi-tech Livia Lives on in ‘Sopranos’ Debut, N.Y. POST, Feb. 25, 2001, at 5. 521. See supra note 518 and accompanying text. 522. When Tyrone Power died of a heart attack during the filming of Solomon and Sheba (Edward Small Productions and Theme Pictures 1959), it was necessary to reshoot the film. Yul Brynner replaced Power. Insurance companies play a significant role in the decision whether to complete a film despite the death of a star. When Natalie Wood drowned before the completion of Brainstorm (JF Productions and Metro-Goldwyn- Mayer 1983), MGM preferred to scrap the film and seek $11 million from Lloyd’s of London. The insurance company deemed it more prudent to pay $6 million to complete the film using rewrites and creative editing of existing film. In contrast, when River Phoenix died before completion of the film Dark Blood (1993) and a number of significant scenes featuring Phoenix remained to be shot, the insurance company agreed with the producer to scrap the film. Jeff Silverman, From the Grave the Show Still Goes On, N.Y. TIMES, May 1, 1994, at H17. It is interesting to note that Forrest Gump director, Robert Zemeckis, has been quoted as saying “I’ve taken to making digital scans of all of the actors in my movies.” He went on to say “I know some are worried about what uses will be made of it.” Rick Lyman, Movie Stars Fear Inroads by Upstart Digital Actors, N.Y. TIMES, July 8, 2001, at A1, A16.

violate the S.A.G. Agreement.523 Obviously, the star would want contractual safeguards against misuse of the digital image including any changes in the script that would adversely affect the reputation of the star.524 While the S.A.G. agreement may preclude an actor from agreeing in a present contract to re-use of his image from the present production in future productions,525 the agreement would not prevent the actor from agreeing in a present production to the re-use of his image from prior productions. Of course, permission of the owner of the copyright in the earlier films would be needed. The inter-vivos transfer should contain explicit provisions for the ownership of the digital model once the film is complete.

IV. TWILIGHT ZONE: THE IMAGINARY “If I am elected president, synthetic parts will go to synthetic actors”— so pledged Nestor Sexton in his bid to be president of S.A.G. No, not that S.A.G., but, rather the Synthetic Actors Guild.526 It seems Sexton is starting to make good on that pledge. Toy Story527 with its totally digital toys was a harbinger of a new type of actor—a digital one with its own personality, not merely the alter ego of some human being and not simply an animated cartoon. Not surpisingly, although the actors in Toy Story were toys, synthetic—or virtual, if you please—actors are not limited to play only things. Some synthetic actors will be aliens or some other nonhuman species, but many will be virtual humans: they will look like humans, walk and talk like humans, smile,

523. See Producers-Screen Actors Guild Agreement, supra note 103 and accompanying text. 524. For example, in Gladiator (DreamWorks SKG, Scott Free Productions., and Universal Pictures 2000), the script originally called for Oliver Reed’s character Proximo to survive; the script was rewritten to give the character a hero’s death (he finishes with the words “And I, after all, am just an entertainer.”). See Lou Lumenick, Dead Man Act- ing, N.Y. POST, Apr. 27, 2000, at 61. While Reed might not have disagreed with the rewritten script had he been alive, one could envision situations in which a post-mortem re- write might not have pleased a now-dead actor had he survived. 525. See Producers-Screen Actors Guild Agreement, supra note 103 and accompanying text. 526. Nestor Sexton for President was created in 1988 by Kleiser-Walczak Construc- tion Co. (which despite its building industry name is actually a special effects house). The company owns the federally registered trademark “Synthespian” for computer graphic design services featuring the physical representation of actors and actresses for use in films and videos. Credits include Judge Dredd (Cinergi and Hollywood Pictures 1995)) and Stargate (Columbia Pictures, Centropolis Film Productions, Journal Film, and Le Studio Canal+ 1994). 527. (Pixar Animation Studios and Walt Disney Pictures 1995). frown, cry, the full panoply of human emotion. Names like Kyoko Date, Ananova, Webbie Tookay and Aki Ross will become as well known as those of Cindy Crawford, Jane Pauley, and Kim Basinger. She is a Japanese pop star. Thousands adore her. Letters, flowers, the lot from stage door johnnies. She is an idol. “Her legs are impossibly long, her face utterly flawless, her movements precise and flowing.”528 Like other stars she has her own website. But, she is not like other stars: Kyoko Date is not flesh and blood; she is virtual, the creation of the Japanese firm, Horipro.529 And, in an “art imitates life … well, virtual life, anyway,” science fiction writer William Gibson, of “cyberspace” fame, has written a novel, Idoru,530 about a Japanese digital heroine, Rei Toei, who gains an actual consciousness. But, a virtual person with artificial consciousness, a self awareness, is not only the subject of science fiction, it is also a matter receiving serious attention from the computer technology community as well.531 Kyoke Date is not the only virtual woman inhabit- ing our world. John Casablancas, the founder of Elite Model Management, is now managing the career of Webbie Tookay, the cyber creation of Swedish animator Steven Stahlberg. She has posed in a Nokia phone ad and has been “signed” by Sony Music Latin America to join a Spice Girls- style virtual band.532 And Britain’s Press Association boasts a digital an-

528. Pat Kane, Half of Hollywood Has Fallen in Love with this Sweet Little Thing. The Other Half is Terrified of Her, THE GUARDIAN, Jan. 19, 1997, at T2. 529. Another Japanese virtual teenage idol, high school junior Shiori Fujisaki has been the subject of a copyright infringement and moral rights violation. Fujisaki is the principal character in a computer game, Tokimeki Memorial, where the players take the role of male high school students with the goal of getting a confession of love from Fuji- saki. The defendant produced a pornographic animated video featuring a female high school student who looked substantially similar to Fujisaki. The plaintiff was awarded damages of ¥275,000 for copyright infringement and ¥2 million for moral rights violation. An injunction was also granted. John A. Tessensohn, Mishima & the Virtual Sweet- heart-Moral Rights Protection in Japan, 11 ENT. L. REV. 109 (2000). For a detailed discussion of Shiori Fujisaki and the game, Tokimeki Mormorial, see Andrew Pollack, Ja- pan’s Newest Young Heartthrobs Are Sexy, Talented and Virtual, N.Y. TIMES, Nov. 25, 1996, at D5. 530. WILLIAM GIBSON, IDORU (1996). 531. Giorgio Buttazzo, Artificial Consciousness: Utopia or Real Possibility?, 34 COMPUTER No. 7, at 24 (2001). Buttazzo is a professor of computer engineering at the University of Pavia in Italy. See also RAY KURZWEIL, THE AGE OF SPIRITUAL MACHINES (1999). According to one computer scientist “human minds migrating into machine brains will result in a much wider range of human intelligence.” Bill Hibbard, Super- Intelligent Machines, 35 COMPUTER GRAPHICS & APPLICATIONS No.1, at 12 (2001). 532. Ruth La Ferla, Perfect Model: Gorgeous, No Complaints, Made of Pixels, N.Y. TIMES, May 6, 2001, Section 9, at 1.

chor, Ananova who reads news and weather in a “trans-Atlantic” accent on website www.ananova.com.533 Another virtual woman on the web is Vivian Livingston in Vivianlines.com.534 The silver screen is also beginning to feature virtual humans like Princess Fiona in Shrek535 and Aki Ross in Final Fantasy: The Spirits Within.536 “Science fiction becomes science fact” is a mantra that is repeatedly validated. In the 19th Century, Jules Verne’s submarine Nautilus was powered by an exotic energy source. In 1955, the U.S. Navy Submarine, Nautilus, reported “underway on nuclear power.” Verne’s novel From the Earth to the Moon became fact in 1969 when Neil Armstrong stepped onto the moon’s surface. In the Steven Spielberg film A.I. Artificial Intelli- gence,537 the central character, David, is a robotic human programmed to love his “adopted” family. David is played by the talented young actor Ha- ley Joel Osment. Nestor Sexton presumably would have preferred a synthetic actor to play the role of the synthetic boy, but, virtual actor technology cannot yet match a human actor’s nuanced performance. The fiction of the film A.I. will, however, ultimately become fact. If Sexton is somewhat frustrated by A.I., he would be pleased by Final Fantasy: The Spirit Within released shortly after A.I. Final Fantasy: The Spirits Within boasts an entire cast of virtual humans. The film, loosely based on the Final Fantasy video games, took four years to create.538 The film produced by Square Pictures is being distributed by Columbia. Hu- man actors provide the voices and motion capture provides the animation,

533. Id. at 8. 534. Id. 535. (DreamWorks Pictures and Pacific Data Images 2001). 536. (Chris Lee Productions and Square Co. Ltd. 2001). See generally STEPHEN L. KENT & TIM COX, THE MAKING OF FINAL FANTASY, THE SPIRITS WITHIN (2001). Hiro- nobu Sakaguchi, the director of Final Fantasy, has talked about casting Aki Ross “in a range of roles in new movies, as though she were just another Michelle Pfeiffer on Jenni- fer Lopez.” Michael A. Hiltzik & Alex Pham, Synthetic Actors Guild, available at http://www.latimes.com/cgi-bin/print.cgi (May 8, 2001) (on file with author). This echoes a comment made by George Lucas that “conceivably you can get to a point where you can create a character that anybody can use, and you can put him in any kind of environment.” Kevin Kelly & Paula Parisi, Beyond Star Wars—What’s Next for George Lucas, WIRED, Feb. 1997, at 160, 216. 537. (Amblin Entertainment, DreamWorks SKG, Stanley Kubrick Productions, and Warner Brothers 2001). 538. In contrast, another videogame-to-feature film starred human actress Angelina Jolie as the digital superheroine in Lara Croft: Tomb Raider (Core Design Ltd., Law- rence Gordon Productions, Mutual Film Co., Paramount Pictures. and Tele- München2001). but the physical features of the virtual actors are completely computer- generated. The virtual humans of this film are more than cartoon characters, they are a step in the evolution of virtual human technology: “From skin pores to eye moisture, the designers of the movie have worked to achieve a near-photographic level of detail.”539 Eventually, imaginary virtual humans will be indistinguishable from visual and audio representations of real humans. They will pass the “Tur- ing Test”540 as to their physical aspects. In fact, today we are even seeing the beginning of synthetic minds. Intelligent, software-based agents are acting as our representatives gathering and distributing information and making decisions.541 “Given the current pace of advances in artificial intelligence and neural computing . . . [m]any people now believe that artificial consciousness is possible and that, in the future, it will emerge in complex computing machines.”542 Thus, the day may come when the imaginary virtual human gets a brain. At the same time, we humans are becoming more machine-like with hearing aids, hip replacements and artificial hearts. We are becoming the bionic man or woman. The differences that distinguish the real from the virtual human will narrow. The Age of Spiritual Machines543 is one futurist’s blueprint to an age when “there is no longer any clear distinction between humans and computers.”544 As previously discussed we protect real humans and their digital clones against unauthorized exploitation through right of publicity, copyright and trademark law. The next section addresses the question of how to protect imaginary virtual humans against unauthorized exploitation.

539. Id. 540. The “Turing Test” was developed by computer science pioneer Alan Turing. The test uses two keyboards, one connected to a computer and the other in front of a human operator. Both are hidden from view. An examiner poses questions to be answered. If the examiner cannot distinguish between the computer response and the human operator response, the computer passes the “Turing Test.” See N. KATHERINE HALES, HOW WE BECAME POSTHUMAN (1999). 541. Simon Case et al. Enhancing E-Communities With Agent-Based Systems, 34 COMPUTER No. 7, at 64 (2001). 542. Giorgio Buttazzo, Artificial Consciousness: Utopia or Real Possibility, 34 COMPUTER No. 7, at 24 (2001). 543. RAY KURZWELL, THE AGE OF SPIRITUAL MACHINES (1999); see also N. KATHERINE HALES, HOW WE BECAME POSTHUMAN 3 (1999) (“The posthuman view con- figures human beings so that it can be seamlessly articulated with intelligent machines. In the posthuman, there are no essential differences or absolute demarcations between bodily existence and computer simulation.”). 544. KURZWELL, supra note 543, at X.

Should we protect imaginary virtual humans in exactly the same way we do real humans? A. It’s a Bird! . . . It’s a Plane . . . It’s . . . an IVH! In the 1960s British science fiction/horror film Island of Terror,545 actor Peter Cushing’s character must save visitors to the island from unnatu- ral life-forms. In the story, a laboratory experiment seeking a cure for can- cer goes tragically awry when carbon-based material transmogrifies into silicon-based material from which the life-forms evolved. Suddenly, Cush- ing was faced with the dilemma of dealing with living things that were not carbon-based. Old solutions would not work. New solutions were needed. Luckily for the surviving visitors, Cushing found a solution. Virtual humans are born in the silicon innards of the digital computer. Like the crea- tures in Island of Terror, the synthetic humans are silicon-based. We carbon-based humans who live in a carbon-based culture must, like Peter Cushing, decide how to deal with this new “life-form.” Do we treat a virtual human, who is not the digital clone of a living or deceased person, as a person or as some form of technologically sophisticated animated cartoon? And, to what extent does selecting one choice over the other lead to a different level of protection? Although it may seem to be an odd bit of terminology, I shall refer to a virtual human that is not a digital clone of a human, living or deceased, as an “Imaginary Vir- tual Human” (“IVH”)546 and a clone of a real person, living or dead, as a “Real Virtual Human” (“RVH”). At the outset of this section, I asked whether an IVH should be treated as a person or as a cartoon. Anticipating a further discussion, infra, with respect to copyright, I suggest that the scope of copyright protection will be identical whether one treats the IVH as a person or as an animated cartoon. I further suggest that trademark protection would be available on equal terms regardless of how the IVH is classified. The only question is should an IVH have a right of publicity like an RVH and if not, to what degree, if any, is the overall protection of an IVH less than that of an RVH? First, an RVH does not have a right of publicity; rather, it is the person whom the digital clone represents who has the right of publicity. The protection of the clone is determined by the extent to which, during his or her

545. (Planet Film Products and Protelco 1966). 546. At SIGGRAPH 2001, the annual international graphics conference held in Los Angeles, Aug. 12-17, 2001, one panel cleverly chose to call such digital humans VIP’s, Virtually Invented People. lifetime, the human counterpart is protected, and, after death, the extent to which, if any, there is post-mortem right of publicity protection. With some few possible exceptions,547 protection will terminate at some point, either at death—as is the case in New York548 and Wisconsin549—or at some finite time after death—such as seventy550 or 100 years.551 In contrast, an IVH could “live” indefinitely not unlike a corporation. The late professor Melville Nimmer once suggested that, “since animals, inanimate objects and business and other institutions all may be endowed with publicity values, the human owners of these nonhuman entities should have a right of publicity.”552 Professor Nimmer’s suggestion a half-century ago has not been met with great enthusiasm.553 But, if the law were to give an IVH a right of publicity, the question would need to be asked would the term of protection be for a finite or for an indefinite period? Given that right of publicity statutes for humans are for limited periods such as life—a finite life of publicity protection for an IVH would be consistent with the protection provided an RVH. Perhaps borrowing the terms extended to works-for- hire under copyright law would be appropriate—i.e., ninety-five years from publication or 120 years from creation whichever expired first.554 On the other hand, Lanham Act section 43(a) protection against likelihood of

547. See, e.g., NEB. REV. STAT. ANN. § 20-202 (Michie 1997) (the Nebraska statute is for an indefinite term). Also, courts have not set any term limitations when finding a common law post-mortem right of publicity. See, e.g., Estate of Presley v. Russen, 513 F. Supp. 1339 (D. N.J. 1981). 548. See Pirone v. MacMillan, Inc., 894 F.2d 579 (2d Cir. 1990). 549. See Hagen v. Dahmer, 38 U.S.P.Q.2d (BNA) 1146 (E.D. Wis. 1995). 550. E.g., CAL. CIV. CODE § 3344.1(g) (Deering Supp. 2001). 551. E.g., IND. CODE ANN. § 32-13-1-8 (West 2000). 552. Melville B. Nimmer, The Right of Publicity, 19 LAW & CONTEMP. PROBS. 203, 216 (1954). At a 1994 American Association of Law Schools Symposium on the licensing and merchandising of characters, one panelist, Peter Nolan from the Walt Disney Co., suggested that “the common law right of publicity might be extended to give publicity rights to fictional characters.” Jessica Litman, Mickey Mouse Emeritus: Character Pro- tection and the Public Domain, 11 U. MIAMI ENT. & SPORTS L. REV. 429, 430 n.7 (1994). 553. See generally MCCARTHY, supra note 121, at § 4.37. 554. See 17 U.S.C. § 302(c) (1994). For an analogous suggestion, see the dissent of Chief Justice Bird in Lugosi v. Universal Pictures, 603 P.2d 425, 446-47 (Cal. 1979) (“The Copyright Act of 1976 . . . provides that a copyright in new works shall be recognized during the authors life and for 50 years thereafter . . . That period represents a reasonable evaluation of the period necessary to effect the policies underlying the right of publicity. Therefore, I would hold that the right of publicity should be recognized during the subject’s life and for 50 years thereafter.”).

confusion with respect to celebrities is not subject to any prescribed term limitation;555 a fact which might support an argument for a right of publicity for an IVH that was indefinite as to duration. If the law established a right of publicity for an IVH, the same persona characteristics of humans that are protected by the typical right of publicity statutes such likeness, voice and name would be appropriate for the IVH. However, if a human provided the voice, as opposed to a syntheti- cally created voice,556 it would be the human’s voice, not the IVH’s that would be protected; though the related image would be protected by the IVH right of publicity. Presumably, the law would protect an IVH against advertising557 and trade purposes uses.558 However, if an IVH were subject to the same types of unlicensed performance exploitation that an RVH would be, the IVH might—as is explained infra—be better off being treated as an animated cartoon figure. Either the states or the federal government could fashion a right of publicity statute, perhaps along the lines discussed above, to protect the IVH against unauthorized exploitation. But is it likely that such a statute will become law?

555. See 15 U.S.C. § 1125(a) (1994). 556. See Pollack, supra note 140 and accompanying text. 557. Both humans and cartoon characters are protected against unauthorized advertising uses. See White v. Samsung Elecs. Am., Inc., 989 F.2d 1512, (9th Cir. 1993); Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988); DC Comics Inc. v. Crazy Eddie, Inc. 205 U.S.P.Q. (BNA) 1177 (S.D.N.Y. 1979) (“Look! . . . Up in the Sky! . . . It’s a bird! . . . It’s a plane! . . . It’s Crazy Eddie!”); Onassis v. Christian Dior-New York, Inc., 472 N.Y.S.2d 254 (Sup. Ct. 1984), aff’d., 488 N.Y.S.2d 943 (App. Div. 1985). 558. Both humans and cartoon characters are protected against unauthorized trade purpose uses. See Wendt v. Host Int’l. Inc., 125 F.3d 806 (9th Cir. 1997) (animatronic figures); Titan Sports, Inc. v. Comics World Corp., 870 F.2d 85 (2d Cir. 1989) (oversized photograph stapled inside magazine); King Features Syndicate v. Fleischer, 299 F. 533 (2d Cir. 1924) (toy horse, an exact replica of “Spark Plug” in book of cartoons picturing “Barney Google” and “Spark Plug”); United Feature Syndicate, Inc. v. Koons, 817 F. Supp. 370 (S.D.N.Y. 1993) (unauthorized sculpture of “Garfield” comic strip character “Odie”); DC Comics Inc. v. Unlimited Monkey Bus., Inc., 598 F. Supp. 110 (N.D. Ga. 1984) (use of “Superman” and “Wonder Woman” costumes and balloons to deliver singing telegrams); United Feature Syndicate, Inc. v. Sunrise Mold Co., 569 F. Supp. 1475 (S.D. Fla. 1983) (“Peanuts” characters plaster molds and figures); Universal City Studios, Inc. v. J.A.R. Sales, Inc., 216 U.S.P.Q. (BNA) 679 (C.D. Cal. 1982) (“E.T.” dolls); Mar- tin Luther King, Jr. Ctr. for Social Change, Inc. v. Am. Heritage Prods., Inc., 296 S.E.2d 697 (Ga. 1982) (busts of Dr. King); Brinkley v. Casablancas, 438 N.Y.S.2d 1004 (App. Div. 1981) (poster). A human being is not copyrightable, though images of the person are, be they photographs, drawing or sculptures.559 A human’s voice is not copyrightable but fixation of that voice in some medium is, provided only that some modicum of creativity is contained in the vocal effects so fixed.560 Thus, fixed representations of the person are copyrightable though the human, as such, is not. A cartoon character has no such inde- pendence—its “being” depends on its fixation in some medium, be it analog or be it digital. An IVH is like a traditional cartoon in that regard. Unlike a real human whose very existence does not depend on its replication in some medium, an IVH does not exist except as it is fixed in some medium. Assuming the necessary, constitutionally-required “originality,” an IVH is federally copyrighted at birth—i.e., at first fixation. So, it is unlikely that any state or the federal government would entertain a pro- posal to create a statutory right of publicity for an IVH, unless it was being done in connection with granting such a right to corporations or other nonhuman entities. And, even that last possibility is remote, given that almost fifty years have past since Professor Nimmer proposed such protection. If, as is likely to be the case, an IVH will not receive right of publicity protection but rather will be left with copyright and trademark protection only—as contrasted to an RVH that will enjoy right of publicity protection in addition to copyright and trademark protection—will the absence of right of publicity protection disadvantage the IVH vis-à-vis an RVH? The answer to that question depends on an analysis of: (1) the term of protection; (2) the aspects of persona protected; (3) the criteria for determining if a use of persona has taken place; and (4) the types of exploitation by third parties that would require permission as between a right of publicity on the one hand and copyright on the other. 1. The Term of Protection Treating an IVH as an animated cartoon figure would provide copyright protection for the IVH.561 The law would protect the image of the IVH to the same extent as it would a cartoon character’s. If the voice were synthetic then, unlike a real voice, it would, arguably, be protected by copyright. If a human voice-over were used in a work-for-hire situation,562

559. 17 U.S.C. § 102(a)(5) (1994) (discussing pictorial, graphic, and sculptural works). 560. 17 U.S.C. § 102(a)(7) (1994) (discussing sound recordings). 561. See, e.g., Walt Disney Prods. v. Air Pirates, 581 F.2d 751 (9th Cir. 1978). 562. 17 U.S.C. § 101 (1994) (discussing works made for hire).

the voice would be subject to the human voice-over actor’s right of publicity, presumably assigned to the owner of the rights in the IVH.563 In either case the actual words spoken would be copyrightable. The IVH’s term of protection would be, if not a work-for-hire, life of the author plus seventy years,564 or, if jointly authored, for the life of the last surviving author plus seventy years.565 If the IVH is a work-for-hire, the term of protection would be ninety-five years from publication or 120 years from creation, whichever expired first.566 And, while there might have been an issue as to whether a laser-scan-created clone of a person was copyrightable, that issue would not arise where the virtual human is created from “whole cloth.” The right of publicity of a human is available for life and, in some states, for post-mortem periods as well—even up to 100 years after death.567 As just mentioned, the term of protection for a cartoon is the life of the creator plus seventy years568or, if a work-for-hire, ninety-five years from publication (or in a long-postponed publication, 120 years from creation).569 With average longevity, some state post-mortem statutes will provide a longer period of protection for a person than a copyright would provide for a cartoon.570 In other states the reverse will be true.571 If Con- gress passes a federal right of publicity law, its provisions might be in a stand-alone statute or integrated into the Lanham Act—perhaps as part of section 43—or the Copyright Act—not unlike the provision against recording live performances.572 Wherever codified by Congress, the term of protection of such a right of publicity is very likely to be for the life of the person plus some fixed period after death, probably identical to that provided authors of copyrighted works. If this conjecture becomes fact, then whether one treats an IVH as a human or as a cartoon, the term of protec-

563. See, e.g., Rooney v. Columbia Pictures Indus., Inc., 538 F. Supp. 211 (S.D.N.Y. 1982). 564. 17 U.S.C. § 302(a) (1994). 565. 17 U.S.C. § 302(b) (1994). 566. 17 U.S.C. § 302(c) (1994). 567. E.g., Indiana, IND. CODE ANN. § 32-13-1-8 (West 2000); Oklahoma, OKLA. STAT. ANN. tit. 12, § 1448(G) (West 1993). 568. 17 U.S.C. § 302(a) (1994). 569. 17 U.S.C. § 302(c) (1994). 570. E.g., Indiana, IND. CODE ANN. § 32-13-1-8 (West 2000) (100 years); Oklahoma, OKLA. STAT. ANN. tit. 12, § 1448(G) (West 1993) (100 years). 571. E.g., Texas, TEX. PROP. CODE ANN. § 26.012(d) (Vernon 2000) (50 years); Vir- ginia, VA. CODE ANN. § 8.01-40(B) (Michie 2000) (20 years). 572. 17 U.S.C. § 1101 (1994). tion would be identical (or virtually so).573 So term of protection is not, in general, dispositive of the question. But, there is one situation in which treating the IVH as a cartoon rather than as a human may be to the advantage of the IVH. If a human actor were made up to appear as a character, such as Jack Nicholson’s portrayal of the “Joker” in Batman,574 any exploitation would implicate the actor’s right of publicity and the copyright in the character. In contrast, if an IVH were made up to appear differently from its “normal” image, that would possibly be considered a derivative work under copyright law.575 While this would have no effect on the term of copyright in a non-work-for-hire situation (inasmuch as original works and their de- rivatives are protected for the life of the author plus seventy years), if it were a work-for-hire scenario, there would be a term of protection for the derivative component measured, not from the creation/publication of the underlying IVH, but rather from the creation/publication of the derivative.576 Thus, depending on the longevity of the human counterpart of an RVH, a copyright-protected IVH might have a longer term of protection as to its derivative copyright than provided to a similarly used RVH relying on the right of publicity of its human counterpart. But, it should be noted that if the RVH is copyrightable,577 then, as a matter of copyright law, the term of protection for the derivative component would be identical for both the RVH and the IVH. 2. The Aspects of Persona Protected Right of publicity laws vary in the aspects of persona protected. States with only statutory protection are limited to the statutorily mandated list of personal attributes. New York, for example, protects only “name, portrait,

573. Presumably, though not necessarily, Congress would model the term of protection on that provided by copyright, life of the person and seventy years after death. If an IVH were treated as a cartoon, in a non-work-for-hire situation, its duration would be life of the author plus seventy years, whereas if treated as having a right of publicity, it might have the 95/120 year duration. Presumably Congress thought the 95/120 year duration was roughly equivalent to life plus seventy. 574. (Polygram Filmed Entertainment and Warner Brothers 1989). 575. See, e.g., Silverman v. CBS, 870 F.2d 40, 49-50 (2d Cir. 1988); see also Heijo E. Ruijenaans, The World of Fictional Characters: A Journey of Fantasy, 4 ENT. L. REV. 182 (1993). “If an author ‘adapts’ his comic character . . . [s]uch modifications of a character, if original, make it possible that the subsequent characters can be regarded as ‘derivative works’ with their own part of copyright.” Id. at 183. 576. 17 U.S.C. § 103(b) (1994). 577. See infra Part II.A and Part III.A.

picture or voice.”578 Indiana provides, as previously mentioned, the most generous “laundry list” of statutorily protected aspects of persona.579 States that rely on common law or, as in California, common law as a complement to statutory protection, have flexibility in the aspects of personality to be protected and the types of exploitation that will be considered an infringement.580 Federal copyright law is like the common law right of publicity in that it is not limited with respect to the aspects of persona that it protects. Its only requirements are that the work not be a copy of an existing work and that it have some modicum of creativity.581 Thus, copyright can protect an IVH’s physical characteristics—facial features in particular—and voice as well as gestures and mannerisms. The protection of copyright has also been extended to “traits, characteristics and qualities”582 and to “uncanny calm under pressure . . . a dry sense of humor and wit.”583 Depending on which state’s law was relevant, an IVH may well be better off relying on copyright rather than the right of publicity, but in no event will it be worse off.

578. N.Y. CIV. RIGHTS LAW §§ 50-51 (McKinney 1992 & Supp. 2001). Before the New York statute was amended in 1995 to include “voice” in section 51 (but curiously not in section 50), the court in Tin Pan Apple, Inc. v. Miller Brewing Co., 737 F. Supp. 826 (S.D.N.Y. 1990) held that “New York Civil Rights Law does not yet extend to sound-alikes.” Id. at 838. It is questionable, even now, whether New York law applies to sound-alikes since section 51 applies to “voice” and in Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988), the Ninth Circuit held “voice” meant actual voice and not sound-alike under the statute. Id. at 463; see also Lahr v. Adell Chem. Co., 300 F.2d 256 (1st Cir. 1962). 579. See supra note 169. 580. E.g., in Midler, 849 F.2d 460 (9th Cir. 1988), the plaintiff, while unable to prevail against the use of a sound-alike in a commercial under the California statute, which the court concluded limited the term “voice” to actual voice, was able to prevail under California common law. Id. at 463. 581. Feist Publ’ns v. Rural Tel. Serv. Co., 499 U.S. 340 (1991). 582. Walt Disney Prods. v. Air Pirates, 345 F. Supp. 108, 113 (N.D. Cal. 1972). In DC Comics Inc. v. Filmation Assocs., 486 F. Supp. 1273 (S.D.N.Y. 1980) the Lanham Act was held not to protect personality traits. Id. at 1277. But see Warner Bros., Inc. v. ABC, 523 F. Supp. 611 (S.D.N.Y.), aff’d., 654 F.2d 204 (2d Cir. 1981). “[U]nder a Lanham Act claim of character similarity, a disclaimer notice was required although the similarities were primarily as to physical abilities and personality traits.” 1 NIMMER, supra note 43, at § 2.12 n.25. 583. Metro-Goldwyn-Mayer, Inc. v. Am. Honda Motor Co., 900 F. Supp. 1287, 1297 (C.D. Cal. 1995). 3. Criteria for Determining if an Infringement has Taken Place Is there a difference between right of publicity protection, on the one hand, and copyright, on the other, as to the criteria for determining whether the defendant had actually used aspects of another’s persona? The issue may be illustrated by two hypotheticals: (1) a human is exploited by a cartoon replica;584 and (2) a human portrays a cartoon character.585 In both instances we have a human and a cartoon. The difference is the first scenario is governed by right of publicity law and the second by copyright law. When dealing with the right of publicity, the test of whether the persona of the individual has been taken is identifiability.586 With respect to copyright, the test is whether the purportedly infringing use is substantially similar to the original, with respect to copyrighted elements of the latter.587 There are some situations in which the identifiability requirement would be satisfied whereas substantial similarity would not be satisfied. In Motschenbacher v. R.J. Reynolds Tobacco Co.,588 the plaintiff was not identifiable as such, but because his racing car was, his right of publicity was properly invoked.589 Had the unauthorized image been of the Batmo- bile in the Batman cartoon, and had Batman himself not been visible in the drawing, there would have been no copyright infringement as to Batman himself, though perhaps infringement as to the Batmobile. Thus, in such a scenario, the law would protect an IVH against unauthorized exploitation if a right of publicity applied but not if copyright law applied. And, in Cohen v. Herbal Concepts, Inc.,590 the court held the nude rear and side of the two subjects to be identifiable as a matter of right of publicity law. The same aspect might not be sufficient, were copyright law applicable, to satisfy the substantial similarity test. And, in the case of Vanna White, a be- jeweled robot dressed in a blond wig and white gown was held to invoke

584. See Ali v. Playgirl, Inc., 447 F. Supp. 723 (S.D.N.Y. 1978). 585. See, e.g., DC Comics Inc. v. Unlimited Monkey Bus., Inc., 598 F. Supp. 110 (N.D. Ga. 1984) (“Superman” and “Wonder Woman”); Hill v. Whalen & Martell, Inc., 220 F. 359 (S.D.N.Y. 1914) (“Mutt and Jeff” v. “Nutt and Giff”). 586. Cohen v. Herbal Concepts, Inc., 473 N.Y.S.2d 426, 427 (App. Div. 1984). 587. Computer Assocs. Int’l, Inc. v. Altai, Inc., 126 F.3d 365 (2d Cir. 1997). 588. 498 F.2d 821 (9th Cir. 1974). 589. “Having viewed a film of the commercial, we agree with the district court that the ‘likeness’ of plaintiff is itself unrecognizable; however the court’s further conclusion of law to the effect that the driver is not identifiable as plaintiff is erroneous in that it wholly fails to attribute proper significance to the distinctive decorations appearing on the car.” Id. at 827. 590. 473 N.Y.S.2d 426 (App. Div. 1984).

her image as a matter of right of publicity law; but, as a matter of copyright law, it is highly unlikely a court would find substantial similarity between a photograph of Vanna White, and a robot, despite the blond wig, white dress and jewelry.591 However, while there are demonstrable differences between the results under the two tests, I suggest that the typical IVH exploitation would lead to identical results whether a court applied the identifiability test or substantial similarity test. I reach that conclusion based on what is the likely use of an IVH. If an unauthorized user exploits the IVH in a film, it is likely to be seen from various aspects and, so, not only readily identifiable but also substantially similar to the legitimate IVH. Consider facial characteristics. Generally, people have two eyes, two ears, one nose and one mouth. But, it is the particular shape, color and spatial relationship of those attributes and shape of head that let us distinguish, i.e., identify, one human from another592 and that allows us to say that one person is a look- alike, an image, of another,593 or that a drawing is the image of the person portrayed.594 Those same individualized characteristics that create identifiability with a respect to a flesh-and-blood human can elevate a human cartoon character from the generic level of idea to copyrightable expres-

591. White v. Samsung Elecs. Am., Inc., 989 F.2d 1512, 1514 (9th Cir. 1993). 592. At the 35th Superbowl in Tampa, Florida, police used FaceIt, a computer software program by Visionics Corp., to electronically scan every face in the crowd and then match those faces against a database of known criminals. The Pentagon is spending $50 million in a project called “Human ID at a Distance” which includes face recognition. The Digital Eye Is on You, L.A. TIMES, Aug. 13, 2001, at B10. Another company involved in face matching, Visage, digitizes a face and reduces the data to a string of 128 numbers which are used to find a match. Rob Turner, Faceprinting, N.Y. TIMES MAGA- ZINE, Aug. 12, 2001, at 18. For a prescient 1994 article on face recognition, see Matt Crenson, Distinctly Different on the Face of It, SEATTLE TIMES, Mar. 15, 1994, at E1. (“Computers programmed to recognize faces will catch criminals in the not-too-distant future.”); see also Alex (Sandy) Pentland & Tanzeem Choudhury, Face Recognition for Smart Environments, 33 COMPUTER No. 2 (2000), at 51-52. For an interesting experiment in the computer manipulation of images to transform facial characteristics along dimensions such as age, gender, race or health, see Bernard Tiddeman, Michael Burt and David Perrett, Prototyping and Transforming Facial Textures for Perception Research, in 21 IEEE COMPUTER GRAPHICS & APPLICATIONS No. 5, at 42 (2001). 593. Allen v. Nat’l Video, Inc., 610 F. Supp. 612 (S.D.N.Y. 1985); Onassis v. Chris- tian Dior-New York, Inc., 472 N.Y.S.2d 254 (Sup. Ct. 1984), aff’d, 488 N.Y.S.2d 943 (App. Div. 1985). 594. Ali v. Playgirl, Inc., 447 F. Supp. 723 (S.D.N.Y. 1978). sion595 and it is the taking of those characteristics that creates substantial similarity. If the unauthorized exploiter makes changes to the IVH, it is likely that when the so-called derivative is not substantially similar596 to the original it also will not be identifiable as the IVH. Thus, the tests of identifiability on the one hand and substantial similarity on the other are indistinguishable from one another in most instances of IVH exploitation. 4. The Types of Exploitation Requiring Permission As previously mentioned, both the right of publicity and copyright protect against unauthorized exploitation for advertising597 and trade pur- poses598 subject only to First Amendment considerations.599 So, it would not appear that an IVH is disadvantaged in having to rely on copyright law rather than right of publicity law with respect to those types of exploitation. Unauthorized performance exploitation is the third area that is possibly subject to right of publicity and copyright law. Part II.B discussed the use of a person’s image—whether actual image, look-alike, or, in the future, an RVH. The conclusions to draw from that discussion are: (1) that if the person was being portrayed in a biographical work, docudrama or to add an air of verisimilitude, to a “period” piece, then such exploitation, even if unauthorized by the person portrayed,

595. E.g., Dick Tracy, Brenda Starr, and Superman. See Country Kids ‘N City Slicks, Inc. v. Sheen, 77 F.3d 1280 (10th Cir. 1996), and cited cases, for an excellent analysis of protectable versus not protectable elements of a copyrighted work. 596. Warner Bros., Inc. v. Am. Broad. Cos.’ Inc., 720 F.2d 231, 241 (2d Cir. 1983) (quoting 3 NIMMER ON COPYRIGHT §13.03[B] at 13-38: “a defendant may legitimately avoid infringement by intentionally making sufficient changes in a work which would otherwise be regarded as substantially similar to that of plaintiff’s”). The court further noted: [u]ltimately, care must be taken to draw the elusive distinction between a substantially similar character . . . and a somewhat similar though noninfringing character whose appearance, behavior, or traits, and especially their combination, significantly differ from those of the copyrighted character, even thought the second character is reminiscent of the first one. Id. at 242. To stir one’s memory “is insufficient to make out a claim of copyright infringement.” Am. Greetings Corp. v. Easter Unlimited, Inc., 579 F. Supp. 607, 615 (S.D.N.Y. 1983); see also Harvey Cartoons v. Columbia Pictures Indus., Inc., 645 F. Supp. 1564 (S.D.N.Y. 1986). 597. See supra note 557. 598. See supra note 558. 599. Cardtoons, L.C. v. Major League Baseball Players Ass’n, 95 F.3d 959 (10th Cir. 1996); Lighthawk, The Envtl. Air Force v. Robertson, 812 F. Supp. 1095 (W.D. Wash. 1993).

would be subject to the First Amendment, notwithstanding right of publicity claims; but (2) if the image was used to play a fictional role, such exploitation would be subject to the right of publicity. With respect to cartoons, Walt Disney Productions v. Air Pirates600 provides an example of a cartoon character playing a “fictional” role. In Air Pirates, Mickey Mouse and his companions were portrayed, not as in plaintiff’s works as “an image of innocent delightfulness,” but, rather, in a manner that “could not fairly be called innocent.”601 A First Amendment defense failed.602 In United Feature Syndicate, Inc. v. Koons,603 the defendant argued that as a result of the commercial success of the Garfield cartoon characters and their pervasive presence in society, the characters had become public figures.604 The defendant further argued that these characters had “a factual existence as such” which entitled them to less protection under the copyright laws.605 In response, the court stated “[t]he popularity and commercial success of the Garfield characters cannot transform them into the ‘factual’ realm any more than Mickey Mouse, Snoopy, Superman or Bart Simpson could be said to have acquired a ‘factual existence’ which results in a loss of their copyright protection.”606 The court noted, however, that “such characters like other types of copyrighted works, can be the subject of parody which is protected by the fair use doctrine.”607 With respect to the parody comment, one could conclude that if Superman can be legitimately parodied by Ralph Hinkley608 there is no reason to believe that an IVH could not also be parodied. That leaves the question of whether one could tell the life story of a famous IVH using the voice and image of the IVH to tell that story. With respect to humans, such telling of a life story would be protected by the First Amendment.609 But the First Amendment generally protects stories about persons who are, or at least were, in the

600. 345 F. Supp. 108 (N.D. Cal. 1972). 601. Id. at 110 (Defendant depicted Disney characters engaged in drug use and sexual activity). 602. Id. at 116. 603. 817 F. Supp. 370 (S.D.N.Y. 1993). 604. Id. at 380. 605. Id. 606. Id. 607. Id. at 380 n.5. 608. Warner Bros., Inc. v. ABC, 720 F.2d 231 (2d Cir. 1983). 609. Joplin Enters. v. Allen, 795 F. Supp. 349 (W.D. Wash. 1992); Ann-Margret v. High Society Magazine, Inc., 498 F. Supp. 401 (S.D.N.Y. 1980); Taylor v. NBC, 1994 WL 762226 (Cal. Sup. 1994). public eye, even if only for “15 minutes.” Since an IVH has no more a factual existence than a cartoon character, Koons may suggest that one could not use the image of an IVH without permission to tell the story of that IVH. The above analysis suggests that, for the most part, denying an IVH a right of publicity will not particularly disadvantage an IVH as opposed to a flesh-and-blood person. True, in certain states, the term of protection may be longer for a human than an IVH, but in certain jurisdictions the reverse will be true. With respect to the aspects of persona protected, copyright provides a flexibility not available under a statutory right of publicity and is on a par with common law right of publicity. It is true that identifiability may be a less demanding criteria than substantial similarity; but, as discussed above, for most unauthorized appropriations of an IVH there would be no practical distinction between identifiability and substantial similarity. Finally, with respect to unauthorized exploitation, an IVH is on a par with a real human as far as advertising and trade purpose are concerned and may be somewhat better off with respect to performance exploitation. Therefore, denying a right of publicity to an IVH does not appear to be particularly prejudicial to the ownership interests in the IVH. We now turn to the issue of maximizing the protectability of those ownership interests in the IVH. B. Mr. Potato Head Goes Digital: Maximizing IVH Identifiability. Imaginary Virtual Humans will find themselves employed in a variety of settings: actors in film, characters in video games, instructors in educa- tional and training endeavors and personal representatives on the Internet. The works in which the IVH appears will be protected by copyright and possibly trademark law. But those who create an IVH will want to protect their investment in the IVH itself. An IVH is a combination of the computer program that animates it and its audiovisual “exterior.” To the extent of its original expression, the computer software will be protected by copyright. But, the strongest protection will be with respect to the IVH’s “exterior” much as a human’s right of publicity is not based on its brain, heart, lungs, digestive or circulatory system, but rather on how that human looks and sounds and the other attributes that help us distinguish one human from another. If, as previously discussed, one analogizes a virtual human to an animated cartoon character, then copyright protection and, possibly, trademark protection are the appropriate legal vehicles for guard- ing them. The degree of protection the law will give a virtual human can be directly influenced by the physical appearance, voice, and idiosyncra-

sies with which the virtual human is endowed. Mr. Potato Head610 is a popular children’s game in which various eyes, noses, mouths, etc. can be put on Mr. Potato Head. In a more sophisticated way, a virtual human creator can begin with a generic human, male or female, and, like a Mr. Potato Head artist, select from a palette of noses, lips, weight and height and produce a particularly singular virtual human. Decisions dealing with the protection of flesh and blood humans by right of publicity, copyright, and the Lanham Act are instructive. Face and voice are the two main characteristics by which we identify one another, but they are not the only characteristics. In deciding whether a representation is, or suggests, a particular person, courts have looked to a variety of characteristics, typically in various combinations. 1. Facial Characteristics “We had faces then” is not only a memorable quote from the film Sun- set Boulevard,611 but also underscores the significance of the face in establishing identity.612 Courts have considered as significant facial features such as Muhammad Ali’s “cheekbones, broad nose and wideset brown eyes,” and his “distinctive smile”613 and Woody Allen’s “high fore- head.”614 Hairstyle has also been a significant factor in a number of cases. Charlie Chaplin’s mustache,615 the “close cropped black hair” of Muham- mad Ali,616 Woody Allen’s “tousled hair” giving the impression of an “en- dearing schlemiel,”617 the distinctive Beatles’ “mid-1960’s” haircuts,618

