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IntellectualAmerican University — Washington College of Law

Property BriefVolume 3 Issue 2 Fall 2011

In this issue:

The American University Intellectual Property Brief is licensed under a Creative Commons Attribution 3.0 United States License.

www.ipbrief.net

Featured Blog Posts and Updatesby the Intellectual Property Brief Staff

Capturing Clouds: Intellectual Property Issues Within the Live Entertainment Production Process

by Brian Knowlton by Mark Tratos

Informal Formalities: The Government’s Attempt to Find Families for Orphan Works

The New Hawaiian Model: The Native Hawaiian Cultural Trademark Movement and the Quest for Intellectual Property Rights to Protect and Preserve Native Hawaiian Culture

by Nina Mantilla

The Russian IPR Problem: How Accession to the WTO is not the Magical Solution, Rather a Step in the Right Direction

by Joshua M. Green

2 Fall 2011

Table of Contents


by Brian Knowlton

by Mark Tratos

In formal Formal i t i e s : The Government’s At tempt to Find Fami l i e s f o r Orphan Work s


by Nina Mantilla

The Russian IPR Problem: How Accession to the WTO is Not the Magical Solution, Rather a Step in the Right Direction

by Joshua M. Green

8

26

42

57

3American University Intellectual Property Brief

Featured Posts

To Patent or Not To Patent, That is The Question: Embryonic Stem Cell Patents Rejected in Europe

by Amer Raja-The European Court of Justice was asked to determine the patentability of stem-cell products derived from human embryos. In doing so, they made some highly controversial decisions that may force European scientists to get creative when protecting their research.

70

Remitting the Remittal of Joel Tenenbaum’s Remittitur Motion

by Jess Robinson-The First Circuit reinstated Joel Tenenbaum’s $675,000 debt to Sony for having infringed upon Sony’s copyrighted music, but all may not be what it seems. In its opinion, the First Circuit didn’t overturn the district court’s reasoning but only said it was premature. Can anything be inferred from this?

68

Largest Copyright Infringement in History: Five US Universities Sued

for Copyright Infringementby Alexandra Mackey-Authors from Australia, Britain, and Canada are claiming copyright infringement against five US universities for supporting digital libraries without authorization from the authors or publishers.

66Top 1% Files for Trademark of

“Occupy Wall Street”by Seth Dennis-Spurred by the trademark application for OCCUPY WALL ST, two applications have recently been filed for OCCUPY WALL STREET. While one of the applications belongs to OWS organizers, the other application seems to trace back to a likely member of the 1%.

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4 Fall 2011

Editor-in-ChiefEric Perrott

Senior Managing Editor Senior Articles Editor Ashlee Hodge Mark Tratos

Copyright Section Editor Patent Section Editor Trademark Section Editor Jim Hill Greg Lultschik Nina Mantilla

Senior Symposium Chair Senior Events Chair Ali Sternburg Rachel Gordon

Senior Marketing Manager Senior Web Editor James Conlon Peter Bodri

Blog Editor Blog Editor Blog Editor Griffin Barnett Aaron Gleaton Ashley Kobi

Senior Staff

Sofia Castillo Sarah Leggin Jess RobinsonSeth Dennis Alexandra Mackey Ashley RoseBrian Dudley Joe Massie Brenda SackmanJJ Gottschalk Christopher McDonough Liz Shen

Caroline Gousse Richard Patterson Jonathan StroudJessica Jones Amanda Patton Hasan TbeilehJeff Kettle Stephen Price Sarah Zucco

Amer Raja

Junior Staff

Sean Braun TJ Johnson Greg MeditzKate Collins Sitara Kadalbal Greg Melus

Alexander Dowd John Langlois Ji "Jean" RyuDang "Stephen" Huh Brandon Marsh Corsica Smith

Daniel Jang Thomas Snyder

2011-2012 Staff

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Symposium

American UniversityIntellectual Property Brief

SymposiumEmpowering Users/Creators to Take Control of

Their Intellectual Property

APRIL 16, 2012 - 9:00 am – 5:00 pm

Recently, traditional intellectual property schemes have been shifting due to the rise of new technologies. In the past, the distinction between users and creators was clear, but now the line is becoming blurred. Newspapers, printed research materials, and DVDs are giving way to new media, such as blogs, Wikipedia, and streaming video, which do not coexist peacefully with traditional methods of protecting intellectual property. Digital distribution and the flourishing of amateur creators with less commercial incentive has led to efforts such as Creative Commons and other new and more open models. Join artists, innovators, practitioners, academics and policy makers as we discuss how the traditional forms of intellectual property are adapting to new technologies and methods of communication.

6 Fall 2011

The IP Brief is always accepting article submissions for our upcoming issues. Please submit completed papers concerning any area of intellectual property law to [email protected]. Any questions regarding submissions may also be directed to this email address.

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http://law.bepress.com/expresso

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net/subscribe/“IP Briefly” covers the top IP stories from our blog, upcoming events, and other important IP news from the week.

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On the Web license

The IP Brief provides daily commentary on intellectual property law at ipbrief.net. Here, readers can find daily blogs, columns, upcoming events, and past issues of the Intellectual Property Brief.

Looking for back issues of the Intellectual Property Brief? All volumes are available on http://www.ipbrief.net/issues/

The Intellectual Property Brief is licensed under a Creative Commons Attribution License 3.0 (CC BY 3.0). You are free to copy, distribute, transmit, adapt, or to make commercial use of the work without seeking permission. However, you must include the author’s name and “Originally Published in the American University Intellectual Property Brief ” where applicable.

http://creativecommons.org/licenses/by/3.0/

I. Introduction

“It is not once nor twice but times without number that the same ideas make their

appearance in the world.” ~ Aristotle ~

Ludwig Van Beethoven. There is perhaps no other artist, certainly no other musician, whose name is more synonymous with creative daring. Over one hundred and eighty years after his death, his life struggle continues to reverberate through western culture. Best known for having lost his hearing during the pinnacle of his career, Beethoven accomplished the artistic impossible: creating significant musical works while lacking the most basic of musical sensibilities. For Beethoven, composition ceased being a mere form of esthetic expression and his skill and artistry

elevated to a level of articulating raw ideas; weaving and untangling complex systems of process; communicating through forms and structures that could not otherwise be expressed and; reconciling his humanity through the craft of organizing sound.1 Suicidal but with a life sustaining regard for his gift, Beethoven had the audacity to change western culture, not only through music but also with ideas, expression of ideas, and

* Brian Knowlton is a Senior Production Manager at SeaWorld Parks and Entertainment and 2012 J.D. Candidate at St. Mary’s School of Law. He has produced over 100 shows and events, has performed as a symphonic recording artist in multiple cities and with the Emmy and Tony award-winning Broadway musical “Blast!,” is the recipient of multiple International Association of Amusement Parks and Attractions Big “E” awards, and has served as Creative Director of a non-profit music education organization. The author can be reached at [email protected].

1. Mark Evan Bonds, After Beethoven: Imperatives of Originality in the Symphony 9-27 (Harvard Univ. Press 1996).

8 Fall 20118 Fall 2011


by Brian Knowlton*Illustrations by Patrick Thomas


his recognizable public personality: the quintessential tortured artist who brought wisdom and joy to the world.2

But even Beethoven copied. Even he stole the compositional processes of other artists.

There is an innate human sense that one’s original idea, unique expression of an idea, belongs to them and that others should not assume compensation or acclaim for work that is not their own. It feels right. And, on first pass, knowing that Beethoven copied and stole somehow feels wrong. Of course, the sound of a Beethoven symphony only vaguely resembles that of one composed by Mozart, but Beethoven’s 1st Symphony copied the harmonic structure and compositional process of his predecessor’s Jupiter Symphony.3

Why would such a prolific and culture-changing composer need to copy from other composers? Does Beethoven’s borrowing and Mozart’s influence somehow

2. See Lewis Lockwood, Beethoven: the Music and the Life (W. W. Norton and Co. 2003) (In a letter from Ludwig Van Beethoven to his brothers Carl and Johann known as the Heiligenstadt Testament, Beethoven writes, “ . . . I would have ended my life -- it was only my art that held me back. Ah, it seemed to me impossible to leave the world until I had brought forth all that I felt was within me.”); see also Nicholas Cook, Beethoven: Symphony No. 9 (Cambridge Music Handbooks 1993).

3. See Carl Schachter, Mozart’s Last and Beethoven’s First: Echoes of K. 551 in the First Movement of Opus 21 227 (Cliff Eisen ed., Oxford: Clarendon Press 1991) (“[A] close study of the first movements reveals an intriguing similarity in the tonal plans of their development sections. The similar feature is a rather unusual modulatory progression . . .”).

detract from his stature as an artist? If Beethoven needed to copy to produce musical works, what does that mean for the rest of us? How does this change our approach to using another’s ideas, copying another’s work or imitating how these works are presented to the public? “Therein lays the rub.”4 Copying is a reality of most pure artistic creation. From this it is no surprise that copying is pervasive at other levels of artistic creation and, in particular, today’s world of fast-paced and demanding commercial art. There is no area where these commercial artistic disciplines intersect in greater number and variety than today’s live events and entertainment productions and thus, there is no territory more fertile for the infringement of trademarks, trade secrets and copyrights. The purpose of this article is to explore such intellectual property issues as they arise in the production of such events.II. Defining the Scope

“Think left and think right and think low and think high. Oh, the thinks you can think up if

only you try!”~ Dr. Seuss ~

At a time when a large part of daily entertainment is experienced virtually, either through movies, the internet, television or mobile devices, audiences seek an escape from this virtual reality to the actual-reality of live entertainment. However, they also bring with them the expectation that live experiences will

4. William Shakespeare, Hamlet Act 3. Scene 1.

10 Fall 2011

Capturing Cloudsprovide the same pacing, perfection and emersion as its virtual counterpart. Consumer demand for high-end experiences is not only met by large-scaled shows and events in major cities, but also by smaller tier production companies such as theme parks, cruise lines, community theaters, resorts, a variety of independent production companies, and other regional tourist destinations.

As the quality of these live events increases to meet the growing expectations of perfection and complete emersion, a gap between the business practices behind the productions and the legal protections of intellectual property rights becomes increasingly apparent. Whereas large revenue streams in New York, Las Vegas, and Hollywood allow businesses to carefully avoid infringement of intellectual property, producers with smaller budgets are often driven to use less expensive alternatives for certain types of production elements. Creatively using pre-recorded audio tracks and stock imagery, leveraging already popularized show-styles, adapting pre-existing content, and cross-utilizing up-and-coming design talent often causes unique intellectual property issues. In many ways, constrained budgets and repurposing ideas result in highly creative solutions, for true creativity is not the result of limitless resources, but manifests as solutions created by need and constraint. Although these smaller productions frequently produce bright and original ideas, they often do so through the use of the intellectual property of others. They lack the resources and established business practices to routinely avoid infringing on other’s intellectual property, or even to properly protect their own intellectual property rights. So far these infringements have flown below the radar relative to the use of intellectual property in major Hollywood Blockbusters, Broadway Musicals and Las Vegas Shows.

The scope of this article is directed towards this smaller tier of production, and although it will only provide a cursory review of the law that protects intellectual property and a general overview of the process followed to create these live events, it is aimed precisely at those points where the law and production process intersect. It aims to give a producer a more thorough understanding of intellectual property rights and attorneys a clearer understanding of the business practices and needs of this unique demographic of clientele. It first gives an overview of the production process and provides a summary of current intellectual property law. After exploring practical examples, it reviews the various legal instruments available to ensure

the protection and safe use of intellectual property and discusses how they operate within the production process.II. Overview of the Production Process

“There are two ways of being creative. One can sing and dance. Or one can create an environment in which singers and dancers

flourish.”~ Warren G. Bennis ~

A general approach to the process of producing live entertainment and events can be divided into five parts, idea generation, concept development, production, rehearsals and performance. Although every project is unique, they all progress through the same five stages.

A. Idea Generation

As its name suggests, the idea generation phase occurs when the creative concepts behind the production are distilled. The process involves narrowing, focusing, and defining the parameters of each idea. To create a solution that meets a business need (“high-concept”), one must first understand that need. Market demands, fiscal objectives, and capital investment goals of a project all play into this calculation. Next, a creative team is assembled (they are frequently contracted as expert consultants from diverse disciplines) and the producer presents her objectives and leads the team in brainstorming feasible ideas. This can happen through formalized creative development meetings or informal conversations, within or between different business entities, in a defined amount of meeting time or over a period of years, and with strategic objectives or a general sense of goal. The culmination of the idea generation phase is an executive presentation, bid to a client or proposal for investors and in any case, is used to secure the final financial endorsement for the project. Regardless of how this phase is structured, it results in a high-concept, which is a solution to a business problem and realized through interactions between people.

B. Concept Development

The concept development phase of the production process is comprised of developing plans for the various creative elements that will ultimately become a part of the live show: script, scenic, music, video, costumes, lighting, and special effects. The producer hires designers through either an employee or contracted relationship, the latter of which sometimes subcontract


Brian Knowlton

and/or hires employees to meet objectives. The producer also hires a show director who interfaces with designers and not only ensures that each designer is creating work that supports the high-concept, but also ensures that the diverse disciplines work together with coherence. The work-products that result from this phase include scripts, illustrations, music ‘scratch-tracks’, storyboards, costume designs, architectural drawings, engineering documents, sketches, and lighting plots. The concept development phase creates documents and plans that will be used to fabricate items that will ultimately be used in the show.

C. Production

It is in the production phase that the actual tangible elements for the show are created: scripts are printed; sets and costumes are built; music is recorded; video is filmed, animated, and edited; special effects are designed and constructed; lights are hung; and performing talent is cast. In addition to the designers from the concept development phase who oversee the production of their elements, various other entities are brought on-board: scenic companies; music studios and recording artists; video production teams; costume shops; electricians; stage managers; and stage crew. Each of these entities or individuals can be employed, contracted or sub-contracted.

D. Rehearsals

Once rehearsals begin, entities and individuals from the production phase begin to complete their work, the producer hires cast members and the director and her various assistants (choreographer, lighting designer, stunt coordinator, and effects coordinator) rehearse with performers and other live-action components of the show. Individually, these assistants interact within the scope of their specialty, but are frequently present during major on-the-spot decisions. Performers are consulted by the director when making creative decisions regarding the reality of whether a staging idea is possible, on-going performance challenges, and other content-based issues.

E. Performance

Finally, the concept becomes a reality and it is time for performance[s]. At this point, the design team steps away from the production and a group of stage managers and other operational personnel run the show. A live show can run anywhere from a single event to decades of continuous performances. The maintenance of a multi-run show can be contracted with entities and individuals who are entirely new to the production. Creative changes can occur for a variety of business reasons, each with the capacity to include new ideas, directors and designers.

12 Fall 2011

Capturing Clouds

III. Overview of Intellectual Property Rights

“No man acquires property without acquiring with it a little arithmetic also.”~ Ralph Waldo Emerson ~

Those from whom Beethoven borrowed would have understood his copying. Mozart copied from maestro Franz Haydn, who copied from Johann Sebastian Bach, and Bach copied from a generation of Baroque composers.5 These masters understood that originality is developed through experience, and experience is merely interaction with what already exists. It is then no surprise that the world is full of influence, borrowing and the outright wholesale misappropriation of ideas. “Imitation contains a complex interplay of impulses: among these, in varying degrees, are the desire to learn, rivalry, and homage.”6 During a time when renowned composers lived with and were supported by aristocratic families, perhaps rising to a level of influence that resulted in others borrowing ideas was of benefit to a composer’s status, a status that determined the quality of their philanthropically-supported lifestyle. Today, however, artists are rewarded through direct financial compensation and generally do not benefit from the borrowing of others. So then, how does one ensure

5. See Jeremy Yudkin, Beethoven’s “Mozart” Quartet, 45 J. of the Am. Musicological Soc’y 30, 34 (1992) (“[W]hat a composer looked for in another’s work was usually not material itself, but ways of approaching the material, rhetorical strategies, ideas of span, control, expression, and coherence.” “Mozart’s String Quartet, K. 464, is one of the “Haydn” quartets, written as a deliberate homage to the older master.”).

6. Id. at 32.

they are compensated for their ideas or works and what if their intellectual property is infringed upon?

Amongst the powers enumerated to Congress in the United States Constitution is the authority “To regulate Commerce” and “To promote the Progress of . . . useful Arts, by securing for limited Times to Authors . . . the exclusive Right to their . . . writings . . . .”7 The bundle of intellectual property rights with which the live entertainment production process most directly interacts includes the laws of trademark, copyright and trade secrets. These protections grant private property rights of intellectual assets in order to encourage artistic expression and promote economic growth.8 This section will give a broad overview of these doctrines, the general concepts of which will be discussed in more detail later, when applied to issues that arise during the production process.

A. Trademark

Trademark law protects the marketplace by restricting unauthorized use of marks associated with particular manufacturers in a manner that causes confusion as to the source of the goods.9 For example, a business cannot name a beverage “Coco-Cola” in an attempt to leverage the brand of “Coca-Cola.” Trade “marks” can be words, phrases, logos and symbols

7. U.S. Const. art. I, § 8, cl. 8; Paul Goldstein, Copyright, Patent, Trademark and Related Doctrines 1 (Robert C. Clark 4th ed., Foundation Press 1999).

8. See id. at 6.9. Arthur R. Miller & Michael H. Davis, Intellectual

Property: Patents, Trademarks, and Copyrights In a Nutshell 238-55 (West 1983).


Brian Knowltonused to identify goods.10 Trademarks are distinct from copyright and trade secrets because trademarks do not depend on novelty, invention, discovery, or any other intellectual creation; rather, the strength of a mark depends on the type of mark and impression of the consumer11.

A trademark claim turns on the perception of the mark in the marketplace. The validity and strength of a mark is analyzed by whether it is fanciful, arbitrary, suggestive, descriptive, or generic.12 All marks are considered inherently distinctive and protectable except for descriptive marks, which are protectable upon showing a secondary meaning, and generic marks, which are never protectable.13 A mark is inherently distinctive when it is capable of identifying a product source; secondary meaning exists only when consumers associate a mark with a single market source.14 Thus, a showing of secondary meaning places a greater burden on a plaintiff because it is not assumed that consumers associate a descriptive mark with a specific product.

10. See id.11. See id.12. Abercrombie & Fitch Co. v. Hunting World, Inc., 537

F.2d 4, 9 (2nd Cir. 1976).13. Sicilia Di R. Biebow & Co. v. Cox, 732 F.2d 417, 425

(5th Cir. 1984).14. Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763, 768

(1992).

To own a trademark, a party need merely use a mark in commerce to identify and distinguish a product or service.15 Registration is evidence of the registrant’s right to use the mark in commerce.16 Ownership of an incontestable mark gives the registrant almost exclusive rights to use the mark.17

Trademark infringement occurs when there is a likelihood of confusion among the relevant class of customers with regard to a trademark.18 Courts may consider the following non-exhaustive list of factors to determine if infringement occurred: (1) the type of mark allegedly infringed upon, (2) the similarity between the two marks, (3) the similarity of the products or services, (4) the identity of the retail outlets and purchasers, (5) the identity of the advertising media used, (6) the defendant’s intent, and (7) any evidence of actual confusion.19

Absent a showing of a likelihood of confusion, a party may enjoin an act that is likely to dilute a distinctive quality of a registered mark.20 The party is

15. 15 U.S.C.A. § 1127 (2006).16. 15 U.S.C.A. § 1115(a) (2002); Soweco, Inc. v. Shell Oil

Co., 617 F.2d at 1184; 15 U.S.C.A. § 1065 (2010).17. Pebble Beach Co. v. Tour 18, I Ltd., 155 F.3d 526, n.4

(5th Cir. 1998).18. See id. at 543; 15 U.S.C.A. §§ 1114(1), 1125(a).19. Two Pesos, Inc. v. Taco Cabana, Inc, 932 F.2d 1113, 1122

n.9 (5th Cir. 1991); Conan Properties, Inc. v. Conans Pizza, Inc., 752 F.2d 145, 149 (5th Cir. 1985).

20. Tex. Bus & Com. Code Ann. § 16.29 (2011); Service Merchandise Co. v. Service Jewelry Stores, Inc., 737 F. Supp.983, 993 (S.D.Tex. 1990).

14 Fall 2011

Capturing Cloudsable to do this because of anti-dilution statutes. The, “[p]urpose of an anti-dilution statute is to prevent the gradual ‘whittling away’ of a party’s distinctive trademark or trade name and a plaintiff must demonstrate ownership of a distinctive mark and a likelihood of dilution.”21 A mark can be diluted by tarnishment or blurring.22 A mark is tarnished when it is “linked to products of shoddy quality” and blurred when “customers . . . see the plaintiff’s mark used on a plethora of different goods.”23

An infringing party can limit its risk of liability by using defenses pertaining to the limited area of use, the abandonment of a mark, the genericness of a mark, the functionality of a product, or the fair use of a mark. A limited area defense confers upon a user of the mark the right to the use of an otherwise infringing mark in a remote geographic area if a good faith continuous use without notice of infringement was established before the plaintiff’s use or registration; under this doctrine, the other user can not typically expand geographically.24 A plaintiff is found to have abandoned a mark through non-use or not policing licenses.25 Genericness is determined by whether or not the mark is understood by the relevant public to refer to a particular good.26 A functionality defense alleges that a mark is attempting to control a product feature, considered functional, where such use would put competitors at a non-reputation-related disadvantage; courts look to whether the questioned functionality is (1) essential to the use or purpose or (2) affects the cost or quality of the article.27 Unauthorized use of another’s mark may be fair-use if it is for the purpose of describing one’s goods or services, or to compare advertisements; a fair use defense requires that there is not a misrepresentation or likelihood that consumers will be confused as to the

21. Pebble Beach, 155 F.3d at 550; Fruit of the Loom, Inc. v. Girouard, 994 F.2d 1359, 1363 (9th Cir. 1993); Hormel Foods Corp. v. Jim Henson Productions, Inc., 73 F.3d 497, 506 (2d Cir. 1996).

22. Deere & Co. v. MTD Prod., Inc., 41 F.3d 39, 43 (2d Cir. 1994); Hormel Foods, 73 F.3d at 506, 507.

23. See id.24. 15 U.S.C.A. § 1115(b)(5) (2002); Hanover Star Milling

Co. v. Metcalf, 240 U.S. 403, 415 (1916); see United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90 (1918).

25. Paul Goldstein, Copyright, Patent, Trademark and Related Doctrines 235-37 (Foundation Press, Robert C. Clark 4th ed. 1999).

26. 15 U.S.C.A. § 1052(e)(1); H. Marvin Ginn Corp. v. Int’l Ass’n of Fire Chiefs, Inc., 782 F.2d 987 (Fed. Cir. 1986).

27. Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 851 n.10 (1982); Qualitex Co. v. Jacobsen Products Co., Inc., 514 U.S. 159 (1995).

source, identity or sponsorship of the product.28

B. Copyright

The purpose of copyright law is to promote creativity by balancing the benefits of encouraging creation with the costs of restricting access and use in order to protect authorship.29 Copyrights can be obtained for literary works, musical works, dramatic works, pantomime and chorography, pictorial works, graphic and sculptural works, motion picture and other audio-visual works, architectural works, and sound recordings.30 The principals of copyright are distinguished from trademark and trade secret law in that copyright owners hold the exclusive right to reproduce works, prepare derivative works, distribute copies of works, and perform or display works publicly.31

Copyrighted subject matter must be an original work of authorship fixed in any tangible medium.32 The requirement for originality is independent creation plus a modicum of creativity.33 An author is an entity “to whom anything owes its origin” and a work is considered fixed when “its embodiment . . . is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration.”34 A work must be a tangible expression of an idea. Because copyright protection never extends to “an idea, process, method of operation or concept,” the more ways an idea can be expressed, the greater chance it has of being held to be an expression and not merely an un-protectable idea.35 A derivative work “based upon one or more preexisting works, such as a translation,

28. Calvin Klein Cosmetics Corp. v. Lenox Laboratories, Inc., 815 F.2d 500, 503 (8th Cir. 1987); G.D. Searle & Co. v. Hudson Pharm. Corp., 715 F.2d 837, 841 (3d Cir. 1983); Hypertherm, Inc. v. Precision Products, Inc., 832 F.2d 697, 700 (1st Cir. 1987); Zatarains, Inc. v. Oak Grove Smokehouse, Inc., 698 F.2d 786, 791 (5th Cir. 1983).

29. Goldstein, supra note 25, at 556-58; Ralph S. Brown & Robert C. Denicola, Copyright 9-10 (Robert C. Clark ed., Foundation Press 2009).

30. 17 U.S.C.A. § 101 (2010); H. Clark Anawalt, Ideas in the Workplace 15-23 (Caroline Academic Press 1988).

31. 17 U.S.C.A. § 101 (2010).32. 17 U.S.C.A. § 102(a) (2011).33. Feist Publications v. Rural Telephone Service Co., 499

U.S. 340 (1991); Waldman Publ’g Corp. v. Landoll, Inc., 443 F.3d 775 (2d Cir. 1995).

34. Feist Publications, 499 U.S. at 340; Burrow-Giles Lithographic Co. v. Sarony, 111 U.S. 53 (1884) (internal quotations omitted); 17 U.S.C.A. § 101.

35. 17 U.S.C.A. § 102; Baker v. Selden, 101 U.S. 99 (1879); Mazer v. Stein, 347 U.S. 201, 217 (1954).


Brian Knowlton

musical arrangement, dramatization, fictionalization, motion picture version, sound recording, [or] art reproduction” is considered to be an original work of authorship, but the copyright in the derivative work only covers the new elements and not the original expression on which the work was based.36

The various types of subject matter protected under the Copyright Act are treated differently and thus a more in-depth understanding of each is necessary. Musical works not only include musical notation, but also “any accompanying words.”37 However, because one can copyright a musical work by merely recording it (without notating it in tablature), ownership of lyrics may not vest as they would have through the process of notated composition. The lyrics may therefore be considered a literary work as well, in which case both the composer and lyricist receive an undivided fifty-percent interest in the copyrighted musical work.38 Although a musical arrangement may be a derivative work from the original composition and deserving of a copyright regardless of the authorship of the underlying work, the arranged work must meet the requirement of originality and not merely re-arrange the form and

36. 17 U.S.C.A. § 101 (2010).37. Melville Nimmer, Nimmer on Copyright § 2.05[B]

(Neil P. Myers ed., LexisNexis 2011)38. Id. § 2.05[A].

structure of the work.39 Melodies (even melodies suggestive of prior works) and counter-melodies can rise to meet the creativity threshold while only some courts recognize creativity in harmony and rhythmic creativity is legally impossible; “fingerings, dynamics marks, tempo indications, slurs, and phrasing” do meet the standard of creativity.40

To be considered an author of a sound recording (and thus a copyright holder), one needs to have made an original contribution. A producer of a sound recording (who likely does not make an original contribution) is the owner of a copyright if they obtain an express written and signed transfer or assignment from the performing artists, recording engineer, and employees of the music production company. Transfers can be recorded with the Copyright Office to ensure ownership.41

Copyrighted dramatic works must relate to a story as well as depict a story (through accompanying music, dialogue and/or action) independent from narration, and “any dramatic work other than a pantomime is also a literary work.”42 “Exhibitions,

39. Id. § 2.05[C] and [D]; Anheuser-Busch, Inc. v. Elsmere Music, Inc., 633 F. Supp. 487 (S.D.N.Y. 1986).

40. Nimmer, § 2.05[D]; Bridgeport Music, Inc. v. UMG Recordings, Inc., 585 F.3d 267, 272 n.1 (6th Cir. 2009) (Treatise cited).

41. Nimmer, § 2.10 and § 10.07.42. Id. § 2.06.

16 Fall 2011

Capturing Cloudsspectacles, arrangements of scenic effects,” and chorography “devoid of story or content” are not considered dramatic works.43 Pantomimes and choreography are “significant gesture[s] without speech” and are protectable whether or not the presentation is dramatic.44 Jokes and gags can claim copyright protection if the work rises from the level of an idea to an actual expression (not an easy threshold because cleverness is idea-based) and stage direction remains un-litigated.45

One does not need to author subject matter to become an owner of a copyright: she can also gain ownership within the context of a ”work-made-for-hire” relationship with the author. A work-made-for-hire relationship is created through employment or if there is a written agreement that the work is work-made-for-hire and the work falls within one of nine limited categories: (1) a contribution to a collective work, (2) a part of a motion picture or other audiovisual work, (3) a translation, (4) a supplementary work, (5) a compilation, (6) an instructional text, (7) a test, (8) answer material for a test, or (9) an atlas.46 Unless the work falls specifically under category (2), it is doubtful that it will obtain work-made-for-hire status in relationship to producing live entertainment.

Once an owner establishes her copyright, she proves infringement by showing the defendant (1) had access to the copyrighted work and (2) that the infringing work is substantially similar to the protected work.47 Proof of access requires that the infringer had an “opportunity to copy the plaintiff’s works” and can be proven by (a) establishing a chain of events between the work and the access to the work or (b) showing that the work was widely available.48 A work is substantially similar when an average lay observer would recognize a copy as having been appropriated from the copyrighted work.49 To show substantial similarity, a copyright owner can show striking similarity, literal similarity,

43. Id.44. Id. § 2.07.45. Id. § 2.13.46. Stephen P. Koch & Joseph D. Yao, Drafting

Confidentiality Agreements, Intellectual Property Law 101 IP Agreements (TexasBar CLE 2011).

47. Arnstein v. Porter, 154 F.2d 464 (2d Cir. 1946).48. Sid and Marty Krofft Television Productions, Inc v.

McDonald’s Corp., 562 F.2d 1157, 1172 (9th Cir. 1977).49. Warner Bros., Inc. v. American Broadcasting Co., 654

F.2d 204, 208 (2d Cir. 1981) (quoting Ideal Toy v. Fab-Lu Ltd., 360 F.2d 1021, 1022 (2d Cir. 1966); Mark Miller, Copyright Infringement 25-6 (unpublished manuscript, sponsored by the Houston Univ. Houston Law Foundation).

fragmented literal similarity, or comprehensive non-literal similarity.50 Striking similarity does not require a showing of access and, in the absence of direct proof, copying may be inferred from circumstantial evidence.51 Literal similarity is either verbatim copying or paraphrasing.52 Fragmented literal similarity “exists where ‘the work [copies] only a small part of a copyrighted work but does so word-for-word.”53 Comprehensive non-literal similarity is evident where the fundamental essence or structure of one work is duplicated in another.”54

Parties can also infringe vicariously if they (1) have the right or ability to control and (2) directly benefit from the infringing activity (landlords are generally not vicariously liable for the infringement of a tenant, i.e. owner of a property leased to a infringing dance club).55 Contributory infringement requires that the infringer (1) had knowledge and (2) acted in furtherance of the infringement but is defeated if a non-infringing use is shown.56

An otherwise infringing party can claim the affirmative defense of fair use. Courts consider: (1) the purpose and nature of the use, (2) nature of the work, (3) amount used, and (4) the effect on the potential market.57 Parody can be a fair use defense wherein it “comment[s] upon or criticize[s] a prior work by appropriating elements of the original in creating a new artistic, as opposed to scholarly or journalistic work.”58

50. Letterese and Assoc. Inc. v. World Inst. Of Scientology Enter., 533 F.3d 1287 (11th Cir. 2008).

51. Miller, supra note 49, at n.156; Calhoun v. Lillenas Publ’g, 298 F.3d 1228, 1232 n.6 (11th Cir. 2002).

52. Miller, supra note 49, at n.156; Letterese, 533 F.3d at 1303 n.19.

53. Miller, supra note 49, at n.156; Palmer v. Braun, 287 F.3d 1325, 1330 (11th Cir. 2002).

54. Miller, supra note 46, at n.156 (unpublished manuscript, sponsored by the Univ. of Houston Law Foundation); Warner Bros. Entertainment Inc. v. RDR Books, 575 F. Supp. 2d 513 (S.D.N.Y. 2008).

