TIPLJ: Volume 4

Issue 1 – Fall 1995


Trademarks on the Internet: Confusion, Collusion or Dilution?

Citation: 4 Tex. Intell. Prop. L.J. 1 (1995)

Author: Gary W. Hamilton

About: Akin, Gump, Strauss, Hauer & Feld, Austin, Texas

Abstract: The explosive growth in the use of the Internet by individuals has been accompanied by a heightened interest in the use of the Internet for commercial transactions. Obviously, for businesses to communicate effectively on the Internet, it is essential that they have a unique “address” that is easily recognizable by customers. Although commercial activities on the Internet raise a host of legal issues, the most significant controversies relating to trademarks have involved “domain names” that serve as the addresses for communicating over the Internet. In late 1994, more than 17,000 commercial domain name addresses had been registered with more than 2,000 new registrations being requested each month.

While foregoing illustrates proliferation of commercial activities on the Internet, the recent controversies involving the use of trademarks on the Internet cannot be fully understood without first understanding the organization and operation of the Internet. The following discussion will provide a brief summary of fundamental Internet principles that bear on the use of trademarks on the Internet.

Although there is disagreement within the legal community over the question of whether Internet domain names are trademarks, there is little doubt that significant commercial interests are at stake. As the commercial use of the Internet expands, there will be increasing pressure to resolve the question of whether domain names truly qualify as trademarks to establish clear guidelines to prevent unfair competition for domain name squatters who hope to benefit from the goodwill established by others. Though current trademark laws are founded upon principles established long ago in “real space,” we should rest assured that they can be adapted to today’s commerce in “cyberspace” or, for that matter, to future commerce in a “galaxy far, far away.”


System Operator Liability for a User’s Copyright Infringement

Citation: 4 Tex. Intell. Prop. L.J. 13 (1995)

Author: Edward A. Cavazos & G. Chin Chao

About: Mr. Cavazos is an attorney at Andrews & Kurth in Houston, Texas and G. Chin Chao is at J.D. candidate, Stanford Law School, May 1996.

Abstract: System Operators (sysops) who administer and manage multi-user or networked computer conferencing systems are currently facing a wide variety of potential liabilities. This exposure stems not only from the acts and omissions which sysops themselves engage in during the day-to-day maintenance of their system, but also from the acts of third parties who access the system directly or through the Internet and similar networks. The problems are magnified by the evolving nature of the laws and precedents which govern, or might be argued to govern, on-line dealings. This Article explores one particular area of potential sysop liability: copyright infringement resulting from the acts of third-party users of the system.

The threat of copyright liability for sysops is a real one. Sysops, whose users or subscribers rely on the system to facilitate infringing activities, or use it when engaging in such activities, are susceptible to both claims of direct infringement and the various forms of third-party liability, such as contributory infringement and vicarious liability. This is particularly troubling for sysops who maintain file collections that allow users to upload and download unsolicited files. The files in these collections may represent computer software, digital images or video, digital audio, text, or novel combinations of all these media (multimedia). Once placed on the system by a user, these files can be downloaded by other users and subscribers. The system acts as a data repository allowing users to “swap” their favorite files with others. Some systems even maintain an upload/download ratio which governs the number of files a given user can retrieve based on the number of files that user has contributed. Using these and similar methods, many large on-line services have amassed enormous file collections of tens or even hundreds of thousands of selections. The problem facing the sysop is that each of these files could represent an independent infringement, unless the user who contributed the file properly obtained permission from the copyright owner to upload the file. This places the sysop in the untenable position of needing to somehow verify the legitimacy of every upload received, a nearly impossible task. Plaintiffs who find that their copyrighted works are being swapped in this way might allege that the sysop, by virtue of running the system, directly infringed the copyright, or, in the alternative, that the sysop is liable under a theory of vicarious liability or contributory infringement.

This Article examines the validity of such claims by exploring the potential copyright liability faced by sysops for copyright infringement occurring on or through their bulletin boards. Parts II, III, and IV discuss the applicability of direct infringement, contributory infringement, and vicarious liability doctrines, respectively. Part V explains how recent federal courts have attempted to apply these doctrines. Finally, Part VI takes a look at the future of copyright liability for sysops and the various directions this rapidly evolving body of law may take. For the purposes of this paper, the factual backdrop assumes that the sysop is neither specifically responsible for placing the copyrighted work in the file collection areas nor explicitly solicits such conduct. Instead, the copyrighted works are assumed to have been uploaded by system subscribers on their own accord, and later downloaded by other users, all potentially unbeknownst to the sysop.

