Tabberone is pronounced tab ber won not tay ber own

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Making A New Product There are a number of pundits who claim that it is either illegal or immoral to use someone's product to make and sell something you make. It is not illegal. Those who say it is immoral usually have some ulterior basis for their claims such as they consider themselves to be "creative" and/or "artists" and they are asserting their personal opinions as though they are fact. Many of these misinformation mavens can be found lurking on varoius craft site boards and forums. There are many such on the Etsy web site, for example. Federal law and the federal courts do not recognize the unethical aspects as being relevant or part of infringement. But they do recognize that there are legitimate uses of another's products to make and sell a new product. Infringment involves copying or counterfeiting and most infringement cases involve some sort of misrepresentation that create a "likelihood of confusion". But the courts recognize that using genuine product changes the dynamics of infringement. Mirage Editions, Inc. v. Albuquerque A.R.T. Co, 856 F.2d 1341 (9th Cir. 1988), cert. denied, 489 U.S. 1018 (1989), is not included on this list as it is considered by other circuits to be very flawed and is heavily criticized by legal scholars. Likewise, the 2010 case from the 9th Circuit Court of Appeals, Au-Tomotive Gold v Volkswagen, another very bad decision, is not included until after the appeal time period is up.

The following cases represent what we have been able to locate concerning the use of copyrighted and/or trademarked goods to make and sell a new product. There are logical limits to what one can do with another's goods in the marketplace. You cannot place your name on a product and sell it as your own. You cannot materially alter a product, such as removing batch codes. You cannot use a name or mark similar to the name or mark of a competitor. Corporate lawyers will lie to you and tell you that you cannot use the manufacturer's name to sell their genuine product. They will also claim that you cannot use a picture of the product or any of the specifications or wording on the packaging. They are lying to you. Corporate lawyers are professional liars and they are paid to lie by their clients.

However, the defendant is still entitled to inform consumers by use of plaintiff's name and trademark that the towel of which the handbag is made is the product of Scarves by Vera. The result is, of course, that defendant will get some advantage from the trademark. This, however, is wholly permissible so long as plaintiff is not identified with the manufacture of the handbag. All plaintiff is entitled to is full disclosure. Champion Spark Plug Co. v. Sanders, 1941, 331 U.S. 125, 130, 67 S.Ct. 1136, 91 L.Ed. 1386.

The court did require American Handbag to sew on the inside of the handbag near the clasp, and plainly visible to anyone opening the handbag, a label which stated that "The design on the cover of this handbag is the copyrighted design of Scarves by Vera, Inc. which is in no way connected with American Handbags, Inc., manufacturer of this handbag."

"It is clear that once the copyright proprietor consents to the sale of particular copies of his work, he may not thereafter exercise the right to vend with respect to such copies. Thus, in the usual situation the Sec. 27 exclusions mean that the right to vend may be exercised with respect to the initial sale of copies of the work, but may not prevent or restrict the resale of such copies." 1 M. B. Nimmer, 192 Copyright § 103.3 (1972) "The Copyright Act grants to the copyright proprietor the exclusive right to print, reprint, publish, copy, and vend the copyrighted work (17 U.S.C. § 1), but it gives him no further right of control over the use or disposition of the individual copies of the work once he has sold or otherwise disposed of them."

The court did require labeling to displel confusion:

Henceforth, defendant is to indicate on the back of all of its products upon which appear any of plaintiff's copyrighted artworks, by plainly visible label or stamp in easily readable letters of the same size, the following: "Artwork hereon is copyrighted design of C. M. Paula Co. which is in no way connected with L. Gene Logan Co., manufacturer of this plaque."

As the holder of a patent, Roho has, by statute, been granted a monopoly over the technology and the cushions. Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225, 229-30, 84 S.Ct. 784, 787-88, 11 L.Ed.2d 661 (1964). That patent, however, is strictly construed and "cannot be used to secure any monopoly beyond that contained in the patent." Id. at 230, 84 S.Ct. at 788. Additionally, as long as the terms of the patent [page 360] are not violated, the purchaser of a patented article has the right to use and sell it. Marquis' right to copy Roho's unpatented product, the Roho mattress, also cannot be disputed. The common law has long recognized that an unpatented article "is in the public domain and may be made and sold by whoever chooses." Id. at 231, 84 S.Ct. at 789.

In its analysis, the district court seemed to focus on the similarity between the two mattresses to resolve the "new product" issue and dismissed Marquis' modification of the cushions as trivial. Because Roho was essentially claiming that Marquis purchased one of its products and then sold that product in a slightly modified form under a different label, the central comparison should be between the product Marquis purchased — the wheelchair cushions — and the product he ultimately marketed — the mattress. By making the mattress Marquis created a new product in relation to the wheelchair cushions. He modified those cushions in a more than superficial manner by attaching them with the necessary glue and grommets to create a mattress. Additionally, the two products are commercially distinguishable, in that [page 361] they are generally marketed to different consumers for different purposes.

However, while Marquis "procured" that patented invention from Roho, he paid the price they asked and Roho profited from the sale. If Marquis can buy component parts from Roho and assemble them into a product at a price that is competitive with another of Roho's products, that competition serves the public interest.

