This review of New York appeals in the area of intellectual property law covers copyright, trademark, and patent cases. Since federal statutes control many legal issues involving intellectual property law, the most significant decisions emanate from federal courts. This discussion will address intellectual property cases in the Second Circuit and their impact beyond this jurisdiction.
In the area of copyright law, the Second Circuit Court of Appeals' decision in Barclays Capital, Inc. v. Theflyonthewall.com, Inc., addresses the issue of copyright preemption as it is applied to New York's common law doctrine of "hot news" misappropriation. (1) The Second Circuit's decision in Salinger v. Colting modifies the standard for obtaining a preliminary injunction in a copyright infringement case, making it consistent with the standard applied by the U.S. Supreme Court in patent infringement cases. (2) Federal district courts in New York also rendered copyright decisions addressing termination of transfer of rights, as well as standards for bringing a motion to dismiss a copyright infringement claim. (3)
In the area of trademark law, the Second Circuit addresses the issue of contributory trademark infringement for the sale of counterfeit goods by online auction site eBay in Tiffany (NJ) Inc. v. eBay Inc. (4) The case highlights the difficulties faced by companies doing business in the online marketplace. (5) Although patent cases are tried in district courts throughout the country, patent appeals are decided only by the United States Court of Appeals for the Federal Circuit. In a case arising out of the Southern District of New York, the Federal Circuit addressed the issue of whether certain DNA molecules would be considered patentable subject matter in the case of Ass'n for Molecular Pathology v. U.S. Patent & Trademark Office. (6) Another case arising from the Southern District of New York is Public Patent Foundation, Inc. v. GlaxoSmithKline Consumer, Healthcare, L.P., which addresses the issue of damages when there is a claim for false patent marking. (7)
A. Barclays Capital Inc. v. Theflyonthewall.com, Inc. (8)
In June 2011 the Second Circuit Court of Appeals addressed the issue of whether a claim for "hot news" misappropriation under New York's common law is preempted by federal copyright law. (9) Several financial services firms, including Barclays Capital Inc. and Merrill Lynch, commenced a lawsuit in the U.S. District Court for the Southern District of New York against the Theflyonthewall.com, Inc., an Internet based subscription news service, alleging claims of copyright infringement, as well as "hot news" misappropriation under New York law, with regard to plaintiffs securities recommendations. (10) Although the district court granted judgment on both claims in favor of the plaintiff, (11) the Second Circuit held that federal copyright law preempted the plaintiffs misappropriation claim. (12)
The plaintiffs, Barclays and Merrill Lynch, are securities brokers with a public clientele. (13) As part of their business, the plaintiffs perform "extensive research" into the securities markets and make "recommendations as to the wisdom" of particular investment strategies. (14) The firms generally circulate their reports and recommendations each day prior to the opening of U.S. securities markets, providing clients and others with the opportunity to act upon the recommendations when the markets open. (15) The plaintiffs' efforts in providing these reports result in "brokerage commissions" when clients use their firm to act on the recommendations. (16) Defendant, Theflyonthewall.com, owns an electronic news service. (17) Defendant was not disseminating the research of plaintiffs, but rather is briefly reporting on the recommendations of the plaintiffs. (18) Theflyonthewall.com electronically streamed hundreds of headlines each day, including a category entitled "recommendation. …