Managing Litigation In The Ever-Changing Landscape Of Copyright And Trademark Law

Introduction

It is an exciting time to be a copyright and trademark litigator. Important issues are finding their way to the steps of the United States Supreme Court at a rate that was unprecedented just a few years ago. The issues at stake have become more important and more contentious, often causing industry-leading companies to weigh in in record numbers, usually on both sides of the issues.

The developments in copyright law are particularly fascinating. Copyright law is being relentlessly challenged to keep up with ever-evolving technology. That is no easy feat. The Copyright Act was codified nearly forty years ago, in 1976, and drafted, in some cases, decades before that— well before anyone even dreamed of streaming movies, music, or television to devices held in one's hand. Computers were not even mainstream then, and everybody watched what was on TV at its scheduled time and listened to music on albums or on the radio.

Attempting to apply that 1976 copyright code to the technologies and the ways that we can now deliver content is understandably quite difficult. Often, the law is unsettled, and equally often, it is amenable to more than one reasonable interpretation or application to the issue at hand.

Trademark law is evolving in a different way. Again, the Supreme Court is hearing more substantive trademark cases than ever before, but rather than struggling to apply old law to new technology, on the trademark side, it seems the Court is weighing in on issues that those in the field viewed as settled years ago, often reaching conclusions opposite to those that have been generally accepted. Those developments, just like on the copyright side, have the potential to shake up the way trademark rights are litigated.

This chapter will discuss some of the recent developments—first in copyright and then in trademark—that are redefining the law and shaping industries. It will then offer some strategies for managing copyright and trademark litigations in this complex legal setting where the law is constantly evolving.

Copyright Developments Worth Watching

When technology and copyright law collide, interesting issues arise. There are three exciting areas to watch where such collisions are readily at work:

The application of the first sale doctrine to digital content: Can a secondary market exist? The evolution of television and radio: How will we watch and listen in the future? Oracle v. Google1 and the dispute over Java: How much protection is there for computer software? Each of these areas not only presents questions of copyright law and policy and tricky questions of statutory construction—so much so that each has found its way to the US Supreme Court—but these issues also have the potential to impact our everyday lives.

Application of the First Sale Doctrine to Digital Content: Can There Be a Secondary Market for Digital Files?

The first sale doctrine is codified in the Copyright Act,2 but everyone is generally familiar with it. You buy a book, and then it is yours; you are free to do with it what you wish. You may lend it to a friend, give it away, or sell it at a flea market. That is the first sale doctrine in action. While the copyright owner still owns the copyright in the book, the copyright owner's right to control that particular copy ended once you bought it.

The official statute reads, "the owner of a particular copy or phonorecord lawfully made under this title ... is entitled ... to sell or otherwise dispose of the possession of that copy or phonorecord."3 The first sale doctrine allows you to give your book away without infringing the copyright owner's right of distribution (one of the §106 bundle of copyrights). This doctrine first arose in the common law context in 1908 and was first codified into the Copyright Act4 in 1909. Clearly, that statute addressed traditional copyrighted goods—books and movies in hard copy. The digital and transient copies prevalent today were not part of the discussion, or even the imagination, at that time.

The Supreme Court took on the first sale doctrine in the landmark case of Kirtsaeng v. John Wiley & Sons, Inc.5 The facts of the case were relatively simple: Supap Kirtsaeng, a graduate student at University of Southern California, subsidized his university expenses by reselling textbooks. He had his family back home in Thailand buy books there, where they were less expensive, and ship them to him in the United States, where he would sell them on eBay. Some of the books he resold were published by Wiley.

The law was much less straightforward. When Wiley sued Kirtsaeng for infringement of its distribution right, Kirtsaeng asserted the first sale defense. Before trial, though, the district court rejected Kirtsaeng's first sale defense as a matter of law, holding that the defense is "unavailable to the goods manufactured in a foreign country."6 The Second Circuit affirmed, holding that "the phrase 'lawfully made under this Title' in §109(a) refers specifically and exclusively to works that are made in territories in which the Copyright Act is law, and not to foreign-manufactured works."7

The Supreme Court granted certiorari to consider the issue of whether the first sale doctrine applies to copies made abroadi.e., whether a copy made abroad can be "lawfully made under this title" within the meaning of...