CIVIL INSTRUCTIONS __________ 1. PRELIMINARY INSTRUCTIONS 1.01 DUTY OF JURY Ladies and gentlemen: You now are the jury in this case, and I want to take a few minutes to tell you something about your duties as jurors and to give you some instructions. At the end of the trial I will give you more detailed instructions. Those instructions will control your deliberations. It will be your duty to decide from the evidence what the facts are. You, and you alone, are the judges of the facts. You will hear the evidence, decide what the facts are, and then apply those facts to the law which I will give to you. That is how you will reach your verdict. In doing so, you must follow that law whether you agree with it or not. The evidence will consist of the testimony of witnesses, documents, and other things received into evidence as exhibits and any facts on which the lawyers agree or which I may instruct you to accept. You should not take anything I may say or do during the trial as indicating what I think of the evidence or what your verdict should be. Comment See InstructionÊ3.01 for instruction at end of case. 1.02 CLAIMS AND DEFENSES To help you follow the evidence, I will give you a brief summary of the positions of the parties: Plaintiff claims that ___________________________________________________. Defendant denies those claims [and also contends that ______________________]. 1.03 WHAT IS NOT EVIDENCE The following things are not evidence, and you must not consider them as evidence in deciding the facts of this case: 1. statements and arguments of the attorneys; 2. questions and objections of the attorneys; 3. testimony that I instruct you to disregard; 4. anything you may see or hear when the court is not in session even if what you see or hear is done or said by one of the parties or by one of the witnesses. Comment See InstructionÊ3.05 for instruction at end of case. 1.04 EVIDENCE FOR LIMITED PURPOSE Some evidence is admitted for a limited purpose only. When I instruct you that an item of evidence has been admitted for a limited purpose, you must consider it only for that limited purpose and for no other. Comment As a rule, limiting instructions need only be given when requested and need not be given sua sponte by the court. United States v. McLennan, 563 F.2d 943, 947-48 (9th Cir. 1977), cert. denied, 435 U.S. 969 (1978). See also InstructionsÊ2.08, 2.09, and 3.05. 1.05 DIRECT AND CIRCUMSTANTIAL EVIDENCE Evidence may be direct or circumstantial. Direct evidence is direct proof of a fact, such as testimony by a witness about what that witness personally saw or heard or did. Circumstantial evidence is proof of one or more facts from which you could find another fact. You should consider both kinds of evidence. The law makes no distinction between the weight to be given to either direct or circumstantial evidence. It is for you to decide how much weight to give to any evidence. Comment See InstructionÊ3.06 for instruction at end of case. 1.06 RULING ON OBJECTIONS There are rules of evidence which control what can be received into evidence. When a lawyer asks a question or offers an exhibit into evidence and a lawyer on the other side thinks that it is not permitted by the rules of evidence, that lawyer may object. If I overrule the objection, the question may be answered or the exhibit received. If I sustain the objection, the question cannot be answered, and the exhibit cannot be received. Whenever I sustain an objection to a question, you must ignore the question and must not guess what the answer might have been. Sometimes I may order that evidence be stricken from the record and that you disregard or ignore the evidence. That means that when you are deciding the case, you must not consider the evidence which I told you to disregard. Comment See InstructionÊ3.05 for instruction at end of case. 1.07 CREDIBILITY OF WITNESSES In deciding the facts in this case, you may have to decide which testimony to believe and which testimony not to believe. You may believe everything a witness says, or part of it, or none of it. In considering the testimony of any witness, you may take into account: 1. the opportunity and ability of the witness to see or hear or know the things testified to; 2. the witness' memory; 3. the witness' manner while testifying; 4. the witness' interest in the outcome of the case and any bias or prejudice; 5. whether other evidence contradicted the witness' testimony; 6. the reasonableness of the witness' testimony in light of all the evidence; and 7. any other factors that bear on believability. The weight of the evidence as to a fact does not necessarily depend on the number of witnesses who testify. Comment See InstructionÊ3.07 for instruction at end of case. 1.08 CONDUCT OF THE JURY I will now say a few words about your conduct as jurors. First, do