610. Mr. Potato Head was created in 1952 by Hasbro, Inc. He had a supporting role in Toy Story (Pixar Animation Studios and Walt Disney Pictures 1995). 611. (Paramount Pictures 1950). 612. See, e.g., Prudhomme v. Procter & Gamble Co., 800 F. Supp. 390, 393 (E.D. La. 1992); Allen v. Nat’l Video, Inc., 610 F. Supp. 612 (S.D.N.Y. 1985); Ali v. Playgirl, 447 F. Supp. 723 (S.D.N.Y. 1978); Simeonov v. Tiegs, 602 N.Y.S.2d 1014 (Civ. Ct. 1993); ; Onassis v. Christian Dior-New York, Inc., 472 N.Y.S 2d 254, 261 (Sup. Ct. 1984), aff’d, 488 N.Y.S.2d 943 (App. Div. 1985); Young v. Greneker Studios, Inc., 26 N.Y.S.2d 357 (Sup. Ct. 1941). 613. Ali, 447 F. Supp. at 726. 614. Allen, 610 F. Supp. at 617. 615. Chaplin v. Amador, 269 P. 544, 546 (Cal. Ct. App. 1928). 616. Ali, 447 F. Supp. at 726. 617. Allen, 610 F. Supp. at 617; see also Allen v. Men’s World Outlet, Inc., 679 F. Supp. 360, 362 (S.D.N.Y. 1988) (noting Woody Allen’s “schlemiel persona”). 618. Apple Corps. v. Button Master, Inc., No. Civ. A 96-5470, 1998 WL 126935, at *12 (E.D. Pa. Mar. 19, 1998); Apple Corps. v. A.D.P.R., Inc., 843 F. Supp. 342, 348 (M.D. Tenn. 1993). the hair “style” of Elvis Presley,619 the distinctive “coiffure” of Jackie Kennedy Onassis,620 the “dark hair and full dark beard” of the chef Prud- homme,621 and Vanna White’s “blond hair”622 have all been considered protectable elements of a persona in right of publicity cases. Even Woody Allen’s “heavy black glasses,”623 and a rap group’s “square studded eye- glasses”624 have been considered part of a protectable persona. The court for the Southern District even considered Woody Allen’s “quizzical and somewhat smug” expression as significant.625 2. Voice A celebrity’s voice has also received protection under trademark and right of publicity law. A distinctive voice is more readily protected than a more pedestrian one. But a voice may be distinctive without being a caricature. For example, using “Liverpool accents” and performing “only songs which the Beatles recorded or performed” have been held to be aspects of persona.626 Similarly, Elvis’ “singing voice,”627 Bette Midler’s “distinctive voice,”628 and Tom Waits’ “raspy, gravelly singing voice”629

619. Estate of Presley v. Russen, 513 F. Supp. 1339, 1348 (D. N.J. 1981). 620. Onassis v. Christian Dior-New York, Inc., 472 N.Y.S 2d 254, 257 (Sup. Ct. 1984), aff’d, 488 N.Y.S.2d 943 (App. Div. 1985). 621. Prudhomme v. Proctor & Gamble Co., 800 F. Supp. 390, 394 (E.D. La. 1992). 622. White v. Samsung Elecs. Am., Inc., 971 F.2d 1395, 1399 (9th Cir. 1992). In White, hair, jewelry and gown viewed separately would not have been sufficient to justify a finding that the robot violated Vanna White’s right of publicity and that, in fact, it was the Wheel of Fortune game board that was most identified with her. See also Cohen v. Herbal Concepts, Inc., 472 N.E.2d 307, 309 (N.Y. 1984) (noting that the plaintiffs’ hair was a factor to consider in deciding whether the unauthorized picture could be recognized as the plaintiffs). 623. Allen v. Nat’l Video, Inc., 610 F. Supp. 612, 617 (S.D.N.Y. 1985). 624. Tin Pan Apple, Inc. v. Miller Brewing Co., 737 F. Supp. 826, 833 (S.D.N.Y. 1990). 625. Allen, 610 F. Supp. at 617. 626. Apple Corps. v. A.D.P.R., Inc., 843 F. Supp. 342, 345 (M.D. Tenn. 1993). 627. Estate of Presley v. Russen, 513 F. Supp. 1339, 1348 (D. N.J. 1981). 628. Midler v. Ford Motor Co., 849 F.2d 460, 463 (9th Cir. 1988). But see Booth v. Colgate-Palmolive Co., 362 F. Supp. 343, 346 (S.D.N.Y. 1973) (holding that states are preempted by federal intellectual property laws from protecting “performers from imitators” under state competition laws). But see Waits v. Frito-Lay, Inc., 978 F.2d 1093, 1099 (9th Cir. 1992) (holding that Supreme Court precedent suggested that the singer’s state law claim for misappropriation was not preempted by federal law). See generally Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 165 (1989) (discussing the interplay of federal intellectual property laws and state laws “for the promotion of intellectual creation”). 629. Waits, 978 F.2d at 1097.

were all found to be protectable. Even a famous comic’s “style of vocal comic delivery” has been held to be considered worthy of protection.630 However, the finding of liability regarding a celebrity’s voice centers around its distinctiveness, and courts have held that where a voice is not “uniquely personal,” relief will not be granted.631 3. Other Physical Characteristics Courts have also consistently held that physical characteristics as a whole may be protected: Woody Allen’s characteristic “physical features,”632 and the “recognizable personae of overweight, young singers” of a rap group633 have been considered as protectable elements of a person’s image. Pose has been seen as a protectable element: Woody Allen “leaning on his hand” with “an elbow on the counter,”634 Muhammad Ali’s “seated on a stool” in a boxing ring “with both hands taped and out- stretched resting on the ropes on either sides,”635 and the “distinctive poses, and body movements made famous by Presley.”636 Courts have even seen a celebrity’s build as important. Chef Paul Prudhomme’s “portly build”637 and the “overweight” bodies of three

630. Lahr v. Adell Chem. Co., 300 F.2d 256, 257 (1st Cir. 1962) (interpreting New York and Massachusetts law in reversing the trial court’s dismissal of the action and stating that the plaintiff’s allegations of unfair competition deserved the “crucible” of trial). But see Tin Pan Apple, Inc., v. Miller Brewing Co., 737 F. Supp. 826, 838 (S.D.N.Y. 1990) (holding that the New York Civil Rights Laws sections 50-51 “does not yet extend to sound-alikes”). 631. Sinatra v. Goodyear Tire & Rubber Co., 435 F.2d 711, 716 (9th Cir. 1970) (stating that “[o]ne wonders whether her voice, and theatrical style, would have been identifiable if another song had been presented, and not ‘her song’”). With respect to a right of publicity as to a “signature” song, see Oliveira v. Frito-Lay, Inc., 251 F.2d 56, 61 (2d Cir. 2001). (Astrud Gilberto, “The Girl from Ipanema.” The real girl from Ipanema who was the inspiration for the song itself is currently embroiled in a dispute in Brazil. Heloísa Pinheiro, better known as Helô has been sued by the heirs of the two men who wrote the song demanding that she change the name of The Girl from Ipanema boutique and to remove photographs from the store picturing her with the composer Antônio Carlos Jo- bim and Vinicius de Moraes. Larry Rohter, Still Tall and Tan, a Muse Fights for a Title, N.Y. TIMES, Aug. 11, 2001, at A1). 632. Allen v. Nat’l Video, Inc., 610 F. Supp. 612, 617-18 (S.D.N.Y. 1985). 633. Tin Pan Apple, Inc. v. Miller Brewing Co., 737 F. Supp. 826, 833 (S.D.N.Y. 1990). 634. Allen, 610 F. Supp. at 617, 628. 635. Ali v. Playgirl, 447 F. Supp. 723, 726 (S.D.N.Y. 1978). 636. Estate of Presley v. Russen, 513 F. Supp. 1339, 1364-65 (D. N.J. 1981). 637. Prudhomme v. Procter & Gamble Co., 800 F. Supp. 390, 393-95 (E.D. La. 1992). young rappers638 have been included in the comparison for a finding of liability. Courts have also given weight to mannerisms. Chaplin’s “mannerisms facial expression and movements of his body,”639 the “musical performance” style of the Beatles,640 the “distinctive and original combination of pitch, inflection, accent and comic sounds” of a famous comic,641 the “lovable but mischievous urchin” image of Spanky McFarland’s character in “The Little Rascals,”642 the distinctive singing style known as “rapping,” described “to be spoken or semi-sung rhyming verse recited over a powerful rhythm track created by drums and drum sounds,”643 and Elvis’ “hips and leg gyrations”644 have all been considered as aspects of persona. 4. Ancillary Identifiers While physical characteristics are usually the focal point of a celebrity’s image, courts have held other traits to be part of an individual’s persona. Courts have considered ancillary identifiers such as clothing design, setting, props, and jewelry in deciding whether an alleged infringer was impermissibly copying a celebrity’s persona. Clothing has often entered into a court’s calculus. Chaplin’s “decrepit derby, ill-fitting vest, tight fitting coat, and trousers and shoes much to large for him,”645 the “blue bolero blouse, white vest decorated with three blue five-pointed stars on each side of the front of the vest and white fringe at the bottom of the vest, tight white shorts with a belt decorated with blue stars, and white boots” of a Dallas Cowboys cheerleader,646 the “white cap and bandana” of Chef Paul Prudhomme,647 the “T-shirts, striped sneakers, satin baseball jackets” of a rap group,648 the “jumpsuit”

638. Tin Pan Apple, 737 F. Supp. at 833. 639. Chaplin v. Amador, 93 Cal. App. 358, 362 (Cal. Ct. App. 1928). 640. Apple Corps. v. A.D.P.R., Inc., 843 F. Supp. 342, 345 (M.D. Tenn. 1993). 641. Lahr v. Adell Chem. Co., 300 F.2d 256, 257 (1st Cir. 1962). 642. McFarland v. Miller, 14 F.3d 912, 914 (3rd Cir. 1994); see also McFarland v. E & K, Corp., 18 U.S.P.Q.2d (BNA) 1246 (D. Minn. 1991) (granting the plaintiff a right of publicity claim against the unauthorized use of the name and likeness of “Spanky McFarland” by a Minnesota bar). 643. Tin Pan Apple, 737 F. Supp. at 827. 644. Estate of Presley v. Russen, 513 F. Supp. 1339, 1345 (D. N.J. 1981). 645. Chaplin v. Amador, 93 Cal. App. 358, 360 (Cal. Ct. App. 1928). 646. Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd., 467 F. Supp. 366, 369 (S.D.N.Y. 1979). 647. Prudhomme v. Procter & Gamble Co., 800 F. Supp. 390, 394 (E.D. La. 1992). 648. Tin Pan Apple, 737 F. Supp. at 833.

of the king of rock and roll,649 or the plush “gown” of Vanna White have been significant factors in court decisions.650 Even jewelry has played a part, for example, the “large, gold, name pendants” worn around the necks of a rap group were considered an element by the Southern District of New York.651 Another important element used in finding an infringing use of celebrity’s persona has been to examine the setting in which a character is portrayed. Courts have considered the fact that Muhammad Ali’s was “in the corner of a boxing ring,”652 the presence of a racing car in the midst of “several racing cars on a racetrack,”653 a look-alike of a “famous restau- ranteur” in a restaurant,654 the placement of characters reminiscent of the Cheers’ characters, Norm and Cliff “in bars.”655 Courts have considered props as indicative of a famous personality, Chaplin’s “flexible cane, swung, and bent,”656 “videotape cassettes of An- nie Hall and Bananas” on a counter next to a Woody Allen look-alike,657 Muhammad Ali sitting “on a stool,”658 a group using the same musical “equipment” as the Beatles as well as having “placed The Beatles logo on the group’s bass drum;”659 using the “distinctive narrow white pinstripe” against “solid red” car, adorned with a number set in a white “oval medal- lion” of a famous car driver;660 the “hand[ing] out to the audience [of] scarves as did Presley” and the opening of shows with the same “theme from the movie ‘2001—A Space Odyssey’ which Elvis Presley also used;”661 and displaying a “game board instantly recognizable as the

649. Estate of Presley v. Russen, 513 F. Supp. 1339, 1345 (D. N.J. 1981). 650. White v. Samsung Elecs. Am., Inc., 971 F.2d 1395, 1396 (9th Cir. 1992). 651. Tin Pan Apple, 737 F. Supp. at 833; see also Estate of Presley, 513 F. Supp. at 1348 (noting the infringer’s use of “the same style and design of . . . jewelry as did Presley”); White, 971 F.2d at 1405 (noting that the defendant had selected the same style of jewelry as plaintiff was known to wear on her popular show). 652. Ali v. Playgirl, 447 F. Supp. 723, 726 (S.D.N.Y. 1978). 653. Motschenbacher v. R.J. Reynolds Tobacco Co., 498 F.2d 821, 822 (9th Cir. 1974). 654. Prudhomme v. Procter & Gamble Co., 800 F. Supp. 390, 394 (E.D. La. 1992). 655. Wendt v. Host Int’l, Inc., 50 F.3d 19 (9th Cir. 1995) unpublished disposition available at 1995 WL 115571. 656. Chaplin v. Amador, 93 Cal. App. 358, 360 (Cal. Ct. App. 1928). 657. Allen v. Nat’l Video, Inc., 610 F. Supp. 612, 617 (S.D.N.Y. 1985). 658. Ali v. Playgirl, 447 F. Supp. 723, 726 (S.D.N.Y. 1978). 659. Apple Corps. v. A.D.P.R., Inc., 843 F. Supp. 342, 345 (M.D. Tenn. 1993). 660. Motschenbacher v. R.J. Reynolds Tobacco Co., 498 F.2d 821, 822 (9th Cir. 1974). 661. Estate of Presley v. Russen, 513 F. Supp. 1339, 1349 (D. N.J. 1981). Wheel of Fortune game show set.”662As the decisions discussed above demonstrate, a wide variety of factors from face to clothing and surround- ings help to establish persona as well as to identify copycats. The lessons to be learned from these decisions should aid those who create IVHs to maximize the protection of their virtual humans. Using distinctive facial characteristics, voice, dress, and accessories will maximize a creator’s chance of receiving protection under copyright and trademark law. However, eccentricities of physiognomy, voice or mannerisms may not be the best solution for an all-purpose synthetic actor. There are, and were, actors who essentially play the same character even if the character’s stories, and sometimes name, change: Laurel and Hardy, Abbot and Costello, Groucho Marx, Jean Claude Van Damme, Chuck Norris. On the other hand, there are actors who range, or did, across a wide variety of roles: Spencer Tracy, Paul Muni, Katherine Hepburn, Helen Hayes, An- thony Hopkins, Robert Duvall, Sally Field, Glenn Close, to name a few. An all purpose synthetic actor should not have such unusual features or built-in mannerisms that would detract from playing a variety of roles and yet should be sufficiently distinctive that their persona is easy to recall— and to protect. Where the virtual actor is committed to the same role, regardless of his character’s name or plot, such as a dispenser of slapstick or action adventure hero, the creator of the actor can be more adventurous in assigning characteristics and idiosyncrasies to the IVH.

V. CONCLUSION Virtual human technology has been with us for over a quarter of a century now. Virtual humans entertain us on film, television, and in video games. They educate us and help us better design the things we use. They are playing a critical role in the field of medicine including diagnostic routines and treatment, particularly surgery. Virtual humans are beginning to represent us on the globe-girdling Internet, answering questions, and, most significantly, making decisions. In the future, they will take on more and more tasks, saving us time, making us more efficient, and keeping us safe. With time, they will look and sound more and more like us. Eventually, virtual humans will pass the “Turing Test,”663 being indistinguishable from us carbon-based humans. How effectively we protect these virtual humans, whether replicas of actual humans or totally imaginary, has been the subject of this article, drawing on and applying the existing right of

662. White v. Samsung Elecs. Am., Inc., 971 F.2d 1395, 1405 (9th Cir. 1992). 663. See supra note 540.

publicity, copyright and trademark laws. If existing laws are an imperfect fit, then the laws must be changed to accommodate the era of the virtual human. And, while this article limited its scope to the protection of the virtual human against unauthorized reproduction and exploitation, there are many other issues that will ultimately need to be addressed. For example, who will be liable if a virtual human libels a real human or vice- versa? Who will be responsible for criminal acts, such as larceny by trick, committed by a virtual human? What will be the result if a virtual human exceeds the authority given him in contract negotiations? I leave these and other questions for another day. But eventually these issues, like the intellectual property and personality issues addressed in this article, will themselves have to be addressed. Finally, if the predictions of futurists like Ray Kurzwell and Katherine Hales come true,664 perhaps the time will come when a virtual human will write a law review article about us. Who knows?

664. See supra note 543.

LINK LAW REVISITED: INTERNET LINKING LAW AT FIVE YEARS By Mark Sableman†

ABSTRACT Internet links may create legal liability. Despite the Internet’s initial “free linking” ethos, links can be unlawful when they are designed to confuse viewers, to evade court orders or clear statutory prohibition, or to promote illegal conduct by others. But most linking is lawful, even where the linked site claims the right to authorize and control links. Linking law, which began with the Shetland Times headline-linking case in Scotland in late 1996, now includes several United States precedents as well as a developing worldwide body of opinions on various subjects. As new linking claims are asserted, and as new linking techniques are created, courts are being challenged to carefully analyze the practical, technological and business circumstances surrounding the claims, and to fashion sound legal principles. This Article comprehensively reviews linking claims and potential claims, including cases of direct linking, deep linking, metatags, keyword purchases, inlining, framing, and derivative liability. It analyzes the legal theories asserted, suggests defenses and strategies for combating linking claims, and concludes with recommendations for link-law policies.

TABLE OF CONTENTS I. INTRODUCTION...... 2 A. Berners-Lee and the Ethos of Free Linking...... 3 B. Hyperlinks and Other Practical Internet Links ...... 4 II. LAWS THAT MAY AFFECT LINKING USAGE ...... 7 A. Trademark Infringement...... 7 B. Trademark Dilution ...... 9 C. Passing Off ...... 10 D. False Advertising...... 10 E. Copyright Infringement ...... 11 F. Database Protection ...... 12 G. Misappropriation ...... 12 III. LINKING CLAIMS, REAL AND POTENTIAL ...... 13

© 2001 Mark Sableman. † Partner, Thompson Coburn LLP, St. Louis, Missouri. A. Copyright Infringement Through Direct Linking—From Shetland Times Headlines to Ditto.com Thumbnails...... 13 B. Deep Linking...... 20 C. Inlining and Framing—Combined Content Claims from Dilbert to Total News ...... 26 D. Metatags—The Deceptive or Descriptive Use of Indexing Keywords ...... 30 E. Keyword-Based Customized Advertising ...... 38 F. Tarnishment and Disparagement Claims...... 43 G. Possible Negligence Claims ...... 46 H. Derivative Liability Based on Links (Direct and Indirect) to Prohibited or Illegal Content...... 46 IV. DEFENSES AND DEFENSIVE STRATEGIES FOR HYPERLINK CLAIMS ...... 58 A. Standard Defenses to Claims...... 58 B. Right to Link Defense ...... 60 C. Normal Competitive Conduct...... 62 D. Disclaimers, Linking Restrictions, and Other One-Party Actions...... 63 E. Permission Agreements ...... 65 V. PRINCIPLES FOR LINK LAW DISPUTES...... 67 VI. CONCLUSION ...... 74

I. INTRODUCTION Can Internet links ever be unlawful? After five years of cases worldwide, an answer has emerged: yes, in some relatively rare situations, one web publisher’s attempt to link to other Internet sites or content may create liability. Despite the “free linking” ethos of the founders and first users of the World Wide Web, links can be unlawful, usually when they are designed to confuse viewers, to evade court orders or clear statutory prohibition, or to promote illegal conduct by others. Most customary linking to content willingly placed on the Internet, however, is fair and lawful, even in those increasingly familiar situations where the linked site claims the right to authorize and control links. Linking law, which began with the Shetland Times headline-linking case in Scotland in late 1996,1 now includes a fair number of United States precedents and a developing worldwide “grab-bag” of opinions on subjects such as metatags, deceptive links, and the thorny issue of linking to illegal content. Still, the law is hardly settled. Indeed, the now-established principle that some links can be unlawful, together with emerging new legal doctrines that affect the copying of digital content (such as database protection and anti-circumvention laws), are likely to encourage parties

1. Shetland Times Ltd. v. Wills, 1997 S.L.T. 669 (Sess. Cas. 1996). who feel aggrieved by links to assert claims. The continuing innovative efforts of software writers, web designers, and Internet businesses are bound to create new techniques of linking, which, like past situations, will demand careful analysis and wise application of old legal principles. This Article discusses the current state of linking law, five years after Shetland Times. It draws from and expands upon the discussion and analysis in Link Law: The Emerging Law of Internet Hyperlinks, published in 1999.2 It also attempts to explain linking technologies and place linking disputes in their proper technological, factual, and legal context. A. Berners-Lee and the Ethos of Free Linking Tim Berners-Lee, the software expert who unwrapped the promise of the Internet by developing the World Wide Web, has long understood and argued that easy, intuitive, and free linking lies at the heart of the Inter- net.3 Berners-Lee “invented” the World Wide Web at CERN (the Euro- pean Particle Physics Laboratory) in 1990.4 In developing the Web and its hypertext markup language (“HTML”) backbone, Berners-Lee sought to facilitate making connections between computers and to make these connections within a computer network as intuitive as the connections within our own brain.5 Specifically, he sought to create “an intuitive interface” that would permit “the computers, networks, operating systems and com- mands . . . to become invisible” so that users could communicate and access information directly.6 Universal free linking of information was essential to Berners-Lee’s original dream:

The Web was designed to be a universal space of information, so when you make a bookmark or a hypertext link, you

2. Mark Sableman, Link Law: The Emerging Law of Internet Hyperlinks, 4 COMM. L. & POL. 557 (1999). 3. Tim Berners-Lee, Realizing the Full Potential of the Web, at www.w3.org/1998/02/Potential.html (Dec. 3, 1997). 4. Steve Lohr, His Goal: Keeping the Web Worldwide, N.Y. TIMES, Dec. 18, 1995, at D2. Berners-Lee came up with the standards for addressing, linking language, and transferring the multi-media documents on the Web: URLs (universal resource loca- tors), HTML (hypertext mark-up language), and HTTP (hypertext transfer protocol). Id. 5. TIM BERNERS-LEE, WEAVING THE WEB: THE ORIGINAL DESIGN AND ULTIMATE DESTINY OF THE WORLD WIDE WEB BY ITS INVENTOR 3 (1999). Berners-Lee traces his interest back to a conversation with his father, a mathematician, when his father sought ways “to make a computer intuitive, able to complete connections as the brain did.” Id. 6. Berners-Lee, supra note 3. should be able to make that link to absolutely any piece of information that can be accessed using networks. The universality is essential to the Web: it loses its power if there are certain types of things to which you can’t link. There are a lot of sides to that universality. You should be able to make links to a hastily jotted crazy idea and to link to a beautifully produced work of art. You should be able to link to a very personal page and to something available to the whole planet.7 Now director of the World Wide Web Consortium, Berners-Lee argues for the freedom of a web publisher “to . . . link to absolutely any piece of information that can be accessed using networks” as a natural-law proposition of the computer age.8 Aside from experts such as Berners-Lee, many nontechnical web users also perceive hyperlinking as essential to the operation of the web, or, at least, as a mechanism so basic and essential that its use could not possibly be unlawful. Additionally, most Internet users see links as desirable on all sides and are puzzled by any legal scheme that would penalize or restrict use of such mutually beneficial indexes, roadmaps, and accolades. A terse posting on an Internet newsgroup asserts: “To ask permission to link to a page borders on the inane. Next, we will have the position that you cannot recommend a book in the local library without the author’s permission.”9 Undoubtedly, most linkers and linkees perceive established links as beneficial to them, for reasons of commerce, prestige, and ease of Internet navigation.10 B. Hyperlinks and Other Practical Internet Links Hypertext links are the signature characteristic of the World Wide Web.11 The ability to jump from one page to another through hypertext

7. Id. 8. Id. 9. Posting of Owen Cook, at http://dgl.com/msg1/messages/7.html (posted Sept. 14, 1997). 10. Eric Hellman, Link Openly: Linking Dos and Donts, at http://www.openly.com/- link.openly/etiquette.html (last visited Nov. 25, 2001) (“In many cases, it is a good thing, even a valuable thing, to be the target of a hyperlink. Links are generally beneficial to both linker and linkee.”). 11. In the words of the World Wide Web Consortium, “the link has been one of the primary forces driving the success of the Web.” World Wide Web Consortium, HTML 4.01 Specification: W3C Recommendation 24 December 1999, Links 12.1 at http://www.w3.org/TR/REC-html40/struct/links.html. links makes the web exciting and attractive to viewers. Both creation and use of hyperlinks are relatively simple tasks, which can be accomplished unilaterally by the author or reader of a webpage:

[A]dding a web link on a home page is relatively simple and requires only knowing the address of the linked page. The WWW technology . . . does not require coordination from both ends of a link to establish one . . . . [T]he simplest link acts merely as an automated directory—when the hypertext link is clicked with the mouse, the connection to the page with the link is dropped and the user’s computer then connects with the linked site, without further connection with the original page. . . . The simplicity of making web links and the lack of any centralized control are largely to credit for the enormous (and somewhat anarchic) growth of the Web.12 At least three kinds of technical links—or, more exactly, references— are made possible by the web’s current lingua franca, HTML,13 used on the Internet.14 The simple hyperlinks that almost all web viewers regularly use are Hypertext REFerence (“HREF”) links. These convenient links permit a viewer to jump from one webpage to another; clicking on the link instructs the viewer’s web browser software to go to the linked location, which is often another website and which is specified in the markup written in the HTML language.15 Framing also creates links or associations between webpages; it is a method, which web browsers introduced to

12. Subcomm. on Interactive Servs. of the Comm. on the Law of Commerce in Cy- berspace, Web-Linking Agreements: Contracting Strategies and Model Provisions, 1997 A.B.A. SEC. BUS. L., 1-2. 13. “HTML is the lingua franca for publishing hypertext on the World Wide Web. It is a nonproprietary format based upon SGML, and can be created and processed by a wide range of tools, from simple plain text editors—you type it in from scratch—to sophisticated WYSIWYG authoring tools. HTML uses tags such as

and

to structure text into headings, paragraphs, lists, hypertext links etc.” World Wide Web Consortium, HyperText Markup Language Home Page, at http://www.w3.org/MarkUp/ (last visited Nov. 25, 2001). 14. HTML permits other kinds of linking as well. Indeed, some of these links even use the HTML tag “,” such as the link “” which is used to make a document display according to presentational suggestions written into a stylesheet on another web page. Although HREF links, framing and inlining have made appearances so far in reported or publicized linking cases, the less common links have not yet made their legal debut. 15. The linked location could also be another part of the website itself—for example, a link from a home page, an index or table of contents to another page on the website, or even another part of a document that begins on the page that contains the link. Internet users in 1996, of arranging and viewing webpages. Framing allows the operator of a website to divide a browser window into multiple, independently scrollable frames with different layouts, and to place separate documents, from different Internet sources, into each window.16 Inlined images linking (sometimes called IMG (“ImaGe”) links) enables graphics to be visible on screen as part of a web document’s main body (i.e., not in a separate frame) even though they originate outside the document’s HTML code—that is, somewhere else on the website publisher’s server, or even at a different website.17 Because of the digital—hence easily analyzed and classified—nature of the Internet and the need for indices and search engines, some HTML and Internet techniques may be viewed as de facto linking tools. The use of metatags to index webpages, for example, is a kind of linking technology, and metatag disputes have emerged as a fruitful source of linking law. A metatag is essentially invisible computer code, which search engine software can read and understand as text. If an infringer’s website contains the phrase “Star Wars” in its metatag, for example, its site may rank high in response to a search seeking Star Wars-related sites. Use of a keyword or phrase in metatags will give a site a big boost from search engines that give extra weight to words that are listed in metatags. Both “keyword” and “descriptive” metatags are commonly used by website authors. Metatags are both invisible and effective. Thus, a website author may place one or more keywords in metatags, drawing significant traffic

16. The World Wide Web Consortium describes the intended purpose of framing as follows: HTML frames allow authors to present documents in multiple views, which may be independent windows or subwindows. Multiple views offer designers a way to keep certain information visible, while other views are scrolled or replaced. For example, within the same window, one frame might display a static banner, a second a navigation menu, and a third the main document that can be scrolled through or replaced by navigating in the second frame. World Wide Web Consortium, HTML 4.01 Specification: W3C Recommendation 24 December 1999, Frames 16.1, at http://www.w3.org/TR/html401; see also Brian D. Wassom, Copyright Implications of ‘Unconventional Linking’ on the World Wide Web: Framing, Deep Linking and Inlining, 49 CASE W. RES. L. REV. 181, 191 (1998) (explaining how framing works). 17. See Richard Raysman & Peter Brown, Dangerous Liaisons: The Legal Risks of Linking Web Sites, N.Y.L.J., Apr. 8, 1997, at Computer Law 3; Wassom, supra note 16, at 193. to his site without altering the physical appearance of the site or bringing attention to the metatags. Other keyword technologies work similarly to metatags. For example, search engines sell advertisements and featured placements based upon search words used by their users. If a user uses a search engine to search for a particular product, the search engine operator may place on its search results screen a banner advertisement for a seller of that product, or may list that seller’s webpage in a featured position. As with metatags, where the keywords lure a search engine into making a link to the metatagged site, search engine keyword sales essentially beckon a searcher to the advertiser’s site. In both cases, moreover, the linking is usually invisible to the user.

II. LAWS THAT MAY AFFECT LINKING USAGE It is no surprise that the absolute “free linking” ethos of Berners-Lee and other Internet pioneers has not been adopted by the law. The real business world operates differently than the world of academics, technology enthusiasts, and information-loving individuals. Businesses care about what information is shared, with whom, and in what context—especially when the communications involved interfere with their sales or marketing. They also care about how they are portrayed in relationship to others, especially competitors. Hence, in the context of business and advertising, Internet links may raise issues of, among other things, unfair competition, trademark or copyright infringement, tarnishment, and misappropriation. The laws of unfair competition and intellectual property provide the backdrop for most hyperlink disputes. In particular, the law of unfair competition―an umbrella term that embraces trademark infringement and dilution, passing off, and false or deceptive advertising―provides the legal context for many linking disputes. Several other legal areas―copyright, data protection, and misappropriation―have figured in several important Internet linking disputes. This section briefly describes the basic principles of the legal fields on which most unauthorized linking claims are based. A. Trademark Infringement A trademark or service mark is any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods or services and distinguish them from those manufactured or sold by others.18 Trademarks indicate origin—that is, they distinguish one party’s products (or services in the case of service marks) from those of competitors.19 Trademarks and service marks may also serve to guarantee the quality of the goods or services bearing the mark, and through advertising, they may help to create and maintain a demand for the product or service.20 Trademark infringement occurs when one party uses a mark that is so similar to that of another that consumers are likely to be confused.21 Like- lihood of confusion depends on many factors, including: (1) the strength of the owner’s mark; (2) the similarity between the owner’s mark and the alleged infringer’s mark; (3) the degree to which the products compete with each other; (4) the alleged infringer’s intent to “pass off” its goods as those of the trademark owner; (5) incidents of actual confusion; and (6) the type of product, its cost, and conditions of purchase.22 Strong trademarks are entitled to more protection than are weak ones.23 Reverse trademark confusion may occur when a trademark infringer so saturates the market with promotion of his mark that consumers come to believe that the infringer, rather that the plaintiff, is the source of the trademarked product.24 Not all use of another’s trademarks constitutes infringement. Words that are trademarks may also be used in their normal descriptive sense.25 In many cases, trademarks may describe a person, a place, or an attribute

18. 15 U.S.C. § 1127 (Supp. V 1999). 19. New Kids on the Block v. New Am. Pub., Inc., 971 F.2d 302, 305 (9th Cir. 1992) (stating that “[t]hroughout the development of trademark law, the purpose of trademarks remained constant and limited: Identification of the manufacturer or sponsor of a good or the provider of a service”). 20. See Berner Int’l Corp. v. Mars Sales Co., 987 F.2d 975 (3d Cir. 1992). 21. 15 U.S.C. § 1114 (Supp. V 1999). 22. Co-Rect Prods., Inc. v. Marvy! Adver. Photography, Inc., 780 F.2d 1324, 1330 (8th Cir. 1985); see also Squirtco v. Seven-Up Co., 628 F.2d 1086, 1091 (8th Cir. 1980) (holding that an alleged mark had not acquired secondary meaning due to insufficient time in the marketplace and insufficient evidence establishing the effectiveness of the company’s advertising linking the mark to the mark’s source in consumers’ minds); C. Blore & D. Richman, Inc. v. 20/20 Adver., 674 F. Supp. 671, 681 (D. Minn. 1987) (quoting Co-Rect Prods., 780 F.2d at 1330). 23. See McDonald’s Corp. v. Druck & Gerner, 814 F. Supp. 1127, 1134 (E.D.N.Y. 1993). 24. See Murray v. Cable Nat’l Broad. Co., 86 F.3d 858 (9th Cir. 1996). 25. RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 28 cmt. a (1995) (“Reason- able use of a descriptive term by another solely to describe the nature or characteristics of its own goods or services will not subject the user to liability for infringement.”). of a product. For example, one may say, “Let’s take a vacation to Disney World,” or, “I have the data in Excel,” without violating the trademark rights of Walt Disney or Microsoft. Thus, trademark law recognizes a “nominative use” defense when the mark is used only “to describe the goods or services of [a] party, or their geographic origin.”26 B. Trademark Dilution Even when a trademark is not infringed—that is, when there is no likelihood of confusion—one who uses a similar mark may dilute the distinctive quality of that trademark. Dilution may occur by blurring (weakening) the trademark association or by tarnishing the trademark by giving it a bad association along with its original trademark association.27 Confusion and dilution involve different states of mind. Confused consumers think there is a connection with the trademark owner. In the case of dilution, although members of the public make a mental connection between the marks, they are not actually confused. They still associate the trademark with its owner, but that association is weaker than before (in the case of blurring) or a negative connotation is added to the mark (in the case of tarnishment).28 The laws of about twenty-five states prohibit trademark dilution,29 and federal law prohibits dilution of “famous” marks.30 Businesses often assert dilution in Internet cases to stop the use of their trademarks by other parties who are not their direct competitors.31

26. 15 U.S.C. § 1115(b)(4) (Supp. V 1999). 27. Deere & Co. v. MTD Prods., Inc., 41 F.3d 39, 42 (2d Cir. 1994) (“Traditionally, this Court has defined dilution . . . ‘as either the blurring of a mark’s product identification or the tarnishment of the affirmative associations a mark has come to convey.’” (quoting Mead Data Cent., Inc. v. Toyota Motor Sales, U.S.A., Inc., 875 F.2d 1026, 1031 (2d Cir. 1989))). 28. See generally RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 25 (1995). 29. E.g., CAL. BUS. & PROF. CODE § 14330 (Deering Supp. 2001); FLA. STAT. ANN. § 495.151 (West Supp. 2000); 765 ILL. COMP. STAT. 1036/65 (West 2001); MO. REV. STAT. § 417.061(1) (Vernon 2001); N.Y. GEN. BUS. LAW § 368-d (McKinney 1996); 54 PA. CONS. STAT. ANN. § 1124 (Purdon Supp. 2001); TEX. BUS. & COM. CODE ANN. § 16.29 (Vernon Supp. 2001). 30. 15 U.S.C. § 1125(c) (Supp. V 1999). 31. In passing the Anti-Cybersquatting Consumer Protection Act, Congress noted that trademark dilution was frequently asserted in domain name cases. S. REP. NO. 106- 140, at 7 (1999); see Virtual Works, Inc. v. Volkswagen of Am., Inc., 238 F.3d 264 (4th Cir. 2001). C. Passing Off “Passing off” or “palming off” refers to deceptive marketing in which one party attempts to “pass off” its goods or services as those of another.32 Passing off is illegal under the Lanham Act’s prohibition against a false description or false designation of origin, since it encompasses selling one’s goods under the name of a competitor.33 It also reaches merchandising practices that are “‘economically equivalent’ to palming off.”34 D. False Advertising Section 43(a) of the Lanham Act contains a broad prohibition against the making of false statements in connection with commercial advertising or marketing and has been characterized as creating a federal law of “false advertising,” “deceptive marketing,” or “unfair competition.”35 Whatever its name, the sweep of the claim created by this section is wide: it covers any “false or misleading description of fact” made in commercial advertising or marketing activities, that relate to one’s own, or a competitor’s, goods, services, or commercial activities.36 A violator may be liable in a damages action for the harmed party’s lost profits, the violator’s own profits due to its misconduct, and, in exceptional cases, for treble damages and an award of attorney’s fees.37

32. See RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 4 (1995). 33. 15 U.S.C. § 1125(a)(1) (1994). See Roho, Inc. v. Marquis, 902 F.2d 356, 359 (5th Cir. 1990); Lamothe v. Atl. Recording Corp., 847 F.2d 1403, 1406 (9th Cir. 1988). 34. Smith v. Montoro, 648 F.2d 602, 605 (9th Cir. 1981). The court stated: [A] section 43(a) claim may be based on economic practices or conduct “economically equivalent” to palming off. Such practices would include “reverse passing off,” which occurs when a person removes or obliterates the original trademark, without authorization, before resell- ing goods produced by someone else. Reverse passing off is accomplished “expressly” when the wrongdoer removes the name or trademark on another party’s product and sells that product under a name chosen by the wrongdoer. “Implied” reverse passing off occurs when the wrongdoer simply removes or otherwise obliterates the name of the manufacturer or source and sells the product in an unbranded state. Id. (citations omitted). 35. 15 U.S.C. § 1125(a) (Supp. V 1999); see also S. REP. NO. 100-515, at 40 (1988), reprinted in U.S.C.C.A.N. 5577, 5603 (stating that § 43(a) “has been widely interpreted as creating, in essence, a federal law of unfair competition”); RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 2 (1995). 36. 15 U.S.C. § 1125(a)(1) (1994). 37. 15 U.S.C. § 1117(a) (Supp. V 1999). E. Copyright Infringement Under United States copyright law, copyright protection attaches to every creative work as soon as the work is created and “fixed in any tangible medium of expression.”38 Copyright infringement occurs when someone with access to a copyrighted work creates a substantially similar work, and uses it in a way that violates one or more of the copyright owner’s five exclusive rights39—the rights of reproduction, distribution, adaptation, performance, and public display.40 In addition to the person who directly infringes someone’s copyright, others who assist in the infringement may face derivative liability, under two theories. First, one who induces, causes, or materially assists in the infringement may be guilty of contributory infringement.41 Courts generally require that the plaintiff prove that the contributory infringer knew or had reason to know of the direct infringer’s infringement and materially contributed to it.42 Additionally, the doctrine of vicarious liability, derived from the doctrine of respondeat superior, may create liability when one has the right and the ability to supervise the infringing activity and derives financial interest from those activities.43 Not all copying or imitating of a copyrighted work constitutes infringement. Some creative expression (such as book titles and short advertising slogans) may be too short or lacking in originality to qualify for copyright protection.44 Some copying may be permissible as personal use

38. 17 U.S.C.§ 102 (1994). Copyrightable works are broadly construed to include not only books, paintings and sculptures, but also movies, plays, musical compositions, recordings, photographs, computer software code, architectural designs, and even routine business writings. See Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53, 58 (1884) (defining “author” broadly as “he to whom anything owes its orign [sic],” and holding that the originator of a photograph may claim copyright in photographic work); Bleistein v. Donaldson Lithographing Co., 188 U.S. 239 (1903) (holding that circus posters are entitled to copyright protection). 39. 17 U.S.C. § 501 (Supp. V 1999); see also Nichols v. Universal Pictures Co., 45 F.2d 119 (2d Cir. 1930) (stating test for infringement). 40. 17 U.S.C. § 106 (Supp. V 1999). 41. The doctrine of contributory copyright infringement originated with Justice Oliver Wendell Holmes’ decision in Kalem Co. v. Harper Bros., 222 U.S. 55 (1911). 42. Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971). 43. Id.; see Polygram Int’l Publ’g, Inc. v. Nevada/TIG, Inc., 855 F. Supp. 1314, 1325-26 (D. Mass. 1994). 44. 17 U.S.C. § 102(b) (1994). or fair use, or for “transformative” uses such as parody and commentary.45 Finally, copyright protection has a limited term, and works for which the copyright term has expired, or which never had copyright protection, are in the public domain and are free for anyone to reproduce or imitate.46 F. Database Protection United States copyright law does not protect database collections, as the U.S. Supreme Court held in 1991 in Feist Publications, Inc. v. Rural Telephone Service Co.47 The European Union and other nations, however, do protect databases, and Congress has been considering database protection for several years.48 Although several database protection bills have been introduced in Congress, they have not passed because of the differing interests of database owners—such as legal publishers and telephone companies—and database users—such as financial and media analysts and Internet services.49 The increased importance and value of electronic databases and the increased clout of the database industry may put pressure on Congress to enact database protection. In addition, the European Union’s 1996 database directive50 contains a reciprocity clause, which means that database producers in the United States will not get protection under the EU database law unless Congress enacts protection similar to the EU directive.51 G. Misappropriation Although it is little used and narrowly confined, a common law tort theory of information misappropriation exists in United States law. This cause of action essentially prohibits the unauthorized interference by one

45. See infra text accompanying notes 298-300. 46. See 17 U.S.C. §§ 302-304 (Supp. V 1999) (limiting term of copyright); 17 U.S.C. § 105 (1994) (stating that federal government works are never subject to copyright). 47. 499 U.S. 340 (1991). 48. See Amy Sullivan, When the Creative is the Enemy of the True: Database Pro- tection in the U.S. and Abroad, 29 AIPLA Q.J. 317, 356-68 (2001) (describing U.S. legislative attempts at database legislation since 1996). 49. E.g., The Collections of Information Antipiracy Act, H.R. 354, 106th Congress § 2 (1999); The Consumer and Investor Access to Information Act of 1999, H.R. 1858, 106th Congress §§ 101-108 (1999). 50. Council Directive 96/9/EC of 11 March 1996 on the Legal Protection of Data- bases, 1996 O.J. (L 77) 20, available at http://europa.eu.int/eur-lex/en/lif/dat/- 1996/en_396L0009.html. 51. Id. art. 11(3), at 27. party with another party’s valuable and time-sensitive information.52 In a landmark press association case, International News Service v. Associated Press,53 the Court recognized the theory and held actionable one news service’s attempt to pirate the “hot news” content of a rival news service.54 The theory is narrow, and not nearly as pliable as some information owners would like,55 but a recent decision makes clear that it is still viable in limited situations.56

III. LINKING CLAIMS, REAL AND POTENTIAL In the few years since Tim Berners-Lee invented the World Wide Web, hyperlinks and other references have proliferated on the global network. Only a few of the millions upon millions of Internet links have led to litigation. Some pathbreaking cases have identified how links can raise linking claims, which courts seriously consider and sometimes uphold. This section discusses reported linking cases, other linking claims that we may expect to see, and emerging trends in link law analysis and policies. A. Copyright Infringement Through Direct Linking—From Shetland Times Headlines to Ditto.com Thumbnails Link law began with a hyperlinked headline on an electronic newspaper in the Shetland Islands of Scotland.57 The ensuing copyright lawsuit between rival newspapers brought little enlightenment to the concept of links as copyright infringement. A few years later, a parallel lawsuit in

52. See, e.g., NBA v. Motorola, Inc., 105 F.3d 841 (2d Cir. 1997). According to this decision, misappropriation claims require the following elements: (1) the plaintiff gener- ates or collects information at some cost or expense; (2) the value of the information is highly time-sensitive; (3) the defendant uses the information in a way that constitutes free-riding on plaintiff’s efforts; (4) the defendant uses the information in a way that competes with plaintiff; and (5) the ability of others to free-ride on plaintiff’s efforts would substantially reduce plaintiff’s incentive to produce the product or service. Id. See generally Bruce P. Keller, Condemned to Repeat the Past: The Reemergence of Misap- propriation and Other Common Law Theories for Protection for Intellectual Property, 11 HARV. J.L. & TECH. 401 (1998). 53. 248 U.S. 215 (1918). 54. Id. at 246. 55. See NBA v. Sports Team Analysis & Tracking Sys., Inc., 931 F. Supp. 1124 (S.D.N.Y. 1996), amended by 939 F. Supp. 1071 (S.D.N.Y. 1996), aff’d in part and vacated in part sub nom, 105 F.3d 841 (2d Cir. 1997). 56. Motorola, Inc., 105 F.3d at 852. 57. Shetland Times Ltd. v. Wills, 1997 S.L.T. 669 (Sess. Cas. 1996). California,58 concerning thumbnail photographs as links, brought the copyright theory of link law into sharper focus. The Shetland Times case raised the curtain on linking claims just around the time that the World Wide Web was reaching a wide audience, in late 1996. The established Shetland Times (“Times”) claimed that its rival, the upstart Shetland News (“News”), infringed the Times’ copyright by using the Times’ headlines as the text for hyperlinks to the Times’ stories.59 The case focused on the dramatically divergent views of the parties concerning hyperlinks. Dr. Jonathan Wills, editor of the News, obviously viewed himself and his innovative electronic newspaper as advanced trendsetters, familiar with new technology and its uses. He viewed his rival (and former employer) the Times as stodgy and backward (though it too issued an electronic edition in 1996).60 The News offered its readers tangible evidence of its competitive preeminence—it claimed that it linked to the Times for any news stories missed by the News.61 Of course, the link not only served the News’ readers, but also subtly highlighted how few stories the News had missed.62 The links involved were standard HREF links. When the Times protested the News’ periodic links to its stories, Dr. Wills expressed his disbelief that anyone would complain about hyperlinks, and published, with commentary, his personal, sarcastic reply to the Times’ cease-and-desist letter:

The principle of the Internet is free access. We have no turnstile where we vet or charge readers. Nor do you. What we have done, are doing and will continue to do is direct our readers to your website on those occasions when your six editorial staff [sic] manage to come up with a story which our single member of staff has either missed or not got around to writing. . . . .

