1. You have three (3) hours to complete this exam.

2. This is an open book exam. You may use any written materials.

3. This exam consists of three (3) essay questions. You are not required to spend the entire time working on the exam - the average time for completion is between two and three hours. You should outline your response to each question, before writing the response. We recommend that you spend one third of the time on each question creating your outline, and the remainder of your time writing your answer. For example, if you spend 1.0 hour per question, devote 20 minutes to the outline, and 40 minutes writing the answer.

Question 1: 25 points
Question 2: 41 points
Question 3: Part A, 23 points / Part B, 11 points

4. Please answer these questions in the blue books provided to you. Write only on the right hand side of the page (skipping a page each time) and double-space your work. Please write legibly.

5. Question 3 pertains to patent law. This question will be graded by Adjunct Professor Morrill. YOU MUST ANSWER THE THIRD (PATENT) QUESTION IN A SEPARATE BLUE BOOK AND WRITE “PATENT QUESTION” ON THE BLUE BOOK COVER. If you need more than one blue book to answer Question 3, each blue book you use must be labeled “Patent Question.”

6. Write your exam number on your exam envelope. Put student exam # at the top of this page, each page of questions, and each blue book. Do not use your name, student ID number, Social Security Number, or in any other way identify yourself on any exam materials.

7. At the conclusion of the exam, return all exam materials to the exam envelope and submit it to the proctor. Do not seal the envelope. Students who do not return all exam materials at the end of the exam may not be graded.

Good luck!

QUESTION NO. 1 (25 points):

Blue Velvet, Inc. is a Mexican corporation that bottles and distributes tequila in Mexico, with plans to expand into the U.S. market. On February 20, 2004, Blue Velvet Inc. filed an Intent To Use (ITU) application with the U.S.P.T.O. for the BLUE VELVET trademark for tequila based on its registration of the BLUE VELVET mark in Mexico (which issued on December 7, 2003). BLUE VELVET is a premium tequila that comes in a deluxe cobalt blue bottle with a blue velvet case. It sells for $200 per bottle and contains a blue worm in each bottle. Blue Velvet, Inc. plans to bring up to 5,000 cases of BLUE VELVET tequila into the U.S. market per year. Its target customers are upscale restaurants and cigar bars. Blue Velvet, Inc. began importing BLUE VELVET tequila into the U.S. on March l, 2004. The initial shipments have been limited to Texas and California.

Velvet Distilleries Corp. is a U.S. corporation that is well established as a distributor of vodka. Its main product is a packaged clear bottle of vodka with a royal blue label with the work "VELVET" in silver type. During the last ten years, it has promoted its line of vodka with the tagline "As smooth as Blue Velvet". Consumers frequently order their vodka at bars by asking for "Blue Velvet". In June of 2003, Velvet Distilleries conducted a marketing survey that showed 60% of those surveyed associate the term "BLUE VELVET" with Velvet Distilleries' vodka product. Velvet Distilleries believes it has strong rights to the trademark, "BLUE VELVET", but it has not filed for any state or federal trademark registration. Velvet Distilleries sells its vodka product through package stores, supermarkets, price clubs bars, and restaurants throughout the U.S.

On March 5, 2004, Velvet Distilleries learned about Blue Velvet Inc.'s recently filed ITU application. At the same time, it learned of Blue Velvet, Inc.'s shipments of products to Texas and California. On March 15, 2004, Velvet Distilleries sent Blue Velvet, Inc. a warning letter demanding that it stop shipping its product into the U.S. market.

Based on your performance in this class, you have been asked to represent Blue Velvet, Inc. Your client wants your advice on what intellectual property rights against Velvet Distilleries it might be able to assert, including the probable outcome. In order to assess its potential liability in any legal action, Blue Velvet, Inc. also wants you to assess whether Velvet Distilleries has any valid claims against it. What is your analysis?

QUESTION NO. 2 (41 points):

In 2002, Mary Morris, a dance choreographer, prepared an elaborate firework display to be presented at a waterfront party and firework display for the 4th of July in San Francisco, which was open to the public. She called her firework display "A Dance in the Air". To accompany the fireworks, Morris also wrote a brief poem. On the 4th of July, Morris recited her poem as her firework display was performed. After she was done, one of her fans, Robert Rose, went up to Morris to compliment her on the fireworks and the poem. Rose told Morris she ought to set the poem to music. Morris laughed and said that she was going to focus on her dance work from then on, but that Rose could "write the music for her poem if he liked", handing him a copy of the poem. A reporter for the San Francisco Chronicle, who had recorded all events at the waterfront party, included Morris' poem in his article about the party, which the newspaper published on July 5. He also produced a videotape of the firework display from the party with the recorded voice of Morris reciting her poem, which the Chronicle news staff had recorded during the event. The Chronicle sold 1,000 videotapes of this recording to commemorate the events.

