Category Archives: intellectual property

Law and the Multiverse Online CLE Programs

For many attorneys it will soon be annual CLE reporting season.  If you need CLE credits, we may be able to help.  We have partnered with Thomson West in the past to produce four online, on-demand programs with CLE credit available in most states:

What Superheroes and Comic Books Can Teach Us About Constitutional Law

Real-Life Superheroes in the World of Criminal Law

Everyday Ethics from Superhero Attorneys

Kapow! What Superheroes and Comic Books Can Teach Us About Torts

For a 20% discount on any or all of these programs, use code KABLAM2013.

And if you missed the IP and the Comic Book Superhero program presented by the ABA IP Section, it is available for pre-order as an audio CD for delivery on May 17th.  It may be available as an on-demand program later, I’m not sure.

Finally, if you’ve already taken these courses or are looking for something different, keep an eye out for a new program (presented by Thomson West) to be announced soon.

Genetiks and Human Gene Patents

(This post was the subject of Retcon #6, which addressed the Supreme Court’s decision in the Association for Molecular Pathology v. Myriad case.)

No, that’s not a typo in the title.  I’m referring to Genetiks, the graphic novel from Archaia Entertainment.  The protagonist of the book works for a genetic research company (the titular Genetiks), which requires each of its employees to submit a symbolic cell to the company.  The protagonist’s cell is used in a human DNA sequencing project, reminiscent of Celera Genomics’s private competitor to the Human Genome Project.  Apparently it is the first of its kind in the fictional world of the book, and after the protagonist’s DNA is completely sequenced he is told that, because the company now owns his genetic sequence, it now effectively owns him and everything he will ever do or produce.

This immediately raises a host of questions.  Can an employer commercially exploit the genetic information of its employees without further compensation?  Does sequencing someone’s DNA mean that you own it, in some sense?  Does owning that DNA sequence confer any rights over the person?  And can DNA sequences be owned in the first place?

I. Commercial Exploitation

The answer to the first question is a pretty straightforward yes.  To begin with, people don’t have a property right in their own body parts.  Moore v. Regents of Univ. of Cal., 51 Cal.3d 120 (1990).  Once an employee gives up a cell to the employer, that employer can pretty well do what they want with it, including exploit it for commercial gain, and the employee is not entitled to a cut.  But what’s more, the employee almost certainly signed a contract indicating that the cell and any resulting intellectual property rights or income were being exchanged for employment with the company.  Similar contracts are signed all the time, whereby employees agree to assign rights in creative works or inventions to their employers in exchange for employment.

II. Gene Patents

Genetiks makes a pretty broad leap from “sequenced DNA” to “ownership.”  In reality, there’s a bit more to it than that.  There is no property right in a bare DNA sequence.  Such a sequence is simply a fact.  But if a sequence is observed to be new, useful, and nonobvious, then it may qualify as a patentable invention (NB: in the United States inventions are defined as both inventions and discoveries under 35 U.S.C. § 100(a)).  This might be the case if, for example, the sequence is the sequence for a particular gene, which is what so-called “gene patents” are about.  But that still requires applying for a patent; it’s not automatic the way copyright protection is.

III. The Scope of Gene Patents

What gene patents definitely don’t do, however, is confer any inherent rights over the person that the gene was originally sequenced from or any person that the gene is found in.  First, such patents typically claim isolated DNA molecules with a particular sequence, which don’t exist in human beings, even humans with the genes in question.  Second, it has long been Patent Office policy—now codified in the law—that no patent may claim an invention “directed to or encompassing a human organism.”  Third, even if all that failed, the 13th Amendment would almost certainly have something to say about it.

IV. Are Human Genes Patentable?

But all of this may be a moot point.  The Supreme Court is current considering that question (“are human genes patentable?”) in the case of Association for Molecular Pathology v. Myriad Genetics, Inc.  The oral arguments were heard earlier this month, and the case has the potential to upend the biotechnology sector in the United States.  I won’t try to read the oral argument tealeaves, but I will say that—in general—recent Supreme Court patent cases have not been especially favorable to inventors and patent owners.

V. Conclusion

Genetiks is a good read, even though it rests on an extremely shaky legal premise.  You pretty much have to assume that it takes place in an alternate universe with a very different legal system, despite its apparent similarity to our own world and overall realistic tone.

