Copyright and Clothing

By Elisa G.

   The Innovative Design and Privacy Prevention Act (IDPPPA) was first introduced on August 5, 2010 by New York senator Charles C. Schumer in an effort to provide more protection to fashion designers. If passed, the bill will offer intellectual property protection in an industry that often depends on the use of copying.

   Currently, nothing in U.S intellectual property law protects the design of practical articles such as clothing. Intellectual property rights, copyright, trademark, and patent laws do not protect the clothing industry and its designers. Previous attempts to solve this problem, most notably the Design Piracy Prohibition Act (DPPA), have failed to win congressional approval.

   The IDPPPA provides limited protection to fashion.  If passed the IDPPA would protect only “unique designs” and only “substantially identical” copies would be illegal. For qualifying designs, the bill would offer protection by prohibiting unauthorized importation, sale, or distribution of any infringing design for three years. Remedies would include statutory damages or an infringer’s profits, injunctive relief, and destruction of infringing articles.

   Supporters of this bill say the ability to receive royalties from the production of knockoffs would encourage the investment of capital in design activity and therefore boost the entire apparel industry. Supporters say that the three-year protection is enough time to award research and development without hindering creativity and progress in products based on the protected design.

   However, the IDPPPA has its share of critics. A strong concern is that the bill will hurt the fashion industry. Critics argue that much of the growth and creativity in fashion depends on imitation. These critics argue that the concept of the “trend” is what sells fashion. Because of this, they argue, copyright protection for clothing fashion would cause prices to rise and the creative cycle to slow down. Others critics argue that once in the hands of lawyers and judges, such a law will expand to harm both designers and consumers. They say that the only people who will benefit from this law are lawyers and those who can afford costly lawsuits.

   According to insiders, the bill is likely to pass. Should intellectual property protection be given to this industry, the result might be that imitation may no longer be the sincerest form of compliment but instead an expensive ticket to the courtroom.

iPhone Jailbreaking and the DMCA

By Sinny T.

   The Digital Millennium Copyright Act (DMCA) was originally enacted to prohibit “circumvention” of digital rights management and “other technical protection measures” used to protect and control access to copyrighted works. The DMCA has since cast a wide net to protect copyrighted material even when the use of the copyright materials arguably may be permissible under fair use guidelines.

   In order to curtail DMCA’s overly restrictive implications, the DMCA provides that the Library of Congress possesses the power to define exceptions under the DMCA for legitimate, non-infringing uses of copyrighted material. Pursuant to this power the Librarian of Congress has recently issued a public statement declaring that it was legal to bypass a cell phone’s operating system (particularly iPhone) on the particular software it will run to get “lawfully obtained” programs to operate.

   Apple, Inc. has maintained tight control over the types of programs allowed to run on the iPhone, namely, applications (a.k.a. Apps) pre-approved by Apple and which only could be purchased through the App Store. But, with the Library of Congress’ new ruling, Apple’s ability to police and prohibit jailbroken iPhones has vanished. A jailbroken iphone allows the user to bypass the restriction Apple places on iPhones to only allow the installation of applications from the App Store.

   Here’s how the argument had developed over this issue between Apple and “jailbreakers”:

   Apple argues that it has the right to control the software on its devices and jailbroken, altered phones infringes upon Apple’s copyright for Apple’s operating system. Apple further argues that altering the phone encourages pirated applications, exposes iPhones to security risks, and hampers the user’s overall iPhone experience.

   Jailbreaking proponents, however, argue that users should be allowed to customize their phones as they see fit and to have freedom to use features or programs that fall outside of the App Store. Furthermore, allowing this ability to customize phones will in fact bolster iPhone sales and appeal when Apple would not have such a restrictive grip over its products and application store.

   The current Library of Congress ruling allows jailbreaking iPhone users a big sigh of relief as to fear of prosecution.  The ruling also alleviates any concerns about bringing a jailbroken iPhone into the Apple Store for repair or analysis. 