Publishing on the Internet: Pitfalls and Protections

Citation: 4 Tex. Intell. Prop. L.J. 33 (1995)

Author: Peter D. Kennedy & James A. Hemphill

About: Mr. Kennedy and Hemphill are attorneys at George, Donaldson & Ford in Austin, Texas.

Abstract: Today, everyone can be a publisher at almost no cost. Whether through commercial on-line services such as America Online or CompuServe or through the Internet and the user-friendly World Wide Web (WWW), any individual or company can easily go on-line with articles, speeches, and advertisements, all of which can be fully illustrated with text, graphics, and sound. This communications revolution has happened almost overnight, and it is already considered to be virtually commonplace.

The scope of the legal risks involved in on-line publishing and how they may differ from the risks associated with more traditional publishing are issues that are slowly being defined. With increasing regularity, electronic publishers are finding themselves defending against legal actions, as well as seeking the law’s protection against attempted intrusions. Meanwhile, courts often look to existing law and attempt to apply it to new technologies.

On another front, on-line publishers, particularly electronic Bulletin Board Service (BBS) operators and commercial information services, can be huge repositories of information that are valuable to numerous people, including prosecutors, investigators, and civil or criminal defense lawyers. There have been, and will continue to be, attempts to “tap into” these repositories of information through legal methods such as search warrants, subpoenas, and civil discovery. To what extent can these information services protect themselves from unwarranted or overly intrusive requests for information? This Article does not attempt to be a comprehensive discussion of either the “pitfalls” or “protections” out there; indeed, it purposefully avoids several of the more common and extensively discussed legal issues, including liability for defamation and copyright. Rather, this paper attempts to briefly highlight a selection of interesting, but less visible, issues that will inevitably confront those involved in on-line publishing.

The landscape of laws that have been applied to situations involving “traditional” media (i.e., print and broadcast) is exceedingly broad. All indications are that this wide panorama of legal issues will have an equal impact on on-line communications. This paper could not begin to address all the issues, but rather it illustrated the types of concerns that operation of an electronic information service may entail. Although principles of free speech provide a great deal of breathing space, providers of on-line services should not take freedom for granted. Awareness of the potential pitfalls and protections will aid in the effective use of the great opportunities offered by new technologies.


Finding Out What’s There: Technical and Legal Aspects of Discovery

Citation: 4 Tex. Intell. Prop. L.J. 57 (1995)

Author: James H.A. Pooley & David M. Shaw

About: Mr. Pooley and Shaw are attorney with Fish & Richardson, P.C., Menlo Park, CA.

Abstract: Computer technology and electronic communications are pervasive in our society. It is the rare business transaction that does not in some way involve computerized data transfer or analysis. It is the exceptional document that is now typed on a typewriter and corrected with correction fluid. Even as far back as 1973, courts were cognizant of the fact that “computerized record keeping is rapidly becoming a normal procedure in the business world.” It is estimated that, in the modern business world, at least thirty percent of electronic data never realize embodiment in ink on paper. It is reasonable to anticipate that most business information will eventually be stored exclusively in various electronic media.

As a result, computers and electronic data have become vastly important sources of information and, for attorneys, evidence in the ever-competitive world of litigation. This paper is designed to introduce the reader to the subject of acquiring that information and to provoke some thought into the best means of doing so.

Rule 34 of the Federal Rules of Civil Procedure was amended in 1970 to address changing technology, thereby indisputably bringing the Federal Rules into the computer age and evidencing that electronically-stored information is discoverable. The rule now states that “[a]ny party may … request … to inspect and copy, any designated documents (including … other data compilations from which information can be obtained, translated, if necessary by the [responding party] through detection devices into reasonably usable form).” The change clarified that discovery of information stored in new and different media, including punched data cards, computer tapes, floppy and hard disks, and computer memories, even though that information is not as accessible as the traditional tangible form of information (paper), is nevertheless both necessary and proper. The information provided, however, must be in a “reasonably usable form,” and courts will ensure that the party requesting the information is able to access the data.

Much of the law on electronic discovery is yet to be settled. For example, for a company to meet its obligations under discovery rules, will it have to sift through months of backed-up hard drives, cull and redact backup tapes, and attempt to “undelete” information that does not exist as far as it is concerned? Or will the burden or expense of such activity outweigh any likely benefit? How does a party go about demonstrating sufficient need to gain the right to inspect deleted disks or erased files? These and related questions will provide the basis for much legal sparring in the years to come.


