Intellectual Property Law – Page 16 – Marquette University Law School Faculty Blog

One Public Domain to Rule Them All

Post author:Bruce E. Boyden
Post published:October 5, 2011
Post category:Constitutional Interpretation Intellectual Property Law Public

The Supreme Court heard oral argument this morning in Golan v. Holder, which considers the constitutionality of Section 104A of the Copyright Act, added in 1994 by the obfuscatorily named Uruguay Round Agreements Act. The constitutional issue is whether Congress can, consistent with the Copyright Clause and the First Amendment, remove works from the public domain by “restoring” copyrights to works that had either expired or failed to vest due to a failure to comply with technical requirements.

If that sounds a bit abstruse, here’s the issue put more concretely: can Congress restore the United States copyright to J.R.R. Tolkien’s Lord of the Rings trilogy? Or once a work is in the public domain, for whatever reason, is it there irretrievably? The first volume of The Lord of the Rings was published in the United States in 1954 with a paltry 1,500 copies; even though the Hobbit had done well, Tolkien’s publishers did not anticipate what a blockbuster success The Lord of the Rings would be. As a result, the copies soon sold out, and instead of running another U.S. printing, Houghton Mifflin, Tolkien’s U.S. publisher, imported more copies from the UK to fill demand. But apparently Houghton Mifflin screwed up, because they accidentally imported too many: U.S. copyright law at the time contained a protectionist “manufacturing requirement” for books, requiring books sold in the United States to be printed in the United States, with only limited exceptions. A paperback publisher discovered the error in 1965 and printed 150,000 copies of the trilogy without paying any royalties to Tolkien or his publishers.

The Lord of the Rings is just one example of foreign copyright owners getting tripped up by U.S. copyright formalities.

Can Intellectual Property Be a Source of Repression?

Post author:J. Gordon Hylton
Post published:September 10, 2011
Post category:Intellectual Property Law Public

Concerned with the current direction of world intellectual property law, an international group of intellectual property and information policy experts has issued the Washington Declaration on Intellectual Property and the Public Interest. The Declaration calls for a re-articulation of the “public interest dimension in intellectual property law and policy” and expresses concern for the “unprecedented expansion of the concentrated legal authority exercised by intellect property rights holders.”

The document’s primary assertions are that national and international “intellectual property policy affects a broad range of interest within society, not just those of rights holders,” and that “markets alone cannot be relied upon to achieve a just allocation of information goods—that is, one that promotes the full range of human values at stake in intellectual property systems.”

The document was issued following the Global Congress on Intellectual Property and the Public Interest, held at American University in Washington, D.C. from August 25-27, 2011. As of September 9, there were 420 signatories to the document. Early signers include Marquette University Law School Professors Irene Calboli (#187) and Gordon Hylton (#243) and University of Wisconsin-Milwaukee Professors Dick Kawooya (#191) and Richard Grusin (#376).

The text of the Washington Declaration can be found at http://infojustice.org/washington-declaration.

Combatting Gray Markets: A Copyright-Protected Distribution Right or a Sherman Act Violation?

Post author:Andrew Spillane
Post published:July 20, 2011
Post category:Business Regulation Intellectual Property Law U.S. Supreme Court

At one time, the prospect of stating legal claims against gray market importers looked bleak. Product manufacturers tried trademark protection, but trademark law proved disappointingly unsuccessful. One company has now turned to copyright protection, and this company obtained a Ninth Circuit decision that found a store using a gray market importation scheme unable to raise a defense to copyright infringement. The company is Omega S.A., a Swiss luxury watch manufacturer known for producing the Seamaster line of watches appearing in many James Bond films, and the case is Omega S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9th Cir. 2008). In spite of Omega’s favorable Ninth Circuit judgment and opinion, market-wide legal questions about Omega’s distribution practice remain. Regardless of whether or not a manufacturer could state a claim for copyright infringement against gray marketers, infringement defendants may answer back by counterclaiming an antitrust violation. And if an antitrust counterclaim can halt copyright enforcement, then Omega’s win at the Ninth Circuit would end up a hollow victory at best or an academic stroll through the Copyright Act at worst.

Here are the facts of Omega v. Costco. Omega maintains a tight grip on its authorized distribution channels. Omega attempted to gain control of its watches’ distribution by engraving a design on the back of its watches (pictured below) and registering this design at the U.S. Copyright Office. Omega sold watches with these designs to their authorized distributors. Somewhere along the distribution line, however, the watches ended up in the hands of distributors outside of Omega’s authorized channels abroad. As the Ninth Circuit recognized, this is a paradigm gray market importation scheme, in which products meant to be sold in one territory are imported into another, usually for cheaper prices. One of Costco’s suppliers based in New York imported watches from these unauthorized distributors and eventually transferred the watches to Costco, which then sold these watches to its customers in California. One of those purchasing customers turned out to be a plant employed by Omega.

Omega then sued Costco for violating their exclusive right to distribute its copyrighted works and for importing them without Omega’s authorization. Costco asserted the first-sale defense, arguing that Omega’s right to control the distribution of its watches under both the distribution and importation statutes ends with its first transfer to its authorized distributors. Costco v. Omega’s ending at the Supreme Court was a bit anticlimactic, with the U.S. Supreme Court evenly divided 4-4 (Justice Kagan didn’t take part in the non-decision). This led to a summary affirmance of the Ninth Circuit’s decision below and no rule from the Supreme Court resolving the statutory tension in the Copyright Act.