LAW 7555-00: INTELLECTUAL PROPERTY
FINAL EXAMINATION -- Fall 1998

This exam consists of 3 parts and 6 questions. You have three hours in which to outline and write your answers. The questions count for various percentages of your final grade for this exam, so I advise you to allocate your time accordingly.

I strongly suggest that before you begin writing an answer you 1) read the question carefully; 2) think about exactly which issues you need to address; and 3) outline your answer. Good organization and good analysis almost always go hand-in-hand.

Use as many exam booklets as you need. Start your answer to each part in a new booklet and number the booklets so that I can easily follow their intended sequence. Please write on one side only of each page, on every other line.

For your benefit and my eyesight, please write as legibly as possible. I cannot grade what I cannot read.

This is an open book exam. You may use your casebook, statutory supplement, any material that I handed out in class, and any notes that you or your study group prepared. You may not use other materials, such as nutshells or commercial outlines.

If you have any procedural questions about taking this exam, please contact me in my office. If you think it necessary to assume an unstated fact in order to answer a question you may do so, but you should clearly indicate that you are making an assumption and briefly explain why you consider it reasonable to do so.

I've got a very successful friend to whom people often say, "Gosh, you're lucky." She always replies, "The harder I work, the luckier I get." May you, too, achieve the success that your hard work merits.

The opinion in Manhattan Industries, Inc. v. Sweater Bee by Banff, Ltd., reprinted at page 229-232 of your text, describes the "free-for-all" that followed General Mills' formal abandonment of its "Kimberly" mark. That opinion tries to balance the rights of two parties fighting to use a newly abandoned mark. But it ignores a more fundamental question: How might allowing a party to adopt a newly abandoned mark contravene the primary goal of trademark law? Answer this question in a few sentences.

Your client is a California-based video production company that has done business since 1992 under the name "Lights, Camera, Action! Inc." (LCA). LCA produces training videos under contract with large organizations. For example, it recently produced "Give Our Customers the Red Carpet Treatment!" for the American Carpet Company. It charges around $50,000 per video production.

Thanks largely to word-of-mouth among corporate training departments, LCA's business has expanded in recent years to include clients throughout the Western United States. In conversation, LCA's customers typically refer to the business as simply "Lights," saying for example, "Lights has done a great job training our employees--you should try them."

LCA's success has over the last year attracted several acquisition attempts by Corporate Training & Communications, Inc. (CTC), which prepares employee education manuals for organizations throughout the U.S. Despite long and often heated negotiations, CTC has yet to offer LCA enough money to close a deal.

Last March, however, CTC did succeed in striking a deal with "Lieght's Computer Training." Its owner and operator, Bob Lieght (pronounced like "light"), has since 1990 traveled throughout the Southeast U.S. providing in-person computer training to the employees of his corporate clients. As part of its deal with Lieght, CTC taped his classes and began selling "Lieght's Computer Training" videos, at $20 each, to its corporate clients across the U.S.

LCA suspects foul play. At any rate, it worries that its customers will confuse "Lights" with "Lieght's." Neither CTC, nor Bob Lieght, nor LCA have registered any marks. Prepare a memo applying unfair competition and trademark law to describe LCA's rights and remedies against CTC and Bob Lieght, their defenses, and a suggested course of action. Be sure to advise LCA on whether it should seek registration.

CTC and Bob Lieght, whose businesses and relationship the prior question described in part, recently agreed to expand the "Lieght's Computer Training" video set sold by CTC. Many of CTC's clients had asked for a video on how to use the World Wide Web (the "web"), so CTC asked Lieght to prepare such a class. Lieght prepared a draft class for CTC's review. At CTC's request, he added a discussion on the risks of downloading computer files off the web. CTC taped the revised class, paid Lieght, and began selling the video in June.

Lieght taught his class on the web largely by way of demonstration, showing to his students and to CTC's video camera the screen of a computer accessing the web through a web browser program. Lieght's demonstration used Webscape Corporation's popular web browsing program, WebSailor. Lieght's license from Webscape allowed him to use a single copy of the WebSailor program "for educational purposes."