55. Warner Brothers, Inc. v. O’Keefe, 468 F. Supp.16 (S.D. Iowa 1977).

56. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984); A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001); Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F. Supp.1361 (N.D. Cal. 1995).

57. 17 U.S.C.A. § 107.58. Mark Miller, Copyright Infringement 183

(unpublished manuscript, sponsored by the Univ. of Houston Law Foundation); Suntrust Bank v. Houghton Miffin Co., 268 F.3d 1257 (11th Cir. 2001).


Brian KnowltonC. Trade Secret

Trade secrets are formulas, patterns, devices, or compilations of information used in one’s business, which “derive independent economic value from not being generally known” and give one an advantage over competitors.59 Trade secret is the only law (common law) that protects actual ideas.60 Protection of trade secrets requires that the developer make continuous effort to protect economically valuable ideas by keeping them confidential.61 This protection is destroyed through disclosure (accidental or not). Courts look to whether the secret is ahead of industry awareness, the extent to which the information is known outside of the original business, the affirmative steps taken to guard the secret, the value of secret to the originator and competitor, the amount of resources expended in developing the secret, and the ease or difficulty with which the info can be acquired.62

59. H. Clarke Anawalt, Ideas In the Workplace: Planning for Protection 23-88 (Carolina Academic Press, 1988); Metallurgical Industries v. Fourtek, 790 F.2d 1195 (5th Cir. 1986).

60. See id.61. Restatement (First) of Torts § 757 (1939); Tax Track

Systems Corp. v. New Investor World, Inc., 478 F.3d 783 (7th Cir 2007).

62. Restatement (First) of Torts § 757 (1939).

To protect a trade secret, a party might use confidentiality agreements, specifically identify secret information, require routine and special contact with employees who have access to secret information, create restrictions regarding outside contact, or debrief employees.63 To infringe upon a trade secret, the defendant must have acquired (misappropriated) the information wrongfully through improper means or breach of confidence.64

A potential defendant can limit their liability by (1) independent invention, (2) reverse engineering, (3) observation of the item in public, or (4) obtaining information from published literature.65

63. H. Clarke Anawalt, Ideas In The Workplace: Planning for Protection 23-88 (Carolina Academic Press, 1988).

64. DuPont v. Rolfe Christopher, 431 F.2d 1012 (5th Cir. 1970); Smith v. Dravo, 203 F.2d 369 (7th Cir. 1953).

65. Kadant v. Seeley Machine, 244 F. Supp. 2d 19 (N.D.N.Y. 2003).

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IV. Practical Application of Intellectual Property and the Production Process

“Semper idem, sed non eodem modo”(“Always the same, but not the same way”).

~ Heinrich Schenker ~

Understanding the legal protections for intellectual property can cause one to question the value in using the ideas, works, or marks of others. In the early 20th century, Pablo Picasso was amazing the world with the creativity inherent in his paintings and sculptures.66 Picasso’s art, however, was more than influenced by the impressionistic founder Edgar Degas. Picasso copied themes, characters and processes from the impressionist leader. Picasso went so far as to move down the street from the older master and use the same models.67 Why is it then that Picasso and Beethoven are held with such high regard?

At some point in their lives as artists, Beethoven’s and Picasso’s grappling with the creative processes of others grew into original works; “they [began] to convert the substance or riches of [the other] to [their] own use.”68 Therefore, copying works and borrowing ideas is a natural part of the artistic process,

66. Elizabeth Cowling & Richard Kendall, Picasso Looks at Degas (2010).

67. Id.68. Jeremy Yudkin, Beethoven’s “Mozart” Quartet, 45 J. Am.

Musicological Soc. 30, 34 (Spring 1992) (“In 1785, at fifteen, Beethoven imitated Mozart to absorb, to learn, to grow. In 1800, at thirty Beethoven imitated Mozart in order to deliberately to ‘misprise’ him, to ‘convert the substance or riches of [the other] to his own use.”).

a reality reflected in the practice of producing live entertainment. The issue of borrowing works or ideas is not an ethical dilemma; rather, it is of the correctness of process.

A. The Process Gone Wrong

There is much to learn from the successes of The Walt Disney Company with their industry leading international entertainment portfolio. The unstoppable synergy between its motion picture division, animation studios, touring shows and theme parks continues to pioneer the industry. There is also a lot to be learned from the failures of Disney. In August of 2000, a judgment of 240 million dollars was entered in favor of All Pro Sports Camps against Disney for having misappropriated concepts for the Wide World of Sports Complex at Walt Disney World.69 Although the plaintiff failed to show substantial similarity in its federal copyright claim, it was later held that the Copyright Act did not preempt the common law trade secret claim because the claim met the “extra element” of unfair competition or breach of confidential relationship and fiduciary duty.70

All Pro submitted a written proposal and business plan for the creation of the sports complex and Disney and All Pro entered into a joint venture wherein Disney would provide the land, transportation, hotels,

69. Satisfaction of Judgment, All Pro Sports Camps, Inc. v. Walt Disney Co., No. CI-97-134 (Fla. Cir. Ct. Sept. 16, 2002).

70. All Pro Sports Camp, Inc. v. Walt Disney Co., 727 So. 2d 363, 367 (Fla. Dist. Ct. App. Florida 1999).


Brian Knowlton

and golf course.71 It was noted during litigation that All Pro submitted architectural models and sketches while using Disney computers, printing facilities, and secretarial staff.72 Although Disney succeeded in the prior copyright litigation, they were not able to defeat All Pro’s claim that the “integration of, [sic.] elements of sport, education and entertainment” were novel and not previously known to Disney.73

Again, this 240 million dollar judgment turned in part on whether Disney had previous knowledge of the idea of combining the elements of sports, education and entertainment.74

B. It Could Happen to You

How does one introduce themselves, their ideas, and/or their services to other entities without creating the type of disclosure that destroys the protection of trade secrets? How can a producer enlist the services of the creative team without destroying the same protection? Once in creative development meetings, how does the producer ensure that the creative team is not infringing copyrights? Members of the creative team often design for and are exposed to the work product of other entities in the marketplace, so how can the producer protect the project from these

71. Id. at 364.72. Id. at 364-65.73. Id. at 368.74. Id. (“Thus, the concept behind Sports Island may not,

in fact, be ‘generally known to . . . other persons who can obtain economic value from its disclosure or use.’”).

entities from cross-pollinating ideas and expressions in violation of another’s trade secret or copyright? Once tangible items are being produced, how does the producer ensure that the various companies contracted to fabricate the designs are taking the appropriate steps to ensure their sub-contractors and employees protect the project’s intellectual property? What if some of these businesses use stock assets like pre-existing music, stock imagery or video, or literary content owned by a third party? What becomes of derivative works created from these assets? What if a composer edits an existing music track? What if that track is augmented with additional music or sound effects? What if a timeless musical hit needs “sweetening” by adding post-produced effects or additional sounds (full sounding kick-drums, synthetic bass-lines, or techno underscore)? If a director changes the plot of a show during rehearsals, what is his ownership right to that change? What if a performer’s suggestion during a rehearsal becomes content within the show? What if a performer’s likeness becomes an iconic and branded moment within the show? How does one safely market a show that is levering the brand of an established Vegas sensation? What if your newest sensation is being diluted or blurred by other production companies? After one navigates these issues and opens a show, how are they mitigated over the run of on-going performances?

Most importantly, how does one produce a show that addresses these issues without depleting the budget or creative drive?

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Capturing Clouds

C. It Starts at the Beginning

There are a few professional precautions, that when taken at the beginning of the production process, can help to reduce liability and ensure clear communication. Understanding who will own the rights to work product, who will obtain and maintain the rights to existing assets, and how future contributors will share in the rights of new and existing ideas and expressions will not only reduce liability and potential frustration, but also help to reduce both current and future production costs. The legal instruments typically used to accomplish this are employment agreements, work-for-hire agreements, non-compete clauses, non-disclosure/confidentiality agreements, and licensing agreements. All of these instruments are contracts or clauses within contracts and the purpose of each is to express the understanding between the parties of who owns what in exchange for what.

D. Employment/Work-for-Hire Agreements

Although authorship normally vests in the person who creates a work, an employer/contractee can acquire ownership of a work if it is prepared within the scope of an employment or independent contractor

relationship.75 To create an employee relationship, courts consider the skill required to perform the job, the source of the instrumentalities and tools, the location of the work, the duration of the relationship, whether the hiring party has the right to assign ownership of the work to the hired party, the extent of the hired party’s discretion over when and how long to work, the method of payment, the hired party’s role in hiring and paying assistants, whether the hiring party is a business, the provision of employee benefits, and the tax treatment of the hired party.76 For an independent contractor relationship to be a work-made-for-hire, the work must (1) fall within nine categories of work (as described above); (2) be commissioned (courts consider the motivating factor for commissioning); and (3) be contracted expressly by a written and signed instrument (some courts require the agreement be made prior to creation.)77

75. Michael D. Paul, State bar of Texas, Intellectual Property Law 101 IP Agreements, ch. 2 at 1-2 (2011); 17 U.S.C.A. § 101.

76. Id. at 2.77. Id.; Playboy Enter. Inc. v. Dumas, 53 F.3d 549 (2d Cir.

1995); Schiller & Schmidt, Inc. v. Nordisco Corp., 969 F.2d 410, 413 (7th Cir. 1992).


Brian KnowltonE. Non-Compete Agreements

A non-compete agreement is a restrictive covenant and under common law, an exception to the general rule that an employer cannot prevent an employee from competing.78 The agreement must (1) be contained within another contract (i.e. service or employment agreement), (2) be designed to protect a legitimate interest of the employer, (3) have adequate consideration, (4) be reasonably limited in scope (time and territory), (5) be supported by valid consideration and (6) not be harmful to the public.79 Trade secrets, confidential information, good will, and unique and extraordinary skills are protected business interests while “covenant[s] . . . designed for some other purpose such as eliminating competition” are not.80 Consideration for the overall contract is sufficient for the non-compete clause and the mere act of hiring an employee can be consideration (unless it is “at will” employment), but it is recommended that the employer give “more money, greater responsibility, or a new position.”81 Courts consider three factors when determining the reasonableness of the covenant: (a) whether the restriction is greater than necessary to protect the employer, (b) whether the restriction is oppressive to the employee, and (c) whether the restriction is injurious to the general public (the public’s right to choose).82

F. Non-Disclosure and Confidentiality Agreements

Non-disclosure and confidentiality agreements are basically the same instrument and both serve similar purposes as non-compete agreements, “however, specific nondisclosure [and confidentiality] clauses are not subject to territorial limitations, and their reasonableness turns on the legitimacy of the employer’s business need to protect the information.”83

78. Covenants Not To Compete §§ 1.01, 2.01 (Aspen Publishers 2007); 14 Williston, Contracts § 1643 (3d ed. 1972); 6A Corbin, Contracts § 139 (Supp. 1989); Hoddeson v. Conroe Ear, Nose & Throat Assocs., P.A., 751 S.W.2d 289 (Tex. App. 1988).

79. Id.80. Covenants Not To Compete § 2.01 (Aspen Publishers

2007); Owens v. Penn Mut. Life Ins. Co., 851 F.2d 1053 (8th Cir. 1988); Harlan M. Blake, Employee Agreements Not To Compete, 73 Harv. L. Rev. 625, 653-7 (1960); M. Jager, 1984 Trade Secrets Handbook § 13.05 (1984).

81. Id.82. Covenants Not To Compete § 2.01 (Aspen Publishers

2007); Hamer Holding Group, Inc. v. Elmore, 560 N.E.2d 907 (1990).83. Richard A. Lord, Williston on Contracts § 54:33

(Thomson Reuters 2011); Lee v. Environmental Pest & Termite Control, Inc., 516 S.E.2d 76 (Ga. 1999); Duracell Inc. v. SW Consultants, Inc., 126 F.R.D. 571 (N.D. Ga. 1989).

Although there is an implied duty of non-disclosure regarding trade secrets and confidential information, a confidentiality clause can help to clarify the scope of protection but cannot “make secret that which is already not secret.”84 To determine if a confidentiality agreement is enforceable the courts generally consider whether (1) it is reasonably necessary for the protection of the employer’s business; (2) it is not unduly restrictive of the employee’s rights; (3) it is not prejudicial to the public interest; (4) the employer is attempting to protect confidential information relating to the business, such as trade secrets, methods of operation, names of customers, or personnel data—even though the information does not rise to the stature of a trade secret; (5) and the restraint is reasonably related to the protection of the information.85 When negotiating a non-disclosure clause, one should consider: key terms; confidentiality periods; confidentiality obligations; exclusions to confidentiality; definitions of the access and use rights to the proprietary information and standard of care; the extent to which the information will be disclosed; statements as to whether the information will be returned; (for one-way agreements) a negation of reverse confidentiality obligation; a negation of implied licenses; negation of warranties and representations; a negation of implied commitment for further relationship; a negation of the right to use other party’s name; and the duration of confidentiality and continuing obligations.86

G. Back to the Process

When a producer recruits a creative team, it is advisable that she execute non-compete and non-disclosure agreements, remembering that a non-compete agreement may only be effective once the creative team is contracted to work on the production. Similarly, a producer must execute these instruments when soliciting or receiving proposals for ideas that

84. Richard A. Lord, Williston on Contracts §54:33 (Thomson Reuters 2011); Structural Dynamics Research Corp. v. Engineering Mechanics Research Corp., 401 F. Supp. 1102 (E.D. Mich. 1975); Union Pacific R. Co. v. Mower, 219 F.3d 1069 (9th Cir. 2000).

85. Richard A. Lord, Williston on Contracts §54:33 (Thomson Reuters 2011); Coady v. Harpo, Inc., 719 N.E.2d 244 (1st Dist. 1999); Revere Transducers, Inc. v. Deere & Co., 595 N.W.2d 751 (Iowa 1999); Julius Hyman & Co. v. Velsicol Corp., 233 P.2d 977 (1951).

86. Stephen P. Koch & Joseph D. Yao, State bar of Texas, Intellectual Property Law 101 IP Agreements, ch. 1 at 3-8 (2011).

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Capturing Cloudsmay be owned by other individuals or that may reveal the producer’s trade secrets. This critical step can slow a process and create awkwardness in the pacing of conversation, but when done right, it can build a professional relationship. It is also wise to stay aware of when other contributors might be inadvertently discussing trade secrets from past projects that could later be construed as misappropriated. Similarly, as ideas become presentations, it is advisable to consider how their expression may need to be treated through either their tangible production or legal transfer of copyright so as not to create a copyright infringement.

Similar procedures need to be followed when hiring or contracting designers for the creative development phase. The producer also needs to consider how these designers are enlisting the services of their own design staff and using assets obtained from others. For example, under a transfer agreement with the producer, the designers are obligated to transfer the intellectual property rights associated with the work-product because of their work-for-hire status; however, if they sub-contract additional designers, without a transfer of copyright ownership from those sub-contractors, the authorship will vest the intellectual property right in the sub-contractor and the designer cannot transfer to the producer that which they do not own. Further, if a design firm uses stock imagery in their designs and executes a licensing agreement in perpetuity, they may assume they are meeting the producer’s requirement of transferring ownership; but, although it might be in perpetuity, the licensing agreement may not provide for uses not yet imagined by the producer (i.e. print or video for marketing or derivative works). Another potential pitfall can arise from a composer who either unknowingly enlists the help of a lyricist without obtaining her fifty-percent joint interest in the composition or allows a recording artist to rise to the level of an author by their creative contribution in a recording session. In these examples, the producer has contracted for rights to be transferred to her, but the designers do not possess the rights they are attempting to convey. Although the producer has a breach of contract claim against the designers, through which she might be able to indemnify herself after she has settled with the actual copyright owner, she will no doubt incur damages because her use makes her, not the designer, the infringer.

Some of these risks can also be mitigated through the use of another type of legal instrument: a license.

Licensing Agreements. A license agreement

is a contract that grants a party permission to use another party’s intellectual property for limited use, the consideration for which can include “a fixed payment, a royalty calculated as a percentage of licensee’s sales or income derived from the licensed property, or a fixed payment upon execution of the agreement followed by the periodic payment of royalties.”87 The terms of the agreement should consider (1) how derivative works are to be handled (what derivative works are, whether derivative works are allowed, and whether the licensee will benefit from the licensor’s derivative works), (2) whether the license is assignable, and (3) how each party will respond to claims of third party infringement or that the licensed property is infringing (duty of notice).88 It is important for a producer to (1) understand the limits of liabilities within a licensing agreement (as she will want to know what penalties the project may suffer if she needs to terminate the contract), (2) obtain written authorization of the licensee’s right to license the property and (3) secure warranties and indemnification from third party claims.89

A party can license a trademark in order to “extend an existing and established trademark” (i.e. the owner of a trademarked brand can license another person to produce live entertainment based on that brand).90 In the instance of casting an artist with equity in their likeness and stature, a producer will need to license that likeness, the terms of which will need to address the artist’s name, likeness, biography, voice, and the artist’s rendering of publicity services.91 When licensing moving images, the producer should secure: (1) the literary rights to the story, characters, and title; (2) the rights to underlying materials integrated such as other film/animation clips (3) performer’s reuse rights; (4) music rights; (5) sequel rights; (6) the adaptation rights for existing assets used in the new product;” (7) waivers of moral rights from the writer and director; and (8) rights necessary for marketing.92 When licensing still images, confirm the copyright or public domain status

87. Drafting License Agreements § 1.01 (1996).88. Id. § 1.02; U.C.C. § 2-718(1) (1989); JMD Holding

Corp. v. Congress Fin. Corp., 828 N.E.2d 604 (N.Y. 2005); Truck Rent-A-Center, Inc. v. Puritan Farms 2nd, Inc., 361 N.E.2d 1015 (N.Y. 1977); McGann v. United Safari, Inc., 694 S.W.2d 332 (Tenn. Ct. App. 1985); LTR Rental Corp. v. Simmons, 595 P.2d 1283 (Or. Ct. App. 1979).

89. Drafting License Agreements § 8 (1996). 90. Id. § 10.01. 91. Id. § 11.01.92. Id.


Brian Knowltonof a photograph, illustration, trademark, or other category of graphic art, which includes the term and the territory and secure (1) the adaptation rights for the image in the new product; (2) a waiver of moral rights from the artist(s); and (3) any “other rights necessary to promote the product and broaden the product’s market, such as advertising rights and merchandising rights.”93

When licensing music, consider the following licenses: (1) a mechanical license; (2) a synchronization license; (3) a public performance license; (4) a license of dramatic work; and (5) an adaptation license.

1. A Mechanical License

A mechanical license (for non-dramatic work) derives its name from the need to license the mechanical reproduction of music in piano rolls.94 One needs a mechanical license if a song is to be recorded for distribution and the license covers the right to record and distribute through a mechanical means (i.e. Compact Disk orMP3).95 Most mechanical licenses are permitted by statute and once someone makes a sound recording, anyone can thereafter make their own sound recording: you merely tender the statutory royalties for the sound recordings you make.96

2. A Synchronization License

A synchronization license is directly applicable to the use of music in live entertainmen,t but to date “ha[ve] been given little consideration by the courts.”97 Distinct from performance rights, a synchronization license covers using a musical work in time relation with another expression (i.e. audiovisual works).98 Although there are no specific instances of litigation regarding synchronization within the context of live entertainment, because live productions frequently use video within their productions and music is synced to other mechanically driven visual components (i.e. lighting, pyrotechnics, and other special visual effects), there is potential for future issues to arise. Courts have

93. Id.94. Gary Myers & George Howard, The Future of Music:

Reconfiguring Public Performance Rights, 17 J. Intell. Prop. L. 207, 214-15 (2010).

95. Drafting License Agreements § 10.01; Harry Fox Agency, Mechanical Licensing, http://www.harryfox.com/public/MechanicalLicenseslic.jsp (last visited Nov. 10, 2011).

96. Drafting License Agreements § 10.01.97. Lewis Rinaudo Cohen, The Synchronization Right: Business

Practices and Legal Realities, 7 Cardozo L. Rev. 787, 788 (1986).98. Foreign & Domestic Music Corp. v. Licht, 196 F.2d 627

(2d Cir. 1952); E. Scott Johnson, Considering the Source: Licensing Threat to Performing Rights in Music Copyrights, University of Miami Ent. and Sports L. Rev. 6, 7 (1989).

held that synchronization licenses are required for the non-infringing use of syncing newly recorded music with video in video games and a voice recording with a control talking mechanisms in Teddy Ruxpin stuffed bears; it follows that the definition of “audiovisual work” may one day expand to works that are used within the context of the highly synchronized layers of a live production.99

3. A Public Performance License

A public performance license is required to perform a musical composition publicly (i.e. background music and music festivals) and are available from performing rights societies such as ASCAP, BMI, and SESAC.100

4. A License of Dramatic Work

A license of dramatic work is necessary if the music accompanies a dramatic performance (anytime the action tells a story).101 ASCAP and BMI expressly state they are not granted the rights to license a dramatic performance of the works of their musician cliental and thus, performing a musical work accompanied by dialogue, pantomime, dance, stage action or performed as a musical comedy, opera, play with music, revue or ballet requires a dramatic licenses from the owner of the work.102

5. An Adaptation License

An adaptation license is necessary to alter to the musical work (i.e. the “juxtaposition of lyrics with an instrumental musical work” or two-track editing of a song into a different form or medley).”103

Although the Harry Fox Agency, ASCAP, BMI

99. Romantics v. Activision Publ’g, Inc., 532 F. Supp. 2d 884 (E.D. Mich. 2008); Worlds of Wonder, Inc. v. Vector Intercontinental, Inc., 653 F. Supp. 135 (N.D. Ohio 1986); Worlds of Wonder, Inc. v. Veritel Learning Sys., Inc., 658 F. Supp. 351 (N.D. Tex. 1986).

100. ASCAP Licensing Types, The American Society of Composers, Authors and Publishers, http://www.ascap.com/licensing/general/types.aspx; Get a BMI Music License, Broadcast Music Inc., http://www.bmi.com/licensing/; Obtain A SESAC License, Sesac, http://www.sesac.com/Licensing/obtainlicense.aspx.

101. Melville Nimmer, Nimmer on Copyright § 2.06 (Neil P. Myers ed., LexisNexis 2011) (1963).

102. Synchronization, Harry Fox Agency, http://www.harryfox.com/public/LicenseSynchronization.jsp; Common Music Licensing Terms, The American Society of Composers, Authors and Publishers, http://www.ascap.com/licensing/termsdefined.aspx (select the drop-down link “Dramatic or Grand Rights or Dramatic Performances”); BMI and Performing Rights, Broadcast Music Inc., http://www.bmi.com/licensing/entry/C1289; Patry on Copy § 3:94.

103. Drafting license Agreements § 10.01 (Michael A. Epstein & Frank L. Politano ed., 1996).

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Capturing Cloudsand SESAC have streamlined the process of obtaining various music licenses (namely performance and mechanical), they are not a complete solution; there is no agency solution to securing synchronization rights, rights to a dramatic performance or adaptation rights, which must be obtained directly from the holder of the copyright.104

Because the purpose of this article is to address the needs of a specific tier of production companies, it must be stressed that this is a huge, mostly un-litigated liability and, as this area of the industry expands, will certainly be more closely policed by owners of intellectual property.

H. Intellectual Property During the Process

The marketing plan begins to develop during the idea generation phase of a project and the producer should ensure that the marketing strategy does not appear poised to infringe a trademark. In order to ensure profitability, smaller productions frequently leverage on new, but established brands. The way the show is interpreted by the consumers though will greatly influence the risk of infringement. Thus, the producer must strike a balance between (1) communicating to her audience the similarities between the experience she offers and that of the trademarked show or event of which they have a positive impression and (2) not creating a likelihood of confusion between the marks that could create liability. Non-compete clauses and non-disclosure agreements are also necessary during this phase so as to ensure the producer both protects her trade secrets and does not misappropriate the trade secrets of others during the creative development sessions.

It is important to consider a licensing strategy as soon as the creative development phase is underway so that the producer can ensure her budget can sustain the impact of the necessary, ongoing licensing agreements. In each instance, she should consider the ongoing cost of licensing to the higher cost of original creation. In one instance, a licensing fee in perpetuity might be significantly less than the expense of constructing an asset from scratch. While in another instance however, the impact of royalty payments, frequent licensing renewals, restrictions on the scope of use, increased costs for adaptations and synchronization, and the risk of inadvertently infringing could justify a larger capital commitment when compared to completely original works.Non-compete clauses, non-disclosure

104. Id. § 8.09[B][2].

agreements, and licensing agreements are also necessary during the production phase. During this phase, the addition of builders, musicians, and artists increases the risk of authorship manifesting in the work of sub-contractors. The risk of misappropriating the intellectual property of other production companies increases as scenic and costume companies, who have relationships with many other production companies, are brought into the project. As the designs manifest into tangible items, the difficulty of ensuring that assets are properly licensed also increases. If the producer sets a tone from the idea generation phase of the project, contracted entities will become accustomed to the intellectual property contract process and most will begin to think through their own liabilities. The process of insuring that intellectual property is protected will begin to flow naturally and, when followed, stimulates numerous new opportunities for negotiations. For example, for smaller projects, the producer now has the ability to create a relationship with a composer who will be compensated based on the success of the production (through royalties) and thus require less front-end capital cost.

The rehearsal process adds a few new issues to consider, the first of which is the addition of the cast. As the quality of these smaller tier productions grow, it is increasingly more important to ensure that the producer owns the likeness of the performers and (as discussed above) the performance agreement needs to address the artist’s name, likeness, biography, voice, and publicity services. These are simple additions to the performance agreement, but invaluable once the show has earned brand equity. Another interesting, and mostly un-litigated question that arises during the rehearsal process is any potential authorship that might manifest from creative decisions made by the director or input from a cast member. A work created by this means could rise to the level of a derivative work or could create work of joint authorship because this tier of production can over-depend on the talent of a director to create a coherent show from a less-developed script.

Finally, it is imperative that all of these issues are resolved before performances begin because infringement occurs when the copyrighted work or trade secret is placed in commerce: the performance phase. Also, it is important to maintain awareness of how the ever-developing marketing plan flirts with trademark infringement. Now that the live production is operational, it contains intellectual property assets


Brian Knowltonthat will need to be monitored with regard to others’ infringing use. The same principles apply, but now your production is protecting its assets.V. Recapitulation

“It seemed unthinkable for me to leave the world forever before I had produced all that I

felt called upon to produce”~ Ludwig van Beethoven ~

We find ourselves at an ending that closely resembles our beginnings. How and why do we borrow? How might we derive new creations from other’s works? What is there to learn and borrow from the process of other artists? How are shows uniquely presented to audiences in relation to other events in ways that leverage popular inclinations? So we end where we begin, that is, with a blank slate and without these answers. But we know the questions and that every instance of another’s work or idea is a color in the palette from which we create our works. All creativity is justifiably derived from some tangible experience. Master artists know this fact. It has been the intent of this article to show why it is permissible to exploit these influences and to give a legal perspective that ensures it is done with the least amount of risk, the

highest amount of integrity, and in ways that increases the likelihood of success, both creativity and financially. The law of intellectual property rights has but one ultimate goal: to encourage creation.

26 Fall 2011

I. IntroductionIn 2002, Disney released the animated movie

Lilo & Stitch, which told the story of an orphaned Hawaiian girl and a marooned alien she mistakes for a dog. Native Hawaiians were disturbed to find that the movie contained two mele inoa, traditionally used to honor King Kalākaua and Queen Lili‘uokalani, two rulers in the 19th century known for their strong national and ethnic identity and role in the Hawaiian counterrevolution.1 Mele inoa are sacred name chants that utilize a person’s name to honor them. These two mele inoa, traditionally viewed as a source of Native Hawaiian pride, were performed as a single song and renamed for the orphaned character, Lilo.2 Disney subsequently copyrighted the song for the movie’s soundtrack.3 The inaccurate and culturally insensitive presentation of these mele inoa in the movie misappropriated traditional Native Hawaiian culture and, along with growing incidences of bioprospecting, sparked Native Hawaiians to come together at the Ka ‘Aha Pono ’03: Native Hawaiian Intellectual Property Rights Conference to address the growing problem of misappropriation of traditional knowledge and culture.4

* Nina Mantilla is a 3L at American University Washington College of Law.

1. See Amy K. Stillman, History Reinterpreted in Song: The Case of the Hawaiian Counterrevolution, 23 Hawaiian J. of Hist. 1, 13 (1989) http://evols.library.manoa.hawaii.edu/bitstream/10524/346/2/JL23007.pdf (translating to mean name chants).

2. See R. Hōkūlei Lindsey, Responsibility with Accountability: the Birth of a Strategy to Protect Kanaka Maoli Traditional Knowledge, 48 How. L.J. 763, 766 (2005) (quoting a notable Hula instructor stating that Disney “has no right to sell our collective intellectual properties and traditional knowledge.”); Stillman, supra note 1, at 13 (describing and defining the types of traditional chants).

3. See U.S. Copyright No. PA0001101452 (registered July 2, 2002) (listing the title of the copyright as “He mele no Lilo,” and the owner as Walt Disney Music Company).

4. See Lindsey, supra note 2, at 766-69 (describing bioprospecting as the process by which large corporations gain exclusive rights to scientific discoveries appropriated from traditional knowledge holders, listing examples to include the transformation of the Hawaiian Genome Project into an issue of intellectual property rights, rather than the original focus on social responsibility, and the patenting of traditional knowledge by mainland biotech companies).

This Article argues that a new solution is needed to address the specific needs of Native Hawaiians, and it can be created by borrowing elements from other successful cultural trademark programs. Part II examines the development of the Native Hawaiian Intellectual Property Rights movement and also examines the current legal barriers to indigenous intellectual property protection.5 Part III argues that the common goals of self-determination in intellectual property rights between the Native Hawaiian and other indigenous peoples globally allow Native Hawaiians to borrow elements of other existing intellectual property models to find a solution to the Native Hawaiian context.6 Part III also proposes a new model of protection, the New Hawaiian model, that combines elements of the New Zealand model and the Alaska model to create a solution for protecting indigenous forms of artistic expression that is uniquely tailored to the Native Hawaiian context.7 This Comment concludes that this New Hawaiian model provides a customized solution for protection of traditional cultural expressions for Native Hawaiians, but acknowledges that the model is an incremental step in what should be a larger movement in Hawaii to protect and preserve all aspects of Native Hawaiian culture. II. Background

A. The Native Hawaiian Cultural Trademark Movement

The use of the melo inoa in Disney’s Lilo & Stitch was not the first time Native Hawaiians dealt with misappropriation of their native culture. Other examples of misappropriation included the Dodge Kahuna, a cartoonish concept car that crossed a mini-van with a surf buggy.8 In Hawaiian, a kahuna is a

5. See infra Part II (outlining the current legal context in Hawaii and the current status of indigenous intellectual property rights in the United States and globally).

