Category Archives: intellectual property

Law and the Multiverse Retcon #8: Orphan Black…Again

This is the eighth post in the Law and the Multiverse Retcons series, in which I discuss changes in the law (or corrections in my analysis) that affect older posts.  Or older retcon posts, since not longer after I wrote this Orphan Black Retcon I saw Season 2 Episode 5, which further complicated matters.  Soon after that I received an email asking about it, and I knew I would have to write the first Retcon Retcon.  Spoilers ahead!

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Law Comics

Law Comics is a new webcomic series created by Julia Powles and illustrated by Ilias Kyriazis.  As described by Powles in this wired.co.uk article, it’s “a project steered by non-boring lawyers to render iconic legal cases in full-colour glory, accompanied by short, authoritative, whimsical texts. The aim is to animate the magnificent stories of law to engage and empower the curious public.”

The first issue of Law Comics, Alice in Patent Land, is about patentable subject matter, which is an issue near and dear to me.  I approve of Powles’s explanation of the topic and the recent Supreme Court case of Alice v. CLS Bank.  Being so close to the issue it’s a little hard for me to say how approachable the comic makes it to those who aren’t, but I think it does a good job.  And certainly I approve of using the medium of comics to discuss the law.  I look forward to the next issue.

(As far as I can tell Law Comics doesn’t have its own site yet, but the comic is available at the wired.co.uk article and the Alice in Patent Land link to Patently-O.)

George Mason Law Review Article

I promise I’ll be back to comic books soon, but I have another publication announcement, this time a law review article I co-authored with F. Scott Kieff: Benefits of Patent Jury Trials for Commercializing Innovation, 21 Geo. Mason L. Rev. 865 (2014).  The article is part of a special issue focused on commercializing innovation.  The entire issue is online and includes a host of great articles from scholars such as Joshua D. Wright (now a Commissioner at the FTC), Damien Geradin, and Anne Layne-Farrar.

Law and the Multiverse Retcon #6: Orphan Black Redux

This is the sixth post in the Law and the Multiverse Retcons series, in which I discuss changes in the law (or corrections in my analysis) that affect older posts.  Or not so old posts in this case.  Barely a week ago I wrote this post about the TV series Orphan Black.  Today the US Court of Appeals for the Federal Circuit handed down a decision relevant to that post.  Spoilers ahead!

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Orphan Black

A few readers asked about the TV series Orphan Black a while back.  Now that the show is in its second season (and I finally got around to watching the first one and have caught up with the second one), I thought I’d address the central legal questions raised by the show.  Moderate spoilers below if you haven’t seen past the first episode or so, followed by big spoilers if you haven’t seen the season one finale.

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Landslide Article

I recently co-authored an article with Professor Brad Desnoyer and Janet Fries discussing superhero-related intellectual property topics, both real and fictional.  Last month the article was published in Landslide, the magazine of the ABA section of IP law, as the cover story!  You can read the article for free online. Thanks to Brad and Janet for their excellent work on the article and to David Postolski for putting everything together.

She-Hulk #1

Marvel has started a new run of She-Hulk, written by practicing attorney Charles Soule.  In contrast to the somewhat further ranging series written by Dan Slott, this volume promises to focus somewhat more closely on Jennifer Walters’s day job.  So has Soule’s considerable legal experience allowed him to blend interesting stories and accurate legal detail?  Let’s take a look.

(Spoilers ahead: if you haven’t checked out the first issue (which is pretty good), go buy it.)

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ABA Annual Meeting Panel Tomorrow

Just a reminder for anyone attending the ABA Annual Meeting in San Francisco this week: I will be presenting “IP and the Comic Book Superhero” with Brad Desnoyer and Janet Fries tomorrow, Friday, August 9th from 4pm – 5pm at the InterContinental San Francisco.  Complimentary CLE credit is offered with the program.  We hope some of the attorneys and law students in the audience can make it out there!