IP CLE Reminder

This is a reminder of the live 90 minute CLE program this Friday, “IP and the Comic Book Superhero.”  The program starts at 10am Pacific / 11 am Mountain / noon Central / 1pm Eastern. The program will cover many aspects of IP law, including patents, trademarks, copyrights, publicity rights, and their tax implications with examples and inspiration drawn from both fictional superheroes and real-world superhero-related IP.  We hope you can join us!

IP and the Comic Book Superhero CLE

On Friday, April 26th at 10am Pacific / 11 am Mountain / noon Central / 1pm Eastern I will be co-presenting a live 90 minute CLE program called “IP and the Comic Book Superhero“, sponsored by the ABA Section on Intellectual Property Young Lawyers Action Group, the ABA Young Lawyers Division, the ABA Forum on the Entertainment and Sports Industries, and the ABA Center for Professional Development.  My co-presenters are Brad Desnoyer, associate professor at the University of Missouri School of Law and previous guest post author here at Law and the Multiverse; Janet Fries, of counsel at Drinker Biddle & Reath LLP in DC; and Martha L. Voelz, a solo attorney in New York.  The moderator is David Postolski, a patent attorney at Day Pitney LLP in New Jersey.

The program will cover many aspects of IP law, including patents, trademarks, copyrights, publicity rights, and their tax implications with examples and inspiration drawn from both fictional superheroes and real-world superhero-related IP.  We hope you can join us!

Pirate Cinema by Cory Doctorow

This guest post was written by Stuart Langley, an intellectual property attorney.  Thanks to Stuart for this fantastic post!  If you are a legal professional (e.g. an attorney, judge, or law professor) or a comic book professional (e.g. an author, editor, or illustrator) and  you have an idea for a post that would be a good fit for Law and the Multiverse, feel free to contact us!  

Cory Doctorow’s novel Pirate Cinema is a 2012 young adult speculative fiction novel set in near-future England that follows roughly a year in the life of a band of footloose youths living in, around, and outside traditional London society.  The story is told from the perspective of 16-year old filmmaker Trent McCauley (a.k.a. Cecil B. deVille) who’s obsession is creating mashups using images from the net.  Guided by his vagabond friends Jem, Dodger and a young woman named “26”, Trent matures from filmmaker to copyright activist.  

If you haven’t read Pirate Cinema, as always with Doctorow’s books you can download it for free, or you can do as I did and buy a copy.

Cory Doctorow is well-known for both his fiction and his informed, thoughtful copyright activism.  Pirate Cinema takes clear positions on copyright issues, but what is exceptionally fun about Pirate Cinema is the energy Doctorow puts forth to set out the whole cornucopia of property issues so we may consider law and theory.  Rather than steadfastly advocating a position, Pirate Cinema advocates advocacy itself; advocacy informed by human needs, respectful of human institutions created to meet those needs, and appreciative that these systems are changeable to satisfy our needs.  I will focus not on copyright issues per se, but the much more interesting context Pirate Cinema creates for understanding copyrights in the scheme of property law.  Pirate Cinema asks us to wonder about whether the way we treat intellectual property follows how we treat other kinds of property.

But first, Trent’s adventure begins when his family’s internet access is disconnected because of his downloading activity.  Is internet access a public utility subject to a higher “obligation to serve” standard, or merely a contractual service that can be denied for violation of any agreed upon term of service?

I. Is Internet Access a Public Utility?

Trent’s home has received a series of notices telling them their IP address has been associated with illegal downloading.  These notices go unheeded because Trent has intercepted them.  The third notice is accompanied by an appealable, but immediate one-year suspension of the family’s internet access.  The appeal process is portrayed as too burdensome and slow to pursue.

The McCauley’s internet access has been disconnected consistently with what appears to be an implementation of the United Kingdom Digital Economy Act 2010.  Implementation of this act has been slow, but is expected to lead to notices and service disruption as early as 2014.  The implementing code of this act obligates ISPs to respond to copyright infringement reports by notice to subscribers, maintain a list of subscribers that have received notices which can be disclosed to copyright owners under court order, and degrade or deny service to repeat offenders.  The technical measures imposed by the law will be appealable; on paper the appeal processes appear designed to protect subscribers, however, the regulations on the appeal process have not yet been published.  This foundational scenario in Pirate Cinema is plausible.