General Does Not Mean Generic—Shedding Light on In re Alappat

Citation: 4 Tex. Intell. Prop. L.J. 71 (1995)

Author: Jonathan N. Geld

About: Jonathan Geld is a J.D. candidate, The University of Texas School of Law, May 1996.

Abstract: The recent Federal Circuit decision in In re Alappat has generated a great deal of press regarding the scope of software patenting. The popular (and not so popular) press has focused on the portion of the majority opinion which stated that “a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.” While this statement is open to philosophical debate, it is hardly a new one. A look at the history of software patenting needs to be made in order to assess its current validity. This history also shows the state of software patenting prior to the Alappat decision. By analyzing the history of software patenting we can determine where we stand today and whether the furor over the Alappat decision is warranted.

The general purpose computer language of the Alappat decision is the end result of two decades of decisions regarding the patenting of algorithms. The chain of cases between Benson and Arrhythmia show a gradual relaxation of an absolute prohibition on mathematical algorithm patents permitting claims which are implemented in accordance with a mathematical algorithm. The use of means-plus-function language in algorithm patents has allowed patent holders to increase the scope of their patents. But the restrictions placed upon the Alappat claims toward the application of a general purpose computer show that the court is not yet accepting broad-based algorithm patents. Equivalence analysis under both 35 U.S.C. § 112 para. 6 and the doctrine of equivalents reveals that the use of a mathematical algorithm must still be restricted by the underlying physical structure claimed in means-plus-function claims. The court’s qualification in the opinion regarding the nature of the general purpose computer is evidence that the court acknowledges this restriction. Recent developments in software patenting reveal that the court is maintaining its stance regarding the necessity of structure to support such patents. These developments publicize the necessity for structure rather than hide it in a footnote. For now, at least, something more than just a programmed general purpose computer is needed to get a software patent.


Recent Developments in Trademark Law

Citation: 4 Tex. Intell. Prop. L.J. 87 (1995)

Author: Rose A. Hagan

About: Ms. Hagan is an attorney with Arnold, White & Durkee, Austin, Texas.

Abstract: This Article reviews selected noteworthy trademark and unfair competition decisions reported in United States Patents Quarterly Second Series, Volume 33, Number 8 (February 20, 1995) through Volume 35, Number 9 (August 28, 1995).

In a unanimous decision, the Supreme Court held that color alone can qualify for trademark protection under the Lanham Act, settling a split among the circuits.

Issues involving trade dress protection for product configuration have been the topic of several recent conflicting decisions in various circuits. This area appears ripe for a Supreme Court decision to settle the split among the circuits.

The First Circuit upheld the constitutionality of Section 2320 of the Trademark Counterfeiting Act in United States v. Bohai Trading Co. The “authorized use” exception, set forth at section 2320(d), exempts manufacturers or producers from liability for trademark counterfeiting if authorized to use the mark “at the time of the manufacture or production” of the allegedly counterfeit goods. Bohai argued that the phrase “at the time of the manufacture or production” (especially the word “production”) was unconstitutionally vague, leaving the reader helpless to understand at what point in the production process the trademark holder’s authorization is necessary. The court of appeals gave short shrift to this argument, holding that the plain language of the statute makes it sufficiently clear that the exception is limited to “those goods or services for which authorization existed during the entire period of production or manufacture.”


Recent Developments in Patent Law

Citation: 4 Tex. Intell. Prop. L.J. 99 (1995)

Author: William N. Hulsey III, Anthony E. Peterman, & Steven Sprinkle

About: Mr. Hulsey, Peterman, and Sprinkle are attorneys with Baker & Botts, L.L.P., Austin, Texas.

Abstract: This Article provides an analysis of significant developments in patent law in the United States during a survey period spanning January through August of 1995. In the area of patent prosecution, the Court of Appeals for the Federal Circuit and the U.S. Patent and Trademark Office (PTO) worked to solidify the law relating to patentable inventions. With both judicial decisions and new guidelines, the Federal Circuit and the PTO made major advances in clarifying patentable subject matter, especially in the computer software and biotechnology areas. Not only did the Federal Circuit work to remove uncertainty as to patentable subject matter, it also strove to resolve questions in the areas of best mode and inequitable conduct. In dealing with the inequitable conduct question, the divided Federal Circuit panel highlighted the tension that exists between the attorney’s duty of disclosure to the Patent Office, on the one hand, and the duty of maintaining the attorney-client privilege, on the other.