6. See discussion infra Part III (analyzing current models from which Native Hawaiians can, and should, borrow from).

7. See infra Part III (describing how this new model incorporates elements that will work for the specific needs of the Native Hawaiian context).

8. See Dodge Kahuna Concept Car (2003), Car Body

by Nina Mantilla*



person who participates in religious ceremonies; Native Hawaiians found the use of the word in that way offensive.9 A recent study conducted by the Hawaii Tourism Authority found that a majority of Native Hawaiians felt the tourism industry in Hawaii is inauthentic and distorts their traditional culture.10

Commercial misappropriation of Native Hawaiian culture affects the ability of Native Hawaiian artists to make a living from their crafts.11 The combination of cultural misappropriation and unfair competition in the marketplace is what Native Hawaiians have sought to protect themselves against through adoption of the Paoakalani Declaration at the Ka ‘Aha Pono ’03 Conference.12

The Ka ‘Aha Pono ’03 Conference took place in 2003, and brought together Native Hawaiian artists, elders, individuals experienced in spiritual and ceremonial practice, and individuals skilled in traditional healing and plant knowledge, among many others.13 After Disney’s misappropriation of traditional name chants and other incidences of cultural misappropriation, Native Hawaiians began preliminary work towards a solution that would provide legal protection for their traditional cultural expressions (TCEs) and traditional knowledge by first asserting their rights over Hawaiian TCEs and

Design (May 29, 2007), http://www.carbodydesign.com/archive/2007/05/29-2003-dodge-kahuna-concept/ (advertising the car as embodying “California coastal culture,” rather than acknowledging the Hawaiian origin of the name).

9. See John Book, Name for the new model of Dodge car is offensive to Hawaiians and the Hawaiian culture, http://www.petitiononline.com/Kahuna04/ (last visited Nov. 14, 2010); see also Definition of kahuna, http://www.websters-online-dictionary.org/definitions/kahuna (last visited Jan. 3, 2011) (stating that there are more than forty types of kahunas, including healing professions, and other cultural practitioners).

10. See Herbert A. Sample, Native Hawaiians say tourism industry distorts their culture, (Feb. 15, 2010, 5:00pm), http://www.usatoday.com/travel/destinations/2010-02-15-hawaii-tourism-survey_N.htm (noting that sixty percent of the Native Hawaiians surveyed disagreed that the tourism industry “helps to preserve Native Hawaiian language and culture”).

11. See Heidi Chang, Native Hawaiians seek cultural trademark for art, Pacific Business News (Nov. 14, 2004, 12:00am HST), http://www.bizjournals.com/pacific/stories/2005/11/14/story4.html (explaining that imitators flood the market with cheaper fake versions of authentic Native Hawaiian crafts, such as native drums and leis).

12. See Ka ‘Aha Pono ‘03: Native Hawaiian Intellectual Property Rights Conference, Paoakalani Declaration 2 (Oct. 3-5, 2003), http://kaahapono.com/PaoakalaniDeclaration05.pdf [hereinafter Paoakalani Declaration] (asserting that the creative cultural expressions of Native Hawaiians are misappropriated and commercialized in violation of their rights as cultural owners).

13. See Paoakalani Declaration, supra note 12, at 1 (including non-Hawaiians experienced in indigenous intellectual property protection).

traditional knowledge.14 The Ka ‘Aha Pono ’03 Conference produced the Paoakalani Declaration as its final product.15 The Paoakalani Declaration asserted the self-determination rights of Native Hawaiians over their TCEs and advocated the creation of a sui generis system that would empower Native Hawaiians to have complete control over TCEs.16 The Hawaiian State Legislature adopted the Paoakalani Declaration, and then funded a study to determine the best legal solution to the problem.17

The Native Hawaiian Cultural Trademark Study (Study) was sponsored by the Office of Hawaiian Affairs (OHA).18 The Study found that the majority of Native Hawaiian artists surveyed favored the use of a cultural trademark program19 to protect against misappropriation and to provide public recognition of Native Hawaiian cultural arts.20

14. See World Intellectual Property Organization (WIPO) Intergovernmental Committee, Revised Draft Provisions for the Protection of Traditional Cultural Expressions/Expressions of Folklore 1, 3 (2010), http://www.wipo.int/edocs/mdocs/tk/en/wipo_grtkf_ic_17/wipo_grtkf_ic_17_4.pdf (borrowing the term “traditional cultural expressions,” or “TCEs” from the WIPO Draft Provisions, designed to be all encompassing, and include any form of traditional cultural expression, tangible or intangible).

15. See Paoakalani Declaration, supra note 12, at 2 (incorporating the statements of previously-produced unifying statements, such as the Mataatua Declaration and the Kari-Oca Declaration).

16. See id. at 3 (defining self-determination to include the right to freely determine political status and freely pursue economic, social, and cultural developments and stating that because traditional knowledge is dynamic, it cannot be adequately protected by rigid western intellectual property laws).

17. See S. Con. Res. Recognizing Native Hawaiians as Traditional, Indigenous Knowledge Holders and Recognizing their Collective Intellectual Property Rights, S. Con .Res. 167, 22nd Leg. (Haw. 2004), available at http://www.capitol.hawaii.gov/session2004/bills/SCR167_.htm (recognizing that the western intellectual property system does not address the protection of indigenous peoples’ rights to their collective traditional knowledge); Committee Minutes, Office of Hawaiian Affairs Comm. on Beneficiary Advocacy and Empowerment (Mar. 17, 2004) (on file with author) (offering financial funding to support the OHA commission to address the bioprospecting and intellectual property rights of Native Hawaiians).

18. See Native Hawaiian Cultural Trademark Study, Final Report 1, 3 (January 2007) http://hawaiiantrademarkstudy.org/Media/TrademarkStudyReport.pdf [hereinafter Study] (including collaboration on the final study from legal professionals, master artists, and academics).

19. See id. (defining a cultural trademark program as one that uses a designator or symbol, on certain products to certify their authenticity).

20. See id. at 3, 9 (determining further that a cultural trademark would distinguish authentic Native Hawaiian arts from imitations in the marketplace).

28 Fall 2011

The New Hawaiian ModelB. The Legal Context of Indigenous Intellectual

Property Rights in the United States

Intellectual property law protects copyrights, patents, and trademark. Trademark is most relevant to the Native Hawaiian context because the Study, and therefore Native Hawaiians themselves, concluded that the most effective solution for protecting and preserving Native Hawaiian TCEs is through the use of a cultural trademark.21

1. Federal StatutesThe following subsections will outline current

United States federal and state law applicable to indigenous intellectual property rights, noting potential areas in the law that might provide protection to Native Hawaiian TCEs.

a. The Lanham Act and Native American Tribal Insignia Database

The Lanham Act is the federal trademark statute.22 The purpose behind the Lanham Act is to protect goods and services used in trade, and to prevent consumer deception in the marketplace.23 The Lanham Act limits registration to marks that are to be used in commerce.24 Registration is not allowed under § 1052(a) for trademarks “which may disparage or falsely suggest a connection with persons, living or dead institutions, beliefs, or national symbols, or bring them into contempt, or disrepute[.]”25 This section seems to offer potential protection to indigenous peoples against cultural misappropriation and provides for the creation of the National American Tribal Insignia Database.26

The Native American Tribal Insignia Database is a collection of insignia that the United States Patent and Trademark Office (USPTO) refers to when determining if new trademark applications attempt to trademark the symbol of a federally or state recognized Native American tribe.27 However, the USPTO specifically

21. See id. at 3 (finding that the majority of Native Hawaiian artists surveyed over the course of a 12-month period favored the use of a cultural trademark program).

22. 15 U.S.C. §§ 1051 et seq. (2006).23. See J. Thomas McCarthy, McCarthy on Trademarks

and Unfair Competition § 2:2 (4th ed.) (expounding on the two goals behind any trademark statute).

24. See § 1051(a)(2) (stating that applications must include the date on which the applicant first used the mark in commerce).

25. § 1052(a).26. See id. (suggesting a connection with particular

institutions that is false, deceptive, or disparaging is a valid reason for rejection of a trademark application).

27. See Native American Tribal Insignia Database—FAQs, USPTO, http://www.uspto.gov/trademarks/law/tribal/index.jsp, (last visited July 31, 2010, 1:14 PM) (explaining how federally recognized tribes can submit an insignia to the database and the effect of that submission).

notes that registering an insignia does not provide any affirmative legal rights akin to those of registering a trademark; rather, the purpose of registering an insignia is merely to prevent others from registering a trademark.28

b. Lanham Act LitigationAs demonstrated by Pro-Football, Inc. v. Harjo,

the burden to bring action under § 1052(a) of the Lanham Act rests on Native Americans.29 In Pro-Football, Inc., Native Americans brought a claim under § 1052(a) to cancel six trademarks of the Washington Redskins team, alleging that the marks “may disparage” Native Americans or “bring them into contempt, or disrepute.”30 On cross-motions for summary judgment to review the decision of the Trademark Trial and Appeal Board (TTAB), the court ruled in favor of the defendants, Pro-Football.31 The holding requires Native Americans to actively monitor forthcoming trademark applications for any offensive marks, and additionally to bring a claim in a timely fashion against the offensive trademark.32

c. Indian Arts and Crafts Act In addition to the Lanham Act, the Indian Arts

and Crafts Act (IACA), enacted in 1935, is a second potential way indigenous peoples can protect TCEs.33 The IACA authorizes a federally-recognized Indian tribe to bring an action against a person who “directly or indirectly, offers or displays for sale or sells a good . . . in a manner that falsely suggests it is Indian produced[.]”34 Although the IACA has specific criteria for protection, the IACA does not have the same effect as intellectual property rights and only confers upon Native Americans a cause of action against those who

28. See id. (noting further that the USPTO does not inquire into the validity of a tribe’s insignia, and accepts the insignia as authentic so long as a federally recognized tribe submits it).

29. See Pro-Football, Inc. v. Harjo, 284 F. Supp. 2d 96, 123 (D.D.C. 2003) (stating that registrant has presumption that trademark is valid and burden shifts to contestant).

30. See id. at 99 (bringing evidence of expert testimony and survey results alleging that the term “redskin” was a derogatory, offensive reference to Native Americans).

31. See id. at 144 (focusing on the issues of evidence and timing of the claim rather than the appropriateness of Native American imagery used in team names).

32. See id. at 145 (stating that a delayed claim makes it difficult for a fact-finder to determine if trademarks are disparaging).

33. See 25 U.S.C. § 305a (2010) (declaring the function of the Act is to “promote the economic welfare of the Indian tribes . . . through the development of Indian arts and crafts and the expansion of the market for the products of Indian art and craftsmanship”).

34. See id. § 305e(a)(4)(b)-(d) (defining which parties may bring a cause of action).


Nina Mantillafalsely suggest Native Americans made their products.35 Similarly to the Lanham Act’s disparaging mark cause of action, the burden still rests on Native Americans to protect their TCEs.36

In 2000, Senate Report 452 stated that the IACA had not yet had a successful prosecution, and although a decade has passed since that statement, House Report 397, published in 2010, reported the same conclusion.37 Although many claims have been filed, none have progressed past a motion to dismiss.38 However, this may change with the filing of a recent claim in Native American Arts, Inc. v. Contract Specialties, Inc.39 Plaintiff Native American Arts, Inc. alleged that defendant Contract Specialties, Inc. violated IACA by selling goods in a manner that falsely suggested these products are authentic Indian-made goods.40 The court denied the defendant’s motion to dismiss, and the final outcome of NAA’s claim, as based on the merits, is pending.41

35. See id. (requiring that the product must be Indian-made, produced after 1935, and the producer of the Indian product must be a resident in the United States and including only civil causes of action); Protection of Products of Indian Art and Craftsmanship, 68 Fed. Reg. 35,164, 35,169 (June 12, 2003) (to be codified at 25 C.F.R. pt. 309) (defining “made by an Indian” as “that an Indian has provided the artistic or craft work labor necessary to implement an artistic design through a substantial transformation of materials to product the art or craft work”).

36. See § 305e(d) (requiring either the Attorney General, an Indian tribe, an Indian, or an Indian arts and crafts organizations to bring a claim).

37. See S. Rep. No. 106-452, at 3 (2000); see also H.R. Rep. No. 111-397, at 3 (2010) (expanding the IACA criminal actions and sanctions in response to the lack of current successful claims).

38. See H.R. Rep. No. 111-397, at 2 (estimating that although “very few cases relating to the sale of counterfeit Indian goods are investigated each year[,]” almost seventy-five percent of the merchandise sold as authentic is not).

39. See Native Am. Arts, Inc. v. Contract Specialties, Inc., 754 F. Supp. 2d 368, at 369 (D.R.I. 2010) (noting this is the first IACA case in the First District, and one of the few to survive a motion to dismiss).

40. See id. at 368 (commenting that NAA has filed between ninety and 120 claims since Congress amended the IACA in 2000, allowing Indian arts and crafts organizations to bring claims).

41. See id. at 373 (ruling that IACA did not violate the first amendment because IACA does not restrict artistic work, rather it regulates the way such art is marketed and that IACA passes rational basis review).

2. State Trademark Law and Alternative Solutions

The Alaska Silver Hand Program is a state trademark law42 which uses identification seals to certify

authentic Alaskan Native Art.43 The Alaska Silver Hand Program is only available to Native Alaskans who are part of a federally or state recognized village or tribe, and living within the state of Alaska.44 The program issues a two-year permit for the use of the identification seal, and the permit can be renewed indefinitely.45

An alternative model for intellectual property protection at the local level is the example of the Gee’s Bend Quilters of Gee’s Bend, Alabama.46 The Quilters

of Gee’s Bend found a solution for protecting their TCEs through a relationship with the Tinwood Alliance, an Atlanta-based non-profit organization dedicated to promoting vernacular art.47 Tinwood Alliance contracted with the Gee’s Bend Quilters for the intellectual property rights to all their quilts made prior to 1984, and then began displaying the quilts in museums across the country.48 A licensing program controls the rights to the quilts and has led to the use of the Gee’s Bend aesthetic in all kinds of

42. Alaska Stat. § 45.65.010(a) (West 2010).43. See tit. 3, § 58.020(a)-(b); see also Alaska State

Council on the Arts, Time Line Silver Hand Permit Program and Related Events, http://www.eed.state.ak.us/aksca/pdf/SilverHandProgramHistory.pdf (Jan. 28, 2010) [hereinafter Time Line Silver Hand] (tracking the history of the program, beginning around 1972, with the first uses of the Silver Hand trademark).

44. See § 45.65.010(a) (stating that only those who meet these requirements may affix the identification seal to original Alaska Native art or handicrafts).

45. See tit. 3, § 58.020(d) (placing no explicit limit on the number of times a permit may be renewed).

46. See generally Victoria F. Phillips, Commodification, Intellectual Property and the Quilters of Gee’s Bend, 15 Am. U. J. Gender Soc. Pol’y & L. 359 (2007) (arguing that the story of the Gee’s Bend quilters can contribute to current debates regarding commodification and intellectual property laws).

47. See id. at 365-66 (recounting that the partnership was spearheaded by the owner of Tinwood Alliance, William Arnett, after he was fascinated by the quilts from a photo in a book).

48. See id. at 366 (telling how the success of the quilts in museum exhibitions sparked spin-off projects based on the quilts including music, documentary films, and books).

30 Fall 2011

The New Hawaiian Modelhomewares.49 With the help of Tinwood Alliance, the Quilters of Gee’s Bend have formed a collective that is owned, operated and run by the Gee’s Bend women.50 In addition to helping the Quilters form a collective to produce the quilts, Tinwood Alliance pays a royalty to the community of Gee’s Bend on all licensed uses for the quilts made before 1984.51

C. The Legal Context in Hawaii

The following subsections outline the current legal context of Hawaiian state law with respect to Indigenous intellectual property rights, as well as attempts by Hawaiians to change federal law with respect to such rights.

1. Recent Case LawCurrently, Hawaiian state law does not offer much

protection to Native Hawaiians. In fact, recent case law suggests the opposite.52 In Reece v. Island Treasures Art Gallery, Inc., a non-native photographer brought a copyright infringement case against a Native Hawaiian artist.53 Reece was a professional photographer who

49. See id. at 367 (listing products based on the quilts, and approved through licenses, including bedding, pillows, and pet-proof rugs).

50. See id. at 368 (noting that the Gee’s Bend collective serves as the only source of the quilts currently made by the women).

51. See id. at 366 (explaining that Tinwood Ventures purchased the rights to all quilts made prior to 1984).

52. See Reece v. Island Treasures Art Gallery, Inc. 468 F. Supp. 2d 1197 (D.Haw. 2006) (ruling on narrow issues of copyright infringement rather than addressing misappropriation of a Native Hawaiian cultural art).

53. See id.; Danielle M. Conway, Indigenizing Intellectual Property Law: Customary Law, Legal Pluralism, and the Protection of Indigenous Peoples’ Rights, Identity, and Resources, 15 Tex. Wesleyan

had taken a famous photograph entitled “Makanani,” which was an image of a hula dancer kneeling on a beach in a traditional pose.54 Reece first published the image in 1988 as a poster and then broadened the image’s distribution, including use on greeting cards and as picture frame inserts in Wal-Mart and Kmart stores.55 Reece brought a copyright action against the native artist who created the allegedly infringing stained glass artwork “Nohe” as well as the art gallery displaying the work.56 The sacred nature of hula in Native Hawaiian culture is best demonstrated by the expert testimony presented at trial, in which Mapauna De Silva stated, “[h]ula is not just the images, the motions, and the feet. It is the whole culture – the

people, the places, stories, and names given to all those things[.]”57 The court failed to recognize that the

L. Rev. 207, 245 (2009) (proposing that the Native Hawaiian context demonstrates that legal pluralism is needed to protect traditional culture).

54. See Reece, 468 F. Supp. 2d at 1200 (depicting a hula dancer performing the hula kahiko tradition, an ancient style of hula in which all the movements are standard).

55. See id. at 1200, 1204 (citing the widespread visibility of the photograph as evidence that the defendant had reasonable opportunity to view it, an important factor in determining copyright infringement).

56. See id. at 1200 (describing the work as a stained glass depiction, containing over 200 pieces of glass, including a far greater variety in color than Reece’s sepia tone photograph).

57. See Decl. of Mapuana De Silva at ¶¶ 15, 20, 27, Reece v. Island Treasures Art Gallery, Inc., 468 F. Supp. 2d 1197 (D.Hawai`i 2006) (No. 06CV00489), 2007 WL 6344621 (remarking that not only is it impossible to have a hula “pose” because of the fluid nature of hula movements, but that it is repugnant to suggest that an individual can claim ownership over a hula movement).

Photograph entitled “Makanani” by Kim Taylor Reece, showing a traditional hula pose.

Stained-glass portrait in dispute in Reece v. Island Treasures Art Gallery. Created by Marylee Leialoha

Colucci.


Nina Mantillacultural art of hula belongs to Native Hawaiians or recognize that no other judicial remedies are available to Native Hawaiians to protect their cultural art; rather, the court ruled on the narrow issue of protectable elements within the photograph.58

2. Proposed Legislation: The Akaka BillThe low-level of protection currently available to

Native Hawaiians for TCEs is largely because Native Hawaiians do not qualify for federal tribal recognition, and therefore do not have access to the same programs that Native Americans do.59 Daniel K. Akaka, United States Senator for Hawaii, introduced the Native Hawaiian Government Reorganization Act in 2009, often referred to as the Akaka bill, which never made it out of the Senate in the last congressional session.60 The Act would have allowed Native Hawaiians the same federally-recognized tribal status as Native Americans.61 Despite wide support, the bill faced opposition in the Senate.62 The Akaka bill was reintroduced on March 30, 2011, as was a companion bill in the House of Representatives.63 This session of Congress has been

58. See Reece, 468 F. Supp. 2d at 1207 (ruling that protectable elements of the photograph included lighting, camera angle, and perspective, and that when these elements are isolated it is clear that the “Nohe” stained glass artwork did not infringe on Reece’s copyright); see also Conway, supra note 53, at 245 (pointing out that the court “could have provided a more meaningful analysis of the copyright infringement dispute launched by a non-Native Hawaiian copyright holder against a Native Hawaiian artist who herself was raised and trained in the cultural art of hula, a traditional dance that . . . communicates the identity of Native Hawaiians.”).

59. See Study, supra note 18, at 33 (noting that federal law requires a native group to be “continuously organized and governed under a quasi-sovereign entity” in order to be recognized as a tribal entity).

60. See Native Hawaiian Government Reorganization Act, H.R. 2314, S. 1011, 111th Cong. (2010) (placing the bill on the Senate calendar for this session); see also Daniel Kahikina Akaka, U.S. Senator of Hawaii: Native Hawaiian Federal Recognition, http://akaka.senate.gov/issue-native-hawaiian-federal-recognition.cfm [hereinafter Akaka, 111th Congressional Session] (last visited Jan. 25, 2011) (detailing the purpose, content, and status of the bill).

61. See Akaka, 111th Congressional Session, supra note 60 (correcting false accusations by assuring that the bill would not allow Native Hawaiians to secede from the United States, allow private lands to be taken, or authorize gaming in Hawaii).

62. See Akaka Speaks on Senate Floor, Reaffirming his Commitment to the Native Hawaiian Government Reorganization Act, http://akaka.senate.gov/pressreleases.cfm?method=releases.view&id=717cdf0e-c354-4019-a1d4-d223c7f5e747 (Dec. 22, 2010) (stating that the bill is supported by Indigenous leaders and communities across the United States, including American Indians, Native Alaskans, and the American Bar Association, which has written a statement affirming the Constitutional basis for the bill).

63. Daniel Kahikina Akaka, U.S. Senator of Hawaii: Native Hawaiian Federal Recognition, http://akaka.senate.gov/issue-native-hawaiian-federal-recognition.cfm [hereinafter Akaka, 112th Congressional Session] (last visited Oct. 16, 2011).

more favorable to the bill and on April 7, 2011, the Akaka bill was ordered to be reported out of the Senate Committee on Indian Affairs, favorably and without amendment; however, the Senate must still vote on the bill.64

D. The Current Legal Context of Indigenous Intellectual Property Rights Globally

There is a wide array of international models for establishing indigenous intellectual property rights. However, when considering the Native Hawaiian context, it is best to draw upon sui generis models.65 Models that attempt to protect TCEs within existing intellectual property regimes are inappropriate for several reasons.66 Existing intellectual property protection, particularly trademark law, is designed to protect the sign or symbol as it interacts with the marketplace.67 This presents two problems for indigenous expressions. First, protecting a sign or symbol does not address that often with TCEs, the underlying knowledge or cultural values are in need of protection.68 Second, traditional cultural expressions are either forced into the category of signs and symbols used in commerce, or faced with non-protection.69 For the foregoing reasons, the following sui generis models provide the best answers to borrow or learn from for the Native Hawaiian context.

64. Id.65. See generally Legislative Texts on the Protection of

Traditional Cultural Expressions, World Intellectual Property Organization (WIPO) (Jan. 3, 2011), http://www.wipo.int/tk/en/laws/folklore.html (defining sui generis as “special laws and measures which specifically address the protection of traditional cultural expressions/expressions of folklore” as opposed to working protection into existing laws).

66. See Danielle Conway-Jones, Safeguarding Hawaiian Traditional Knowledge and Cultural Heritage: Supporting the Right to Self-Determination and Preventing the Commodification of Culture 48 How. L.J. 737, 739 (2005) (asserting that Native Hawaiians will not benefit from intellectual property laws that promote the commodification of culture).

67. See Susy Frankel, Trademarks and traditional knowledge and cultural intellectual property, in Trademark Law and Theory 433, 445 (Graeme B. Dinwoodie & Mark D. Janis eds., 2008) (pointing out the TRIPS Agreement requires that trademarks must be “capable of distinguishing the goods or services of one undertaking from those other undertakings[,]” and further noting other inherent goals of trademark law include enhancing competition and reducing consumer search costs).

68. See id. at 445 (arguing that it is only a inadvertent side-effect of the symbol protection that the underlying cultural values are protected from misrepresentation by third parties).

69. See id. (additionally noting that the use of a trademark in commerce must often be maintained or the trademark owner will lose the registration for non-use of the symbol).

32 Fall 2011

The New Hawaiian Model1. The SPC Framework and Guidelines

The Secretariat of the Pacific Community (SPC) published Guidelines (SPC Guidelines) and a Framework (SPC Framework) in 2002 to assist Pacific Island countries and territories seeking to establish legal protection for TCEs.70 The SPC Guidelines provide a step-by-step guide for any group seeking intellectual property protection by posing both policy and legal questions for consideration.71 The SPC Framework provides a model law for protection of traditional knowledge and expressions of culture that countries can adopt or from which they can borrow when creating their own protection regime.72 The SPC Guidelines and SPC Framework are tailored for small island countries and territories with relatively homogenous traditional cultures.73

2. The Panama Model Another example of a sui generis law from which

Native Hawaiians can borrow is Panama Law No. 20, enacted in 2000, and corresponding Executive Decree No. 12, enacted in 2001 (Panama model).74 The Panama model stands out from other sui generis models because it focuses exclusively on protection of TCEs that are capable of commercial use.75

70. See Regional Framework for the Protection of Traditional Knowledge and Expressions of Culture, Secretariat of the Pacific Community Background Page (2002), http://www.wipo.int/export/sites/www/tk/en/laws/pdf/spc_framework.pdf [hereinafter SPC Framework] (collaborating to create the framework with the United Nations Educational, Scientific and Cultural Organization (UNESCO), Forum Pacific Island member countries and territories, and the Council of Pacific Arts).

71. See Guidelines for developing national legislation for the protection of traditional knowledge and expressions of culture based on the Pacific Model Law 2002, Secretariat of the Pacific Community 14 (2006), http://www.wipo.int/wipolex/en/details.jsp?id=6712 [hereinafter SPC Guidelines] (listing questions to consider including: what the subject matter of protection should be, who the beneficiaries of such protection are, how should rights be formalized and managed, and what processes should be used for dispute resolution).

72. See SPC Framework, supra note 70, at background page (recognizing that the model law is merely a starting point from which countries should customize elements in accordance with their own experiences, and further, that the model law is meant to provide only national protection).

73. See id. (explicitly stating that the SPC Framework and Guidelines were developed to assist Pacific Island countries and territories).

74. See Act No. 20, Gaceta Oficial, June 26, 2000, http://www.wipo.int/wipolex/en/details.jsp?id=3400 (naming the act the Special System for the Collective Intellectual Property Rights of Indigenous Peoples); Executive Decree No. 12, Ministry of Trade and Industries, Mar. 20, 2001, http://www.wipo.int/wipolex/en/details.jsp?id=3397 (regulating Act No. 20 of Jun. 26, 2000).

75. See Act No. 20 at art. 1 (planning to protect TCEs suitable for commercial use via a registration system designed to

3. The New Zealand Toi Iho ProgramThe toi iho cultural trademark program of New

Zealand has become a model for many other countries seeking indigenous intellectual property protection.76 The toi iho program uses trademarks to certify artwork that is of high quality and expresses traditional Mäori culture.77 The program has the support of well-known Mäori master artists, and their public support of the program, as well as their knowledge of Mäori art, is crucial in setting The toi iho program’s high standards of quality.78 III. Analysis

Ideas from existing models for protecting indigenous intellectual property rights should be borrowed in a way that creates a tailor-made solution that addresses the unique needs of Native Hawaiians. The demands of Native Hawaiians for self-determination in intellectual property rights are similar to those echoed throughout the world by other indigenous peoples.79 Because they share numerous goals with other indigenous groups fighting for intellectual property rights, Native Hawaiians should borrow from these other models.80

promote and market the TCEs); see also Comparative Table on Sui Generis Laws on Traditional Cultural Expressions/Expressions of Folklore, World Intellectual Property Organization (WIPO) 3 (Jan. 3, 2011), http://www.wipo.int/export/sites/www/tk/en/laws/pdf/suigeneris_folklore.pdf [hereinafter WIPO Comparative Table].

76. See Study, supra note 18, at 30 (describing the Mäori Toi Iho program as the best model for a Native Hawaiian cultural trademark program).

77. See Te Puia—Treasuring Mäori Arts and Crafts, NewZealand.com (last visited Oct. 30, 2011), http://www.newzealand.com/travel/media/features/maori-culture/maori-culture_te-puia-maori-arts-crafts_feature.cfm (establishing that the trademark is used to “promote and sell authentic, quality Mäori arts and crafts” as well as to “authenticate exhibitions and performances of Mäori arts”).

78. See Study, supra note 18, at 28-29 (arguing that participation of these master artists was crucial to obtain national and Mäori “buy-in” for the program).

79. See Paoakalani Declaration, supra note 12, at 2 (supporting the statements made in the Kari-Oca Declaration, Indigenous Peoples’ Earth Charter, and Mataatua Declaration on Cultural and Intellectual Property Rights of Indigenous Peoples, among others).

80. See Study, supra note 18, at 26-33 (analyzing existing solutions to determine which are most relevant to the Native Hawaiian context); see also Mataatua Declaration on Cultural and Intellectual Property Rights of Indigenous Peoples, First International Conference on the Cultural & Intellectual Property Regimes of Indigenous Peoples 2 (June 12-18, 1993), available at http://www.wipo.int/tk/en/databases/creative_heritage/indigenous/link0002.html (stating that indigenous peoples of the world have a “commonality of experiences relating to the exploitation of their cultural and intellectual property” and the right to self-determination and exclusive ownership of their TCEs).


Nina MantillaIn addition to sharing goals with indigenous

peoples internationally, Native Hawaiians also share goals with Native Americans in the United States, and should borrow from the intellectual property protection given to Native Americans.81 Native Hawaiians and Native Americans share the identical goal of safeguarding their culture and communities through preserving and protecting their TCEs, and therefore Native Hawaiians can gain much by borrowing from the current solutions proposed for the Native American context.82

There is no one-size-fits-all solution to protecting indigenous intellectual property rights. However, the shared goals of self-determination and protection of traditional culture necessitates that Native Hawaiians borrow from existing models, both within and outside of the United States, to create a new model that works specifically for the Hawaiian context.

A. Current International Solutions Do Not Address the Specific Needs of the Native Hawaiian Context

Examining current sui generis models that other countries have enacted provides strategies and ideas that Native Hawaiians should apply to their situation. However, as demonstrated by the following subsections, none of the current international solutions should be applied without some modifications to the Native Hawaiian context.83

1. The SPC Framework Will Only Work in Smaller, Non-Diverse Populations Where a Coherent Cultural Community Exists

The SPC Framework allows for flexibility in legal ownership by providing for individual or communal ownership of TCEs, and looks to the group or clan’s customary law and practices to determine who is entrusted with these ownership rights.84 The SPC Framework creates a new set of “traditional cultural rights,” giving traditional owners control over the uses

81. See S. Rep. No. 106-452, at *2 (2000) (describing the TCEs of Native Americans as “an extension of their heart and soul,” expressing a spiritual, intangible nature to these TCEs, echoing the way Native Hawaiians describe their TCEs).

82. See id. at *1-2 (reporting that of the more than $1 billion in revenue for Indian-made goods, $400-500 million of the demand is being met by inauthentic and imitation products, demonstrating the detrimental financial effects of inauthentic goods).

83. See generally Legislative Texts on the Protection of Traditional Cultural Expressions (TCEs), supra note 65 (listing a full and comparative list of sui generis laws).