58. Kelly v. Arriba Soft Corp., 77 F. Supp. 2d 1116 (C.D. Cal. 1999). 59. Shetland Times, 1997 S.L.T. at 669; see David H. Rothman, Internet Links Could Take a Hit in Scottish Feud, CHRISTIAN SCI. MONITOR, Dec. 3, 1996, at 18; Steve Outing, War in the Shetlands!—Internet Style, EDITOR & PUBLISHER, Oct. 30-31, 1996, available at http://mediainfo.com/ephome/news/newshtm/stop/st103096.htm (subscription required). 60. Shetland Times, 1997 S.L.T. at 669. 61. Id. 62. See Shetland Times Wins Legal Ban Against the Shetland News: Statement of Shetland News Editor Dr. Jonathan Wills, SHETLAND NEWS, Oct. 24, 1996, available at http://www.factnet.org/shetlnd2.html. At no time have we infringed your undisputed copyright, nor have we made any use whatsoever of your material in our own pages. If we did, we would pay you our normal, single-use, electronic reproduction fees at NUJ rates. Where we give a free link to a Shetland Times story which we think would interest our readers, we send them straight to your very own page, not to one of ours. When they get there they are looking at The Shetland Times, not at The Shetland News. . . . . We don’t need your written permission to put up links to your site, or to any other. You ought to be jolly pleased, because we are bringing you hundreds of readers a day whom you wouldn’t otherwise have.63 The Times, however, was quite serious. It sought a court order to prevent such links.64 The next publication in the News on the dispute took a distinctly different tone than that of Dr. Wills’ confident response letter: “We regret that part of our service to readers has been censored by unprecedented court action at the instigation of Robert Wishart, managing director of The Shetland Times Ltd. He can be reached by e-mail at [email protected].”65 In court, the Times sought to restrain the News’ unauthorized links on the grounds that the News’ links, which reproduced the Times’ headlines for those rare exclusives, constituted copyright infringement.66 The News argued in response that the use of the Times’ headlines could not constitute infringement, because free access constituted the basic principle of the Internet.67 The Court of Sessions in Edinburgh, by Lord Hamilton, disagreed. The court granted the Times an interim interdict (comparable to a U.S. preliminary injunction) preventing the News from making further hyperlinks.68 Among other things, the court noted that the News’ hyperlinks to some of the Times’ stories permitted readers to get access to the Times’ stories while “by-passing the [Times] front page and accordingly missing

63. Internet Publisher Doesn’t Want the Hits, SHETLAND NEWS, Oct. 16, 1996, available at http://www.factnet.org/shetlnd2.html. 64. Shetland Times, 1997 S.L.T. at 669. 65. The Shetland News Appeal Fund, SHETLAND NEWS, Nov. 11, 1996, formerly at http://www.shetland-news.co.uk/appeal.html (on file with author). 66. Shetland Times, 1997 S.L.T. at 669. 67. Internet PublisherDdoesn’t Want the Hits, SHETLAND NEWS, Oct. 16, 1996, available at http://www.factnet.org/shetlnd2.html. 68. Shetland Times, 1997 S.L.T. at 671. any advertising material which may appear on it.”69 This potential advertising loss figured heavily in the court’s decision in favor of the interim relief.70 This interim ruling was appealed, and although the News made a worldwide appeal for assistance through its website, ultimately the case settled shortly before a scheduled further hearing.71 The settlement permitted the News to link to the Times’ page, but it specified that the links would clearly identify the Times as the originator of the linked stories.72 Essentially, the parties negotiated a linking license.73 For all the attention focused on the Shetland Times case, the resulting judicial ruling was a disappointment in terms of clarity, analysis, breadth of application, and precedent for further linking disputes. The court’s analysis—that reproduction of a few of Times’ web links constituted infringement—has been widely criticized and would not be accepted under United States copyright law.74 Since the links involved were basic HREF links that were clearly explained by the News as links to its competitor’s

69. Id. at 670. 70. The court stated: The balance of convenience clearly, in my view, favoured the grant of interim interdict . . . . It was fundamental to the setting up by the pursu- ers of their web site that access to their material should be gained only by accessing their web directly. While there has been no loss to date, there is a clear prospect of loss of potential advertising revenue in the foreseeable future. Id. at 671. 71. Courtney Macavinta, Scottish Link Suit Settled, CNET NEWS, Nov. 11, 1997, at http://news.cnet.com/news/0,10000,0-1005-200-323939,00.html. 72. Id. 73. Other copyright claims similar to those in the Shetland Times case have been threatened. In New Zealand, the editor of the 7am Weekly News web site has reported that a rival publication, the Nando Times—apparently basing its claim on copyright—has demanded payment for the 7am Weekly News’ use of the Nando Times’ headlines and for the right to link to the Nando Times’ site. Similarly, News International Newspapers, the owner of The Times of London, has threatened an Internet news service, News Index, claiming that its listing of The Times’ headlines infringes British copyright law. Courtney Macavinta, Is linking a Copyright Violation?, CNET NEWS, Dec. 11, 1997, at http://news.cnet.com/news/0-1005-202-324822.html. 74. In a similar case in Netherlands in 2000, the court rejected the argument that use of headlines as the content for hyperlinks constituted copyright infringement. The court found no copyright violation in the use of the newspapers’ headlines in the hyperlinks, essentially because of fair use and generally accepted practices. J. Mendlik, Rb. Rotter- dam 22 augustus 2000, KG ZA 00-846, No. 139609 (ann. VKJK), available at http://www.e-jus.it/db/data/Sentenza_Rotterdam_ing_22-8-00.htm (last visited Nov. 25, 2001). content, the links seem tame, fair, and non-confusing compared to later cases. Thus, the case left more questions open than answered on the issue of copyright infringement as a theory for limiting unauthorized linking. A much different approach and answer to a similar question came with the decision of a California federal district court in Kelly v. Arriba Soft Corp.75 Kelly presented essentially the picture equivalent of the Shetland Times headline-as-hyperlink claim. The defendant, Arriba Soft, offered a specialized Internet search engine for photography on its website. On that site,76 Arriba Soft provided a traditional search engine with a photographic twist. As the court explained, like other Internet search engines, Arriba Soft’s search engine: “allows a user to obtain a list of related Web content in response to a search query . . . . Unlike other Internet search engines, Defendant’s retrieves images instead of descriptive text. It produces a list of reduced, ‘thumbnail’ pictures related to the user’s query.”77 Leslie Kelly, a professional photographer, offered his photographs for sale through an Internet website, and Arriba Soft indexed his site along with other professional photographers’ sites.78 That meant that when searchers used Arriba Soft’s “visual search engine” and the search results included Kelly’s photographs, the images of those photos would be made available in thumbnail form on the search results page.79 The thumbnail images in turn linked to Kelly’s own website, and hence potentially increased Kelly’s business traffic.80 Kelly claimed—much as the Shetland Times had claimed about use of its headlines—that use of his work in the thumbnail link constituted copyright infringement.81 The thumbnail images in question were, admittedly, copies of Kelly’s photographs. The issue was thus posed: Did use of Kelly’s photographs as thumbnail markers of links to Kelly’s website constitute copyright infringement? The thumbnails presented a credible case of infringement. While a few words of a headline do not qualify alone as copyrightable material in United States law, the photo thumbnails were simply reduced versions of Kelly’s copyrighted photographs. As such, the thumbnails contained all (or at least most) of the creative elements of the photos, such as subject,

75. 77 F. Supp. 2d 1116 (C.D. Cal. 1999). 76. The site was originally located at www.arriba.com, but was later renamed and relocated to www.ditto.com. 77. Kelly, 77 F. Supp. 2d at 1117. 78. Id. 79. Id. 80. Id. at 1120. 81. Id. at 1117. composition, lighting, and so forth.82 The only question was whether Ar- riba Soft’s use of the photographs in its visual search engine constituted fair use under section 107 of the Copyright Act.83 Judge Gary Taylor analyzed each of the statutory fair use factors, as well as the “transformative use” factor, and found Arriba Soft’s use to be fair.84 Initially, Judge Taylor found that while Arriba Soft’s search engine was commercial, the search engine’s commercial purpose was “of a somewhat more incidental and less exploitative nature” than normal.85 Ar- riba Soft’s website did not exist to exploit the visual impression of the indexed photographs; rather, it served a library-like function, as it “catalog[ed] and improve[d] access to images on the Internet.”86 Thus, the first fair use factor—focusing on the commercial or noncommercial use of the copyrighted work—favored Arriba Soft.87 The second factor—the nature of the work—favored Kelly, because photographs are artistic works at the core of copyright protection.88 On the third factor—focusing on the amount and substantiality of the copyrighted work used—the court found the use of indexing thumbnails generally fair, because thumbnails are necessary on a visual search engine, and the size reduction mitigates any damage.89 Because Arriba Soft’s search engine had also displayed a larger version of the indexed photographs (a practice it had eliminated by the time of the court’s decision), however, the court found the “amount and substantiality” factor to favor Kelly somewhat.90 Finally, in considering the fourth fair use factor—the effect on the market for plaintiff’s products—the court found no evidence of harm, and a logical conclusion that the search engine would increase traffic to the websites of professional photographers such as Kelly. Thus, the court found that this factor favored fair use.91

82. Id. at 1120. 83. 17 U.S.C. § 107 (1994). 84. Kelly, 77 F. Supp. 2d at 1121. 85. Id. at 1119. 86. Id. 87. Id. 88. Id. at 1119-20. 89. Id. at 1120. 90. Id. 91. Id. at 1120-21. With the fair use score a two-two tie, the Court relied on the “transformative use” analysis of Campbell v. Acuff-Rose Music, Inc.,92 to make its final conclusion that Arriba Soft’s use was fair. Essentially, the court recognized the usefulness of search engines and their contribution to users and web publishers (like Kelly) alike, and found that Arriba Soft’s “visual search engine” had transformed Kelly’s images into something new. The court held that the photo-cataloging and thumbnail-displaying functions of Arriba Soft’s visual search engine, which “swept up” plaintiff’s images along with two million other photographs in its ordinary operation, ful- filled an “inherently transformative” function.93 This transformative aspect of the visual search engine—“a new use and a new technology”—weighed more heavily with the court than the fact that Arriba Soft copied the photographs.94 In essence, the usefulness of Internet search engines was the determinative factor in the fair use analysis in Kelly, leading to the court’s conclusion that Arriba Soft could use thumbnail images of copyrighted works in its search results display. Although the Kelly analysis could be questioned or confined to the unique facts of that case, the decision provides guidance for other copyright linking cases. The decision wisely permits use of the content indexes and links that are typically used and needed in Internet searching and navigation. This result seems consistent with fair use principles, since the indexing material does not replace the full copyrighted works and it usually facilitates navigation to the owners of those works. It also accords with precedent, such as long established acceptance of catalogs, summaries, and reviews as fair use. If Kelly is followed when future linking claims based on copyright are asserted, the fair use doctrine is likely to protect normal indexing and summarizing use of Internet content as hyperlinks.

92. 510 U.S. 569 (1994). In Campbell, a copyright parody case, the Supreme Court distinguished transformative use of copyrighted material from the typical situation where the new work merely supersedes or substitutes for the original work. A “transformative” work, like a parody, serves a different purpose—and usually a different market—than the original work, and although it employs portions of the original, it alters the original “with new expression, meaning, or message.” Id. at 579. 93. Kelly, 77 F. Supp. 2d at 1121. 94. Id. The court’s comment that Arriba Soft “never held out Plaintiff’s work as its own” is interesting because passing off is technically irrelevant in this copyright case. As noted in supra note 70 and accompanying text, however, the passing off nature of the headline links in the Times case may well have influenced the court there, and suggestions of passing off or other acts of unfair competition necessarily influence judges and other decision makers, particularly when new rules and policies are being established. B. Deep Linking Perhaps the most curious of all anti-linking theories is the one that holds “deep linking” unlawful. While this theory seems to loom large in popular discussions, it does not yet have legal support in the United States, and courts have addressed the theory with skepticism.95 Most websites have a central “home” page to which all subsidiary pages are linked. Website publishers probably expect users to visit their site through this home page “front door,” and to move around the website using the website’s own links to subsidiary pages. With this expectation, many website publishers post introductory material—possibly including third-party paid banner advertisements, and special teasers and highlights relating to their own site—on that home page. Website publishers expect that most website visitors will encounter those advertisements or special highlights before going further into the website’s subsidiary pages. In practice, however, anyone who reaches a subsidiary page may record the URL of that page and use it as a hyperlink, thus enabling others to bypass the website’s front door and go to the subsidiary page of interest. Such links are known as “deep linking” because they link directly to a subsidiary page “deep” within a website. Is such linking unlawful? The Ticketmaster ticket-selling agency asserted that such linking was unlawful in two highly publicized cases. In the first case, Ticketmaster Corp. v. Microsoft Corp.,96 Ticketmaster complained of a city guide’s unauthorized hyperlink to a subsidiary page that contained event and ticket information about one of the many events Ticketmaster was promoting at the time.97 Ticketmaster alleged that by offering this bypass, Microsoft’s “Seattle Sidewalks” service was “in effect, committing electronic piracy.”98 Ticketmaster claimed that unless it controlled “the manner in which others utilize and profit from its propriety services,” it would “face the prospect of a feeding frenzy diluting its content.”99 It alleged that the bypass hyperlink—which allowed a web user to

95. See, e.g., Ticketmaster Corp. v. Tickets.Com, Inc., CV 99-76542000, 54 U.S.P.Q.2d (BNA) 1344 (C.D. Cal. Mar. 27, 2000); Kelly v. Arriba Soft Corp., 77 F. Supp. 2d 1116 (C.D. Cal. 1999). 96. Ticketmaster Corp.’s Complaint, Ticketmaster Corp. v. Microsoft Corp., No. 97- 3055 DDP (C.D. Cal., filed Apr. 28, 1997), available at http://legal.web.aol.com/- decisions/dlip/tickcomp.html [hereinafter Ticketmaster’s Complaint]. 97. Id. at ¶¶ 10, 14. 98. Id. at ¶¶ 6, 10. 99. Id. at ¶ 6. avoid advertising on Ticketmaster’s home page—constituted trademark dilution and unfair competition.100 After some spirited arguments back and forth, the case settled in February 1999. Microsoft agreed not to “deep link” to Ticketmaster’s webpages,101 but rather to link its Internet “Side- walks” guides only to Ticketmaster’s home page.102 Ticketmaster was back in court a few years later, when it learned that a rival agency, Tickets.Com, Inc., was also linking to Ticketmaster’s subsidiary pages. In Ticketmaster Corp. v. Tickets.Com, Inc.,103 Ticketmaster claimed that deep linking constituted both copyright infringement (because the information derived from Ticketmaster’s website) and unfair competition (because customers would associate Tickets.com with Tick- etmaster).104 In a preliminary decision, the court explained that Tick- ets.com simply linked to Ticketmaster (or some other exclusive ticket bro- ker) for events for which Tickets.com could not itself sell tickets.105 Tick- ets.com provided its customers with a “Buy this ticket from another online ticketing company” link, which automatically transferred the customer to the relevant interior webpage of Ticketmaster, bypassing the home page. Since this interior page contained the Ticketmaster logo, the court concluded that a customer must know he or she was dealing with Ticketmaster, not Tickets.com.106 In granting, in part, Tickets.com’s motion to dismiss the complaint, the court expressed strong skepticism about the deep linking theory.107 First, the court expressly rejected the copyright theory. Ticketmaster alleged that Tickets.com copied facts and used a deep linking hyperlink.108 Facts are not protected by copyright, and the hyperlink simply transferred the user to the plaintiff’s page.109 Next, although the court did not dismiss the unfair competition claims, it brushed off the possibility that merely posting a deep link could itself constitute unfair competition: “[T]he court concludes that deep linking by itself (i.e., without confusion of source)

100. Id. at ¶¶ 20-28. 101. Bob Tedeschi, Ticketmaster and Microsoft Settle Suit on Internet Linking, N.Y. TIMES, Feb. 15, 1999, at C6. 102. Id. 103. 54 U.S.P.Q.2d (BNA) 1344 (C.D. Cal. Mar. 27, 2000). 104. Id. at 1344. 105. Id. at 1345. 106. Id. 107. Id. 108. Id. at 1346. 109. Id. does not necessarily involve unfair competition.”110 Perhaps most significantly, in dicta the court analogized hyperlinks to traditional indexing techniques, thus suggesting that they are benign and indeed helpful, and thus hardly tortious.111 The court stated: “The customer is automatically transferred to the particular genuine webpage of the original author. There is no deception in what is happening. This is analogous to using a library’s card index to get reference to particular items, albeit faster and more efficiently.”112 Similarly, in Kelly v. Arriba Soft Corp.,113 the court briskly dismissed the plaintiff’s objections to the deep links from the defendant’s “visual search engine” to the pages on plaintiff’s website that featured certain photographs taken by the plaintiff.114 The court recognized that the search engine links allowed users to bypass the plaintiff’s “front page” and thereby made it less likely that users would see all of plaintiff’s advertisements and its “entire promotional message.”115 Nonetheless, the court viewed this as insufficient evidence of harm or adverse impact.116 Deep linking claims have encountered appropriate skepticism from courts when claimants have asserted intellectual property or tort rights to control links to their subsidiary pages. As Microsoft quite persuasively pointed out in its response in Ticketmaster Corp. v. Microsoft Corp.,117 such claims run contrary to common sense and the common workings of the web, an open network that by its nature encourages the use and sharing of shortcuts.118 Deep linking claims might, however, have better chances on three other theories: contract, trespass, or database protection. Ticketmaster asserted the contract theory in its suit against Tick- ets.com, claiming that its terms of service barred deep linking use of information obtained by browsing the Ticketmaster site.119 While the court was skeptical of this claim because it was based on small-print terms and

110. Id. 111. Id. at 1345. 112. Id. 113. 77 F. Supp. 2d 1116 (C.D. Cal. 1999). 114. Id. at 1020-21. 115. Id. 116. Id. at 1021. 117. Microsoft Corp.’s Answer to First Amended Complaint, Affirmative Defenses and Counterclaims, ¶¶ at 38-50, Ticketmaster Corp. v. Microsoft Corp., No. 97-3055 (C.D. Cal. May 28, 1997) [hereinafter Microsoft’s Answer]. 118. See infra text accompanying note 312. 119. Tickets.Com, 54 U.S.P.Q.2d (BNA) at 1346. conditions for which no affirmative assent was required, it nonetheless allowed the claim to proceed.120 Obviously in proper circumstances—for example, where parties with roughly equivalent bargaining power explicitly agree to deep linking limitations—a contract can affect one’s ability to deep link. A second alternative deep linking theory is trespass. Some courts have held that when web publishers permit entry to their site for limited purposes, one who violates those conditions may be prosecuted in tort for computer trespass.121 This theory did not survive the motion to dismiss in Ticketmaster Corp. v. Tickets.com, Inc., because the court viewed it as preempted by the Copyright Act.122 In one case abroad, however, the trespass rationale received some serious consideration. In Pacific Internet Ltd. v. Catcha.com Pte Ltd.,123 the owner of a website in Singapore sued on multiple theories, including trespass, based on a rival’s use of deep links to its site. On a motion similar to a motion to dismiss, the court refused to dismiss any of the claims, stressing the novelty of deep linking both in technology and law.124 Specifically with respect to the trespass claims, the court indicated that it would fully entertain the theory that the plaintiff opened its site to the public for most purposes, but not for the purpose of allowing competitors to mine the site for deep links for inclusion on their sites.125 The decision also stressed the significant and creative damage claims made based on the deep linking. Among other things, the plaintiff claimed that the deep links to its site enhanced the value of the linking site, diminished the value of the plaintiff’s site, and deprived the plaintiff of specific advertising revenue it expected because of fewer “eyeballs” being directed to its website.126 The court also accepted as plausible the plaintiff’s theory that deep links to its site promoted customer loyalty with the defendant’s site:

The plaintiffs also complain that the defendants ‘captured’ web surfers within their web sites ‘in that the defendants’ acts of tres-

120. Id. 121. eBay, Inc. v. Bidder’s Edge, Inc., 100 F. Supp. 2d 1058, 1069 (N.D. Cal. 2000) (issuing a preliminary injunction on trespass grounds against the Bidder’s Edge practice of recursively crawling the eBay site with robots and compiling a database of the eBay site, which it then used on its own website). 122. 54 U.S.P.Q.2d (BNA) at 1347. 123. 2000 SLR LEXIS 152, at *6 (Singapore High Court May 10, 2000). 124. Id. at *16. 125. Id. at *18. 126. Id. at *11. pass by-passed the plaintiffs’ home page, the plaintiffs’ MOL web site and/or the plaintiffs’ Tatler web site (as the case may be), thereby creating ‘stickiness’ within the defendants’ web sites. In other words, it would be easier for web surfers to stay within the defendants’ web sites, notwithstanding that the content or search engine being viewed or used belonged to the plaintiffs.127 According to news reports, the case settled before the proceedings went much past the initial pleading stages.128 Several European cases reveal a third possible legal hook—albeit one that would not work in the United States under current law—for the deep linking theory. For example, a German decision in January 2001 held deep linking unlawful in certain circumstances based on the European Union Database Directive.129 Plaintiff StepStone, a Norwegian-based company engaged in online recruitment, sued OFiR.com, A.S., a smaller Danish- based competitor, in Germany.130 Stepstone protested OFiR’s deep links to StepStone’s site, which contained StepStone’s online job advertisements.131 News accounts of the case indicated that StepStone raised a series of arguments against OFiR’s deep links, many similar to arguments that have been made in deep linking cases in the United States.132 StepStone also claimed that OFiR passed off StepStone’s advertisements as its own by including StepStone’s ads in its claims about the advertisements accessible from the OFiR site.133 Thus, StepStone claimed, OFiR had used Step- Stone’s data without authorization. Since the EU Database Directive prohibits such substantial use of another’s protected database, StepStone claimed that use constituted a violation of StepStone’s database rights.134 The EU Database Directive broadly defines “database” as “a collection of works, data or other independent materials arranged in a systematic or me-

127. Id. at *11-12. 128. Nawaz Marican, PacNet, Catcha Legal Battle May be Settled out of Court, CNETASIA, June 6, 2001, at http://asia.cnet.com. 129. Madeline Bennett, Euro Copyright Law Used to Block Link to Web Site, ZDNET UK, Jan. 22, 2001, at http://news.zdnet.co.uk/story/0,,t269-s2083881,00.html. 130. Rick Perera, Court Blocks Company’s Deep Link to Competitor’s Site, ZDNET UK, Jan. 17, 2001, at http://news.zdnet.co.uk/story/0,,t269-s2083881,00.html. 131. Id. 132. Bennett, supra note 129. 133. Perera, supra note 130. 134. Id. thodical way . . . .”135 In the StepStone case, the German court concluded that StepStone’s ads were indeed protected as a database, and granted an injunction against the OFiR hyperlinks.136 In Holland, the District Court in Rotterdam rejected a similar database protection theory. The court upheld the right of a news headline site, Kranten.com, to list the headlines of various newspapers, and to link directly to the full-text of the articles on the newspapers’ websites.137 The plaintiffs, a group of Dutch publishers, raised the typical arguments that deep links cost the publishers lost advertising revenue by bypassing their front doors.138 They also raised the database argument. In response, the defendant stressed that hyperlinks are the functional core of the World Wide Web, and that deep links are common on the Internet and are often displayed in search engine results.139 The court rejected the publishers’ claims, holding that the publishers could have prevented the deep links by technical means, that the publishers’ home pages were still accessible, and that the publishers probably suffered no real damage, given the increased traffic to the publishers’ site due to Kranten.com’s links.140 In addition, the publishers had alternative methods of advertising, including placing the ads next to the news articles themselves. On the database issue, the Dutch court found that the data used by Kranten.com—a list of headlines—did not technically qualify under the database law, since the newspapers had made no “substantial investment”141 in money or effort in developing that list of headlines, as would typically be required to develop and arrange the contents of a data-

135. Directive 96/9/EC, supra note 50, art. 1(2), at 24. 136. Perera, supra note 130. Even before the StepStone decision, some commentators predicted that information available on a page on the World Wide Web would qualify as a protected “database.” See, e.g., L. Kaye, The Proposed EU Directive for the Legal Pro- tection of Databases: A Cornerstone of the Information Society?, 17 EUR. INTELL. PROP. REV. 583, 584 (1995). 137. J. Mendlik, Rb. Rotterdam 22 augustus 2000, KG ZA 00-846, No. 139609 (ann. VKJK), available at http://www.e-jus.it/db/data/Sentenza_Rotterdam_ing_22-8-00.htm (last visited Nov. 25, 2001); see Gordon Cramb, Dutch Papers Fail in Cyber Space, FI- NANCIAL TIMES, Aug. 23, 2000, at http://news.ft.com/. 138. J. Mendlik, KG ZA 00-846 at § 3.2. 139. Id.at § 3.3. 140. Id. at § 4.4. 141. Under the EU directive, databases are protected only if the producer of the database made a qualitatively and/or quantitatively substantial investment in creating them. Directive 96/9/EC, supra note 50, art. 7(1), at 25. base.142 The Dutch decision therefore recognized the database protection theory as a possible basis of an anti-deep linking claim, but rejected the claim solely on factual grounds. At the five-year mark for linking litigation, deep linking remains a creative legal theory in search of viable legal support (at least in the United States), but with strong views by parties on both sides. Those who believe they should be able to control deep links to their sites apparently intend to keep asserting such claims. In order to solidify these claims, they will probably develop stronger contracts or limited-entry-consent terms, as they focus on the contract, database, and trespass theories. Those who view the web as an open network and links as mere indexes will probably keep on making deep links, and may have to fight against the imposition of invisible “limited access” barriers on that open network. C. Inlining and Framing—Combined Content Claims from Dilbert to Total News Inline linking and framing technologies potentially raise associational and copyright concerns. Each of these technologies permit a web publisher, to some extent, to associate itself with the content of another party and to create new adaptive web displays combining content from both sites.143 Inlined links144 allow one to essentially import a graphic from another website and incorporate it in one’s own website. The viewer will not know that the graphic comes from another site; rather, to the viewer, it appears that the inlined graphic is a seamless part of the webpage he is viewing. It is a little bit like painting a picture of a gallery at the Louvre, by simply importing onto your canvas the Louvre’s own digital reproductions of those drawings. At the very least, it seems sneaky. In one situation, a fan’s use of inlined links to Dilbert comic strip images led to a copyright cease-and-desist demand by the company holding rights to the images.145 The parties resolved the matter when Dan Wallach, the fan, “took the safe exit” and removed his page.146 The dispute, how-

142. J. Mendlik, KG ZA 00-846 at § 4.11. 143. See Rebecca Quick, ‘Framing’ Muddies Issue of Content Ownership: Technol- ogy Lets Sites Alter Presentation of Others’ Web Pages, WALL ST. J., Jan. 30, 1997, at B8. 144. See supra text accompanying note 17. 145. See Dan Wallach, Dilbert Page Hack Archives, at http://www.cs.rice.edu/- ~dwallach/dilbert/ (last visited Nov. 25, 2001). 146. Id. ever, presented serious questions and showed how inline links may essentially allow a web author in one place to create a derivative work, directly incorporating another person’s work located on a different website. Because pre-existing content is an essential ingredient of derivative works—new works created as adaptations of pre-existing ones—the creator of the new work must generally obtain permission of the owner of the original work. In the “Dilbert” dispute, Wallach used inline links to comic strips owned and originally posted by United Media Services to essentially create a new and improved “Dilbert” webpage. Wallach’s page had more “Dilbert” comic strips and was arranged for easier viewing than United Media’s official “Dilbert” website. This presented an arguable infringement of the adaptation right because the copyright owner’s original work (e.g., one “Dilbert” comic strip) was displayed in a new and different context and manner, and it arguably became part of a new overall work (in this case, the collection of comic strips published on Wallach’s pages).147 Many Internet works can raise derivative works issues—everything from artistic compilations to summaries of textual works found elsewhere on the network. In one situation involving a derivative work claim based on framing, the court refused to dismiss the claim, noting that the issue was novel and that the most analogous cases shed little light on the issues.148 As browsing technology develops, and as users get faster web access, other webpage display and browsing technologies (particularly involving audio, music and other multimedia outputs) may also raise copyright infringement claims. Framing, like inlining, involves combinations of materials from different sources. In a typical use, two or more webpages, all created by the same web publisher, are displayed together in separate, independently scrollable frames. A web publisher may also use framing to display one or more of his own pages together with one or more pages from other sources—including sources that may not want to be so displayed. That situation has spawned the filing of several claims.149 The most widely

147. See Wassom, supra note 16. 148. Futuredontics Inc. v. Applied Anagramics Inc., 45 U.S.P.Q.2d (BNA) 2005, 2010 (C.D. Cal. Jan. 30, 1998), aff’d, 152 F.3d 925 (9th Cir. 1998); see also Web Site ‘Framing’ Not Likely to Create A Derivative Work of the Web Site, Court Says, 3 ELEC. COMM. & L. REP. 9 (Mar. 4, 1998), at http://pubs.bna.com/ (subscription required). 149. Other organizations have complained of framing. See N.Y. State Soc’y of Certi- fied Pub. Accountants v. Eric Louis Assocs., 79 F. Supp. 2d 331 (S.D.N.Y. 1999) (refusing to decide a framing issue that had not been briefed by defendants); M. A. Stapleton, Playboy Settles Internet ‘Framing’ Trademark Case, CHI. DAILY L. BULL., May 21, publicized of these, Washington Post Co. v. Total News, Inc.,150 arose in 1997 and involved involuntary framing by a news gateway site. Total News, Inc., a small Arizona company, operated an independent gateway to various Internet news pages, including those of the Washington Post and other news organizations.151 Among other things, the plaintiff publishers complained that when a web surfer used the Total News site to explore news sites, the news sites appeared “framed” within the index-and- advertising-filled borders of the Total News site.152 By so framing the news sites, the plaintiff publishers alleged, Total News often prevented the readers from seeing the advertisements, banners and Internet addresses of the publishers, and covered them with Total News’ banners and advertising.153 The complaint alleged that these practices were actionable as common law misappropriation, federal and state trademark dilution, unfair competition, trademark infringement, copyright infringement, and tortious interference.154 As the plaintiffs’ Complaint made clear, the hyperlinks per se were not the problem. Rather, plaintiffs complained of the way Total News orches- trated the links using frames: when a link was clicked by the user, the user would not receive the linked site in its totality but rather would see the linked site within a Total News frame.155 This gave the user something different than he or she would encounter by seeking that site directly, or linking to it from a normal nonframed hyperlink. Most importantly to the plaintiffs, the Total News site potentially blocked out what was most valuable to the plaintiffs—banner advertisements on their pages.156 Not sur-

1997, at 1; Martha L. Stone, News Sites Go After Framers, ZDNET, Dec. 20, 1997, at http://www.zdnet.com/zdnn/content/zdnn/1220/265686.html. An English case filed in early 2001 reportedly raised the issue of framing as a “passing off” violation. Haymarket, a United Kingdom publisher, sued Burmah Castrol PLC, a BP Amoco subsidiary, over a website that framed two of Haymarket’s websites within a Castrol-branded border. John Leyden, Castrol Frames Car Sites—Publisher Sues, THE REGISTER, Jan. 10, 2001, at http://www.theregister.co.uk/content/- 6/15978.html. 150. Wash. Post Co.’s Complaint, Wash. Post Co. v. Total News, Inc., No. 97 Civ. 1190 (PKL) (S.D.N.Y., filed Feb. 20, 1997), available at http://www.courttv.com/- legaldocs/cyberlaw/totalnew.html [hereinafter Wash. Post’s Complaint]. 151. Id. at ¶¶ 22, 30. 152. Id. at ¶ 30. For example, the main news page of the Washington Post, or news pages offered by other plaintiff publishers such as Time, Inc., CNN, and Dow Jones would appear within the frames of the Total News site. Id. at ¶¶ 31-34. 153. Id. at ¶¶ 35-36. 154. Id. at ¶¶ 38-76. 155. Id. at ¶¶ 10, 35-36. 156. Id. at ¶¶ 35-36. prisingly, Total News’ banner advertisement was plainly visible. Pointing to this advertising blocking, plaintiffs claimed that Total News operated a “parasite site” that “diverts” and “free-rides” on plaintiffs’ good will, and that their conduct was akin to that of a counterfeiter.157 The parties settled the Total News case only four months after it was filed, with an agreement that recognized a new Internet property right— the linking license.158 In the settlement, Total News was required to obtain from the publisher plaintiffs’ licenses authorizing the hyperlinks that Total News had previously set up without authorization.159 Additionally, Total News was required as a condition of the license to display the linked materials only in certain ways—for example, without deleting any text, graphics or advertising, and without “framing” the linked site with Total News’ logo or advertising.160 Because of the economics of webpage advertising, “framing” situations like that in the Total News case are likely to be fought by the Internet publishers whose content is framed by another. Banner advertising is a significant source of revenue for some commercial webpages, and is expected to grow in importance as the web grows. Moreover, many banner advertising contracts are written so that costs are related to the number of “hits” on a page; to the extent other linking pages siphon hits off of a page that carries advertising, the owner of the original page is likely to seek to restrain the unauthorized linking page.161 Contractual strategies like the

157. Id. at ¶ 10. Among other things, plaintiffs stated: Simply put, Defendants are engaged in the Internet equivalent of pirat- ing copyrighted material from a variety of famous newspapers, maga- zines, or television news programs; packaging those stories to advertisers as part of a competitive publication or program produced by Defen- dants; and pocketing the advertising revenue generated by their unauthorized use of that material. . . . [J]ust as that conduct would not be tolerated in the world of print and broadcasting, it is equally unlawful in the world of “cyberspace.” Id. 158. Stipulation Order of Settlement and Dismissal, Wash. Post Co. v. Total News, Inc., No. 97 Civ. 1190 (PKL) (S.D.N.Y., filed June 5, 1997), available at http://www.courttv.com/legaldocs/cyberlaw/totalnew.html [hereinafter Wash. Post Stipula- tion Order]. 159. Id. at ¶¶ 3-4. 160. Id. at ¶ 4. 161. Web publishers who sell advertisements on their pages may attempt to minimize harm from framing by negotiating advertising charges based on total number of hits, regardless of whether the hits go directly to the publisher’s home page—but if unauthorized framing becomes more prevalent, advertisers may not agree to such a fee structure. Total News settlement may well emerge as the prevailing solution to framing disputes.162 Additionally, new technologies such as “pop-up” and “pop-under” advertisements may raise new issues similar to framing, which may require new solutions.163 D. Metatags—the Deceptive or Descriptive Use of Indexing Keywords Metatags are optional codes embedded in a webpage’s HTML software code, which essentially act as bait for the indexes created by web search engines.164 In a “hidden metatag” case, an Internet publisher who wishes to attract viewers embeds another company’s trademark in its page as a “metatag.” The first round of metatag cases involved businesses that used their competitors’ trademarks in their metatags, apparently so that their sites would rank high in search engine reports when a user searched for their competitor using its well-known trademarks. In these cases, where bad faith seemed apparent and justification was lacking, several courts reacted quickly with strong injunctive orders for the plaintiffs, and, in one case,165 severe penalties for the metatag user. In several later cases, however, courts have come to recognize that use of another’s trademarks in metatags may, in context, constitute allowable descriptive use rather than trademark infringement.166 Metatag cases are usually brought under a trademark infringement theory, since the keywords used in metatags are usually the plaintiff’s trademarks or trade name. The plaintiffs assert that the use of these keywords leads to consumer confusion because the consumer erroneously be-

162. See Subcomm. on Interactive Servs. of the Comm. on the Law of Commerce in Cyberspace, supra note 12. 163. See Stephanie Olsen, Software Replaces Banner Ads on Top Sites, CNET NEWS, Aug. 17, 2001, at http://news.cnet.com/news/0-1005-200-6897620.html; Stephanie Ol- sen, Online Ads Get in Your Face, CNET NEWS, June 13, 2001, at http://news.cnet.com/- news/0-1005-200-6269719.html. 164. See Danny Sullivan, How to Use HTML Meta Tags, at http://searchengine- watch.com/webmasters/meta.html (last visited Nov. 25, 2001) (describing benefits of metatags); see also supra text accompanying note 17. 165. Playboy Enters., Inc. v. AsiaFocus Int’l, Inc., No. 97-734-A, 1998 U.S. Dist. LEXIS 10359, at *1 (E.D. Va. Feb. 2, 1998); see infra text accompanying notes 168-179. 166. E.g., Playboy Enters., Inc. v. Welles, 7 F. Supp. 2d 1098 (S.D. Cal. 1998) (order denying preliminary injunction) and 78 F. Supp. 2d 1066 (S.D. Cal. 1999) (order granting summary judgment), aff’d, 162 F.3d 1169 (9th Cir. 1998) (unpublished table decision); see infra text accompanying notes 182-202. lieves that the websites on the search engine results page are connected with the trademarks used as search terms. The trademark theory fits in some ways, but is in other ways ill suited to metatag disputes. When the creator of a website intentionally uses a competitor’s trademarks to attract customers to his or her site, it appears to be deliberate misuse of another’s trademark. However, the consumer confusion element of a metatag case is far murkier than that of a traditional trademark infringement case because web users are not exposed directly to the trademark use in question. Rather, they encounter only a search engine results page, which displays links to webpages and descriptive—presumably non-misleading—text about those webpages. Whether the web user in these circumstances is confused—because the search results lists include a competitor to the company for which he or she was searching—is yet to be tested in any reported case. Without empirical evidence, courts appear to have presumed consumer confusion based upon the intent of the metatag user to attract business.167 In one early case, a metatag abuser picked a curious target. Its hidden metatags identified an intellectual property law firm, Oppedahl & Larson, so when a user searched for that firm, the search results featured the defendant’s websites instead. The Internet-savvy Oppedahl firm quickly sued in July 1997, alleging unfair competition, violation of the federal trademark dilution statute, and trademark infringement.168 The court issued permanent injunctions six months later with the consent of all defendants who had appeared.169 In similar (but perhaps more understandable) cases, Playboy Enter- prises sued two firms that embedded the hidden words “playboy” and “playmate” on their sites. In the first case, Playboy sued in late August 1997 and obtained a preliminary injunction on September 8, 1997.170 In the second case, Playboy Enterprises, Inc. v. AsiaFocus International Inc.,171 a trial judge held that defendants’ metatag use of various Playboy- owned trademarks constituted “deceptive tactics” which warranted severe

167. E.g., AsiaFocus Int’l, Inc., 1998 U.S. Dist. LEXIS 10359. 168. Oppedahl & Larson’s Complaint, Oppedahl & Larson v. Advanced Concepts, No. 97-Z-1592 (D. Colo. July 23, 1997), available at http://www.patents.com/ac/- complain.htm [hereinafter Oppedahl’s Complaint]. 169. Oppedahl & Larson v. Advanced Concepts, No. 97-Z-1592, 1998 U.S. Dist. LEXIS 18359 (D. Colo. Feb. 6, 1998). 170. Playboy Enters., Inc. v. Calvin Designer Label, 985 F. Supp. 1220 (N.D. Cal. 1997). 171. 1998 U.S. Dist. LEXIS 10359 at *6-7. sanctions. Although the defendants used Playboy’s trademarks in various ways, the use of the marks in hidden metatags was central to the defendants’ deceptive scheme, and greatly influenced the court:

Specifically, the defendants embedded PEI’s trademarks “playboy” and “playmate” within the Web sites’ computer source code which is visible to “search engines” that look for Web sites containing specific words or phrases specified by computer users. Thus, a consumer conducting a search for PEI’s Web site by typing in the trademark “Playboy” or “Playmate” would receive a search engine-generated list which would include the Asian- playmates Web site. Through the defendants’ willful deception, consumers have been misled into believing the Asian-playmates Web site is connected with, or somehow sponsored by, PEI.172 The court found willful infringement and imposed statutory penalties of $3 million on the defendants.173 Courts have also issued preliminary injunctions in other cases where there appeared to be a clear intent to lure customers to a website using the trademarks of the website’s competitor in hidden metatags. Niton Corp. v. Radiation Monitoring Devices, Inc.,174 is typical: in that case, both the plaintiff and the defendant manufactured instruments that determined whether paint contained lead.175 The defendant, Radiation Monitoring De- vices, placed on its websites misleading metatags that used its competitor’s name—for example, it placed the phrase, “The Home Page of Niton Corp., makers of the finest lead, radon, and multi-element detectors,” in its metatags.176 Similarly, in Insituform Technologies v. National Envirotech Group,177 the plaintiff complained of its competitor’s use of its trademarks “Insitu- form” and “Insitupipe” as metatag keywords. The case settled with a prompt final judgment by consent. The consent judgment required, among other things, that the defendant formally resubmit its webpages to five major search engines after the offending metatags were deleted, to assure that

172. Id. at *3 (record citations omitted). 173. Id. at *1. 174. 27 F. Supp. 2d 102 (D. Mass. 1998). 175. Id. at 103. 176. Id. at 104. 177. Final Judgment of Consent Against Defendant National Envirotech Group, L.L.C., Insituform Technologies v. National Envirotech Group, Civ. No. 97-2064 (E.D. La. Aug. 26, 1997). the misleading keywords were promptly removed from search engine databases.178 Many subsequent decisions have followed Playboy, Niton, and Asiafocus and have found metatag use of competitors’ trademarks to constitute trademark infringement.179 One may, of course, exploit the quirks of search engine technology without clearly infringing another’s trademark. For example, there appears to be nothing wrong with using someone else’s trademark in regular (non- hidden) text, so long as it is clear that the user is not authorized by or related to the trademark owner (i.e., no trademark dilution). This was illustrated, somewhat humorously, by a web author who, as a follow-up to the Oppedahl case, published his own page repeatedly disavowing any connection with the firm. Because the website used the firm’s name so often, it ranked high in searches for the firm—but because of the non-hidden and factual context of the use of the words, the firm did not view it as infringement.180 In the same manner, a business could openly use its competitor’s name on its website, perhaps in making product comparisons. In such a case, the site might attract viewers who were looking for the competitor’s site but this situation would present a markedly different situation from the hidden metatag cases.181 Nor is use of a trademark forbidden even in hidden metatags if it is not likely to confuse a consumer as to source. Hence, Terri Welles (Playboy magazine’s “Playmate of the Year” in 1981), successfully defended Play- boy Enterprises’ suit complaining of her use of “playboy,” “playmate,” and related terms as metatags (and as portions of the webpage title and