   Although negative publicity over the leak of a secret phone prototype and iPhone 4 antenna problems have chipped away Apple’s iron control over its products, sales figures have not been impacted. Consumers continue to purchase Apple products regardless of any government ruling or unsavory publicity.

   The Library of Congress exception has also allowed artists to remix copyright-protected video content for noncommercial work, and renewed its approval for cellphone owners to “unlock” their devices in order to allow its operation under other wireless carriers.

HP v. Hurd: Trade Secret Misappropriation and Inevitable Disclosure in California

By Patrick U.

    On September 7, 2010, Hewlett-Packard (HP) filed a complaint against Mark Hurd, former HP President and CEO, in an effort to obtain an injunction to prevent Hurd from joining competitor Oracle as President and member of the board.  HP alleged (1) breach of contract and (2) threatened misappropriation of trade secrets.  The claim for breach of contract alleged that Hurd was under contractual obligations to maintain the confidentiality of HP’s trade secrets, and that Hurd violated those obligations.  The threatened misappropriation claim alleges that, in his position at Oracle, it will be impossible for Hurd to avoid using or disclosing HP’s trade secrets. 

    On September 20, 2010, HP and Oracle reached a settlement that would allow Hurd to join Oracle.  The details of the settlement are confidential, but an SEC filing indicates that Hurd forfeited a large chunk of HP stock options and experts suspect Hurd agreed not to participate in certain business decisions.  Hurd will likely not be allowed to make business decisions for a period of time in areas involving Oracle’s growing hardware business.

    This note will analyze HP’s claims on their merits and take a quick look at California’s rejection of the inevitable disclosure doctrine.

HP’s Claims

    HP’s claims are really one and the same.  HP is claiming that Hurd is in breach of his employment contract because he will inevitably disclose information he is under an obligation to keep confidential. The second cause of action, threatened misappropriation of trade secrets, is an extension of this theory.  That, regardless of the employment contract, Hurd will inevitably disclose HP’s statutorily protected trade secrets in his new role at Oracle.

    The inevitable disclosure doctrine arises from Cal. Civ. Code § 3426.2(a): “Actual or threatened misappropriation may be enjoined.”  Threatened misappropriation has been interpreted, in some jurisdictions, to include situations in which a former employee would “inevitably” disclose trade secrets.  Schlage Lock Co. v. Whyte, 101 Cal. App. 4th 1443 (2002).  The seminal case on the inevitable disclosure doctrine is Pepsico v. Redmond, in which a former Pepsi executive takes a job at Quaker Oats and Pepsi seeks an injunction to prevent the move.  54 F.3d 1262 (7th Cir. 1995).  The court held that “a plaintiff may prove a claim of trade secret misappropriation by demonstrating that defendant’s new employment will inevitably lead him to rely on the plaintiff’s trade secrets.”  Id.

    Plaintiff in Schlage attempted to apply the inevitable disclosure doctrine in California.  101 Cal. App. 4th 1443.  In California, non-compete agreements in employment contracts are per se void. Cal. Prof. Bus. Code § 16600.  Through this statute, California seeks to promote employee mobility and protect a person’s right to earn a living.  In Schlage, the California Court of Appeals declined to extend the doctrine to threatened misappropriation cases in California, reasoning that it creates an “after-the-fact covenant not to compete restricting employee mobility.”  101 Cal. App. 4th at 1447.

    In HP v. Hurd, both causes of action were likely to fail because of California’s policy of favoring employee mobility.  Despite the suit’s lack of merit, Hurd (Oracle) and HP settled quickly because of the deep relationship between the two companies.  The companies have around 140,000 customers in common, and 40% of Oracle software runs on HP machines.  The suit would have soured relations between two companies who have long been synergistic.  Interestingly, hiring Hurd signifies Oracle’s hardware ambitions, which is most likely why HP brought the suit in the first place.  A legal “firing across the bow.”  Watch for this relationship to degrade further over the next few years.