And Now a Shameless Plug

Pardon the slightly off-topic post (I promise we’ll be back with more superheroes and supervillains soon), but an article I co-wrote with F. Scott Kieff was just published in the Emory Law Journal: James E. Daily & F. Scott Kieff, Anything Under the Sun Made by Humans: Patent Law Doctrines as Endogenous Institutions for Commercializing Innovation, 62 Emory L.J. 967 (2013).  You can find the full article for free here.  Scott and I wrote the article as part of our work with the Stanford University Hoover Institution’s Project on Commercializing Innovation.  To give you an idea of what it’s about, here’s the abstract:

This Essay outlines a comparative institutional analysis among various doctrines in patent law to show how they can have different impacts on the way inventions are commercialized. It builds on a prior body of work about the positive role that property rights in patents can play in commercializing innovation to show how recent shifts in approaches to the particular legal doctrine known as patentable subject matter can be expected to have different effects on the commercialization of inventions than prior approaches. It concludes that, to the extent society wants to increase the overall rate of invention commercialization and increase overall competition as reflected in diversity in firm size among participants in the markets for commercializing innovation, society should consider reversing course on the law of patentable subject matter and return to an approach that is closer to the “anything under the sun made by man” view that was championed by the Supreme Court in the 1980s and by Congress through most of the second half of the twentieth century, updating only its gender biased language.

As you might guess, it’s a little denser reading than our usual material, but I thought some of our readers might be interested.

“Holy Secret Recipe, Batman!”: Superheroes, the Misappropriation of Trade Secrets, and Economic Espionage

(This guest post was written by T. Stephen Jenkins, an associate in the Commercial Litigation Practice Group of Pepper Hamilton LLP.)

While Law and the Multiverse has featured several posts on various forms of intellectual property law (e.g. patent, copyright, and trademark), it has yet to discuss trade secrets . . . until now.  Trade secrets commonly appear in comic books, and given the recent concern with computer security and the alleged theft of trade secrets by domestic and international hackers, theft of trade secrets is a worthwhile topic to discuss.  (Warning:  minor spoilers ahead)

 

I. What IS a Trade Secret?

A person or company holding a trade secret, as its name suggests, seeks to safeguard information that is known by the person or company that is not readily known by anyone in the public.  Trade secrets can overlap with other forms of intellectual property, such as non-patentable inventions, trade dress, and “know-how.”  However, unlike many other forms of intellectual property where recovery of damages might be limited by lack of federal registration (disclosure) of the intellectual property (e.g. copyrights and patents), generally speaking, a trade secret holder may be able to recover damages if he or she maintained a reasonable level of protection to prevent non-disclosure of the trade secret.  The Uniform Trade Secrets Act (“UTSA”), which 48 of 50 states have adopted (or introduced) in some form, defines a trade secret as

(1) information, including a formula, pattern, compilation, program, device, method, technique, or process, that (2) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (3) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Uniform Trade Secrets Act §1, ¶ 4.

Trade secrets are common—and even famous—in the real world.  One of the most famous examples is the Coca-Cola secret recipe, which, for years has been guarded and has been the subject of threats of economic espionage.  Other examples of famous trade secrets include KFC’s “11 herbs and spices” and Google’s search algorithm.  Even less apparent examples of trade secrets have gained fame including the methodology for creating the New York Times Best Sellers’ list and Starwood Hotels’ (the owner of Westin hotel chain) luxury ambience.  Each of the above satisfies the three elements of the UTSA definition of a trade secret.

First, each example easily satisfies the information prong.  See  1-1 Milgrim on Trade Secrets § 1.01 (“The classic definition of trade secrets is stated at § 757, comment b, of the 1939 Restatement of Torts. . . . It covers any information (which can be embodied in a physical thing . . .”).  Second, because some have attempted to either unlawfully misappropriate and/or reverse-engineer the above trade secrets, it is probably safe to assume each trade secret has independent economic value in not being generally known.  Third, all are highly protected (though safeguarding all the details that create a Starwood Hotel’s luxury ambience is undoubtedly challenging).

Given the broad definition of a trade secret under UTSA, one can see how patterns, formulas, or devices in the Multiverse likely qualify as trade secrets.  The challenge is demonstrating whether these secrets have economic value.

The most famous comic book trade secret may be the Super Soldier Serum that created Captain America (and other characters), which many have tried to misappropriate (e.g. the Red Skull) and reverse engineer (e.g. the Green Goblin).  Though the Super Solider Serum was the product of government military research, there is a strong case that is has economic value.  Many villains and fictional enemies of the United States have tried to misappropriate the secret formula and use it either to gain a military advantage or to create a steady supply of mercenaries for hire.  Therefore, it is reasonable to assume that the Super Soldier Serum could meet the trade secret requirements.