But whether it is acceptable to cut off internet access as punishment for violating how that service is used is another question.  Because of the disconnection Trent’s father cannot find work, his mother cannot find medical care, and his sister’s schooling suffers.  Is internet access is a public utility that should be more difficult to disconnect than summary and unilateral administrative action?  As explained in Jim Rossi’s article Universal Service in Competitive Retail Electric Power Markets: Whither the Duty to Serve? 21 Energy L.J. 27 (2000), common law principles express a public utility having a higher obligation to provide service—to provide extraordinary levels of service, especially to small residential customers.  These obligations include the duty to extend service, provide continuing reliable service, provide advanced notice of disconnection and to continue service even though a customer cannot make full payment.  Public utilities can have terms of service and can terminate service for violations, commonly payment and safety related transgressions.  One U.S. city proposed to cut off utility service for failure to pay speeding tickets, although using utility service as a tool to enforce other regulations seems very unusual and inconsistent with the common law “duty to serve”.  The question posed by Pirate Cinema is timely as governments try to regulate internet access, they do so by treating it as a public utility.  This will be a double edged sword in that one treated as a utility, society should, perhaps, have a higher duty to provide internet access and similarly higher barriers before disconnecting service, including greater due process and evidentiary protections for subscribers.

II. Property Rights in Pirate Cinema

Trent learns quickly how to live without money.  He needs food, he needs shelter, he needs comforts of water and electricity and, significantly, he needs to create films.  Without money the satisfaction of these needs brings Trent face-to-face with all types of property theory and practice.

The origin of property rights–the question of how something moves out of “the commons” to become the exclusive property of an individual is found in variations of “first possession theory” and the more thorough Natural Rights theory advocated by John Locke.  According to these theories property rights arise from the human ability to take something from nature, or the commons, and improve it and put it to use.  This act of taking from the commons gives the taker ownership in the thing taken.

Laws and social institutions have evolved to manage property rights, how they are granted and retained, and what privileges are granted to those that possess them.  These institutions and laws are the creation of man as well, and in spite of the strength of our belief that they are immutable, these institutions change over time to meet the needs of society.  Pirate Cinema asserts that property rights are enforced by political entities and powerful corporations and asks us to think about whether our existing institutions and laws are adequate with the reminder that we can change them to better meet society’s needs.  Paramount of those societal needs is the efficient and effective distribution of resources in our quest to satisfy human needs such as the need to eat, the need for shelter, and the more abstract needs to be comfortable, to share knowledge, and to be creative.

A. Tangible Property: Discarded Goods

Pirate Cinema’s society is characterized by great poverty and apparent abundance of resources being wasted.  At Waitrose, an upmarket grocer in London, Trent has a sinking feeling they might be about to shoplift.  Shoplifting is a crime and Trent is no thief.  Instead, his guide Jem teaches him to gather discarded food from the skips (dumpsters) behind the grocery which provide such abundance that they share this bounty with the less fortunate.  Similarly, they acquire all manner of computer and audiovisual equipment, all discarded.  This contrast—the repulsion of stealing against the acceptance of taking discarded goods—lets us think about when tangible property rights make sense and when they do not.  But is this a difference recognized in law?

Trent is right, people found guilty of shoplifting in the UK are charged with theft under the Theft Act 1968 and repeat offenders risk jail time.  However, can he take those same goods from a skip when discarded?  In the UK, no.  Dumpster diving in England and Wales may qualify as theft within the Theft Act 1968 as well.  However, there is little enforcement in practice.  In England, unless aggravated, theft from a skip will only be a civil wrong.  This non-uniform enforcement suggest that society, like Trent, views these acts differently, with a higher regard for personal property in some circumstances (e.g., when it is inside a store, while the owner is exercising dominion, and when taking property would cause loss to the property owner) than in other circumstances (e.g., once the owner has abandoned the property and would no longer suffer loss by the property being taken).