178. Id. 179. E.g., Eli Lilly & Co. v. Natural Answers, Inc., 233 F.3d 456, 464 (7th Cir. 2000); Playboy Enters. Int’l., Inc. v. Global Site Designs, Inc., No. 99-1210-CIV- DAVIS, 1999 WL 311707 (S.D. Fla. 1999); N.Y. State Soc’y of Certified Pub. Account- ants v. Eric Louis Assocs., 79 F. Supp. 2d 331, 346 (S.D.N.Y. 1999); SNA, Inc. v. Array, 51 F. Supp. 2d 554, 576 (E.D. Pa. 1999). 180. Oppedahl & Larson links to that page on its webpage about the Advanced Con- cepts case, listing it as “a humorous response.” See Advanced Concepts Lawsuit, at http://www.patents.com/ac/ (last visited Nov. 25, 2001). 181. “If, for example, Ford Motor Company has a page on its Web site displaying the results of a comparison test between a Ford Taurus and a Pontiac Grand Am, it would be irrational to prohibit Ford from using ‘Pontiac’ and ‘Grand Am’ as metatags on that page.” Robert L. Tucker, Information Superhighway Robbery: The Tortious Misuse of Links, Frames, Metatags, and Domain Names, 4 VA. J.L. & TECH. 8, at ¶ 82 (1999). wallpaper).182 The district court found that because Ms. Welles was indeed named a “playmate,” and the term was not only a trademark, but also a “title bestowed upon particular models who appear in [Playboy] magazine,”183 her use of the term to attract Internet viewers was not deceptive.184 The court concluded based on the overall impression of the Welles website, including its disclaimers of affiliation with Playboy, that Ms. Welles “has not attempted to trick consumers into believing that they are viewing a Playboy-endorsed website.”185 Most important, the court relied on the fair use defense of the Lanham Act186 and on one of the classic statements of the right to use trademarks descriptively—the comment of Justice Oliver Wendell Homes in Preston- ettes v. Coty187 that: “when the mark is used in a way that does not de- ceive the public we see no such sanctity in the word as to prevent its being used to tell the truth. It is not taboo.”188 The court found that the inclusion of the “Playboy” trademark in metatags—conduct that incensed the court in the Asiafocus case and undoubtedly contributed to the assessment of willful infringement damages—could be justifiable and, indeed, even beneficial: “Much like the subject index of a card catalog, the metatags give the websurfer using a search engine a clearer indication of the content of a website.”189 The Ninth Circuit affirmed this ruling.190 The court in Bally Total Fitness Holding Corp. v. Faber191 reached a similar conclusion of allowable use and rejected trademark infringement and dilution claims based on the use of the “Bally” trademarks in the metatags of a critic’s “Bally Sucks” consumer commentary website. The court found the critic’s use of the “Bally” trademark in metatags aided Internet viewers by facilitating discovery of the commentary page:

182. Playboy Enters., Inc. v. Welles, 7 F. Supp. 2d 1098 (S.D. Cal. 1998) (order denying preliminary injunction) and 78 F. Supp. 2d 1066 (S.D. Cal. 1999) (order granting summary judgment), aff’d, 162 F.3d 1169 (9th Cir. 1998) (unpublished table decision). 183. 7 F. Supp. 2d at 1102 (quoted passage); 78 F. Supp. 2d at 1079 (holding that the use of the terms “Playmate of the Year” was descriptive of Ms. Welles). 184. 7 F. Supp. 2d at 1105; 78 F. Supp. 2d at 1090-1101. 185. 7 F.Supp. 2d at 1103-1104 ; see also 78 F. Supp. 2d at 1085 (holding similarly). 186. 15 U.S.C. § 1115(b)(4) (Supp. V 1999). 187. 264 U.S. 359 (1924). 188. Id. at 368. 189. Welles, 7 F. Supp. 2d at 1103. 190. Playboy Enters., Inc. v. Welles, 162 F.3d 1169 (9th Cir. 1998) (unpublished table decision). 191. 29 F. Supp. 2d 1161 (C.D. Cal. 1998). [T]he average Internet user may want to receive all the information available on Bally. The user may want to access the official Internet site to see how Bally sells itself. Likewise, the user may also want to be apprised of the opinions of others about Bally. This individual will be unable to locate sites containing outside commentary unless those sites include Bally’s marks in the machine readable code upon which search engines rely. Prohibiting Faber from using Bally’s name in the machine readable code would effectively isolate him from all but the most savvy of Internet users.192 Other decisions have similarly allowed use of trademarks in metatags in contexts where the marks were used as valid and non-confusing indicators of the content of a website.193 When unique, arbitrary trademarks such as Insituform, Niton, and Op- pedahl & Larson were used in metatags, it was clear that the words at issue were trademarks, and it was an easy jump to conclude that the defendants used the marks to lure the plaintiffs’ customers to its site. When the mark is not arbitrary, but consists of words that have their own ordinary meanings, and perhaps multiple trademark meanings as well, the analysis of metatags becomes more difficult. In that situation, the words in question may have been used in metatags fairly in their dictionary or other trademark senses. Neither the infringement line of metatag cases (Asiafo- cus, Niton, etc.) nor the fair use line (Welles and Bally’s) precisely fits this situation, which the Ninth Circuit struggled with in Brookfield Communi- cations, Inc. v. West Coast Entertainment Corp.194 In that case, both parties had some rights to trademarks using the term “moviebuff,” and both targeted their operations to persons interested in information about movies and entertainment. The court, however, treated the plaintiff as the senior and legitimate user of the “moviebuff” trademark.195 The issues in the case were the legitimacy of the defendant’s use of the moviebuff.com domain name, and the single word “moviebuff” in metatags (not the two-word phrase “movie buff,” which the court ac-

192. Id. at 1165. 193. E.g., Trans Union L.L.C. v. Credit Research, Inc., 142 F. Supp. 2d 1029 (N.D. Ill. 2001) (holding that local credit bureau was entitled to use Trans Union’s trade name in its metatags because the bureau offered products derived from Trans Union’s database). 194. 174 F.3d 1036 (9th Cir. 1999). 195. Id. at 1046-50. knowledged could be fairly and descriptively used).196 With respect to the metatags, the court first noted that any confusion from the metatags would be indirect, as opposed to the direct confusion that would result from use of a competitor’s trademark in one’s own domain name.197 The metatags are hidden, and reach the web user only indirectly, by influencing somewhat the search results that he or she obtains from a search engine.198 The defendant’s entry in that search results list will not itself be misleading—it will clearly identify the defendant using its own name.199 The Brookfield court, however, found that use of “moviebuff” in metatags would nonetheless result in “initial interest confusion.”200 Consumers looking for the plaintiff will find the defendant. Even though they will recognize that the defendant is not the plaintiff, they may nonetheless stay with the defendant and consider purchasing from it.201 That is, after en- countering the defendant West Coast on a search result listing (in response to a search for the word “moviebuff”), “a sizeable number of consumers who were originally looking for Brookfield’s product will simply decide to utilize West Coast’s offerings instead.”202 The court held that this kind of limited confusion is actionable under trademark law, and accordingly it held that West Coast could not use “moviebuff” in its metatags.203 The Brookfield decision has stimulated many academic and theoretical discussions relating to the “initial interest confusion” doctrine and its application on the Internet, and is certainly susceptible to criticism.204 What- ever the ultimate wisdom of its conclusion, however, the decision is note- worthy in that it began to directly tackle the issue of consumer confusion, which was assumed rather than analyzed in many of the early metatag cases. Brookfield recognizes, for example, that metatag use has only an indirect affect on the consumer, a point that prior decisions glossed over.

196. Id. at 1066. 197. Id. at 1061-62. 198. Id. at 1062. 199. Id. 200. Id. 201. Id. at 1062-65. 202. Id. at 1062-64. 203. Id. at 1066. 204. See generally Melinda S. Giftos, Reinventing a Sensible View of Trademark Law in the Information Age, 2 J. INTELL. PROP. 2 (2000); F. Gregory Lastowka, Note, Search Engines, HTML, and Trademarks: What’s The Meta For?, 86 VA. L. REV. 835 (2000); Tom Monagan, Can an Invisible Word Create Confusion? The Need for Clarity in the Law of Trademark Infringement through Internet Metatags, 62 OHIO ST. L.J. 973 (2001). In this regard, Brookfield belongs with the second wave of metatag cases, including Welles and Bally’s, in which courts have looked critically at metatags with a view to whether their use is as deceptive or misleading as originally thought.205 These second-wave cases suggest an increasing attention on actual, not speculated, consumer conduct resulting from metatag use. This new focus could well cause a change in the direction of metatag decisions. The Welles decision at first blush appears limited to Welles’ descriptive use of trademarks—a defense not available to defendants like Asiafocus. The court’s analogy to indexing and its focus on the benefit conferred to the web surfer, however, suggest that even competitors’ use of metatag trademarks could be benign. Particularly where consumers may tend to use a trademark as shorthand for a particular product, prohibition of metatag use of a competitor’s trademark may frustrate the web-searching consumer. Courts that have relied on dilution theories to ban metatag use of trademarks should examine whether the practice really blurs or tarnishes the trademark—the harm dilution is meant to cover—or whether it simply helps give the web user (a person accustomed to never-ending search results) a broad array of data about the trademark owner and its industry, no more or less confusing or dilutive than many other search results. The principles of the metatag cases may apply to other situations where keywords are used to attract search engines. For example, “invisible” webpage text has been used to attract search engines. Invisible text is text coded to appear in the same color as the background. Although the text is usually invisible to the viewer of the webpage, the words are visible to search engines, and thus are often indexed. In one reported case in Bel- gium, the original publisher of certain texts (a paragraph relating to horo- scopes) sued an Internet site that republished that text, invisibly, on its competitive website.206 Similarly, repetitive use of a competitor’s trade-

205. See also Bernina of Am., Inc. v. Fashion Fabrics Int’l, Inc., 57 U.S.P.Q.2d (BNA) 1881 (N.D. Ill. Feb. 9, 2001) (enjoining a reseller’s metatag use of plaintiff’s trademarks because marks were used in a confusing manner on the visible portions of the website, but stating that if the website had not been confusing, the metatags would have been allowable as useful directions for consumers). 206. David Gallagher, Cyber Law Journal: Invisible Publishing Sparks a Law Suit, N.Y. TIMES, June 29, 2001, http://www.nytimes.com/2001/06/29/technology/29- CYBERLAW.html (free subscription required). mark purely as bait for search engines may constitute infringement even if it is visible.207 E. Keyword-Based Customized Advertising Because the Internet is a digital electronic medium, website operators can essentially customize their pages in response to viewers’ needs or de- sires. Every Internet user is familiar with this phenomenon. Many users take advantage of customized personal pages available through commercial Internet portals and news sites—for example, the popular “My Ya- hoo” pages in which viewers essentially instruct the Yahoo portal as to the particular features to present and the way to display them. Viewers regularly customize webpages by selecting the language in which they wish to view a site or the particular products in which they are interested. Some website operators customize pages even without the viewer’s explicit request. The Amazon.com site, for example, will display for new customers (without prompting) lists of books similar to the ones for which they searched. It also offers regular customers (again without prompting) suggestions on books they may like, based on their past buying habits and those of like-minded readers. Essentially, the website takes data derived from viewer input—search terms used by the viewer in looking for books, for example—and based on some programmed directives it customizes its web display in a manner designed to appeal to that viewer. For example, any book buyer who searches using the word “battle” may be presented with a list of the top-selling military history books. Customization of this nature can be seen as a kind of link—a pre- ordained software-activated link between the viewer’s conduct and the material displayed in response to it. Can such links violate anyone’s rights? Keyword-based advertising has led to several disputes, as search engines have sold banner advertisements and featured search engine listings based on keywords. The analysis differs based on the nature of the words at issue, and how the advertiser’s sites are advertised or displayed in response to a search for those words. Advertisements sold in response to generic keywords (such as “law- yer” or “books”) do not raise any proprietary rights issues, since no one

207. See SNA, Inc. v. Array, 51 F. Supp. 2d 554 (E.D. Pa. 1999); Playboy Enters., Inc. v. Universal Tel-A-Talk, Inc., No. 96-6961, 1998 U.S. Dist. LEXIS 17282 (E.D. Pa. Nov. 2, 1998). has protectable rights to these generic words.208 Where, however, the keyword that is sold is a recognizable trademark, infringement claims may be asserted. The kind of display that is posted in response to a search using that keyword constitutes an important element of the case. The test for trademark infringement is consumer confusion, but consumers may well react differently to a banner advertisement than to a “featured placement” on a search results page. The first round of keyword advertising claims arose in 1999 when Es- tee Lauder and Playboy Enterprises sued the Excite search engine for allowing their competitors to buy banner advertising space over or next to the search results page in response to searches using their trademarks.209 Specifically, when an Excite user searched that search engine for “playboy,” Excite then posted, over the search results a banner advertisement for a non-Playboy-affiliated adult site. Similarly, when a user searched for “Estee Lauder,” Excite posted a banner advertisement for Fragrance Counter, a company that is not an authorized seller of Estee Lauder fra- grances. The companies contended that this practice constituted trademark infringement. The court in the Playboy case described the practice of keyword sales as follows:

As with other media, advertisers seek to maximize the efficacy of their ads by targeting consumers matching a certain demo- graphic profile. Savvy web site operators accommodate the advertisers by “keying” ads to search terms entered by users. That is, instead of posting ads in a random rotation, defendants program their servers to link a pre-selected set of banner ads to certain “key” search terms. Defendants market this context-sensitive advertising ability as a value-added service and charge a pre- mium.210

208. See Park ‘N Fly v. Dollar Park and Fly, Inc., 469 U.S. 189, 194 (1985) (“A generic term is one that refers to the genus of which the particular product is a species. Ge- neric terms are not registrable, and a registered mark may be canceled at any time on the grounds that it has become generic.”) (citations omitted). 209. Estee Lauder, Inc. v. The Fragrance Counter, Inc., 189 F.R.D. 269 (1999); Play- boy Enters., Inc. v. Netscape Communications Corp., 55 F. Supp. 2d 1070 (C.D. Cal. 1999), aff’d, 202 F.3d 278 (9th Cir. 1999); see Carl S. Kaplan, Cyber Law Journal: Playboy Ruling Recognizes Limits to Online Rights of Trademark Holders, N.Y. TIMES, Sept. 15, 2000, http://www.nytimes.com/2000/09/15/technology/15CYBERLAW.html (free subscription required). 210. Netscape Communications Corp., 55 F. Supp. 2d at 1072. Playboy contended that such advertising used its trademarks to divert customers from its sites to the advertiser’s sites. The case Estee Lauder brought in the United States settled before the court made any substantive decision.211 Estee Lauder brought a parallel case in Germany, which resulted in a victory for Estee Lauder.212 In the United States case brought by Playboy Enterprises, the court entered summary judgment against Playboy, although the court avoided directly dealing with the unique issues raised by keyword sales.213 The court noted that the keywords at issue, “playboy” and “playmate,” were standard English words with their own non-trademark definitions, and hence the court treated the use of the words as non-trademark use.214 Of course, sale of advertising keyed to searcher use of an ordinary English word in its dictionary sense implicates no trademark infringement issues. The problem with the court’s approach, however, is that words like “playboy” and “playmate” have dual meanings—standard dictionary meanings, and trademark meanings. The court did not seriously consider whether the words in the context presented were used in their trademark sense. This apparent error was particularly serious because the words most likely were used in their trademark sense—it is likely that most Internet users who search for “playboy” and “playmate” are looking for the websites of Play- boy Enterprises, not a man devoted to the pursuit of pleasure, or a com- panion in play.215 The court also ruled that even if the words in question were being used in their trademark sense, there was no infringement connected with the

211. See Kaplan, supra note 209. According to this article, the Estee Lauder companies settled with iBeauty, a successor to The Fragrance Counter, and iBeauty agreed to refrain from using the Estee Lauder trademarks. Id. 212. See Excite, iBeauty Lose Key Name Use Lawsuit, at http://www.newsbytes.com/news/00/145545.html (last visited Nov. 25, 2001). 213. Netscape Communications Corp., 55 F. Supp. 2d at 1076. 214. Id. at 1073. 215. The court stated that “whether the user is looking for goods and services covered by PEI’s trademarks or something altogether unrelated to PEI is anybody’s guess.” Id. Although it is generally unwise for courts to speculate on consumer behavior, see infra text accompanying notes 336-341, most observers of human nature and the Ameri- can male would not find this “guess” a difficult one to substantiate. Indeed, the record in the case established that “the word ‘playboy’ is allegedly one of the most frequently-used search terms on the Internet,” Netscape Communications Corp., 55 F. Supp. 2d at 1083, and it is unlikely that all of those searchers were looking merely for “a man devoted to the pursuit of pleasure.” sale of advertising space keyed to them.216 Again, however, the court’s reasoning was somewhat self-contradictory. The court stated that there would be no trademark confusion because of the existence of alternative non-trademark meanings.217 Additionally, the court downplayed the possibility of consumer confusion by stating that the search engine defendants were in different business fields than the adult-entertainment plaintiff.218 The court did not address the fact that the search engines’ customers were direct competitors of Playboy. Finally, the court expressed concern that a ban on keyword advertising might allow trademark owners to censor otherwise allowable use of the words that they use in a trademark sense.219 The district court ruling has been appealed and the International Trade- mark Association filed an amicus brief asserting that the case raises serious direct and contributory infringement issues.220 The trademark infringement theory asserted by Playboy and Estee Lauder in the keyword sale cases goes a step beyond the metatag cases and implicates the freedom to advertise because of the likely different effects on consumer perceptions. Trademark infringement is based on a consumer perception of affiliation between a particular trademark and a particular seller. Search engine users probably give little thought to the banner advertisements that pop up each time they do a search, and indeed most users probably have no idea whatsoever that there is any connection between the search terms they input and the advertisements that appear after the search.221 To the extent viewers make the connection, they

216. Id. at 1074-75. 217. Id. 218. Id. 219. Id. at 1085. 220. See Brief of Amicus Curiae International Trademark Association, Playboy En- ters., Inc., v. Netscape Communications Corp., 55 F. Supp. 2d 1070 (1999), aff’d, 202 F.3d 278 (9th Cir. 1999) (Nos. 99-56230 and 99-56231), published at 91 TRADEMARK RPTR. 756 (2001). 221. The plaintiffs’ theory in these cases depends upon web users expecting a close connection between their search terms and the banner advertisements generated in response. This theory, however, appears contrary to the fact, recently recognized by some courts, that dead ends and false starts, not flawless connections, are what most regular users come to experience and expect. See Strick Corp. v. Strickland, 162 F. Supp. 2d 372, 377 (E.D. Pa. 2001) (stating that it is “clear that ‘Internet surfers are inured to the false starts and excursions awaiting them’ and are ‘unlikely to be dissuaded, or unnerved’ when, after ‘tak[ing] a stab at what they think is the most likely domain name for a particular web site’ guess wrong and bring up another’s webpage.” (quoting Chatam Int’l, Inc. v. Bodum, Inc., 157 F. Supp. 2d 549, 559 n.17 (E.D. Pa. 2001))). probably realize what is really behind such search-term-responsive advertising: that the advertiser is someone who wants to attract the viewer, based on the viewer’s interest in a similar or competing product. This consumer understanding would of course negate the consumer confusion necessary to prove trademark infringement. At root the situation complained about in the search engine cases is not much different from a typical practice in the business world—the attempt to sell consumers who are interested in one product on a competing product. The “compare to” labels used on house-brand packages, a waiter’s request that a customer who asked for “Coke” accept “Pepsi” instead, and even highway signs for hotels and attractions are often premised on steer- ing a consumer from one brand-name product or service to a competing one. The advertiser, who learns of the customer’s preference from his or her search of certain trademarks, seeks to divert the consumer to a rival brand, and of course the search engine seeks to make money off of such invitation-to-switch advertising. These are hardly forbidden activities in normal non-Internet commerce, and there appears to be no need to forbid them in the context of Internet keyword sales.222 Keyword sales that result in “featured placements” in a search engine listing may raise different issues than keyword banner advertisement sales. While banner advertisements may appear so clearly to be advertisements that consumers should not be confused, search engine featured listings may well appear to consumers as listings of Internet webpages that are highly relevant to their search. For example, a consumer who searches for “Coca-Cola” may well be confused if the “featured placement” top website on the search results page is headlined “Your Favorite Soft Drink” but turns out to be the site for Pepsi-Cola. In practice, while consumers often ignore or do not click on or pursue banner advertisements, consumers inevitably give disproportionate attention to search result listings on the first search results page, given the practical impossibility of scanning the thousands of search results obtained in typical search engine searches. Accord- ingly, “featured placements” succeed in obtaining special consumer attention. If after giving those featured placement displays some attention, the consumer thinks they may be related to the company for which he or she

222. See Matthew A. Kaminer, The Limitations of Trademark Law in Addressing Trademark Keyword Banners, 16 SANTA CLARA COMPUTER & HIGH TECH. L.J. 35 (1999). was searching, then at least “initial interest confusion” would seem to exist.223 A slightly different dispute, also based on keyword-activated links based on pre-ordained judgments, relates to Netscape’s “smart browsing” function introduced in 1998 in its version 4.5 browser. This browser allowed viewers to type in only a portion of a web address destination; the browser, calling on programmed-in lists and judgments about popular websites, would automatically complete the address. All is well, of course, when the browser correctly anticipates the full address, but what about when it jumps ahead to “widgets.com” when the viewer really wanted the “widgets.org” site run by a competitor? Does this link violate the rights of the second website operator? One early complainant, the operator of the scripting.com domain, cried foul when Netscape instead directed the viewer to Netscape’s own scripting news sites.224 However, Netscape reportedly changed its practices to favor its own pages less—a possibly unnecessary change since it is commonplace for publishers of all sorts to favor their own related products when providing references for their readers. Many new and developing web technologies and techniques based on keyword linking could also raise legal issues. Microsoft’s “Smart Tags” technology, which the company originally planned to bundle with its Win- dows XP operating system, could have added automatic links to any word on a web page.225 As with keyword-based banner advertisements and featured placements, use of one firm’s trademark as the keyword leading to another firm’s advertisement would raise possible trademark infringement issues. F. Tarnishment and Disparagement Claims Trademarks are essentially advertising, and most companies like free advertising. Thus, trademarks used as images for links to the website of

223. One consumer advocacy group has brought a complaint to the Federal Trade Commission based on keyword featured placement sales, alleging that such sales are inherently deceptive. See Commercial Action, Commercial Action Files Complaint Against Search Engines for Deceptive Ads, at http://www.commercialalert.org/releases/- searchenginerel.html (July 16, 2001). 224. Chris Oakes, The Next Net Name Battle, WIRED NEWS, July 20, 1998, at http:\\www.wired.com/news/news/technology/story/13820.html; see also Malcolm Maclachlan, Critics Slam Netscape’s Smart Browsing, TECHWEB INTERNET, July 16, 1998, at http://content.techweb.com/ wire/story/TWB19980716S0009. 225. Scott Ard & Steven Musil, Microsoft Clips Windows XP Smart Tags, CNET NEWS, June 27, 2001, at http://news.cnet.com/news/0-1003-200-6399150.html. the trademark owner are relatively common on the Internet and rarely give rise to legal claims. In some situations, however, the trademark owner may not like the context, purpose, or manner of use of its trademark, and in some of these cases even a reference hyperlink may supply the offensive context. In Bally Total Fitness Holding Corp. v. Faber,226 for example, a health club operator sued a dissatisfied customer who used the plaintiff’s “Bally” trademark on its “Bally Sucks” webpage. The court granted defendant’s summary judgment motion, on the grounds that the defendant’s site did not infringe or dilute plaintiff’s trademark, because no reasonable consumer would consider the “Bally Sucks” site to be sponsored by Bally.227 Bally found a link to a pornographic site on defendant’s site particularly offensive; Bally claimed that the pornographic link, on a page that used the “Bally” trademark, tarnished (i.e., diluted) the mark.228 The court disagreed, finding that no “reasonably prudent Internet user” would associate Bally with the linked site.229 The Bally court did not address the situation where a more direct link existed between a trademark and an objectionable site. If the “Bally” trademark itself had been used as the link to a pornographic site, the court may well have found tarnishment. Similarly, links from pornographic or other objectionable sites directly to business sites may present tarnishment issues. Some adult sites, for example, use introductory pages that offer viewers the opportunity to “enter” or “leave” their sites; those who click on “leave” are sometimes linked directly to Disney’s website or other children-oriented sites. Family-oriented website operators may feel that any such direct link with an adult site tarnishes their marks. The tort of “passing off” played a significant role in several of the hyperlink cases to date. This tort addresses a key concern of businesses that is raised by many linking situations: the extent to which one firm’s reputation is appropriated or misused by another. Links may cause “passing off” concerns if one firm uses links to suggest that its goods or products are those of a better regarded competitor. Links may also lead to the relatively unusual “reverse passing off” claim in which one firm attempts to

226. 29 F. Supp. 2d 1161 (C.D. Cal. 1998). 227. Id. at 1168. 228. Id. at 1162. 229. Id. at 1163-64. suggest that another’s goods are its own.230 For example, an Internet publisher might use a linkage to suggest that it was responsible for the highly regarded goods or services on a competitor’s page. We may envision many situations in which links give rise to different kinds of passing off and reverse passing off claims. The use of logos and trademark designs in webpages presents one of the obvious problems. An Internet page creator who wants to link to the Disney’s official pages or fan pages,231 and who creates a Mickey Mouse icon for its hyperlink, may well receive a cease-and-desist letter from Burbank, California. Owners of valuable trademarks probably view hyperlinks as more likely to create a “passing off” problem than non-hyperlink use of a trademark, particularly where famous design marks are involved. As an example of reverse passing off, a company that manufactures or distributes low-quality goods could seek to upgrade its image in the marketplace—and possibly pass its goods off as associated with better-known producers—by hyperlinking to sites for top-quality producers. These and similar situations may also raise concerns about tarnishment or disparagement of one’s business reputation because of unwelcome associations. If, for example, Joe’s Internet Home Page for Junk Goods contains a hyperlink to your page, your goods may be implicitly disparaged, and your trademarks tarnished, by the association of your goods with “junk.” A media company, for example, has objected to a link to its website by a protest group.232 Similarly, the Better Business Bureau (“BBB”) has attempted to prevent links to its website by individual companies, fearing that the mere existence of the link may imply that BBB supports or is associated with that website.233 Finally, the Office of the Comptroller of the Currency, in a somewhat overcautious directive to banks, has warned that bank customers may seek to hold their banks responsible if hyperlinks on the bank’s website lead them to “disappointment, poor quality products

230. See, e.g., Kelly v. Arriba Soft Corp., 77 F. Supp. 2d 1116, 1121 (C.D. Cal. 1999) (holding that Arriba Soft’s use of photographer’s copyrighted images in its search engine results page was fair); see also supra note 94. 231. Fan pages are pages established by fans of entertainers, devoted to information, tributes and discussion concerning the entertainer. See generally Ericka S. Koster and Jim Shatz-Akin, Set Phasers on Stun: Handling Internet Fan Sites, COMPUTER L.J., Jan. 1998, at 18. 232. Adam Creed, Record Label Threatens Australian Web Site Over Song Link, NEWSBYTES, Aug. 25, 2000, at http://www.newsbytes.com/news/00/154197.html. 233. Better Business Bureau Tries to Stop Web Links, at http://www.siliconvalley.com/docs/news/tech/041049.htm (Mar. 14, 2001). or services, or loss as a result of their transactions with linked companies.”234 G. Possible Negligence Claims Hypertext links may create problems even for Internet advertisers with the best of intentions (for example, where one party’s Internet page links to a source which was considered reliable, but which turns out to contain misleading or harmful information). Even such simple informational links—posted with no particular commercial purpose other than to help provide information to consumers—could create risks under the theory of “negligent publication.”235 The “negligent publication” theory is disfavored and usually rejected as a matter of tort and constitutional law.236 However, extensive use of links to other sites in the “chaotic” and uncontrolled Internet may raise judicial eyebrows. Prudent web publishers, moreover, confront a dilemma as to the extent of their monitoring of linked sites; if they conduct extensive checking, they may be deemed under negligence law to have assumed the obligation to verify linked sites, whereas if they do not check, they may be charged with reckless linking.237 H. Derivative Liability Based on Links (Direct and Indirect) to Prohibited or Illegal Content Links consist of expressive conduct (“speech” in its broad meaning: words and/or images), and an action component (in the case of a standard HREF link, the mark-up code that executes the transfer of information). Legally, is a link speech or action, or both? So far courts have not directly addressed this basic issue of theory, but several decisions have treated links as embodiments of some action, not as pure speech.

234. Office of the Comptroller of the Currency, Weblinking: Message to Bankers and Examiners, OCC 2001-31, at http://www.occ.treas.gov/ftp/bulletin/2001%2d31.txt (last visited Nov. 25, 2001). 235. The “negligent publication” theory seeks to hold a publisher liable for publishing material that instructs and/or encourages readers in committing violent or other unlawful conduct. See Sandra Davidson, Blood Money: When Media Expose Others to Risk of Bodily Harm, 19 HASTINGS COMM. & ENT. L.J. 225, 281 (1997). 236. Id. at 253. 237. Cf. Stratton Oakmont, Inc. v. Prodigy Servs. Co., No. 31063/94, 1995 WL 323710 (N.Y. Super. Ct. May 24, 1995) (holding online service that conducts some screening of content to have assumed responsibility for content). The speech/action distinction is crucial because under the First Amendment, speech is constitutionally protected.238 Action is not. For policy reasons, classification of something as speech or action depends in part on intent and context, not simply whether words are used. Flag burning or a silent skit may constitute expression even though no words are used.239 The exhortation “Fire!” spoken in a crowded theater or “Go get ‘em!” to an attack dog, constitute action, even though no actions are used. 240 Thus, the speech/action distinction is inherently policy-based. Several court decisions have imposed liability for links to prohibited or illegal content, and these decisions appear to be based on the view that the links at issue constitute action (or part of a pattern of action), not protected speech. The first such United States decision was Intellectual Re- serve, Inc. v. Utah Lighthouse Ministry, Inc.241 The case involved a critic of the Mormon Church, that, among other things, posted on its website Mormon writings in which the church claimed a copyright.242 The church sued, and the defendant consented to an injunction that enjoined it from posting certain copyrighted material.243 The injunction sparked other church critics to post similar materials (or publicize their postings), and even to encourage creation of mirror sites. While the defendant did not participate in these postings, it did enthusiastically publicize them, and even provided instructions on how to reach the other sites and browse the forbidden material.244 Among other things, it published hyperlinked URLs for the other sites. The plaintiff immediately sought an order enjoining the links. Notably, these links were essentially links to illegal postings: copy-

238. U.S. CONST. amend. I. 239. Texas v. Johnson, 491 U.S. 397, 407 (1989) (holding that the act of burning an American flag was expressive conduct within the protection of the First Amendment); Iota Xi Chapter of Sigma Chi Fraternity v. George Mason Univ., 993 F.2d 386 (4th Cir. 1993) (holding “ugly woman contest” skit to be protected free speech). 240. Schenck v. United States, 249 U.S. 47, 52 (1919) (stating that “[t]he most stringent protection of free speech would not protect a man in falsely shouting fire in a theatre and causing a panic”); United States v. Hoff, 22 F.3d 222, 224 (9th Cir. 1994) (stating that defendant’s “potentially dangerous attempt to incite a dog to attack or repel the rang- ers on the second day, although verbal, was not spoken ‘criticism’ in even the basest sense of the word”). 241. 75 F. Supp. 2d 1290 (D. Utah 1999). 242. See Utah Lighthouse Ministry Official Homepage, at http://www.utlm.org (last visited Nov. 25, 2001). 243. Intellectual Reserve, 75 F. Supp. 2d at 1291. 244. Id. at 1292. righted material that the defendant had been previously enjoined from posting. The court’s decision carefully addressed the defendant’s potential contributory infringement or vicarious liability for providing links to the infringing material.245 First, the court reviewed the basic requirements for contributory infringement, including the requirement that defendant actively encourage infringement of the copyrighted material.246 The court found that the defendant did not actively encourage the original posting of the material by the linked-to sites, but that its link did actively encourage infringement by the users who followed those links.247 In this regard, the facts included more than the mere posting of links; the evidence also showed defendants provided specific instructions and encouragement for users who wished to visit the other sites. The court’s order required Utah Lighthouse Ministry and the other defendants to “remove from and not post on [its] website, addresses to websites that defendants know, or have reason to know, contained the material.”248 Although the decision has been criticized by some as chilling free use of hyperlinks on the Internet, the factual context of the holding significantly limits any broad application of the decision to customary linking. Moreover, in the context of the case, it seems clear that the court was influenced in reaching this decision by its inherent equitable power to enforce its own decisions, since the links had the practical effect of undercutting the effectiveness of the court’s injunction against direct posting of the material by the defendant. The circumstances and intentions behind these links thus substantially distinguish this case from the typical posting of links. As one commentator put it: “The publishing of the URLs was one thread in a tapestry of purposefully subverting an order of court. The tapestry, not the thread, is what got Utah Lighthouse Ministry into trouble.”249

245. Id. at 1292-93. 246. Id. at 1294-95. 247. Id. at 1294 (stating that web users who visited the sites that posted infringing materials were guilty of infringement by the mere visiting of those sites). 248. Id. at 1295. 249. T.R. Halvorson, How to Start an Urban Legend: the Reporting of Intellectual Reserve, Inc. v. Utah Lighthouse Ministry, at http://www.llrx.com/features/urban.htm (March 15, 2000). In other cases, courts have sanctioned or enjoined hyperlinks because the links appeared to be designed to evade court orders. See, e.g., Jeri-Jo Knitwear, Inc. v. Club Italia, Inc., 94 F. Supp. 2d 457 (S.D.N.Y. 2000) (ordering links to Italian website re- Just as Utah Lighthouse Ministry involved links to copyright infringing material, the celebrated Napster250 case and other cases involving sharing of music files also can be seen as linking cases. The common element of these cases is that the Internet user goes to a middle party (Nap- ster, Scour, or a similar site), which makes available a list of links to third parties who willingly make digital copies of copyrighted works available for downloading. The middle party does not itself host or transmit the copyrighted material; it merely provides (a) links to the third parties who make that material available, and (b) other facilities, such as peer-to-peer software, that assist the downloading of material from remote sources.251 In the Napster case, the court initially determined that the wholesale downloading of copyrighted music files by Napster users constituted direct copyright infringement, and that activity was not protected by the fair use doctrine or the asserted defenses of sampling or space-shifting.252 The court then turned to whether Napster was secondarily liable for this direct infringement through the doctrines of contributory copyright infringement or vicarious copyright infringement.253 The court quoted the classic definition of contributory infringement: “one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ in-

moved from U.S. website when links essentially served to evade prohibition on defendant’s use of a trademark in the United States). 250. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001). 251. Id. at 1011-12. The court stated that: Through a process commonly called “peer-to-peer” file sharing, Nap- ster allows its users to: (1) make MP3 music files stored on individual computer hard drives available for copying by other Napster users; (2) search for MP3 music files stored on other users’ computers; and (3) transfer exact copies of the contents of other users’ MP3 files from one computer to another via the Internet. . . . To transfer a copy of the contents of a requested MP3 file, the Napster server software obtains the Internet address of the requesting user and the Internet address of the “host user” (the user with the available files). . . . The Napster servers then communicate the host user’s Internet address to the requesting user. The requesting user’s computer uses this information to establish a connection with the host user and downloads a copy of the contents of the MP3 file from one computer to the other over the Internet, “peer- to-peer.” Id. (emphasis added). 252. Id. at 1013-19. 253. Id. at 1019-24. fringer.”254 It then examined (a) whether Napster had knowledge of the direct infringement, and (b) whether it materially contributed to that infringement. In addressing the first issue, knowledge, the court took pains to reject as insufficient mere knowledge that a computer system could be used for infringement.255 But the court found that Napster had knowledge far beyond that understanding of potential misuse. Napster’s own documents boasted of its use in “piracy” and the record demonstrated that “Napster has actual knowledge that specific infringing material is available using its system, that it could block access to the system by suppliers of the infringing material, and that it failed to remove the material.”256 Finally, the court examined whether Napster “materially contributed” to infringement, and concluded, in a two-paragraph analysis, that it did.257 The court did not single out Napster’s provision of links, but rather approvingly quoted the district court’s finding that “Napster is an integrated service designed to enable users to locate and download MP3 music files.”258 Obviously, one of those “integrated services” was the list of relevant links provided by Napster to its users. Next, the Ninth Circuit in Napster considered whether the Napster service created vicarious liability. For this doctrine the court relied on the

254. Id. at 1019 (quoting Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d Cir. 1971)). 255. Id. at 1021. The court stated that: We agree that if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement. See Netcom, 907 F. Supp. at 1374. Conversely, absent any specific information which identifies infringing activity, a computer system operator cannot be liable for contributory infringement merely because the structure of the system allows for the exchange of copyrighted material. See Sony, 464 U.S. at 436, 442-43. To enjoin simply because a computer network allows for infringing use would, in our opinion, violate Sony and potentially restrict activity unrelated to infringing use. Id. The court thus reconciled two of the key contributory precedents of the electronic age—the Sony case, which found no contributory infringement by manufacturers of videotape recorders used by consumers for time-shifting purposes, and the Netcom case on Internet Service Provider liability for retransmitting infringing material. Id. 256. Id. at 1022 (emphasis in original). 257. Id. 258. Id. (quoting A&M Records, Inc. v. Napster, Inc., 114 F. Supp. 2d 896, 920 (N.D. Cal. 2000)). pathbreaking Gershwin259 case, which extended vicarious liability beyond employer/employee relationships and into cases in which a defendant “has the right and ability to supervise the infringing activity and also has a direct financial interest in such activities.”260 The court found that Napster derived financial benefit from its users’ infringement, because the ability to download copyrighted music acted as a draw for Napster, and Napster possessed, but deliberately did not use, the ability to police its system and prevent infringement.261 Finally, the court rejected various defenses that Napster raised to the imposition of injunctive relief.262 Accordingly, the court affirmed, in relevant part, the injunction entered in the district court, which enjoined Napster from facilitating the unauthorized downloading or distribution of copyrighted music and recordings.263 While the Napster decision does not discuss links, the Napster system was in essence a linking system, and, in overview, the Napster ruling is not much different from Utah Lighthouse Ministry. Direct infringement occurred in both cases. In both cases, the defendant not only provided links to the infringing material, but also actively encouraged or facilitated the use of those links in various ways. In Utah Lighthouse Ministry, the additional steps were mostly verbal—instructions on following the links, and encouragement to use them—and in Napster, they were mostly technological—the Napster software that facilitated downloads. However, in both cases they allowed the courts to find the key “action” element of contributory infringement: material contribution to infringement.264 Yet another celebrated digital copyright case, Universal City Studios, Inc. v. Reimerdes,265 raised an issue of derivative liability for links to illegal content. The Digital Millennium Copyright Act of 1998 made it unlawful for anyone to circumvent copy-protection measures intended to protect copyrighted material from unauthorized copying.266 Special en-

259. Gershwin Publ’g Corp. v. Columbia Artists Mgmt., Inc., 443 F.2d 1159 (2d Cir. 1971). 260. A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1022 (quoting Gershwin Publ’g Corp., 443 F.2d at 1162). 261. Id. at 1023. 262. Id. at 1024-28. 263. Id. at 1029. 264. See supra text accompanying notes 241-263. 265. 111 F. Supp. 2d 294 (S.D.N.Y. 2000), aff’d sub nom, Universal City Studios, Inc. v. Corley, No. 00-9185 (2d Cir. Nov. 28, 2001). 266. 17 U.S.C. § 1201 (West Supp. 2001). In relevant part, this section provides that “(2) No person shall manufacture, import, offer to the public, provide, or otherwise traffic in any technology, product, service, device, component, or part thereof, that—(A) is cryption used on DVDs, known as Content Scramble System (“CSS”),267 qualified as protected copy protection measures. In late 1999, a Norwe- gian teenager developed, and hundreds of computer enthusiasts posted on the Internet, a software utility that decrypted CSS; this utility became known as DeCSS.268 The motion picture studios that use the CSS encryption system, and the entity that owns and licenses the system, brought various actions against those who actively disseminated the DeCSS software code. These suits implicated links in various ways. The first suit, brought by the CSS licensing agency in state court in California, actually may have created many links. The complaint itself contained long lists of URLs for sites that posted the DeCSS utility, and soon after it was filed, the complaint was posted on the Internet by DeCSS supporters, with the lists of links enabled as HREF links. Perhaps with a view to the links in the complaint, both in the courthouse file and on the Internet, the court in that case refused in its initial order to generally enjoin links to sites carrying the DeCSS utility. The court did, however, enjoin the defendants from dis- seminating the utility.269

primarily designed or produced for the purpose of circumventing a technological measure that effectively controls access to a work protected under this title . . . .” Id. 267. Universal City Studios, Inc. v. Reimerdes, 111 F. Supp. 2d 294, 308 (S.D.N.Y. 2000). 268. Id. (DeCSS is a software utility or computer program “that enables users to break the CSS copy protection system and hence to view DVDs on unlicensed players and make digital copies of DVD movies. The quality of motion pictures decrypted by DeCSS is virtually identical to that of encrypted movies on DVD.”). 269. DVD Copy Control Ass’n v. McLaughlin, No. 786804, 2000 WL 48512, at *4 (Cal. Super. Ct. Santa Clara Cty. Jan. 21, 2000). In refusing to enjoin links to sites carrying the DeCSS utility, the court stated: [T]he Court refuses to issue an injunction against linking to other websites which contain the protected materials as such an order is overbroad and extremely burdensome. Links to other websites are the main- stay of the Internet and indispensable to its convenient access to the vast world of information. A website owner cannot be held responsible for all of the content of the sites to which it provides links. Further, an order prohibiting linking to websites with prohibited information is not necessary since the Court has enjoined the posting of the information in the first instance. Id. The California Court of Appeal reversed the Superior Court’s injunction against posting of the DeCSS utility on the grounds that the DeCSS utility was not protected speech under the First Amendment and the plaintiff could not overcome the constitutional barriers to prior restraints. DVD Copy Control Ass’n v. Bunner, No. H021153, 2001 WL 1340619, at *10 (Cal. App. Nov. 1, 2001). The right to link to sites that carried the DeCSS utility eventually ma- tured as an issue in the federal case in New York brought by major movie studios.270 The plaintiffs sought to enjoin defendants both from posting DeCSS and from electronically linking their sites to others that had posted DeCSS.271 By the time the key linking issue became ripe for decision, there were only two defendants, Eric Corley and his company, 2600 En- terprises, Inc. (which the court described as “a leader of the computer hacker community”).272 Before the suit was brought, Corley had posted on his website, 2600.com, the text and object code for the DeCSS utility, as well as a list of links to other sites where the decryption utility could be found.273 After the lawsuit was filed against Corley and several other defendants, all of the defendants were enjoined from posting the DeCSS utility, but they were not enjoined from posting links to sites that carried the utility. Corley and 2600.com continued to post their links, and described their acts in doing so as “electronic civil disobedience.”274 They also actively encouraged copying and republication of the utility, stating at one point— somewhat reminiscent of Utah Lighthouse Ministry—“it’s especially important that as many of you as possible, all throughout the world, take a stand and mirror these files.”275 Corley and 2600.com, with support from both the hacker community and many critics of the anti-circumvention provisions of the Digital Millennium Copyright Act, challenged, unsuc- cessfully, the anti-circumvention provisions themselves and their application to the DeCSS utility. The parties and the district court also focused on a key issue of linking liability: regardless of whether Corley and 2600.com could post the DeCSS utility, could they be forbidden from merely linking to those who had posted it? The defendants portrayed this as a basic free speech issue, while the plaintiffs focused on the statutory language, which prohibited