In the area of patent infringement litigation, the Federal Circuit attempted to eliminate uncertainty by issuing en banc decisions addressing claim interpretation, doctrine of equivalents, and damages. Eliminating questions for jury review, thereby eliminating uncertainty, was apparently on the agenda of the Federal Circuit. However, in In re Lockwood, the U.S. Supreme Court reintroduced uncertainty on the issue of the right to a jury trial concerning validity by vacating the Federal Circuit panel opinion.

Recently, a milestone occurred in the harmonization of the U.S. patent laws with international intellectual property rights treaties and statutes, as the end of the General Agreement on Trade and Tariffs (GATT) interim period drew to a close and the permanent GATT Trade Related Aspects of Intellectual Property Rights (TRIPS) provisions of U.S. patent law came into effect. With numerous bills pending in Congress and a new report from a Presidential task force on intellectual property addressing the National Information Infrastructure (led by the Commissioner of Patents and Trademarks), it is likely that additional significant developments can be expected in the future.


Recent Developments in Copyright Law

Citation: 4 Tex. Intell. Prop. L.J. 129 (1995)

Author: Amy C. Wright & Jeff A. McDaniel

About: Ms. Wright and Mr. McDaniel are attorneys with Conley, Rose & Tayon, Austin, Texas.

Abstract: The federal courts have developed and refined copyright jurisprudence in several areas of importance over the past few months and have applied the law to a number of interesting cases. Reported below, by topic, are selected copyright decisions appearing in Volumes 34 and 35 of United States Patents Quarterly Second Series.

Issue 2 – Winter 1996


Enforcing a Non-Compete

Citation: 4 Tex. Intell. Prop. L.J. 149 (1996)

Author: Larry D. Carlson

About: Mr. Carlson is an attorney with Baker & Botts, L.L.P., Dallas, Texas.

Abstract: Your biggest and best client is the Acme Widget Company. Acme’s leading salesperson is John Smith. John is an “at-will” employee, not hired for a particular term. His sales territory consists of Dallas and Tarrant Counties.

You drafted John’s employment agreement. It has a covenant not to compete: For five years after leaving Acme, John will not sell widgets to any of Acme’s present or future customers anywhere in the State of Texas. The agreement also has a nondisclosure covenant: John will not disclose to others or misuse for his own benefit confidential or proprietary Acme information. Last, the agreement has a covenant that John will not solicit other employees to leave Acme.

On Monday morning, Acme’s president storms into your office in a panic. John quit his job at Acme to set up a competing company—the Beta Widget Company. Now he is stealing Acme’s customers and employees. Three of Acme’s customers have pulled their accounts and moved to Beta. Others customers are likely to follow. Four Acme salespeople have quit and gone to work for Beta. The president’s words to you are blunt: “John’s employment agreement says that he cannot steal our customers or our employees. You wrote the agreement, now you enforce it. I want Beta shut down immediately!”

This Article is designed to help the Texas lawyer faced with situations like the one described. After discussing the Texas statutory and case law concerning covenants not to compete (non-competes), this Article walks the reader through the process of enforcing a non-compete, from initial factual investigation and legal evaluation through preparation of the paperwork required to file suit, obtaining a temporary restraining order, expedited discovery, the hearing on your application for temporary injunction, and preparation for trial.


Facing the Sears-Compco Doctrine, When a Service Mark Is Used in Texas and Other Issues Addressed Recently by the State Trademark Office

Citation: 4 Tex. Intell. Prop. L.J. 171 (1996)

Author: Elizabeth B. Yahiel

About: Ms. Yahiel is Corporate and Trademark Examining Attorney, Office of the Secretary of State, Statutory Filings Division, Corporations Section.

Abstract: The purpose of this Article is to provide an update for attorneys who practice before the Trademark Office of the Office of the Secretary of State of Texas. Since this author’s last article on state trademark practice was published, various changes in procedure have occurred. In addition, several notable applications have passed through the Office. These applications have required that the Office develop a policy position regarding requirements for registration. The following is a summary of these recent developments.


Defending Against a Dilution Claim: A Practitioner’s Guide

Citation: 4 Tex. Intell. Prop. L.J. 205 (1996)

Author: Megan E. Gray

About: Ms. Gray is an attorney with O’Melveny & Myers, Los Angeles, California. The author wishes to extend her gratitude to Mark Lemley, Professor of Law at The University of Texas School of Law, for his invaluable advice and critiques of this paper.