B. Real Property: Adverse Possession

Later, Trent and Jem take up residence in an abandoned pub they name Zeroday and claim it as their own under adverse possession laws.  Can they hope to own the pub where they take up residence?  Their actions to improve the property and put it to better use appeal to the natural law theory of property.  Acquiring real property by “adverse possession” is the process by which a person who is not the legal owner of real property can become its owner after having occupied it for a specified period of time.  The Land Registration Act 2002 provides a legal scheme by which a person wishing to claim adverse possession of registered land would need to continuously occupy the land for ten years, or for a period of twelve years if the land is unregistered.  Pirate Cinema accurately describes the adverse possession law, although the youth’s rigid interpretation of notice provisions and continuous occupation are likely overstated.  Just as importantly, when the pub’s new owner appears, destroying the adverse possession claim, Trent readily yields to the new owner, apparently acknowledging both the new owner’s claim in law and the natural rights principle that although he could claim property from the commons, he could not claim property owned by another.  Once again, the contrast presented suggests our laws and culture give high regard to real property rights in some circumstances and less regard in other circumstances such as when the property is abandoned and can be put to better use.

C. Abstraction of Electricity

In a third property-like scenario, the pub’s power is originally restored by Dodger, Jem’s friend who bypasses the meter.  Not long after, the authorities forcibly remove the residents of Zeroday for “abstraction electricity”.  Electricity is not property in the UK and cannot therefore be stolen.  See the Crown Prosecution Service citing Low v. Blease Crim L.R. 513 (1975).  However, under section 13 of the Theft Act 1968, electricity used without due authority, or dishonestly wasted or diverted is charged with the offense of abstracting electricity.  Trent and the inhabitants of Zeroday unwillingly recognize this authority, vacating Zeroday as punishment for this crime.  Later, when they wish to re-habit the pub, the youths avoid this problem by installing a pay as you go service.  Consistent with the “duty to serve” notion, so long as the youths pay for their service the utility did not deny them service even though they do not own the property.  The contrast presented here is not in conflicting views of the law, but in that Trent does reluctantly but willingly commit the crime, and then agrees with the terms of service and his obligation to pay for services.  Trent acknowledges his needs alone do not justify theft, or abstraction, of what is rightfully “owned” by another.

III. Conclusion

So now our table is set; we have before us examples of when property rights systems work, and when they don’t.  We have examples of when it is right to acknowledge the rights of an owner and when we should question the scope of the powers conferred by those property rights.  Is internet access more like electricity we should be hesitant to withhold, or is it more like tangible or real property where theft laws are rigorously enforced?  Are downloaded clips more like real and tangible property in which we consistently recognize broad rights of owners, or discards from the skips where society implicitly or explicitly accepts that in spite of laws to the contrary, we restrain our enforcement of owner rights in favor of more effective ways of meeting human needs?

Pirate Cinema does not answer these questions for us.  It urges us to appreciate our own responsibility in defining property rights and systems of crime and punishment that meet human needs, including and most dearly the human need to create.  More than anything, the tale urges us to decide, and to learn about the law and regulation being created to regulate society, and take an active part in how those laws are made.

Superhero Journalists Revisited

You may recall our previous post about superhero journalists Clark Kent and Peter Parker, which discussed how copyright affected them differently as an employee and an independent contractor, respectively.  Well the times they are a changin’, and Clark Kent quit his job at the Daily Planet in Superman #13 to become a blogger.  This will have more than a few legal consequences for Kent, some of which we’ll touch on today and some of which will have to wait for a future post.

I. Intellectual Property

As an individual Kent will either be working as a freelancer, selling stories to companies like the Huffington Post, or he may publish stories himself.  Regardless of which business model Kent chooses, he’ll also have to choose a form of business association (corporation, LLC, etc).  Basically, he could either choose some sort of corporation, or he could operate a sole proprietorship.  The latter is easier, but it’s also riskier (more on that later).

With regard to IP, the different kinds of business association give him some options.  For example, he could be an employee of a corporation, in which case the copyright in his works would be automatically owned by the corporation, just as they were owned by the Daily Planet when he worked there.  Or, if he wasn’t an employee then he could assign those copyrights by contract.  And if he chose not to incorporate, then he could retain ownership of the copyrights as an individual.