270. Reimerdes, 111 F. Supp. 2d at 308-09. 271. Id. at 312. 272. Id. at 308-09. The court also stated that the defendant and his company were known for publishing “articles on such topics as how to steal an Internet domain name, access other people’s e-mail, intercept cellular phone calls, and break into the computer systems at Costco stores and Federal Express.” Id. 273. Id. at 309. 274. Id. at 303. 275. Id. at 312-13. providing or trafficking in any technology designed for the purpose of circumventing copy-prevention technology.276 The district court addressed both the statutory language and the defendants’ defenses. The court noted that the defendants made various links, some of which actively and automatically facilitated the downloading of the decryption utility, and others of which simply transferred the web user to the sites of parties that offered DeCSS.277 The court found a clear statutory violation in the more active links. Specifically, since the statute made it unlawful to offer, provide or otherwise traffic in described technology, a violation occurs wherever one “presents, holds out or makes a circumvention technology or device available, knowing its nature, for the purpose of allowing others to acquire it.”278 This, the district court held, clearly occurred when Corley “linked to sites that automatically commence the process of downloading DeCSS upon a user being transferred by defendants’ hyperlinks;” such a linkage was “the functional equivalent of transferring the DeCSS code to the user themselves.”279 The court then took the next step and found ordinary hyperlinks directed to pages that only made available the DeCSS code equally violative of the act, since the fact that the user was left with the option of downloading the illegal code was “a distinction without a difference.”280 What, then, should be made of standard passive HREF links, particularly where they were joined together with text and commentary? The defendants argued that 2600.com was a media outlet, an electronic journal of opinion, fact, and commentary, one that had its own particular non- mainstream point of view, but one as fully deserving of constitutional protection as the opinionated journals of revolutionary times.281 The court brushed off these arguments by focusing again on the background, prior acts, and apparent intent of the defendants and their links. The court distinguished the Corley/2600.com link with intent to promote copying of the prohibited material from a newspaper’s hypothetical, purely informational link.282 In addressing the defendants’ free speech arguments, the court

276. Id. at 316-27. 277. Id. at 324. 278. Id. at 325-32. 279. Id. at 325. 280. Id. 281. Id. 282. Id. The court stated: Defendants urged others to post DeCSS in an effort to disseminate DeCSS and to inform defendants that they were doing so. Defendants made explicit its conclusion that the links in question, viewed in context, were actions, not speech. Therefore, the links were capable of regulation under United States v. O’Brien,283 which governs regulation of conduct that contains expressive elements:

Links bear a relationship to the information superhighway comparable to the relationship that roadway signs bear to roads but they are more functional. Like roadway signs, they point out the direction. Unlike roadway signs, they take one almost instanta- neously to the desired destination with the mere click of an electronic mouse. Thus, like computer code in general, they have both expressive and functional elements. Also like computer code, they are within the area of First Amendment concern. Hence, the constitutionality of the DMCA as applied to defendants’ linking is determined by the same O’Brien standard that governs trafficking in the circumvention technology generally.284 The Second Circuit affirmed the district court’s ruling and explicitly endorsed the district court’s application of the O’Brien test for speech that contains both action elements. The appeals court noted that a hyperlink both “conveys information, the Internet address of the linked the web pages” and in addition “has the functional capacity to bring the content of the linked web page to the user’s computer screen.”285 Because the application of the DMCA’s anti-circumvention provisions provisions to linking is content-neutral, the O’Brien test must apply.286 The appeals court held that the district court had sufficiently (if not more than sufficiently) protected free speech by requiring knowledge and intent of unlawfulness before the linker would be enjoined from linking to prohibited material.287 Finally, the appeals court distinguished Internet hyperlinks from their non- electronic counterparts, such as printed addresses of bookstores that sell illegal materials, because a hyperlink to digital material facilitates “instan-

then linked their site to those “mirror” sites, after first checking to ensure that the mirror sites in fact were posting DeCSS or something that looked like it, and proclaimed on their own site that DeCSS could be had by clicking on the hyperlinks on defendants’ site. By doing so, they offered, provided or otherwise trafficked in DeCSS, and they continue to do so to this day. Id. 283. 391 U.S. 367 (1968). 284. Reimerdes, 111 F. Supp. 2d at 339. 285. Universal City Studios, Inc. v. Corley, No. 00-9185, at 60 (2d Cir. Nov. 28, 2001). 286. Id. at 62. 287. Id. at 63-63. teous worldwide distribution before any preventative measures can be effectively taken.”288 The court acknowledged that enjoining hyperlinks could cause “some impairment of communications,” just as not disturbing them would require toleration because of the policy choice made by Con- gress in the DMCA.289 In sum, the Second Circuit approved the district court’s essential analysis that hyperlinks to illegal can be enjoined because of their action component. Much like the courts in Utah Lighthouse Ministry and Napster, the Reimerdes court viewed and analyzed the links at issue as part of an overall pattern of conduct. In that context, they found that the total conduct met the standard for derivative liability (in this case, the anti- circumvention provision of the DMCA).290 The trio of Utah Lighthouse Ministry, Napster, and Reimerdes/Corley appear to establish the principle that links to illegal content, when revealed in context as having a significant action component, may be enjoined or sanctioned. Some foreign courts have made similar determinations. Decisions in Belgium and Denmark have reportedly found liability for those who provided links to illegal content such as illegal software, obscene material, or copyright-infringing works.291 In India, a search engine operator was criminally charged with making available links to obscene material.292 A Swedish decision involving links to MP3 music files recognized the possibility of hyperlink liabilities.293 Deliberate links to illegal content—as appear to have occurred in Utah Lighthouse Ministry and Napster—present strong cases for derivative liability. Links that were posted for traditional media informational purposes, as in the 2600.com links in Reimerdes/Corley, present closer questions. Then come links, most likely posted for purely informational pur-

288. Id. at 65. 289. Id. at 66. 290. Reimerdes, 111 F. Supp. 2d at 304. 291. See Western High Court, Denmark, Apr. 20, 2001, nn. V.L. B-1943-99, V.L. B- 2089-99 (holding defendants liable for establishing direct links to music tracks on their webpages); Belgacom Skynet N.V. v. IFPI Belgium VZW, Appeal Court of Brussels, 8th Division, Feb. 13, 2001, Record No. 2095 (holding Internet service provider Belgacom Skynet liable for subscriber-created MP3 links to unlawful reproductions of musical recordings). 292. Manu Joseph, Porn a Thorn for Indian Portal, WIRED NEWS, Dec. 4, 2000, at http://www.wired.com/news/business/0,1367,40432,00.html. 293. Linking and copyright—a summary of a recent ruling in a Swedish court of Ap- peal, at http://www.juridicum.su.se/iri/karc/linking.htm (last visited Nov. 25, 2001). poses, that link only to other links, and thereby only indirectly to any illegal content. To what extent, and under what circumstances do links to links ever create derivative liability, assuming that something in the end chain is indeed illegal content? In particular, are links to links inevitably expressive, and hence protected by the First Amendment, or may links to links constitute non-protected and sanctionable action even when they lead only remotely to illegal content? The first answer is that contributory infringement, where recognized, must be subject to reasonable limits. Based on the interconnectedness of the web and the theory that no more than “six degrees of separation” stand between any two individuals on the planet, it would not take much to wrap many innocent and unknowing people into a claim for contributory infringement. This was illustrated in Bernstein v. J.C. Penney, Inc.,294 in which a photographer sued a retailer not for anything on its website, but for a link on its site to a movie database, which in turn linked to a site in Sweden that allegedly infringed the photographer’s copyright in two celebrity photographs.295 The case never reached final resolution, but suggests that claims of remote contributory infringement will be viewed with skepticism: the district court denied the plaintiff’s motion for a preliminary injunction, and the plaintiff dismissed his case shortly thereafter.296 The next answer, perhaps, is that intent and context do matter, and the Utah Lighthouse Ministry, Napster, and Reimerdes/Corley cases should be interpreted as “linking-plus” cases, not “linking” cases. In each of these cases, the defendant was held liable because it did more than just post Internet links. The encouragement of copying and even excitement at others’ posting of the infringing materials in Utah Lighthouse Ministry, the intentional encouragement of wholesale copying of copyrighted music in Napster, and the active encouragement of downloading and use of the DeCSS utility by Corley in Reimerdes/Corley make up the “plus” element. Where the context makes clear that a link is posted merely for its informational (indexing, referencing) content, and with no active encouragement

294. No. 98-2958, 1998 U.S. Dist. LEXIS 19048 (C.D. Cal. Sept. 29, 1998); see Carl S. Kaplan, Can a Web Link Break Copyright Laws?, N.Y. TIMES CYBER L.J., Sept. 25, 1998, at http://www.nytimes.com/library/tech/98/09/cyber/cyberlaw/25law.html (free subscription required). 295. Bernstein, 1998 U.S. Dist. LEXIS 19048, at * 1. 296. The defendants contended, among other things, that “multiple linking does not constitute substantial participation in any infringement where the linking website does not mention that Internet users could, by following the links, find infringing material on another website.” Id. of use of illegal content, then “plus” factors are missing, the expressive nature of the link dominates, and courts should not impose derivative liability. Indeed, in such cases involving informational (“pure speech”) links, the traditional and necessary elements of material furtherance of infringement (contributory infringement) and financial gain from infringement (vicarious liability) are likely to be lacking or weak. The “link-plus” derivative liability precedents should not apply to “mere link” situations; imposition of derivative liability for a mere expressive link posted solely for informational purposes would almost inevitably violate the First Amendment. Thus, for example, a libel plaintiff ought not to have a viable claim against those who merely post links to a site containing allegedly defamatory statements.297

IV. DEFENSES AND DEFENSIVE STRATEGIES FOR HYPERLINK CLAIMS Link Law pioneer Dr. Wills of the Shetland News was incredulous at the linking claim made against him in 1996, but linking claims are no longer so novel or shocking. Increasingly, Internet publishers should understand that links on, or to, business sites might raise claims. They should be prepared with strategies for preventing or minimizing such claims, or with defenses to them. The sections below outline several possible defensive strategies. A. Standard Defenses to Claims When plaintiffs make claims based on hyperlinks, the defendants will find some ready-made defenses available. In copyright and trademark law, for example, parties often use the defenses of “fair use” (copyright law) and “descriptive” or “nominative” use (trademark law). Defendants find these defenses particularly useful where the defendant is not a business competitor and has a public-interest justification for using a part of another’s intellectual property. For example, a linking page owner may defend against hyperlink copyright infringement claims on grounds of non-copyrightability or fair

297. See Brenda Sandburg, Hyperlinked Blast Sparks a Lawsuit, NAT’L L.J., Feb. 21, 2000, at A-4 (describing libel suit by professor Daniel Curzon Brown against a Teacher Review website containing critical student evaluations of him, and another site that linked to the Teacher Review site); see generally Lisa Fernandez, Free-Speech Fight Over Webmaster, SILICON VALLEY NEWS, March 6, 2000, at http://www0.mercury- center.com/svtech/news/indepth/docs/webwar030700.htm. use. If the copy used on the linking page is short enough or is a mere factual description, it may not constitute infringement even if the copy is taken from the originating page. In the Shetland Times case, for example, the News claimed that the Times headlines that it copied onto its page were too short to be copyrightable. Fair use is a complicated issue in United States law, but the flexible statutory fair use factors,298 the “transformative use” factor introduced by Campbell v. Acuff-Rose Music Inc.,299 and the Supreme Court’s approval of viewer initiated time-shifting trans- fers for personal use in Sony,300 may support the defense in this context. As the Welles and Bally cases demonstrate, two similar defenses in trademark law, relating to “descriptive use” and “nominative use,” permit some use of trademarks in normal discourse. The “descriptive use” defense permits a word that is a trademark to be used in its normal dictionary non-trademark sense; it “forbids a trademark registrant to appropriate a descriptive term for his exclusive use and so prevent others from accurately describing a characteristic of their goods.”301 A related doctrine, also often known as “descriptive use,” but sometimes distinguished as “nominative use,” allows use of the term as a trademark but in a non- confusing descriptive context.302 Use of the trademark will not imply sponsorship or endorsement of the product where the mark is used only to describe the thing, rather than to identify its source, particularly where no descriptive substitute for a trademark exists. For example, even though “Boston Marathon” is a trademark, a television station could not be stopped from using the name “Boston Marathon” because those words described the event that the station broadcast.303 Whether use of a trademark on a hyperlink is justifiable as a descriptive or nominative use of the mark will often depend on whether consumers believe that a trademark hyper-

298. 17 U.S.C. § 107 (1994). 299. 510 U.S. 569 (1994). 300. Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984). 301. Soweco, Inc. v. Shell Oil Co., 617 F.2d 1178, 1185 (5th Cir. 1980). 302. RESTATEMENT (THIRD) OF UNFAIR COMPETITION § 28 (1995). 303. WCVB-TV v. Boston Athletic Ass’n, 926 F.2d 42, 46 (1st Cir. 1991). As one court put it: Such nominative use of a mark—where the only word reasonably available to describe a particular thing is pressed into service—lies outside the strictures of trademark law: Because it does not implicate the source-identification function that is the purpose of trademark, it does not constitute unfair competition; such use is fair because it does not imply sponsorship or endorsement by the trademark holder. New Kids On the Block v. News Am. Pub., Inc., 971 F.2d 302, 306-08 (9th Cir. 1992). link indicates some sponsorship by, or a recognized or licensed association with, the trademark owner.304 In a noncommercial context, there may well be a stronger First Amendment right to make a hyperlink and even to use another’s trademark in a hyperlink. In American Civil Liberties Union of Georgia v. Miller,305 the court indicated that a ban on noncommercial use of trademarks would raise First Amendment problems. The court stated in dictum that use of trademarks in connection with hyperlinks was allowable.306 Other traditional defenses will also apply to intellectual property infringement claims based on linking. For example, Bernstein v. J.C. Pen- ney, Inc.307 illustrated that normal legal limitations on contributory infringement claims are sufficient to bar extreme claims of remote contributory infringement based on hyperlinks. B. Right to Link Defense Creators and users of links can claim that web traditions and practices have given rise to an implied license to link, or, as it is sometimes characterized, an implied right of public access. For example, a British professor offered a custom-based argument in favor of the Shetland News’ hyperlinks:

The copyright owner made a deliberate choice to place his Web site online, with full knowledge (presumably) of how the system operates. Linking of Web sites to one another is extremely common and is, arguably, both the raison d’être of the WWW and the reason for its success. It is custom and practice, and so if a copyright owner puts up a Web site, he MUST expect others to link into his site. Services such as Web search rights could not operate without this ability.308 Similarly, in its Answer to the Ticketmaster Corp. v. Microsoft Corp. suit, Microsoft asserted the right to hyperlink, but highlighted technology

304. See Brief of Amicus Curiae International Trademark Association, supra note 220 (containing an excellent discussion of the descriptive use versus nominative use distinction). 305. 977 F. Supp. 1228 (N.D. Ga. 1997). 306. Id. at 1233 nn.5-6. 307. See supra text accompanying notes 294-295. 308. Charles Oppenheim, The Internet Copyright Case and Its Implications for Users of the WWW, SHETLAND NEWS, Dec. 6, 1996, available at http://www.ariadne.ac.uk/- issue6/copyright. rather than custom as giving rise to the right.309 In its affirmative defenses to Ticketmaster’s claims, Microsoft first explained webpages and hyperlinks, emphasizing that webpage publishers invite the public to view their sites, and that hyperlinks merely facilitate that activity.310 Microsoft claimed that links on its “Seattle Sidewalks” site to the Ticketmaster site were no different from footnotes or directory listings in print, which scholars and newspapers are free to publish, and which have an effect, if at all, only through the independent actions of readers.311 Based on these facts, Microsoft alleged as affirmative defenses, among others, (a) that Ticketmaster assumed the risk “when it elected to participate in the World Wide Web system” that Internet users would view its site, (b) that because Ticketmaster encouraged traffic to its site, it was estopped from making claims based on that traffic, and (c) that Microsoft’s use of Ticketmaster’s trademarks was fair noncommercial use, devoid of any suggestions of sponsorship or endorsement.312 Implied rights certainly exist as to many Internet materials and practices. Under current copyright law, almost any artistic or linguistic composition that may be posted on a website is likely to be copyrighted, meaning that the copyright owner has the exclusive rights to reproduce, distribute and display the work.313 Simply browsing the web would constitute copyright infringement if we did not recognize that by posting materials on an open computer network, a publisher is inviting visits and granting web viewers the implied right to view its postings. Whether based on custom or technology, “implied license” or “implied public access” theories may be dependent on the evidence regarding actual web practices. In particular, if web publishers begin incorporating in their pages prohibitions against linking, or if they begin requiring prior consent to links, those practices would seriously undercut the implied license or consent arguments. In instances where the linking site does more than just provide a neutral link— for example, where, as alleged in Washington Post Co. v. Total News, Inc.,

309. Microsoft’s Answer, supra note 117, ¶¶ at 43, 45, 47. 310. Id. 311. Id. 312. Id. at ¶¶ 51-62. Microsoft also claimed that its use of Ticketmaster’s trademarks and its “publication of basic information and commentary about Ticketmaster” constituted “news reporting of information” and “constitutionally protected speech” that could not constitutionally be enjoined. Id. at ¶¶ 61-62, 71-75. 313. 17 U.S.C. § 501 (Supp. V 1999) (listing exclusive rights of copyright owner). the linking site frames the linked material with its own banners and advertisements—it would be harder to justify a right to link freely.314 In situations where links are encouraged or tolerated for the most part—and as many web publishers acknowledge that one may freely link to their websites315—courts will likely recognize the implied license theory. C. Normal Competitive Conduct Before a defense to linking is asserted on constitutional or intellectual property grounds, it may be wise to examine whether the conduct at issue falls within normal competitive behavior. Normal competitive behavior is traditionally considered fair and controlled by the marketplace, not the courtroom. After all, to recast Justice Holmes’s comment about trademarks in Prestonettes,316 there is nothing particularly sacred about an Internet link; using or exploiting Internet linking technology for commercial advantage is not taboo. Some of the Internet community’s thought on linking, perhaps stretching back to Berners-Lee’s initial commitment to build and make available a totally open system, appears to imbue linking technology with a kind of sacredness, and take the view that linking technologies must be kept apart from the world of commerce. Most particularly in the case of keyword-based advertising, the commercial world teaches that no cognizable confusion exists where the consumer understands that a rival of the company for whose goods he is searching is directing advertising to him. Every business seeks to place its advertising before those potential customers most interested in its goods or services. That is precisely what search engines sell in their banner advertising: an opportunity to reach those potential customers who may have an interest in particular goods or services. To analogize to institutions of eighteenth century America—as the Supreme Court likes to do317—it is no different from the fruit-seller calling out, “Apples for sale!” when a hun- gry-looking fellow approaches on the street. The conduct changes charac-

314. See supra text accompanying notes150-151. 315. E.g., Los Angeles Times Co. Complaint, Los Angeles Times Co. v. Free Repub- lic, No. 98-7840, 2000 U.S. Dist. LEXIS 5669 (C.D. Cal. filed Sept. 28, 1998), available at http://www.techlawjournal.com/courts/freerep/19980928.htm (stating in plaintiff’s complaint that plaintiff publishers would have no objection to “use of plain hypertext links to plaintiffs’ websites”). 316. Prestonettes v. Coty, 264 U.S. 359, 368 (1924). 317. See, e.g., Reno v. ACLU, 521 U.S. 844 (1997) (analogizing Internet publishers with pamphleteers and participants in New England town meetings). ter only when it deceives (for example, when the consumer is presented not with obvious advertising but with a featured listing presented as if it were the most relevant site). Similarly, “smart browsing” may be imperfect in directing consumers to the particular places they may wish to visit, but in that regard it is no different from any other commercial directory or travel agent. To claim that Netscape should favor one site or another in its “smart browsing” service is no different from claiming that Fodors should recommend one hotel over another, or that Michelin should award a particular restaurant four stars instead of three. “Negligent advice” claims of this sort have rightly been universally rejected in the past. Indeed, if giving flawed directions were actionable, that famous seeker of a route to India, Columbus, would be a tortfeasor, not a hero. An important premise that underlies much of our law is that competitive conduct is normal, acceptable, and even socially beneficial. Such conduct is limited only in certain situations when the need for limits is clearfor example, anti-competitive conduct, and violations of the rights of others. Just as in the First Amendment area where the remedy for speech we do not like is normally counter-speech rather than a prohibition of speech,318 so too in the business world the remedy for unwise business practices should normally be competition, offering consumers the alternative of better practices. In the long run, Internet sellers, search engines, and browsers will not succeed over their competitors if their hyperlinks, keyword advertising, or judgments about viewer preferences misjudge, or are offensive to, the values of a large number of Internet users. D. Disclaimers, Linking Restrictions, and other One-Party Actions Those who make links to other Internet sites may of course include in their sites appropriate disclaimers and disavowals. Such disclaimers may cure some potential problems with links, especially in the trademark area, where the legal focus is on whether a consumer is likely to be confused as to any affiliation between the linker and the linkee. For example, one might explain the ownership of trademarks used on a webpage, and disavow any affiliation or endorsement by the trademark owners or by operators of linked sites. Some websites post no specific disclaimers for their hyperlinks, but in response to a click on a hyperlink to another website, display a notice explaining that the user will be leaving the present web-

318. See Whitney v. California, 274 U.S. 357, 377 (1927) (Brandeis, J., concurring). site for another site, over which the present website owner has no control.319 Such a warning operates as a sort of disclaimer.320 A number of trademark infringement and related cases, including some involving web linking disputes, have relied on disclaimers.321 The effectiveness of disclaimers, at least in trademark law, is a factual question that depends on the overall impression created, taking into account the psychology of the consumers who are likely to be exposed to the trademark use.322 Disclaimers relegated to fine print at the bottom of a page—which are often not visible unless the viewer scrolls down to them—may not override a misleading impression left by more prominent parts of a webpage display. Additionally, disclaimers may not work for appearances of unfair competition created by framing or misleading links. Even a well- worded disclaimer, moreover, may not avoid initial interest confusion, when a consumer is led to one website by improper techniques such as metatag use of a competitor’s trademarks.323 Just as disclaimers represent a unilateral attempt by the linking party to avoid link-law liabilities, potential linked sites often unilaterally seek to limit or prevent links by their own announced linking restrictions. Such self-proclaimed restrictions are probably not effective or enforceable, unless the linking party takes some affirmative steps that make it contractually bound to follow the linking restrictions. Where, for example, an Internet site announces that no one may link to it without permission, it is probably safe for a linking party to ignore that announcement and link to the site in a standard, nonobjectionable manner (for example, without any attempt to suggest affiliation, framing, or commercially motivated deep linking). While arguably the placement of links in contravention of the

319. Dianne Lynch, Without a Rulebook: Cyberspace Presents Journalists with an Entirely New Set of Ethical Dilemmas, AM. JOURNALISM REV., Jan./Feb. 1998, at 43. 320. Id. (“In a way, that’s a legal disclaimer to the point where we’re telling you that you’re going somewhere that has some affinity to the story, but we don’t know what you’re going to find when you get there.” (quoting Rob Fixmer, editor of the Cyber Times section of the New York Times)). 321. See, e.g., Playboy Enters., Inc. v. Welles, 7 F. Supp. 2d 1098, 1104 (S.D. Cal. 1998) (stating that the use of disclaimers “indicates good faith in the use of the trademarks and weights in favor of defendant” (citing Consumers Union of U.S. v. Gen. Sig- nal Corp., 724 F.2d 1044, 1053 (2d Cir. 1983))). 322. See, e.g., Am. Chicle Co. v. Topps Chewing Gum, Inc., 208 F.2d 560, 562-63 (2d Cir. 1953) (noting that in trademark law, courts consider habits of buyers including their tendency to quickly glance at package labels without carefully studying them). 323. See, e.g., N.Y. State Soc’y of Certified Pub. Accountants v. Eric Louis Assocs., Inc., 79 F. Supp. 2d 331, 342 (S.D.N.Y. 1999). linked site’s expressed policies could evidence bad faith, courts are unlikely to assess liability in these situations, especially where the placement of unauthorized links is commonplace and accepted in the web world, and no laws appear to have been violated. E. Permission Agreements The simplest and most direct way to prevent claims of unauthorized hyperlinks is to obtain authorization. Often this will be quite easy to accomplish. Some websites solicit or encourage links, and even make readily available artwork that can be downloaded to serve as the linking symbol; obviously such sites permit linking, and no further permission is required. Other sites may generally seek links, but perform some limited screening and approval process. Here, if one follows the approval process and is allowed to link, authorization is established. Where one finds no “link freely” invitation or link approval process, the linking party can seek authorization in various ways. If a letter or e- mail to the webmaster of the prospective linkee gets an approval in response, this offer and acceptance through exchange of correspondence should evidence an enforceable linking agreement. If the linkee in response imposes limits or conditions to its linking authorization, then a response from the operator of the linking site will be needed to complete the offer-counterproposal-acceptance cycle. Given the simplicity of even the arms-length settlement agreements in the Total News324 and Shetland Times325 cases, a simple exchange of correspondence should suffice for most simple linking authorizations. Linking licenses may well become expected where framing or inline technologies are used to specially present or aggregate content from other websites. In such situations, a prudent web publisher should at least consider obtaining such a license, due to the possible objections and claims, illustrated by the Total News, which may attend to unauthorized framing. The most complex linking licenses may require significant attention like any other important contract.326 Indeed, in anticipation of an increasing use of formal linking licenses in situations like this, an American Bar As-

324. Wash. Post’s Complaint, supra note 150 325. Shetland Times Ltd. v. Wills, 1997 S.L.T. 669 (Sess. Cas. 1996). 326. See, e.g., Mark Kaminkey, Net License: Favored Way to Protect IP, NAT’L L.J., Nov. 11, 1996 (describing issues which may be covered in linking licenses). sociation subcommittee has published a guide to considerations relating to terms in linking licenses.327 Where one seeks and obtains permission to link to such a site, the linking party will probably then be contractually bound to honor the linked party’s policies.328 If the linked party later revokes permission to link, the linking party is probably then contractually bound to cut the link. Some sites take pains to entice potential linkers into such contracts. For example, the eBay Internet auction site makes available, for no charge, a color- ful eBay trademark button that embodies an HTML hyperlink to eBay. The twist is that in completing the form required to install the eBay button, the linking site agrees to eBay’s Link License Agreement, which, among other things, gives eBay the right to revoke the license at any time in its sole discretion.329 Given the significant drawbacks of agreeing to a site’s self-imposed linking restrictions, most savvy linkers will simply ignore self-proclaimed linking restrictions rather than subject themselves to contractual linking limits. Where the kind of link created falls outside the commonplace, unilateral restrictions may carry more force. Some sites, for example, state that they permit normal hyperlinks, but that they prohibit, or require express permission for, framing or inline linking. To the extent these more intru- sive linking practices are less accepted in the web world, these unilateral restrictions are likely to be taken seriously and enforced by courts. Linking permission agreements are likely to become more and more common with respect to business sites on the web. They permit businesses to control their gateways to customers and the public, maintain quality and performance standards, and prevent misunderstandings. Eventually, linking rights may become valuable salable commodities for owners of the most desirable sites.

327. Subcomm. on Interactive Servs. of the Comm. on the Law of Commerce in Cy- berspace, supra note 12. 328. Presumably there is an enforceable contract, because consideration was ex- changed—the linking party received the assurance that its link would be permitted and it would not be subject to legal action, and the linked party received a preview and opportunity to reject a proposed link. 329. See Link your site to eBay, http://pages.ebay.com/services/buyandsell/link- buttons.html. V. PRINCIPLES FOR LINK LAW DISPUTES New technologies always lead to predictions of dire technological harm, and corresponding cries for new legal controls. It happened with the telegraph, the so-called “Victorian Internet” of the late nineteenth century.330 It happened with radio and television.331 It happened even quite recently with such benign technologies as the telephone and the facsimile.332 Accordingly, a gimlet eye needs to be focused on the early Internet link law cases, especially to the extent that they appear to restrict or prohibit use of Internet linking technologies without adequate policy justification. If the history of broadcasting is any guide, a new communications technology is most likely to blossom in the absence of strict regulation. Just as hard cases make bad law,333 cutting-edge cases, decided when a technology appears new and mysterious, can make questionable precedents. Moreover, the truism that courts many times reach the right result for the wrong reason is often borne out in novel situations, where judges must proceed to decision points without the comforting aid of many precedential pointers, or even a firm grip on the technology and how it may develop. In developing sound link law policies, we need to heed early link law cases, without being tied to all of their narrow conclusions. Against this background, several principles for Internet linking con- troversies may be suggested: Recognize a presumptive right to make reference links. HREF links seem presumptively allowable in almost all situations. A hyperlink is, in one analyst’s words, “an automated version of a scholarly footnote or bib- liographic reference; it tells the reader where to find the referenced material.”334 While such links were held actionable in the initial Shetland Times decision, that decision seems wrong as a matter of United States

330. See generally TOM STANDAGE, THE VICTORIAN INTERNET: THE REMARKABLE STORY OF THE TELEGRAPH AND THE NINETEENTH CENTURY’S ON-LINE PIONEERS (1998). 331. See generally ITHIEL DE SOLO POOL, TECHNOLOGIES OF FREEDOM: ON FREE SPEECH IN THE ELECTRONIC AGE (1983). 332. See, e.g., Telephone Consumer Protection Act of 1991, 47 U.S.C. § 227 (1994) (banning automated telephone calls for telemarketing purposes and unsolicited facsimile advertisements). 333. Ex Parte Long, 3 W.R. 19 (1854). 334. Dan C. Burk, Proprietary Rights in Hypertext Linkages, J. INFO. L. & TECH. (June 30, 1998) (suggesting that “providing a hyperlink should be no more objectionable than supplying someone with the call number of a book found on a physical library shelf”), available at http://elj.warwick.ac.uk/jilt/intprop/98_2burk. copyright law.335 It also appears unnecessary to vindicate the unfair competition interests that seemed to trouble the trial court. Where there is concern that a reference link threatens to confuse consumers or appropriate business opportunities, these perils can usually be avoided by adequate disclosures and nondeceptive practices by the linking party. A fair, adequate disclosure by the Shetland News that its link will take the reader to the Shetland Times website should have been sufficient in that case. Of course even reference hyperlinks will occasionally lead to liability. One may easily use a simple hyperlink to libel another, or to tarnish a trademark, for example, and hence there can be no immutable rule that hyperlinks are always allowable. The principle should simply be that a linkage itself is presumptively all right, and restrictions should be imposed only when the circumstances show a clear abuse that would be actionable in a non-Internet situation. Study actual consumer understandings and recognize web user intelligence and sophistication as appropriate. Trademark and unfair competition laws focus on consumer understandings. Whether a particular use of a mark constitutes infringement depends on how consumers will react; specifically, whether they are likely to be confused. Even dilution laws, which protect trademarks beyond the area of “confusion,” focus essentially on states of mind: whether use of a mark will “blur” or “tarnish” the image of the mark in the minds of the relevant consumers. False advertising and unfair competition law also depend on how consumers understand certain information put forth by one competitor about another. In such cases, consumer surveys are often needed to determine consumer perceptions and how consumers’ overall knowledge and instincts interact with the advertising or statements at issue. While the law’s focus should be on actual consumer understandings, courts have become accustomed to assume at times that, at least in the general product marketplace, consumers do not use a terrible amount of thought or intelligence. The image of unthinking and simplistic consumer

335. Copyright claims arising from pure reference hyperlinks, such as those asserted in the Shetland Times case, are especially weak. One who places his copyrighted material on an open network distinguished by easy reference linking can hardly complain when such links are made. As Microsoft asserted in its defenses to the Ticketmaster case, the linker is doing no more than facilitating the “visit me” invitation that the linked site has already made. Microsoft’s Answer, supra note 117, at ¶¶ 43,47. Moreover, “hyperlinking [without framing] does not itself involve a violation of the Copyright Act . . . since no copying is involved.” Ticketmaster Corp. v. Tickets.com, Inc., 54 U.S.P.Q.2d (BNA) 1344, 1346 (C.D. Cal. Mar. 27, 2000). behavior is widespread, and goes back at least to Judge Learned Hand’s observation that buyers tend to quickly glance at package labels without carefully studying them.336 Some of the key link law cases can be seen as hinging on somewhat paternalistic views of Internet users. The metatag cases that found infringement, for example, are premised on Internet users as being easily confused about sponsorship and associations.337 However, the Bally and Welles decisions that permitted use of another’s trademarks in metatags seemed to have assumed that users would readily understand the lack of any association.338 Several other decisions went further and suggested that Internet users were so “inured to false starts and excursions awaiting them” that they would not be confused by any site to which they were misdirected.339 Courts should not assume any particular level of naiveté or sophistication of Internet users. Rather, they need to require litigants to develop specific evidence about the understandings and behavior of Internet users. Internet users may well turn out to be far more sophisticated and capable of understanding the significance of links than many courts have thus far credited. After all, they have the ability to turn on a computer and the dar- ing to attempt to navigate the world’s largest collection of information. Actual evidence of consumer understandings may be especially important in instances, such as framing and inlined links, where at present one can only speculate as to typical user perceptions.340 So far, although some litigants have attempted to survey Internet users, there is a paucity of empiri-

336. Am. Chicle Co. v. Topps Chewing Gum, Inc., 208 F.2d 560, 562 (2d Cir. 1953). 337. See supra text accompanying note 167. 338. In Brookfield Communications v. West Coast Entertainment Corp., 174 F.3d 1036, 1057 (9th Cir. 1999), for example, the court of appeals readily assumed lack of sophistication in Internet users: In the Internet context, in particular, entering a web site takes little effort—usually one click from a linked site or a search engine’s list; thus, Web surfers are more likely to be confused as to the ownership of a web site than traditional patrons of a brick-and-mortar store would be of a store’s ownership. Id. (emphasis added). This assumption appears to be totally unsupported by evidence. 339. E.g., Strick Corp. v. Strickland, 162 F. Supp. 2d 372 (E.D. Pa. 2001). 340. But see Burk, supra note 334 (explaining that “sophisticated web users undoubtedly already will know that on-line frames and framed materials are not ‘bundled,’ and as the level of familiarity with the technology increases, the average web user may be assumed to recognize the potential for different origins of screen display elements just as she now recognizes the potential for different origins of combined physical goods”). cal evidence regarding the psychology and understanding of Internet users.341 Recognize the unique nature and value of information linking technologies. Lawyers and judges live by the analytical tools of precedent and analogy, and where precedents are lacking, as in the case of new technologies, they rely on analogies. The Internet, for example, has been analogized to everything from a New England town meeting to a dance hall to a dark alley. So, not surprisingly, linking technologies have been analogized to various kinds of nontechnological links and associations, including the familiar links, endorsements, and associations known to the law of unfair competition. While the term “link” suggests these analogies, they may not be the proper analogies. If indeed an Internet “link” is no more than an automated footnote or a digitized Dewey decimal reference, then the unfair competition analogy is not valid, and such an analogy inhibits sound analysis. Internet linking technologies need to be examined afresh, without the prejudgment of forced analogies. In particular, courts need to examine the unique benefits and possibilities of these new technologies, as well as of- fenses alleged to have been committed with them. In such a “big picture” examination, perhaps even new terminology is needed. Professor Dan Burk has aptly characterized the issue in many link law disputes as that of “control over information referencing.”342 Perhaps not surprisingly in view of this characterization of the issue, Professor Burk has suggested that “[i]ntellectual property law should optimally be interpreted so as to forestall future monopolization of information tagging systems.”343 What- ever the ultimate policy—or, more likely, policies—relating to linking disputes, we will all be better served if courts undertake to understand and consider the overall potentialities and benefits of the technology under examination. Recognize the right to create, use and exploit electronic searching of an open electronic network. Just as telephone technology led to the telephone book, the Internet has caused the creation of search engines. As a practical matter, navigation of the web would be difficult or impossible without search engines. Yet just as telephone directories could conceiva-

341. See, e.g., Simon Prop. Group L.P. v. MySimon, Inc., 104 F. Supp. 2d 1033 (S.D. Ind. 2000) (discussing survey issues relating to consumer understanding of search engine listings). 342. Burk, supra note 334. 343. Id. bly be faulted as invasions of privacy, search engines and how they are used and exploited can be, and have been, faulted on numerous grounds. As we have seen, linking claims can arise from website owners’ use of metatags to attract search engines, and from search engine operators’ own sale of banner advertisements. These acts of use and exploitation of electronic searching capabilities should not be viewed in isolation. The Internet is an electronic network, where electronic searching—and hence electronic tagging—is necessary and expected. Because of the vastness of the Internet, and its decentralized openness allowing practically anyone to add new content, effective computer-based search tools are needed. No one who enters into an open computer network ought to be surprised by the existence, capabilities or use of electronic searching. Nor should anyone, even one who remains outside the network, be shocked that words of trade and commerce, including trademarks, show up in Internet communications as targets and outputs of search engines. Put simply, a web user’s utilization of search technology should be no more suspicious than a sign painter’s use of a paintbrush; what matters is not the technology but what is done with it. Mere search engine use of the trademarks of another—as metatag targets or banner advertisement prompts, for example—should not be verboten any more than use of trademarks in labels, coupons, or comparative print advertisements. Abuses, if they occur, can always be distinguished and dealt with appropriately.344 Just as media are treated more deferentially than other speakers, and just as common carriers like telephone companies are given immunity from content restrictions, courts may need to provide special protections for search engines. Certainly an automatically generated search engine list of links to illegal content should be treated differently than a list of links created by a party that deliberately seeks to direct traffic to the illegal sites. While this problem may be handled in part by the application of the traditional element of contributory infringement that requires knowledge by the alleged contributory infringer, it may be necessary to create a

344. For example, in the case of metatags, courts can readily distinguish between helpful allowable use of metatags as indexing aids, and deceptive use that confuses consumers. E.g., Bernina of Am., Inc. v. Fashion Fabrics, Int’l., Inc., 57 U.S.P.Q.2d (BNA) 1881 (N.D. Ill. Feb. 9, 2001) (acknowledging usefulness of metatags as indexing tools but holding them unlawful where, in context of website, the defendant attempted to confuse consumers); SNA, Inc. v. Array, 51 F. Supp. 2d 554 (E.D. Pa. 1999) (relying on repeated use of plaintiff’s trademark in metatags and other evidence of bad faith in concluding that metatags should be enjoined). search engine exemption or privilege in some situations. Courts already seem cognizant of the critical need for search engines, indexes, and links associated with such search tools.345 Use technology rather than law to close doors on any open network. Where web publishers desire to control access to their otherwise unrestricted websites—such as by prohibiting deep links—legal barriers should not be the preferred method. Rather, web publishers should be expected to utilize all practical and available technological tools to achieve their objectives before they seek innovative legal rulings, which will inevitably carry broad effects. Deep linking, for example, can be addressed by various means, including requiring password access, blocking requests or links except from certain pre-approved sites, use of dynamic (i.e., frequently changing) URLs for subsidiary pages. If web publishers use these rather than legal methods to control or restrict deep links, they can satisfy their objectives without causing distortions to the law or hardships or restrictions on the broad Internet community. The same principles ought to apply to problems besides deep linking as well.346

345. E.g., Playboy Enters., Inc. v. Netscape Communications Corp., 55 F. Supp. 2d 1070, 1077 (C.D. Cal. 1999) (“Because the Internet contains an almost infinite number of Web pages, Internet search engines provide a critical tool for Internet users. Without search engines, Internet users would be unable to locate all but the most obvious Web sites.”). 346. As one commentator stated: [T]here are technological solutions to most of the unauthorized linking or framing problems. These methods—which can block or redirect unauthorized links—are so simple and readily available that it is difficult to understand why anyone would want to resort to litigation rather than use the quick, certain, and comparatively inexpensive technological fix instead. In fact, this may be the very reason why there is so little law or commentary on this issue. For example, if a Web site operator does not wish to have his site “framed” by the operator of a linking site, the linked site operator need only include readily-available anti-framing programming into his Web site. Many Web site operators have already incorporated this programming that prevents others from framing their site, including The New York Times, CNN, The Los Angeles Times, and USA Today. Unauthorized linking can also be prevented by limiting access to the site to paid subscribers, or by imposing registration and password requirements that allow access to the site only to those who have previously registered. Alternatively, a Web site operator can program an automatic change of his URL address (rendering links established by other Web site operators obsolete) on a regular basis, although this obviously poses some Study issues raised by framing or inlining, and encourage licensing where websites incorporate off-site materials. Framing and inlining technologies raise more concerns than simple reference hyperlinks. Both techniques raise serious issues of the creation of derivative works under copyright law. In image inlining, when A takes B’s copyrighted image and places it on A’s website—perhaps as an integrated element of a composite design such as a collage—A seems to have adapted B’s work and hence violated B’s exclusive right to make derivative works. When A uses framing technology to frame portions of B’s web content on A’s website, the derivative work issue may arise, although one does not create a derivative work by putting a frame (e.g., a picture frame) around a copyrighted work.347 The non-copyright issues arising from framing and inlining need more study. The Total News complaint artfully highlighted some serious potential legal concerns with framing, but due to the particular relative sizes of the litigants (major media companies against a small web pioneer) and the early settlement utilizing a linking license, these innovative theories never underwent real testing. In particular with respect to the unfair competition theories in such a case, the facts regarding consumer perceptions are all- important. Do consumers believe when they view a framed site that the framed site is associated with the framing site? Or do viewers see a framed site for what it is, and easily navigate directly to the framed site when they so desire? Similarly the issues of advertising expectations and losses need factual development before we settle on legal policies for these situations. Consider Internet consequences in analyzing proposed legislation. Just as the Shetland Times case foreshadowed linking disputes in the United States, foreign link law disputes continue to preview the kind of disputes—and legal claims—that may develop in the United States. Sev- eral recent European cases, for example, warn that we may see future deep linking claims based on database rights if the United States enacts database protection legislation similar to that in the European Union. For that

though this obviously poses some problems (or at least annoyance) for users that have “bookmarked” the page for easy access. In short, as one author put it, “There is usually a technological solution to any linking problem that is perceived to be offensive.” Tucker, supra note 181, at ¶¶ 143, 145. 347. Lee v. A.R.T. Co., 125 F.3d 580 (7th Cir. 1997) (holding ceramic tiles on which copyrighted note card designs and lithographs were mounted were not derivative works). But see Greenwich Workshop, Inc. v. Timber Creations, Inc., 932 F. Supp. 1210 (C.D. Cal. 1996) (holding framed and matted works made using plaintiff’s copyrighted works infringed the derivative works right). reason, our policy makers should consider Internet consequences—such as the possibility of opening up more deep linking claims—in connection with proposed legislation like database protection. As our society walks down the path of greater recognition of proprietary rights, it must take care that it does not in so doing unduly restrict useful tools and techniques like Internet linking. Maintain flexibility to permit adaptation to technological advances. Laws must be adaptable to evolving technologies. The Internet is changing and evolving rapidly and consequently courts need to be careful not to promulgate doctrines narrowly tailored to today’s technology, which may be gone tomorrow. HTML, today’s “language of the web,” may be replaced before long with eXtensible Markup Language (“XML”), a new computer language that could dramatically affect the way links operate, and which might empower both linker and linkee alike to deal more directly with the links of concern to them. Courts should be particularly cautious about intervening in areas where new technology may empower private problem solving.

