Download IP Law Newsletter Spring 2009 - Pennsylvania Bar Association

Intellectual Property
Law Newsletter
Spring 2009
A Publication of the Pennsylvania Bar Association Intellectual Property Law Section
In Weathering the Economic Downturn,
What Changes Will Obama’s Stimulus Package
Bring to Patent Practice?
By Steve Kwon
Vol. 13 No. 2
After President Barack Obama signed the
American Recovery and Reinvestment Act of 2009
(the stimulus package), the nation has been taking
steady breaths and precariously watching for signs of
economic improvement. Signed into law on Feb. 17,
2009, the stimulus package aims to jumpstart the ailing U.S. economy by providing $787 billion for economic recovery tax cuts, state and local fiscal relief,
and funding for federal, social and spending programs. There is little question the United States is in
need of an immediate economic turnaround. Companies facing this economic slowdown have sought
ways to survive through budget cuts and layoffs. As
of March 2009, the Bureau of Labor and Statistics
(BLS) stated that the national unemployment rate has
risen to 8.5 percent, while Pennsylvania fairs a little
better than the national average with an unemployment rate of 7.8 percent. The BLS also stated that
“[s]ince the recession began in Dec. 2007, 5.1 million
jobs have been lost, with almost two-thirds (3.3 million) of the decrease occurring in the last 5 months.”
Lost profits, with reduced budgets and workforces,
have undoubtedly affected many companies’ efforts
in research and development and their creation of new
technological innovations.
The negative effects of the current economy have
also clearly impacted the legal community. Reccurring news of law firms’ layoffs, mergers and dissolutions have become less shocking and have uncomfortably grown more the customary. Unimmunized
from the ills of the economy, the United States Patent
and Trademark Office has also seen a drop in patent
applications filed and placed an immediate hiring
freeze on new examiners. However, as the shockwaves of this recession ripple through the legal profession and patent practice, the foundation of intellectual property law remains firmly planted in the often
quoted U.S. Constitution, Article I, Section 8, Clause
8: Congress’ power “To promote the Progress of
Science and useful Arts, by securing for limited Times
to Authors and Inventors the exclusive Right to their
respective Writings and Discoveries[.]” In light of the
Constitution and under the clouds of this recession,
the question arises as to what changes will President
Obama’s stimulus package bring to the area of patent
practice?
Increased Patent Applications Relating to Green
Technology
The stimulus package targets its efforts to rejuvenate the U.S. economy by strengthening America’s
energy independence with an emphasis on cleaner
and more efficient energy sources, modernizing the
nation’s infrastructure, expanding educational
resources, creating tax cuts and jobs, lowering health
care costs, helping those workers hurt by the economy, and saving public sector jobs and vital services.
Much of the billions being injected into the economy
is aimed at construction and creation. Through the
federal government’s encouragement to build and create, a new surge of technological innovations will
likely follow.
Specifically, the stimulus package allocates over
$60 billion for clean, efficient, American energy in
order to reduce the nation’s dependence on foreign
oil, with efforts to transform the nation’s energy trans(Continued on Page 3)
IP Law Newsletter
Spring 2009
Message From the
Chair
Intellectual Property Law Section
2008 -2009 Officers
Scott O’Brian, Chair
McNees Wallace & Nurick (Harrisburg)
By K. Scott O’Brian
Henry M. Sneath, Chair-Elect
Picadio, Sneath, Miller & Norton (Pittsburgh)
My year as chair of the Intellectual
Property Law Section has come to a close.
It has been my privilege to serve the
Scott O’Brian
Section, and I am grateful for the continued selfless efforts of those during the past year. Namely, I am
particularly thankful to the officers and committee chairs,
notably newsletter editor Geoff White.
We have kept our members informed via our regularly
scheduled conference calls to discuss and address significant
developments in the law. Our thanks to Alexander Detschelt, our
committee chair on patents; Abigail Byman, our committee chair
on copyrights; Richard Coldren, our committee chair on trade
secrets and Christiane Schuman Campbell, our committee chair
on trademarks.
We continue to conduct an annual writing competition on
current intellectual property topics. Our congratulations to the
winners: Daniel Bell-Jacobs of Widener University School of
Law who will receive the first place $1,500 cash prize, and Kelly
Lombardo of Widener University School of Law who will
receive the second place $1,000 cash prize. Once again, my
thanks to the Section officers who evaluated the contest entries.
Finally, it is my pleasure to welcome Henry Sneath as chair
of the Section for the upcoming year. Henry will undoubtedly do
an exceptional job in this role and continue to build upon the successes of this Section. ■
Robert H. Lefevre, Vice Chair
Morrow Tompkins Trueblood & Fittipaldi (Norristown)
Cecilia R. Dickson, Secretary
Jones Day (Pittsburgh)
Richard Coldren, Treasurer
Respironics Inc. (Murraysville)
David J. Shannon, Immediate Past Chair
Marshall Dennehey Warner Coleman & Goggin (Philadelphia)
Committee Chairs
Patents: Alexander Detschelt
The Webb Law Firm (Pittsburgh)
Copyrights: Abigail Byman
University of Scranton (Scranton)
Trade Secrets: Richard J. Coldren
Respironics Inc. (Murraysville)
Bylaws: Cecilia R. Dickson
Jones Day (Pittsburgh)
Licensing: vacant
Community Outreach: Tonya Evans-Wall
Widener Law School (Harrisburg)
Trademarks: Christiane Schuman Campbell
Duane Morris (Philadelphia)
CLE: Kurt Saunders
California State University (Northridge, Ca.)