One practical effect of this choice will come into play when contracts with publishers are signed.  If Kent’s company owns the copyrights (either automatically or by assignment), then the company will be the one selling the stories, which entails either assigning the copyright to the publisher or granting the publisher a license.  If Kent operates as an individual, then it’ll be Kent selling the stories directly.  Either way it’ll probably be Kent signing the contracts, since he’ll be his company’s sole employee/shareholder/member.  The difference will be whether he signs it something like “Clark Kent, Manager, KentCo LLC” or just “Clark Kent.”

So what’s the point of all of this?  Why would Kent bother setting up a company, especially if he’s going to be the only employee or if it won’t even have any employees?  The answers are, as they so often are in the law, liability and taxes.  Taxes will have to wait for a future post, but let’s take a brief look at liability.

II. Liability

As a writer working alone, Kent probably won’t have to worry too much about some of the common sources of liability for companies, such as products liability or workplace injuries.  But he will have to worry about suits for defamation, invasion of privacy, and related torts.  To a certain extent these risks can be insured against, and it’s usually part of commercial general liability insurance, but there are limits to what insurance will cover.  If Kent intentionally defames someone or (more likely) intentionally invades their privacy, then an insurer isn’t going to cover that.  This is where the liability protection of the corporate form comes in to play.

Basically, the way this works is that the plaintiff could sue Kent’s corporation or company but not Kent himself as an individual.  This means that the corporation’s assets would be vulnerable in the suit, but not Kent’s personal assets.  There are some exceptions to this general rule, however.  Sometimes a plaintiff can “pierce the corporate veil” and sue the employees or directors and officers of the corporation as individuals.  There are several reasons why this can happen, but some of the most common are when the corporation is just an “alter ego” of the individual (i.e. they aren’t really distinct entities) or when the corporation is under-capitalized (i.e it doesn’t have nearly the assets it should given the kinds of risks it undertakes).  Both of these are potential issues for a one-person corporation or LLC.  Kent will have to be careful to observe the corporate formalities, avoid commingling personal and corporate assets, and maintain adequate capital in the company.

If Kent decides not to incorporate but instead operate a sole proprietorship or even act as an individual, then he won’t have this benefit.  He could be named in the suit as an individual and his assets would all be up for grabs, subject to the limitations of bankruptcy.  Incorporation has some upfront costs and requires some effort to maintain, but it beats being on the wrong end of a million dollar damage award.

III. Conclusion

So far there haven’t been a lot of details in the comics, but it’ll be interesting to see where this part of the Superman story goes.  Clark Kent’s work at the Daily Planet has been an iconic part of the character for decades.  “Clark Kent, mild-mannered blogger” doesn’t have quite the same ring to it.

Amicus Curiae Comic

At Law and the Multiverse we mainly talk about how the law is portrayed in comics.  Well here is a very literal example: an amicus curiae brief / comic filed in the ebook price-fixing case, U.S. v. Apple et al.  The brief was illustrated by Julia Alekseyeva and written by Bob Kohn, who is the co-author of Kohn on Music Licensing and knows a thing or two about copyright law.  We take no position on the case itself or the merits of the brief, but it’s easy to read and very entertaining.  There have been illustrated court filings before (here’s the sad backstory to that one), but this is the first full-blown comic we’ve seen.

Thanks to Len for forwarding the brief to us.

Daredevil #17

Today’s post covers the latest issue of Daredevil, “Divide by Hero.”  Mark Waid’s run continues to be terrific, and this issue was particularly good.  Most of it is a flashback, so it’s a good issue to check out even if you haven’t been following the series (which you really should be).  A couple of legal issues stood out in this issue, including one involving my personal area of practice, patent law, which doesn’t come up terribly often in comics.  Minor spoilers ahead.

I. Invention Promotion Companies and Other Scams

Part of the flashback story involves a scientist, Elliot Pasko, who had been taken in by a company called Fortknight, which Foggy Nelson describes as “a predator corporation posing as a no-strings endowment fund.  They stake promising young inventors…then bury them with bogus ownership claims, patent infringement allegations, and worse whenever their ‘beneficiaries’ strike gold.”  As it turns out, there are quite a few scams aimed at inventors, though they usually don’t take this form.  Nonetheless, what Foggy describes could work.