Meanwhile, Rose spent five full months in 2003 writing a melody to accompany the poem Morris had handed to him back in July of 2002. He called this song "Dance in Air". Rose also became so enamored of the creative process that he quit his job as a reporter and devoted himself full-time to a songwriting career, which until then had just been a dream. Rose teamed up with a fast-rising pop star, Dan Devine, who had recently been named one of the best pop artists in the U.S. by People Magazine. Devine loved "Dance in Air" so much he used it as his opening song at all of his concerts after teaming up with Rose. On July 4th of 2003, Devine performed the song in an outdoor concert held in Denver. He also used a firework display at this concert to accompany this song, which he had created after viewing the Chronicle videotape of the San Francisco 2002 party. Devine produced a CD recording of this live concert, which became an instant hit, selling over one million copies.

Judy Jensen, a photographer for Denver City Magazine, attended the July 4, 2003 concert given by Devine. She took pictures of Devine singing "Dance in Air", which Denver City Magazine published in its September, 2003 edition of the magazine, along with an article describing how Devine had come to use this song as his "signature piece" at concerts. Without telling either Denver City Magazine or Devine, Jensen used one of her pictures of Devine which had not been published to create a poster, which she sold at flea markets for $20. Because the poster sold so well, Jensen also created and sold a tee shirt that incorporated this picture.

In October of 2003, Morris was performing as guest choreographer in the dance department of Denver University. At that time, she ran across a copy of the Denver City Magazine article and picture of Devine. She then investigated further and discovered all of the facts described above. She wants to know whether any of her legal rights have been infringed. She also wants to understand if anyone else's legal rights have been infringed. What do you tell her?

QUESTION NO. 3 Patent Law Question

Part A. (23 points)

Your client Fresh Packing, Inc. has come to you with the following situation: Fresh owns the ‘999 patent, which issued on November 18, 2002 on an application filed on November 12, 1999 by Fresh’s employee, Sawyer. The patent claims an “Apparatus For Fruit Packing” (called a “packer”) which fits on top of a conventional fruit crate. Using a packer, an employee on the packing line can pack produce the size of a cherry in plastic bags within the fruit crate. The packer has a separate filling tube for each bag, and holds the bag in place while it is being filled. Using a packer, produce will arrive at the retail store safely, being protected by a crate, but will already be packed in bags, which saves time and money at the store. Doric Equipment is offering a similar packer. Fresh believes that the Doric packer infringes the ‘999 patent, and it asks you if it should take steps to enforce its patent against Doric.

Fresh informs you that:

(1) Sawyer invented the packer in early 1997, and personally made a prototype and tested it during the 1997 cherry packing season. Three Fresh employees helped him.

(2) Based on his testing, Sawyer modified his prototype as the 1997 season progressed, and when the season was over in June, 1997, he made detailed drawings of his packer, which were sent to a company which makes molded plastic articles.

(3) Three hundred of the molded plastic packers were received by Fresh in March, 1998 and paid for at that time.

(4) When the 1998 cherry season began in May, the 300 packers were used in the Fresh line for packing cherries. Fresh is a large packing company, with about 3,000 employees. About 400 of the employees used the packer in some way during the 1998 season, and many more employees saw the packer being used.

(5) Representatives of customers and growers regularly visit Fresh’s packing sheds during the season. Other visitors rarely visit because, under Fresh’s policies, outsiders are not allowed in unless they have some business there. Fresh’s policy is to have all visitors check in at the office, where they sign a form agreeing to keep everything they see confidential. The policy is to protect the identity of Fresh’s growers and customers.

(6) Doric began soliciting orders for its packer in April, 1998. It received orders for several thousand by the beginning of November, 1998. Each of the orders stated that it was “subject to acceptance by Doric at its office in Olympia, Washington.” Doric did not begin accepting the orders until December 3, 1998, when it began shipping its packer.

Please discuss separately how, if at all, each of the numbered items above will affect the validity of Fresh’s patent should it go into litigation.

Part B. Short Answer (11 points)

For Part B, please assume that Fresh’s patent is held valid and infringed by Doric’s packer after trial. Fresh’s packer was a big success and, besides using the packer on its own packing lines, it sold 20,000 packers to other fruit packers during the 2003 packing season. The following facts were proven at trial:

(1). Fresh only had 5,000 packers left when the season ended.

(2). Fresh’s manager testified that “it takes about 6 months lead time to order these packers.”

(3) Fresh made $10.00 in net profit for each packer it sold.

(4). Doric sold 40,000 infringing packers.

(5). Doric had lower production costs, and made $20.00 in net profit for each packer it sold.

(6) No one else sells anything comparable to a packer.

What damages is Fresh entitled to recover? Please make it clear in your discussion how, if at all, each of the numbered items above affects your damage analysis.

END OF EXAM