Other examples might include:

  • Devices:  Spider-Man’s webshooters and Batman’s gadgets;
  • Programs/Patterns:  X-men Danger Room (depending on whether or not it is sentient) and Cerebro/Cerebra;
  • Methods/Techniques/Processes:  The method to access the Speed Force and the process of joining adamantium to Wolverine’s skeleton;
  • Formula: Vibranium and its derivative uses including Captain America’s shield, the Super Solider Serum, and the Anti-Life Equation;
  • Information/Compilations:  S.H.I.E.L.D.’s database on superheroes and villains and Justice League’s/X-Men’s/Avengers team-up database.

A superhero’s secret identity (within the Multiverse) may also be a trade secret, though not as easily established as the above.  See the Law and the Multiverse’s post on secret identities and privacy for an analogous argument.  For public superheroes such as those registered under the Marvel Universe’s Superhuman Registration Act, their secret identities may not enjoy trade secret protection.  However, other superheroes have had to protect their secret identities against those trying to kill them or sell their secret (e.g. Spider-Man).  They have also obtained benefits in their non-superhero professions from keeping their superhero identities secret (e.g. Peter Parker (photographer) / Spider-Man, Clark Kent (journalist) / Superman, and Matt Murdock (attorney) / Daredevil)).  Thus, for these superheroes, a secret identify might qualify as a trade secret.

 

II. What Laws Protect Trade Secrets?

In contrast to patents, copyrights, and trademarks, which federal law either establishes and/or strongly protects, trade secrets’ protection mostly arises from state law, though recently, international and federal protection of trade secrets has increased.  Most states have adopted UTSA in some form, which provides for civil actions for injunctive relief and damages within three years after misappropriation is discovered.  Two U.S.-signed treaties, the Agreement on Trade Related Aspects of Intellectual Property Rights (“TRIPS”) and the North American Free Trade Agreement (“NAFTA”) also provide some protection.

Recently, the federal Economic Espionage Act (“EEA”), 18 U.S.C. §§ 1831 et seq.,  and the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030 et seq., have become enforcement tools against criminal misfeasors.  Both the EEA and the CFAA provide harsh civil and criminal penalties for the trade secret theft. See 18 U.S.C. §§ 1831 et seq. (providing for fines up to $10 million and/or 15 years imprisonment for economic espionage or trade secret theft); 18 U.S.C. § 1030 et seq. providing for unspecified fines and/or up  to 20 years imprisonment).

 

III. Who in the Multiverse Has Violated the EEA or the CFAA?

Though there are several examples of potential violations of the EEA and the CFAA in the Multiverse, a favorite comes from Marvel Entertainment’s popular Iron Man “Armor Wars” storyline (for a DC Comics example, see the mini-series aptly named The Hacker Files).

 

A. The Facts

“Armor Wars” is an Iron Man story arc that has appeared in many of Marvel’s comic book series.  In addition, it was featured in the second season of the Iron Man:  Armored Adventures televised cartoon.  In the Iron Man:  Armored Adventures version, Tony Stark is a teenager balancing being a superhero and a high school student.  Tony’s main antagonist is Obadiah Stane, who ousted Tony from the family company Stark International.

Stane, then Chair of the Board of Stark International, enlists Ghost to steal the Iron Man armor specifications.  Ghost goes to Tony’s hideout to steal the specs from Tony’s computer.  Stane also makes a deal with Doctor Doom, handing over the armor specs to Dr. Doom in exchange for help with creating a version of the armor for Stane.  Using Tony’s armor specs, Stane creates his own version of the Iron Man armor, becoming Iron Monger but is exposed as being involved with Ghost.  Ghost also sells the Iron Man armor specs to Justin Hammer (in this version a 21-year old spoiled rich kid), who creates his own version of the Iron Man armor, becoming Titanium Man.

 

B. Is There a Cause of Action Under the EEA or the CFAA?

While the cartoon takes a different approach to resolve the problem, consider whether a prosecutor or Tony could bring a claim under the EEA or the CFAA against (1) Ghost, (2) Stane, (3) Dr. Doom, and (4) Hammer (collectively, the “Misfeasors”).