The Intellectual Property Law
Section will meet Tuesday, June 2
from 2:00 p.m. – 3:30 p.m.
at the Hilton Pittsburgh
In-House Counsel: Joanne L. Lubart
PennDOT (Harrisburg)
Newsletter Editor: Geoffrey K. White
McNees Wallace & Nurick (Harrisburg)
as part of the PBA Annual Meeting
PBA Section Relations Coordinator: Michael Shatto
Details at www.pabar.org;
click on Events Calendar,
or call (800) 932-0311
PBA Editorial Liaison: Patricia M. Graybill
www.pabar.org/public/sections/iplaw
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Spring 2009
IP Law Newsletter
In Weathering the Economic Downturn, What Changes Will Obama’s
Stimulus Package Bring to Patent Practice?
(Continued from Page 1)
advancements and grow new businesses. As business grows for
companies, the need for attorneys and patent protection would
grow in correlation, slowly bringing the nation out of recession
and helping to heal a battered legal market.
However, questions arise regarding how much time will
have to pass before the nation will see the effects and the innovations from the stimulus package and how much of an impact
the package really will make in the legal market. Although the
aim of the stimulus package is to provide immediate economic
relief, the distribution of the funding has been slower than
expected. In addition, large projects, such as large infrastructure
projects or the large-scale smart grid distribution project, may
take years to develop. Also, the emphasis on using green technologies does not necessarily mean that such technology will
meet the many standards of the USPTO, such as nonobviousness
and novelty. In the immediate future, these questions will likely
be unanswered and as time passes and the economy develops, the
answers will likely be lost in a mix of speculation, criticism and
praise of the stimulus package. However, what will likely remain
true is that scientific innovations and entrepreneurship will create
much-needed economic growth in opposition to the nation’s current recession.
mission, distribution and production systems through smart grid
technology. Stimulus package funding can also be used for reliable and efficient electricity grids, renewable energy research and
technology, advanced batteries, smart appliances, electric transportation, fuel alternatives, cleaning fossil energy and diesel
emission reduction.
The stimulus package allots over $80 billion in infrastructure
investment. In addition to creating much needed jobs for the
nation, the projects include highway construction; modernization
of current infrastructures that lead to energy cost savings; clean
water, flood control, and environmental restoration and transit
and rail that would reduce traffic congestion and gas consumption. Better transit systems would save Americans time and
money while saving billions of gallons in gasoline use and reducing tons of carbon emissions.
In the area of scientific research, the stimulus package dedicates $8.9 billion toward scientific research. This funding is
aimed at expanding employment opportunities for scientists,
researchers and engineers to meet environmental challenges and
improving global economic competitiveness. Money is also allocated for renovating and improving research facilities and equipment and promoting scientific research.
These areas of the stimulus package that emphasize cleaner
and more efficient energy show President Obama’s and
Congress’ movement toward green technology — technology
that could conserve the nation’s natural environment and
resources while reducing the environmental impact of human
involvement. In addition to creating jobs and revitalizing the ailing economy, encouraging new and efficient green technology is
well within Congress’ constitutional power to promote innovation and the progress of science.
... what will likely remain true is that scientific
innovations and entrepreneurship will create
much-needed economic growth in opposition to
the nation’s current recession.
Possible Policy Changes to the United States Patent and
Trademark Office
This recession may bring about policy changes in the U.S.
Patent and Trademark Office (USPTO). Currently, the USPTO
has seen a drop in the number of original utility application filings and continuation applications filed for the fiscal year of
2009. According to sources through Patently-O, a patent law blog
Web site, Director John Doll reports that revenues from original
filings are down to the fiscal year levels of 2004 to 2005. Patent
industry specialists estimate that the number of patent applications filed for the year could drop 10 percent or more. Even
though the number of applications filed is falling, the USPTO
maintained an approximate 42 percent allowance rate during the
first quarter of 2009. Even with the drop in applications filed, the
USPTO continues to have its largest budget and backlog. The
large backlog of patents to be examined is no surprise. According
to the USPTO figures for the 2008 fiscal year, patents received an
average first-action pendency of 25.6 months and an average
total pendency of 32.2 months. There are other signs that show
the economy may be affecting the USPTO. The Office has placed
a hiring freeze on new patent examiners, when just a few months
ago it was racing to fill approximately 1,200 new examiner posi-
The promotion of new innovations, fueled by the
billions of dollars being injected into the economy,
will hopefully in turn give a much-needed boost in
the legal market.
The promotion of new innovations, fueled by the billions of
dollars being injected into the economy, will hopefully in turn
give a much-needed boost in the legal market. The stimulus package provides funding to turn the gears of innovation. As companies begin to use money from the stimulus package to recover
from the economic recession, their development of new technologies will undoubtedly require patent protection. The stimulus
package’s push for clean, efficient and green technological innovations will likely follow with the filing of new patent applications, allowing funding from the stimulus package to flow into
the legal market. These new innovations, supported with patent
protection, would later attract new investors interested in the
value of these new patented innovations, who in turn will provide
the additional capital to commercialize the technological
(Continued on Page 4)
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IP Law Newsletter
Spring 2009
In Weathering the Economic Downturn, What Changes Will Obama’s
Stimulus Package Bring to Patent Practice?
(Continued from Page 3)
protection in order to become companies’ valuable assets.
However, the full rights of a patent only become effective if it is
issued into allowance. If the current pendency of an office action
remains at almost 26 months, many of these new innovations will
remain in a sea of patent backlogs until at least 2011. Although
accelerated examinations are available to patent applicants, the
added cost in combination with current economic recession and
low allowance rate make such option unfavorable for a patent
applicant.
Creating a U.S. patent stimulus package with new policies,
as suggested by Quinn and implemented by other countries, may
give an additional push to get the nation’s economy moving
again. Any funds and resources added to the already $2 billion
USPTO budget should be specifically directed to reduce the number of pending U.S. patent applications and increase the quality
and number of patents allowed already. Adopting fee adjustment
plans such as the Japan Patent Office, the USPTO could consider a deferred payment plan or perhaps reduce its current prosecution fees to attract more applicants. Coupling this plan with the
current stimulus package, this patent stimulus plan could offer
accelerated examinations for those new inventions or clean and
efficient innovative technologies created from the stimulus package. These efforts would expedite the patent prosecution process,
increase the quality of patents issued and encourage companies to
again invest in research and development in efforts to create new
innovations.
tions. However, it should be noted that other factors causing the
USPTO these financial woes may include recent cases such as
KSR v. Teleflex; eBay v. MercExchange; Bilski and the pendency
of Patent Reform Act of 2009, creating hesitancy and uncertainty in patent application filing and patent prosecution.