The District Court in Alexander Binzel Corp. v. Nu-Tecsys, 785 F.Supp. 719 (N.D.Ill.1992) had before it a similar situation. Binzel, a manufacturer of welding guns, charged its competitor with trademark infringement because the competitor's products used, among others, trademarked components purchased from the plaintiff. Other than on the packaging, nowhere on defendants' product was there any mark identifying defendants as the source of the product. Similarly, in our case: (1) Dad's Kid assembled its Tri-Cards using component parts with MLBPA's trademark; (2) defendant's identifying mark can only be found on the packaging of each Tri-Card, not on the product itself; (3) Dad's Kid purchases three officially licensed cards to produce each Tri-Card, thus generating royalty income for MLBPA. Additionally, in this case Dad's Kid prints a disclaimer on the packaging of its product. The defendants in Binzel did not.

Accordingly, the requisite showing of likelihood of success on the merits not being made, MLBPA's motion for a preliminary injunction was denied, as was necessarily the motion for partial summary judgment.

It is well established that copyright protection "has never accorded the copyright owner complete control over all possible uses of his work." Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 432, 104 S.Ct. 774, 784, 78 L.Ed.2d 574 (1984). See also White-Smith Music Publishing Co. v. Apollo Co., 209 U.S. 1, 19, 28 S.Ct. 319, 324, 52 L.Ed. 655 (1908). The Supreme Court stated that a person does not infringe a copyright by using the work in an unauthorized manner which occurs outside the scope of the copyright holder's exclusive rights. Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 155, 95 S.Ct. 2040, 2043, 45 L.Ed.2d 84 (1975).

The Court also stated:

The mundane act of placing notecards onto a ceramic tile falls into the narrow category of works in which no creative spark exists. Thus, the ceramic tiles are not a new and different original work, but the same exact work placed onto a different background. ART did not display any creativity in gluing Annie Lee's work onto the separate surface. ART did not reproduce the images, did not enlarge or diminish the size of the images, and did not make any alteration to the drawings themselves. To the contrary, ART simply glued onto a ceramic tile the exact same notecards DTW purchased from Annie Lee, and placed a clear epoxy resin coating over the entire tile. Since the notecard is in the same "form" as Annie Lee's original work, it necessarily cannot be in a "form in which a work may be recast, transformed, or adapted." 17 U.S.C. § 101. No intellectual effort or creativity was necessary to transfer the notecard to the tile. It does not meet the definition of a "derivative work."

For each tile generated by ART, ART must purchase a notecard originally sold by Annie Lee. For one hundred ceramic tiles, ART must purchase one hundred Annie Lee notecards. The court founds that the ceramic tiles were not "derivative works." ART "did nothing more than compete with [Annie Lee] by reselling individual goods purchased from [Annie Lee] in bulk. Competition is not infringement, even in the market for highly expressive artistic works." Black & Page, supra at 631. As such, the court found that the ceramic tile mounting process utilized by ART could not, as a matter of law, be found to violate the Copyright Act. Accordingly, the court found in favor of ART and against Annie Lee.

[T]he copyrighted note cards and lithographs were not "transformed" in the slightest. The art was bonded to a slab of ceramic, but it was not changed in the process. It still depicts exactly what it depicted when it left Lee's studio. See William F. Patry, Copyright Law and Practice 823-24 (1994) (disapproving Mirage Editions on this ground).[n1] If mounting works a "transformation," then changing a painting's frame or a photograph's mat equally produces a derivative work. Indeed, if Lee is right about the meaning of the definition's first sentence, then any alteration of a work, however slight, requires the author's permission. We asked at oral argument what would happen if a purchaser jotted a note on one of the note cards, or used it as a coaster for a drink, or cut it in half, or if a collector applied his seal (as is common in Japan); Lee's counsel replied that such changes prepare derivative works, but that as a practical matter artists would not file suit. A definition of derivative work that makes criminals out of art collectors and tourists is jarring despite Lee's gracious offer not to commence civil litigation.

Affirmed

While La Infantil has not made any false representations, and indeed appears to have attempted to identify the sources of the products accurately, the Court finds that the notice is inadequate to prevent potential confusion as to Precious Moments' sponsorship (or lack thereof) of the products. In addition to being plainly visible to the purchaser, the notice should specify that, apart from the fabric, the items manufactured by T.M. Sewing Service for La Infantil are not in any way connected to Precious Moments, Inc

The district court concluded that the first-sale doctrine precludes appellants from holding Vintage liable in tort. The first-sale doctrine provides that once the holder of an intellectual property right "consents to the sale of particular copies ... of his work, he may not thereafter exercise the distribution right with respect to such copies...." M. Nimmer and D. Nimmer, Nimmer on Copyright § 8.12[B] (1997). Any other rule would extend the monopoly created by the intellectual property right so far as to permit control by the right-holder over the disposition of lawfully obtained tangible personal property. Therefore, "the policy favoring [an intellectual property right monopoly] ... gives way to the policy opposing restraints of trade and restraints on alienation." Id. at § 8.12[A].

The Court of Appeals also concluded that appellants' argument that Vintage acted tortiously because appellants' licensing arrangements did not authorize Vintage (or any other third party) to market or appropriate their likenesses lacked merit in light of their conclusion that the first-sale doctrine applies to the right of publicity. Because the first-sale doctrine limits appellants' rights in controlling the use of their likenesses, Vintage (or any other third party) lawfully could sell or transfer the tangible property containing appellants' licensed images without separately entering a licensing agreement with appellants

Roho, Inc. v. Marquis, 902 F. 2d 356 - Court of Appeals, 5th Circuit 1990