Abstract: The theory of dilution of trademarks was heralded by a seminal article by Frank Schechter. Schechter proposed to protect trademark owners from the “whittling away” of the distinctive value of their trademark by others. The dilution of trademarks has since become a hot legal topic. Numerous lawyers have spent a substantial portion of their careers arguing for and against the legitimacy of a dilution cause of action. This paper does not debate the legitimacy of Schechter’s dilution theory. A number of authors have either supported or opposed dilution’s underlying tenets. For many lawyers, the dilution debates are largely superfluous. For these lawyers, it does not matter if a dilution statute is good or bad—it simply is. Its existence means something much more practical—how do I defend my client against a dilution claim?

A practitioner’s guide like this paper is helpful for defendants because a trademark infringement action commonly accompanies a claim of trademark dilution. This proliferation of dilution suits is both the result of an increase in the number of states which have enacted dilution statutes, as well as an increase in plaintiffs’ awareness of the power of these statutes. Currently, half of the states have adopted dilution statutes. In addition, the variety of judicial interpretations of these statutes is remarkable and particularly advantageous to plaintiffs, who often can choose from a wide range of interpretations.

This paper is designed to help defendants harness legal arguments against a claim of dilution. Although this paper cannot present a full analysis of the varieties of judicial interpretations of dilution laws, it does serve as a guidepost by offering the best possible arguments that a defendant should make and suggesting, in footnotes, where to look for authority for such arguments.

Part II of this paper briefly explains the nature of a dilution cause of action and contrasts it to trademark infringement actions. Part III examines the devastating results that can stem from a dilution victory for the plaintiff, as well as from the very presence of a dilution claim in an infringement suit. Part IV presents the elements of dilution and the defendant’s favored definitions of the statutory terms “distinctiveness” and “dilution.” Part V presents the defendant’s arguments that dilution statutes implicitly require the existence of competition, predatory intent, actual damage, and a fair use exception. Finally, Part VI covers potential constitutional barriers to dilution statutes, or at least the constitutional barriers to a plaintiff’s interpretation of the statutes.


Functional Usefulness vs. Communicative Usefulness: Thin Copyright Protection for the Nonliteral Elements of Computer Programs

Citation: 4 Tex. Intell. Prop. L.J. 233 (1996)

Author: David G. Luettgen

About: Mr. Luettgen is an attorney with Nilles & Nilles, S.C., Milwaukee, Wisconsin. The author would like to thank Professor Neil Netanel and Professor Mark Lemley for their help in preparing the Article. The opinions expressed herein are the author’s own and should not be attributed to Professor Netanel, to Professor Lemley or to Nilles & Nilles, S.C. or its present or former clients.

Abstract: Computer software has thus far presented a doctrinal problem to the law of intellectual property. Copyright and patent law have experienced a significant transition period in deciding exactly how to handle this new technology. This problem is caused by the form that software takes in that software looks like a “writing,” even though it behaves like an “invention.”

In regards to the protection of computer software, copyright law and patent law have experienced a reversal of fortune in the past ten years. Copyright protection started off broad, but has since been getting thinner. In Whelan Associates, Inc. v. Jaslow Dental Laboratory, Inc., the Third Circuit defined the unprotectable idea of a computer program very generally as “the purpose or function of a utilitarian work,” and said that “everything that is not necessary to that purpose or function would be part of the expression of the idea.” More recent cases have applied a much narrower approach. For example, in Computer Associates International, Inc. v. Altai, Inc., the Second Circuit rejected the Whelan approach and instead applied the “abstraction-filtration-comparison” test. Even more recently, the First Circuit in Lotus Development Corp. v. Borland International, Inc. held that the Lotus command menu was an uncopyrightable method of operation.

Meanwhile, patent protection for software has gone from merely a theoretical possibility to being available for nearly all software, assuming the patent attorney properly jumps through the doctrinal hoops. In patent law, the problem has been whether computer programs are mathematical algorithms and therefore not statutory subject matter. In Gottschalk v. Benson, a unanimous Supreme Court had to reassure us that even though “[i]t is said that the decision precludes a patent for any program servicing a computer,” they weren’t so holding. The door began to open, however, in Diamond v. Diehr, when the Court concluded that “a claim drawn to subject matter otherwise statutory does not become nonstatutory simply because it uses a mathematical formula, computer program, or digital computer.” More recently, the Federal Circuit, to which the Supreme Court has generally abdicated its role as the final court in patent matters, stated in In re Alappat that computer software “creates a new machine, because a general purpose computer in effect becomes a special purpose computer once it is programmed to perform particular functions pursuant to instructions from program software.”

The logical conclusion to this trend is to narrow copyright protection all the way down to “thin” protection, while leaving the nonliteral elements of computer programs to patent law. Thin protection means protection only against verbatim copying and near-verbatim copying (using “electronic massaging” techniques) of substantial portions of computer programs.