When viewing the financial challenges facing the USPTO, it
can be argued that the Office should change its current policies
and increase allowance rates. Gene Quinn, a U.S. patent attorney
and the president and founder of IPWatchdog.com, a patent blog
Web site, has been a strong proponent of revising the current
patent examination in order to stimulate the U.S. economy. He
urges a “patent stimulus,” which would increase the USPTO
budget and resources. By increasing the resources of the USPTO,
the backlog of patents would be reduced and the total number of
issued patents should increase. An increase in the number of
patents issued would in turn attract more financial investors who
would reinvest more money into the economy. He also points out
that the current USPTO administration carries a “rejection” mentality with little review into the quality and merits of each patent
application filed. Quinn remains mindful that not all patents are
entitled to allowance and only meritorious patents that meet the
standards of the law should be granted allowance. However, he
stresses the importance of increasing the quality and efficiency of
the current practices of the USPTO.
Other countries have reported implementing stimulus packages designed to promote intellectual property. Stephen AlbainyJenei of PatentBaristas.com, another patent blog Web site, reported that the Japan Patent Office has announced a new policy to
help stimulate their economy. Like the USPTO, the Japan Patent
Office is also experiencing a drop in patent applications filed and
the office also grants less than 50 percent of the applications that
it examines. The Japan Patent Office’s stimulus policy focuses on
the fees for filing a request for examination by allowing an applicant for a patent to file a request for examination, but delay payment of the fees for up to one year. In addition, Albainy-Jenei
also reports that Ireland announced economic stimulus measures
for intellectual property. The Irish Minister for Finance
announced two new measures: 1) “Government intends to introduce a new tax relief for capital expenditure incurred in the purchase of intellectual property assets” and 2) “Government has
committed to increasing R&D spending to 2.5 percent of the
GNP by 2013.” Ireland’s plan would offer intellectual property
tax relief, patent income exemption, stamp duty exemption and
research and development tax credit.
Critics such as Quinn, and the initiatives taken by Japan and
Ireland, create a compelling argument to take a closer look at the
policies and methodology of the USPTO. Intellectual property
has long been valuable intangible property that has helped fuel
the U.S. economy. With the stimulus package pushing for clean
and efficient technologies and funding for scientific research, the
emergence of new technological innovations will need patent
As companies gain more confidence in the patent
process ... the confidence of financial investors
would improve, too, injecting more money into
the economy.
As companies gain more confidence in the patent process
under this proposed patent stimulus plan, the confidence of financial investors would improve, too, injecting more money into the
economy. The growth of intellectual property development would
also bring additional revenue to the legal market. Clients backed
with money and confidence would have less hesitation to seek out
a law firm’s expertise in filing a patent application. More clients
needing to file more patent applications would provide more work
for attorneys, which is what the current legal market needs. Thus,
encouraging inventors and companies to invest time, effort, and
money into creating new technologies will both bring this nation
out of its current recession and promote the progress of science
and useful arts as stated by the Constitution. ■
Steve Kwon is a licensed practitioner in Pennsylvania and New
Jersey, and a registered patent attorney with a background in
electrical engineering. Mr. Kwon obtained his J.D. from Widener
University School of Law and he can be reached at
[email protected].
4
Spring 2009
IP Law Newsletter
Beyond Cyberspace Netiquette: Avoiding Impermissible
Web Site Downloading and Copyright Infringement
exclusive right to reproduce the work or make copies; (2) the
exclusive right to distribute or sell copies of the work to the public; (3) the exclusive right to create adaptations or derivative
works; (4) the exclusive right to perform the work publicly; (5)
the exclusive right to display the work publicly and (6) the exclusive right to perform the work publicly by means of a digital
audio transmission.3
By Joanne Lichtenstein Lubart and Andrea Bowman
Introduction
The World Wide Web offers users the largest smorgasbord of
data, information and works of creative expression ever known to
humankind. With a computer, a modem, an Internet account and
a few mouse clicks, one can access these works instantaneously.
As their numbers increase exponentially, it is easy for the everyday user to assume that these materials are free for the taking.
Yet this is hardly the case. Ease of accessibility doesn’t
equate to a right to take. All online works are protected by copyrights and trademarks unless conclusive information dictates otherwise. The same restrictions that apply to use of works in the
print medium also apply to electronic works on the Internet.
This article focuses on the contours of Web site copyrights.
Online copyrights are ubiquitous, yet most users seem happily
oblivious to them in their daily Internet practices. Users routinely download works from Web sites without realizing that they
risk facing potential copyright challenges. They may believe that
the only hindrance to obtaining information is a click to indicate
consent to an agreement as to use. However, the user rarely reads
the rules for which the click is to indicate assent, if even that is
required. The old “hard copy” copyright protection rules, many
of which are unknown to the average Internet user, remain very
much in play in cyberspace.
The Right of Exclusive Reproduction —
The Most Violated Exclusive Right
The right of exclusive reproduction, which is viewed as the
most fundamental of the bundle of rights, is the right most frequently violated online. Transgressions result because information technology has made access to copyrighted works easier and
easier.
The simple act of viewing an online article automatically
creates two copies: one in the computer’s memory and another in
the hard drive. Reproduction occurs because in digitizing a work
a computer automatically copies and stores the work in its
Random Access Memory (RAM). Since these works could be
saved to a disk, each appearance of any portion of a work in any
computer’s RAM constitutes reproduction within the meaning of
the statute.4 Browsers also make copies so that the user can return
to a site faster. Such actions are technically sufficient to trigger
the federal copyright law.5
In the world before digital technology, the law clearly controlled whether and to what extent someone was regulated by
copyright law. Copyright law rarely targeted individuals who
were not making commercial and/or public uses.