not talk to each other about this case or about anyone who has anything to do with it until the end of the case when you go to the jury room to decide on your verdict. Second, do not talk with anyone else about this case or about anyone who has anything to do with it until the trial has ended and you have been discharged as jurors. "Anyone else" includes members of your family and your friends. You may tell them that you are a juror, but don't tell them anything about the case until after you have been discharged by me. Third, do not let anyone talk to you about the case or about anyone who has anything to do with it. If someone should try to talk to you, please report it to me immediately. Fourth, do not read any news stories or articles or listen to any radio or television reports about the case or about anyone who has anything to do with it. Fifth, do not do any research, such as consulting dictionaries or other reference materials, and do not make any investigation about the case on your own. Sixth, if you need to communicate with me, simply give a signed note to the [marshal] [bailiff] [clerk] [law clerk] to give to me. Seventh, do not make up your mind about what the verdict should be until after you have gone to the jury room to decide the case and you and your fellow jurors have discussed the evidence. Keep an open mind until then. Comment See InstructionÊ2.01 for instruction during trial. A similar instruction should be repeated before the first recess and as needed before other recesses (for example, before a weekend recess). 1.09 NO TRANSCRIPT AVAILABLE TO JURY At the end of the trial, you will have to make your decision based on what you recall of the evidence. You will not have a written transcript to consult, and it is difficult and time-consuming for the reporter to [read] [play] back lengthy testimony. I urge you to pay close attention to the testimony as it is given. Comment A number of judges in this circuit currently use a similar instruction to discourage requests for lengthy readbacks. Such an instruction may be given in the court's discretion. United States v. Ratcliffe, 550 F.2d 431, 434 (9th Cir. 1976). 1.10 TAKING NOTES If you wish, you may take notes to help you remember what witnesses said. If you do take notes, please keep them to yourself until you and your fellow jurors go to the jury room to decide the case. Do not let note-taking distract you so that you do not hear other answers by witnesses. When you leave, your notes should be left in the [courtroom] [jury room] [envelope in the jury room]. Whether or not you take notes, you should rely on your own memory of what was said. Notes are only to assist your memory. You should not be overly influenced by the notes. Comment It is well settled in this circuit that the trial judge has discretion to allow jurors to take notes. United States v. Murray, 492 F.2d 178, 193 (9th Cir. 1973), cert. denied, 419 U.S. 854 (1974), and cert. denied, 419 U.S. 942 (1974); Toles v. United States, 308 F.2d 590, 594 (9th Cir. 1962), cert. denied, 375 U.S. 836 (1963); Harris v. United States, 261 F.2d 792, 796 (9th Cir. 1958), cert. denied, 360 U.S. 933 (1959). See Instruction 3.02 for instruction at end of case. 1.11 OUTLINE OF TRIAL The trial will now begin. First, each side may make an opening statement. An opening statement is not evidence. It is simply an outline to help you understand what that party expects the evidence will show. A party is not required to make an opening statement. The plaintiff will then present evidence, and counsel for the defendant may cross-examine. Then the defendant may present evidence, and counsel for the plaintiff may cross-examine. After the evidence has been presented, [I will instruct you on the law that applies to the case and the attorneys will make closing arguments] [the attorneys will make closing arguments and I will instruct you on the law that applies to the case]. You will then decide the case. Comment Fed. R. Civ. P. 51 allows jury instructions before or after arguments. 1.12 BURDEN OF PROOF--PREPONDERANCE OF THE EVIDENCE When a party has the burden of proof on any claim [or affirmative defense] by a preponderance of the evidence, itÊmeans you must be persuaded by the evidence that the claim [or affirmative defense] is more probably true than not true. You should base your decision on all of the evidence, regardless of which party presented it. Comment See Instruction 5.01 for instruction at end of case. This instruction may not apply to cases based on state law. 1.13 QUESTION TO WITNESSES BY JURORS While it is not customary for a juror to ask a question of a witness, if you wish to do so, put the question in writing and hand it to the [marshal] [bailiff] [clerk] [law clerk]. The court and counsel will review your question. Do not be concerned if the question is not asked. Do not discuss your question with anyone, including the [marshal] [bailiff] [clerk] [law clerk]. Remember that you are not to discuss the case with other jurors until it is submitted for your decision. Comment Permitting questions from jurors is discretionary. See United States v. Evans, 542 F.2d 805 (10th Cir. 1976), cert. denied, 429 U.S. 1101 (1977); United States v. Callahan, 588 F.2d 1078 (5th Cir.), cert. denied, 444 U.S. 826 (1979); DeBenedetto v. Goodyear Tire & Rubber Co., 754 F.2d 512 (4th Cir. 1985). Those judges who wish to allow questions from jurors may give this instruction as a preliminary instruction or as an instruction during trial. 