This paper addresses the copyright aspect of this trend. In particular, this paper argues that copyright should give only thin protection to computer software. For the most part, this paper assumes without argument that patent law will protect the novel and nonobvious aspects of computer software. There are really two different assumptions here. First, this paper assumes that a sui generis form of protection for computer software will not replace patent or copyright protection. Second, this paper assumes that patents will, in view of Alappat and other modern software patent decisions, be available for computer software without significant section 101 limitations. Finally, it is also important to note that this paper does not address the protection that copyright should give to the screen outputs of computer programs.


Hilton Davis and the Doctrine of Equivalents—An Insubstantial Difference

Citation: 4 Tex. Intell. Prop. L.J. 275 (1996)

Author: Keith A. Robb

About: Keith Robb is a J.D. candidate, The University of Texas School of Law, May 1996.

Abstract: Prior to Hilton Davis Chemical Co. v. Warner-Jenkinson Co., the doctrine of equivalents consisted of the function-way-result test and its arguably inconsistent application. The United States Court of Appeals for the Federal Circuit used Hilton Davis in an attempt to clarify the doctrine of equivalents by asking whether it requires any steps in addition to the function-way-result test. The court had ordered the parties to the suit to file supplemental briefs to address this question and two others. Deciding whether the doctrine of equivalents requires additional steps involves consideration of the relevant factors used in applying the doctrine and the policies behind equivalent infringement analysis.

Hilton Davis restated the test for infringement under the doctrine of equivalents as an inquiry into insubstantial difference. The opinion listed relevant factors, but did not arrange the factors within the test. An easier way to view the test involves arranging the relevant evidence to define infringement under the doctrine of equivalents. The function-way-result test illustrates the meaning of difference, while the remaining factors work to develop the scope of what will be considered insubstantial. Such an arrangement of the test makes use of the factors now considered in equivalents analysis and leaves room to add new factors as appropriate.

Factors within the test will have different effects on the result of equivalents analysis. Existing case law illustrates the use of the tripartite test, though now it will exist within the test of infringement under the doctrine of equivalents. It will continue to be widely used in equivalents cases. But, now that it illustrates differences between a claimed invention and an accused device, the tripartite test will not always determine the result of equivalents analysis. The factors relating to the meaning of insubstantial, however, will determine the result of equivalents analysis by varying the meaning of insubstantial. Factors such as copying, pioneer status, and known interchangeability in the art will support a broader scope for the meaning of insubstantial, and therefore, increase the likelihood of a finding of infringement under the doctrine of equivalents. Factors such as prosecution history estoppel, a crowded field, independent development, and designing around a patent will decrease the scope of insubstantial and decrease the likelihood of a finding of equivalents. Ordering the factors within the test of an insubstantial difference will ease application of the test.


Recent Developments in the Unfair Competition Arena Including Trademarks, Trade Dress and False Advertising

Citation: 4 Tex. Intell. Prop. L.J. 289 (1996)

Author: Michael O. Sutton & John D. Cowart

About: Mr. Sutton and Cowart are attorneys with Fish & Richardson P.C., Houston, Texas.

Abstract: False advertising appears to be a popular, up-and-coming cause of action, so this topic is addressed first in this Article. At least two cases have limited the scope of protection or recovery; however, at least one other case has seemingly expanded the potential scope of protection. Next, trademark and trade dress cases are reviewed. As usual, functionality is a topical issue and has appeared in several cases. After reviewing some of the more important procedural issues that have been addressed by the courts, the Article concludes with two cases addressing insurance coverage issues. Both cases hold insurance carriers liable to defend or indemnify defendants accused of Lanham Act violations, reminding all of us who defend companies in this area to check the insurance policy as a first order of business.


Recent Developments in Patent Law

Citation: 4 Tex. Intell. Prop. L.J. 303 (1996)

Author: John M. Cone, Hilda C. Galvan, & Shireen I. Bacon

About: The authors are attorneys with Strasburger & Price, L.L.P., Dallas, Texas.

Abstract: This Article reviews patent cases reported in the September through December 1995 advance sheets of the United States Patents Quarterly Second Series, 35 U.S.P.Q.2d 1577–864 and 36 U.S.P.Q.2d 1001–864.

The cases are reviewed by subject matter and where a case has points of interest under more than one heading, the first reference to the case contains the full discussion of that case. The headings are necessarily arbitrary and were chosen to aid the review of the cases.