By contrast, in cyberspace, the rules of copyright law are
interpreted by the copyright owner at the outset and are built into
the technology that delivers copyrighted content. Since the
Internet serves as one gargantuan copying machine, copyright
owners seek greater control of user behavior with regard to copying of digital works. Consequently, many copyright scholars
argue that code rather than law rules in cyberspace.6
The Copyright Act, itself, which is intended to apply to all
mediums, neglects to address the legal obligations of those who
are consuming or acting in their private capacities in cyberspace
as opposed to exploiting copyrighted works commercially. The
net effect of this is that copyright owners who are empowered
with the ability to control how content is used and who wish to
exploit their rights to the fullest are afforded greater protection
online than in the print medium or in real space. This facilitates
the ability of the copyrighted content industry to label behavior
such as sharing articles with friends as piracy even though this
practice is generally viewed as legal.7
Many copyright scholars believe that this is taking copyright
law beyond its intended parameters and suggest that the exclu-
Fostering Copyright Recognition in Cyberspace
Copyright protection arises automatically without the need
for notice, publication or registration whenever the following
three components exist: minimal creativity, originality and fixation.1 As soon as original works of authorship are created by
being typed into a computer or by being fixed in a database or
CD-ROM, they are fully protected by copyright law.
While only creative expression is protected, not facts or
ideas, copyright protections attach to an array of online artistic
works and digital format. Most Web sites consist of copyrighted
artwork, text, graphics, videos, sounds, scripts, electronic mail,
maps, clip-art, books, pamphlets, photographs, signs, wallpaper,
software, code Hypertext Markup Language (HTML), computer
programs (both object and source code) and designs. Digital or
electronic content, such as e-books, online documents and photographs, are subject to the same copyright protections as non-digital, traditional or analog works.
All copyrighted works, including digital materials, carry the
bundle of exclusive rights accorded a copyright holder. The commercial value of copyright itself stems from these intangible
rights, referred to as “statutory rights,” that a copyright author
automatically acquires upon the creation and fixation of an original work of authorship.2 The federal copyright law, the
Copyright Act of 1976, as amended (Copyright Act), gives a
copyright author or holder the following exclusive rights: (1) the
(Continued on Page 6)
5
IP Law Newsletter
Spring 2009
Beyond Cyberspace Netiquette: Avoiding Impermissible Web Site
Downloading and Copyright Infringement
(Continued from Page 5)
The Increased Potential for Copyright Infringement
in Cyberspace
As noted above, the most important factors that determine
whether online downloading is actionable are what one downloads and how one uses a copyrighted work. The key to actionable infringement rests with the diminution of an author’s potential or actual profit. Users who download in lieu of purchasing
make ready targets.14
One of the most common types of illegal downloading by
individuals is copying online copyrighted music without permission. This act is viewed as tantamount to stealing.15 Every time
someone downloads an MP3 file of a copyrighted song from a
free file-sharing network instead of buying the CD, the individual who wrote the music and the artist who created the song lose
money. By using works on the Internet, musicians mix sounds
and create new works that violate the copyright of the original
author or artist.16
Another example is using clip art made available for downloading and then selling the work without permission from the
copyright owner or holder. Even if the copyright owner allows
downloading, he or she may want to prohibit users from selling
the clip art and restrict use to personal use.
Compounding the matter is the ease with which copyright
infringement is detected online by digital technologies. The same
Internet that affords users the ability to readily access, reproduce,
distribute and share copyrighted works makes it possible to monitor, record and restrict what users look at, listen to, read and hear.
As a consequence, it allows content owners to enforce their
exclusive and broad copyright bundle of rights.17 Many companies aggressively patrol the Web for infringement, and wrongful
users are easy to find. New technology makes it possible for
copyright owners to encode music, artwork, photographs and text
with digital tags or marks that allow rapid tracking and that meter
consumption.18
A standard paradigm for copyright infringement focuses on
the literal terms of Section 106 of the Copyright Act of 1976,
statutory rights that give copyright owners control over fixed
reproductions, adaptations and public distributions, public performances and displays. An individual who violates these rights
violates the federal copyright law unless there is an express statutory exemption. However, the Copyright Act does not provide
copyright owners with control over private performances, displays or distributions.
Copying that rises to the level of infringement generally
involves a “substantial part” of a given work.19 The Copyright Act
affords the copyright author or holder the right to sue for damages or to obtain a court order prohibiting further copying.
Infringement actions may be brought in federal district court
within three years of the date of infringement or within three
years of the last infringement that relates to the date of the last
sive rights have grown too broad. While debates ensue as to
whether the rights of copyright owners should be maintained or
weakened, copyright law enforcement remains a force to be reckoned with in cyberspace.8 And the federal law has never required
that an infringer be aware that he or she is violating another’s
copyright to risk legal exposure and to be held liable for copy9
right infringement.
While some copyright owners insist that the law gives them
the right to control the making of every copy of their works
(especially in digital format), others are more pragmatic. In practice, most digital content owners realize that it makes no sense to
criminalize the making of “copies” when that event is at the root
of every digital action. They recognize that in order for a copyrighted work to have value, a user needs to be able to read or
view an article or artwork. Consequently, RAM copies made in
the course of reading an e-book are generally viewed as noninfringing. And where personal, noncommercial use or copying is
intended, this is less likely to be objectionable or actionable.10
The user who risks infringement is one who takes another’s
copyrighted content, reproduces it, and sells it without the
owner’s permission thereby competing directly with the copy11
right owner for commercial use and commercial opportunity.
Courtesy of today’s technology, consumers have access to software tools that permit them to alter and combine copies of copyrighted works in ways that were previously reserved for commercial businesses. Since the primary concern of content owners is protecting their content against unauthorized and unpaid
usage, these actions are frequently labeled as unlawful commercial piracy.