 

1. Economic Espionage Act

Under the EEA, a prosecutor or Tony could bring claims of both theft of trade secrets (42 U.S.C. § 1832) and economic espionage (42 U.S.C.§ 1831).  The EEA makes it unlawful for a person to steal a trade secret and transmit it to a person who knows he or she is not authorized to possess it.  The EEA also makes it unlawful for a person to steal a trade secret with the purpose or knowledge that the delivery of the trade secret will benefit a foreign government (economic espionage).

The Misfeasors are all potentially liable for theft of trade secrets.  The EEA provides that “[w]hoever, with intent to convert a trade secret . . . steals, or without authorization,” or “appropriates . . . information” or “receives, buys, or possesses such information” or “attempts . . . or conspires . . . to commit any offense” described above shall be subjected to fines and/or imprisonment.  First, the Iron Man armor specs, at least in this storyline, are trade secrets  because they meet all the requirements under UTSA (see above Captain America/Super Soldier Serum analysis).  Moreover, the reason Stane and Hammer pay Ghost to steal the specs is because they want to derive economic value.  Second, the Misfeasors were involved in a conspiracy to misappropriate the specs:  Ghost stole the specs; Stane and Hammer bought the stolen specs, and Dr. Doom received the stolen specs.

However, not all of the Misfeasors are clearly liable for economic espionage under the EEA.  The EEA’s economic espionage provision is conceptually the same as its theft of trade secret provision, but requires that a misfeasor transmit a trade secret “intending or knowing that the offense will benefit” a foreign government or agent.  Here, the foreign government or agent is Latveria or Dr. Doom, respectively.

Hammer is likely not liable for economic espionage because it would be difficult to prove that he intended or knew that Dr. Doom would gain the armor specs.  In contrast, Stane and Dr. Doom are likely liable because they conspired for Dr. Doom to obtain the specs.  But the trickier case is Ghost who was happy to sell the specs to highest bidder.  Because it was Stane and not Ghost who gave the specs to Dr. Doom, Ghost can argue that he did not intend or know that his theft would benefit Dr. Doom.  However, given that “a conspiracy can exist even if each participant does not know the identity of the others or does not participate in all the events,” cf. United States v. Monroe, 73 F.3d 129, 131 (7th Cir. 1995) (internal citations omitted), Ghost’s argument may fail.

 

2. Computer Fraud and Abuse Act

The Misfeasors are also likely liable under the CFAA, which provides that “[w]hoever . . . knowingly accessed a computer without authorization or exceeding authorization . . . obtain[s] information that has been determined by [U.S. law] to require protection against unauthorized disclosure . . . [and] transmits . . . or conspires [to transmit]. . . to any person not entitled to receive it” will be subject to fines and/or imprisonment.  18 U.S.C. § 1030 (a)–(c).  The analysis under the CFAA is similar to the theft of trade secret analysis but requires that the information be obtained from a “protected computer.”  Under the CFAA a protected computer is either (1) a computer “exclusively for the use of a financial institution or the United States Government, ”18 U.S.C. § 1030(e)(2)(A), or (2) a computer used in “interstate or foreign commerce or communication,” 18 U.S.C. § 1030(e)(2)(B).  The latter requirement is a low standard to meet

Tony’s computer is a protected computer because it was used in interstate communication.  Thus, the Misfeasors could be facing years of imprisonment or at least hefty fines.  Dr. Doom may escape penalty given that, as the sovereign of his own country, he will likely not extradite himself for prosecution.  And if the U.S. government came after Dr. Doom or any of the Misfeasors, it would likely take years to reach a resolution, which is probably why the story arc’s writers resolved the issue in a much swifter way.

Using the EEA and the CFAA to pursue real-world misfeasors may increase in the coming years.  The EEA and the CFAA give federal prosecutors—and to a lesser extent civil litigants—broad power to prosecute alleged misfeasors, making even attempts to misappropriate trade secrets actionable.  “The Department of Justice has made the investigation and prosecution of corporate and state sponsored trade secret theft a top priority. . . . The FBI is also expanding its efforts to fight computer intrusions that involve the theft of trade secrets by individual, corporate, and nation-state cyber hackers.”  See Office of the President, Admin. Strategy on Mitigating the Theft of U.S. Trade Secrets at 7.

While there are many proponents and opponents of their use, there is no doubt that the Economic Espionage Act and the Computer Fraud and Abuse Act have had profound effects.  Of course, you can always come to Law and the Multiverse to see how the EEA and the CFAA continue to affect super powered individuals—and Pepper Hamilton LLP if you ever need real-world advice.