84. See SPC Framework, supra note 70, at 4 (noting further that “the customary use of traditional knowledge or expressions of culture does not give rise to civil or criminal liability”).

of traditional knowledge or expressions of culture.85 It offers an incredibly high level of legal protection for TCEs by creating rights that last indefinitely and by requiring prior informed consent from the traditional owners before third-party use is permitted.86 Unfortunately, the SPC Framework is only able to offer such high levels of protection in exchange for relatively little flexibility as to the type of community to which the rights can apply.87 Therefore, it is likely to work only in the smaller island nations for which it was initially developed, where traditional owners are more easily identified and a more coherent cultural community exists.88

2. The Panama Model’s Market-Driven Focus and Restriction to Communal Ownership Does Not Provide Enough Flexibility for The Native Hawaiian Context

The Panama model provides another example of sui generis protection that could be useful to Native Hawaiians.89 It aims to offer protection of TCEs that are capable of commercial use by implementing a system to register, promote, and market the rights.90 This distinct emphasis on the ability of the TCEs to be capable of commercial use differentiates the Panama model from other models.91 However, the market-focused nature of the Panama model does not provide protection to those TCEs which are not meant, or which the artists do not want, to be

85. See id. at 5 (defining traditional cultural rights as exclusive control over publishing, reproducing, performing or displaying, recording, photographing, or translating any traditional knowledge or expressions of culture).

86. See id. at 6-8 (explaining that a prospective user must either get prior and informed consent from traditional owner or ask the Cultural Authority, which utilizes a public application process in which traditional owners are given an opportunity to object to third-party use).

87. See SPC Guidelines, supra note 71, at 1-2 (acknowledging that the Guidelines are based on the needs of Pacific Island communities, and that other countries may have different ideological standpoints and cultural assumptions).

88. See Study, supra note 18, at 26 (arguing that the more intact a cultural community has remained, the more likely the SPC Framework will work, unlike communities that have become diverse through colonization and democratic rule such as Hawaii).

89. See Act 20, Gaceta Oficial (Jun. 26, 2000), available at http://www.wipo.int/wipolex/en/details.jsp?id=3400; Executive Decree No. 12, Ministry of Trade and Industries (Mar. 20, 2001), available at http://www.wipo.int/wipolex/en/details.jsp?id=3397.

90. See Act 20 at art. 1 (stating that this registration and promotion system aims to guarantee social justice for indigenous cultures).

91. See WIPO Comparative Table, supra note 75, at 5-7 (listing the additional requirements of the Panama model: must be based upon tradition, must fit within the classification system established by Article 3 of the Decree, and must be “collective”).

34 Fall 2011

The New Hawaiian Modelused in commerce, as is often the case among Native Hawaiians.92 The Panama model confers rights similar to other models: the right of exclusion, the right to use in commercialization and reproduction, and the right to prevent third-party usage.93 However, the Panama model lacks flexibility in ownership of the rights by only allowing for collective ownership, ruling out protection for individual artists.94 Allowing only for communal ownership does not provide the flexibility that individual artists seeking protection for their TCEs need, as is the case in Hawaii.95 The Panama model, in which the collective indigenous community functions as if it were a single owner, does not offer protection to smaller collectives of artists or individual artists.96

B. Current National Solutions Fail to Offer Ideas to Native Hawaiians

The potential legal solutions present seemingly promising solutions to Native Hawaiians in their pursuit of TCE protection. Unfortunately, none of these federal programs are available to Native Hawaiians because Native Hawaiians do not qualify as a federally recognized tribe.97 Native Hawaiians are not listed under the 564 tribal entities that are federally recognized and eligible to receive funding and services from the Bureau of Indian Affairs.98 The Akaka bill seeks to address this inequality; however, even if the Akaka bill passes, none of the federally-funded options provide workable solutions for the Native

92. See Decl. of Mapuana De Silva at ¶¶ 18, 19 Reece v. Island Treasures Art Gallery, Inc., 468 F. Supp. 2d 1197 (D.Hawai`i 2006) (No. 06CV00489), 2007 WL 6344621 (remarking that hula is not meant to be recorded or photographed for teaching purposes, that hula is meant to be passed down orally).

93. See Act 20 at arts. 2, 15, 20 (explaining that the authority to grant third-party usage rests exclusively with the indigenous peoples).

94. See Executive Decree No. 12 at arts. 5-6 (making no mention of the potential for individual as well as communal ownership).

95. See Study, supra note 18, at 12-16 (surveying individual artists about their intellectual property needs).

96. See Act 20 at art. 16 (explaining that general congresses, or traditional authorities, of a community are treated as the owner of the rights and the congress creates rules as a single unit regarding regulation of the rights).

97. See Study, supra note 18, at 33 (explaining that, unlike other states, which can recognize state tribes, Hawaii does not have state tribal recognition powers, because it is not within the continental United States).

98. See Indian Entities Recognized and Eligible To Receive Services From the United States Bureau of Indian Affairs, 75 Fed. Reg. 60,810 (Oct. 1, 2010), available at http://www.bia.gov/idc/groups/xraca/documents/text/idc011463.pdf (listing a separate section that includes native entities within the state of Alaska eligible to receive services from the U.S. Bureau of Indian Affairs).

Hawaiian context.99 Rather, it is the state trademark program from Alaska which offers the best example of indigenous intellectual property rights protection to Native Hawaii.100 United States federal law, including the Lanham Act, the Native American Insignia Database, and the IACA, will not work for the Native Hawaiian context.

1. Current Federal Statutes and Programs Place Too Much of a Burden on the Indigenous Population to Protect Traditional Cultural Expressions

The following subsections identify the shortcomings in current federal statutes and programs for protecting TCEs, concluding that current United States federal law places too high a burden on Indigenous populations to protect their own TCEs.

a. The Lanham Act is Inadequate Because Its Commercial Focus Does Not Address the Specific Needs of Native Hawaiians

The Lanham Act requires that a trademark be used in commerce to qualify for registration.101 Emphasizing only commercial use of a trademark does not address the Native Hawaiian’s desire to have a specifically cultural trademark, with a dual focus of protecting TCEs in commerce and also preserving traditional Native Hawaiian culture.102 Additionally, the Lanham Act provides no answer to the issue of communal ownership.103 Further, the Act places a heavy burden on Native Americans to defend their TCEs, which is demonstrated by the real-world operation of both the Native American Tribal Insignia Database and section 1052(a), the disparaging mark section, of the Lanham Act.104

99. See Study, supra note 18, at 17 (pointing out the problems that Native American have had with over-reliance on federal government programs).

100. See Alaska Admin. Code tit. 3, § 58.020 (2010) (outlining the basic components of the Alaska Silver Hand program under state trademark law).

101. See 15 U.S.C § 1051(a)(2) (2010) (requiring the applicant include the date of first use of the mark in commerce and the goods in connection with which the mark is used, in addition to a drawing of the mark).

102. See Study, supra note 18, at 9 (expressing that a cultural trademark program would provide public recognition of master Native Hawaiian artists and therefore preserve cultural traditions by encouraging teaching and mentoring of new generations of Native Hawaiian artists).

103. See § 1051(a) (referring only to applicants in terms of a singular “person” or “owner” of the trademark).

104. See Native American Tribal Insignia Database—FAQs, supra note 27 (requiring that Native Americans arrange to have their insignia submitted to the database).


Nina Mantillai. The Native American Tribal Insignia

Database is Insufficient Because the Da-tabase Confers No Legal Rights Akin to Intellectual Property Rights

The Native American Tribal Insignia Database is a passive stance to protection of indigenous culture on the part of the federal government. First, the Native American Tribal Insignia Database places the burden for protection on Native Americans by requiring Native Americans to register their tribal insignia with the government.105 Second and more importantly, the Database confers no legal rights to the registration of an insignia.106 It explicitly states that registration does not provide any positive legal rights, such as the right to bring an infringement claim or to exclusive use of the insignia, as would be the rights under a trademark registration.107

ii. The IACA is Inadequate to Address the Needs of Native Hawaiians Because it Only Creates a False Attribution Cause of Action that Native Hawaiians Do Not Qualify to Use

The IACA is not applicable to Native Hawaiians, but would also not be a good source from which to borrow concepts for protecting TCEs because the IACA only addresses inauthentic marketing of goods claiming to be Indian-made. It attempts to address a hole in the Lanham Act for Native Americans’ ability to protect their TCEs by offering a cause of action for false attribution.108 However, the right to bring a false attribution claim only gives a cause of action against people who falsely attribute their work to a source, and does not grant separate affirmative rights to the TCE in question.109 In contrast, intellectual property law offers the right to exclusive use and the right to bring a claim for infringement, which the

105. See id. (listing the following requirements to registration: a written request, depiction of the insignia at or near the center of 8.5x11 paper, the name and address of the tribe for correspondence purposes, a copy of the tribal resolution adopting the depiction as the official insignia, and a signed statement by an official with authority to bind the tribe).

106. See id. (stating explicitly the database is merely a tool to aid the USPTO examiners in evaluating new trademark applications).

107. Compare id. (stating that registration with database does not confer any positive legal rights), with 15 U.S.C. §1114 (2010) (listing the private causes of action available to an owner of a registered trademark against third-party infringement, as well as available remedies).

108. See 25 U.S.C. § 305e (2010) (explaining what parties may bring a cause of action, the availability and limits on damages, and what a party must establish to prevail in a cause of action).

109. See § 305e (granting no affirmative rights to contesting parties).

IACA does not.110 The IACA does not stop a third party from copying the design of a Native American and then selling it, so long as it is not labeled in any way that would indicate that it is “Indian-made.”111 In addition to not addressing the limited rights the IACA confers on Native Americans, it also does not address the main concern of Senate Report 452: mass-productions of Indian-imitation products undercutting the legitimate, authentic Indian-made market.112 The IACA is only a regulation on the labeling of products, an issue often brought up in the IACA suits.113 The complete absence of any successful prosecutions under IACA demonstrates that the legislation has been an unsuccessful solution for Native Americans, and therefore not a solution from which Native Hawaiians should borrow.114 The recent case of Native American Arts, Inc. v. Contract Specialties, Inc., may offer some new potential for Native Americans implementing the IACA to protect their TCEs, but the limited rights and singular cause of action available under the IACA will not meet the needs of Native Hawaiians.115

b. The Lanham Act Litigation Demonstrates That the Indigenous Populations Have Not Been Able to Use the Disparaging Mark Cause of Action as a Means to Protect Traditional Cultural Expressions

Although the text of section 1052(a) of the Lanham Act seems to offer promise to indigenous peoples, the way courts have applied the section as seen in Pro-Football, Inc., operates as a kind of passive aid on the part of the federal government.116 In Pro-

110. Compare 15 U.S.C. §1114 (2010) (listing causes of action available to an owner of a registered trademark against third-party infringement), with § 305e(b) (allowing only an action to be brought against a person who sells a product and “falsely suggests it is Indian produced”).

111. See § 305e(b) (listing no other available causes of actions).

112. See S. Rep. No. 106-452, at *2 (2000) (arguing that mass-production of imitation arts and crafts at a fraction of the cost has required traditional Indian artists to either reduce their prices and profit margin, or retire).

113. See Native American Arts, Inc. v. Contract Specialties, Inc., 754 F. Supp. 2d 386, at 388 (D. Rhode Island 2010) (describing the IACA as a truth-in-advertising statute aimed at preventing counterfeit products).

114. See S. Rep. No. 106-452, at *3 (stating there has never been a successful civil or criminal suit under the IACA); see also H.R. Rep. No. 111-397, at 1 (2010) (describing that the continually low amount of cases actually investigated under IACA prompted Congress to implement amendments to the Act).

115. See Native American Arts, Inc., 754 F. Supp. 2d, at 387 (denying defendant’s motion to dismiss, allowing case to proceed forward on the merits).

116. See Pro-Football, Inc. v. Harjo 284 F. Supp. 2d 96, 99 (D.C. 2003) (avoiding the public policy implications of the case

36 Fall 2011

The New Hawaiian ModelFootball, Inc., the defendant Native Americans lost on cross-motions for summary judgment for two reasons.117 First, the court questioned whether the aggregate number of Native Americans would find the Washington Redskins’ trademarks offensive or disparaging.118 The court reasoned that although the term “redskins” is a derogatory term to refer to Native Americans, that mere use of the word by a professional football team in various trademarks does not mean that the trademarks are offensive.119 The court’s logic separates the everyday use of a disparaging word from the use of the same disparaging word in a registered trademark, even though the latter would seem to be more offensive since registration is an implicit endorsement of the disparaging word by the federal government.120

The second reason the Native Americans lost the motion for summary judgment was because of the doctrine of laches, the delayed bringing of a claim.121 The court incorrectly infers that because Native Americans did not bring a claim when the marks were first registered in the 1960s, Native Americans must not have been truly offended by the trademarks, ignoring that perhaps Native Americans lacked the legal and financial resources to bring such claims.122 This ruling suggests that even if a mark is deemed offensive or disparaging, a court will not order cancellation of the trademarks if the claim is brought several years after the mark is used in commerce.123 The court’s emphasis on

and focusing on the narrow issue of reviewing the TTAB’s decision and the laches defense).

117. See id. at 145 (stating that although this is “undoubtedly a ‘test case’ that seeks to use federal trademark litigation to obtain social goals. . . . By waiting so long to exercise their rights, Defendants make it difficult for any fact-finder to affirmatively state that in 1967 the trademarks were disparaging.”).

118. See id. at 121, 122 (pointing to the fact that the survey on which TTAB based its opinion used surveyed only twelve states and this could not be representative of the majority opinion of Native Americans).

119. See id. at 133 (deciding that the derogatory connotation of the word does not extend to the use of the term “redskins” in connection with Pro-Football’s entertainment services).

120. See id. at 124 (explaining the meaning of the word “disparaging” takes the ordinary meaning, which is that the mark may “dishonor by comparison with what is inferior, slight, deprecate, degrade, or affect or injure by unjust comparison”).

121. See id. at 140 (pointing out that plaintiffs had known about the Redskins trademarks for at least a decade each and had not brought a claim in a timely fashion); see also id. at 136 (stating that in trademark, a laches defense is used to argue that the plaintiff “fumbled away its trademark rights through inattention”).

122. See id. at 140 (stating that the court’s finding of laches correlates with the court’s findings that the TTAB’s decision did not meet evidentiary standards).

123. See id. at 139 (reasoning that it would be both inequitable and undermine the place of trademark in the free market economy to allow Pro-Football’s trademarks to be subject to

timing of a claim requires Native Americans to monitor forthcoming applications to ensure that offensive or disparaging marks are not registered.124 Overall, the burden the Lanham Act places on indigenous peoples to bring a claim is too high for such people to successfully pursue a claim.

c. The Gee’s Bend Solution is a Small-Scale Solution Entirely Dependent on Private Funding and Will Not Work for the Large and Diverse Native Hawaiian Population

The Gee’s Bend Quilters solution demonstrates how a tailor-made program for protection of TCEs, specific to the needs of the group involved, works well, although it is an inappropriate model for Native Hawaiians.125 The success of the Gee’s Bend solution is dependent on the fact that a private actor had both a genuine interest in promoting the quilters’ cultural arts and the financial ability to do so.126 The solution works in a very small-scale, close-knit community, and depends entirely on private funding.127 This small-scale, privately-funded solution is not a realistic possibility for an entire population of native peoples, such as Native Hawaii, encompassing numerous art forms and numerous island communities.128

Native Hawaiians should not borrow from the currently available national solutions because they are either not narrowly tailored enough to the address the needs of Native Hawaiians, or Native Hawaiians do not have legal access to the solutions.

attack at any point after registration).124. See id. at 122 (demonstrating that the burden of proving

that a mark is disparaging rests on the party seeking cancellation).125. See Phillips, supra note 46, at 376 (noting how the

partnership with Tinwood Alliance has allowed an ongoing dialogue of the needs of the quilters and their community).

126. See id. at 365-66 (describing the relationship between the well-connected art scholar, William Arnett, and the Gee’s Bend Quilters as collaborative in nature, and based on Arnett’s genuine desire to promote the quilts as forms of artistic expression, rather than exploit the quilts through cheap imitations).

127. See id. at 359, 370 (explaining how the profits of the Tinwood Ventures licensing activities are reinvested in the Gee’s Bend Community, a remote bend on the Alabama River).

128. See Study, supra note 18, at 26 (describing the Native Hawaiian community as diverse and spread out over the islands of Hawaii, requiring a solution with more flexibility).


Nina MantillaC. The Toi Iho Program in New Zealand and

the Alaska Silver Hand Program Contain Elements that Best Address the Unique Needs of Native Hawaiians Seeking a Cultural Trademark Program

The following subsections identify workable elements from The toi iho program of New Zealand and the Alaska Silver Hand Program that would be beneficial to the Native Hawaiian context.

1. The Toi Iho Program in New Zealand is the Best International Model for Native Hawaiians to Borrow From for Their Own Model

Native Hawaiians should borrow heavily from New Zealand’s toi iho program because The toi iho program allows for indigenous self-determination, flexible ownership options, and art standards based on quality of art rather than ethnicity of the artist.129 The program sets itself apart from other models through its emphasis on a high-level quality of artwork.130 The two goals articulated by the program are to “maintain the integrity of the Mäori art culture” and “promote Mäori art and artists nationally and internationally.”131 The dual goals of the Mäori program protect all forms of traditional cultural expression by protecting those forms of art that enter the marketplace, as well as preserving those forms of art that are not meant for commercial uses.132 The program is able to maintain its high standards of quality by requiring artists to register annually to continue to use The toi iho trademark.133

There are three main reasons The toi iho program

129. See The Arts Council of New Zealand Toi Aotearoa, Rules Governing the use by artists of The Toi Iho Mäori Made Mark, 1 (Nov. 4, 2009), http://www.toiiho.com/Apply/Rules/tabid/273/Default.aspx [hereinafter Mäori Made Rules] (describing the fundamentals of The toi iho program). But see Toi Iho (Nov. 14, 2011), http://toiiho.blogspot.com/ (The New Zealand government divested funding of the toi iho program in 2009 and the program is currently in a state of transition to a new, Mäori-controlled entity: TIKI- Toi iho Kaitiaki Incorporated Trust. TIKI is currently rebuilding the database of Mäori artists and expects to have an update website in the near future.).

130. See Study, supra note 18, at 29 (comparing The toi iho program to less successful models in which certification is based on ethnicity of the artist).

131. Mäori Made Rules, supra note 129, at 1 (administering these two goals will include the maintenance of a registry of artists currently using any toi iho marks); see also Rules Governing the Use By Artists of The toi iho Mainly Mäori Mark, The Arts Council of New Zealand Toi Aotearoa (Nov. 4, 2009), http://www.toiiho.com/Apply/Rules/tabid/273/Default.aspx.

132. See Mäori Made Rules, supra note 129, at 2 (protecting artwork in electronic form or other media, as well as performance art in either live, electronic form, or other media).

133. See id. at 1 (requiring that the artist(s) continue to create quality works of authentic Mäori expression).

has achieved greater success than other models and should be used as a guide for the Native Hawaiian context. First, the program is based on the right of indigenous peoples’ to self-determination.134 The rules of The toi iho program name the Te Waka Toi as the guardians of the marks, and that this indigenous council will administer the rules of the program.135 The implementation and administration of The toi iho program acknowledges that indigenous peoples often need government funding to get such a program started, but also that indigenous people have the right to run the program autonomously in accordance with their cultural traditions.136

The second reason for the success of The toi iho program is the program’s focus on the quality of artwork it certifies, rather than the ethnicity of the artist.137 The focus on quality rather than ethnicity keeps the mark from becoming diluted through usage on common or low-quality products and prevents the “potentially divisive system of registering persons as being of Mäori descent or blood quantum.”138

Finally, The toi iho program’s flexibility addresses the modern reality that artists often collaborate and create art in collective form.139 The toi iho program contains three different trademarks to ensure flexibility in ownership: Mäori Made, Mainly Mäori, and Mäori Co-Production.140 The variety of cultural trademarks available to artists acknowledges that Mäori artists may collaborate with non-Mäoris and still create works of authentic Mäori expression, thereby allowing

134. See id. (stating that the indigenous peoples are the guardians of the trademarks and responsible for administration of the rules and the program).

135. See id.; see generally The Arts Council of New Zealand Toi Aotearoa Act 1994 No 19 §§ 13, 14(1)(e)-(i) (2009) http://www.legislation.govt.nz/act/public/1994/0019/latest/whole.html?search=ts_act_Education_resel (creating the Te Waka Toi and stating they are responsible for administering all aspects of funding and guidelines for Mäori arts).

136. See Study, supra note 18, at 28 (describing the amount of funding given to Mäori arts programs but also that Mäoris are given leading positions in the arts programs).

137. See Mäori Made Rules, supra note 129, at 4 (requiring that the artwork be a work of high quality in addition to proving Mäori descent of artist).

138. See Study, supra note 18, at 29 (arguing that programs based on ethnicity of the artist are unsuccessful because poor-quality works dilute the distinctiveness of a cultural trademark).

139. See id. at 31 (arguing that the success of The toi iho program is aided by the fact that it does not isolate itself within the Mäori community, but enlists support from the broader non-native public including art vendors, purchasers, and non-native artists).

140. See toi iho > About us, supra note 77 (reserving Mäori made for artists of proven Mäori descent, Mainly Mäori for use by a group of artists, most of whom are of Mäori descent, and Mäori Co-Production for use by collaborations between Mäori and non-Mäori artists).

38 Fall 2011

The New Hawaiian Modelperformance art, and other group-oriented cultural arts, protection within the program.141

The toi iho program allows the Mäori the right to self-determination because the Mäori set the standards of quality.142 The toi iho program also allows for great flexibility through the use of several trademarks to protect all varieties of indigenous cultural expressions.143 Finally, the program’s focus on quality, rather than ethnicity, addresses the reality of diversity and fluidity in cultural heritage.

Given the popularity and success of the program, it came as a shock to many Mäori when, in 2009, the New Zealand government cut funding for The toi iho program, stating that the program had not delivered the financial benefits to indigenous artists it had originally hoped for.144 The New Zealand government stated that many Mäori artists were receiving high recognition and sales for their artwork without the need of The toi iho trademark.145 Despite the official statement by the New Zealand government that The toi iho program was not successful, Mäori artists were outraged at the government’s decision to cut funding and demanded the government transfer the program to Transition Toi Iho Foundation (TTIF), a group comprised of toi iho artists.146 The overwhelming response from Mäori after the government’s announcement, and subsequent reclamation of the program, demonstrates that this program not only plays a critical role in the preservation and protection of indigenous art in New Zealand, but is also a source of cultural pride and

141. See Mäori Made Rules, supra note 129, at 2 (defining performance as any artistic presentation performed live, or reproduced in electronic form or other media).

142. See id. at 4 (granting and renewing of licenses to use the marks requires approval by a panel of persons with special knowledge of Mäori artforms).

143. See toi iho > About us, supra note 77 (providing for four different trademarks to choose from, depending on the applicant).

144. See Creative New Zealand statement on disinvestment in toi iho, Creativenz.govt.nz, http://www.creativenz.govt.nz/en/news/creative-new-zealand-statement-on-toi-iho (last visited Nov. 14, 2011) (stating that while the ideas behind The toi iho brand have remained important, the program has not met the goals of increasing sale of Mäori art).

145. See id. (explaining that for many artists, “the quality of their work speaks for itself ” and that artists have not needed the use of the trademark to the extent originally thought).

146. See Mäori Reclaim Toi Iho Trade Mark, Voxy.co.nz (Dec. 15, 2009), http://www.voxy.co.nz/national/maori-reclaim-toi-iho-trade-mark/5/33358 (reporting that outrage followed the announcement that New Zealand government planned to “disinvest” in The toi iho program); see also Creative NZ agrees to transfer Mäori Trademark – toi iho, the big idea – te aria nui (May 27, 2010), http://www.thebigidea.co.nz/news/industry-news/2010/may/70176-creative-nz-agrees-to-transfer-maori-trademark-toi-iho (describing the formalities of the transfer from the New Zealand government to the TTIF and expecting the transition to be complete by June 2010).

identity for the Mäori.147

2. The Alaska Silver Hand Program is the Best Current National Solution and Contains Key Structural Elements to Borrow When Developing a Solution for the Native Hawaiian Context

The Alaska Silver Hand Program is a state trademark law that issues renewable identification seals to Native Alaskan artists to verify that their works of art are authentic, original, and made in the state of Alaska, and is the most appropriate national model for Native Hawaiians to borrow from.148 The benefit of utilizing a state trademark program is that garnering state support for such a program is easier than attempting to get federal support.149 The Alaska model is structured well, but the ways in which these structural aspects have been implemented present some problems.

The structural aspects of the Alaska model that stand out include the way the program is funded, the use of a state arts council to administer the program, and the mandatory renewal process for use of the identification seals.150 The program is self-funded with application fees to offset costs, which addresses the difficulty of gaining sufficient government funding.151 However, starting a brand new program, as would be the case in Hawaii, would require initial government funding before the program could self-fund through application fees.152 The use of a state arts council to administer the program provides implicit government support and keeps the use of the trademarks centralized and regulated.153 The Alaska State Council on the

147. See Mäori Reclaim Toi Iho Trade Mark, supra note 146 (disagreeing with the government’s assessment that the program has been unsuccessful, reporting that artists feel that the program has been very successful and a source of price and cultural identity).

148. See Alaska State Council on the Arts Silver Hand Program & Permit Application, Alaska State Council on the Arts (AKASCA), http://www.eed.state.ak.us/aksca/Forms/individuals/SH.pdf (last visited Jan. 25, 2011) (explaining the operation of the program and instructions for a permit).

149. See Study, supra note 18, at 11 (determining that trying to get federal support for a program to benefit Native Hawaiians would require too much time and too many resources).

150. See Alaska Admin. Code tit. 3, § 58.020(a)-(d) (2010) (stating the requirements for certification under the program).

151. See Time Line Silver Hand, supra note 43 (implementing a small twenty dollar fee for a two year permit to solve funding issues).

152. See Panel Discussions, Keomailani Hanapi Foundation, http://www.khfnativehawaiianarts.com/PDF/2004_Panel_Hawaiian_Art_Transcript.pdf (pointing out that government funding has allowed cultural trademark programs in other countries to get off the ground).

153. See Alaska State Council on the Arts Silver Hand Program & Permit Application, supra note 148 (providing all arts education, development, and services under one state agency ensures that there


Nina MantillaArts is the agency that runs the Silver Hand program and issues permits to use the identification seals, and the governor appoints members of this council.154 However, there are no requirements that Native Alaskan artists sit on the council, and consequently, those issuing identification seals for native artwork are not necessarily knowledgeable about Native Alaskan art.155 Additionally, although the mandatory renewal process seems to keep the use of identification seals current, the renewal period does not require artists to demonstrate that they are still making authentic works of art.156 The permits are also based on membership in an Alaskan tribe rather than the quality of the work, which could lead to dilution of the Silver Hand trademark.157

D. Combining Elements from Both the Alaska Model and the New Zealand Model Creates a Custom Solution to Address the Unique Needs of the Native Hawaiian Context

Native Hawaiians favor the use of a cultural trademark program in order to protect and promote the Native Hawaiian cultural arts, and the best solution will consider the unique needs of the Native Hawaiian context and create a tailor made cultural trademark program.158 This article proposes a solution entitled the New Hawaiian model, which combines elements of both the Alaska model and the New Zealand model. Combining elements of these two successful programs will give Native Hawaiians a critical tool to use in protecting and preserving the Native Hawaiian cultural arts.159 The New Hawaiian model is a state trademark

is no confusion for artists and consumers).154. See AKASCA – Mission and History, AKASCA, http://

www.eed.state.ak.us/aksca/about.htm (last visited Jan. 25, 2011) (defining the council’s missions to foster “the development of the arts for all Alaskans though education, partnerships, grants and services.”).

155. See AKASCA – Council Members, AKASCA, http://www.eed.state.ak.us/aksca/about3.htm (last visited Jan. 25, 2011) (stating that the council is made up of eleven volunteer members all serving staggered three-year terms).

156. See Alaska Admin. Code tit. 3, § 58.020(d) (2010) (listing the only criteria for renewal as submission of a renewal application within thirty days of the end of the two-year permit period).

157. See tit. 3, § 58.020(c)(1)-(3) (requiring only that applicant is certified Alaskan Native and living in the state of Alaska); see also Study, supra note 17, at 29 (using the Australia model as an example of how programs based on ethnicity rather than quality will fail).

158. See Study, supra note 18, at 43 (confirming that the Native Hawaiian community favors implementation of a cultural trademark program in Hawaii).

159. See id. at 40 (arguing that the similar worldviews of Native Hawaiians and the Mäori facilitates borrowing from the Mäori example).

program which emphasizes self-determination for Native Hawaiians through the use of a Native Hawaiian arts council, focuses on quality of art over ethnicity to prevent dilution of the trademark, and allows flexibility in ownership and in trademark use.

The New Hawaiian model would fit under Hawaiian state trademark law, much like the Alaska Silver Hand program.160 As the Alaska model demonstrates, it is easier to initiate a cultural trademark program in the state legislature where the needs of local indigenous peoples are better understood and supported.161 Native Hawaiians understand how difficult it is to have federal legislators consider the unique circumstances of Native Hawaiians. 162 The Office of Hawaiian Affairs already supports the plight of Native Hawaiian artists, and funding would be more readily available from the Hawaiian state government than the federal government.163 Despite this initial government funding, the New Hawaiian model, like the New Zealand model, would be administered by an indigenous peoples’ arts council after the initial phases of the program.164 Native Hawaiian artists advocate limited government involvement in the administration and regulation of a cultural trademark program but also understand that government funding is a necessary tool to initiate the program.165 Providing for administration and regulation of the program by a Native Hawaiian arts council would ensure that Native Hawaiians are assured the right of self-determination over the protection and preservation of traditional culture.166

The New Hawaiian model borrows from both the Alaska model and the New Zealand model regarding the requirements for certification to use the cultural

160. See Alaska Stat. § 45.65.010(a) (2010) (protecting certain articles created or crafted in the state by Alaska Native persons, but does not preempt federal trademark law).

161. See Study, supra note 18, at 11 (arguing that the difficulty with getting support for the Akaka bill demonstrates that national support would be tough to get).

162. See id. at 11, 15 (citing that a majority of artists surveyed supported the idea of state funding of the cultural trademark program).

163. See id. at 5 (demonstrating state legislature support for the program supports through formal adoption of Paoakalani Declaration and funding of OHA study).

164. See id. at 40 (supporting transfer of administration of the cultural trademark program to an organization to be entitled the “Native Hawaiian Cultural Arts Board”).

165. See id. at 11; see also Panel Discussions, supra note 152, at 11 (speaking about money, panelist Meleanna Meyer stated “it’s a necessary tool to allow us to do what we want to do”).

166. See Study, supra note 18, at 40 (arguing that a Native Hawaiian cultural arts council will be able to have powers far beyond implementation of the trademark program to include protecting heritage treasures, developing and recognizing emerging artists, promoting native arts education, and developing new markets).