The Derivative Work Right:
The Second Most Violated Exclusive Right
The right to prepare derivative works is the second most violated copyright right online. This right is the exclusive province
of the owner of the original work under Section 106(2) of the
12
Copyright Act. Internet users need to be wary of taking an
online work, revising it and distributing it to others, since these
actions could violate the original copyright owner’s exclusive
right to prepare derivative works.
While all works are derivative to some extent, a work is
derivative for copyright purposes if the author has taken a substantial amount of a previously existing work’s expression in the
process of creating a new work. To be substantial, there must be
enough so that the average intended reader would conclude that
it has been adapted from or based upon the previously existing
expression.
There are a variety of types of derivative works. They
include: dramatizations, abridgements, condensations, translations (from one language to another), annotated editions, parodies and other works recast from an original.13
(Continued on Page 7)
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Spring 2009
IP Law Newsletter
Beyond Cyberspace Netiquette: Avoiding Impermissible Web Site
Downloading and Copyright Infringement
No matter what material is sought, users should clearly identify the rights that they need to avoid having to go back to the
owner a second time and also ascertain whether a payment and a
license are required. Many copyright owners have form agreements and customary royalties in place. As a general rule, one
should expect to pay at least $50 or more per copyright permission.24
(Continued from Page 6)
sale of an infringing copy.20 When a court makes a finding of willful infringement, it can award damages on the basis of an amount
set forth in the Copyright Act. Penalties of $150,000 per infringement can be imposed.
There are, however, ways to avert the possibility of copyright
infringement. As the U.S. Supreme Court has stated, copyright
“has never accorded the copyright owner complete control over
all possible uses of his work.” Sony Corp. of America v. Universal
City Studios, Inc., 464 U.S. 417, 432 (1984). The following practice pointers bear consideration:
Read Copyright Usage Terms Carefully:
Watch for Misuse of Copyright Notices
In addition to copyright notices, Web sites often contain useful information that addresses copyright permissions, obligations
and constraints and that helps the user identify and make reasoned downloading decisions relative to copyrighted works. If a
user scrolls down to the footer of most Web sites, he or she will
find copyright usage language along with warnings or statements
relative to the prescribed uses of Web site content. A restrictive
notice might read: “Sorry – this document is read only.” Users
should be wary, however, since some notices are overly restrictive and neglect to take the fair use doctrine (see discussion
below) into account.
Most notices restrict copying of works to personal use. These
notices also require that some type of credit or attribution be
given to the author and that the copyright notice appear prominently on any display of the work. When such instructions appear
on a Web site, the user can take comfort, so long as the author of
same has the authority to grant such usage.
Assume that the Online Work is Protected
and Obtain Copyright Permission
In general, it is wise to operate under the assumption that all
works are protected by copyright law unless information dictates
otherwise.21 Even though a work appears on a Web site and can
be readily accessed and read, it is not necessarily available for
copying, downloading and dissemination. Unless the user only
intends to download a small portion of a copyrighted work for an
educational or nonprofit purpose or to make one copy for personal use, he or she needs to exercise a seeming abundance of
caution by securing permission from the copyright owner prior to
downloading or sharing the material with others.
The wisest course of action is to assume that all works are
protected and to track down the author and seek permission or
“clearing rights.” Unless the work is in the public domain or subject to fair use (as discussed below) or some other statutory
exemption, this is a safe assumption.
The first source for identifying the copyright owner is the
copyright notice on the work. A copyright notice typically bears
the word “Copyright” or ©, followed by the name of the author
and the year of publication.22 In copyright parlance, notices often
include “All Rights Reserved” to reaffirm the bundle of rights
accorded a copyright holder.
However, one cannot rely on the presence or absence of a
copyright notice as dispositive, because a copyright notice is not
required for works published after March 1, 1989.23 While most
authors create these notices, currently, the United States is the
only major nation that actively encourages their use.
Moreover, individuals often place notices on online works in
the public domain out of ignorance or greed. In some cases, material that appears on a Web site has been pirated or copied without
permission of the true owner or author.
The best way to ascertain whether a work is protected by
copyright is to consult the U.S. Copyright Office circular, “How
to Investigate the Copyright Status of A Work.” This work can be
obtained at www.copyright.gov. Users can also research the registration and ownership records of the Copyright Office site for
books, music, films, sound recordings, maps, software, photos,
artwork and multimedia works.
Look for Works that Are Intended for Downloading
Some content creators post friendly notices that dispense
with the need for Web site users to contact anyone for permission
to copy material; such notices give advance permission to Web
site visitors. They contain “printer-friendly” or “e-mail to a
friend” buttons.
Typical language provides: “You may download and print
one copy of this information sheet from our Web site for your reference.25 This is extremely helpful so long as the true copyright
proprietor is creating the usage.
Be Wary of Misleading or Mixed Messages
Such as “Copyright-Free” Language
Some Web sites contain cryptic language that leaves users
uncertain about the use of a copyrighted work. Internet users tend
to be waylaid by the use of language indicating that material on a
Web site is “copyright-free.” The word “free” is a Web misnomer.
It has decidedly different connotations.
It most commonly refers to works such as photographs and
clip art protected by copyright but made available to the public
for a set fee rather than under a royalty arrangement.26 It is also
used when copyrighted materials are licensed to the public for
free.27
(Continued on Page 8)
7
IP Law Newsletter
Spring 2009
Beyond Cyberspace Netiquette: Avoiding Impermissible Web Site
Downloading and Copyright Infringement
Search engines like Yahoo and Google now offer portals that
search the Internet and filter on the basis of Commons licenses.
Google has enabled searches for Commons licenses content by
using its “advanced search” feature and selecting among the
“license terms” indicated.33
(Continued from Page 7)
Read Click-Wrap Agreements Carefully
Many Web sites control content access by requiring that
intended users agree to accept a limited license by “clicking to
accept” terms through an online agreement, often referred to as a
“click-wrap” or “click-through agreement.”28 This type of online
agreement is a clickable form of acceptance of terms of service.