VI. CONCLUSION Every Internet user understands the delight that Berners-Lee and other technological pioneers must have felt with the creation of hypertext markup language, the World Wide Web, and quick and easy hyperlinks. The technology is truly revolutionary and holds great promise for increasing communication, learning, and the speed and reach of business activity. Users of the World Wide Web, however, also understand intellectual property laws, and in particular one immutable principle that applies not only to technology but to all human affairs: One thing leads to another. When one thing—including an Internet link—leads to another—such as a copyright or trademark infringement, a false or misleading reference, or a misappropriation of a business opportunity—our law comes into play. Where there are legal prohibitions against certain kinds of associations, the law will examine links carefully and prohibit improper links. Put simply, the millions of links on the World Wide Web are themselves linked, inextricably, to the laws that regulate business activities. IS THERE A THERE THERE? TOWARD GREATER CERTAINTY FOR INTERNET JURISDICTION By Michael A. Geist†

ABSTRACT The unique challenge presented by the Internet is that compliance with local laws is rarely sufficient to assure a business that it has limited its exposure to legal risk. Since websites are accessible worldwide, the prospect that a website owner might be haled into a courtroom in a far- off jurisdiction is much more than a mere academic exercise, it is a very real possibility. The article identifies why the challenge of adequately accounting for the legal risk arising from Internet jurisdiction has been aggravated in recent years by the adoption of the Zippo legal framework, commonly referred to as the passive versus active test. The test provides parties with only limited guidance and often results in detrimental judicial decisions from a policy perspective. Given the inadequacies of the Zippo passive versus active test, it is now fitting to identify a more effective standard for determining when it is appropriate to assert jurisdiction in cases involving predominantly Internet-based contacts. With the benefit of the Zippo experience, the new test should remain technology neutral so as to: a) remain relevant despite ever-changing web technologies; b) create incentives that, at a minimum, do not discourage online interactivity; and c) provide sufficient certainty so that the legal risk of operating online can be effectively assessed in advance. The solution submitted in the article is to move toward a targeting- based analysis. Unlike the Zippo approach, a targeting analysis would

© 2001 Michael Geist. † Assistant Professor, University of Ottawa Faculty of Law, and Director of E- Commerce Law, Goodmans LLP. The author would like to thank the Uniform Law Con- ference of Canada and Industry Canada for their financial support in sponsoring this paper; Teresa David and William Karam for their research assistance; Vaso Maric, Rene Geist, Harvey Goldschmid, Ted Killheffer, Denis Rice, as well as the participants at the Consumer Measures Committee/Uniform Law Conference of Canada April 2001 Work- shop on Consumer Protection and Jurisdiction in Electronic Commerce, the TPRC 2001 Conference, and the Georgetown University Advanced E-commerce Institute, for their comments on earlier versions of this paper; the editors of the BERKELEY TECHNOLOGY LAW JOURNAL for their excellent work in bringing this paper to publication; and to Alli- son Geffen for her continued love and support. Any errors or omissions remain the sole responsibility of the author. seek to identify the intentions of the parties and to assess the steps taken to either enter or avoid a particular jurisdiction. Targeting would also lessen the reliance on an effects analysis, the source of considerable uncertainty since Internet-based activity can ordinarily be said to create some effects in most jurisdictions.

TABLE OF CONTENTS I. INTRODUCTION ...... 2 A. The Yahoo.com France case ...... 5 B. The iCraveTV case ...... 7 II. JURISDICTION ON THE INTERNET...... 9 III. THE RISE AND FALL OF THE ZIPPO TEST ...... 16 A. The Emergence of the Zippo Passive versus Active Test...... 16 B. Post-Zippo Case Law ...... 23 C. The Shift Away from Zippo ...... 27 IV. TOWARD A TRIO OF TARGETS...... 36 A. Advantages of a Targeting Approach...... 36 B. The Targeting Test ...... 40 1. Contracts...... 42 2. Technology...... 49 a) User Identification...... 52 i) Infosplit ...... 52 ii) NetGeo ...... 52 iii) EdgeScape...... 53 iv) Digital Envoy ...... 53 v) Quova ...... 54 b) Self-identification...... 54 c) Offline Identification...... 55 d) Targeting and Technology...... 57 3. Actual or Implied Knowledge...... 58 V. CONCLUSION...... 60

I. INTRODUCTION

The Internet has no territorial boundaries. To paraphrase Gertrude Stein, as far as the Internet is concerned, not only is there perhaps ‘no there there,’ the ‘there’ is everywhere where there is Internet access.1

- Judge Nancy Gertner, Digital Equipment Corp. v. Altavista Technology, Inc., 1997

1. Digital Equip. Corp. v. Altavista Tech., Inc., 960 F. Supp. 456, 462 (D. Mass. 1997). We order the company YAHOO! Inc. to take all measures to dis- suade and make impossible any access via Yahoo.com to the auction service for Nazi objects and to any other site or service that may be construed as constituting an apology for Nazism or contesting the reality of Nazi crimes . . . 2

- Judge Jean-Jacques Gomez, UEJF et LICRA v. Yahoo! Inc. et Yahoo France, May 2000

As business gravitated to the Internet in the late 1990s, concern over the legal risks of operating online quickly moved to the fore, as legal issues inherent in selling products, providing customer service, or simply maintaining an information-oriented website began to emerge.3 Certain legal risks, such as selling defective products or inaccurate information disclosure, were already well-known to business, as these risks are encountered and addressed daily in the offline world.4 The unique challenge presented by the Internet is that compliance with local laws is rarely sufficient to assure a business that it has limited its exposure to legal risk. Since websites are instantly accessible worldwide, the prospect that a website owner might be haled into a courtroom in a far-off jurisdiction is much more than a mere academic exercise; it is a very real possibility.5 Businesses seeking to embrace the promise of a global market at the click of a mouse must factor into their analysis the prospect of additional compliance costs and possible litigation. The risks are not limited to businesses, however. Consumers anxious to purchase online must also balance the promise of unlimited choice, greater access to information, and a more competitive global marketplace with the fact that they may not benefit from the security normally afforded by local consumer protection laws. Although such laws exist online, just as they do offline, their effectiveness is severely undermined if consumers

2. Yahoo!, Inc. v. LICRA, C-00-21275 JF, 2001 U.S. Dist. LEXIS 18378, at *6, 7 (N.D. Cal. Nov. 7, 2001) (citing the French court’s decision in UEJF et LICRA v. Yahoo! Inc. et Yahoo France). 3. See, e.g., Louis Trager, Unhappy Holidays at Toys “R” Us, ZDNET INTERAC- TIVE WK., January 12, 2000, at http://www.zdnet.com/filters/printerfriendly/- 0,6061,2421416-35,00.html. 4. See, e.g., Cornell Law School Legal Information Institute, Products Liability Law: An Overview, at http://www.law.cornell.edu/topics/products_liability.html (last visited Nov. 26, 2001). 5. See, e.g., UEJF et LICRA v. Yahoo! Inc. et Yahoo France, T.G.I. Paris, May 22, 2000, N° RG: 00/05308 [hereinafter Yahoo!France]; see also Braintech, Inc. v. Kostiuk, [1999] 171 D.L.R. (4th) 46, 63-64 (B.C.C.A.) (translated by Richard Salis). do not have recourse within their local court system or if enforcing a judgment requires further proceedings in another jurisdiction.6 Moreover, concerns over the legal risks created by the Internet extend beyond commercial activities. Public interest information-based websites on controversial topics may face the prospect of prosecution in far-away jurisdictions despite their legality within the home jurisdiction.7 Mean- while, anonymous posters to Internet chat sites face the possibility that the target of their comments will launch legal action aimed at uncovering their anonymous guise.8 In recent years, adoption of the Zippo legal framework has exacerbated the challenge of adequately accounting for the legal risk arising from Internet jurisdiction.9 In the Zippo framework, commonly referred to as the passive versus active test, courts gauge the relative interactivity of a website to determine whether assertion of jurisdiction is appropriate. At one end of the spectrum lies “passive” websites—minimally interactive information-based websites.10 At the other end of the spectrum lies “active” websites, which feature greater interactivity and end-user contacts.11 The Zippo test suggests that courts should refrain from asserting jurisdiction over passive sites, while jurisdiction over active sites is appropriate. The test has proven to be largely unhelpful as it provides parties with only limited guidance and often results in detrimental judicial decisions from a

6. The U.S. Federal Trade Commission has noted: Shifting to a pure country-of-origin approach to address challenges inherent in the current system risks undermining consumer protection, and ultimately consumer confidence in e-commerce. The same would be true under a “prescribed-by-seller” approach to the extent it would allow contractual choice-of-law and choice-of-forum provisions dictated by the seller to override the core protections afforded to consumers in their home country or their right to sue in a local court. United States Federal Trade Commission, Bureau of Consumer Protection, Consumer Protection in the Global Electronic Marketplace: Looking Ahead (Staff Report), available at http://www.ftc.gov/bcp/icpw/lookingahead/electronicmkpl.pdf (Sept. 2001). 7. See Yahoo!France, supra note 5; see also Yahoo! Ordered To Bar French from Nazi Sites, REUTERS, Nov. 20, 2000, available at http://www.zdnet.co.uk/news/2000/- 46/ns-19192.html. 8. In Canada, see Irwin Toy Ltd. v. Doe [2000] O.J. No. 3318 (Ont.). In the United States see J. Erik Hvide v. “John Does 1-8,” No. 99-22831-CA01 (Fla. Cir. Ct. Jun. 14, 2001). See also John Doe, also known as Aquacool_2000 v. Yahoo! Inc., No. 00-20677 (Cal. Super. Ct. filed May 11, 2000); see generally C. S. Kaplan, Judge Says Online Critic Has No Right To Hide, N.Y. TIMES CYBER L. J., June 9, 2000 (on file with author). 9. Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1122-23 (W.D. Pa. 1997). 10. Id. at 1124. 11. Id. at 1127. policy perspective. As courts start to break free from the passive versus active test, they have begun to shift toward an equally problematic effects- based approach that potentially grants jurisdiction to every court in the world.12 Yahoo.com France13 and iCraveTV14 are two recent cases involving Internet jurisdiction that illustrate the difficulties with the current test. In these two cases, international jurisdictional issues combine with complicated fact patterns to demonstrate the limitations of the Zippo test. A. The Yahoo.com France case Few cyberlaw cases have attracted as much attention as the Yahoo! France case, in which a French judge ordered the world’s most popular and widely visited website to implement technical or access control measures blocking auctions featuring Nazi memorabilia from French residents.15 Yahoo! reacted with alarm, maintaining that the French court could not properly assert jurisdiction over the matter.16 Yahoo! noted that the company maintains dozens of country-specific websites, including a Yahoo.fr site customized for France, that were free of Nazi-related content.17 These country-specific sites target the local population in their local language, and endeavor to comply with all local laws and regulations.18 The company argued that its flagship site, Yahoo.com, primarily targeted a United States audience. Since United States free speech laws pro-

12. See infra Part III.B. 13. Yahoo!France, supra note 5. 14. Twentieth Century Fox Film Corp. v. iCraveTV, No. 00-121, 2000 U.S. Dist. LEXIS 1013 (W.D. Pa. Jan. 28, 2000). 15. See Jim Hu & Evan Hansen, Yahoo Auction Case May Reveal Borders Of Cy- berspace, CNET NEWS.COM, Aug. 11, 2000, at http://news.cnet.com/news/0-1005-200- 2495751.html (“A warning to Internet companies doing business abroad: Local governments may have the power to impose restrictions even if your servers are in the United States.”); see also Kristi Essick, Yahoo Told To Block Nazi Goods from French, THE STANDARD, Nov. 20, 2000 (on file with author) (“A French judge upholds his previous decision, ordering the company to install a filtering system for its auction site. The case raises questions about the jurisdiction of national courts over international Net companies.”). 16. Hu & Hansen, supra note 15. 17. See Brian Love, Can Neo-Nazis Yahoo! in France?, REUTERS, Aug. 10, 2000, at http://www.zdnet.com/zdnn/stories/news/0,4586,2614196,00.html (“French law prohibits the sale or exhibit of objects with racist overtones and none are directly available or visible on the Yahoo.fr site.”). 18. See Yahoo! Terms of Service, at http://docs.yahoo.com/info/terms (last visited Nov. 26, 2001). tect the sale of Nazi memorabilia, the auctions were entirely lawful.19 Moreover, the Yahoo.com site featured a terms of use agreement, which stipulated that the site was governed by United States law.20 Since the Ya- hoo.com site was not intended for a French audience, and users implicitly agreed that United States law would be binding, the company felt confident that a French judge could not credibly assert jurisdiction over the site.21 Judge Jean-Jacques Gomez of the County Court of Paris disagreed, ruling that the court could assert jurisdiction over the dispute since the content found on the Yahoo.com site was available to French residents and was unlawful under French law.22 Before issuing his final order, the judge commissioned an international panel to determine whether the technological means were available to allow Yahoo! to comply with an order to keep the prohibited content away from French residents. The panel reported that though such technologies were imperfect, they could accurately identify French Internet users at least seventy percent of the time.23 Based on this report, Judge Gomez ordered Yahoo! to ensure that French residents could not access content that violated French law on the site. Failure to comply with the order would result in fines of 100,000 francs per day after a three month grace period.24 Soon after, Yahoo! removed the controversial content from its site,25 but the company proceeded to contest the validity of the French court’s order in a California court.26 In November 2001, the court ruled in favor of Yahoo!, holding that the French judgment was unenforceable in the United States.27

19. See Brendon Fowler et al., Can You Yahoo!? The Internet’s Digital Fences, 2001 DUKE L. & TECH. REV. 12, ¶ 1, at http://www.law.duke.edu/journals/dltr/articles/- 2001dltr0012.html. 20. See Yahoo! Terms of Service, supra note 18. 21. See id. 22. See Yahoo!France, supra note 5. 23. Id.; see also UEJF et LICRA v. Yahoo! Inc. et Yahoo France, T.G.I. Paris, Nov. 20, 2000, N° RG: 00/05308 [hereinafter Yahoo!France Interim Order]. 24. See id. 25. Lisa Guernsey, Yahoo to Try Harder to Rid Postings of Hateful Material, N.Y. TIMES, Jan. 3, 2001, available at http://www.nytimes.com/2001/01/03/technology/- 03YAHO.html (“Yesterday, Yahoo officials said the monitoring policy was not a response to the French ruling. Rather, they said, the company was responding to users who had requested a more active policy and to groups like the Wiesenthal Center and the Anti-Defamation League, which have been in talks with Yahoo throughout the year.”). 26. Yahoo!, Inc. v. LICRA, C-00-21275 JF, 2001 U.S. Dist. LEXIS 18378 (N.D. Cal. Nov. 7, 2001). 27. Id. at *10. B. The iCraveTV case In late 1999, iCraveTV, a small Canadian Internet startup company, attracted the legal wrath of broadcasters, sports leagues, and movie studios in both Canada and the United States when it began providing Internet users with the opportunity to watch television in real-time on their personal computers.28 The lawsuits proved effective. On February 28, 2000, approximately one month after a federal court issued an injunction banning its webcasting,29 iCraveTV announced that it had reached a settlement with the broadcasters, sports leagues, and movie studios on both sides of the border. It agreed to permanently stop its unauthorized webcasting activities.30 One of the most interesting aspects of the case was the ease with which a United States court asserted jurisdiction over a Canadian company webcasting in Canada, referring to indicia such as the United States registrant address attached to the iCraveTV domain name. iCraveTV had sought to limit its distribution to Canadians and thus avoid United States jurisdiction.31 Since iCraveTV recognized that its activities were legal in Canada, but potentially illegal elsewhere, it conditioned access on passing through three stages of verification. The company’s clickwrap agreements were designed to ensure that only persons located in Canada could lawfully access the service.32 The first step required the potential user to enter

28. “A tiny Canadian Internet startup is being hit with the wrath of Hollywood and the big broadcasting networks in the U.S. The company is called iCraveTV. It’s been in business less than two months, and it’s just been hit with a huge lawsuit, backed by most of the American entertainment industry.” Michael Colton, U.S. Broadcasters Take iCraveTV to Court (CBC radio broadcast, Jan. 21, 2000). 29. Twentieth Century Fox Film Corp. v. iCraveTV, No. 00-121, 2000 U.S. Dist. LEXIS 1013, at *2 (W.D. Pa. Jan. 28, 2000). 30. Bloomberg News, Broadcasters Pull the Plug on iCraveTV, CNET NEWS.COM, Feb. 28, 2000, at http://news.cnet.com/category/0-1004-200-1559907.html. For the settlement agreement, see Canadian Association of Broadcasters, Settlement Agreement, at http://www.cab-acr.ca/english/joint/submissions/settlement.htm (last visited Nov. 26, 2001). Interestingly, the settlement provides that if a court in Canada makes a final determination that Internet webcasting without permission is not a violation of Canadian copyright law, iCraveTV can move to vary the terms of the settlement. Moreover, in addition to stopping the webcasting, iCraveTV agreed to stop its application for an Internet royalty before the copyright board. Id. 31. See Susanne Craig, Court Shuts Down iCraveTV—for now, GLOBE AND MAIL, Jan. 29, 2000, available at http://friendscb.org/articles/Globe&Mail/globe000129.htm (“iCraveTV argued in court that its service is intended only for Canadians and it has taken steps as recently as yesterday to prohibit non-Canadians from accessing the site.”). 32. See Steven Bonisteel, Peepers.com Lawsuit Eyes Net Jurisdiction, INFOWAR.COM, May 24, 2000, at http://www.infowar.com/law/00/law_052-400b_j.shtml; his local area code. If the area code was not a Canadian area code, the user was denied access to the service. This approach was viewed, with some justification, as an ineffective safeguard, since iCraveTV’s own Toronto area code was posted on the site.33 The second step required the user to confirm that he was located in Canada.34 The user was confronted with two icons—an “In Canada” icon and a “Not in Canada” icon.35 If the user clicked on the “In Canada” icon, he was then presented with the third step, another clickwrap agreement.36 This agreement contained a complete terms of use agreement including another confirmation that the user was located in Canada.37 To complete the agreement, the user was required to scroll to the bottom of the agreement and click on the “I Agree” icon.38 The specific details of this case highlight the challenges of distinguishing between active and passive websites as required by the Zippo test. United States-based users were required to pass through three stages to access the site, including fraudulently entering into two clickwrap agreements. It is, therefore, arguable that under the Zippo test described below, while the iCraveTV site was “active” in Canada, it was actually “passive” for United States purposes, and therefore should have fallen outside of United States jurisdiction. If it was passive for United States users, the court should have lacked jurisdiction to hear the case under the Zippo test. In light of the various standards being applied by courts in establishing jurisdictional rights in the online environment, this paper examines the effectiveness of the current approaches and recommends possible reforms. I argue that the passive versus active test established in Zippo has, with time, become increasingly outdated and irrelevant. It has been surpassed in practice by an effects-based analysis that poses even greater danger to legal certainty and the prospect for “over-regulation” of Internet-based activities. I argue instead for the adoption of a three-factor targeting test that includes analysis of contract, technology, and knowledge as the standard for assessing Internet jurisdiction claims. Part II of this paper contains an analysis of the complications created by Internet jurisdiction, highlighting four policy considerations that must

see also Michael A. Geist, iCraveTV and The New Rules of Internet Broadcasting, 23 U. ARK. LITTLE ROCK L. REV. 223, 225 (2000). 33. See Geist, supra note 32, at 226. 34. Id. 35. Id. 36. Id. 37. Id. 38. Id. be balanced in order to develop a test that garners approval from a diverse group of stakeholders and remains relevant as technologies change. These four policy considerations are: foreseeability, bias towards effects-based analysis, jurisdictional quid pro quo, and technological neutrality. Mindful of these complications, Part III contains a review of recent Internet jurisdiction jurisprudence in both the United States and Canada, beginning with the development of and subsequent approval of the Zippo passive versus active test. It identifies the subtle changes that have been occurring since late 1999, as courts begin to find the Zippo test too con- straining and shift their analysis toward an effects-based paradigm. Having argued that the Zippo test should be replaced, Part IV presents an alternative, proposing a targeting-based test for Internet jurisdiction which is supported by the growing acceptance of targeting in both case law and international policy levels. It then advocates the adoption of a three-factor approach to targeting that includes assessments of any contractual provisions related to jurisdiction, the technological measures employed to identify the targeted jurisdiction, and the actual or implied knowledge of the website operator with respect to targeted jurisdictions. Part V concludes by applying the targeting test to the Yahoo! France and iCraveTV cases. Although the analysis would not change the outcome in these cases, it demonstrates how the parties would benefit from the greater legal certainty that accompanies a targeting-based analysis.

II. JURISDICTION ON THE INTERNET Internet jurisdiction suffers from heightened uncertainty on several levels. First, challenges in defining the issue have often left policy makers and courts at odds over which aspect of the jurisdictional issue should be analyzed. Second, the challenges of applying reasonableness and foreseeability principles to the online environment are complicated by changing technology and an environment where cross-border disputes are the norm. Professor Yochai Benkler of NYU Law School argues that communications systems are divided among three interconnected layers.39 There is a physical layer that includes the wires and connections needed to link phones, computers, routers, and other communications technology. Above the physical layer is a logical layer that determines who is able to access

39. The Information Law Institute at New York University School of Law, Free Information Ecology in the Digital Environment, at 29, at http://www.law.nyu.edu/- ili/conferences/freeinfo2000/webcast/transcripts/105124DemDiscourse.pdf (last visited Nov. 26, 2001). what on the network. Finally, above the logical layer is a content layer where the content being communicated resides. Internet jurisdiction can also be conceptualized in three layers. There is an application layer that determines whether courts are entitled to apply their laws to a particular dispute. Above the application layer is a substantive layer, where courts apply their substantive laws to the dispute.40 Above the substantive layer is the enforcement layer, where court orders must be enforced in an online environment that often resists the imposition of foreign judgments because of large distances and minimal monetary disputes.41 Internet jurisdiction discussions often fail to adequately distinguish between these three layers. For example, criticism leveled at the French court’s decision in the Yahoo!France case has focused on the court’s willingness to assert jurisdiction over a site based in the United States, the in- appropriateness of French free speech law, and the challenge of forcing Yahoo! to comply with the order.42 Although each of these criticisms is

40. The substantive layer tends to be the most contentious since it frequently pits divergent perspectives on fundamental legal freedoms, such as freedom of speech, against one another. See, e.g., Stephan Wilske & Teresa Schiller, International Jurisdic- tion in Cyberspace: Which States May Regulate the Internet?, 50 FED. COMM. L.J. 117, 122-23 (1997) (“When CompuServe, Inc. blocked access by its subscribers in the United States and around the world to two hundred discussion groups after a federal prosecutor in Germany had indicated that they might violate German pornography laws, users realized that ‘cyberspace doesn’t belong to a single country,’ but to a whole range of countries with diverse legal concepts.”). 41. Despite this article’s focus on the application layer—better known as adjudica- tory jurisdiction—some commentators have opined that the enforcement layer actually presents the greatest challenge in the online environment. See, e.g., Henry H. Perritt, Jr., Will the Judgment-Proof Own Cyberspace?, 32 INT’L LAW. 1121, 1123 (1998) (“The real problem is turning a judgment supported by jurisdiction into meaningful economic relief. The problem is not the adaptability of International Shoe—obtaining jurisdiction in a theoretical sense. The problem is obtaining meaningful relief.”). 42. The case was characterized in the following manner by the Center for Democ- racy and Technology: In a setback for free expression on the Internet, a French court has ruled that U.S.-based Yahoo, Inc. is to be held liable under French law for allowing French citizens to access auction sites for World War II Nazi memorabilia . . . . The ruling appears to impose blocking requirements that many view as impractical to implement on a wide scale and highly imperfect at identifying Internet users by country. It also sets a dangerous precedent for countries seeking to impose restrictions on speech outside their borders. Center For Democracy and Technology, French Court Holds Yahoo Accountable For U.S. Auction Content, at http://www.cdt.org/publications/pp_6.20.shtml (last visited Nov. 26, 2001). treated as a single critique of the case, each, in fact, involves a separate jurisdictional layer and merits a different response. This paper focuses on Internet jurisdiction’s application layer. Argu- ments about the substantive layer are much more difficult to defend— different countries have different norms and values, and it is unrealistic to expect the Internet to spur harmonization of all substantive issues. Simi- larly, arguments over the enforcement layer tend to involve business risk analysis—rather than legal risk analysis—because the ability to enforce a local decision will often depend upon whether the affected party has local assets subject to seizure or is sufficiently large enough that it cannot afford to ignore an outstanding court order, no matter where it is located.43 Sorting through conflicting laws and competing claims often presents lawmakers and courts with several difficult policy choices—choices that tend to blur the distinction between the three layers. For example, although it is intuitively appealing that local laws should protect consumers online in the same manner as they protect them offline, the application of these offline principles to the Internet is particularly complex. This complexity raises concern over the application of local law, the desire to protect local citizenry from harmful cyber-effects, the furtherance of policy goals that seek to encourage e-commerce and Internet use, as well as the difficulty in defining policies that can be applied in a technology-neutral fashion. Should local courts assert jurisdiction over every online consumer purchase (application layer)? Should policy explicitly seek to encourage e- commerce by creating protection legislation specific to e-commerce (substantive layer)? Will a consumer actually benefit from a local judgment if the award must still be enforced elsewhere (enforcement layer)? At the heart of the matter lies a deceptively simple question—when is it appropriate to assert jurisdiction over Internet-based activities? Since the question of jurisdiction is not new (most countries have a rich body of law addressing conflict of laws, choice of forum, and enforcement of judgments),44 most courts and policy makers quite properly revert to first principles in developing appropriate guidelines.45 In many jurisdictions, the litmus test for determining whether assertion of jurisdiction is appropriate involves analyzing whether jurisdiction is reasonable under the circumstances, with courts in the United States and

43. See Yahoo!France, supra note 5. 44. See generally EUGENE F. SCOLES & PETER HAY, CONFLICT OF LAWS (1998). 45. See generally Ogilvy Renault Internet Group, Jurisdiction and the Internet: Are Traditional Rules Enough?, at http://www.law.ualberta.ca/alri/ulc/current/ejurisd.htm (Jul. 1998). Canada regularly relying on a reasonableness standard as their guide. In the United States, the reasonableness standard is couched in terms of “minimum contacts,”46 while in Canada the language of choice is “real and substantial connection.”47 Although these terms necessitate somewhat different analyses, the core principle remains the same—the appropriateness of asserting jurisdiction depends upon whether the parties themselves would think it reasonable to do so. Unfortunately, aside from reassuring parties that jurisdiction will not be asserted indiscriminately, substituting the word “reasonable” for “appropriate” does little to provide additional legal certainty. Accordingly, it has fallen on the courts to provide guidance on how the term “reasonable” should be interpreted. Case law analysis suggests that within the context of jurisdiction law, a foreseeability metric lies at the heart of the reasonableness standard. This metric dictates that a party should only be haled into a foreign court where it was foreseeable that such an eventuality might occur.48 Although a foreseeability test may not always provide absolute legal certainty, it does provide an intuitive sense of when a court will assert jurisdiction over a dispute. For example, if a contract dispute arises between two parties in different countries, it would generally be considered foreseeable that, absent a forum selection clause—a clause in which the parties settle on the governing jurisdiction in advance of the dispute—courts in either country might be willing to assert jurisdiction. In other instances, such as a defamation tort action, a court would likely conduct an effects- based analysis on foreseeability, concluding that the alleged defamer would have foreseen that the defamatory statements would have an impact within the defamed party’s jurisdiction and thus she might face the prospect of litigation there. While the foreseeability/reasonableness standard may have functioned effectively in the offline world, there are several reasons why the Internet complicates the issue. First, with worldwide Internet availability, foreseeability is much more difficult to gauge. Scholars have commented that the “borderless Internet” significantly impedes the application of physical laws, leading some to advocate for a separate cyberspace jurisdiction.49 Since jurisdictional tests are rooted in the principle of providing greater clarity, the Internet clouds matters by providing an “all or nothing” envi-

46. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945). 47. Morguard Invs. Ltd. v. De Savoye [1990] 3 S.C.R. 1077. 48. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 296 (1980). 49. David R. Johnson & David G. Post, Law and Borders: The Rise of Law in Cy- berspace, 48 STAN. L. REV. 1367 (1996). ronment in which either every jurisdiction is foreseeable or none is foreseeable. Second, courts and policy makers are likely to be biased toward asserting jurisdiction where harm has been experienced locally.50 This can best be understood by assessing a simple business-to-consumer e-commerce transaction. Suppose that a consumer located in Ottawa downloads an electronic book from Amazon.com, a leading e-commerce business located in Seattle, Washington.51 The terms of sale stipulate that all disputes are to be settled in Washington. Suppose further that the consumer is dissatisfied with the transaction because the downloaded e-book causes his computer system to crash and lose valuable data. If the parties are unable to negotiate a settlement, the consumer may wish to sue for the price of the book and resulting damages in Ontario. Amazon is likely to contest the action on jurisdictional grounds, arguing that the forum selection clause controls any disputes and that legal actions should be brought in a court in Washington. Should the Ontario court dismiss the action by upholding the enforceability of the forum selection clause? Will doing so effectively eliminate the consumer’s access to Ontario consumer protection legislation? Courts throughout North America appear divided on the issue. In a 1999 Ontario case, a court dismissed a class action lawsuit brought against Microsoft on the grounds that a clickwrap agreement between the parties provided for Washington to have exclusive jurisdiction over any disputes.52 A recent California case ruled in the opposite manner, holding that a dispute between AOL and one of its customers could be heard in a California court

50. According to one report on European activity: The law, dubbed the Brussels I regulation, will come into effect next March. It states that where there is a dispute between a consumer in one EU country and an online retailer in another, the consumer will be able to sue in a court in his own country. The justice ministers and the Euro- pean Commission, who drafted the regulation, argue that this focus on the consumer is essential to help get electronic commerce off the ground in Europe. ‘A lack of consumer confidence is the main thing holding up the development of e-commerce here,’ said Leonello Gab- rici, spokesman on judicial matters for the Commission. He said that by handing jurisdiction of such cross-border disputes to the courts in the consumers’ country, the regulation will be encouraging consumers to purchase online. Paul Meller, European Justices Pass Stiff E-Commerce Law, IDG.NET, Nov. 30, 2000, at http://www.idg.net/idgns/2000/11/30/EuropeanJusticesPassStiffECommerceLaw.shtml 51. See amazon.com, at http://www.amazon.com/exec/obidos/subst/misc/company- info.html/002-2423967-3027211 (last visited Nov. 26, 2001). 52. Rudder v. Microsoft Corp., [1999] 2 C.P.R. (4th) 474 (Ont.). despite the existence of a forum selection clause that provided that all disputes be brought in a Virginia court.53 The scenario becomes even more complicated when the case involves free speech rather than commercial concerns. For example, the recent French Nazi memorabilia case involving Yahoo! illustrates how a local court may assert jurisdiction—even in the absence of evidence that the harm was directed at that jurisdiction—reasoning that the perceived local harm is too great to ignore.54 While such an approach raises few concerns when it involves activity such as securities fraud, where global rules are relatively uniform,55 the application of an effects-based standard on issues such as free speech is likely to prove highly contentious since restrictions on free speech vary between even democratic countries. Although courts and policy makers may have a bias towards protecting local citizenry from commercial or content-based harm, the issue is further complicated by the fact that all countries face the same concern. Accord- ingly, while a country may wish to protect its own consumers by asserting jurisdiction over out-of-country entities, it would prefer that other countries not exert the same authority over its citizens and companies.56 Moreover, the laws applied locally will vary because different countries will promote different policy priorities. Some countries may view consumer protection as more important than promotion of e-commerce growth and thus adopt a policy of aggressively asserting jurisdiction to protect local consumers. Others may favor the promotion of privacy protection and will thus seek to assert jurisdiction over a privacy framework. As Lawrence Lessig argues in his seminal book, Code and Other Laws of Cyberspace, these competing policy priorities encourage countries to engage in a quid pro quo approach to jurisdictional cooperation.57 In discussing Minnesota’s desire to enforce state anti-gambling laws, Lessig notes:

Why would any other jurisdiction want to carry out Minnesota’s regulation?

53. Mendoza v. AOL (Cal. Super. Ct.) (unreported, on file with author). 54. See Yahoo!France, supra note 5. 55. International Organization of Securities Commissions (IOSCO), Technical Committee, Securities Activity on the Internet, Sept. 1998, at http://www.iosco.org/- download/pdf/1998-internet_security.pdf [hereinafter IOSCO]. 56. Dean Henry Perritt notes “[e]xtending the bases of jurisdiction is a two-edged sword. United States citizens may be able to assert U.S. law in U.S. courts with respect to harmful conduct occurring offshore, but they also may be subject to prosecution or litigation in foreign tribunals.” Perritt, supra note 41, at 1131. 57. LAWRENCE LESSIG, CODE AND OTHER LAWS OF CYBERSPACE 55 (1999). The answer is that they would not if this were the only regulation at stake. Minnesota wants to protect its citizens from gambling, but New York may want to protect its citizens against the misuse of private data. The European Union may share New York’s objective; Utah may share Minnesota’s.

Each state has its own stake in controlling certain behaviors, and these behaviors are different. But the key is this: the same architecture that enables Minnesota to achieve its regulatory end can also help other states achieve their regulatory ends. And this can initiate a kind of quid pro quo between jurisdictions.58 As if the policy choices were not already sufficiently complicated, an additional consideration must be factored into the analysis. As policy makers continue to grapple with the challenges of the Internet, it has become increasingly accepted that establishing effective and enduring guidelines or standards for the Internet requires the adoption of a “technology neutral” approach.59 Technology neutral approaches have been a hallmark of many Internet law policy initiatives, including the development of e- commerce legislation60 and the adoption of electronic evidence statutes.61 “Technology neutral” in this context refers to statutory tests or guidelines that do not depend upon a specific development or state of technology, but rather are based on core principles that can be adapted to changing technologies.62 Since technological change is constant, standards created with specific technologies in mind are likely to become outdated as the technology changes. In the context of Internet jurisdiction, using indicia that reflect the current state of the Internet and Internet technologies is a risky proposition since those indicia risk irrelevancy when the technology changes.

58. Id. 59. As the Australian Attorney General’s office has noted within the context of UNCITRAL e-commerce negotiations, “[a] technology neutral approach is preferable as it has become clear that technology specific legislative schemes can inhibit market choice. Furthermore, legislative regimes that prefer one technology over another create impediments to electronic commerce and restrict innovation.” Australian Attorney Gen- eral’s Department, Information Economy Section, UNCITRAL Developments, at http://law.gov.au/publications/ecommerce (last visited Nov. 26, 2001). 60. Uniform Law Conference of Canada (ULCC), Uniform Electronic Commerce Act (Model Law), available at http://www.law.ualberta.ca/alri/ulc/current/euecafin.htm (last visited Nov. 26, 2001). 61. Id. 62. See Telecommunications Standards Advisory Council of Canada (TSACC), Business Transaction Model: Data Component, at http://www.tsacc.ic.gc.ca/openforum/- docs/TSACC-010-313.pdf (last visited Nov. 26, 2001). In seeking to balance these four factors—foreseeability, bias towards effects-based analysis, jurisdictional quid pro quo, and technological neutrality—the development of a single standard for Internet jurisdiction analysis presents a difficult, though not insurmountable, challenge. Unfor- tunately, the current passive versus active test moves the law squarely in the wrong direction by failing to provide parties with sufficient guidance on any of these four factors.

III. THE RISE AND FALL OF THE ZIPPO TEST While Internet jurisdiction creates significant challenges, courts have not enjoyed the luxury of considering the issue from an abstract, theoretical perspective. Since 1996, courts in the United States have regularly faced litigation that includes an Internet jurisdiction component. As courts grapple with the issue, the jurisprudence has shifted first toward the Zippo passive versus active test, then more recently towards an effects-based test with elements of targeting analysis. This section traces the case law development of Internet jurisdiction in the United States and Canada. A. The Emergence of the Zippo Passive versus Active Test In International Shoe Co. v. Washington, the Supreme Court outlined the contemporary basis for jurisdiction.63 Under International Shoe, a court can exercise personal jurisdiction over a nonresident defendant if that defendant has “certain minimum contacts with [the forum] such that the maintenance of the suit does not offend ‘traditional notions of fair play and substantial justice.’”64 The minimum contacts standard serves two purposes: protecting defendants from burdensome litigation and ensuring that states do not reach too far beyond their jurisdictional limits.65 “Minimum contacts” have been defined as “conduct and connection with the forum . . . such that [the defendant] should reasonably anticipate being haled into court there.”66 A defendant’s contacts are sufficient to satisfy the minimum contacts standard where they are “substantial” or “continuous and systematic,” such that the defendant “purposefully avail[ed] itself of the privilege of conducting activities within the forum State, thus invoking the benefits and protections of its laws.”67 The plaintiff has the burden of showing that the defendant took action “purposefully

63. 326 U.S. 310, 316 (1945). 64. Id. (quoting Milliken v. Meyer, 311 U.S. 457, 463 (1940)). 65. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291 (1980). 66. Id. at 297. 67. Hanson v. Denckla, 357 U.S. 235, 253 (1958). directed” at the forum and that the cause of action arises from this action.68 A defendant “purposefully avails” himself of jurisdiction when “the contacts proximately result from actions by the defendant himself that create a ‘substantial connection’ with the forum State.”69 In determining whether the exercise of jurisdiction comports with notions of fair play and substantial justice, a court must balance several factors. These factors are: (1) the extent of a defendant’s purposeful inter- jection; (2) the inconvenience to the defendant of defending in that forum; (3) the extent of conflict with the sovereignty of the defendant’s state; (4) the forum state’s interest in adjudicating the dispute; (5) the interstate judicial system’s interest in the efficient resolution of conflicts; (6) the plaintiff’s interest in obtaining convenient and effective relief; and (7) the existence of an alternative forum.70 One of the first North American applications of these principles to the Internet traces back to 1996 and Inset Systems, Inc. v. Instruction Set, Inc., a Connecticut district court case.71 In this instance, Inset Systems, a Con- necticut company, brought a trademark infringement action against In- struction Set, a Massachusetts company, arising out of its use of the domain name “Inset.com.”72 Instruction Set used the domain name to advertise its goods and services on the Internet, a practice to which Inset objected since it was the owner of the federal trademark “Inset.”73 The legal question before the court was one of jurisdiction. Did Instruction Set’s activity, the establishment of a website, properly bring it within the jurisdiction of Connecticut under that state’s long-arm statute? Did Inset’s con-

68. See Calder v. Jones, 465 U.S. 783, 789 (1984) (upholding jurisdiction where conduct was allegedly calculated to cause injuries in the forum state and the cause of action arose from this conduct). 69. Burger King v. Rudzewicz, 471 U.S. 462, 475 (1985). 70. See id. at 476-77. 71. Inset Sys., Inc. v. Instruction Set, Inc., 937 F. Supp. 161 (D. Conn. 1996). 72. Internet domain names, which have become a ubiquitous part of commercial advertising, enable users to access websites simply by typing in a name such as “www.inset.com” in their web browser. The “www” portion of the address identifies that the site is part of the World Wide Web; the “Inset” portion is usually the name of a company or other identifying words; and “com” identifies the type of institution, in this case a company. Domain names, the subject of several other litigated cases, are administered in the United States by a government appointed agency, Network Solutions Inc. (NSI) and are distributed on a first come, first served basis. See Cynthia Rowden & Jeannette Lee, Trademarks and the Internet: An Overview, Nov. 4, 1998, at http://www.bereskinparr.com/art-pdf/TM&InternetOverview.pdf. 73. Inset, 937 F. Supp. at 163. duct meet the minimum contacts standard outlined by the United States Supreme Court in World-Wide Volkswagen?74 The Inset court concluded that it could properly assert jurisdiction, basing its decision on Instruction Set’s use of the Internet.75 Likening the Internet to a continuous advertisement, the court reasoned that Instruction Set had purposefully directed its advertising activities toward Connecticut on a continuous basis and therefore could reasonably have anticipated being sued there.76 The court’s decision was problematic for several reasons. First, its conclusion that creating a website amounts to a purposeful availment of every jurisdiction distorts the fundamental principle of jurisdiction.77 Sec- ond, the court did not analyze the Internet itself, but merely drew an analogy between the Internet and a more traditional media form, in this case a continuous advertisement.78 If the court was correct, every court, everywhere, could assert jurisdiction where a website was directed toward its forum. This approach would stifle future Internet growth, as would-be Internet participants would be forced to weigh the advantages of the Inter- net with the potential of being subject to legal jurisdiction throughout the world. Third, the court did not assess Instruction Set’s actual activity on the Internet.79 The mere use of the Internet was sufficient for this court to establish jurisdiction.80 In fact, the court acknowledged that Instruction Set did not maintain an office in Connecticut nor did it have a sales force or employees in the state.81 A more complete analysis of the underlying facts would have included an assessment of precisely what the parties were doing on the Internet. Was Instruction Set selling products directly to people in Connecticut through its website? Was it providing a service directly through its website? Was it actively soliciting the participation of potential users by encouraging correspondence? What was the approximate number of Con- necticut users who actually accessed the website? Asking these and similar questions would have provided the court with a much stronger basis for holding that Instruction Set had purposefully directed its activity toward Connecticut.