40 Fall 2011

The New Hawaiian Modeltrademark.167 It would require artists to be residents of Hawaii to receive permission to use the trademark, similar to the residency requirements under the Alaska model.168 Imitation products sold in the Hawaiian tourism industry have a profoundly detrimental effect on the authentic Native Hawaiian arts market, and requiring that those who use the cultural trademark be residents of Hawaii provides an extra layer of protection against imported fakes in the tourism market.169 The Study stated that a cultural trademark program should identify native artworks that reflect a “cultural truth,” demonstrating that, for Native Hawaiians, it is more important for an artist to understand the Native Hawaiian cultural experience and traditional arts than prove pure blood quantum.170 This emphasis on an artist’s understanding of cultural truth combined with the proven success of the New Zealand model demonstrates that certification should be based on works of quality, rather than ethnicity.171 Borrowing from the New Zealand model, the standards of quality should be determined by a set of well-known and well-respected master artists.172 Distinguishing works of art based on quality rather than the ethnicity of the artist is particularly important for any program implemented under United States law, where a program that discriminated based on ethnicity would likely be deemed unconstitutional.173

The New Hawaiian model would borrow the flexibility of ownership of the New Zealand model and the periodic renewal requirements from the Alaska

167. See generally Study, supra note 18, at 41 (stating that the trademark should be a newly created and visually distinctive design that embodies the cultural essence of Native Hawaiians).

168. See Alaska State Council on the Arts Silver Hand Program & Permit Application, supra note 148 (requiring proof of residency through current photo I.D.).

169. See Study, supra note 18, at 38-39 (suggesting the cultural trademark’s use in tourism industry will help weed out fakes and imitations while simultaneously emphasizing authentic expressions of native culture with tourists).

170. See id. at 8 (commenting on the perspective of Native Hawaiians that “they do not think of the race or racial content of a person as defining the person’s standing in Native Hawaiian culture. It is a matrix of genealogy, kinship to indigenous families, cultural lineage, and the source(s) of a person’s cultural knowledge rather than race that Native Hawaiian artists believe is important”).

171. See id. at 29 (arguing that focusing on quality rather than ethnicity is more consistent and effective for achieving the goal of distinguishing imitation artwork from authentic artwork).

172. See Mäori Made Rules, supra note 129, at 4 (establishing that the panel in charge of artistic standards will be made up of “persons who Creative New Zealand considers have specialist knowledge of Mäori artforms”).

173. See Study, supra note 18, at 34-35 (pointing out that it is not illegal for a trademark to be associated with a particular ethnic or racial group but that in order to receive any government funding, there can be no racial discrimination).

model. It would employ several trademarks to allow artists to collaborate with non-Native artists.174 The success of the New Zealand program has largely been because the program gives native artists the choice to collaborate with non-native artists and still create works of traditional cultural expression.175 The New Hawaiian model borrows the two-year renewal requirement from the Alaska program, and would require artists to provide examples of quality works they have recently produced in order to qualify for re-certification.176 Periodic renewal of the trademarks would ensure that artists are preserving the high-quality standards of the trademark and still producing works of authentic cultural expression to represent Native Hawaiian cultural arts.IV. Conclusion

The New Hawaiian model is an important step in the preservation and protection of Native Hawaiian culture, and would give Native Hawaiian artists a way to distinguish their authentic works of art from cheaper imitations in marketplace while simultaneously elevating the status of Native Hawaiian cultural arts.177 However, the New Hawaiian solution does not provide answers to every example of cultural misappropriation; it would not stop Disney from copyrighting mele inoa, and it would not prevent Dodge from misusing Hawaiian words in car names. However, given the conclusion in the Study, the New Hawaiian model presents a uniquely tailored solution that would align with the Native Hawaiian artists’ desire to implement a cultural trademark.178 Although a cultural trademark program is only an incremental step toward protecting native culture, it is an important step nonetheless.179 Furthermore, placing administration of the program in the hands of Native Hawaiians will give them the power and resources to expand into other areas

174. See toi iho > About us, supra note 77 (listing the variety of marks available and the purpose behind each mark).

175. See id. (allowing retailers and gallery owners to use a mark to show that they are an official vendor of authentic art).

176. See Mäori Made Rules, supra note 129, at 4 (requiring artist to demonstrate continual artistry upon submitting renewal application).

177. See Study, supra note 18, at 29 (noting that The toi iho program has not only been able to distinguish authenticity in the marketplace but also establish a reputation for excellence in the arts).

178. See id. at 3 (concluding that a cultural trademark program would greatly benefit Native Hawaiian cultural arts).

179. See id. at 17 (referring to the statement of Maui Solomon, a Mäori lawyer invited to the cultural trademark conference because of his involvement with The toi iho program, that a cultural trademark program is an important step in building the “cultural capacity” of indigenous peoples to demand and shape their intellectual property rights).


Nina Mantillain need of solutions, such as native arts education and protection of traditional knowledge from bioprospecting.180 The New Hawaiian solution is an incremental step in what should be a larger dialogue in Hawaii of creating customized solutions to protect indigenous intellectual property rights and preserve Native Hawaiian culture.

180. See id. at 17, 18 (describing a cultural trademark program as producing a “ripple effect” that would empower Native Hawaiians “to develop the capability to exercise sovereignty over culture”).

42 Fall 2011

I. IntroductionOrphan works are the death knell of copyright

law. They have been a growing predicament for the United States since January 1, 1978 and there has never been a successful legislative attempt to fix it.1 That is not to say that there has never been a good proposed solution to the problem though. The Shawn Bentley Orphan Works Act of 20082 was the closest the United States Congress has ever come to solving the problem of orphan works. However, the proposed solution would have led to polarizing consequences that affected previously disregarded elements of U.S. copyright law. Instead of simply facilitating the eventual use of orphan works by those engaging in good faith searches to find the owners of orphan works, the Shawn Bentley Orphan Works Act would have imposed a system of “informal formalities” upon copyright owners while functioning in the current “no formalities” system of copyright law. The legislation would have reduced the number of orphan works in the United States by imposing penalties upon copyright owners, forcing those owners to complete specific acts or meet certain requirements in order to ensure their copyrights, while the remedies for copyright infringement would stay intact. This solution would fall in line with the basic foundations of copyright law, but would also force the United States to question where its priorities lie.

This paper will first describe what orphan works are, why they exist under current copyright law, and why they are currently a problem. Second, the paper will review the legislative history regarding attempted solutions for the orphan works predicament. The third portion of the paper will describe how the most

* Mark S. Tratos is a 2012 J.D. candidate at American University, Washington College of Law. He is an evening student. He works for the United States Senate. Mark holds a B.A. in Economics and Ancient Studies from Washington University in St. Louis.

1. Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (1976) (informing the public that the Copyright Act of 1976 was to become law on January 1, 1978); Shawn Bentley Orphan Works Act of 2008, S. 2913, 110th Cong. (2008); Orphan Works Act of 2008, H.R. 5889, 110th Cong. (2008); Copyright Modernization Act of 2006, H.R. 6052, 109th Cong. (2d. Sess. 2006); Orphan Works Act of 2006, H.R. 5439, 109th Cong. (2006).

2. S. 2913

recent attempt at orphan works legislation, the Shawn Bentley Orphan Works Act of 2008, would have created a new type of copyright formality called “the informal formality,” and how that would have impacted copyright owners. The fourth portion of the paper will address possible reactions to the implementation of such a law. The fifth and final section will discuss why such legislation is necessary and how a few changes to the Shawn Bentley Orphan Works Act of 2008 could lead to a more acceptable solution to the orphan works problem.II. Why do Orphan Works Exist?

The term “orphan work” describes a situation where an individual wanting to use a work in a way that would require prior permission from the copyright owner is not able to locate or identify the original owner.3 The only two requirements to be an orphan work are that a work must be copyrighted, which has become significantly more likely since the elimination of copyright formalities, and that the owner of such a work must be an individual who cannot be located.4 These two simple requirements, when met, cause problems that only federal legislation can fix.5

Orphan works in the United States are the by-product of Congress’s war against copyrighted works prematurely entering the public domain and the international community’s push for stronger creator rights.6 Orphan works first appeared on January 1,

3. U.S. Copyright Office, Report on Orphan Works 1 (2006), available at http://www.copyright.gov/orphan/orphan-report-full.pdf (traditionally in the form of a license for an exclusive right).

4. Id. at 1-2.5. Letter from Senators Orrin G. Hatch and Patrick J. Leahy

to Marybeth Peters, Registrar of Copyrights (January 5, 2005), reprinted in U.S. Copyright Office, supra note 3; Letter from Representative Lamar Smith to Marybeth Peters, Registrar of Copyrights (January 7, 2005), reprinted in U.S. Copyright Office, supra note 3; Letter from Representative Howard L. Berman to Marybeth Peters, Registrar of Copyrights (January 10, 2002), reprinted in U.S. Copyright Office, supra note 3; U.S. Copyright Office, supra note 3, at 15-17; see The Authors Guild v. Google, Inc., 770 F. Supp. 2d 666, 678 (S.D.N.Y. 2011) (“The question of who should be entrusted with guardianship of orphan books . . . safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties”).

6. Promoting the Use of Orphan Works: Balancing the Interest of Copyright Owners and Users: Hearing before the Subcomm. on

by Mark Tratos*

Informal Formalities: The Government’s Attempt to Find Families for Orphan Works


1978, the same day that the Copyright Act of 1976 became effective.7 The problem became worse in 1989 when the United States agreed to the terms of the Berne Convention.8 These pieces of legislation eliminated the long-held requirements (or “formalities”) for copyright protection in the U.S.9

Copyright formalities were conditions or acts independent from simply creating the work required of a work’s creator to ensure that the work was protected by copyright.10 If someone wanted to ensure a monopoly on the use of his work and retain the ability to license the exclusive rights associated with that work, he would stringently adhere to the formalities or risk his work entering the public domain forever.11 This required a number of actions, such as publishing the work, placing notice of copyright protection upon the work, depositing the work with the Library of Congress, renewing the term of copyright protection, and recording the transfer of exclusive rights.12 One formality almost singlehandedly caused the orphan works problem however.

While U.S. copyright law does not require the registration of an author’s work to gain copyright protection, it is required if an owner wishes to enforce their rights in the United States.13 In addition, for a rights-holder to recover attorney’s fees or statutory damages, she must register the work before the infringement occurs.14 This formality incentivized

the Courts, the Internet, and Intellectual Property of H. Com. on the Judiciary, 110th Cong. 1-2 (2008) (Statement of Howard M. Berman, Chairman of the Subcommittee on Courts, the Internet, and Intellectual Property, of the House Committee on the Judiciary); see U.S. Copyright Office, supra note 3, at 3.

7. See Letter from Senators Orrin G. Hatch and Patrick J. Leahy to Marybeth Peters, Registrar of Copyrights (January 5. 2005), reprinted in U.S. Copyright Office, supra note 3 (“A principal concern is that the current Copyright Act might be creating a class of ‘orphan works’ – works for which no copyright owner can be found, and this which permission to use or to adapt these works cannot be obtained.”).

8. Berne Convention for the Protection of Literary and Artistic Works, art. 5(2), as revised on July 24. 1971, 1161 U.N.T.S. 30, 35 available at http://treaties.un.org/doc/Publication/UNTS/Volume%201161/volume-1161-I-18338-English.pdf (eliminating all formalities which could prevent a creator form obtaining a copyright).

9. Promoting the Use of Orphan Works: Balancing the Interest of Copyright Owners and Users: Hearing before the Subcomm. on the Courts, the Internet, and Intellectual Property of H. Com. on the Judiciary, 110th Cong. 20 (2008) (Statement of Marybeth Peters, Register of Copyright); see U.S. Copyright Office, supra note 3, at 3.

10. See U.S. Copyright Office, supra note 3, at 60.11. Jane C. Ginsburg, The U.S. Experience with Mandatory

Copyright Formalities: A Love/Hate Relationship, 33 Colum. J.L. & Arts 311, 321-22 (2009).

12. Id. at 315-18.13. The Copyright Act of 1976, 17 U.S.C. § 411 (2008).14. Id. § 412.

copyright owners to register their works promptly, even though it was not required to receive a copyright after 1909.15 Registration would in turn encourage individuals wishing to use the work to search the registry of copyrighted works at the Copyright Office, which serves as the pre-eminent database of copyrighted works.16 This concept relies on the idea that a search of the U.S. Copyright registry can yield fruitful results.17 Registration of a work also benefits the owner by serving as a prima facie presumption of copyright validity if the author registers the work within five years of its publication.18

The formalities that were pervasive throughout the U.S. system of copyrights eventually found themselves extinct after Congress eliminated formalities in four distinct ways. First, the Copyright Act of 1976 granted copyright protection upon the fixation of the work, a change from the previous requirement that an author publish her work with notice or register an unpublished work before it could receive protection.19 Creators now simply produce their work in order to receive copyright protection.20 Second, the 1976 Act21and later the Copyright Term Extension Act,22 extended the term of copyright ownership to the life of the author plus an additional seventy years.23 The term of copyright protection has potentially tripled and the creator is not required to take any additional steps. Third, the alteration and extension of the term of copyright eliminated the renewal requirement found in the Copyright Act of 1909.24 Fourth, the Berne

15. Copyright Act of 1909, Pub. L. No. 60-349, §§ 2, 10 (1909) (holding that publication of a work with notice would suffice requirements for copyright protection).

16. Derek Andrew, Inc. v. Proof Apparel Corp., 528 F.3d 696, 700-01 (9th Cir. 2008) (holding that the awarding of damages that are contingent on registration promotes the early registration of copyrights).

17. But cf. John Tehranian, The Emperor Has No Copyright: Registration, Cultural Hierarchy, and the Myth of American Copyright Militancy, 24 Berkeley Tech. L.J. 1399, 1430-31 (2009) (acknowledging that search reports from the U.S. Copyright office will be non-interpretive and search criteria may not accurately identify the work or owner sought out).

18. 17 U.S.C. § 410(c) (2008). 19. 17 U.S.C. § 102(2008); Copyright Act of 1909, Pub. L.

No. 60-349, §§ 2, 10 (1909).20. 17 U.S.C. § 102(a) (noting that something will receive

copyright protection if it is an original work fixed in a tangible medium).

21. See Pub. L. No. 94-553, § 302(a) (1976) (extending the term of copyright ownership from 56 years to the life of the author plus 50 years).

22. See Pub. L. No. 105-298, § 102(b), (d) (2008) (extending copyright protection an additional 20 years).

23. 17 U.S.C. § 302(a).24. See U.S. Copyright Office, supra note 3 at 3; Copyright

Act of 1909, Pub. L. 60-349 § 24.

44 Fall 2011

Informal FormalitiesConvention, agreed to by the United States in 1989, eliminated the formal requirements that creators had to meet both to receive copyright protection and exercise their exclusive rights associated with copyright, which included the visual notice requirements upon a work.25 By the new millennium, copyright law protected works in the United States upon fixation, for longer periods, with a much smaller chance for the work entering the public domain, and without requiring identification that the work was actually protected. These four factors suddenly made it much harder to discern whether a work was protected by a copyright.

The abolition of formalities was only one factor in the rise of orphan works. Despite the fact that individuals now had to assume any work they encountered was protected,26 copyright owners of those works could still be identified, meaning the work is not an orphan work.27 The methods an individual can use to identify the owner of a copyrighted work, whether in the U.S. or abroad, have never yielded sufficient or wholly accurate results.28 The U.S. Copyright Office Registry, the singular government-approved database available to individuals wanting to determine who controls the rights to a work, does not provide an effective way to identify the owner of a specific copyrighted work.29 Since a registry search may not provide the necessary information sought to identify a copyright owner, an individual must find the information in other ways, assuming the copyright owner registered the work in the first place.30

25. Berne Convention for the Protection of Literary and Artistic Works, art. 5(2), as revised on July 24. 1971, 1161 U.N.T.S. 30, 35 available at http://treaties.un.org/doc/Publication/UNTS/Volume%201161/volume-1161-I-18338-English.pdf (noting that the requirement for some form of notice upon any copyrighted work was a formality which would not comply with the treaty).

26. See U.S. Copyright Office, supra note 3, at 15-16 (noting that automatic copyright protection could exist in cases where circumstances lead people to believe the work has no commercial value).

27. See id. at 1 (recognizing one of the requirements of an orphan work is that the creator or rights-holder cannot be found).

28. See also id. at 32-34 (determining that factors like the cost of a search, the lack of identifying information on a work, the general obscurity of the work, and the country of the works origin will hamper a potential licensor’s search or decision to conduct a search).

29. See Tehranian, supra note 17, at 1430-31 (acknowledging that search reports from the U.S. Copyright office will be non-interpretive and search criteria may not accurately identify the work or owner sought out).

30. When conducting an electronic search of the Copyright Office’s public catalogue, search entries will often provide you with a title of the work, the type of work, the year of the work’s creation, and the date of the work’s publication. The search will not provide you with any contact information in order to make contact with the author. The search entry will also no provide you with an example

Although the lack of effective search methods and the current insufficiencies of the Copyright Office’s Registry have made it hard to identify the owners of copyrights, current technology and the culture surrounding digital works have made the process of identifying rights-holders even more difficult. Recent technological developments have facilitated the availability of works in digital formats and the ability to copy those works multiple times over.31 Our current technology-heavy, instant gratification culture encourages the distribution of copies to one or two friends, who in turn disperse their copies in similar ways.32 These copies often contain no information that a searcher could use to identify the author or rights-holder of the work.33 This is partially because of digital piracy and partially because of the elimination of the notice formality from U.S. copyright law.34 The problem is particularly pervasive in digital copies of photographs.35 Current technologies allow users to encounter works in a multitude of ways that often afford no opportunity to identify the author or rights-holder of the work. With no indication of the identity of the copyright owner, potential licensors are forced to use the U.S. Copyright Registry and their own intuition to find the owner, both of which often prove to be unsuccessful.36 This is how orphan works came to be. III. Why are Orphan Works a Problem?

Both Congress and the Copyright Office believe that the orphan works problem has had a dramatic impact on the economy.37 The copyright system in the United States has created a market around the

of the work to ensure the work or author searched for is the work or author found.

31. See Diane Leenheer Zimmerman, Finding New Paths Through the Internet: Content and Copyright, 12 Tul. J. Tech. & Intell. Prop. 145, 146-47 (2009) (recognizing that the Internet facilitates transactions outside the visible market, making transactions hard to monitor and control).

32. See id. at 147.33. U.S. Copyright Office, supra note 3, at 23.34. Id. at 26, 41-42.35. Id. at 24.36. See Tehranian, supra note 17, at 1430-31 (acknowledging

that search reports from the U.S. Copyright office will be non-interpretive and search criteria may not accurately identify the work or owner sought out).

37. See Letter from Senators Orrin G. Hatch and Patrick J. Leahy to Marybeth Peters, Registrar of Copyrights (January 5, 2005), reprinted in U.S. Copyright Office, supra note 3; Letter from Representative Lamar Smith to Marybeth Peters, Registrar of Copyrights (January 7, 2005), reprinted in U.S. Copyright Office, supra note 3; Letter from Representative Howard L. Berman to Marybeth Peters, Registrar of Copyrights (January 10, 2002), reprinted in U.S. Copyright Office, supra note 3; U.S. Copyright Office, supra note 3, at 15-17.


Mark Tratoscontrol of exclusive rights to a copyrighted work.38 If an individual wants to exercise the rights to a particular work she does not own, she seeks out the owner of that work and negotiates a contract or license to use the work.39 Owners and potential licensors determine the value of the rights to that particular work, thus shaping the market and pushing the economy forward.40 This system of negotiations and eventual transactions necessitates, however, that an individual can find the author or rights-holder of a work.41 When searchers cannot find the rights-holders, the copyright market suffers.42

The fact that a work is an orphan does not mean that people do not still want to acquire the rights to its use. In fact, the growth of digital works and the Internet has increased the demand for the acquisition of rights from a variety of sources.43 When individuals are unable to discover or locate the author or rights-holder of a work they wish to exploit, a potential licensor is forced to make a serious decision: does she use the work without permission and risk an infringement lawsuit,44 or, does a she simply abandon her desire to use the work, choosing not to risk liability?45 Potential licensors often choose not to use the work.46 This fear of lawsuits has been incredibly debilitating to the market for copyright licenses and to the nation’s heritage.47

The inability to use orphan works without the fear of infringement suits has affected the entire market of

38. U.S. Copyright Office, supra note 3, at 15. 39. Id.40. Id.41. U.S. Copyright Office, supra note 3, at 1.42. See also Promoting the Use of Orphan Works: Balancing the

Interest of Copyright Owners and Users: Hearing before the Subcomm. on the Courts, the Internet, and Intellectual Property of H. Comm. on the Judiciary, 110th Cong. 19-20 (2008) (statement of Marybeth Peters, Register of Copyright) (asserting that if there is no copyright owner, there is no beneficiary of the copyright terms and that is an enormous waste in the copyright market).

43. C.f. Zimmerman, supra note 31, at 153-54 (asserting that the internet is now seen as a place for new artists to be discovered, in addition to being a place where a large amount of piracy of unattributed works occurs).

44. See 154 Cong. Rec. S3437-38 (daily ed. Apr. 28, 2008) (statement of Sen. Orrin G. Hatch); see also 154 Cong. Rec. S3405-06 (daily ed. Apr. 24, 2008) (statement of Sen. Patrick J. Leahy).

45. Id. 46. U.S. Copyright Office, supra note 3, at 15.47. See Promoting the Use of Orphan Works: Balancing the

Interest of Copyright Owners and Users: Hearing before the Subcomm. On the Courts, the Internet, and Intellectual Property of H. Comm. on the Judiciary, supra note 42 (asserting that when a copyright owner cannot be identified and potential users abandon the work, several productive projects which may be beneficial to our national heritage are lost); id.

potential copyright licensors.48 The Report on Orphan Works from the U.S. Copyright Office identified four general types of users who most often wanted to make use of orphan works, ranging from individuals wanting to incorporate orphan works into their own large-scale creations to individuals who are “small-time” enthusiasts or who wish to obtain the work for private uses.49 All of these potential users have the ability to bring new life or new audiences to works, but many decide against using the work when they consider the potential liability standing in their way.50 Potential users of orphan works were unable to conduct business in the market of copyright licenses and therefore Congress proposed orphan-work legislation.51

IV. Orphan Works LegislationThere have been a few recent attempts to pass

legislation to correct the orphan works problem. Orphan works legislation was first proposed in the United States House of Representatives in 200652, but the Orphan Works Act of 2006 never made it out of the House Judiciary Committee53. After it was clear the legislation would never receive enough votes on the floor of the House, supporters subsequently inserted the substance of the 2006 Act into the Copyright Modernization Act of 200654, which was stuck in committee.55 Attempts at an orphan works solution did not die though, as legislation reemerged in 2008 through two different bills.56 The Orphan Works Act of 2008 appeared and subsequently died in the House of Representatives,57 and the Shawn Bentley Orphan Works Act of 2008 (S. 2913), which originated in

48. See Promoting the Use of Orphan Works: Balancing the Interest of Copyright Owners and Users: Hearing before the Subcomm. On the Courts, the Internet, and Intellectual Property of H. Comm. on the Judiciary, supra note 42 (asserting that when a copyright owner cannot be identified and potential users abandon the work, several productive projects which may be beneficial to our national heritage are lost)

49. U.S. Copyright Office, supra note 3, at 36-40 (asserting that the categories of proposed uses are “uses by subsequent creators,” “large-scale access uses,” “enthusiast uses,” and “private uses”).

50. See 154 Cong. Rec. S3405-06 (daily ed. Apr. 24, 2008) (statement of Patrick J. Leahy) (“[O]rphan works . . . often languish unseen, because those who would like to bring them to light, and to the attention of the world, fear the prospect of prohibitively expensive statutory damages.”).

51. See S. 2913; H.R. 5889; H.R. 6052; H.R. 5439.52. H.R. 5439.53. See Yeh, Cong. Research Serv., RL 33392, Orphan Works

in Copyright Law 8 (2010). 54. H.R. 6052 (appearing in Title 2).55. See Brian T. Yeh, supra note 53.56. Alessandra Glorioso, Note, Google Books: An Orphan

Works Solution?, 38 Hofstra L. Rev. 971, 980 (2010).57. Id.; H.R. 5889.

46 Fall 2011

Informal Formalitiesthe Senate and was passed by the higher house, was eventually lost in House committee.58 The Shawn Bentley Orphan Works Act is the focus of this paper not only because the bill represented the culmination of changes deemed necessary after considering the previous legislative attempts,59 but also because of the likelihood that a bill resembling the Shawn Bentley Orphan Works Act of 2008 could be passed by the United States Senate again, and possibly the House of Representatives in future.

Congress introduced the Shawn Bentley Act of 2008 (S.2913) to solve the problem of orphan works. S.2913’s primary goal, as agreed on by the bill’s sponsors, was to identify the owners of such works.60 By encouraging the identification of the authors or rights-holders of the orphan works, the Act would facilitate the licensing of these works to interested parties.61 The Act was designed to keep the most basic tenets of U.S. copyright law intact, ensuring that a rights-holder may still benefit from their work as they did previously.62 With these two aims in mind, legislators attempted to re-insert thousands of previously unidentifiable and unusable works back into the licensing market.63 The way in which the Shawn Bentley Orphan Works Act of 2008 intended to do

58. S. 2913; see Promoting the Use of Orphan Works: Balancing the Interest of Copyright Owners and Users: Hearing before the Subcomm. On the Courts, the Internet, and Intellectual property of H. Comm. on the Judiciary, supra note 42.

59. See also Promoting the Use of Orphan Works: Balancing the Interest of Copyright Owners and Users: Hearing before the Subcomm. On the Courts, the Internet, and Intellectual property of H. Comm. on the Judiciary, supra note 42, at 24-25 (statement of Marybeth Peters, Register of Copyrights) (incorporating changes designed to protect visual artists, to document searches, to define “reasonable compensation,” and to address the availability of attorney’s fees).

60. See also U.S. Copyright Office, supra note 3, at 93 (“Any system to deal with orphan works should seek primarily to make it more likely that a user can find the relevant owner in the first instance”); 154 Cong. Rec. S3437-38 (daily ed. Apr. 28, 2008) (statement of Sen. Orrin G. Hatch); 154 Cong. Rec. S3405-06 (daily ed. Apr. 24, 2008) (statement of Sen. Patrick J. Leahy).

61. See 154 Cong. Rec. S3405-06 (daily ed. Apr. 24, 2008) (statement of Sen. Patrick J. Leahy) (believing that the identification of rights-holders will help the owners receive compensation).

62. See id. (noting that the act was not designed to change the basic premise of copyright law, that if you use the copyrighted works of others, you must compensate them for such use); see also Promoting the Use of Orphan Works: Balancing the Interest of Copyright Owners and Users: Hearing before the Subcomm. On the Courts, the Internet, and Intellectual property of H. Comm. on the Judiciary, supra note 42, at 21 (statement of Marybeth Peters, Register of Copyrights) (“we do not wish to unduly prejudice the legitimate rights of the copyright owner by depriving him of the ability to assert infringement or hinder his ability to collect an award that reflects the true value of his work”).

63. 154 Cong. Rec. S3437-38 (daily ed. Apr. 28, 2008) (statement of Sen. Orrin G. Hatch).

this, however, would prove to be truly controversial, challenging the very tenets upon which U.S. and international copyrights currently rely.

The drafters wrote the Shawn Bentley Orphan Works Act of 2008 from the perspective of a rights-holder of an orphan work, with Section 2 of the Act dealing the most damage to said rights-holders. The section informed the rights-holder that there was a limitation placed upon the remedies available to them if someone infringed their work, should the Act deem it an orphan.64 Section 2 proposed that remedies would be limited if the alleged infringer “performed and documented a qualifying search, in good faith, to locate and identify the owner of the infringed copyright; and was unable to locate and identify the owner of the infringed copyright.”65 After a more meticulous description of what a qualifying search would entail, the Act described the limitations upon remedies, allowing the rights-holder to receive only “reasonable compensation” from the guilty infringer.66 Rights-holders received a small allowance of injunctive relief, dependent on whether the infringer paid “reasonable compensation” to the owner of the orphan work upon identification of the owner or if infringement litigation occurred.67 Therefore, while the Act proposed a way for potential licensors to identify the owners of orphan works68, it also notified those same owners that the Act limited their enforcement rights and ability to recoup damages, should they remain unidentified when an individual used their work.

Because of this shift, the Act required potential infringers to perform a search for the rights-holders in order to escape the liability for using an orphan work.69 To conduct a “qualifying search” for the owner of the work, the individual would undertake a “diligent effort that is reasonable under the circumstances to locate the owner of the infringed copyright prior to, and at the time reasonably proximate to, the infringement.”70 The diligent effort to find the rights-holders required a minimum of 5 steps to be taken: (1) a search of all Copyright Office records available to the public; (2) a search of all reasonably available sources of copyright owner and licensor information; (3) the use of all appropriate technologies, publications, and experts to locate the owner; (4) the use of appropriate internet databases to locate the owner; (5) and performance of

64. S. 2913 § 2.65. Id. § 2(b)(1)(A)(i)(I)–(II).66. Id. § 2(c)(1)(A).67. Id. § 2(c)(2)(A).68. 154 Cong. Rec. S3,437-38 (daily ed. Apr. 28, 2008)

(statement of Sen. Orrin G. Hatch).69. S. 2913 § 2(b)(2)(A)(i)70. Id.


Mark Tratosany other actions when searching that could be deemed “reasonable and appropriate” when considering the facts that have been discovered during the course of the investigation.71 The Copyright Office shaped the search through a statement of recommended practices,72 which attempted to hone the search for the rights-holder, as legislators rationalized that different search parameters would prove effective for different types of works.73

The limitations on remedies in the Shawn Bentley Orphan Works Act of 2008 applied to both monetary relief and injunctive relief. The monetary damages previously available to a registered work include actual damages, statutory damages, costs and attorney’s fees.74 These damages would no longer be available to the rights-holder if the infringer met the “qualifying search” requirements.75 Instead, the rights-holder only recovered “reasonable compensation,” which was intended by the Copyright Office and legislators to be the market value of the copyright license if they had engaged in negotiations of a license before the infringement began.76 Even then, the Act placed the burden upon the copyright owner, not the infringer, to prove that the work in question was worth market value at the time of infringement.77 If a copyright owner wished to pursue injunctive relief upon the infringer of her copyright, the Act required stringent limitations. Infringers who successfully met the “qualifying search” requirement of subsection (b) recovered monetary damages for the injury that the injunction would cause.78 In addition the Act provided that, should an infringer meet the requirements of subsection (b) and pay reasonable compensation to the copyright owner in a timely manner, the copyright owner would not have the right to pursue injunctive relief of any kind.79 Through the limitation of monetary and injunctive

71. Id. § 2(b)(2)(A)(ii).72. Id. § 2(b)(2)(A)(iii).73. Id.; see also U.S. Copyright Office, supra note 3, at 109-

10.74. 17 U.S.C. §§ 504-05 (2006).75. S. 2913 § 2(c)(1)(A).76. Id.§ 2(c)(1)(B) (holding that reasonable compensation

must not be paid if the infringer is a “nonprofit educational institution, museum, library, archives, or public broadcasting entity” or if the infringer proves the infringement was not done to receive a commercial advantage, the infringement was educational in nature, or if the infringers stopped infringement upon receiving a notice of claim of infringement); U.S. Copyright Office, supra note 3, at 116.

77. U.S. Copyright Office, supra note 3, at 116-17 (noting that reasonable compensation, in many cases, may be found to be zero or royalty-free because similar transactions in the market support such a finding).

78. S. 2913 § 2(c)(2)(A) (holding that the harm to the infringer must be noted by the court before any injunctive relief can be granted).