A page or window that appears before the user is allowed to perform a certain function that states the terms of an agreement. A
user will not be able to process information on the Web site
unless or until he or she has clicked in a box to indicate acceptance of the agreement. The agreement is nonnegotiable and
therefore serves to control access by checking the identity of the
user and the content file.
These agreements also give the Web-site owner the right to
control use of copyrighted work. Often they address such concerns as how a site may be used for reading and printing, procedures and policies for the site, waivers of implied legal warranties
and copying content.
Locate and Use Public Domain Works
The public domain proffers a treasure trove of works that can
be used without permission or charge because no one owns it.
Works in the public domain include those that do not qualify for
copyright protection, works that are no longer subject to copyright and unprotected elements of still-copyrighted works. The
following is a list of items that do not meet the requirements of
the federal copyright law and are therefore freely accessible as
part of the public domain: (i) blank forms or checks, (ii) stock
characters and standard plots, (iii) rules of grammar, diction and
punctuation (iv) abstract laws of nature, (v) names, (vi) literary
plots, situations, locales or settings, (vii) food and drink recipes
(mere lists), (viii) short phrases (may be trademarks), (ix) typefaces, (x) facts, ideas, or theories, (xi) rhythm or structure of
musical works, (xii) short musical phrases, (xiii) works created
by U.S. government employees as part of their official duties,
(xiv) bare historical facts, (xv) scenes a faire, (xvi) information
that is common property (calendars, height and weight charts)
and (xvii) federal, state and local laws, ordinances, administrative
rulings, judicial opinions and official legal documents.34 Public
domain works also include artwork, music, sound recordings,
photographs, maps, databases, movies, television and computer
software.
Although it is relatively rare, some copyright authors
expressly dedicate their electronic works to the public domain,
from Day One. In such instances, there is no prescribed formula
and the dedication need not be in writing. However, the author
must make his or her intentions clear. The following language
would satisfy the dedication component: “This work is dedicated
to the public domain and may be reproduced without authorization.”
As with copyright notices, the dedication language should be
carefully scrutinized. The question always remains whether the
individual making the dedication has the authority to do so. One
may also see notices online indicating that images are “presumed” to be in the public domain. A statement to this effect can
be a tip off that the materials on the site are actually not in the
public domain.
If a work is truly in the public domain, it can be used without restriction. However, there is no catalogue, list or database of
works in the public domain and these works do not look any different from works protected by copyright notices.35 In general, all
works published before 1923 are in the public domain.36
It is also important to note that a work may be in the public
domain for copyright purposes but be protected by trademark and
Consider the Creative Commons
The Creative Commons (Commons) is a nonprofit copyright
reform organization that allows copyright owners to define the
terms on which their content can be used.29 The Commons makes
it easier for artists and authors to mark their content with the permissions they intend to carry and to invite users to use the work
consistent with the freedoms and rights reserved. The Commons is
not the same thing as the public domain (discussed below) because
it is comprised of copyrighted content that is licensed. However, it
is intended to serve as a mechanism that defines the spectrum of
use options between full copyrights and the public domain.
A Commons license is a form copyright license that can be
linked to via the Internet. It replaces the default “all rights
reserved” with “some rights reserved” approach that is less
restrictive than standard licenses and permits a variety of uses
subject to one or more limitations that the copyright owner has
placed on the work.30 In addition to the legal code, the license is
described by a ”human readable” Commons Deed that identifies
the key terms of the license and machine-readable metadata that
associate the Internet location of the licensed resource with the
Internet location of the license document.31
There are six core licenses and attribution is required for
each of them. Owners of Commons property have the same interest as most copyright owners in trying to prevent users from commercial as opposed to informational or educational uses.
According to Larry Lessig, founder of the Commons, its aim is
“to find a simple way to mark content with the freedoms the
author intends the content to carry, so that when you encounter
such free content, you know what you are allowed to do consistent with the law.”32
(Continued on Page 9)
8
Spring 2009
IP Law Newsletter
Beyond Cyberspace Netiquette: Avoiding Impermissible
Web Site Downloading and Copyright Infringement
(Continued from Page 8)
Conclusion
Since copyrighted works abound in cyberspace, Internet
users are duty-bound to take the time to review the use of such
materials by reading Web site usage policies and permissions.
Given the current state of digital technology, no one can afford to
be on automatic pilot when cruising the Internet. Savvy users
should remain mindful that there is no such thing as unrestrained
downloading; learn to know their Web sites by looking for copyright usage notices and seek permission, where necessary, to
avoid the challenge of a dispute or having to pay money to the
owner of copyrighted works. ■
trade secret law. Many Web sites contain protected logos and
service marks. Hidden aspects of a Web site including source
code, object code, algorithms and data flow charts can be protected by trade secret law, so long as they are not disclosed to the
public.37
Consider the Fair Use Doctrine
If the work intended to be downloaded falls within the fair
use exemption from copyright infringement, which is the most
important limitation on a copyright owner’s right to control his or
her work, then one is free to download and use the work, particularly if it is for non-commercial use. The problem, however, is
one of detecting fair use, since there is no magic formula to determine whether a use is fair. In theory, fair use means that you need
no permission and negates copyright protection in favor of the
content owner. However, since it constitutes an affirmative
defense in a copyright infringement action and is not defined in
the Copyright Act, fair use involves a judgment call and is factspecific.
The acceptable fair uses listed in the Copyright Act are criticism and commentary, news reporting, research and scholarship.38 The same fair-use template used to assess works in the
print medium applies to the Internet. Four factors set forth in
Section 107 of the Copyright Act should be taken into account:
(1) the purpose and character of the use including whether for
nonprofit education or commercial use; (2) the nature of the
copyrighted work; (3) the amount and substantiality of the portion used and (4) the effect upon the potential market or value. 39
In general, fleeting and incidental uses of copyrighted material
are viewed as fair use.