The most common form of scam is the ‘invention promotion company.’  The United States Patent and Trademark Office has a useful page that details the common elements of these scams.  Basically they lure inventors with unwarranted promises of success at the Patent Office and easy money, when in reality they either deliver nothing or, at most, an often useless design patent that protects only the non-functional design of a thing.  The kinds of companies are a real problem, particularly for individual inventors, but Fortknight seems to be operating a different kind of scam.

I suspect that the way Fortknight’s scam would work is that the company would promise research funding, but hidden in the agreement would be an assignment of patent rights from the inventor to Fortknight.  Then, as soon as the research was far enough along to apply for a patent, Fortknight would pull the rug out from under the inventor, obtain a patent, and sue the inventor if he or she tried to continue their research elsewhere.  If an inventor assigns their rights, then they can be prevented from making, using, or selling their own invention just like anyone else.

As a side note (and as discussed in our review of Daredevil: Yellow), there’s no reason that Nelson & Murdock couldn’t take this case, since it involves patent litigation rather than practice before the United States Patent & Trademark Office.

II. Profit Sharing and Legal Ethics

Foggy took Pasko’s case under curious terms: “all the pro bono he required in exchange for ten percent of future profits.”  Now, pro bono doesn’t necessarily mean free; it can also mean working at a substantially reduced rate, but this isn’t pro bono work.  This is for-profit work (literally) that is effectively a kind of contingent fee, since if Pasko loses then there definitely won’t be any profits.  But is this kind of thing ethical?  The answer is a highly qualified yes.

In New York, “A lawyer may accept an equity interest in a client if the lawyer complies with the Rule of Professional Conduct governing business transactions with clients and the acceptance does not otherwise create a conflict for the lawyer or result in an excessive fee.”  NYSBA Opinion 913.  Entering into a business transaction with a client in this way brings with it several requirements, including that the transaction be fair, reasonable, and communicated in writing.  The client must also be advised of and be given a reasonable opportunity to seek independent legal advice regarding the transaction.  And the client must communicate his or her informed consent in writing.  Contingent fee arrangements likewise have their own rules, mostly to do with carefully explaining the nature of the fee agreement in writing.  See NY Rule 1.5(c).

Other jurisdictions have taken a similar approach.  See, e.g., LA County Bar Assoc. Formal Opinion No. 507; DC Bar Opinion 300.

I’ll admit that I was a bit surprised by this result.  I knew that lawyers could, under some circumstances, enter into business transactions with clients, and that lawyers could take contingent fees.  But I did not expect that the two could be ethically combined.  I would have thought that combining the risks involved would simply be too much and that ethics committees would opt for a bright line rule prohibiting the practice.

III. Conclusion

Daredevil doesn’t always get the law right, but it’s better than most comics on that score.  And despite my initial skepticism, it looks like it was right this time around as well.  Kudos to Mark Waid for combining accuracy and excellent storytelling.

Spider-Man and Likeness Rights

Today we have a question from Hurley, who writes:

In [Ultimate Spider-Man #109]  Wilson Fisk, A.K.A. the Kingpin, points out to Spider-Man that the costume he wears and his name were given to him by a now-defunct wrestling company. Kingpin bought said company [in issue #106], which he says gives him merchandising rights to all things Spider-Man related. Clothing, toys, etc. Is this legally correct?

(If you’re interested, this storyline is collected in Ultimate Spider-Man vol. 18.)

Here’s the complete history: As usual, Spider-Man tried to make some extra money on the wrestling circuit.  The company that organized the matches was Hercules Wrestling, Inc., and apparently Parker signed away the Spider-Man name and merchandising rights to Hercules.  Later, a Spider-Man movie came out, and the studio managed to prevent Hercules from putting out Spider-Man merch, resulting in Hercules going bankrupt.  Apparently a company called C and C Licensing picked up the rights from Hercules in bankruptcy. C and C is a subsidiary of GG Enterprises, which Fisk purchased.  Thus, through this chain of subsidiaries, Fisk owns the rights to the Spider-Man name as well as the licensing rights for his likeness.  As a result, Fisk actually wants Spider-Man to keep doing his thing because Fisk makes more money from the merchandise sales than he loses from Spider-Man meddling in his affairs.  Pretty villainous, eh?

There are three major questions here.  First, what rights are involved, exactly?  Second, could Fisk have purchased them that way?  Third, is Spider-Man really powerless to do anything about it?