79. Id. § 2(c)(2)(B)-(C).

relief for the copyright owner, the Shawn Bentley Orphan Works Act would have created, in essence, a compulsory license for the exclusive rights of any orphan work. As a result of the Act, either the infringer would have found the owner of the orphan work through a qualifying search and hopefully negotiated a reasonable license, or the infringer would have been unable to find the owner and would have used the work anyway. If someone used the work without finding the owner he or she might eventually pay the same reasonable cost of a license, but only if the owner of the orphan work later identified themselves or sued. The only possible options that a copyright owner would have had to prevent his or her work from being used would be to deny the grant of a license when asked by potential users or make sure they could be found by potential users conducting a diligent, qualifying search. In either case, an individual must be able to identify and locate the owner of the copyright. The desire to find the owners of orphan works started to look more like legislators’ desire to use orphan works with or without the owner’s permission.80

Members of Congress threw the gauntlet. They legislated a procedure for the potential infringer to follow with the eventual destination being a copyright license. Individuals would know exactly what stops they must take along the route: searching the records of the copyright office, using experts, scouring internet databases, and so on. In fact, the odds were better to get a license if you performed a reasonable search and did not find the rights-holder because at worst, you would end up paying reasonable compensation for the license, and that was only if the owner of the orphan work appeared. So when Congress tried to force authors and rights-holders to grant unwanted licenses, Congress said those same authors and rights-holders must do all they can to make sure their works do not become orphans. To do that, creators and rights-holders must purposefully place themselves and their works in the public, assuring themselves that anyone who would wish to license their work would find them, and thus retaining the ability to bring the weight of the United States Judicial System upon infringers.V. The Creation of the Informal Formality

As legislators and the U.S. Copyright Office observed the problems that orphan works were causing in the copyright market, they were left with a

80. U.S. Copyright Office, supra note 3, at 8 (asserting that the first goal of orphan works legislation was to create a system that would make it more likely for users to find a relevant rights-holder and negotiated a license agreement and recognizing that the second goal was to encourage use of orphan works only when the rights-holder could not be found).

48 Fall 2011

Informal Formalitiespredicament. Were they to re-impose the formalities that originally prevented the existence of orphan works, or were they to kneel before the orphan works problem and accept the mess as the new standard? The Shawn Bentley Orphan Works Act of 2008 was an attempt to navigate between the two extremes. Legislators alleged it was not attempting to create formalities for copyright owners to meet; however, they evidently thought that they must put some requirements in place to prevent orphan works from overrunning the market.81 The concept of informal formality emerged.

An informal formality, as this author defines it, is an action taken by the owner of a copyright to ensure he do not lose any rights associated with that copyright. Unlike formalities however, copyright law does not specifically require or even articulate these actions. An owner will not necessarily lose his rights if he does not complete the formalistic task. Instead, a copyright owner can choose to take this extra step to ensure that there will never be a circumstance in which he will not lose his rights.

Before the creation of the informal formality however, both the legislators and the U.S. Copyright Office knew they could not transgress the international treaty limits.82 The Berne Convention, as well as other international agreements83, has prevented the imposition of formalities upon foreign authors.84 Specifically, the Convention prevents the imposition of any requirement, other than the creation of the work itself, to ensure an author retains a copyright.85 Most of the countries that agreed to the Berne Convention no longer require creators to comply with any copyright formality.86 However, the Berne Convention does not suspend all formalities.87 There is a notable difference

81. U.S. Copyright Office, supra note 3, at 61 (“Any legislative solution to the orphan works problem, must not require an author to comply with formalities if failure to comply with those formalities would result in the author becoming unable to enjoy or exercise copyright in the work.”).

82. Id.83. See Agreement on Trade-Related Aspects of Intellectual

Property Rights, Apr. 15. 1994, art. 9.1 Marrakesh Agreement Establishing the World Trade Organization, Annex IC, Legal Instruments-Results of the Uruguay Round vol. 31, 33 I.L.M. 81, 87 (1994); World Intellectual Property Organization Copyright Treaty art. 3, Dec 20, 1996, 36 I.L.M. 65, 69 (1997); World Intellectual Property Organization Performances and Phonograms Treaty art. 20, Dec. 20, 1996 36 I.L.M. 76, 86 (1997).

84. Berne Convention for the Protection of Literary and Artistic Works, art. 5(2), as revised on July 24. 1971, 1161 U.N.T.S. 30, 35 available at http://treaties.un.org/doc/Publication/UNTS/Volume%201161/volume-1161-I-18338-English.pdf (noting that the Berne Convention does not apply to a country’s imposition of copyright formalities upon its own creators).

85. Id.86. See Ginsburg, supra note 11, at 313.87. Id. at 314

between formalities that affect ownership of a copyright or rights therein and formalities affecting whether a copyright exists or whether a rights-holder can enforce his rights.88 Those differences are the reason that sections 411 and 412 of the Copyright Act of 1976 still exist. U.S. Copyright law does not force individuals to register their work with the Copyright Office in order to receive a copyright.89 Instead, registration gives copyright owners the power to enforce their copyright and to receive different types of monetary damages through infringement litigation.90 There has been speculation as to the legality of the relief limitations imposed by U.S. copyright law in the face of the Berne Convention.91 Berne states that any copyright registration system that affects or alters substantive, exclusive rights granted through copyright too closely resembles a formality.92 If a copyright owner cannot pursue statutory damages or attorney’s fees in an infringement action, little would be done to encourage copyright enforcement amongst rights-holders.93 Despite such a reading, the United States has continued to require registration of a work to commence infringement litigation. It is amongst this quagmire of international conventions and statutory law that the Shawn Bentley Orphan Works Act of 2008 attempted to make its mark.

Despite the fact that the goal of orphan works legislation was to identify the owners of orphan works, the legislation was a roadmap for potential infringers, charting a course on how to search for the owners of orphan works, with the destination being the use of the orphan work in almost every situation. In order to prevent such uncontrolled use of orphan works, copyright owners would have to make sure that they are along the side of the road, waving down each potential infringer, notifying them of who the rights-holder was. This begins with the diligent effort requirement of the “quality search.”94

The first requirement of the diligent effort was an internet search of the publically available records of the Copyright Office, assuming that the work provides enough identifying information on which a potential licensor can base a search.95 The registration of a work

88. Id.89. 17 U.S.C. § 102 (2011).90. Id. §§ 411-12.91. Berne Convention for the Protection of Literary and

Artistic Works, art. 5, Sept. 9, 1886, (amended on Sept. 28, 1979), S. Treaty, Doc. No. 99-27 (1986) (“The enjoyment and the exercise of these rights shall not be subject to any formality”).

92. U.S. Copyright Office, supra note 3, at 61; Tehranian, supra note 17, at 1439 (including significant remedies).

93. Tehranian, supra note 17, at 1439.94. S. 2913 § 2(b)(2)(A)(ii).95. Id. § (b)(2)(A)(ii)(I)(aa).


Mark Tratoswith the Copyright Office would be a potentially necessary step if copyright owners wished to be found by potential licensors. The lack of comprehensive results that often occurs after a search of the Copyright Registry, however, made this step unlikely to be fruitful.96 The creator of a work would not only have to register their work, but also provide a title, name, or keyword that sufficiently described the work in hopes that a potential licensor would consider the same title, name, or keyword when they search for the work. If both the owner and the potential licensor consider the same terms, the likelihood of a successful search of the Copyright Office’s public catalog becomes more reasonable. While such searches often prove to be fruitless, registering with the Copyright Office would increase the likelihood that a potential licensor would find the creator of a work. Taking such an opportunity would result in either a potential licensor finding the owner or a court finding that a diligent effort was not made by the infringer to try to locate the owner, thus securing a plethora of monetary and injunctive relief for the rights-holder.

The second diligent effort requirement was a search of sources of copyright ownership, authorship information, and if possible, licensor information.97 While this search was limited to sources reasonably available to the potential licensor, the criterion did encapsulate a plethora of potential sources of information. This search requirement included the Copyright Card Catalog at the Library of Congress.98 In addition, the vagueness of the definition of “source of copyright authorship and information” could have allowed the courts to impose numerous other potential searches of information sources upon a licensor, dependent upon the facts of the case. The Copyright Office even predicted that orphan works legislation would develop privately owned and operated sources of copyright authorship information.99 If such sources appeared, one source, if not more, could become de facto components of a diligent search for potential licensors.100 The growth of private sources of copyright information and the possible creation of de facto components would lead to creators and copyright owners finding included indentifying information within those sources. By encouraging a rights-holder

96. See Tehranian, supra note 17, at 1430-31 (acknowledging that search reports from the U.S. Copyright office will be non-interpretive and search criteria may not accurately identify the work or owner sought out).

97. S. 2913 § 2(b)(2)(A)(ii)(I)(bb)98. Circular 23: The Copyright Card Catalog and the Online

Files of the Copyright Office 1 (Nov. 2010), available at http://www.copyright.gov/circs/circ23.pdf

99. U.S. Copyright Office, supra note 3, at 103-04.100. Id.

to associate their works with these sources, simply in hopes that the rights-holders would be more easily found, we can assume the rate of publication of works will rise. While publication of a work has not been a requirement of copyright protection in many years101, it suddenly may be a way of ensuring that potential licensors find the creators.

The third diligent effort requirement was the use of appropriate technological tools, printed publications, and expert assistance when conducting a search for a copyright owner.102 This requirement opened the reasonable search criteria for a potential licensor beyond that of the Copyright Office’s resources. Resources like internet search engines, address directories, telephone directories, and even ownership information appearing on the orphan works themselves were potential areas requiring reasonable search before limitations could be placed on the liability of a copyright infringer.103 The growth of high-speed internet, e-mail, and search engines has potentially made it much easier for a rights-holder to be found.104 If a potential licensor was required to use the internet to search for the owner of an orphan work, there would be impetus for a work owner to then put their work online. Online publication is not required by any statute or regulation, but it would increase the likelihood of finding that the owner of any copyrighted work. This requirement is not limited to online publications. The requirement to search printed publications could lead to the growth of copyrighted works directories, potentially functioning like the Copyright Office Card Catalogue. While the existence of such publications would not require rights-holders to place themselves and their works in the publication, such opportunities could have given creators the best chance of retaining all of their rights to monetary and injunctive relief. Should individuals become experts in locating the rights-holders of orphan works, would it not also be prudent for the creators of orphan works to make themselves known to such experts? Owners should at least associate themselves with or publish themselves within the resources used by those experts so that licensors can identify them.

The fourth diligent effort requirement was the most controversial. This criterion told potential licensors to make “use of appropriate databases, including databases that are available to the public through the Internet.”105

101. Publication has not been a requirement for copyright protection since the enactment of the Copyright Act of 1976 on January 1, 1978. Copyright Act of 1976, Pub. L. No. 94-553, 90 Stat. 2541 (1976)

102. S. 2913 § 2(b)(2)(A)(ii)(I)(cc).103. U.S. Copyright Office, supra note 3, at 77-78.104. Id. at 104.105. S. 2913 § 2(b)(2)(A)(ii)(I)(dd).

50 Fall 2011

Informal FormalitiesThis requirement acknowledged the potential faults of the Copyright Office Registry, in that a search of the registry may not provide sufficient results.106 Instead, the federal legislators preferred to release a potential tidal wave of databases upon rights-holders and licensors.107 The Copyright Office even acknowledged that the operation of a singular registration system or database would be cost ineffective.108 The existence of a singular copyright database or registry could also lead to disagreements between system administrators and rights-holders choosing to enter their work in the database, as rights-holders may believe that the database is unable to provide the sufficient resources to chronicle and document the work.109 Instead, the Copyright Office suggested that multiple registries would solve the orphan works problem, and the fourth requirement encapsulated all those databases in the reasonable search.110 These would most likely have been private registries, as the private market has better capabilities to market their products to potential rights-holders and desired licensors.111 While the Copyright Office and legislators desired to distance themselves as much as possible from mandatory registration requirements,112 they still required the search of registries by those looking to obtain licenses to exclusive rights.113 If copyright owners wished to protect their ability to receive full monetary and injunctive relief, they must ensure that potential licensors found them. Placing their works in the databases described was a way to, yet again, increase the likelihood of potential licensors finding copyright owners. Take note that a potential licensor would mostly likely not meet the diligent effort requirement by simply searching one database, but many.114 This leads one to believe that a creator would have to register their work in multiple databases to facilitate their discovery. The legislation encouraged copyright owners to comply with more increasingly burdensome steps to ensure that they are identified and

106. See Tehranian, supra note 17, at 1430.107. See U.S. Copyright Office, supra note 3, at 104-05.108. Id. (relying on their experience operating a registration

database for copyrights, they understand a singular system entails larger costs and burdens than most individuals fail to anticipate).

109. Id. (noting that the ambiguous scope of registrations, paired with constant evolution in copyrighted works, may not insure that information in the registry is an effective way of indentifying or cataloguing the work).

110. Id. at 106 (“[W]e believe that registries are critically important, if not indispensible, to addressing the orphan works problem.”).

111. Id. 112. See id. at 105 (acknowledging the traps caused by

mandatory registration systems). 113. S. 2913 § 2(b)(2)(A)(ii)(I)(dd).114. See id.(requiring that a reasonable search be conducted

does not limit the search to one database).

located along with their work.The fifth and final explicit requirement of a diligent

search was the performance of actions deemed to be “reasonable and appropriate” under the circumstances of the search.115 This last criterion was the one piece of hope for a rights-holder. If a potential licensor, during the completion of any of the four minimum requirements for a diligent search, located any information about who may own the rights to a work that information could force the licensor to continue his search until the investigation has come to a fruitful end.116 Once the five requirements of the diligent search were met, however, that did not mean that the potential licensor, or the owner, was free to do as they please.

The Shawn Bentley Orphan Works Act of 2008 also created “recommended practices” for potential licensors. The recommended practices were intended to be the ongoing contribution of the United States Copyright Office to fix the orphan works problem.117 The Copyright Office noted that potential users desired guidelines to follow when searching for works and owners in different mediums.118 Recommended practices would allow the Copyright Office to address the requirements of the diligent search with more specificity, guiding licensors to focus on particular criteria of the diligent search for different types of works. The Copyright Office, with this requirement, could determine a de facto database to be explored or tool to be used in order to meet the diligent search requirement of S. 2913. The Copyright Office has investigated potential technologies and databases that could have made their way into the “recommended practices,”119 further spelling out criteria for a diligent search and hinting at locations where copyright owners should make themselves and their works known to prevent their works from becoming orphans. With this power granted to the Copyright Office, the five criteria

115. S. 2913 § 2(b)(2)(A)(ii)(II).116. U.S. Copyright Office, supra note 3, at 106 (holding

that a reasonable search would entail efforts to identify, locate and make contact with any individuals associated with the work who are probably not the legal owners of any right).

117. See 154 Cong. Rec. S-3437-38 (daily ed. Apr. 28, 2008) (statement of Sen. Orrin G. Hatch) (noting that the disclosure of “best practices” for finding the owner of an orphan work will be the contribution of the Copyright office, which the courts will make determinations as to if searches are diligent and in good faith).

118. U.S. Copyright Office, supra note 3, at 108.119. Promoting the Use of Orphan Works: Balancing the Interest

of Copyright Owners and Users: Hearing before the Subcomm. on the Courts, the Internet, and Intellectual Property of H. Com. on the Judiciary, supra note 42 (informing the committee of recent examination of products and databases from Copyright Clearance Center, Digimarc, Google, InfoFlows, PicScout, PLUS, Audible Magic and Corbis).


Mark Tratosof the diligent search were suddenly less reliable because the Copyright Office had the power to expand or define the reasonable search criteria at will. Following the roadmap in the statute would no longer be enough.

Lastly, the Act imposed a payment requirement. The legislation informed the potential licensor that qualifying searches might require the use of databases or other technical resources that necessitate a payment or subscription to use.120 While this element was clearly directed at the potential user, there was nothing to indicate that the databases could not charge the individuals populating the database as well. Some rights-holders would no doubt be comfortable with paying to ensure their exclusive rights stay intact, but others would most likely stay away from using a costly service. Would database owners find more revenue charging the potential licensors who want to find the rights-holders, or charging the rights-holders who just want to be found? It is not clear how this would have worked out, especially in the private sector, but when placed in the hands of unregulated sectors, the potential ramifications should be noted.

While the intentions of the Shawn Bentley Orphan Works of 2008 were grand, were they worth the risks and potential harm placed upon rights-holders? The informal formalities were a dramatic development and the limitations on relief were possibly huge, but on a grander scale, what could have been the ramifications on copyright law?VI. Ramifications on Current Copyright Law

The Shawn Bentley Orphan Works Act of 2008 aimed to address the inadequacies of the U.S. copyright system, and while it did that, it challenged some long-standing tenets of copyright law. From statute to case law to international treaty, everything was on the cutting block to cure orphan works.

The Act would have substantially affected monetary relief. As the Act made clear, the only possible monetary relief available to a rights-holder was “reasonable compensation” in the form of the market price for the license prior to the infringement.121 In current copyright infringement cases, reasonable compensation to a copyright owner would be the “actual damages suffered by him or her as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.”122 Prior to S. 2913, when an infringer used an orphan work, courts would most likely consider the cost of the license when the infringement occurred, so it appears the Act

120. S. 2913 § 2(b)(2)(A)(v).121. Id § 2(c)(1).122. 17 U.S.C. § 504(b).

would not change the allocation of damages at all. The only question is whether the Shawn Bentley Orphan Works Act would have prevented a rights-holder from receiving the profits attributable to the infringement. When a reasonable license fee is lost, there is guarantee to receive profits,123 so it is unclear if rights-holders would have lost much in actual damages under the Shawn Bentley Orphan Works Act.

Statutory damages are another story. An individual who previously registered their work with the Copyright Office, in doing what orphan works legislation was trying to incentivize,124 stands to lose up to $150,000 per work in potential damages.125 Absent this legislation and a lessening of liability, a court would likely find a potential licensor’s use of an orphan work to be willful infringement, bringing up to $150,000 in statutory damages.126 Obviously, judges in such cases examine the totality of the circumstances to determine the appropriate award of damages, but losing a potential $150,000 because of orphan works legislation is a significant change from current copyright law. This is especially important because statutory damages are considered a reward for registering your work.127

Injunctive relief could be rendered non-existent for orphan works under this legislation as well. Section 502 under current copyright law gives federal courts the authority to grant reasonable injunctions to prevent or restrain the infringement of copyrights.128 This can be more important to the copyright owner than monetary relief, as injunctive relief is the way for a rights-holder to protect the integrity of their work. However, under the orphan works legislation, that option is once again taken away from the copyright owners by the courts asserting the payment of reasonable compensation.129

The Shawn Bentley Orphan Works Act arguably would have affected or eliminated Section 201(e) of

123. See On Davis v. The Gap, Inc. 246 F.3d 152, 167 (2d Cir. 2001) (“[D]ecisions of this and other courts support the view that the owner’s actual damages may include in appropriate cases the reasonable license fee on which a willing buyer and a willing seller would have agreed for the use taken by the infringer.”).

124. See 17 U.S.C. § 412125. Id. § 504(c)(2); see 17 U.S.C. § 412.126. Id.; see Island Software & Computer Serv. v. Microsoft

Corp., 413 F.3d 257, 263 (2d Cir. 2005) (holding that willful infringement requires the defendant being aware that they were infringing another’s copyright).

127. See Derek Andrew, Inc., 528 F.3d at 701 (holding that because the plaintiff waited almost two years from the date of first publication to register its copyright, they should not receive the reward of statutory damages).

128. 17 U.S.C. § 502.129. S. 2913 § 2(c)(2)(B) (“[A]ny injunctive relief ordered by

the court may not restrain the infringer’s continued preparation or use of that new work, if the infringer pays reasonable compensation in a reasonably timely manner.”).

52 Fall 2011

Informal FormalitiesTitle 17 as well. Section 201(e) does not allow any government body, official or organization to “seize, expropriate, transfer, or exercise rights of ownership with respect to the copyright, or any exclusive rights under copyright.”130 Under the orphan works legislation, the government, by granting “licenses” to potential users, would have exercised the right of the copyright holder to grant licenses to all of the exclusive rights under Section 106.131 Despite the fact that the government ownership of copyrights is rare,132 the Shawn Bentley Orphan Works Act would have effectively allowed the government to act as if they owned all the orphan works.

A changing of Section 201(e) leads directly to a potential changing of the way we view Section 106. If the government can give any of the Section 106 rights to a potential licensor without the owner’s consent, does the owner really have exclusive rights? It is also unclear what rights a potential licensor would have been allowed to take as well. The right to create a derivative work is clearly at the heart of the orphan works matter, but could it extend to the granting of a license to simply reproduce the work in the same manner as it was originally produced? It is unclear how the courts would handle such a scenario, and until orphan works legislation is passed, it will remain unclear.

One of the rights not represented in Section 106, but that is no less vehemently fought for amongst copyright owners, is the “right to exclude.” The right to exclude anyone from licensing has long been viewed as one of the rights of a copyright owner.133 This legislation would perhaps change the way that we approach copyright, changing copyright from a property right into something entirely different.

Finally, the Shawn Bentley Orphan Works Act of 2008 arguably stood in the way of the Berne Convention and what it was trying to accomplish, along with many other international copyright treaties. Despite establishing that “the enjoyment and exercise” of all rights associated with copyright protection cannot

130. 17 U.S.C. § 201(e).131. 17 U.S.C. § 106 (transferring the exclusive rights to

reproduce the copyrighted work, to prepare derivative works, to distribute copies of the work, to perform the work publicly, to displace the work publicly).

132. See 17 U.S.C § 105 (denying copyright protection for any work of the United States Government); see Schnapper v. Foley 667, F.2d 102 (D.C. Cir. 1981) (allowing the government to acquire ownership of copyrights).

133. Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932)(noting that Article 1, Section 8, Paragraph 8 of the United States Constitution granted the right of an author to license their work, which in turn allows for the owner of a copyright to refuse to license their work).

be subject to the completion of some formality, the United States Congress has always been comfortable treading a fine line between what is a formality and what is not.134 The United States does not require an individual to register their work to receive copyright protection, a belief that follows the Berne Convention’s dicta; however, the United States does require registration if one wants to bring an infringement action or receive monetary relief for infringement in the form of statutory damages or attorney’s fees.135 While the United States has always claimed our registration system is valid in the face of international treaties, requiring registration to enforce your copyright has been deemed by some to have the same effect as forcing registration for protection in the first place.136 The Shawn Bentley Orphan Works Act of 2008 could have further complicated this scenario by necessitating the registration of your work with not only the Copyright Office, but also with other private databases and directories.137 Not doing so would lead to the potential loss of your exclusive rights to copyright.138 While still most likely falling in line with the United States’ rationale that current registries can still function in the wake of Berne and other international agreements, this scenario does add more ammunition to the argument that coerced registration could function as a true formality. The ramifications of orphan works legislation have been noted and there is no doubt that they played a part in this legislation’s demise. The next question is how bodies other than Congress would treat solutions to the orphan works problem.VII. Reactions

The ideologies on the two opposite sides of the orphan works legislation have been battling for a few years now. It could be argued that the rights-holders are “winning” the battle, as legislation has not passed both houses of Congress, but that also means that the orphan works problem has been allowed to grow exponentially for additional years without a legislative solution. There was, however, a recent attempt at a private solution.

134. See Tehranian, supra note 17, at 1438-39 (holding that copyright registration is not a formality when it only affects copyright remedies and not copyright subsistence).

135. 17 U.S.C. § 411-12.136. See Tehranian, supra note 17, at 1439 (noting that

copyright owners who did not register their work previous to infringement are often left to extralegal means to reverse the infringement, thus eliminating the legal effect of having copyright protection).

137. S. 2913 § 2(b)(2)(A)(ii) (requiring potential licensors to search various databases and directories as required under reasonable circumstances).

138. See S. 2913 § 2(b)(3).


Mark TratosIn 2004, the Google Corporation undertook

a project to digitally copy books and other written works, with the eventual purpose that Google users could search through a book’s text online, amongst other goals.139 The project was met with a great deal of resistance from publishers and rights-holders.140 Eventually an agreement was reached between the Author’s Guild and Google allowing Google to continue the digitizing books, sell subscriptions to an electronic books database, sell access to individual books, and to make other prescribed uses.141 The settlement would have created a registry of all the rights-holders of the works scanned in the Google Books Project.142 Should the owner of the work choose not to have their previously digitally scanned work used by Google or not to have their work digitized in the first place, they could have their book and/or their records removed from the registry.143 Although this system seemed like a reasonable agreement amongst consenting parties, there was a great deal of contention regarding orphan works.144 While Google was required to use all reasonable efforts to find the owners of the works,145 Google would, under the terms of the agreement, gain the rights to use the orphan works unless the rights-holder purposefully opted out of the registry.146

While the Google Books agreement is not completely analogous to the Shawn Bentley Orphan Works Act, the similarities between the two scenarios are worthy to note. These similarities were not lost on the federal court judge in charge of approving or denying the settlement, Judge Chin, either, who said it has been the charge of Congress to further copyright policy.147 While the issue was in front of him however, he held that the Google Books settlement was not “fair, adequate, or reasonable.”148 Judge Chin held that it is inconsistent with the longstanding purpose of U.S. copyright law to force rights-holders to come forward to protect their rights when Google first copied the

139. The Authors Guild, 05 Civ. 8136, slip op. at 2-3. 140. Id. at 4.141. Id.142. Id. at 7-8.143. Id. at 8.144. Id. at 23-24 (holding that Congress has attempted to

solve the orphan works problem, signifying it may not be the role or right of a private agreement to do so).

145. Id. at 9.146. Id. at 32-34.147. Id. at 23 (“The question of who should be entrusted

with guardianship of orphan books . . . safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties.”).

148. Id. at 1.

works without seeking permission.149 In addition, the judge found it to be very unlikely that most copyright owners would actually know to come forward to enforce their copyrights by removing their works from the registry.150 The court also held that the agreement would have a massive impact on foreign rights-holders, who would most likely find it more difficult to receive notification of what they must do to protect their work than it would be for U.S. rights-holders.151 Judge Chin finally took note that foreign digital libraries, which are in line with international treaty agreements, would not receive control over orphan works that Google was trying to obtain with the agreement.152

While the first private attempt at a solution to the orphan works problem failed in federal court, this does not mean that a legislative attempt at a similar solution would not be successful. All the ruling does is reinforce the basic concept that current copyright law will in no way provide for a solution to the orphan works problem. Congress’s changes to copyright law enabled the orphan works situation, and it is only when U.S. copyright law changes again that the problem will disappear; the Shawn Bentley Orphan Works Act was an attempt at that change. The question is, is the United States Congress ready to sacrifice many of the current elements of copyright law to reach that solution? The Senate was in 2008. Moreover, while that attempt was meant to shape the actions to be taken by all copyright holders, that may not have been a bad thing. In fact, it may have been the right solution for U.S. copyright law. VIII. The Shawn Bentley Orphan Works Act

Would Have Been Good for the United States Copyright Market, and Thus Good for the United States

The Shawn Bentley Orphan Works Act of 2008 was no doubt a controversial piece of legislation. This controversy does not necessitate that the legislation be unsuccessful, does not attempt to incorrectly legislate, nor does it place the legislation outside of the “goals” of copyright law. In fact, the Shawn Bentley Orphan Works Act might have been the most successful attempt to get the United States back to what copyrights originally were meant to be and do in the United

149. Id. at 35.150. Id. at 35-36.151. Id. at 43-44 (noting the concerns of foreign rights-

holders that they are unable to accurately search the records of the Copyright Office without traveling to Washington, D.C. or paying a fee of $330).

152. Id. at 45 (noting that the German digital library “Deutshe Digitale Bibliothek” must still license the rights of orphan works in order to use them).

54 Fall 2011

Informal FormalitiesStates.153

The solution to the orphan works problem is to make every rights-holder locatable when an individual wishes to license the work. It seems clear that the legislation, with its imposition of informal formalities, would have done that. Individuals could license orphan works under certain reasonable search criteria, and that would in turn encourage current and future rights-holders to make themselves known to potential licensors. That is not what makes the legislation controversial though; what makes this legislation truly novel and insightful are the requirements that rights-holders must satisfy to maintain their rights. Why should this be such a controversy though? The greater controversy might, in fact, be the changes to U.S. copyright law that led us to the problems in the first place.

The first copyright law in the United States was a law populated with formalities to receive copyright protection. The Copyright Act of 1790 gave copyright protection (the sole right and liberty of printing, reprinting, publishing and vending) for 14 years to any individual who registered their work with the U.S. government.154 To extend protection another 14 years, the rights-holder would have to renew their work with the government again.155 The protection would never be granted unless individuals deposited a copy of their work with the government as well.156 From the birth of this nation, copyright holders were expected to perform certain actions to receive copyright protection.

The belief that formalities were beneficial and necessary for copyright protection was held firm in U.S. law until the implementation of the Copyright Act of 1976 and the Berne Convention, which eliminated copyright formalities from U.S. copyright law. Even as the United States moved away from copyright formalities, it does not appear that was ever the true intent of the Copyright Office. The Register of Copyrights did not approve the instant granting of copyright protection when Congress looked to revise copyright law in the 1970s.157 The Register believed

153. See U.S. Const. art. 1, § 8, cl. 8 (noting that the copyright clause is not meant to benefit individual people, but “to promote the Progress of Science and useful Arts” for the people).

154. Copyright Act of 1790, 1 Stat. 124 (protecting only maps, charts, or books).

155. Id.156. Id. at 125. 157. Ginsburg, supra note 11, at 333 (citing the Report of the

Register of Copyrights on the General Revision of the U.S. Copyright Law (1961), available at http://en.wikisource.org/wiki/Report_of_the_Register_of_Copyrights_on_the_General_Revision_of_the_U.S._Copyright_Law (“The Constitution does not establish copyrights, but provides that Congress shall have the power to grant such rights if it thinks best. Not primarily for the benefit of the

that when the public’s interests and the interests of the artist were to conflict, the interests of the public were of greater priority.158

Such favoritism of copyright formalities in our legislative past shows that the United States was never a nation that treated a copyright as a natural right.159 One could assume that if a copyright were a natural right, created upon inception of a work, an individual would have to do nothing other than create the work to receive protection.160 Instead, the U.S. Government traditionally viewed copyrights as a government-granted monopoly over the rights associated with a work.161 It was the “thinkers” and authors of treatises who instead believed in the “natural rights of authorship,” viewing formalities as hurdles in the path of that right.162 Therefore, while the “thinkers” and most Western European countries believed that copyrights were natural rights,163 the United States continued to legislate and adjudicate that copyrights were government-granted monopolies, subject to the strictest formalities.164

By acknowledging the United States’ rationale on copyright’s origins and what was required to receive them, one can foresee the potential problems that the United States would have by eliminating copyright formalities to fall in line with international conventions. The U.S. copyright system was based on the principle that someone must do more than simply create the work to own a copyright in it. So when Congress decided to retreat from that principle, problems arose, the most significant being orphan works. Recognizing this problem, Congress attempted to re-impose the formalities through the creation of informal formalities in the Shawn Bentley Orphan Works Act. Forced to function in between U.S. copyright principles and international beliefs, orphan

author, but primarily for the benefit of the public, such rights are given.”).

158. See id.159. See id. at 319160. See id. at 318-19 (noting that the imposition of

formalities reflects the concept that creating a work alone does not justify protection).

161. See id. (holding that a government-granted monopoly would most likely require the copyright holder to meet certain requirements to receive the copyright).

162. See id. at 320.163. See also Circular 38A: International Copyright Relations of

the United States, 1 (Nov. 2010) (noting that France, Germany, the United Kingdom, Italy, Portugal, and Spain agreed to the Berne Convention, and subsequent elimination of copyright formalities, in the 19th century).