The fair-use exemption is intended to apply to short excerpts
of copyrighted content.40 If fair use applies, it does not apply just
to copying; it applies to making derivative works and all other
rights accorded a copyright holder or owner. The user can enjoy
limited usage rights without a license and permission from the
rights holder. Even though attribution does not make a use fair, it
should always be provided.
Many copyright scholars contend that fair use has been
diminished online because content owners use technology to control or impede access to their works and this technology does not
have any ability to carve out fair use exceptions. Therefore, consumer rights are being impeded.
The fair use doctrine is intended to serve as a safety valve for
the First Amendment. It plays a crucial role in limiting the reach
of what might otherwise be an unacceptable expansive grant of
rights to copyright owners. Also, when noncommercial users get
sued, they tend to have powerful fair use arguments to make as
an affirmative defense.
1
2
3
4
5
6
7
8
9
10
Lee Wilson, The Copyright Guide 3 (2003). The pool of
copyrighted works is so large as to be infinite.
17 U.S.C. Section 106. Note that e-mails are copyrighted
works.
Id. The distribution right is limited by the “first sale doctrine,” which allows the owner of a copy of a copyrighted
work to sell or transfer that copy. However, neither the courts
nor the Copyright Office has endorsed a “digital first sale
doctrine.” Also, not all rights attach to all works. For example, a sculpture cannot be performed.
Copyright scholars maintain that this is how code becomes
law. The controls built into digital technology and access
protection become rules the violation of which is violation of
the law, even if the subject regulated would otherwise constitute fair use.
The rules of copyright law, as interpreted by the copyright
owner, get built into the technology that delivers.
See, for example, Lawrence Lessig, Free Culture, 106
(2004).
Some scholars raise a First Amendment right: “The expressive liberty protected by the First Amendment encompasses
copying as a way of receiving or preserving personal access
… and distributing copies as a means of communicating to
others what the distributor wants to communicate. C. Edwin
Baker, “First Amendment Limits on Copyright,” 55 VAND.
L.REV. 891,904 (2002)
The leading lights of the field such as Larry Lessig and
Jessica Litman favor limiting copyright.
As with other areas of the American jurisprudence, ignorance of the law is no excuse.
Thomas G. Field, Jr., Copyright for Computer Authors,
www.fplc.edu/tfield. Professor Marci Hamilton has coined
the phrase “free use zone” to describe these uses. See Marci
A. Hamilton, “The Trips Agreement: Imperialistic,
Outdated, and Overprotective,” 29 VAND. J. TRANSNAT’L
L. 613, 615 (1996).
(Continued on Page 10)
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IP Law Newsletter
Spring 2009
Beyond Cyberspace Netiquette: Avoiding Impermissible Web Site
Downloading and Copyright Infringement
31
(Continued from Page 9)
32
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15
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17
18
19
20
21
22
23
24
25
26
27
28
29
30
Copyright scholars note that in real space, if you purchase a
book, you are buying the right to resell it. However, this is
not the case in cyberspace.
All fan fiction sites are protected by copyright unless the fair
use privilege applies.
In 1989, the United States entered into the Berne Convention.
The signatory countries to the Berne Convention have dispensed with formalities such as notice as a condition for
copyright protection.
Content owners are most concerned about preventing a user
from obtaining pecuniary gain for the owner’s work.
See Lawrence Lessig, Free Culture, 66(2004).
Professor Lessig believes that the new work, “remix,” is
transformative and creates a new work rather than a derivative work of the original author.
The ease with which piracy can now be detected is staggering.
Companies such as Markwatch located at www.mark
watch.com) function as cyber bounty hunters. They increase
the ease of detecting copyright infringement. Cory Doctorow
has noted that “technology giveth and technology taketh
away.” See, Cory Doctorow, Content 78 (2008).
Cheryl Besenjak, Copyright Plain & Simple, 142 (2001).
Id.
Although trademark law is very much at issue online, the
focus of this article is on copyright since copyright issues
abound on the Internet. Trademark also raises issues about
linking and metatagging.
The notice is also referred to as the “copyright bug.”
This change resulted from an international treaty, the Berne
Convention, which the United States signed in order to conform copyright law with other nations.
Lee Wilson, Fair Use, Free Use, and Use by Permission, 13
(2005).
Most content owners signal whether they wish to share their
materials with Internet users.
See Mitchell W. Carroll, Creative Commons as
Conversational Copyright, 455, at http://ssrn.com/abstract=
978195.
Id.
Stephen Fishman, Legal Guide to Web & Software
Development, 387-88 (October 2007).
Cory Doctorow, Content: Selected Essays on Technology,
Creativity, Copyright, and the Future of the Future 198
(2008). Users who wish to enter into a Creative Commons
license can go the Creative Commons Web site located at
creativecommons.org and make a selection among various
license options. The Creative Commons was founded by former Stanford Law professor Lawrence Lessig.
See http://creativecommons.org.
33
34
35
36
37
38
39
40
Id.
Professor Lessig has noted that the current law applied
online has gone beyond it intended control so that it has the
potential to limit a user’s right to read.
See Google Web site.
Stephen Fishman, The Public Domain: How to Find & Use
Copyright-Free Writings, Music, Art & More, 26 (2006).
The term “cyberspace” originated from a science fiction
novel. See William Gibson, NEUROMANCER 4 (1984).
Id. Also note that software such as the Public Domain
Prowler is available which can be used to facilitate the location of public domain works.
This enlargement of the term of copyright stifles the public
domain as the next works will not enter the public domain
until 2019. As a result of extension of the copyright term
under the 1998 Sonny Bono Copyright Term Extension Act
(CTEA), 20 years was added to most copyright terms.
Richard Stim & Stephen Fishman, Nondisclosure
Agreements, 13 (2001).