Recent Developments in Copyright Law

Citation: 4 Tex. Intell. Prop. L.J. 321 (1996)

Author: Shannon T. Vale & Daniel J. Brennan

About: Mr. Vale and Brennan are attorneys with Arnold, White & Durkee, Austin, Texas.

Abstract: In recent months, trial and appellate courts have decided a number of interesting copyright cases. Several of these decisions addressed relatively novel topics, while others provided guidance concerning the application of established law to unusual fact patterns. Significant cases from Volumes 35 and 36 of the United States Patents Quarterly Second Series, are summarized below.


Issue 3 – Spring 1996


Ex Parte Appellate Procedure in the Patent Office and the Federal Circuit’s Respective Standards of Review

Citation: 4 Tex. Intell. Prop. L.J. 335 (1996)

Author: Jeffrey W. Rennecker

About: Research Scholar, Max Planck Institute for Foreign and International Patent, Copyright, and Competition Law, Munich, Germany. This Article was prepared in partial satisfaction of an LL.M. degree at The George Washington University National Law Center. The author wishes to acknowledge Professor Harold C. Wegner, Director of the Intellectual Property Law Program, George Washington University National Law Center, Washington, D.C.; Professor Theo Bodewig and Professor Gerhard Schricker, Director, Max Planck Institute, Munich, Germany, for their support and encouragement in drafting this Article.

Abstract: In light of the Akamatsu and Alappat decisions, and taking into account the context of PTO procedures within the boundaries of administrative law, this Article will critically examine whether the Court of Appeals for the Federal Circuit correctly decided in Alappat that the PTO Board should be subservient to the Commissioner. If so, the court’s decision raises two important issues: (1) whether such an arrangement is preferable in terms of administrative efficiency and policy making; and (2) whether the administrative procedure employed, particularly in Alappat, challenges the due process rights of the patent applicant.

Part I outlines procedural guidelines imposed on agencies by administrative law, discusses the broad powers vested in administrative agencies, and basic goals sought to be achieved by endowing agencies with legislative, executive, and judicial powers. With Part I as a legal backdrop, Part II details the sources of administrative power vested in the PTO, including the Commissioner and Board of Appeals. Necessary to this development is an exploration of the evolution of the appeals process within the legislative history of the Patent Act both in its historical context and within the overall framework of administrative agency law. The relationship between the Board of Appeals and the Commissioner is ascertained and evaluated, with a comparison of the BPAI and other similar adjudicatory bodies within the federal government.

Part III focuses on the administrative limits and requirements imposed by law upon the exercise of agency powers with special regard to Patent Office procedures. Part III discusses the Administrative Procedures Act (APA), its applicability to the functions of the Patent Office, and whether the PTO adheres to those APA guidelines. Agency action outside the boundaries of law is subject to review by the federal appellate courts. Therefore, the relevant standards of review applicable when the Federal Circuit reviews Board findings of fact, determinations of law, and determinations based on mixed law and fact are articulated, with special regard to the Federal Circuit’s most recent annunciations in the In re Brana and In re Napier decisions.

Part IV addresses the PTO appeals process in terms of constitutional considerations of fundamental fairness and procedural due process. Part IV also discusses APA provisions aimed at satisfying constitutional standards. The Commissioner’s and BPAI’s exercise of their administrative and adjudicative powers in the cases of Akamatsu and Alappat is analyzed to determine if current practices exceed the bounds of administrative law and procedure, especially in regard to Utica Packing Co. v. Block.

Part V concludes that the relevant statutes and regulations make it feasible for the BPAI to operate independently of the Commissioner. While the designation practices of the Commissioner may be an economically acceptable exercise of his administrative resources, his stacking of the BPAI to effectuate certain outcomes for appealed cases deprives applicants of procedural due process and erodes the certainty and integrity of the patent procurement process. Fairer means of policy implementation could be achieved through the employment of the Commissioner’s rule-making powers to overturn the Board. Such action would be more consistent and certain with the benefit of having a prospective effect on a larger group of individuals.


Reconciling the Patent Act and the Lanham Act: Should Product Configurations Be Entitled to Trade Dress Protection After the Expiration of a Utility or Design Patent?

Citation: 4 Tex. Intell. Prop. L.J. 383 (1996)

Author: Michael S. Pérez

About: J.D. candidate, The University of Texas School of Law, May 1997. This note is dedicated to the memory of my beloved grandfather, Emilio Saenz, who remains one of my greatest sources of inspiration.