164. See Ginsburg, supra note 11, at 320-21 (recognizing that federal legislation and subsequent federal court decisions that enforced the “highly restricted view of copyright” that prevailed throughout the 19th century in the United States).


Mark Tratosworks legislation danced the fine line between freely granting copyrights and asking owners to do more than simply create. Orphan works legislation simply acknowledged that the United States has always treated copyrights differently than most of the world, and that formalities, albeit informal, will be necessary.IX. The Next Step for Orphan Works Legislation

So where can we go from here? All attempts at legislation have failed. It does not appear that another attempt at solving the orphan works problem will be made in the current political climate. If another attempt were made though, some changes could make the solution more amiable for all.

A simplification of the proposed legislation could go far to increase the likelihood that orphan works legislation would be passed. Referring back to the proposed statutory language from the Copyright Office’s Report on Orphan Works, the legislation would call for a “reasonably diligent search to locate the infringed copyright” when “performed in good faith.”165 There were no criteria for specialized databases to be searched or for tools to be used, not even a mandatory search of the Copyright Office Registry.166 Instead, the legislation required only a diligent search.167 This could lessen the formalistic requirements placed on every rights-holder while still encouraging preemptive actions to make themselves known to potential licensors. The searches would still be required, and a possible loss of exclusive rights might occur, but no longer would the rights-holders be told where their works should go. By giving creators more control over their own works and how they are to make themselves known to the world, rights-holders are given more freedom to protect their works as they see fit. All that would be required to accomplish this is a simplification of the legislation’s language.

By not statutorily defining the criteria for a diligent search, Congress would not be limiting itself to specific ways that potential licensors could find the owners of works. The Report on Orphan Works spoke of the rise of new tools to identify and protect works168; however, the Shawn Bentley Orphan Works Act attempted to require the use of these tools before it was known what tools would prove useful in the first place169. The Report on Orphan Works frequently

165. U.S. Copyright Office, supra note 3, at 127.166. Id.167. Id.168. Id. at 104 (noting that the growth in technology,

particularly internet based technology, would factor into what qualified as a reasonable search as it would be much easier to identify and locate authors).

169. See S. 2913 § 514(b)(2)(A)(ii)(requiring specific steps to be taken to qualify as a diligent search).

emphasized the need for flexibility in defining what constitutes a reasonable search.170 By eliminating the factors of a diligent search (records of the Copyright office, technological tools, appropriate databases, etc.), Congress would encourage the development of new resources to find rights-holders instead of forcing those resources to fall into specific categories.

The elimination of the diligent search criteria could also encourage the development of a more reasonable diligent search. The Report on Orphan Works acknowledged the prevalence of “private users” who wished to obtain a license to use an orphan work.171 These private users would be the least likely to use the orphan work for commercial benefit and it could be assumed that they also had limited funds to conduct a diligent search. Such uses would harm rights-holders the least, and yet orphan works legislation still required every potential user to complete every step of the diligent search. Despite the limited impact of private users on the licensing market, the licensors would still be required to conduct ineffective searches of copyright records, occasionally paying Copyright Office staff to conduct such a search in addition to potentially paying for expert assistance or the right to use technological databases.172 Such monetary requirements would still deter private users from appropriating orphan works, and the deterrence of the least harmful uses of orphan works is antithetical to the purpose of the legislation.173 The elimination of diligent search criteria would no doubt facilitate the use of orphan works by private users, a goal that is supposedly the focus of this legislation.174

Finally, instead of mandating specific search criteria for a potential licensor175, future legislation should address the factors that courts would use to

170. U.S. Copyright Office, supra note 3, at 104.171. Id. at 125. (noting the prevalence of individuals wishing

to reproduce old family photographs). 172. S. 2913 § 514(b)(2)(A)(ii) (requiring searches of the

records of the Copyright Office, technological databases, and the use of expert assistance to conduct a reasonable search).

173. See U.S. Copyright Office, supra note 3, at 38-40 (noting that small-time users would might be willing to pay small fees to use a work, but only if it would ensure finding the owner of the copyright).

174. U.S. Copyright Office, supra note 3, at 8 (asserting that the first goal of orphan works legislation was to create a system that would make it more likely for users to find a relevant rights-holder and negotiated a license agreement and recognizing that the second goal was to encourage use of orphan works only when the rights-holder could not be found).

175. See id. (requiring that every diligent search entail a search of the records of the Copyright Office, as search of available sources of copyright authorship, the use of appropriate technological tools while searching, and the use of appropriate databases while searching).

56 Fall 2011

Informal Formalitiesdetermine if a reasonable search actually occurred. The Report on Orphan Works acknowledged that what is a reasonable search in certain circumstances might not be a reasonable search in others.176 The reasonability of a search would often depend on numerous factors, which would have to be balanced by the courts.177 Arguably, the most important factor to determine reasonability is the nature and extent of the use.178 The Report stressed that the more commercial the use of an orphan work by the potential licensor, the greater the effort the licensor must expend in finding the rights-holder.179 This factor will truly protect the rights-holder, as the potential licensor’s search for rights-holders, while intending to profit, would be scrutinized for good faith and diligence. Orphan works legislation must focus upon this factor in order to persuade rights-holders that they will be sufficiently protected from licensors who stand to benefit from attempting to skirt the reasonable search requirements, or those licensors who perform the bare minimum when conducting the search. Instead of establishing strict diligent search criteria for the licensor, orphan works legislation should establish statutory factors that courts will use to determine the reasonability of the search, with the nature and extent of the use being the most influential. Such a statutory construction has proven to be effective in the past, with federal courts embracing and shaping the four factors of copyright fair use.180 By giving the courts factors that would shape what constitutes a reasonable search instead of strictly defining it, the legislation could be friendlier to both parties involved. The private users who wish to license orphan works would, in theory, not be forced to waste money on costly and ineffective searches. The rights-holders should, in turn, be able to make themselves known as much or as little as they would choose. They could choose to identify themselves everywhere, likely increasing that odds that every licensor would find them, or they could choose to put themselves in only a few small places, hopefully allowing those who truly wished to profit off their work would find them, letting the private users with limited means use the orphan work freely. This flexibility is essential for orphan works legislation to succeed.

By simplifying orphan works legislation and replacing the diligent search criteria with the factors

176. U.S. Copyright Office, supra note 3, at 98.177. Id. at 98-108 (holding that the reasonability of a search

would be shaped by identifying information on the work itself, the public nature of the work, age of the work, whether indentifying information exists in publically available records, and the status of the author).

178. See id. at 107-08.179. See id.180. See 17 U.S.C. § 107.

of a reasonably diligent search, a more flexible, and therefore workable, standard will be created. Such a standard will assuage the fears of rights-holders and make orphan works legislation easier to pass, all the while accomplishing the goals of previous orphan works legislation.X. Conclusion

There seems to be unanimous agreement that orphan works are a devastating problem for copyright law; however, there is no agreement as to what should be done about them. The most recent legislative attempt at fixing that problem, the Shawn Bentley Orphan Works Act of 2008, was novel, but by creating informal formalities, the bill might have been doomed from the start. When you look at the beginnings of copyright protection in the United States though, the idea behind informal formalities seems to fall in line with the country’s goals. The United States, through legislation and common law, has always treated a copyright as something that is earned, not freely given. It is with this goal in mind that Congress must continue to shape its orphan works legislation, perhaps by eliminating search criteria and instead creating factors for courts to use in determining what constitutes a reasonable search. By taking these actions, Congress may be able to eliminate orphan works and establish the copyright license market as a functional part or our national economy.


Joshua M. Green


by Joshua M. Green*

The Russian IPR Problem: How Accession to the WTO is Not the Magical Solution, Rather a Step in the Right Direction

I. IntroductionInternational failures to enforce and protect

intellectual property rights (IPRs) have a lasting impact on economic growth,1 consumer safety,2 and even national security.3 These failures are costing companies and consumers billions of dollars annually.4

* Joshua M. Green is a graduate of Gonzaga University School of Law.

1. See Frontier Economics, Estimating the Global Economic and Social Impacts of Counterfeiting and Piracy, 6, 9 (Feb. 2011) (commissioned by Business Actions to Stop Counterfeiting & Piracy (BASCAP)), available at http://www.iccwbo.org/uploadedFiles/BASCAP/Pages/Global%20Impacts%20-%20Final.pdf; see also International AntiCounterfeiting Coalition , Submission of the International AntiCounterfeiting Coalition to the United States Trade Representative: Special 301 Recommendations, 4 (Feb. 11, 2011) [hereinafter IACC] https://www.law.stanford.edu/display/images/dynamic/events_media/IACC%202011%20Special%20301.pdf (concluding that “the global scale of counterfeiting and piracy estimate the total global value of counterfeit and pirated products to be US$455-650 billion each year, with the projected annual global value of counterfeit and pirated products to exceed $1 trillion by 2015”).

2. See e.g., 8 Arrested for Selling Counterfeit Rabies Vaccine, Desk Of Brian, Sept. 27, 2010, http://deskofbrian.com/2010/09/8-arrested-for-selling-counterfeit-rabies-vaccine/?utm_source=rss&utm_medium=rss&utm_campaign=8-arrested-for-selling-counterfeit-rabies-vaccine (revealing that eight people were arrested for selling fake rabies vaccine which killed one and endangered over a thousand); Martin Cassidy, Trading Standards Issues Counterfeit Brake Pads Warning, BBC, Aug. 2, 2010, http://www.bbc.co.uk/news/uk-northern-ireland-10846035 (detailing counterfeit brake pads in Northern Ireland that failed friction tests and were held together by glue); Former Bellevue Salon Owner Sentenced for Fake Botox Injections, Seattle Pi, Jan. 15, 2010, http://www.seattlepi.com/sound/414309_sound81776672.html (reporting inflammation, swelling, and hardening of patients faces after receiving counterfeit Botox and Restylane injections, causing one woman to undergo plastic surgery); Leslie Meredith, Counterfeit Phones May Explode, TechNews Daily, Sept. 28, 2010, http://www.technewsdaily.com/counterfeit-phones-may-explode-1339/ (detailing twenty hospitalizations and one death in India due to recent counterfeit cell phone explosions).

3. See e.g., Grant Gross, U.S. Agencies Crack Down on Counterfeit Networking Hardware, PCWorld, May 6, 2010, http://www.pcworld.com/article/195791/us_agencies_crack_down_on_counterfeit_networking_hardware.html (describing how Ehab Ashoor, a Saudi citizen who purchased counterfeit Cisco Gigabit Interface Converters, was sentenced for intending to sell them to the U.S. Marines for use in transmitting troop movements, relaying intelligence, and maintaining security at a military base in Iraq).

4. See Rachael King, Fighting a Flood of Counterfeit

Furthermore, the highest burden is carried by G20 countries, which lose billions annually because of counterfeiting and piracy.5 These figures include billions in lost tax revenues, billions of increased welfare spending, “$25 billion in increased costs of crime, $18.1 billion in the economic cost of deaths resulting from counterfeiting, and $125 million for the additional cost of health services to treat injuries caused by dangerous fake products.”6 Needless to say, bolstering worldwide IPR enforcement would plausibly save G20 countries billions of dollars every year and should be a top priority for every nation.7 However, counterfeiting and piracy continue to be an international problem.8

Every year the U.S. Trade Representative publishes a report detailing the failures of other nations in enforcing IPRs.9 In the Trade Representative’s latest report, the Russian Federation topped the list as one of the biggest infringing nations, second only to China.10 Indeed, Russia has been a leading infringer for quite some time.11 Much scholarly attention has addressed the challenges international trade organizations place on developing nations, which in turn makes regulating

Tech Products, Bloomberg Businessweek, Mar. 1, 2010, http://www.businessweek.com/technology/content/feb2010/tc20100228_486251.htm.

5. See IACC, supra note 1, at 5.6. Id.7. See id.8. See Office of the U.S. Trade Representative, 2011

Special 301 Report 25 (April 30, 2011) http://www.ustr.gov/webfm_send/2841.

9. See id.10. See id. at 19-24.11. In fact, Russia has been second to China on the Priority

Watch List since at least 2007. See generally, Office of the U.S. Trade Representative, 2010 SPECIAL 301 REPORT, (April 30, 2010) http://www.ustr.gov/webfm_send/1906; Office of the U.S. Trade Representative, 2009 Special 301 Report, (April 30, 2009) http://www.ustr.gov/sites/default/files/Full%20Version%20of%20the%202009%20SPECIAL% 20301%20REPORT.pdf; Office of the U.S. Trade Representative, 2008 Special 301 Report, (April 30, 2008) http://www.ustr.gov/sites/default/files/asset_upload_file553_14869.pdf; Office of the U.S. Trade Representative, 2007 SPECIAL 301 REPORT, (April 30, 2007) http://www.ustr.gov/sites/default/files/asset_ upload_file230_11122.pdf.

58 Fall 2011

The Russian IPR Problemand enforcing IPRs extremely difficult.12 However, there is little dispute that there is a problem in Russia with guaranteeing protection of international IPRs within their borders,13 which has the potential to affect the Russian Federation’s economic development in the future.14

The World Trade Organization (WTO) has the most comprehensive and extensive series of international agreements, including the Trade Related Aspects of Intellectual Property Rights agreement (TRIPS),15 which has been somewhat effective in regulating IPRs in member nations and has helped to improve the overall enforcement of IPRs in lesser-developed countries.16 However, Russia is not a member of the WTO, although they are members of other international intellectual property agreements and are taking steps to win accession into the WTO.17 One glaring question has emerged from discussions regarding Russia’s imminent membership in the WTO: will Russia’s accession to the WTO and more particularly TRIPS have any real impact in the

12. See Beatrice Lindstrom, Scaling Back TRIPS-Plus: An Analysis of Intellectual Property Provisions in Trade Agreements and Implications for Asia and the Pacific, 42 N.Y.U. J. Int’l L. & Pol. 917, 944 (2010) (noting that compliance with TRIPS costs developing countries $60 billion per year); see also Darya Haag, Time to Pay the Dues or Can Intellectual Property Rights Feel Safe with the WTO?, 8 Rich. J. Global L. & Bus. 427, 437 (2009) (addressing arguments “that an imposition of costly minimum standards deprives [developing countries] of finances necessary for medicine, education and the development of infrastructure”); Paulina Rezler, Breaking Through the Great Wall: Problems of Enforcement of Intellectual Property Rights in China, 14 Touro Int’l L. Rev. 194 (2010); Candace S. Friel, The High Cost of Global Intellectual Property Theft: An Analysis of Current Trends, The TRIPS Agreement, and Future Approaches to Combat the Problem, 7 Wake Forest Intell. Prop. L.J. 209 (2007) (noting some of the problems with TRIPS and other international agreements).

13. See Leah Dow, Russia Tackles Intellectual Property Piracy, But More Work Needed, America.Gov Archive (May 4, 2009) http://www.america.gov/st/business-english/2009/May/20090504182236SBlebahC0.0366894.html; Janet L. Hoffman, Denis Khabarov & Tom Thomson, Navigating the Russian Legislative Maze (Feb./Mar. 2010) http://www.cipr.org/files/WTR_Feb_Mar_10.pdf.

14. See Intellectual Property Rights: A Key to Russia’s Economic Revival, The Coalition for Intellectual Property Rights, http://www.cipr.org/activities/articles/RBWipr.pdf (last visited Sept. 13, 2011).

15. See Agreement on Trade-Related Aspects of Intellectual Property Rights, Apr. 15, 1994, Marrakesh Agreement Establishing the World Trade Organization, Annex 1C, Legal Instruments--Results of the Uruguay Round, 1869 U.N.T.S. 299, 33 I.L.M. 1125 (hereinafter TRIPS Agreement) available at http://www.wto.org/english/docs_e/legal_e/legal_e.htm.

16. See World Trade Organization, Least Developed Countries’ Needs in Intellectual Property: Key Developments, Nov. 4, 2011, http://www.wto.org/english/tratop_e/trips_e/ldc_e.htm.

17. See World Trade Organization, Status of Accession Working Party, (last visited Sept. 13, 2011) http://www.wto.org/english/thewto_e/acc_e/a1_russie_e.htm.

regulation and enforcement of IPRs in the Russian Federation? If China, which shares many geographical, political, and socio-economic similarities with Russia, is an indication of what is to come, accession into the WTO will have little impact on the staggering IPR infringement problem the Russian Federation faces, especially at first.18

This article will address the international IPR implications of Russia joining the WTO. Section II provides a background of current Russian laws as well as a brief history of the government’s efforts to conform to world IPR enforcement standards. Section III it addresses the challenges the Russian Federation faces against the backdrop of China’s progress as a neighboring nation that shares many of its limitations. Finally, section IV suggests practical changes for the WTO and Russia, which could make the Russian Federation’s transition quicker, smoother, and more effective.II. Background

A. History of Russian IP Laws Leading Up to Contemporary IP Law

The Russian Federation has been trying to win accession into the WTO since 1993.19 Until recently,20 the U.S. had blocked all efforts by Russia to join the WTO community because of their failures to protect U.S. IPRs.21 Unlike U.S. intellectual property law, which can trace its roots back to Article I, Section 8 of the Constitution,22 the history of Russian IP protection has a blemished past.23 Prior to the Communist Revolution in 1917, Russia’s protection of IPRs was actually on par with the rest of the world.24

18. See China has been a member of the WTO since November 10, 2001. Press Release, World Trade Organization, WTO Ministerial Conference Approves China’s Accession, (November 10, 2001) available at http://www.wto.org/english/news_e/pres01_e/pr252_e.htm. Regardless of their 10 year tenure as a WTO nation, they still remain at the top of the U.S. Trade Representative’s priority watch list. See Office of the U.S. Trade Representative, 2010 Special 301 Report, (April 30, 2010) http://www.ustr.gov/webfm_send/1906.

19. See Esprit Eugster, Evolution and Enforcement of Intellectual Property Law in Russia, 9 Wash. U. Glob. Stud. L. Rev. 131, 150 (2010); World Trade Organization, Accessions: Russian Federation,://www.wto.org/english/thewto_e/acc_e/a1_russie_e.htm (last visited Sept. 14, 2011).

20. See Steve Gutterman, Update 1- U.S. Vice President Biden Backs Russia WTO Bid, Reuters (March 9, 2011) http://www.reuters.com/article/2011/03/09/russia-usa-biden-idUSLDE7281LC20110309.

21. See Eugster, supra note 19, at 132.22. See U.S. Const. art. 1, § 8.23. See Eugster, supra note 19, at 136-151 (chronicling the

history of intellectual property laws in Russia). 24. See id. at 136.


Joshua M. GreenHowever, with the rise of the Soviet era, Russia’s

concept of property changed drastically and, unsurprisingly, notions of intellectual property rights changed with it, albeit not immediately.25 By 1931, IPRs under Soviet rule devolved into nonexistence—the new laws abolished private ownership of intellectual property.26 IPRs did not receive any national attention again until 1991, spurred by the cultural and political paradigm shift under President Mikhail Gorbachev’s economic, ideological, and social reforms of the mid 1980s.27 Actual legislative changes did not surface until 1992, when the new republican government of the Russian Federation enacted a series of intellectual property laws.28 Between 1994 and 2004, Russia’s legislative body enacted a host of laws that would directly regulate trademarks, copyrights, patents, and even trade secrets.29

B. Part IV of the Russian Civil Code: A New Day of IP Protection

In 2006, the Russian Federation proposed and adopted Part IV of the Russian Civil Code,30 a hotly controversial piece of legislation,31 which amended and essentially replaced the existing intellectual property laws.32 The 2006 legislation was largely a knee-jerk reaction to the vast amount of negative national attention the Federation was receiving regarding its IP laws.33 It was also an effort by the Federation to finally win accession into the WTO.34 The new legislation appeared to satisfy the U.S., which, up until that point, had vigorously opposed Russia’s admission into the WTO.35

Even though Part IV of the Russian Civil Code

25. See id. at 137.26. See id. at 136.27. See id.28. See id.29. See Sergey Budylin & Yulia Osipova, Total Upgrade:

Intellectual Property Law Reform in Russia, 1 Colum. J. E. Eur. L. 1, 4 (2007) (reviewing the history of Russian IP legislation after the collapse of the Soviet Union).

30. See Eugster, supra note 19 at 145.31. See Russia Proposes New Civil Code, Coalition for

Intellectual Property Rights, (March 2006) http://www.cipr.org/activities/advocacy/civil_code/index.htm; see also Part IV of the Russian Civil Code: Summary of Key Trademark Protection Issues, Coalition for Intellectual Property Rights, http://www.cipr.org/activities/advocacy/files/CIPR_PartIVSummary_12-06.pdf (last visited Sept. 13, 2011) (highlighting the key trademark issues in the new law even after they were enacted); Olga Barannikova, An Intellectual Property Rights Headache, Moscow Times (March 14, 2006), http://www.cipr.org/activities/publications/intellectual_property_rights/index.htm.

32. See Budylin & Osipova, supra note 29, at 8.33. See id. at 2.34. See id. at 3.35. See id.

essentially replaced all prior IP laws, much of the preexisting provisions were incorporated into the new legislation.36 Although the amendments were accepted and signed into law with little public debate,37 the new legislation established a framework of IP laws that meet the international standards established by TRIPS.38

1. TrademarksWhen President Putin signed Part IV of the

Russian Civil Code into law on December 19, 2006, many questions regarding trademark protection still remained.39 For example, some questioned the absence of a uniform infringement standard, the insufficient protection of famous and other well-known marks, the absence of opposition procedures, and the lack of transparency at Rospatent, Russia’s version of the United States Patent and Trademark Office (USPTO).40 However, despite the controversy, Part IV made few substantive changes with regard to trademarks. 41

Contrary to the many concerns that nations and businesses had about the 2006 law, Part IV complies with TRIPS requirements42 and actually mirrors the Lanham Act on many provisions.43 For example, Part IV has a similar definition of trademarks and service marks,44 provides legal protection for registered marks,45 lays out the rights of trademark holders,46 establishes statutory

36. See id. at 8; Eugster, supra note 19, at 145.37. See Barannikova, supra note 31 (noting that the new

legislation “appeared like a bolt out of the blue. None of the organizations that had been working on this issue with the government had seen the draft or even known of its preparation until it” was proposed to the Duma); Russia Proposes New Civil Code, Coalition for Intellectual Property Rights, (March 2006) http://www.cipr.org/activities/advocacy/civil_code/index.htm (stating that there were concerns “because the draft legislation was not the subject of public discussion”).

38. See Budylin & Osipova, supra note 29, at 38 (concluding that Part IV “corresponds to the current international standards and treaties, and can be tentatively characterized as ‘WTO-ready’”).

39. See Part IV of the Russian Civil Code: Summary of Key Trademark Protection Issues, Coalition for Intellectual Property Rights, http://www.cipr.org/activities/advocacy/files/CIPR_PartIVSummary_12-06.pdf (last visited Sept. 13, 2011).

40. See id.41. Pavel Sodovsky, Part IV of the Civil Code: A Mixed

Blessing, AEB Bus. Quarterly No. 4 (2007), available at http://www.magisters.com/publication.php?en/592/articles/.

42. See TRIPS Agreement, supra note 15, at art. 15. 43. Compare Law of the Russian Federation On

Trademarks, Service Marks and Appellations of Origin English translation available at http://www.liapunov.com/legislation-tm.html, with 22 U.S.C. §1051 et seq.

44. See Law of the Russian Federation on Trademarks, Service Marks and Appellations of Origin, supra note 43, at art. 1.

45. Id. at art. 2.46. Id. at art. 4.

60 Fall 2011

The Russian IPR Problembars to registration,47 and clearly establishes a system for registration.48 Trademarks can be denied if they are confusingly similar to “a company name, commercial designation, or a domain name that is already protected in the Russian Federation.”49 In fact, the new features that Part IV incorporated into its trademark statutes were mostly procedural, although Part IV also expanded notions of trademark use and introduced new sanctions.50 In totality, the trademark provisions are actually rather complete.

2. CopyrightsThe Russian Federation is already a member of the

Berne and Rome Conventions.51 Although Russia is not yet a member of the WTO, the copyright provisions in Part IV were written with the TRIPS agreement in mind.52 From a copyright standpoint, the 2006 legislation protects expressions of authorship “that are the product of creative work, regardless of the purpose, the merit and the manner of expression thereof.”53 This concept is similar to American provisions for copyright, which protect any “original works of authorship fixed in a tangible medium of expression.”54 Article 7 of the Russian Copyright statute has an almost identical list of protectable works as the list found in § 102 of the U.S. statute on copyrights.55 Furthermore, like in the United States, an author need not register to receive authors’ rights or neighboring rights.56 Even the duration of copyright protection, life plus 70 years, emulates the U.S. provision.57

The changes to previous copyright statutes in Part IV go a long way to protect authors and “will undoubtedly shape a new system of intellectual law and

47. Id. at art. 6, 7.48. Id. at ch. 2.49. Sodovsky, supra note 41; see also Law of the Russian

Federation on Trademarks, supra note 43, at art. 7.50. See Sodovsky, supra note 41.51. Russia joined the Berne Convention in March of 1995

and later joined the Rome Convention in May of 2003 and the Universal Copyright Convention. See Dmitry Golovanov, Transformation of Author’s Rights and Neigbouring Rights in Russia 3 (2008), available at http://www.obs.coe.int/oea_publ/iris/iris_plus/iplus2_2008.pdf.

52. See id.53. Law of the Russian Federation On Copyright and

Related Rights, art. 6, English translation available at http://www.liapunov.com/legislation-co.html.

54. 17 U.S.C. § 102(a) (1990). 55. Compare Law of the Russian Federation on

Copyright and Related Rights, supra note 53, at art. 7.1,53, with 17 U.S.C §§ 102(a)(1)-(8) (2006).

56. See Golovanov, supra note 51, at 3.57. Compare Law of the Russian Federation on Copyright and

Related Rights, supra note 53, at art. 27,53, with 17 U.S.C. 302(a) (2006).

law-enforcement practice in Russia.”58 To be sure the level of protection extended to copyright holders is on the rise and this should be cause for encouragement.59 The laws currently in place securing authors in their intellectual property rights is currently on par with the WTO and other nations, including the United States.60 It also shows that Russia is firmly committed to the legislative protection of intellectual property rights.61

3. PatentsRussia’s patent laws under Part IV protect

inventions, utility models, and industrial designs.62 It is noteworthy that Article 1 protects each of the objects contemplated in the Paris Convention63 and contains very similar language to Section 5 of TRIPS.64 Until recently, the patent laws in the United States granted patent protection to the first to invent or conceive.65 Congress recently passed legislation that placed the U.S. on par with the rest of the world,66 including Russia, by granting patent protection to the first party to file.67 A patent will only be granted to those objects that are new or novel, which require an “inventive step,” and they must be “industrially applicable.”68 These concepts are strikingly similar to the U.S. counterpart, which requires that inventions be novel, non-obvious, and useful.69 Conversely, discoveries, scientific theories, mathematical methods, aesthetic designs, business methods, and computer programming are not considered inventions and thus not patentable under Part IV.70

Part IV formally establishes a meticulous method for applying for a patent.71 As part of the application process, the applicant must disclose the patentee, clearly describe the invention so that it can be reduced to practice,

58. Golovanov, supra note 51, at 8.59. See id. 60. See Budylin & Osipova, supra note 29, at 38 (concluding

that Part IV “corresponds to the current international standards and treaties, and can be tentatively characterized as ‘WTO-ready’”).

61. See Eugster, supra note 19, at 150.62. Patent Law of the Russian Federation at art. 1

[hereinafter Patent Law] English translation available at http://www.liapunov.com/legislation-pat.html;); Budylin & Osipova, supra note 29, at 17.

63. Budylin & Osipova, supra note 29, at 17.64. Compare Patent Law of the Russian Federation, supra note

62, at art. 1,62, with TRIPS Agreement, supra note 15, at art. 5.65. See 35 U.S.C. § 102(g)(2) (1952).66. See, Press Release, US House of Representatives

Committee on the Judiciary,Smith Patent Reform Bill Becomes Law (Sept. 16, 2011) http://judiciary.house.gov/news/Patent%20Reform%20Law.html .

67. Patent Law, supra note 62, at art. 19.68. Id. at art. 4.69. 35 U.S.C. §§ 102, 103; U.S. Const. art. 1, § 8, cl. 8.70. See Patent Law, supra note 62, at art. 4.2.71. See id. at tit. V.


Joshua M. Greenlist the claims made by the patented object, include drawings where necessary, and provide a synopsis.72 The application process, which is administered by Rospatent, permits patent applications to be filed by foreign nationals.73 Once a patent is granted, the patent holder has an exclusive right to the invention, utility model, or industrial design.74 Part IV protects patent owners from infringement and grants them with a cause of action to stop infringement and to disgorge the profits resulting from infringement.75

The protections afforded to patent holders in under Part IV are robust and on par with the patent protections afforded in other TRIPS nations, including the United States. Russia has established a legal framework that parallels some provisions within Section 5 of the TRIPS agreement.76 The protections extended to patent holders meet the minimum standards established by the WTO and should not hinder their accession in to the world organization.III. Discussion

Given the trademark, copyright and patent provisions in Part IV, on paper Russia should be a decent candidate to be the next member of the WTO. However, the Russian Federation’s problem stems not from a lack laws, but a lack of enforcement.77 Despite new laws and increased raids, piracy in Russia still continues to grow.78 U.S. losses resulting from Russian piracy totaled nearly 2 billion dollars in 2006 when Russia passed Part IV and 1.4 billion dollars in 2010.79 According to the International Anti Counterfeiting Coalition (IACC), the sale of counterfeit goods accounted for 24% of the retail goods sold in key product sectors in Russia in 2009.80 Although Russia has improved its efforts in combating infringing activities, these efforts have not had a meaningful impact on curtailing piracy.81

Some argue that the reason Russia is not seeing any improvement is the lack of criminal prosecutions against those caught trafficking pirated goods.82 However, Russia has a host of unique geographic, socioeconomic, and political limitations, which make IPR enforcement very difficult. These limitations are also shared to some

72. Id. at art. 16.2.73. See id. at art. 15.74. Id. at art. 10.1.75. Id. at art. 14.2.76. TRIPS Agreement, supra note 15, at Section 5.77. Eugster, supra note 19, at 146-47.78. Id. 79. 2011 Special 301 Report, supra note 8, at 32.80. IACC, supra note 1, at 35-36. 81. Eugster, supra note 19, at 146-48.82. Id. at 147 ( “[T]hough the numbers of raids have

increased over the past several years, the percentage of criminal penalties following these raids remains low.”).

degree with China, which is the top infringer among all nations, despite being a member of the WTO.83 The two nations can be compared in terms of these shared limitations as well as their ability and willingness to zealously enforce IPRs.

A. Geographic Size

Russia is the largest nation in the world with over 17,098,242 square kilometers of terrain within its boundaries.84 Most of this vast territory is harsh and undeveloped and its over 138 million citizens are spread all across the nation.85 Furthermore, Russia shares a border with China, which remains the top manufacturer of counterfeit goods.86 If the U.S. thinks it has a border problem with Mexico, it pales in comparison to the border problem between Russia and China, which is currently one of the longest borders in the world stretching 3,645 km.87 This creates a custom officer’s nightmare, where customs personnel are looking for a needle in a haystack.