See Section 107 of the Copyright Act.
All four factors are weighed in a fair use determination.
A good rule of thumb is to copy not more than 10 percent of
an article or image.
Joanne Lichtenstein Lubart serves as senior counsel with the
Pennsylvania Department of Transportation where she specializes
in intellectual property law, federal Disadvantaged Business
Enterprise (DBE) regulatory practice and contract law. She is the
founder and chair of the Office of General Counsel’s
Subcommittee on Intellectual Property and currently serves as inhouse counsel for the Pennsylvania Bar Association’s Intellectual
Property Section. Lubart is a magna cum laude graduate of the
University of Pennsylvania and received her Juris Doctor degree
from American University Law School where she served as executive editor of the International Law Citation Manual.
Andrea Bowman is deputy general counsel for the Pennsylvania
Governor’s Office of General Counsel (OGC); special assistant
to the general counsel and chair of the OGC Records Access and
Management Committee. Her responsibilities include records
management and Right-to-Know Law matters, as well as special
projects for the general counsel. She was admitted to the bar in
1979, practiced in Philadelphia with the firm of White and
Williams, then with Duane, Morris & Heckscher (now Duane
Morris LLP). She has specialized in commercial litigation and
was the director of The Institute for Paralegal Studies, a graduate level program in international trade law, at the American
University of Paris. Andrea attended the American University in
Paris, graduated from Wellesley College and received her J.D.
from Syracuse University College of Law, where she was executive editor of the Law Review.
10
Spring 2009
IP Law Newsletter
Statutory Subject Matter (post-Bilski)
The Federal Circuit explained that a particular mathematical
formula to calculate an “alarm limit” is not statutory subject matter5. They explained that using electromagnetism to print characters at a distance that was not transformative or tied to any particular apparatus is not statutory subject matter6. They explained
that a particular algorithm operating on a digital computer where
the fundamental principle showed no other utility other than
operating on the digital computer is not statutory subject matter7.
They explained that an undefined “complex system” and intermediate “factors” drawn from unspecified “testing” is not statutory subject matter8. They explained that a data-gather step added
to an algorithm is not statutory subject matter9. They explained
that a mathematical optimization algorithm is not statutory subject matter10. Finally, they explained that a mental and mathematical process of arbitrating disputes is not statutory subject matter.
By Geoffrey K. White
Introduction
In re Bilski, Fed. Cir. 2007-1130 (Serial No. 08/833,892), has
created much concern regarding what constitutes statutory subject matter. This article is intended to aid patent prosecutors in
determining whether innovation constitutes statutory subject
matter in this post-Bilski era.
In Bilski, the Federal Circuit examined “what test or set of
criteria governs the determination as to whether a claim to a
process is patentable under [35 U.S.C.] § 101 or, conversely, is
drawn to unpatentable subject matter because it claims only a
fundamental principle.” Specifically, the Federal Circuit held that
Machine-or-Transformation test is a valid test for determining
whether innovation is statutory subject matter.
However, the Federal Circuit provided much more guidance.
The Federal Circuit elaborated upon the Machine-or-Transformation test, applied the Machine-or-Transformation test, and
reviewed several other tests.
Other Tests
Finally, the Federal Circuit reviewed several other tests for
determining whether innovation constitutes statutory subject
matter. They invalidated the “Technology Arts test,” which
requires a determination of whether the claim is “implemented on
a specific apparatus ... without limitation to a practical application.” They invalidated the Freeman-Walter-Abele test, which
requires an evaluation on the basis of individual limitations. They
explained that the State Street & Alappat test or the “useful, concrete, and tangible result” test is insufficient. Finally, they cautioned that the “physical steps test” is not what was meant by
Comiskey11. ■
The Machine-or-Transformation test
The Federal Circuit explained that drafting patentable claims
in view of the Machine-or-Transformation test can be performed
in one of two manners. If relying upon innovation being tied to a
particular machine or apparatus (1) the claim must impose meaningful limits on the claim’s scope, and (2) the claim must not
merely be insignificant extra-solution activity. If relying upon
innovation transforming a particular article into a different state
or thing (1) the claim must impose meaningful limits on the
claim’s scope, (2) the claim must not merely be insignificant
extra-solution activity, (3) the transformation must be central to
the purpose of the claim, and (4) the transformation can be electronic transformation of data into a visual depiction.
1
2
3
4
5
6
7
Applying the Machine-or-Transformation test
The Federal Circuit applied the Machine-or-Transformation
test to several cases. Applying the test, they explained that x-ray
attenuation data producing a two dimensional field by a computed tomography scanner is statutory subject matter1. They
explained that operating on a computerized rubber curing apparatus and transforming raw, uncured rubber into molded, cured
rubber products is statutory subject matter2. They explained that
transforming grain meal into purified flour is statutory subject
matter3. Also, they explained that transforming fats into constituent compounds is statutory subject matter4.
8
9
10
11
See In re Abele, 684 F. 2d 902 (CCPA 1982).
See Diamond v. Diehr, 450 U.S. 175 (1981).
See Cochrane v. Deener, 94 U.S. 780 (1877).
See Tilghman v. Proctor, 120 U.S. 707 (1880).
See Parker v. Flook, 437 U.S. 584 (1978).
See O’Reilly v. Morse, 56 U.S. (15 How.) 62 (1853).
See Gottschalk v. Benson, 409 U.S. 63 (1972).
See In re Meyer, 688 F. 2d 789 (CCPA 1982).
See In re Grams, 888 F. 2d 835 (Fed. Cir. 1989).
See In re Schrader, 22 F. 3d 290 (Fed. Cir. 1994).
See In re Comiskey.
Geoffrey K. White has been the editor of this publication since the
fall of 2007. He is an associate with McNees, Wallace and Nurick
in Harrisburg. He received his J.D. from Widener University and
his I.P. LL.M. from George Washington University Law School.
He can be reached at [email protected].
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