74. World-Wide Volkswagen Corp. v. Woodson, 444 U.S. 286, 291-92 (1980). 75. Inset, 937 F. Supp. at 160. 76. Id. at 165. 77. Id. 78. Id. 79. Id. 80. Id. 81. Id. at 162-63. With the Inset precedent established, however, many similar cases soon followed. In Maritz, Inc. v. Cybergold, Inc., for example, a Missouri federal district court confronted the question of personal jurisdiction on the Internet in the context of a trademark infringement action.82 Citing the Inset decision with approval, the Court struggled for an effective meta- phor, noting that:

the nature and quality of contacts provided by the maintenance of a website on the Internet are clearly of a different nature and quality than other means of contact with a forum such as the mass mailing of solicitations into a forum . . . . or that of advertising an 800 number in a national publication.83 Unable to arrive at an effective analogy, the court concluded that Inset made a conscious decision to transmit advertising information to all Inter- net users and that such knowledge was sufficient for the assertion of personal jurisdiction.84 In Canada, the experience with of Internet jurisdiction closely paral- leled that of the United States. In keeping with the Inset line of cases, the Newfoundland Supreme Court asserted jurisdiction based partly on the provision of information via the Internet in Alteen v. Informix Corp.85 Al- teen involved allegations that Informix Corporation, a United States-based maker of database software, issued false and misleading statements that led to an inflated stock price. When shareholders residing in Newfound- land launched a lawsuit, Informix responded by arguing that the local court could not properly assert jurisdiction since the company did not trade shares on a Canadian public exchange, issue public statements to the Canadian press, or maintain direct contact with the plaintiffs.86 The court rejected the argument and sided with the plaintiffs who maintained that the availability of public statements on the Internet often led to Canadian media coverage.87 Since the shares were purchased in Newfoundland and corporate information was available within the province, the court ruled that it was entitled to assert jurisdiction over the tort action.88 Although the action involved tort rather than trademark infringement, Alteen bears a striking similarity to the early United States Internet

82. 947 F. Supp. 1328 (E.D. Mo. 1996). 83. Id. at 1333. 84. Id. 85. [1998] N.J. No. 122 (Newf.). 86. Id. at ¶ 8. 87. Id. at ¶ 13. 88. Id. at ¶¶14, 15. cases, where the mere availability of information on the Internet was viewed as sufficient grounds to assert jurisdiction. Had that analysis been adopted, all Canadian courts would theoretically be entitled to assert jurisdiction over parties posting information on the Internet. While several additional United States cases followed the Inset approach,89 a New York district court case stands out as an important exception.90 The Blue Note was a small Columbia, Missouri club operated by Richard King. King promoted his club by establishing a website that included information about the club, a calendar of events, and ticketing information.91 New York City was also home to a club named The Blue Note, this one operated by the Bensusan Restaurant Corporation, who owned a federal trademark in the name.92 King was familiar with the New York Blue Note as he included a disclaimer on his website that stated: “The Blue Note’s Cyberspot should not be confused with one of the world’s finest jazz club[s], [the] Blue Note, located in the heart of New York’s Greenwich Village. If you should find yourself in the Big Apple give them a visit.”93 Within months of the establishment of King’s Blue Note website, Ben- susan brought a trademark infringement and dilution action in New York federal court.94 Once again, the court faced the question of personal jurisdiction in a trademark action arising out of activity on the Internet. Unlike the Inset line of cases, however, the court considered the specific uses of the website in question. It noted that King’s website was passive rather than active in nature—several affirmative steps by a New York resident would be necessary to bring any potentially infringing product into the state.95 Specifically, tickets could not be ordered online, so that anyone wishing to make a purchase would have to telephone the box office in Missouri, only to find that the Missouri club did not mail tickets.96 The

89. See, e.g., Heroes, Inc. v. Heroes Found., 958 F. Supp. 1, 5 (D.D.C. 1996) (citing Inset with approval in finding that a website sustained contact with the District of Co- lumbia); Panavision Int’l, L.P. v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996) (finding that use of a trademark infringing domain name in Illinois was an act expressly directed at California). 90. Bensusan Rest. Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996), aff’d 126 F.3d. 25 (2d Cir. 1997). 91. Id. at 297. 92. Id. at 298. 93. Id. at 297-98. 94. Id. at 297. 95. Id. at 299. 96. Id. purchaser would have to travel to Missouri to obtain the tickets.97 Given the level of passivity, the court ruled that the website did not infringe Ben- susan’s trademark in New York.98 The court argued “[t]he mere fact that a person can gain information on the allegedly infringing product is not the equivalent of a person advertising, promoting, selling or otherwise making an effort to target its product in New York.”99 The Bensusan decision, which the Court of Appeals for the Second Circuit affirmed in September 1997,100 provided an important step toward the development of deeper legal analysis of Internet activity. Although the decision did not attempt to reconcile the Inset line of cases, it provided the groundwork for a new line of cases.101 By the end of 1996, however, the majority of Internet-related decisions evidenced little genuine understanding of activity on the Internet. Rather, most courts were unconcerned with the jurisdictional implications of their rulings and instead favored an analogy-based approach in which the Internet was categorized en masse.102 In early 1997, a new approach emerged, led by a Pennsylvania district court decision, Zippo Manufacturing Co. v. Zippo Dot Com, Inc.103 It was with this decision that courts gradually began to appreciate that activity on the Internet was as varied as that in real space, and that all-encompassing analogies could not be appropriately applied to this new medium. Zippo Manufacturing was a Pennsylvania based manufacturer of the well-known “Zippo” brand of tobacco lighters.104 Zippo Dot Com was a California

97. Id. 98. Id. 99. Id. 100. Bensusan Rest. Corp. v. King, 126 F.3d 25, 29 (2d Cir. 1997). 101. See, e.g., Hearst Corp. v. Goldberger, No. 96 Civ. 3620 PKL AJP, 1997 WL 97097, at *15 (S.D.N.Y. Feb. 26, 1997). The Goldberger court relied heavily upon the Bensusan analysis in refusing to assert personal jurisdiction in a trademark infringement matter involving the domain name “Esqwire.com.” Id. The Goldberger court carefully reviewed Internet case law to that point, noted its disagreement with decisions such as Inset, Maritz, and Panavision, and cautioned that: [w]here, as here, defendant has not contracted to sell or actually sold any goods or services to New Yorkers, a finding of personal jurisdiction in New York based on an Internet website would mean that there would be nationwide (indeed, worldwide) personal jurisdiction over anyone and everyone who establishes an Internet website. Such nationwide jurisdiction is not consistent with traditional personal jurisdiction case law nor acceptable to the court as a matter of policy. Id. at *13. 102. Michael Geist, The Reality of Bytes: Regulating Economic Activity in the Age of the Internet, 73 WASH. L. REV. 521, 538 (1998). 103. 952 F. Supp. 1119, 1126 (W.D. Pa. 1997). 104. Id. at 1121. based Internet news service that used the domain name “Zippo.com” to provide access to Internet newsgroups.105 Zippo Dot Com offered three levels of subscriber service—free, original, and super.106 Those subscribers desiring the original or super level of service were required to fill out an online application form and submit a credit card number through the Internet or by telephone.107 Zippo Dot Com’s contacts with Pennsylvania occurred almost exclusively on the Internet because the company maintained no offices, employees, or agents in the state.108 Dot Com had some success in attracting Pennsylvania subscribers; at the time of the action, approximately 3,000, or two percent of its subscribers, resided in that state.109 Once again, the issue before the court was one of personal jurisdiction arising out of a claim of trademark infringement and dilution.110 Rather than using Internet analogies as the basis for its analysis, the court focused on the prior, somewhat limited Internet case law.111 The court, which clearly used the Bensusan decision for inspiration, determined that, although few cases had been decided, the likelihood that personal jurisdiction can be constitutionally exercised is directly proportion- ate to the nature and quality of commercial activity that an entity conducts over the Internet.112 The court proceeded to identify a sliding scale based on Internet commercial activity:

At one end of the spectrum are situations where a defendant clearly does business over the Internet. If the defendant enters into contracts with residents of a foreign jurisdiction that involve the knowing and repeated transmission of computer files over the Internet, personal jurisdiction is proper. At the opposite end are situations where a defendant has simply posted information

105. Id. 106. Id. 107. Id. 108. Id. 109. Id. 110. Id. 111. One case omitted from the discussion but relied upon by the Zippo court was Compuserve Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996). Although the Zippo court refers to the decision as an Internet case, in fact, the activity in question did not involve the use of the Internet. Rather, Patterson used Compuserve’s proprietary network to distribute certain shareware programs. Accordingly, Patterson’s contacts with Ohio, Compu- serve’s headquarters and the location of the litigation, were confined to an offline contractual agreement and the posting of shareware on a Compuserve server that was available to users of its proprietary network (not Internet users at large). 112. Zippo, 952 F. Supp. at 1127. on an Internet Web site, which is accessible to users in foreign jurisdictions. A passive Web site that does little more than make information available to those who are interested in it is not grounds for the exercise of personal jurisdiction. The middle ground is occupied by interactive Web sites where a user can exchange information with the host computer. In these cases, the exercise of jurisdiction is determined by examining the level of interactivity and commercial nature of the exchange of information that occurs on the Web site.113 Although the court may have conveniently interpreted some earlier cases to obtain its desired result, its critical finding was that the jurisdictional analysis in Internet cases should be based on the nature and quality of the commercial activity conducted on the Internet. There is a strong argument that prior to Zippo, jurisdictional analysis was based upon the mere use of the Internet. Courts relying solely on the inappropriate analogy between the Internet and advertisements developed a legal doctrine poorly suited to the reality of Internet activity. In the aftermath of the Zippo decision, Internet legal analysis underwent a significant shift in perspective. B. Post-Zippo Case Law In the years following Zippo, the passive versus active approach has been cited with approval in numerous cases.114 For example, in Cybersell, Inc. v. Cybersell, Inc., the Ninth Circuit considered whether it could exercise jurisdiction over a website containing an allegedly infringing service mark.115 Both Cybersell Arizona, the owner of the “Cybersell” federal service mark, and Cybersell Florida provided Internet marketing and consult-

113. Id. at 1124 (internal citations omitted). 114. See, e.g., Am. Eyewear, Inc. v. Peeper’s Sunglasses and Accessories, Inc., 106 F. Supp. 2d 895 (N.D. Tex. 2000); Am. Online, Inc. v. Huang, 106 F. Supp. 2d 848 (E.D. Va. 2000); Citigroup v. City Holding Co., 97 F. Supp. 2d 549 (S.D.N.Y. 2000); Standard Knitting, Ltd. v. Outside Design, Inc., No. 00-2288, 2000 WL 804434 (E.D. Pa. Jun. 23, 2000); Decker v. Circus Circus Hotel, 49 F. Supp. 2d 748 (D. N.J. 1999); Hasbro, Inc. v. Clue Computing, Inc., 66 F. Supp. 2d 117 (D. Mass. 1999); Blumenthal v. Drudge, 992 F. Supp. 44 (D.D.C. 1998); Mallinkrodt Med., Inc. v. Sonus Pharm., Inc., 989 F. Supp. 265 (D.D.C. 1998); Resuscitation Techs., Inc. v. Cont. Health Care Corp., No. IP 96- 1457-C-M/S, 1997 WL 148567 (S.D. Ind. Mar. 24, 1997); Smith v. Hobby Lobby Stores, Inc., 968 F. Supp. 1356 (W.D. Ark. 1997); TELCO Communications v. An Apple A Day, 977 F. Supp. 404 (E.D. Va. 1997); Conseco, Inc. v. Hickerson, 698 N.E.2d 816 (Ind. App. 1998); State by Humphrey v. Granite Gate Resorts, Inc., (Minn. App. 1997). 115. 130 F.3d. 414 (9th Cir. 1997). ing services.116 Cybersell Florida’s presence in Arizona was limited to a website advertising its services and inviting interested parties to contact it for additional information.117 The court, in determining the appropriateness of exercising jurisdiction, noted:

[N]o court has ever held that an Internet advertisement alone is sufficient to subject the advertiser to jurisdiction in the plaintiff’s home state. Rather, in each, there has been ‘something more’ to indicate that the defendant purposefully (albeit electronically) directed his activity in a substantial way to the forum state.118 The court followed the Zippo approach by attempting to ascertain the nature and quality of Cybersell Florida’s web-based activity.119 The court considered the passive nature of the site, the fact that no Arizonian other than Cybersell Arizona visited the site, and the lack of evidence that any Arizonians had entered into a contractual relationship with Cybersell.120 On these facts, the court concluded that it could not properly assert jurisdiction in this matter.121 Similarly, in Mink v. AAAA Development L.L.C.,122 the plaintiff, a computer program developer, filed suit in Texas district court against a Vermont corporation, which allegedly conspired to copy the plaintiff’s computer program.123 The district court refused to assert personal jurisdiction in the case and dismissed the suit.124 On appeal to the Fifth Circuit, the plaintiff argued that Texas was the proper forum because the defendant corporation’s website was accessible from that state.125 The court dismissed the appeal on the grounds that, while the website provided users with a printable mail-in order form, an e-mail address, a toll-free telephone number and a mailing address, the fact that no orders were taken through the site meant that it was nothing more than a passive advertisement.126 In GTE New Media Services Inc. v. Ameritech Corp.,127 the court

116. Interestingly, the principals behind Cybersell Arizona were Laurence Canter and Martha Siegel, attorneys who are infamous among web users as the first Internet “spam- mers” or junk e-mailers. Id. at 415. 117. Id. at 419. 118. Id. at 418. 119. Id. 120. Id. 121. Id. at 420. 122. 190 F.3d 333 (5th Cir. 1999). 123. Id. at 335. 124. Id. 125. Id. 126. Id. at 336-37. was asked to assert jurisdiction over a company that was providing national Yellow Pages directory services over the Internet. Applying the passive versus active test, the court noted that the defendants maintained an interactive website that was available in the District of Columbia.128 This fact, coupled with the fact that the defendants derived advertising revenues from the directory sites when District of Columbia residents accessed and utilized its Internet Yellow Pages, led the court to exercise personal jurisdiction.129 Finally, in Desktop Technologies, Inc. v. Colorworks Reproduction & Design, Inc.,130 the plaintiff, a Pennsylvania corporation, filed suit in Pennsylvania district court against a Canadian company that carried on business exclusively in western Canada.131 The complaint alleged trademark infringement and breach of state unfair competition law based on the defendant’s use of a trademark as its domain name on the Internet.132 The defendant brought a motion to dismiss the action for lack of personal jurisdiction.133 Citing the fact that its Internet presence and e-mail links were its only contacts with Pennsylvania, it noted that the company had never entered into any contracts in Pennsylvania nor sold anything in the state.134 Applying Zippo to these facts, the court ruled that the level of interactivity available on the defendant corporation’s website did not justify exercising specific personal jurisdiction over the defendant since it was not doing business over the Internet with Pennsylvania residents.135 Canadian courts signaled their approval of the Zippo approach in Braintech Inc. v. Kostiuk.136 This 1999 British Columbia Court of Appeal case, the first Canadian appellate level decision to address the Internet jurisdiction issue, involved a series of allegedly defamatory messages posted on a stock chat site by a British Columbia resident.137 Braintech, a British Columbia based company, sued the poster in a Texas court; the court

127. 44 F. Supp. 2d 315 (D.D.C. 1999). 128. Id. at 315-16. 129. Id. at 315. 130. No. Civ. A. 98-5029, 1999 WL 98572 (E.D. Pa. Feb. 25, 1999). 131. Id. at *1. 132. Id. 133. Id. at *2. 134. Id. at *1. 135. Id. at *5. 136. [1999] 171 D.L.R. (4th) 46, 61 (B.C.C.A.). For a critical analysis of the Brain- tech decision, see Vaughn Black & Mike Deturbide, Braintech Inc. v. Kostick: Adjudica- tory Jurisdiction for Internet Torts, 33 CANADIAN BUS. L.J. 427 (2000). 137. Braintech, 171 D.L.R. (4th) at 48. awarded the company roughly $300,000 in damages.138 When the company returned to British Columbia to enforce the judgment, the British Co- lumbia courts examined the appropriateness of the Texas court’s assertion of jurisdiction over the dispute.139 Adopting the passive versus active test and citing directly to the Zippo case, the British Columbia Court of Appeal ruled that the Texas court had improperly asserted its jurisdiction.140 It argued that the postings were passive in nature and thus provided insufficient grounds to grant the Texas court authority over the case. The Cana- dian Supreme Court denied Braintech’s leave to appeal in early March 2000.141 The widespread approval for the Zippo test should come as little surprise. The uncertainty created by the Internet jurisdiction issue led to a strong desire for a workable solution that provided a fair balance between the fear of a lawless Internet and one burdened by over-regulation. The Zippo test seemed the best available alternative. This is particularly true in light of the Inset line of cases, which illustrated that the alternative might well be the application of jurisdiction by any court, anywhere. The court in Neato v. Stomp L.L.C., a 1999 federal court case in California, aptly summarized the competing policy positions of consumers and businesses: protecting consumers and encouraging the development of Internet commerce, respectively.142 The court chose to side squarely with consumers, noting that businesses can choose to sell their goods only to consumers in a particular geographic location:

138. Id. 139. Id. at 63. 140. Id. 141. Press Release, Supreme Court of Canada, Judgments in Leave Applications: Braintech Inc. v. John Kostiuk, Mar. 9, 2000, at http://www.lexum.umontreal.ca/csc- scc/en/com/2000/html/00-03-09.3a.html. 142. Stomp, Inc. v. Neato LLC, 61 F. Supp. 2d 1074 (C.D. Cal. 1999). The court also recognized that: [S]uch a broad exercise of personal jurisdiction over defendants who engage in commerce over the Internet might have devastating effects on local merchants and small businesses that seek to expand through the Internet. These small businesses make up the backbone of the American economy and should not have to bear the burden of defending suits in distant fora when they intend only to sell to local consumers their wares from the convenience of their own homes. This concern must be balanced against the ability of a distant consumer to press its cause against a defendant who uses the Internet to do business within the forum while remaining outside the boundaries of the jurisdiction. Id. at 1080-81. When a merchant seeks the benefit of engaging in unlimited interstate commerce over the Internet, it runs the risk of being subject to the process of the courts of those states.143 The Zippo passive versus active test is grounded in traditional jurisdictional principles. The analysis conducted as part of the test draws heavily from a foreseeability perspective, suggesting that it is not foreseeable for the owner of a passive website to face the prospect of being sued in multiple jurisdictions worldwide. Conversely, as the court in Neato recognized, the active e-commerce website owner must surely foresee the possibility of disputes arising in other jurisdictions, and recognize that those courts are entitled to protect local residents by applying local law and asserting jurisdiction. Most importantly, however, in an emphatic repudiation of the “Internet as a separate jurisdiction[al]” approach, the Zippo case made it explicit that local law still applies to the Internet. Although it is at times difficult to discern precisely whose law applies, there is little doubt that at least one jurisdiction, if not more, can credibly claim jurisdiction over any given Internet dispute. With this principle in hand, the Zippo court sent a clear signal to the Internet community: courts were willing to establish a balanced approach to Internet jurisdiction. C. The Shift Away from Zippo Despite the widespread acceptance of the Zippo doctrine (and indeed the export of the test to foreign countries, including Canada), limitations of the test began to appear late in 1999. In fact, closer examination of the case law indicates that by 2001, many courts were no longer strictly applying the Zippo standard, but were using other criteria to determine when assertion of jurisdiction was appropriate.144 Numerous judgments reflect that courts in the United States moved toward a broader, effects-based approach when deciding whether or not to assert jurisdiction in the Internet context. Under this new approach, rather than examining the specific characteristics of a website and its potential

143. Id. 144. In addition to the cases discussed infra, see also Panavision Int’l., L.P. v. Toep- pen, 141 F.3d 1316, 1320 (9th Cir. 1998); Compuserve v. Patterson, 89 F.3d 1257 (6th Cir. 1996); Neogen Corp. v. Neo Gen Screening, Inc., 109 F. Supp. 2d 724, 729 (W.D. Mich. 2000); Search Force v. Data Force Intern., 112 F. Supp. 2d 771, 777 (S.D. Ind. 2000); Uncle Sam’s Safari Outfitters, Inc. v. Uncle Sam’s Navy Outfitters—Manhattan, Inc., 96 F. Supp. 2d 919, 923 (E.D. Mo. 2000); Bochan v. La Fontaine, 68 F. Supp. 2d 692, 701-02 (E.D. Va. 1999); Rothschild Berry Farm v. Serendipity Group LLC, 84 F. Supp. 2d 904, 908 (S.D. Ohio 1999). impact, courts focused their analysis on the actual effects that the website had in the jurisdiction. Indeed, courts are now relying increasingly on the effects doctrine established by the United States Supreme Court in Calder v. Jones.145 The effects doctrine holds that personal jurisdiction over a defendant is proper when: a) the defendant’s intentional tortious actions b) expressly aimed at the forum state c) cause harm to the plaintiff in the forum state, which the defendant knows is likely to be suffered.146 In Calder, a Cali- fornia entertainer sued a Florida publisher for libel in a California district court.147 In ruling that personal jurisdiction was properly asserted, the Court focused on the effects of the defendant’s actions.148 Reasoning that the plaintiff lived and worked in California, spent most of her career in California, suffered injury to her professional reputation in California, and suffered emotional distress in California, the Court concluded that the defendant had intentionally targeted a California resident and thus it was proper to sue the publisher in that state.149 The application of the Calder test can be seen in the Internet context in Blakey v. Continental Airlines, Inc.,150 an online defamation case involving an airline employee. The employee filed suit in New Jersey against her co-employees, alleging that they published defamatory statements on the employer’s electronic bulletin board, and against her employer, a New Jer- sey-based corporation, alleging that it was liable for the hostile work environment arising from the statements.151 The lower court granted the co- employees’ motion to dismiss for lack of personal jurisdiction and entered summary judgment for the employer on the hostile work environment claim.152 In reversing the ruling, the New Jersey Supreme Court found that defendants who published defamatory electronic messages with the knowledge that the messages would be published in New Jersey could properly be held subject to the state’s jurisdiction.153 The court applied the effects doctrine and held that while the actions causing the effects in New Jersey

145. 465 U.S. 783 (1984). 146. Id. at 789. 147. Id. at 784. 148. Id. at 789. 149. Id. at 789-90. 150. 751 A.2d 538 (N.J. 2000). 151. Id. at 543-48. 152. Id. 153. Id. at 543. were performed outside the state, this did not prevent the court from asserting jurisdiction over a cause of action arising out of those effects.154 The broader effects-based analysis has moved beyond the defamatory tort action at issue in Calder and Blakey to a range of disputes including intellectual property and commercial activities. On the intellectual property front, Nissan Motor Co. Ltd. v. Nissan Computer Corp.,155 typifies the approach. The plaintiff, an automobile manufacturer, filed a complaint in a California district court against a Massachusetts-based computer seller. Prompting the complaint was an allegation that the defendant altered the content of its “nissan.com” website to include a logo that was similar to the plaintiff’s logo and links to automobile merchandisers and auto-related portions of search engines.156 In October 1999, the parties met to discuss the possibility of transferring the “nissan.com” domain name.157 These negotiations proved unsuccessful.158 The defendant brought a motion to dismiss for lack of personal jurisdiction and improper venue, and the plaintiff brought a motion for a preliminary injunction in March 2000.159 In considering the defendant’s motion, the court relied on the effects doctrine, ruling that the defendant had intentionally changed the content of its website to exploit the plaintiff’s goodwill and to profit from consumer confusion.160 Moreover, since the plaintiff was based in California, the majority of the harm was suffered in the forum state.161 The court rejected the defendant’s argument that it was not subject to personal jurisdiction because it merely operated a passive website.162 Although the defendant did not sell anything over the Internet, it derived advertising revenue through the intentional exploitation of consumer confusion.163 This fact, according to the court, satisfied the Cybersell requirement of “something more,” in that it established that the defendant’s conduct was deliberately and substantially directed toward the forum state.164 Similarly, in Euromarket Designs Inc. v. Crate & Barrel Ltd.,165 the issue before the court was whether an Illinois-based company could sue an

154. Id. at 556. 155. 89 F. Supp. 2d 1154 (C.D. Cal. 2000). 156. Id. at 1157. 157. Id. 158. Id. at 1158. 159. Id. 160. Id. at 1160. 161. Id. 162. Id. 163. Id. 164. Id. at 1159. 165. 96 F. Supp. 2d 824 (N.D. Ill. 2000). Irish retailer for trademark infringement with an interactive website that allowed Illinois residents to order goods for shipment to a foreign address in a local court. The court noted that the pivotal considerations in resolving this issue were whether the defendant purposefully and deliberately availed itself of the forum and whether the defendant’s conduct and connection with the forum was such that he should reasonably anticipate being haled into court there.166 The court stated that the defendant deliberately established minimum contacts with Illinois and purposefully availed itself of the privilege of conducting activities in Illinois.167 The court concluded that the defendant’s actions established jurisdiction under the effects doctrine because: a) if plaintiff’s trademark was infringed, the injury would be felt primarily in Illinois; b) the defendant intentionally and purposefully directed its actions toward Illinois and the plaintiff, an Illinois corporation, allegedly causing harm to the plaintiff in Illinois; and c) the defendant knew that harm would likely be suffered in Illinois.168 Courts have also refused to assert jurisdiction in a number of cases where insufficient commercial effects were found. For example, in People Solutions, Inc. v. People Solutions, Inc.,169 the defendant, a California- based corporation, moved to dismiss a trademark infringement suit brought against it by a Texas-based corporation of the same name. The plaintiff argued that the suit was properly brought in Texas because the defendant owned a website that could be accessed and viewed by Texas residents.170 The site featured several interactive pages that allowed customers to take and score performance tests, download product demonstra- tions, and order products online.171 The court characterized the site as interactive but refused to assert jurisdiction over the matter.172 Relying on evidence that no Texans had actually purchased from the website, the court held that “[p]ersonal jurisdiction should not be premised on the mere possibility, with nothing more, that defendant may be able to do business with Texans over its web-

166. Id. at 834-35. 167. Id. 168. Id. at 836. 169. No. Civ. A. 399-CV-2339-L, 2000 WL 1030619 (N.D. Tex. Jul. 25, 2000). 170. Id. at *2. 171. Id. at *1. 172. Id. at *4. site.”173 Instead, the plaintiff had to show that the defendant had “purposefully availed itself of the benefits of the forum state and its laws.”174 A copyright dispute over craft patterns yielded a similar result in Winfield Collection, Ltd. v. McCauley.175 The plaintiff, a Michigan-based manufacturer of craft patterns, filed a complaint in Michigan district court accusing the defendant, a resident of Texas, of infringing copyrighted craft patterns that the plaintiff had supplied to the defendant.176 The defendant moved to dismiss the suit for lack of personal jurisdiction.177 The plaintiff argued that the court could exercise personal jurisdiction because: a) the defendant had sold crafts made with the plaintiff’s patterns to Michigan residents on two occasions, and b) the defendant maintained an interactive website that could send and receive messages.178 The court refused to assert jurisdiction, dismissing both arguments.179 With respect to the plaintiff’s first argument, the court focused on the fact that the sales were in fact conducted on eBay, an online auction site.180 Because the items were sold to the highest bidder, the defendant had no advance knowledge about where the products would be sold.181 As such, she did not purposefully avail herself of the privilege of doing business in Michigan.182 In response to the plaintiff’s second argument, the court held that it was not prepared to broadly hold “that the mere act of maintaining a website that includes interactive features ipso facto establishes personal jurisdiction over the sponsor of that website anywhere in the United States.”183 In its judgment, the court noted that the plaintiff had provided it with the unpublished opinion in a case called Amway v. Proctor & Gamble.184 In that case, the court held that “something more” than mere interactivity should be required to assert personal jurisdiction and found that “something more” to be the effects doctrine.185 The court held that the plaintiff

173. Id. at *4. 174. Id. 175. 105 F. Supp. 2d 746, 751 (E.D. Mich. 2000). 176. Id. at 747. 177. Id. 178. Id. at 748. 179. Id. at 751. 180. Id. at 749. 181. Id. 182. Id. 183. Id. at 751. 184. Id. 185. Id. could not rely on that doctrine since it failed to identify a continuing relationship with Michigan or with any resident of Michigan.186 One of the strongest criticisms of the Zippo doctrine can be found in Millennium Enterprises, Inc. v. Millennium Music L.P.,187 another case in which the court found insufficient commercial effects and therefore declined to assert jurisdiction. The defendant, a South Carolina corporation, sold products both offline and on the web.188 The plaintiffs, an Oregon- based corporation, sued the defendants in Oregon district court for trademark infringement.189 The defendant filed a motion to dismiss for lack of personal jurisdiction.190 After canvassing numerous Internet jurisdiction cases decided in the Ninth Circuit, as well as Zippo, the court stated:

[T]he middle interactive category of Internet contacts as described in Zippo needs further refinement to include the fundamental requirement of personal jurisdiction: “deliberate action” within the forum state in the form of transactions between the defendant and residents of the forum or conduct of the defendant purposefully directed at residents of the forum state. This, in the court’s view, is the “something more” that the Ninth Circuit intended in Cybersell and Panavision.191 Applying this reasoning to the facts before it, the court allowed the defendants’ motion to dismiss the case on the grounds that the defendants had consummated no transaction and had not made deliberate and repeated contacts with Oregon through their website such that they could reasonably anticipate being haled into Oregon court.192 In its concluding remarks, the court said:

For all of these reasons, this court will not abandon the basic principle that defendants must have taken some action to direct their activities in the forum so as to “purposely avail” themselves of the privilege of doing business within Oregon. The timeless and fundamental bedrock of personal jurisdiction assures us all that a defendant will not be “haled” into a court of a foreign ju-

186. Id. at 747. 187. 33 F. Supp. 2d 907 (D. Or. 1999). 188. Id. at 909. 189. Id. 190. Id. at 919-20. 191. Id. at 921 (internal citations omitted). 192. Id. risdiction based on nothing more than the foreseeability or potentiality of commercial activity with the forum state.193 Applying that principle to the Internet, the court concluded that:

[D]efendants cannot reasonably anticipate that they will be brought before this court, simply because they advertise their products through a global medium which provides the capability of engaging in commercial transactions.194 Although the case law illustrates that there is no single reason for the courts to shift away from the Zippo test, a number of themes do emerge. First, the test simply does not work particularly well in every instance. For example, with courts characterizing chat room postings as passive in nature,195 many might be inclined to dismiss cases involving allegedly defamatory or harassing speech on jurisdictional grounds. Such speech may often be targeted toward a particular individual or entity located in a jurisdiction different from the poster or the chat site itself. Characterizing this act as passive does not result in a desirable outcome since the poster knows or ought to know that the effect of his posting will be felt most acutely in the home jurisdiction of the target. If the target is unable to sue locally due to a strict adherence to the passive versus active test, the law might be seen as encouraging online defamatory speech by creating a jurisdictional hurdle to launching a legal claim. The Zippo test also falls short when active sites are at issue, as the court in People Solutions recognized.196 That court’s request for evidence of actual sales within the jurisdiction illustrates that the mere potential to sell within a jurisdiction does not necessarily make a website active.197 While the owner of an active website may want to sell into every jurisdiction, the foreseeability of a legal action is confined primarily to those places where actual sales occur. The Zippo test does not distinguish between actual and potential sales, however, but rather provides that the mere existence of an active site is sufficient to assert jurisdiction. The problems with the Zippo test are not limited to inconsistent and often undesirable outcomes. The test also encourages a perverse behavior that runs contrary to public policy related to the Internet and e-commerce.

193. Id. at 923. 194. Id. 195. See Braintech, Inc. v. Kostiuk [1999] 171 D.L.R. (4th) 46, 61 (B.C.C.A.); see also Barrett v. Catacombs Press, 44 F. Supp. 2d 717, 728 (E.D. Pa. 1999). 196. People Solutions, Inc. v. People Solutions, Inc., No. Civ. A. 399-CV-2339-L, 2000 WL 1030619, at *4 (N.D. Tex. Jul. 25, 2000). 197. Id. Most countries have embraced the potential of e-commerce and adopted policies designed to encourage the use of the Internet for commercial purposes.198 The Zippo test, however, inhibits e-commerce by effectively dis- couraging the adoption of interactive websites. Prospective website owners who are concerned about their exposure to legal liability will rationally shy away from developing active websites because such sites increase the likelihood of facing lawsuits in far-off jurisdictions. Instead, the test encourages passive websites that feature limited legal exposure and therefore present limited risk. Since public policy aims to increase interactivity and the adoption of e-commerce (and in doing so, enhance consumer choice and open new markets for small and medium sized businesses), the Zippo test acts as a barrier to that policy approach. One of the primary reasons for the early widespread support for the Zippo test was the desire for increased legal certainty for Internet jurisdiction issues. While the test may not have been perfect, supporters felt it offered a clear standard that would allow businesses to conduct effective legal risk analysis and make rational choices with regard to their approach to the Internet.199

198. The Canadian government’s e-commerce policy is stated as follows: On September 22, 1998, the Prime Minister announced Canada’s Elec- tronic Commerce Strategy, outlining initiatives designed to establish Canada as a world leader in the adoption and use of electronic commerce. Working in close collaboration with the private sector, the federal government has concentrated on creating the most favorable environment possible in areas which are critical to the rapid development of e-commerce. Industry Canada, Electronic Commerce in Canada: Canadian Strategy, at http://www.ecom.ic.gc.ca/english/60.html (last modified Feb. 14, 2001). The U.S. government shares a similar e-commerce policy : Commerce on the Internet could total tens of billions of dollars by the turn of the century. For this potential to be realized fully, governments must adopt a non-regulatory, market-oriented approach to electronic commerce, one that facilitates the emergence of a transparent and predictable legal environment to support global business and commerce. Official decision makers must respect the unique nature of the medium and recognize that widespread competition and increased consumer choice should be the defining features of the new digital marketplace. A Framework for Global Electronic Commerce, Jul. 1, 1997, at http://www.ecommerce.gov/framewrk.htm. 199. John Gedid noted the following at an international conference on Internet jurisdiction: The Zippo opinion is comprehensive, thorough and persuasive . . . . The court’s review of precedents is sweeping and thorough, and its logic is compelling. The Zippo court fully understood and explained difficult In the final analysis, however, the Zippo test simply does not deliver the desired effect. First, the majority of websites are neither entirely passive nor completely active. Accordingly, they fall into the “middle zone,” that requires courts to gauge all relevant evidence and determine whether the site is “more passive” or “more active.” With many sites falling into this middle zone, their legal advisors are frequently unable to provide a firm opinion on how any given court might judge the interactivity of the website. Second, distinguishing between passive and active sites is complicated by the fact that some sites may not be quite what they seem. For example, sites that feature content best characterized as passive, may actually be using cookies or other data collection technologies behind the scenes un- beknownst to the individual user.200 Given the value of personal data,201 its collection is properly characterized as active, regardless of whether it occurs transparently or surreptitiously.202 Similarly, sites such as online cha- trooms may appear to be active, yet courts have consistently characterized such sites as passive.203 Third, it is important to note that the standards for what constitutes an active or passive website are constantly shifting. When the test was developed in 1997, an active website might have featured little more than an email link and some basic correspondence functionality. Today, sites with that level of interactivity would likely be viewed as passive, since the entire spectrum of passive versus active has shifted upward with improved

precedents, so that they could be understood in terms of the Interna- tional Shoe criteria. While there are some who would question the approach on the theories that it does not go far enough or that it goes too far, nevertheless, it is an attempt at stating a more comprehensive and coherent approach to Internet jurisdiction cases. The result was that the Zippo opinion is probably the most persuasive and influential opinion that has been published on the subject of cyberspace jurisdiction. John L. Gedid, Minimum Contacts Analysis in Cyberspace—-Sale Of Goods And Ser- vices, Jul. 1997, at http://ilpf.org/events/jurisdiction/presentations/gedid_addl.htm. See generally, Charles H. Fleischer, Will The Internet Abrogate Territorial Lim- its on Personal Jurisdiction?, 33 TORT & INS. L.J. 107 (1997); Michael J. Sikora III, Beam Me into Your Jurisdiction: Establishing Personal Jurisdiction Via Electronic Con- tacts in Light of the Sixth Circuit’s Decision in Compuserve, Inc. v. Patterson, 27 CAP. U. L. REV. 163, 184-85 (1998). 200. Jerry Kang, Information Privacy in Cyberspace Transactions, 50 STAN. L. REV. 1193, 1226-29 (1998). 201. Id. 202. Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119, 1126 (W.D. Pa. 1997). 203. See, e.g., Barrett v. Catacombs Press, 64 F. Supp. 2d 440 (E.D. Pa. 1999). technology. In fact, it can be credibly argued that owners of websites must constantly re-evaluate their positions on the passive versus active spectrum as web technology changes. Fourth, the Zippo test is ineffective even if the standards for passive and active sites remain constant. With the expense of creating a sophisticated website now easily in excess of $100,000,204 few organizations will invest in a website without anticipating some earning potential. Since revenue is typically the hallmark of active websites, most new sites are likely to feature interactivity, and therefore be categorized as active sites. From a jurisdictional perspective, this produces an effect similar to that found in the Inset line of cases—any court anywhere can assert jurisdiction over a website because virtually all sites will meet the Zippo active benchmark. In light of the ever-changing technological environment and the shift toward predominantly active websites, the effectiveness of the Zippo doctrine is severely undermined no matter how it develops. If the test evolves with the changing technological environment, it fails to provide much needed legal certainty. On the other hand, if the test remains static to provide increased legal certainty, it risks becoming irrelevant as the majority of websites meet the active standard. In the next section, this paper will offer an alternative test.

IV. TOWARD A TRIO OF TARGETS Given the inadequacies of the Zippo passive versus active test, a new standard is needed to determine jurisdiction over Internet contacts. This section sketches the components of a targeting test by focusing on three factors: contracts, technology, and actual or implied knowledge. A. Advantages of a Targeting Approach The Zippo experience suggests that the new test should remain technology neutral so as to: a) remain relevant despite ever-changing web technologies, b) create incentives that, at a minimum, do not discourage online interactivity, and c) provide sufficient certainty so that the legal risk of operating online can be effectively assessed in advance. The solution submitted here is to move toward a targeting-based analysis. Unlike the Zippo approach, a targeting analysis would seek to identify the intentions of the parties and to assess the steps taken to either enter or avoid a particular jurisdiction. Targeting would also lessen the

204. David Legard, Average Cost to Build E-commerce Site: $1 Million, THE STAN- DARD, May 31, 1999 (on file with author). reliance on effects-based analyses, the source of considerable uncertainty because Internet-based activity can ordinarily be said to cause effects in most jurisdictions. A targeting approach is not a novel idea. Several United States courts have factored targeting considerations into their jurisdictional analysis of Internet-based activities. For example, in Bancroft & Masters, Inc. v. Au- gusta National Inc.,205 a dispute over the “masters.com” domain name, the Ninth Circuit considered targeting to be the “something more” required when applying an effects-based analysis:

We have said that there must be “something more,” but have not spelled out what that something more must be. We now conclude that “something more” is what the Supreme Court described as “express aiming” at the forum state. Express aiming is a concept that in the jurisdictional context hardly defines itself. From the available cases, we deduce that the requirement is satisfied when the defendant is alleged to have engaged in wrongful conduct targeted at a plaintiff whom the defendant knows to be a resident of the forum state.206 Targeting has also been raised in the context of online gambling cases, where United States courts have aggressively characterized offshore gambling sites as “targeting” local residents. In People v. World Interactive Gaming,207 the court determined that illegal gambling websites targeting New York residents were within its jurisdiction. Allowing targeted websites to escape New York jurisdiction would “severely undermine this state’s deep-rooted policy against unauthorized gambling, [and] also would immunize from liability anyone who engages in any activity over the Internet which is otherwise illegal in this state.”208 The court concluded that “[a] computer server cannot be permitted to function as a shield against liability, particularly in this case where respondents actively targeted New York as the location where they conducted many of their allegedly illegal activities.”209 The strongest indication of a move toward a targeting test for Internet jurisdiction came in April 2001 in American Information Corp. v. Ameri- can Infometrics, Inc., a Maryland district court case.210 The court left little

205. 223 F.3d 1082 (9th Cir. 2000). 206. Id. at 1087 (internal citations omitted) (emphasis added). 207. 714 N.Y.S.2d 844 (Sup. Ct. 1999). 208. Id. at ¶ 22. 209. Id. at ¶ 22. 210. 139 F. Supp. 2d 696 (D. Md. 2001). doubt that targeting was a central consideration in its jurisdictional analysis, stating that:

In the case at bar, non-customers cannot interact with the website except to submit their contract information to inquire about available services or jobs, according to Goreff, and no one from Maryland has ever inquired, or been a customer of American In- fometrics. On a company’s website, neither the “mere existence of an e-mail link, without more,” nor “receiving . . . an indication of interest,” without more, subjects the company to jurisdiction. The ability of viewers to ask about the company’s services, particularly in the absence of any showing that anyone in Maryland has ever done so, does not subject the company to jurisdiction here.211 Fourth Circuit cases on minimum contacts supported the view that the American Informetrics’ website did not create jurisdiction in Maryland. A company’s sales activities focusing “generally on customers located throughout the United States and Canada without focusing on and targeting” the forum state did not yield personal jurisdiction.212 A web presence that permits no more than basic inquiries from Maryland customers that has never yielded an actual inquiry from a Maryland customer, and that does not target Maryland in any way, similarly, should not yield personal jurisdiction.213 Targeting-based analysis has also become increasingly prevalent among international organizations seeking to develop global minimum legal standards for e-commerce. The OECD Consumer Protection Guide- lines refer to the concept of targeting, stating that “business should take into account the global nature of electronic commerce and, wherever possible, should consider various regulatory characteristics of the markets they target.”214 Similarly, a recent draft of the Hague Conference on Private Interna- tional Law’s Draft Convention on Jurisdiction and Foreign Judgments in-

211. Id. at 700. 212. Id. 213. Id. 214. Organization for Economic Cooperation and Development, Recommendation of the OECD Council Concerning Guidelines for Consumer Protection in the Context of Electronic Commerce, at 5, at http://www.oecd.org/dsti/sti/it/consumer/prod/- CPGuidelines_final.pdf (last visited Nov. 26, 2001). cludes provisions related to targeting.215 During negotiations over the e- commerce implications of the draft convention in Ottawa in February 2001, delegates focused on targeting as a means of distinguishing when consumers should be entitled to sue in their home jurisdiction. Version 0.4a of Article 7 (3)(b) includes a provision stating, “activity by the business shall not be regarded as being directed to a State if the business demonstrates that it took reasonable steps to avoid concluding contracts with consumers habitually resident in that State.”216 Targeting also forms the central consideration for securities regulators assessing online activity. As the United States Securities and Exchange Commission stated in its release on the regulation of Internet-based offerings:

We believe that our investor protection concerns are best addressed through the implementation by issuers and financial service providers of precautionary measures that are reasonably designed to ensure that offshore Internet offers are not targeted to persons in the United States or to U.S. persons.217 The same targeting approach has been met with approval in Canada,218 the United Kingdom,219 and other parts of the world.220 In Canada, the Ca- nadian Securities Association has adopted a policy that requires online securities offerings to specifically exclude Canada in order to avoid the jurisdictional reach of Canadian securities regulators. According to the CSA, excluding Canada requires the use of a prominent disclaimer as well as reasonable precautions to ensure that securities are not sold to anyone in Canada.221

215. Hague Conference on Private International Law, Preliminary Draft Convention on Jurisdiction and Foreign Judgments in Civil and Commercial Matters, Oct. 30, 1999, at http://www.hcch.net/e/conventions/draft36e.html. 216. Id. at art. 7(4)(a). 217. Press Release, U.S. Securities & Exchange Commission, Interpretation re: Use of Internet Websites to Offer Securities, Solicit Securities Transactions, or Advertise In- vestment Services Offshore, Release No. 33-17516, Mar. 23, 1998 (on file with author). 218. See British Columbia Securities Commission, National Policy 47-210: Trading in Securities Using the Internet and Other Electronic Means, at http://www.bcsc.bc.ca/Policy/Nin98-72.pdf (on file with author) [hereinafter National Policy 46-210]. 219. Financial Services Authority, Discussion Paper - The FSA’s Approach To Regu- lation Of The Market Infrastructure, Jan. 2000 (on file with author). 220. See IOSCO, supra note 55. 221. See National Policy 46-210, supra note 218. The American Bar Association Internet Jurisdiction Project, a global study on Internet jurisdiction released in 2000, also recommended targeting as one method of addressing the Internet jurisdiction issue.222 It was noted in the report:

[E]ntities seeking a relationship with residents of a foreign forum need not themselves maintain a physical presence in the forum. A forum can be “targeted” by those outside it and desirous of benefiting from a connecting with it via the Internet . . . . Such a chosen relationship will subject the foreign actor to both personal and prescriptive jurisdiction, so a clear understanding of what constitutes targeting is critical.223 It is the ABA’s last point—that a clear understanding of what constitutes targeting is critical—that requires careful examination and discussion. Without universally applicable standards for assessment of targeting in the online environment, a targeting test is likely to leave further uncertainty in its wake. For example, the ABA’s report refers to language as a potentially important determinant for targeting purposes. That criterion overlooks the fact that the development of new language translation capabilities may soon enable website owners to display their site in the language of their choice, safe in the knowledge that visitors around the world will read the content in their own language through the aid of translation technologies.224 B. The Targeting Test Targeting as the litmus test for Internet jurisdiction is only the first step in the development of a consistent test that provides increased legal certainty. The second, more challenging step is to identify the criteria to be used in assessing whether a website has indeed targeted a particular jurisdiction. This step is challenging because the criteria must meet at least two important standards. First, the criteria must be technology neutral so that the test remains relevant even as new technologies emerge. This would seem to disqualify criteria such as a website language or currency, which

222. See American Bar Association, Achieving Legal and Business Order in Cyber- space: A Report on Global Jurisdiction Issues Created By the Internet (on file with author). In the interests of full disclosure, it should be noted that the author was chair of the Sale of Services Working Group, one of nine working groups tasked with developing Internet jurisdiction recommendations. 223. Id. 224. Currently in beta, Google offers searchers the ability to configure their Google searching to translate automatically any results that appear in a foreign language. See Google, at http://www.google.com/machine_translation.html (last visited Nov. 26, 2001). are susceptible to real-time conversion by newly emerging technologies. In the case of real-time conversion language, a Greek website, which might otherwise be regarded as targeting Greece, could be instantly con- verted to English, and therefore rendered accessible to a wider geographic audience. Second, the criteria must be content neutral so that there is no apparent bias in favor of any single interest group or constituency. Several business groups are currently lobbying for a “rule of origin” approach under which jurisdiction would always rest with the jurisdiction of the seller.225 Con- sumer groups, meanwhile, have lobbied for a “rule of destination” approach that ensures that consumers can always sue in their home jurisdiction.226 The origin versus destination debate has polarized both groups, making it difficult to reach a compromise that recognizes that effective consumer protection does not depend solely on which law applies, while also acknowledging, as the Neato court did, that business must shoulder some of the risk arising from e-commerce transactions.227 To identify the appropriate criteria for a targeting test, we must ultimately return to the core jurisdictional principle—foreseeability. Foresee- ability should not be based on a passive versus active website matrix. Rather, an effective targeting test requires an assessment of whether the targeting of a specific jurisdiction was itself foreseeable. Foreseeability in that context depends on three factors: contracts, technology, and actual or implied knowledge. Forum selection clauses found in website terms of use agreements or transactional clickwrap agreements allow parties to mutually determine an appropriate jurisdiction in advance of a dispute. They therefore provide important evidence as to the foreseeability of being haled into the courts of a particular jurisdiction. Newly-emerging technologies that identify geographic location constitute the second factor. These technologies, which challenge widely held perceptions about the Internet’s architecture, may allow website owners to target their content to specific jurisdictions or engage in “jurisdictional avoidance” by “de- targeting” certain jurisdictions. The third factor, actual or implied knowledge, is a catch-all that incorporates targeting knowledge gained through the geographic location of tort victims, offline order fulfillment, financial intermediary records, and web traffic.