Abstract: Over the last few years, several circuits have been presented with the question of whether nonfunctional features of expired patents should be entitled to trade dress protection under the Lanham Act. While a few courts have held that trade dress protection is available for nonfunctional elements of a product’s design, the Tenth Circuit recently held that trade dress protection is not available for product configurations comprising a “significant inventive component” of a previously patented invention, regardless of the functionality of those elements. Given the split among circuits, the issue appears ripe for Supreme Court intervention. The purpose of this note is to explore this issue in detail in an attempt to show that the Patent Act and the Lanham Act can be reconciled to provide limited trade dress protection for certain expired patent configurations.

Parts II and III of this note examine the history of both the Lanham Act and the Patent Act, as well as the principles governing each doctrine. Part IV discusses the intersection of these two federal statutes and examines the controversy surrounding the expansion of trade dress protection in this area. Finally, Part V presents two schemes that would allow courts to balance the competing doctrines in cases involving trade dress protection for expired patent features. Properly applied, these schemes would neither deny the public the benefit of previously patented inventions nor subordinate consumer confusion concerns that might arise under the Lanham Act.


Looking Back and Forth: The Restatement (Third) of Unfair Competition and Potential Impact on Texas Trade Secret Law

Citation: 4 Tex. Intell. Prop. L.J. 415 (1996)

Author: Patricia A. Meier

About: J.D. candidate, University of Houston Law Center, May 1996.

Abstract: During the past thirty years, protection of trade values from misappropriation has enabled investment and economic growth. In fact, the growth of trade secret law prompted the American Law Institute (ALI) to remove the widely embraced Section 757 of the Restatement (First) of Torts from the 1979 redraft of the Tort Restatement. The ALI council felt that trade secret law had developed into a separate field and had been incorporated into unfair competition. The purpose of this paper is to compare Texas trade secret common law to that incorporated in Chapter 4 of the ALI’s newly released Restatement (Third) of Unfair Competition.

Texas adopted the Restatement (First) of Torts’ definition of a trade secret in Hyde Corp. v. Huffines and has been recognized as a “Restatement state.” Texas has not adopted the UTSA.Many of the differences between the Restatement (First) of Torts and the UTSA have been adopted by the Restatement (Third) of Unfair Competition. The more significant of these include expanding protection to include misappropriation without use or disclosure of the trade secret and imposing a less restrictive statute of limitations. For rapidly advancing technologies such as computers, software, biotechnology and pharmaceuticals, trade secret protection has proven to be more valuable than patent protection. This is due largely to the short-lived nature of the subject matter protected. The expansion of protection for misappropriation without use or disclosure should encourage investment in these fields. However, the elimination of the general misappropriation cause of action seems premature considering growing concerns over protection of software and electronic data.

The discovery rule applied to the statute of limitations as provided in the Restatement (Third) of Unfair Competition could provide advantages for hard-to-detect misappropriation cases, as seen in Computer Associates International, Inc. v. Altai, Inc. Despite implications discussed, the question remains whether Texas will adopt the new Restatement (Third) of Unfair Competition.


Recent Developments in Copyright Law

Citation: 4 Tex. Intell. Prop. L.J. 459 (1996)

Author: Mark D. Perdue & Robert A. Felsman

About: Mr. Perdue and Felsman are attorneys with Felsman, Bradley, Gunter & Dillon, L.L.P., Fort Worth, Texas.

Abstract: This Article reports recent decisions of the state and federal courts pertaining to copyright law and related issues. Unfortunately, for the period examined, few cases of great legal importance were handed down. Nevertheless, the subject matter and fact patterns of a number of these cases are interesting, if not amusing, and several of these decisions appear to represent adoption by circuit courts of appeals of the reasoning applied by other courts of appeals.


Recent Developments in Patent Law

Citation: 4 Tex. Intell. Prop. L.J. 481 (1996)

Author: Todd Mattingly, Paul Morico, Linda Stokley, & Janelle Wake

About: The authors are attorneys with Arnold, White & Durkee, Houston, Texas.

Abstract: The purpose of this Article is to review selected patent decisions reported in the first quarter of 1996. This Article is not intended to provide a comprehensive reference, but instead represents those developments the authors believe have impacted the practice of patent law.


Recent Developments in Trademark Law

Citation: 4 Tex. Intell. Prop. L.J. 497 (1996)

Author: Charles S. Cotropia & John A. Harre

About: This Article reviews selected noteworthy trademark and unfair competition decisions reported in United States Patents Quarterly Second Series, Volume 37, Number 1 (January 1, 1996) through Volume 37, Number 9 (February 26, 1996).

Abstract: Mr. Cotropia and Harre are attorneys with Richards, Medlock & Andrews, Dallas, Texas.