I. Name and Likeness Rights

Name and likeness rights generally fall under the right of publicity, which is something that we (and guest author Brad Desnoyer) have talked about before.  As Brad noted, the right of publicity “protects an individual’s ability ‘to control the commercial use of his or her identity.'” (quoting 31 Causes of Action 2d 121).  In Spider-Man’s case, the rights of publicity at issue would likely cover his “stage name” and his likeness.

Since this all happens in New York, we can use the New York right of publicity statute.  The statute covers a person’s “name, portrait or picture.” N.Y. Civil Rights Law § 51.  A “name” can include a stage name, if it “has become known to the public and identifies its bearer virtually to the exclusion of his true name.”  See, e.g., DeClemente v. Columbia Pictures Indus. Inc., 860 F.Supp. 30, 53 (E.D.N.Y. 1994).  Under this standard, Spider-Man would qualify, as he is nationally known as Spider-Man and is essentially unknown as Peter Parker.  And of course his image would qualify as a “portrait or picture.”

So the rights at issue are pretty much as described in the comics (at least at the beginning; later on Spider-Man refers to Fisk owning “his copyright,” which is not accurate, unless Spider-Man was engaging in a little fourth wall-breaking.).

II. The Chain of Title and IP Holding Companies

From what I can tell from the comic, this all seems believable enough.  It’s not 100% clear to me how the movie studio drove the wrestling company into bankruptcy, but admittedly I haven’t read those earlier issues yet, so maybe that’s explained in more detail.  In any event, the maze of holding companies and subsidiaries is par for the course.  Many media companies have separate holding and licensing companies for characters, trademarks, and other IP.  For example, Marvel Entertainment, LLC (itself now a subsidiary of The Walt Disney Company) has three IP holding companies, including Marvel Characters, Inc.

You might be wondering why businesses bother creating IP holding companies.  The answer, as is so often the case with strange corporate behavior, is tax reduction:

Specifically, if a holding company is created to own the trademarks of the operating company, it can license those marks back to the operating company. In some states, tax income from royalties from license agreements owned by the holding company is exempt. Further, the state from which the income is paid, cannot tax that payment either. Finally, the operating company may deduct the royalty payments as operating expenses.

Allan J. Sternstein et al., Designing an Effective Intellectual Property Compliance Program, in Corp. Compl. Series: Intell. Prop. § 3:7 (2011).  Pretty sweet setup, huh?

III. So is Spider-Man Out of Luck?

Probably, unless his original contract with the wrestling company is invalid or unenforceable.  The New York statute allows a person to sign away (in writing) their right of publicity.  Interestingly, if the person is a minor, then their parent or guardian must give their written consent.  N.Y. Civil Rights Law § 50.  Ultimate Spider-Man is apparently a minor at the time, and I doubt Aunt May or Uncle Ben (who was still alive at the time) signed off on the wrestling contract, so that might be a way out.

Another issue might be whether the contract made the right of publicity assignable or available for sublicense.  If the contract was solely with Hercules Wrestling, then it might not have been properly assigned to C and C, leaving Fisk with nothing.  Unfortunately, Fisk’s storyline gets wrapped up before we find out whether Spider-Man had any legal way out.  Too bad, since he was already teamed up with Daredevil, and I’d think Murdock would like to not only see Fisk behind bars but also a piece of his business empire taken away from him.

IV. Conclusion

This was a nice application of what should be a significant issue in comics: within the fictional comic book world, superheroes and supervillains are real people and so have rights of publicity and privacy that would be worth a lot of money.  Shady licensing deals would likely abound, but some superheroes could become rich from merchandise sales and endorsements (or they could donate it to charity, as it is sometimes suggested that Superman does).  At the same time, a lot of the copyright issues that surround comic books in the real world wouldn’t exist.  Thus, instead of comic book authors getting raw deals, the superheroes themselves would.  Progress!

Daredevil: Yellow

Daredevil: Yellow is a fantastic retelling of Daredevil’s origin story by Jeph Loeb and Tim Sale, whose watercolor illustrations are a great match for the setting and mood of the story.  The subtitle is a reference to the color of Daredevil’s original costume.  It’s part of a related series by Loeb and Sale that includes Spider-Man: Blue, Hulk: Gray, and the (hopefully forthcoming) Captain America: White.  The story is framed as a retrospective by Murdock, relating how he came to start a law practice with Foggy Nelson, become Daredevil, and fall in love with Karen Page.