225. See, e.g., Global Business Dialogue on Electronic Commerce, at http://www.gbde.org (last visited Nov. 26, 2001). 226. See, e.g., Consumers International, at http://www.consumersinternational.org (last update Oct. 16, 2001). 227. Stomp Inc. v. Neato L.L.C., 61 F. Supp. 2d 1074, 1080-81 (C.D. Cal. 1999). Although all three factors are important, no single factor should be determinative. Rather, each must be analyzed to adequately assess whether the parties have fairly negotiated a governing jurisdiction clause at a private contract level, whether the parties employed any technological solutions to target their activities, and whether the parties knew, or ought to have known, where their online activities were occurring. While all three factors should be considered as part of a targeting analysis, the relative importance of each will vary. Moreover, in certain instances, some factors may not matter at all. For example, a defamation action is unlikely to involve a contractual element, though evidence from the knowledge factor is likely to prove sufficient to identify the targeted jurisdiction. It is important to also note that the targeting analysis will not determine exclusive jurisdiction, but rather identify whether a particular jurisdiction can be appropriately described as having been targeted. The test does not address which venue is the most appropriate of the jurisdictions that meet the targeting threshold. 1. Contracts The first of the three factors for the recommended targeting test considers whether either party has used a contractual arrangement to specify which law should govern. Providing parties with the opportunity to limit their legal risk by addressing jurisdictional concerns in advance can be the most efficient and cost-effective approach to dealing with the Internet jurisdiction issue. The mere existence of a jurisdictional clause within a contract, however, should not, in and of itself, be determinative of the issue, particularly when consumer contracts are involved. In addition to considering the two other targeting factors, the weight accorded to an online contract should depend upon the method used to obtain assent and the reasonableness of the terms contained in the contract. Courts in both Canada and the United States have upheld the per se enforceability of an online contract,228 commonly referred to as a clickwrap agreement. These agreements typically involve clicking on an “I agree” icon to indicate assent to the agreement. Given their ubiquity, it should come as little surprise to find that courts have been anxious to confirm their enforceability. For example, in the 1999 Ontario case of Rudder v. Microsoft Corp.,229 the court upheld a forum selection clause contained in an electronic ISP Terms of Service Agreement. The court feared that not

228. Graves v. Pikulski, 115 F. Supp. 2d 931 (S.D. Ill. 2000); Kilgallen v. Network Solutions, 99 F. Supp. 2d 125 (D. Mass. 2000); Rudder v. Microsoft Corp., [1999] 2 C.P.R. (4th) 474 (Ont.). 229. Rudder, 2 C.P.R. (4th) at 2. upholding the clause would not only fail to advance the goal of “commercial certainty,” but would also move this type of electronic transaction into the realm of commercial absurdity. The court further feared that it would lead to chaos in the marketplace, “render ineffectual electronic commerce and undermine the integrity of any agreement entered into through this medium.”230 Courts in the United States have been similarly supportive of forum selection clauses found in clickwrap contracts. In Kilgallen v. Network So- lutions, Inc.,231 the court faced a dispute over the re-registration of a domain name. The plaintiff claimed that Network Solutions, the defendant, was in breach of contract when it transferred its domain name to a third party.232 Network Solutions defended its actions by countering that the plaintiff had failed to make the annual payment necessary to maintain the domain.233 Moreover, it sought to dismiss the action on the grounds that the registration agreement specified that all disputes were to be resolved in the Eastern District of Virginia.234 The federal court in Massachusetts agreed, ruling that forum selection clauses are enforceable unless proven unreasonable under the circumstances.235 Notwithstanding the apparent support for enforcing forum selection clauses within clickwrap agreements, the presence of such a clause should only serve as the starting point for analysis. A court must first consider how assent to the contract was obtained. If the agreement is a standard clickwrap agreement in which users were required to positively indicate their agreement by clicking on an “I agree” or similar icon, the court will likely deem this to be valid assent. Many jurisdictional clauses are not found in a clickwrap agreement, however, but rather are contained in the terms of use agreement on the website. The terms typically provide that users of the website agree to all terms contained therein by virtue of their use of the website. The validity of this form of contract, in which no positive assent is obtained and the website visitor is unlikely to have read the terms, stands on shakier ground. Three recent United States cases have considered this form of contract with the consensus moving toward nonenforcement. In Ticketmaster v. Tickets.com,236 a dispute over links between rival event

230. Id. at ¶¶ 14-16. 231. Kilgallen, 99 F. Supp. at 129. 232. Id. at 126. 233. Id. 234. Id. 235. Id. at 129. 236. No. CV 99-7654 HLH, 2000 WL 525390 (C.D. Cal. Mar. 27, 2000). ticket sites, the court considered the enforceability of the terms and conditions page found on the Ticketmaster site and concluded that the forum selection clause was not enforceable.237 The terms and conditions set forth on the Ticketmaster home page provided that users going beyond the home page were prevented from making commercial use of the information and were prohibited from deep linking.238 Ticketmaster defended on the grounds that courts enforce “shrink-wrap licenses” where “packing on the outside of the CD stated that opening the package constitutes adherence to the license agreement . . . contained therein.”239 The court found that Ticketmaster’s system of notification did not create a binding contract on the user.240 Unlike the agreement on the Ticket- master site, “the ‘shrink-wrap license agreement’ is open and obvious and in fact hard to miss.”241 Ticketmaster’s terms and conditions did not require the user to “click on ‘agree’ to the terms and conditions before going on” as many websites do.242 The court further noted that customers were required “to scroll down the home page to find and read” the terms and conditions.243 Given this system, “[m]any customers . . . are likely to proceed to the event page of interest rather than reading the ‘small print.’ It cannot be said that merely putting the terms and conditions in this fashion necessarily creates a contract with any one using the website.”244 This case suggests that mere inclusion of a forum selection or other jurisdictional clause, within the terms and conditions, may not be enforceable because the term is not brought sufficiently to the attention of the user. Several months after the Ticketmaster decision, another federal court adopted a different approach in Register.com, Inc. v. Verio, Inc.245 This case involved a dispute over Verio’s use of automated software to access and collect the domain name registrant’s contact information contained in the Register.com WHOIS database. Verio collected the data to use for marketing purposes.246 Register.com provided the following terms and conditions for those wishing to access its WHOIS database:

237. Id. 238. Id. at *3. 239. Id. 240. Id. 241. Id. 242. Id. 243. Id. 244. Id. (emphasis added) 245. 126 F. Supp. 2d 238 (S.D.N.Y. 2000). 246. Id. at 252. By submitting a WHOIS query, you agree that you will use this data only for lawful purposes and that, under no circumstances will you use this data to: (1) allow, enable, or otherwise support the transmission of mass unsolicited, commercial advertising or solicitations via direct mail, electronic mail, or by telephone; or (2) enable high volume, automated, electronic processes that apply to Register.com (or its systems). The compilation, repackag- ing, dissemination or other use of this data is expressly prohibited without the prior written consent of Register.com. Regis- ter.com reserves the right to modify these terms at any time. By submitting this query, you agree to abide by these terms.247 Unlike the Ticketmaster case, the court in Register.com ruled that these terms were binding on users, despite the absence of a clear manifes- tation of assent.248 The court relied on the users’ willingness to engage with the website, by using the WHOIS database, as evidence that the user could impliedly be considered to have agreed to the terms of the contract. Most recently, in Specht v. Netscape Communications Corp.,249 the same federal court in New York distinguished between clickwrap contracts, which it argued features positive assent in the form of clicking “I agree”, and browsewrap contracts, in which the user is merely alerted to the existence of a contract through a disclaimer or other notice. The court ruled that the latter form of contract, employed in this case by Netscape Communications, was not binding against the user since Netscape had failed to obtain the user’s positive assent. Netscape argued “the mere act of downloading indicates assent.”250 As the court noted, however, “downloading is hardly an unambiguous indication of assent” because “[t]he primary purpose of downloading is to obtain a product, not to assent to an agreement.”251 The court criticized Netscape for not drawing the user’s attention to the clickwrap contract, for not requiring an affirmative mani- festation of assent, and for only making a “mild request” that the user review the terms of the licensing agreement.252

247. Id. at 242-43. 248. Id. 249. 150 F. Supp. 2d 585 (S.D.N.Y. 2001). 250. Id. at 595. 251. Id. 252. Furthermore, unlike the user of Netscape Navigator or other click-wrap or shrink-wrap licensees, the individual obtaining SmartDownload is not made aware that he is entering into a contract. SmartDownload is available from Netscape’s website free of charge. Before downloading the software, the user need not view any license agreement terms or even any reference to a license agreement, and need not do anything to manifest assent to such a license agreement other than actually taking possession of the product. While the form of assent may call into question the validity of an online contract, the actual terms of the contract itself are of even greater consequence. Courts are required to consider the reasonableness of the terms of a contract as part of their analysis. Within the context of a jurisdictional inquiry, several different scenarios may lead the court to discount the importance of the contract as part of a targeting analysis. A court may simply rule that the forum selection clause is unenforceable in light of the overall nature of the contract. This occurred in Mendoza v. AOL,253 a recent California case involving a disputed ISP bill. After Mendoza sued AOL in California state court, AOL responded by seeking to have the case dismissed on the grounds that the AOL service contract contains a forum selection clause that requires all disputes arising from the contract to be brought in Virginia.254 The court surprised AOL by refusing to enforce the company’s terms of service agreement on the grounds that “it would be unfair and unreasonable because the clause in question was not negotiated at arm’s length, was contained in a standard form contract, and was not readily identifiable by plaintiff due to the small text and location of the clause at the conclusion of the agreement.”255 Though cases such as Mendoza are the exception rather than the rule, they do point to the fact that a forum selection clause will not always be enforced, particularly in consumer disputes where the provision may be viewed by a court as too onerous given the small amount at issue.256

From the user’s vantage point, SmartDownload could be analogized to a free neighbor- hood newspaper, readily obtained from a sidewalk box or supermarket counter without any exchange with a seller or vendor. It is there for the taking. The only hint that a contract is being formed is one small box of text referring to the license agreement, the text that appears below the screen used for downloading and that a user need not even see before obtaining the product: “Please review and agree to the terms before downloading and using the software for the Netscape Smart Download software license agreement.” Couched in the mild request, “[p]lease review,” this agreement reads as a mere invitation, not as a condition. The language does not dictate that a user must agree to the license terms before downloading and using the software. While clearer language appears in the License Agreement itself, the language of the invitation does not require the reading of those terms or provide adequate notice either that a contract is being created or that the terms of the License Agreement will bind the user. Id. at 595-96. 253. Mendoza v. AOL (Cal. Super. Ct.) (unreported, on file with author). 254. Id. 255. Id. 256. For another example in which a Massachusetts state court refused to enforce the AOL forum selection clause in a class action suit over AOL system software see Williams v. AOL, No. 00-0962 (Mass. Super. Ct. Feb 2001) (on file with author). Courts may also be unwilling to enforce such clauses where the court perceives the clause to be an attempt to contract out of the jurisdiction with the closest tie to the parties. Courts must be vigilant to ensure that forum selection clauses are not used to create a “race to the bottom” effect whereby parties select jurisdictions with lax regulations in an attempt to avoid more onerous regulations in the home jurisdictions of either the seller or purchaser.257 Aggressive courts may also be unwilling to enforce a clause with no tie to the jurisdiction. In Standard Knitting, Ltd. v. Out- side Design, Inc.,258 for example, a trademark infringement case involving a Canadian plaintiff, the federal court in Pennsylvania transferred the case to Washington state after it found that venue would be more convenient for the parties there. An alternative to dictating jurisdiction terms to the consumer and risk- ing a court’s refusal to enforce those terms is to provide the consumer with the opportunity to self-declare his or her jurisdiction. The advantage of this approach is that the business can refuse to deal with the consumer if the consumer self-declares a jurisdiction with increased legal risk for the business. For example, Expedia, a leading online travel site, asks users to indicate their home jurisdiction prior to using the service.259 If the user indicates the United States as her home jurisdiction, she remains at the Expedia.com site. If the user lists Canada as her home jurisdiction, she is transferred to Expedia.ca, a Canada-specific site. If the user lists Mexico as her home jurisdiction, the site advises her that Expedia is unable to provide service at the present time due to regulatory constraints. An additional advantage to this approach is that the business should be able to rely on the consumer’s self-declaration. If the consumer intentionally proffers incorrect information—he resides in Mexico but declares that the United States is his home jurisdiction—Expedia should be able to rely on the consumer statement to ensure that they do not run afoul of Mexican regulatory law because they were clearly targeting their activity to the United States.260

257. For example, the Wall Street Journal reports that Bermuda has become a haven for dot-com operations seeking to avoid tax and other regulatory measures in North America. Michael Allen, As Dot-Coms Go Bust in the U.S., Bermuda Hosts a Little Boomlet, WALL ST. J., Jan. 8, 2001, at A4. 258. No. 00-2288, 2000 WL 804434, at *5 (E.D. Pa. Jun. 23, 2000). 259. See Expedia, at http://www.expedia.com (last visited Nov. 26, 2001). 260. The legal implications of a mistaken self-declaration are more problematic. The possibility of a mistaken self-declaration is a genuine possibility where the question posed requires a layperson to apply legal principles. For example, the answer to “where do you habitually reside?” might differ from the answer to the question “where do you live?” If the consumer is unfamiliar with the legal standards for habitual residence, he Despite the potential advantages of self-declaration, courts have ruled that companies cannot rely on the self-declaration of a user where they know or suspect it to be false. For example, in People v. World Interactive Gaming,261 an online gambling case, the court rejected attempts by the online casino to limit registration to gamblers residing in a state that permits gambling. In particular, the court noted that the site required users to enter their permanent addresses when they opened accounts.262 Users who claimed residency in “a state that permitted land-based gambling, such as Nevada, [were] granted permission to gamble.”263 Users who indicated that their permanent addresses were in states, “such as New York, which does not permit land-based gambling, [were] denied permission to gamble.” The court noted, however, that

because the software does not verify the user’s actual location, a user initially denied access could easily circumvent the denial by changing the State entered to that of Nevada, while remaining physically in New York State. The user could then log onto the GCC casino and play virtual slots, blackjack or roulette. This raises the question if this constitutes a good-faith effort not to engage in gambling in New York.264 This court’s approach to self-declaration is reminiscent of the court’s approach in the iCraveTV case, which, as discussed earlier, was dismissive of that company’s attempts to use contract to limit its signal to Canadi- ans.265 Contracts must clearly play a central role in any determination of jurisdiction targeting since providing parties with the opportunity to set their own rules enhances legal certainty. As the foregoing review of recent online contracting case law reveals, however, contracts do not provide the parties with absolute assurance that their choice will be enforced, particularly in a consumer context. Rather, courts must engage in a detailed analysis of how consent was obtained as well as consider the reasonableness of the terms. The results of that analysis should determine what weight to grant the contractual terms when balanced against the remaining two factors of the proposed targeting analysis.

may mistakenly self-declare his jurisdiction. Under such circumstances, it is unclear whether the consumer should bear the legal burden of the mistaken self-declaration should a dispute arise. 261. 714 N.Y.S.2d 844 (Sup. Ct. 1999). 262. Id. 263. Id. at 847. 264. Id. 265. See id; see also supra Part I.B. 2. Technology The second targeting factor focuses on the use of technology to either target or avoid specific jurisdictions. Just as technology originally shaped the Internet, it is now reshaping its boundaries by quickly making geographic identification on the Internet a reality. The rapid emergence of these new technologies challenges what has been treated as a truism in cyberlaw—that the Internet is borderless and thus impervious to attempts to impose on it real-space laws that mirror traditional geographic boundaries.266 Courts have largely accepted the notion that the Internet is borderless as reflected by their reluctance to even consider the possibility that geographic mapping might be possible online. In American Libraries Ass’n v. Pataki,267 a Commerce Clause challenge to a New York state law targeting Internet content classified as obscene, the court characterized geography on the Internet in the following manner:

The Internet is wholly insensitive to geographic distinctions. In almost every case, users of the Internet neither know nor care about the physical location of the Internet resources they access. Internet protocols were designed to ignore rather than document geographic location; while computers on the network do have “addresses,” they are logical addresses on the network rather than geographic addresses in real space. The majority of Internet addresses contain no geographic clues and, even where an Inter- net address provides such a clue, it may be misleading.268 Although the ALA court’s view of the Internet may have been accurate in 1997, the Internet has not remained static. Providers of Internet content increasingly care about the physical location of Internet resources and the users that access them, as do legislators and courts who may want real space limitations imposed on the online environment.269 A range of companies have responded to those needs by developing technologies that provide businesses with the ability to reduce their legal risk by targeting their online presence to particular geographic constituencies. These technologies also serve the interests of governments and regulators who may

266. See generally Johnson & Post, supra note 49. 267. Am. Libraries Ass’n v. Pataki, 969 F. Supp. 160 (S.D.N.Y. 1997). 268. Id. at 170. 269. Bob Tedeschi, E-commerce: Borders Returning to the Internet, N.Y. TIMES, Apr. 2, 2001 (on file with author). now be better positioned to apply their offline regulations to the online environment.270 Since both business and government share a vested interest in bringing geographic borders to the online environment (albeit for different reasons), it should come as little surprise that these technologies have so quickly arrived onto the marketplace. In fact, they have become available before the Internet community has engaged in a current discussion on the benefits, challenges, and consequences of creating borders or “zoning” the Internet with these new technologies.271 This is most unfortunate since geographic bordering technologies raise important privacy considerations that have, as yet, attracted little debate.272 Although critics often point to the inaccuracy of these technologies, few users of the technology actually demand perfection.273 Businesses want either to target their message to consumers in a specific jurisdiction

270. In addition to the discussion below, see Jack L. Goldsmith & Alan O. Sykes, The Internet and the Dormant Commerce Clause, 110 YALE L.J. 785, 810-12 (2001). 271. Although in fairness, there are some that saw these developments coming many years ago. For example, Professor Lawrence Lessig, in the same Stanford Law Review issue featuring Post’s and Johnson’s Law and Borders article, supra note 49, commented that: In its present design, cyberspace is open, and uncontrolled; regulation is achieved through social forces much like the social forms that regulate real space. It is now unzoned: Borders are not boundaries; they divide one system from another just as Pennsylvania is divided from Ohio. The essence of cyberspace today is the search engine—tools with which one crosses an infinite space, to locate, and go to, the stuff one wants. The space today is open, but only because it is made that way. Or because we made it that way. (For whatever is true about society, at least cyberspace is socially constructed.)

It could be made to be different, and my sense is that it is. The present architecture of cyberspace is changing. If there is one animating idea behind the kinds of reforms pursued both in the social and economic spheres in cyberspace, it is the idea to increase the sophistication of the architecture in cyberspace, to facilitate boundaries rather than borders. It is the movement to bring to zoning to cyberspace. Lawrence Lessig, The Zones of Cyberspace, 48 STAN. L. REV. 1403, 1408-9 (1996) [hereinafter Lessig, Zones]; see also, LESSIG, supra, note 57, at 56-57. 272. Stefanie Olsen, Geographic Tracking Raises Opportunities, Fears, CNET NEWS.COM, Nov. 8, 2000, at http://news.cnet.com/news/0-1005-200-3424168.html. 273. As Lessig points out, “[a] regulation need not be absolutely effective to be sufficiently effective.” Lessig, Zones, supra note 271, at 1405. The same applies to bordering technologies; whether used for targeted marketing or to ensure legal compliance, they need not be perfect. or to engage in “jurisdictional avoidance.”274 Effective jurisdictional avoidance provides the means to exclude the majority of visitors who cannot be verified as residing in the desired jurisdiction. For example, iCraveTV did not use identifying technologies, choosing instead to rely on the user clickwrap agreements.275 JumpTV, a new Canadian entry into the webcasting market, has indicated that it will use identifying technologies to ensure that only Canadians access its signal.276 While this may exclude some Canadians who cannot be positively identified as coming from Can- ada, it will provide the company with a greater level of assurance in meeting its goal of limiting its online signal. Government, on the other hand, may often want to engage in jurisdictional identification so that it can more easily identify when its laws are triggered. For example, Nevada recently enacted legislation that paves the way for the Nevada Gaming Commission to legalize online gambling.277 Central to the new legislation is jurisdiction identification. Section 3(2) provides: The commission may not adopt regulations governing the licensing and operation of interactive gaming until the commission first determines that: (a) Interactive gaming can be operated in compliance with all applicable laws; (b) Interactive gaming systems are secure and reliable, and provide reasonable assurance that players will be of lawful age and communicating only from jurisdictions where it is lawful to make such communications.278 To reach the determination required by subsection (b), an analysis of available geographic identification technology will be necessary. Geographic identification technologies can be grouped into at least three categories: a) user identification, which is typically based on IP address identification; b) self-identification, which often occurs through attribute certificates; and c) offline identification.

274. See Tedeschi, supra note 269. 275. Twentieth Century Fox Film Corp. v. iCraveTV, No. 00-121, 2000 U.S. Dist. LEXIS 1013 (W.D. Pa. Jan. 28, 2000). 276. Matthew Fraser, Jump TV Takes On Vested Interests, FIN. POST, Jan. 29, 2001, at C02. 277. Nevada Governor Signs Internet Gambling Bill, SAN JOSE MERCURY NEWS, June 15, 2001, available at http://www.siliconvalley.com/docs/news/tech/060919.htm. 278. H.R. 466, 71st Ass., Reg. Sess., (Nev. 2001), available at http://www.leg.state.nv.us/71st/bills/AB/-AB446_EN.html. a) User Identification User identification has been utilized on a relatively primitive scale for some time. For example, for many years, in order to comply with United States regulations prohibiting the export of strong-encryption web browsers, Microsoft used Internet Protocol (IP) lookups, which determine user locations by cross-checking their IP address against databases that list Internet service provider locations.279 Although imperfect, the process was viewed as sufficiently effective to meet the standards imposed by the regulations. Recently, several companies have begun offering more sophisticated versions of similar technologies. Brief descriptions of some of the leading companies offering geo-identification technologies follow. i) Infosplit Infosplit claims to have the ability to accurately pinpoint the location of any IP address using a proprietary set of techniques and algorithms.280 The technology provides instant and precise geographic identification and page routing in a process invisible to the web user. The company maintains that its technology accurately determines the country of origin with 98.5% accuracy, the state or province with 95% accuracy, and the city with 85% accuracy, and that it can even accurately determine user location for users of national or global ISPs such as AOL. The Infosplit technology returns a geographic location by sending the user’s IP address to the various algorithms including Trace Route, the ARIN/RIPE/APNIC database, and a DNS reverse look-up. The ARIN/RIPE/APNIC component analyzes information obtained from the ARIN/RIPE/APNIC database. The DNS Reverse Lookup component analyzes publicly available domain name registration data. The Trace Route algorithm discovers and interprets the trail left by network packets associated with the viewer’s web page request. By combining the results of all three algorithms, Infosplit can provide a more effective result than with an IP lookup alone. ii) NetGeo NetGeo provides geographic identification primarily through IP address analysis.281 The company features a database and collection of Perl scripts used to map IP addresses and domain names to geographical loca-

279. Anick Jesdanun, The Potential and Peril of National Internet Boundaries, S.F. EXAMINER, Mar. 4, 2001, available at http://www.examiner.com/business/- default.jsp?story=b.net.0107. 280. See Infosplit, at http://www.infosplit.com (last visited Nov. 26, 2001). 281. See NetGeo, at http://www.netgeo.com (last visited Nov. 26, 2001). tions. To determine the latitude/longitude values for a domain name, Net- Geo first searches for a record containing the target name in its own database. The NetGeo database caches the location information parsed from the results of previous whois lookups, which provide IP address information to minimize the load on whois servers. If a record for the target domain name is found in the database, NetGeo returns the requested information. If no matching record is found in the NetGeo database, NetGeo performs one or more whois lookups using the InterNIC and/or RIPE whois servers, until a whois record for the target domain name is found. After obtaining a record from a whois server, the NetGeo Perl scripts parse the whois record and extract location information and the date of last update. The NetGeo parser attempts to extract the city, state, and country from the text of the whois record. For United States addresses, the parser also extracts the zip code, if possible. If the parser is unable to parse an address, it attempts to find an area code or international phone code in the contact section. The phone code is mapped to a country and then the parser attempts to parse the address again, using the hint provided by the phone code. The parser also guesses the country from email addresses with country-code TLDs found in the contact section. iii) EdgeScape Akamai, a network caching service, also provides a geographic identification service called EdgeScape.282 EdgeScape maps user IP addresses to their geographic and network point of origin. This information is assembled into a database and made available to EdgeScape customers. Each time a user accesses the client’s website, EdgeScape provides data detailing the country from which the user is accessing the site, the geographic region within that country (i.e., state or province), and the name of user’s origin network. The company claims accuracy rates as high as 99 percent at the country level, though accuracy diminishes at the state and local levels. iv) Digital Envoy Founded in 1999, Atlanta-based Digital Envoy’s core competency is geographic identification on the web.283 The company’s flagship product, NetAcuity, claims country targeting capability exceeding 99% accuracy with targeting regions, states, or cities as another possibility. The company’s primary focus has been the corporate marketing sector, which re-

282. See Akamai, at http://www.akamai.com (last visited Nov. 26, 2001). 283. See Digital Envoy, at http://www.digitalenvoy.com/prod_netacu.htm (last visited Nov. 26, 2001). lies on Digital Envoy to allow for geographically targeted advertising.284 The company’s technology is also used by CinemaNow Inc., a California- based online distributor of feature-length films. It uses the technology to limit distribution of the films to ensure it is compliant with distribution- license rules that vary by country.285 v) Quova One of the best-funded companies offering geographic identification technologies is Quova,286 a California-based startup that purchased Euro- pean leader RealMapping in early 2001.287 The company spent nine months scanning the Internet’s 4.2 billion IP addresses, yielding a detailed physical map of the Internet.288 The result was the company’s flagship product GeoPoint, which boasts 98 percent accuracy at determining web surfers’ countries and 85 percent accuracy at the city level.289 Currently in development is new technology that will allow for greater identification of AOL users, whose geographic origins are typically more difficult to identify than most other ISPs.290 b) Self-identification Unlike user identification technologies, which identify the user’s geographic location without requesting permission to do so, self-identification uses technologies that enable users to provide geographic identification directly to the website. This is most frequently accomplished through the use of attribute certificates, which, as Michael Froomkin explains, provide information about the attributes of a particular user without revealing his actual identity:

Although identifying certificates are likely to be the most popular type of certificate in the short run, in the medium term CAs are likely to begin certifying attributes other than identity. An authorizing certificate might state where the subject resides, the subject’s age, that the subject is a member in good standing of an

284. Nicole Harris, Digital Envoy Offers a Way To ‘Geo-Target’ Web Surfers, WALL ST. J., Apr. 12, 2001, at B5. 285. Patricia Jacobus, Cinema Now Appeases Studios by Locating Web Surfers, CNET NEWS.COM, Feb. 26, 2001 (on file with author). 286. See Quova, at http://www.quova.com (last visited Nov. 26, 2001). 287. Stefanie Olsen, Tracking Web Users into European Territory, CNET NEWS.COM, Apr. 3, 2001 (on file with author). 288. See Olsen, supra note 272. 289. See Olsen, supra note 287. 290. Id. organization, that the subject is a registered user of a product, or that the subject possesses a license such as bar membership.291 Froomkin points out that attribute certificates have many potential applications, chief among them geographic identification.292 Self- identification technology represents a middle ground between user identification, which puts the power of identification solely in the hands of the website, and self-declaration, in which the user declares where they reside but without any independent or technological verification of the accuracy of the declaration. The danger with self-identification technologies is that if they become popular, they may also quickly cease to be voluntary since businesses may begin to require that their users supply the data contained in an attribute certificate in order to obtain service.293 c) Offline Identification Offline identification combines an online presence with certain offline knowledge to form a geographic profile of a user. The best example of offline identification is credit card data. Since credit cards remain the preferred payment mechanism for most online transactions, sellers are regularly asked to verify the validity of a user’s credit card. The verification process for online purchases includes an offline component, as the address submitted by the user is cross-checked with the address on file to confirm a match prior to authorization of the charge.294 This process provides websites with access to offline data such as the user’s complete address— which is confirmed through a third party, the financial intermediary. While this system may be effective for sites actively engaged in e- commerce and for those whose geographic risks are confined strictly to

291. A. Michael Froomkin, The Essential Role of Trusted Third Parties in Electronic Commerce, 75 OR. L. REV. 49, 62 (1996). 292. It is illegal to export high-grade cryptography from the United States without advance permission from the federal government, but there are no legal restrictions on the distribution of strong cryptography to resident aliens or United States citizens in the United States. The lack of a reliable means to identify the geographical location of a person from an Internet address creates a risk of prosecution for anyone making cryptographic software available over the Internet. For example, if Alice is making high-grade cryptography available for distribution over the Internet, she might protect herself from considerable risk by requiring that Bob produce a valid certificate from a reputable CA, stating that he is a United States citizen or green card holder residing in the United States, before allowing him to download the cryptographic software. Id. 293. See LESSIG, supra note 57, at 42. 294. Credit Card Fraud Crippling Online Merchants, E-COMMERCE TIMES, Mar. 20, 2000, at http://www.ecommercetimes.com/news/articles2000/000320-2.shtml (“At present, credit card companies only verify if a credit card number is correct and then match the number against the customer’s billing address.”). those circumstances when they are selling into a particular jurisdiction, the use of credit-card data is of limited utility to those who do not actively sell online or those who are concerned about jurisdictional issues prior to the submission of a credit card number and address information. This would include sites such as JumpTV, which use an advertiser-supported model so that they do not require users to provide credit card data, yet are concerned with the availability of the site outside Canada. Two other offline identifiers present similar possibilities of geographic identification, but simultaneously raise serious privacy concerns. At one time, Microsoft included a feature in its software that could be used to transmit personal information via the Internet without the user’s knowledge.295 The feature enabled Microsoft software such as Word or Excel to issue identification numbers unique to the software and the computer on which the software was installed. During the online registration process, the number, known as a Global Unique Identifier (GUID), was transferred to Microsoft along with the user’s name, address, and other personal information. Microsoft could then identify users by matching their GUID with the information stored in the Microsoft-controlled database.296 Fol- lowing numerous complaints from the privacy rights community, the software giant altered the feature to better protect user privacy. Intel found itself embroiled in a similar privacy controversy when it was revealed that the company was able to identify people online by using a Processor Serial Number (PSN). A PSN was a number burned onto an Intel processor chip at the time of manufacture and designed to provide authentication in Internet communication and commerce. The PSN identified a person on the Internet by the actual hardware of the computer they were using, limiting their ability to protect their anonymity online and providing for the prospect of quick identification.297 Intel responded to privacy concerns by switching the default setting on the PSN such that users were required to proactively initiate the feature to track users. Though clearly limited in scope, offline identifiers have the advantage of being the most inexpensive method of identifying geographic location because they rely on offline data collected independently of online activities. Precisely because they merge offline and online, these technologies raise profound privacy concerns, creating the prospect of personally iden-

295. M. Ricciuti, Microsoft Admits Privacy Problem, Plans Fix, CNET NEWS.COM, Mar. 7, 1999, at http://news.cnet.com/news/0-1006-200-339622.html. 296. Id. 297. Privacy Exchange, Privacy and the Internet Tutorial: Protecting Web Privacy - Processor Serial Number (on file with author). tifiable information being transferred along with non-identifiable geographic data. d) Targeting and Technology Given the development of new technologies that allow for geographic identification with a reasonable degree of accuracy, a targeting test must include a technology component that places the onus on the party contesting or asserting jurisdiction to demonstrate what technical measures, including offline identifiers, it employed to either target or avoid a particular jurisdiction. The suitability of such an onus lies in the core consideration of jurisdiction law—that is, whether jurisdiction is foreseeable under the circumstances. Geographic identifying technologies provide the party that deploys the technology with a credible answer to that question at a cost far less than comparable litigation expenses. Since parties can identify who is accessing their site, they can use technical measures to stop people from legally-risky jurisdictions, including those jurisdictions where a site owner is reluctant to contest potential litigation or face regulatory scrutiny, from doing so. A fair and balanced targeting jurisdiction test demands that they do just that. It is important to note that parties are not typically required to use geographic identification technologies.298 In many instances, they do not care who accesses their site and thus will be unwilling and may not have the incentive to incur the expense of installing such systems. In other instances, the party may be acutely aware of the need to identify users from a jurisdiction that bans access to certain content or certain activities. In such instances, the party may wish to limit access to those users it can positively identify from a legally safe jurisdiction. The inclusion of technology into the targeting test does not, therefore, obligate parties to use the technology. Rather, it forces parties to acknowledge that such technologies are available and that prudence may dictate using them in some capacity. Moreover, the test does not prescribe any specific technology—it only requires that consideration be given to the technologies used and available at a particular moment in time. This technology neutral prong of the targeting test, which does not prescribe a particular type of technology but rather the outcome, also provides an effective counterbalance to the contract and knowledge factors. It removes the ability to be willfully blind to users who enter into a clickwrap contract stating that they are from one jurisdiction, while the technological evidence suggests something else entirely.

298. Except where as required by law. See, e.g., Jesdanun, supra note 279. 3. Actual or Implied Knowledge The third targeting factor assesses the knowledge the parties had or ought to have had about the geographic location of the online activity. Al- though some authors have suggested that the Internet renders intent and knowledge obsolete by virtue of the Internet’s architecture,299 the geographic identification technologies described above do not support this view. This factor ensures that parties cannot hide behind contracts and/or technology by claiming a lack of targeting knowledge when the evidence suggests otherwise. The implied knowledge factor is most apparent in the defamation tort cases that follow from the Calder decision. In those cases, courts have accepted that the defaming party is or should be aware that the injury in- flicted by her speech would be felt in the jurisdiction of her target. Ac- cordingly, in such cases a party would be unable to rely on a contract that specifies an alternate jurisdiction as the choice of forum. The court’s desire to dismiss any hint of willful blindness is evident in the People v. World Interactive Gaming case, referred to earlier.300 In that case, the online casino argued that it had limited access to only those users that had entered an address of a jurisdiction where gambling was permitted. The court saw through this ruse, however, firmly stating that:

[t]his Court rejects respondents’ argument that it unknowingly accepted bets from New York residents. New York users can easily circumvent the casino software in order to play by the simple expedient of entering an out-of-state address. Respon- dents’ violation of the Penal Law is that they persisted in con-

299. See, e.g., Martin H. Redish, Of New Wine and Old Bottles: Personal Jurisdic- tion, The Internet, and the Nature of Constitutional Evolution, 38 JURIMETRICS J. 575 (1998). Redish notes: The most effective defense of an Internet exception to the purposeful availment requirement is not that state interest should play an important role only in Internet cases, but rather that the technological development of the Internet effectively renders the concept of purposeful availment both conceptually incoherent and practically irrelevant. An individual or entity may so easily and quickly reach the entire world with its messages that it is simply not helpful to inquire whether, in taking such action, that individual or entity has consciously and carefully made the decision either to affiliate with the forum state or seek to acquire its benefits. Id. at 605-06. 300. People v. World Interactive Gaming, 714 N.Y.S.2d 844 (Sup. Ct. 1999). tinuous illegal conduct directed toward the creation, establishment, and advancement of unauthorized gambling.301 The relevance of a knowledge-based factor extends beyond reliance on contracts that the parties know to be false. In an e-commerce context, the knowledge that comes from order fulfillment is just as important. For example, sales of physical goods such as computer equipment or books, provide online sellers with data such as a real-space delivery address, making it relatively easy to exclude jurisdictions that the seller does not wish to target. Courts have also begun to use a knowledge-based analysis when considering jurisdiction over intellectual property disputes. In Starmedia Network v. Star Media, Inc.,302 an April 2001 federal case from New York, the court asserted jurisdiction over an alleged out-of state trademark infringer, noting that:

[t]he defendant knew of plaintiff’s domain name before it registered ‘starmediausa.com’ as its domain name. Therefore, the defendant knew or should have known of plaintiff’s place of business, and should have anticipated being haled into New York’s courts to answer for the harm to a New York plaintiff caused by using a similar mark.303 Although the application of the knowledge principle is more complex when the sale involves digital goods for which there is no offline delivery, the seller is still customarily furnished with potentially relevant information. As discussed above, most telling may be credit card data that the purchaser typically provides to the seller. In addition to the credit card number and expiration date, the purchaser is often also required to supply billing address information so that the validity of the card can be verified before authorization. Since the seller is supplied with a real-space billing address for digital transactions, there remains the opportunity to forego the sale if there is a jurisdictional concern. For example, the Washington Capitals hockey team recently rejected attempts by rival fans from Pitts- burgh to purchase tickets on the team’s website. The site was set to reject purchase attempts from customers entering a Pittsburgh-area code.304 While some sellers may be loathe to use consumer payment information in this fashion, the approach reflects a more general trend toward recognizing

301. Id. 302. No. 00 Civ. 4647 (DLC), 2001 WL 417118 (S.D.N.Y. Apr. 23, 2001). 303. Id. at *4. 304. Thomas Heath, Capitals Owner Puts Pittsburgh Fans on Ice, THE WASH. POST, Apr. 14, 2001 (on file with author). the important role that payment intermediaries such as credit card companies play in the consumer e-commerce process.305

V. CONCLUSION With courts increasingly resisting the Zippo passive versus active approach to Internet jurisdiction, the time for the adoption of a new targeting-based test has arrived. Unlike the Zippo test, which suffers from a series of drawbacks including inconsistent and undesirable outcomes as well as the limitations of a technology-specific approach, a targeting-based analysis provides all interested parties—including courts, e-commerce companies, and consumers—with the tools needed to conduct more effective legal risk analysis. Under the three-factor targeting test, it is important to note that no single factor is determinative. Analysis will depend on a combined assessment of all three factors in order to determine whether the party knowingly targeted the particular jurisdiction and could reasonably foresee being haled into court there. In an e-commerce context, the targeting test ultimately establishes a trade-off that should benefit both companies and consumers. Companies benefit from the assurance that operating an e- commerce site will not necessarily result in jurisdictional claims from any jurisdiction worldwide. They can more confidently limit their legal risk exposure by targeting only those countries where they are compliant with local law. Consumers also benefit from this approach since they receive the reas- surance that online companies that target them will be answerable to their local law. The test is sufficiently flexible to allow companies to deploy as many or as few precautions as needed. For example, if the company is involved in a highly regulated or controversial field, it will likely want to confine its activities to a limited number of jurisdictions, avoiding locations with which it is unfamiliar. Under the targeting test, the company could adopt a strategy of implementing technological measures to identify its geographic reach, while simultaneously incorporating the desired limi-

305. In March 2001, the Electronic Commerce and Information, Consumer Protec- tion Amendment and Manitoba Evidence Amendment Act (S.M. 200, c. E55. 77) and the Internet Agreements Regulations (Man. Reg. 176/2000) took effect within the province of Manitoba. Designed to foster an online environment where consumer confidence will flourish, the new laws apply exclusively to the online retail sale of goods or services or the retail lease-to-own of goods between buyers and sellers. Under the new rules, binding e-commerce transactions require the seller to provide certain obligatory information to the buyer under threat of a purchaser contract cancellation remedy.

tations into its contract package. Conversely, companies with fewer legal concerns and a desire to sell worldwide can still accomplish this goal under the targeting test analysis. These companies would sell without the technological support, incurring both the benefits and responsibilities of a global e-commerce enterprise. Notwithstanding the advantages of a targeting test, there are, nevertheless, some potential drawbacks. First, the test accelerates the creation of a bordered Internet. Although a bordered Internet carries certain advantages, it is also subject to abuse because countries can use bordering technologies to keep foreign influences out and suppress free speech locally.306 Second, the targeting test might also result in less consumer choice since many sellers may stop selling to consumers in certain jurisdictions where risk analysis suggests that the benefits are not worth the potential legal risks. The most effective illustration of the advantages of a targeting test comes from considering how the test would apply to the two cases outlined at the start of this paper. Although the outcomes would remain un- changed, the analysis would be different, providing courts and companies alike with a clearer sense of where the boundaries lie. In the Yahoo! France case, the company argued vociferously that it should not be subject to the jurisdiction of the French court because its flagship dot-com site had not targeted France. Applying the targeting test’s three factors, however, suggests that the French court handled the case correctly. Yahoo! utilizes a terms and conditions page stipulating that the site is governed by United States law, but as the Ticketmaster case demonstrated, that form of contract may not be enforceable. Moreover, the company employed some technological measures to identify the geographic location of visitors accessing its website in order to provide French visitors with French language targeting advertising.307 The company was clearly cognizant that some visitors were French residents. Though the outcome may be the same, the use of a targeting test would have provided the company with a more effective tool to gauge the likelihood of a foreign court asserting jurisdiction.

306. Cf. Joel R. Reidenberg, The Yahoo Case and the International Democratization of the Internet (Fordham Law & Econ. Working Paper No. 11, 2001) (arguing that online bordering facilitates democracy by allowing democratically elected governments to implement policy choices that affect their citizens both offline and online), available at http://papers.ssrn.com/paper.taf?ABSTRACT_ID=267148 (last visited Nov. 26, 2001). 307. Yahoo!France Interim Order, supra note 23, at 4 (“Whereas Yahoo is aware that it is addressing French parties because upon making a connection to its auctions site from a terminal located in France it responds by transmitting advertising banners written in the French language.”). Applying the targeting test to the iCraveTV case, the United States court might still have asserted jurisdiction over the company, but it would have done so for different reasons. Using a targeting analysis, the company would have pointed to its contracts in which users self-affirm that they were Canadian residents as well as its (rather porous) technological measures that were designed to keep its signal within Canada. A court would have likely reviewed the iCraveTV effort and, noting that the company was well aware that United States residents were accessing the site and that its technical measures were ineffective, asserted jurisdiction. The case also highlights how a successor to iCraveTV could effectively limit its jurisdictional liability by employing stronger technological measures to keep its signal from straying across the border. Although the targeting test will not alter every jurisdictional outcome, it will provide all parties with greater legal certainty and a more effective means of conducting legal risk assessments. The move toward using contract and technology to erect virtual borders may not answer the question of whether there is a there there, but at least it will go a long way in determining where the there might be.