In the course of demonstrating the wide variety of materials available free-of-charge on the web, Lieght quickly toured Anna Fan's long-running "Unofficial Space Trek Fan Club Fact Page." Fan's site related various obscure facts about the popular Space Trek television series. By way of Lieght's computer, Fan's site appeared both to Lieght's students and on CTC's videotapes.

On August 1, Webscape discovered that Lieght's class and CTC's videotape thereof included images of its WebSailor browser program being put to use. Webscape had already registered a copyright in WebSailor and immediately brought a copyright infringement suit against both Lieght and CTC. Discuss Webscape's rights and remedies under copyright law and the defenses available to Lieght and CTC.

On September 1, Fan discovered that Lieght's class and CTC's videotape thereof included images of her web page. She immediately registered a copyright in her web page and brought suit against both Lieght and CTC. Discuss Fan's rights and remedies under copyright law and the defenses available to Lieght and CTC.

Alarmed by the outbreak of lawsuits, CTC asked Lieght to immediately prepare another class on web browsing--this time relying on a web browser that CTC had explicitly licensed for such use and visiting only pre-approved sites. Lieght replied that he was familiar only with WebSailor and so could not teach such a class on short notice. CTC asked another Hevy, another computer skills instructor, to prepare the substitute class. Hevy agreed to do so.

Under fear of further claims by WebSailor and Fan, CTC did not give Hevy a copy of Lieght's litigated tape. CTC did give Hevy copies of Lieght's other videotapes, however, so that Hevy could get a feel for the format and style of the series. Hevy prepared a draft class on web browsing. CTC criticized it as too far from Lieght's original and suggested changes. Hevy revised his class, CTC taped the results, and on October 1 CTC began selling the new training video.

On November 1, Lieght discovered that CTC was selling Hevy's class on web browsing. He viewed the videotape of Hevy's class and found that it duplicated the structure and style of his own class. A few times, Hevy repeated word-for-word points Lieght had made in his tape, such as "The Internet is a network of networks." As neither Lieght nor CTC had registered Lieght's work, Lieght immediately registered a copyright in his web browser class and brought suit against both CTC and Hevy. Discuss Lieght's rights and remedies under copyright law and the defenses available to CTC and Hevy.

On January 1, 1995, Kim Ventir had an idea about how to create fast-popping popcorn: add gunpowder to the soil of the growing popcorn plants. She set the idea aside until the following spring, when she tested the idea by mixing gunpowder with the soil of the garden in her suburban backyard. She had only mixed success, as her popcorn exploded on the cob while still in the field. After reassuring her assembled neighbors that her gardening would not set fire to their own yards, she set the idea aside until the following spring.

In the spring of 1996 Ventir tried mixing an especially slow-burning gunpowder to her garden's soil. This time she managed to harvest the popcorn safely and found that it popped a bit more quickly than the usual sort of popcorn. It tasted funny, however. This result proved to Ventir that her idea had merit, but she realized that she did not yet have a marketable process. She thus resolved to sell the idea to someone who could better bring her idea to fruition.

In the fall of 1996, she tried to sell the idea to the Ready-Pop popcorn company. Ready-Pop refused to even listen to her idea, however, unless and until she had filed for a patent. In the spring of 1997 Ventir planted another test batch, this time with deodorizer mixed into the gunpowder. This popcorn popped quickly and came out tasting delicious. Ventir filed a patent application on the process in the fall of 1997 and approached Ready-Pop.

By this time, however, Ready-Pop had no interest in Ventir's idea. It claimed that it had devised a secret process for growing fast-pop popcorn. Strangely enough, it credited one of Ventir's neighbors, Bob Espy, with the idea! Ventir claimed that it had no idea where Espy had gotten the idea and refused to disclose the details of the process.

Now, in the fall of 1998, Ventir has learned that the patent office will issue her a patent if she will make a few modest changes to her claim. Ventir has approached you seeking advice. "Can I bring a trade secret claim against Ready-Pop and Espy? Or should I get my patent and bring a patent infringement suit against them? What rights and remedies might I have under these two approaches? What defenses would I face?" Answer her questions.

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