Nelson and Murdock’s first big break comes when the Fantastic Four approach the firm for representation.  We don’t get a lot of detail regarding the work, but Reed Richards describes it as “the lease on the Baxter Building, patents, that sort of thing.”  Foggy eagerly replies “We’d be happy to.  And anything else you might want to bring us, Mr. Richards.”  This is all incidental to the main storyline, but it raises an issue near and dear to my heart: the practice of patent law.

I. The Peculiarities of Patent Law

The practice of patent law can be divided into two broad categories: practicing before the Patent and Trademark Office and “everything else.”  Practicing before the PTO includes:

preparing and prosecuting any patent  application, consulting with or giving advice to a client in contemplation of  filing a patent application or other document with the Office, drafting the specification or claims of a patent application; drafting an amendment or reply to a communication from the Office that may require written argument to establish the patentability of a claimed invention; and drafting a communication for a public use, interference, reexamination proceeding, petition, appeal to the Board of Patent Appeals and Interferences, or other proceeding.

37 C.F.R. § 11.5.  That’s quite the laundry list, but basically, this means drafting and applying for patents, which can involve a lot of communication with the Patent Office, including some adversarial procedures in which a patent is opposed by another party.  It also includes giving advice and counsel regarding alternatives to patents, including those available under state law.  Note that it doesn’t include anything to do with trademarks; with one very narrow exception, only attorneys can do that, and any attorney can.  37 C.F.R. § 11.14.

“Everything else” includes other transactional matters (e.g. negotiating patent licenses) and litigation (e.g. suing for patent infringement).

Why does this distinction matter?  Because not just anyone—or any attorney—can represent someone before the Patent and Trademark Office, whereas any attorney can handle “everything else.”  Admission to practice before the PTO requires a technical background (broadly speaking: a bachelor’s degree in science or engineering or the equivalent, see here for the complicated details) and passing the registration examination, which is sometimes called “the patent bar exam.”  The examination consists of 100 multiple choice questions, mainly derived from the Manual of Patent Examining Procedure, the rulebook for patent examiners.  The pass rate for the exam is considerably lower than most state bar exams.

Notably, admission to practice before the PTO does not require a law degree or a license to practice law.  Non-lawyers who pass the registration exam become patent agents and lawyers who do so become patent attorneys.  Both have the same abilities to practice before the PTO, but only a patent attorney can handle “everything else.”  If a patent agent later becomes an attorney, he or she can pay a fee to have their registration changed to say “patent attorney,” but there is no functional difference.

II. So What’s the Problem?

Actually, there isn’t necessarily a problem.  Reed did say “patents,” not “patent applications,” so it could be that he’s talking about something like negotiating licenses or handling an infringement suit.  While patent attorneys often deal with the full spectrum of patent law, it is not uncommon for patent litigators or patent license specialists not to be patent attorneys.  So Reed could have a separate firm handle the work of obtaining patents (aka “patent prosecution”) and leave licensing and litigation to Nelson and Murdock.  Or Reed could even represent himself before the PTO, which is always an option even for someone who is not a patent attorney or agent, albeit not one that I would recommend, even for someone as smart as Reed.

Alternatively, Nelson or Murdock could be a patent attorney.  I couldn’t find any information on their undergraduate degrees, so it’s possible that one or both of them have the required technical background.  Statistically this is unlikely, since only about 7% of attorneys have a science or engineering degree.  R. Kim Craft and Joe G. Baker, Do Economists Make Better Lawyers? Undergraduate Degree Field and Lawyer Earnings, 34 J. of Econ. Educ. 263, 271 (2003).  Still, it’s possible, and Murdock clearly has an aptitude for mechanical engineering, since his billy club is chock full of clever gadgets of his own design.

III. Conclusion

It’s a pretty minor issue, but I couldn’t pass up an opportunity to talk about this particular quirk of patent law.  I’ll be taking a look at the other books in the Loeb & Sale series in the future, but until then I recommend checking out Daredevil: Yellow for yourself!