Similarly, China is the fourth largest nation by area in the world with a population of over 1.3 billion people.88 Although it is slightly smaller geographically than the United States, its population is almost three times as large.89 Millions of people are packed into the large cities, with many more spread out across the vast Chinese landscape.90 The size of the country combined with the population is overwhelming. Effective IPR enforcement in this environment is nearly impossible as is evident from China’s track record.

Russia has been making positive customs improvements through their 2010 Customs Union with Belarus and Kazakhstan, which hopes to increase enforcement against counterfeit goods.91 Presently, the current customs operation in regard to the Chinese border is a huge concern.92 Efforts have been made by both countries to improve their customs agents’ ability to identify and seize counterfeit goods.93 These efforts are

83. 2011 Special 301 Report, supra note 8, at 19.84. Central Intelligence Agency, Russia World Factbook,

https://www.cia.gov/library/publications/the-world-factbook/geos/rs.html (last visited May 7, 2011).

85. Id.86. IACC, supra note 1, at 37.87. Li Xiaokun, China, Russia Sign Border Agreement,

China Daily, (July 7, 2008) http://www.chinadaily.com.cn/china/2008-07/22/content_6865847.htm.

88. Central Intelligence Agency, China World Factbook, https://www.cia.gov/library/publications/the-world-factbook/geos/ch.html (last visited May 7, 2011).

89. Id.90. Most Populated Cities in China, http://www.nationsonline.

org/oneworld/china_cities.htm (last visited May 7, 2011).91. IACC, supra note 1, at 37. 92. Id.93. Id. (noting that Russia and China underwent joint

62 Fall 2011

The Russian IPR Problemcommendable, but the tenuous relationship between the two nations over their shared border94 needs to evolve into bilateral discussions regarding border security.

Russia’s geographic size, combined with its border with China, certainly plays a role in its enforcement of IPRs. Emphasis should be placed on the fact that it shares an extremely large border with the leading international infringer.95 While Russia can improve its customs procedures, the international community must be realistic. Indeed, more international assistance from the WTO and member nations would likely assist Russian in addressing its deficiencies at the Russian-Chinese border.

B. Socioeconomic Factors: A Lack of Home Grown Intellectual Property

Although Russia and China are certainly world economic powers, they both lack substantial and exportable goods for which they need IPR protections.96 Russia relies heavily on its vast reserve of natural resources.97 Even then, its exports are primarily to the European Union (EU), China, Japan, and the U.S.98 Exports to the U.S., however, equal less than 7% of the total exports, which means that Russia is a very regional exporter.99 Although certain IPRs apply to natural resource industries, particularly trademarks and possibly some patents, Russian goods are not in high demand around the world or even in Russia.100

China, on the other hand, is a major manufacturer and exporter, producing many of the world’s goods.101

Customs training on IPR in 2010).94. See Li Xiaokun, supra note 87.95. See 2011 Special 301 Report, supra note 8, at 19-20

(asserting that China is the leading international infringer).96. China’s Export Growth Expected to Plummet, English

.News.cn, (April 26, 2011, 10:26 AM), http://news.xinhuanet.com/english2010/china/2011-04/26/c_13846260.htm; Isabel Gorst, Russian exporters forced to drop grain prices, Financial Times (Jul. 4, 2011 6:14 PM), http://www.ft.com/cms/s/0/ac1314fa-a653-11e0-ae9c-00144feabdc0.html#axzz1b6MagWPd; Richard Higgs, Russian resin exports drop as domestic demand rises, Plastics News.com (Sept. 26, 2011) http://plasticsnews.com/china/english/headlines2.html?id=1316810206; Russian oil production increases 1.23% in three quarters, exports drop, RIA Novosti (Oct. 3, 2011 13:19 PM), http://en.rian.ru/business/20111003/167338551.html; Russia Metals Report Q4 2011, Business Monitor International (Oct. 7, 2011), http://www.marketresearch.com/Business-Monitor-International-v304/Russia-Metals-Q4-6620001/.

97. U.S. Dep’t of State, Background Note: Russia, http://www.state.gov/r/pa/ei/bgn/3183.htm (last visited May 7, 2011).

98. Id.99. Id.100. Mikhail Khmelev, Russian Economy Has Little Hope of

Becoming Competitive, RIANovosti (Jan. 5, 2007, 2:17 PM), http://en.rian.ru/analysis/20070501/64714338.html.

101. U.S. Dep’t of State, Background Note: China, http://www.state.gov/r/pa/ei/bgn/18902.htm (last visited May 7, 2011)

However, like Russia it does not have much stake in protecting its own IPRs.102 In fact, one of the problems caused by China’s stellar success has been a substantial drop in Chinese exports, which for the first time in seven years were less than the percentage of imports.103 The steady drop in Chinese exports means that Chinese companies are producing and exporting fewer goods, especially in the market of value added products.104 With a lack of value added products in the marketplace, China’s concern about the protection of its own IPRs is somewhat diminished.

Furthermore, China is the manufacturer and supplier of most of the world’s counterfeit goods.105 In this way, China’s economy provides a boon to the black market. Since much of China’s manufacturing and exports are not made by Chinese companies, but rather those of multinational corporations currently using Chinese labor to create their products more cheaply,106 China has less incentive to protect even their own IPRs because few of their own companies have an actual international presence.

Although Russia and China have drastically different economies and socioeconomic factors that influence their views on protecting IPRs, comparisons can still be made between them. Both countries share a common thread: neither has a strong international presence from the IPR perspective. Russia is rich in natural resources but demand for Russian goods, music, art, literature, movies, and cars is low. Conversely, China produces everyone else’s goods, but has few of its own that demand IPR protection.107 Without national demand for stronger IPR protections, political incentives are low to make significant progress in protecting foreign intellectual property rights.

(finding that China had more than 1.1 trillion in exports in 2010).102. See China’s Export Growth Expected to Plummet, English

News, (April 26, 2011, 10:26 AM), http://news.xinhuanet.com/english2010/china/2011-04/26/c_13846260.htm (with the lack of Chinese goods in the marketplace, there will be fewer infringers of Chinese goods).

103. See id. (finding that Chinese exports were predicted to drop to 20% in 2011).

104. See id. 105. See IACC, supra note 1, at 9.106. See U.S. Dep’t of State, supra note 101 (concluding

that “China has become a preferred destination for the relocation of global manufacturing facilities”).

107. See 2011 Special 301 Report, supra note 8, at 19.


Joshua M. GreenC. Political Corruption: The Biggest Barrier to

Progress

It is no secret that both Russian and China suffer from political corruption.108 According to Transparency International, an international corruption watchdog, Russia and China both struggle with corruption.109 Considering that piracy and counterfeiting thrive in a corrupt environment, the effects of political corruption likely impact IPR enforcement to some degree.110

Russia is among the top 20% of most corrupt nations.111 In 2005, the Organization for Economic Cooperation and Development stated that, “[t]he weakness, inefficiency and corruption of all branches of government are the most important obstacles to further progress in reforming Russia.”112 Bribing government officials has not just become a problem in the Russian Federation, but a way of life, and is often a determining factor as to whether a case is prosecuted.113 Government corruption remains a significant obstacle to combating counterfeiting and piracy.114

In 2009, President Medvedev stated that the Russian Federation had only just begun creating a judicial system that was free of corruption.115 With a judicial and regulatory system burdened with heavy corruption and a severe lack of transparency,116 it is not surprising that Russia has become a prominent market for counterfeit goods.117 It appears that those calling for more criminal prosecutions against perpetrators of IPRs have identified legitimate concerns with this system.118 This situation also explains why the increase in raids and enforcement actions has had little effect in Russia’s multibillion-dollar

108. See Corruption Perceptions Index 2010 Results, Transparency International, http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results (last visited May 9, 2011).

109. See id.110. Compare Corruption Perceptions Index 2010 Results,

supra note 108, with 2011 Special 301 Report, supra note 8, at 19-42 (of the 41 countries listed on the Trade Representatives’ Priority Watch List and Watch List, only 11 had a corruption rating above 5 (on a scale of 10), 14 had a rating between 3 and 4, and 15 had rating of under 3).

111. See id.112. Stephen Lee Myers, Pervasive Corruption in Russia Is

‘Just Called Business’, N.Y. Times, Aug.13, 2005, www.nytimes.com/2005/08/13/international/europe/13russia.html.

113. See id.114. See Jim Nichol, Cong. Research Serv., RL 33407,

Russian Political, Economic and Security Issues and U.S. Interests 21 (2011).

115. See id. at 6.116. See 2011 Index of Economic Freedom, The Heritage

Foundation, http://www.heritage.org/index/Country/Russia (last visited Oct. 18, 2011).

117. See IACC, supra note 1, at 35-36.118. See Eugster, supra note 19, at 147.

counterfeit market. Without the support of the courts and, specifically the judges, enforcement agents will simply be spinning their wheels.

Similarly, Chinese corruption is a significant impediment to effective IPR enforcement.119 A 2007 report from the Carnegie Endowment for International Peace found that “endemic corruption among Chinese officials poses one of the most serious threats to the nation’s future economic and political stability.”120 Despite public commitments to IPR protections, increased raids, and fundamental changes to the judicial system,121 71% of respondents to a research survey felt that IPR enforcement stayed the same or deteriorated over the past year.122 One of the many explanations for these sentiments is that political corruption is still keeping counterfeiters out of court and keeping the laws unreasonably lenient.123

Clearly, both countries struggle with political corruption and dealing with it has become a way of life for companies doing business within their borders.124 In Russia, the corruption is certainly a large part of the problem in regulating and enforcing IPRs and must be addressed. If Russia is ever going to crack down on counterfeiters, its government officials need to be willing to stop the endemic corruption that plagues the country.

D. Practical Solutions: WTO Accession & Border Enforcement

The first step in helping Russia in its quest to improve the country’s treatment of IPRs is to allow them to join the WTO. Russian officials have already made public statements regarding their waning patience as they still wait to be accepted into the World Trade Organization.125 Russia has been waiting for approval

119. See Embassy of the United States Beijing China, Intellectual Property Rights, http://beijing.usembassy-china.org.cn/protecting_ipr.html (last visited May 10, 2011).

120. Minxin Pei, Policy Brief No. 55: Corruption Threatens China’s Future, The Carnegie endowment, (Oct. 2007) available at http://www.carnegieendowment.org/publications/index.cfm?fa=view&id=19628.

121. See Lack of IPR Enforcement Key Concern, The Global Times (Jan. 21, 2011), http://business.globaltimes.cn/china-economy/2011-01/615048.html; see also 2011 Special 301 Report, supra note 8, at 19-21.

122. Id. (results based on the answers of 364 companies surveyed).

123. See 2011 Special 301 Report, supra note 8, at 21 (finding that “[h]igh thresholds for initiating criminal actions have always been a significant barrier to effective enforcement against the sale of counterfeits”).

124. See Myers, supra note 110; Pei, supra note 120.125. See Doubts Grow on Russia’s WTO Plans, BBC News

(Aug. 26, 2008), http://news.bbc.co.uk/2/hi/7582079.stm.

64 Fall 2011

The Russian IPR Problemfor almost 20 years.126 Furthermore, since they are not a member nation, the penalties, sanctions, and discussions of the WTO mean little and have less bite. The U.S. has been a primary objector to Russian accession to the WTO over the past decade,127 but this policy may have been misguided. Indeed, Russian membership in the WTO will likely benefit the U.S., and it might be be in its best interest to clear a path for Russia. Once Russia joins, the U.S. will have the cooperation of other member nations in working with Russia to improve IPR protection.

Accession into the WTO will likely have little immediate effect on Russia’s treatment of IPRs. However, once it becomes a member of the WTO, other nations can help Russia can start the slow, arduous process of cleaning up its treatment of IPRs just like they have with China. China came to the WTO in 2001128 and since then has remained of the leading infringers of U.S. IPRs.129 In 2007, the U.S. began an action with the WTO where it claimed that China’s criminal thresholds were insufficient in cases of willful infringement of IPRs.130 The U.S. also claimed that China was not properly disposing of seized counterfeit goods nor were they meeting their obligations under TRIPS by denying copyrights and other related rights to authors whose works were not authorized for publication in China.131 Considering these allegations, the panel concluded that China had violated multiple provisions of the TRIPS agreement.132 Since then, there has been improvement in China’s attempts to comply with WTO obligations and panel recommendations.133

If Russia were a member of the WTO, the United States could initiate a similar action, which would hopefully begin the slow process of improving Russia’s treatment of IPRs. Denying Russia’s accession simply preserves the status quo and does nothing to motivate Russia to improve the current environment. Since

126. See Eugster, supra note 19, at 150. 127. See id. at 132 (“Until 2006, any legitimate attempts by

Russia to join the WTO were blocked by the United States.”). 128. World Trade Organization, Members and Observers,

http://www.wto.org/english/thewto_e/whatis_e/tif_e/org6_e.htm (last visited May 11,

2011).129. See Office of the U.S. Trade Representative, supra

note 8, at 20.130. World Trade Organization, China—Measures Affecting

the Protection and Enforcement of Intellectual Property Rights , (2009), http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds362_e.htm (select link entitled “Panel Report” circulated on 26 January 2009).

131. Id. at 2-3.132. Id. at 134.133. See Office of the U.S. Trade Representative, supra

note 8, at 19 (monitoring various Chinese campaigns and programs designed to improve China’s commitment to WTO obligations).

Russia still wants to be a part of the WTO, bringing them into the world community could motivate them to make significant changes. At the very least, accession into the WTO would provide an environment for continued discussions, and the U.S. loses nothing if accession has little effect on the treatment of IPRs.

The second step in improving Russia’s treatment of IPRs is to facilitate immediate bilateral discussions between Russia and China regarding their massive shared border. Both nations need to get serious about addressing the border enforcement problem both nations face. For the most part, Russia is not producing or manufacturing counterfeit goods.134 However, Russia is a fertile market for black market and counterfeit goods.135 Russia’s “border control problems exacerbate the domestic availability of counterfeit goods manufactured in neighboring countries” and sold in their markets, kiosks, and stores.136 Russia needs to clamp down on the border and stop the influx of counterfeit goods. Without consistent sources of counterfeit goods, prices for such goods would increase, shrinking the market.

However, Russia faces significant challenges if forced to face the border problem alone. Having an actual impact on the flood of counterfeit goods coming into the country requires bilateral efforts from China. The WTO has already concluded that China has a significant problem with its customs procedures.137 Russia cannot make progress with regard to its border unless China makes similar efforts on its side of the border. A united effort would go a long way to curb the rampant smuggling of counterfeit goods across the Russian-Chinese border. Once Russia and China implement measures at the border, they could target the sources of counterfeit goods rather than collecting them once the goods have already been disseminated for public consumption.IV. Conclusion

Russia is a world power whose economic viability depends on its ability to present itself as a stable and safe market for international businesses. Currently, Russia’s failures in the protection and regulation of IPRs are a large concern for most international businesses. For most companies, their ability to secure and protect their own IPRs is essential to remaining competitive in the market. Becoming a member of

134. See IACC, supra note 1, at 35-36 (pointing out that the main concerns with Russia relate to importation of a trafficking in counterfeit goods, rather than production).

135. Id. 136. Id.137. World Trade Organization, China—Measures

Affecting the Protection and Enforcement of Intellectual Property Rights, supra note 128, at 134.


Joshua M. Greenthe WTO would benefit Russia enormously through a renewed sense of economic stability and would help to attract international business. Although membership in the organization will not have any immediate effect on Russia’s IPR problem, it will provide nations with a forum for bilateral discussions and make Russia part of the WTO’s dispute resolution system, which is starting to have an impact on China, ten years after their accession.

Russia’s membership in the WTO is a necessary first step to establishing a consistent dialogue regarding their treatment of IPRs. With membership come the obligations of TRIPS and the dispute resolution system, which are part of membership with the WTO. While Russia has much to do in the way of enforcement of its IP laws, the laws themselves are sound and comply with the standards established in the TRIPS Agreement. Membership in the WTO could help lead Russia to better enforcement.

Moreover, Russia shares one of the largest borders in the world with a top international infringer of intellectual property. Addressing the Russian-Chinese border is necessary. The fact that a large percentage of consumer goods sold in Russia are counterfeit goods and the fact that China is the largest manufacturer and supplier of pirated products is not an ideal combination. In order to make any kind of impact, Russia and China need to start immediate bilateral discussions on how to address the border problem. If both nations can find a way to limit the amount of counterfeit goods being smuggled into Russia, the world community could see significant changes in Russia.

Improving protections of IPRs will help Russia become a more attractive market for international business. Russian projects and industry will also see an influx of foreign investment in their businesses, which will hopefully help Russia develop their own homegrown intellectual property. With its national IPRs at stake, the government will have more pressure and be more invested in making sure adequate protections are in place. In the end, Russian progress will be like a matryoshka doll. Right now the problems are big and gaudy, but as you remove each layer, the problems become smaller and smaller. Russia is one big IPR matryoshka doll, yet with time and international cooperation, the problems it faces can slowly be solved, layer by layer.

66 Fall 2011

On September 12, the Authors Guild, the Australian Society of Authors, the Union Des Ecrivaines et des Ecrivains Quebecois, and eight individual authors filed a lawsuit against five United States universities. The defendants include the University of Michigan, the University of California, the University of Wisconsin, Indiana University, Cornell University, and HathiTrust. HathiTrust is a partnership formed by the named universities and other research institutions and libraries. Founded in 2008, HathiTrust’s mission is to “to contribute to the common good by collecting, organizing, preserving, communicating, and sharing the record of human knowledge.” In order to achieve this mission, HathiTrust has built a digital archive of library materials and contains millions of copyrighted and public domain books scanned by the universities, Microsoft, and Google.

The writers and publishers claim their books have been copied into digital form by HathiTrust, Google, and others without authorization. The lawsuit charges the universities with “engaging in one of the largest copyright infringements in history.”

The lawsuit centers around HathiTrust’s dissemination of digitalized “orphan works”, or works whose copyrights holder could not be located. In June, HathiTrust and the University of Michigan announced a plan to provide these orphan works in full-text digital form.

The universities have defended their actions publicly by claiming that their conduct is allowed under Section 107 of the United States Copyright Act. Section 107, otherwise known as the fair use doctrine, enumerates various purposes for which the use of the

copyrighted material is not infringement. Among these fair uses are “teaching (including multiple copies for classroom use), scholarship, or research.” However, the University of Michigan is not hiding behind the fair use doctrine just yet and has been quick to respond to the claim. Four days after the lawsuit was filed the University of Michigan released a statement that it

will suspend the digitalization of 163 books until it reexamines its procedures to ensure that copyright holders are being notified that their works are going digital.

The lawsuit against the universities is closely related to a six-year lawsuit between the Authors Guild, the Association of American Publishers, other writers and publishers, and Google. In 2005, the Authors Guild and the Association of American Publishers sued Google for scanning millions of books into its Google Books site. Back in March of 2011, U.S. District Judge Denny Chin rejected Google’s settlement offer of $125 million. Currently, the lawyers for the writers and publishers are still in negotiations with Google but have agreed to move toward

trial. Judge Chin recommended that Google adopt a strategy where writers and publishers grant permission to have their books turned into digital form rather than a system where the books are scanned unless the author or publisher objects. Personally, an opt-in system seems to keep the rights with the copyright holder as opposed to an opt-out strategy.

There is no doubt that book digitalization has great benefits, such as immediate access to research materials and preservation of out-of-print works. Both HathiTrust and Google once had aspirations of owning the largest digital library, but it looks like they may have to answer to writers and publishers before achieving that dream.

Largest Copyright Infringement in History: Five US Universities Sued for Copyright Infringement

by Alexandra MackeyThe following blog post was published on www.ipbrief.net on October 3, 2011.


Top 1% Files for Trademark of “Occupy Wall Street”

Several trademark applications for OCCUPY WALL STREET and OCCUPY WALL ST. have recently been filed with the USPTO. The first application was mentioned in the news several days earlier, but the subsequent applications are where this story gets interesting. For those that missed the story on the first application, the brief version is that an application was filed on October 18, 2011 by a Long Island, NY couple, Diane and Robert Maresca. Their application was for use of OCCUPY WALL ST. on bags, clothing, stickers, etc. Maresca asserted that he supports the movement, and that he filed for the trademark as a preemptive move to keep somebody with less pure motives from filing for the mark. Maresca also maintained that his intentions were to have the OWS supporters get the maximum benefit possible, after any expenses of course; alternatively, Maresca said he was willing to sell the OWS mark to the groups’ members, provided they pay for his expenses in obtaining the mark. Perhaps Maresca does have good intentions, but offering to sell a mark belonging to a people’s movement back to those people smacks of hypocrisy.

After this story appeared in the news it likely triggered the two applications for the phrase OCCUPY WALL STREET. Both applications were filed on October 24, 2011. One of the applications was filed by Pete Dutro and Victoria Sobel, two OWS organizers that have been maintaining the finances for the group. Their significant involvement in the movement is demonstrative of their good intentions, and the move was most likely to prevent people like Maresca from trying to capitalize on OWS.

The questionable part of this story comes from the second application, filed by Fer-Eng Investments, LCC, an Arizona based corporation. Fer-Eng Investments appears to be a shell corporation with the only officer

named as “The Ferraro-Eng Family Trust.” The names provided on the address refer to Vincent Ferraro and Wee Nah Eng. Interestingly enough, Ferraro, a Stanford Business School grad, is the former Vice-President of Worldwide Marketing for Hewlett-Packard, where he met his wife Wee Nah Eng. Ferraro now serves as the Vice President and Chief Marketing Officer of Global Marketing for Eastman Kodak, and also appears to hold several consulting positions. Now, I don’t know

what type of compensation Ferraro receives, but based on his title, position, and impressive (publicly accessible) Linkedin resume, I would be willing to give anyone 10:1 odds that the Ferraro-Eng household is bringing in enough to meet the $380K a year threshold for the “top 1%.”

The irony would be palpable if Ferraro-Eng actually intends to sell the clothing, bags, footwear, etc. that the trademark application covers. If this scenario were in a book or movie script it would probably be rejected for being too obvious – somebody in the top 1% registers OCCUPY WALL STREET as a trademark so that they can make money off the 99% that protests against them.

To be fair though, I do not know what the Ferraro-Engs’ motivations are in registering OCCUPY WALL STREET as a trademark, and I am not aware of either party being affiliated with any particular political group. There are certainly those in the top 1% who support OWS, and would like to see changes made in this country. It is entirely possible that the Ferrero-Engs intended to register the mark to either donate it to the group or to prevent people like Maresca from attempting to exploit the movement. I am personally hoping that is the case – that the Ferrero-Engs are in the top 1%, but have a mindset more akin to Bill Gates than to Steve Jobs. Pending the outcome of the trademark applications, I guess we will find out soon enough.

by Seth Dennis

Image by Michael Thompson

The following blog post was published on www.ipbrief.net on October 30, 2011.

68 Fall 2011

Capturing Clouds

Recently, the First Circuit overruled the district court’s holding in Sony’s copyright infringement case against Joel Tenenbaum. The district court had found Tenenbaum guilty on thirty counts, but it had reduced the jury’s verdict of $675,000 in statutory damages to $67,500 because it was so excessive so as to unconstitutionally violate due process. The First Circuit agreed that Tenenbaum was guilty of the claims against him, but it disagreed with how the district court had denied his motion for remittitur and instead chose to address a constitutional due process issue. According to the First Circuit, the doctrine of constitutional avoidance should have bound the district court to consider all nonconstitutional grounds for reaching a decision (including remittitur) before addressing any constitutional issues. Reinstating the jury’s verdict of $675,000, the First Circuit remanded the case with orders to consider Tenenbaum’s motion for remittitur.

Those in Tenenbaum’s camp might call this a “disappointing ruling,” and that’s certainly understandable when he’s put back on the hook for more than half a million dollars. Nevertheless, you can’t help but ask yourself why the First Circuit overruled a verdict of downsized damages only to remand it so the parties can consider . . . downsized damages. Maybe the First Circuit is only following the rules and enforcing the doctrine of constitutional avoidance, but I think there’s more going on. The

First Circuit’s opinion leaves no room for doubt that Tenenbaum is guilty of having willfully violated copyright law, and it explains that Congress intended for statutory damage awards to be so high that it scares off potential infringers. Tenenbaum was caught precisely in congressional crosshairs and the case should be finished. Instead, by remanding the case for remittitur and saying that it “raises concerns about

application of the Copyright Act,” the First Circuit implies that it agrees $675,000 is too harsh a penalty for illegally sharing thirty copyrighted songs.

Even if it didn’t agree, the First Circuit is extending the case’s proceedings and making it more costly for Sony. It could also be more costly for Tenenbaum,

but I suspect his legal fees are less demanding than Sony’s. On remand, Sony will have two options for how to go forward, and pointing out the continued cost of litigation is relevant because it should factor into its decision. Offered a remittitur, Sony can either accept it or push onward to a new trial for non-downsized damages. Now that Sony has already shelled out money to appeal the case, a cost-benefit analysis might push it to more seriously consider a remittitur, especially when it also knows the district court thought the original verdict was so excessive so as to be unconstitutional. I say “should factor in” only because Sony could very well ignore a cost-benefit analysis and push for a new trial just to prove a point.

Remitting the Remittal of Joel Tenenbaum’s Remittitur Motion

by Jess Robinson

Image by Gaudencio Garcinuño

The following blog post was published on www.ipbrief.net on September 20, 2011.

The opinion implies the First Circuit thinks Sony will push for a new trial with high damages. Assuming it will, the First Circuit might have had a motive by vacating the verdict on due process grounds and ordering a remittitur. The way I see it, the district court only accomplished one thing by originally denying Tenenbaum’s motion for remittitur but then downsizing the verdict on other grounds: it bypassed other opportunities to downsize the damages award so that it could legislate from the bench. I think the First Circuit substantively agrees with the district court’s conclusion, and maybe even that the Copyright Act allows for unconstitutionally harsh punishments, but I think it would prefer the message to come from a jury. Under section 504(c) of the Copyright Act as codified in the U.S.C., the minimum damages allowed for thirty counts of copyright infringement is $22,500 ($45,000 less than the original downsized award). When there are so few copyright infringement cases like this that don’t settle, I can see a lowball jury award being a strong, democratic signal to Congress that something’s wrong with copyright infringement law.


70 Fall 2011

Informal Formalities

To Patent or Not To Patent, That is The Question: Embryonic Stem Cell Patents Rejected in Europe

by Amer Raja

Recently, the European Court of Justice was asked to determine the patentability of stem-cell products derived from human embryos. While the question submitted to the Advocate General was not as straightforward, both the Advocate General and the Court seemed to have little trouble in taking a position in this case. At the heart of this query was “whether the human embryonic stem cells which serve as base material for the patented processes constitute ‘embryos’ within the meaning of Article 6(2)(c) of the Directive.” The Court’s decision in this case, therefore, also necessarily addressed the patentability of “embryonic base material” and subsequent lines of products arising from base material.

The dispute arose from Mr. Oliver Brüstle’s patent on “isolated and purified neural precursor cells produced from human embryonic stem cells used to treat neurological diseases.” Mr. Brüstle works at the University of Bonn in Germany as a Professor of Reconstructive Neurobiology. Greenpeace, along with a number of religious organizations, contested the patent and sued for “ethical reasons,” to invalidate Mr. Brüstle’s ownership rights in the patent. The patent was declared “invalid insofar as it covers precursor cells obtained from human embryonic stem cells,” by the Federal Patent Court (Bundespatentgericht), and the case was subsequently referred to the European Court of Justice.

The issues that the European Court of Justice was asked to determine largely arose from the European Union’s approach to patentability and embryonic research. The relevant legislation and treaty language can be found in the German national law, TRIPS article 27, CGEP articles 52(1) and 53, and Directive 98/44 with respect to article 6(2)(c). Of these sources of law, the Court particularly focused on the directive since the case turned on the definition of “embryo” and

the “dignity and integrity” of a person. The Court’s decision was largely centered on the concepts of ordre public and morality that are included in the laws and treaties. However, since there is some question as to whether a stem cell or purified precursor cell could be considered to be an embryo,

the Court first attempted to define and interpret the concept of human embryo with respect to article 6(2)(c).

To give some context to the Court’s ruling, I will briefly outline a few relevant points in stem cell research. While there are a few different types of stem cells, embryonic stem cells are probably the most potent and controversial since production starts with the fertilization of a human ovum (“egg”). Within a few days after fertilization, a blastocyst is formed, which

The following blog post was published on www.ipbrief.net on October 29, 2011.

is comprised of a number of cells and regarded by a number of scientists to be an early stage embryo. In the interim period between fertilization and blastocyst formation, the ovum (now a “zygote”) undergoes a number of changes.

These changes include the formation of totipotent cells (unspecialized cells which can form anything in a human body) and eventually pluripotent cells (which can form a number of things but within one of three categories). Totipotent cells precede pluripotent cells chronologically and denote different stages of development. Therefore, the issue the Court had to wrestle with determining the moment at which an embryo could be regarded to exist, since it would be protected by national law.

In the end, the Court determined that while the pluripotent cells and blastocyst are more specialized in the development of a human being, that totipotent cells were also necessarily included in the definition of an embryo. The Court stated that “[A]ny human ovum must, as soon as fertilised, be regarded as a ‘human embryo’ within the meaning and for the purposes of the application of Article 6(2)(c) of the Directive, since that fertilisation is such as to commence the process of development of a human being.” This definition is also meant to include traditionally and non-traditionally matured ova, such as in parthenogenesis (maturation of an ovum without fertilization). However, the Court seems to have left open the question of whether a stem cell obtained at the blastocyst stage is an embryo, which may lead to further debate in the field. In addition to its determination that an embryo exists once an ovum is fertilized, the Court determined that scientific research and industrial use of embryos cannot lead to patents and further excluded any materials obtained from the destruction or use of embryos as base material.

While the implications of this decision are not entirely clear at this point, Mr. Brüstle and a number of other scientists have articulated that this decision comes as a huge blow to the scientific community. The scientists feel that this decision will serve as a huge setback in the development of stem cell products and may result in a greater advantage for their Asian counterparts. Greenpeace, the Catholic Church, and a number of religious organizations, however, feel that this decision comes as “a victory for human dignity.”

However, Mr. Julian Hitchcock, a lawyer with Field Fisher Waterhouse LLP also voiced his opinion that this decision may not actually be too detrimental to stem cell research; it could very well provide scientists and researchers with more freedom to not “worry about infringing someone else’s patent.” Furthermore, he points out that “While the ruling restricts patentability of such inventions, it doesn’t in any way restrict the use

of embryonic stem cells.”As a result the Court’s decision may not really

do much at all in the way of discouraging stem cell research – it may very well promote it. While in the United States we have the Bayh-Dole act to promote non-commercial research which can later become commercialized; embryonic stem cell products could very well start as non-commercial ventures in Europe and later lead to greater developments that may be nevertheless be patentable as well. The incentive in obtaining a patent and conducting a research may merely be delayed as opposed to entirely eliminated.

Furthermore, some practitioners have even posited the idea that researchers could depend on trade secrets and regulatory procedures to sidestep the hurdle. Lastly, the Court through its ruling has not foreclosed all embryonic stem cell research as such. Scientists may still be able to patent embryonic stem cell products by establishing that a stem cell obtained at the blastocyst should not be considered an embryo and therefore could potentially be patentable subject matter. In sum, the Court’s decision may provide very little guidance at all, and certainly leaves open the question of how to implement this new restriction on patentability; it will certainly be interesting to see how scientists, organizations, and Courts deal with this matter in the coming months and years.


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