1.14 JURY TO BE GUIDED BY OFFICIAL ENGLISH TRANSLATION/ INTERPRETATION Languages other than English may be used during this trial. The evidence you are to consider is only that provided through the official court [interpreters] [translators]. Although some of you may know the non-English language used, it is important that all jurors consider the same evidence. Therefore, you must base your decision on the evidence presented in the English [interpretation] [translation]. You must disregard any different meaning of the non-English words. Comment See Instruction 3.04 for instruction at end of case. 2. INSTRUCTIONS DURING TRIAL 2.01 CAUTIONARY INSTRUCTION--FIRST RECESS We are about to take our first break during the trial, and I want to remind you of the instruction I gave you earlier. Until the trial is over, you are not to discuss this case with anyone, including your fellow jurors, members of your family, people involved in the trial, or anyone else, nor are you allowed to permit others to discuss the case with you. If anyone approaches you and tries to talk to you about the case, please let me know about it immediately. Do not read or listen to any news reports of the trial. Finally, you are reminded to keep an open mind until all the evidence has been received and you have heard the arguments of counsel, the instructions of the court, and the views of your fellow jurors. If you need to speak with me about anything, simply give a signed note to the [marshal] [bailiff] [clerk] [law clerk] to give to me. I will not repeat these admonitions each time we recess or adjourn, but you will be reminded of them on such occasions. Comment See InstructionÊ1.08 for preliminary instruction. 2.02 BENCH CONFERENCES AND RECESSES From time to time during the trial, it may become necessary for me to talk with the attorneys out of the hearing of the jury, either by having a conference at the bench when the jury is present in the courtroom, or by calling a recess. Please understand that while you are waiting, we are working. The purpose of these conferences is not to keep relevant information from you, but to decide how certain evidence is to be treated under the rules of evidence and to avoid confusion and error. We will, of course, do what we can to keep the number and length of these conferences to a minimum. I may not always grant an attorney's request for a conference. Do not consider my granting or denying a request for a conference as any indication of my opinion of the case or of what your verdict should be. 2.03 STIPULATED TESTIMONY The parties have agreed what __________________'s testimony would be if called as a witness. You should consider that testimony in the same way as if it had been given here in court. Comment There is a difference between stipulating that a witness would give certain testimony and stipulating that the facts to which a witness might testify are true. United States v. Hellman, 560 F.2d 1235, 1236 (5th Cir. 1977). 2.04 STIPULATIONS OF FACT The parties have agreed to certain facts that have been stated to you. You should therefore treat these facts as having been proved. Comment When parties enter into stipulations as to material facts, those facts will be deemed to have been conclusively proved, and the jury may be so instructed. United States v. Houston, 547 F.2d 104, 107 (9th Cir. 1976). 2.05 JUDICIAL NOTICE The court has decided to accept as proved the fact that [e.g., the city of San Francisco is north of the city of Los Angeles], even though no evidence has been introduced on the subject. You may, but are not required to, accept this fact as true. Comment An instruction regarding judicial notice should be given at the time notice is taken. Fed.ÊR. Evid. 201(g), while it permits the judge to determine that a fact is sufficiently undisputed to be judicially noticed, also requires that the jury be instructed that it is not required to accept that fact. Failure to so instruct does not, however, rise to the level of plain error. United States v. Berrojo, 628 F.2d 368, 370 (5th Cir. 1980); United States v. Piggie, 622 F.2d 486, 488 (10th Cir.), cert. denied, 449 U.S. 863 (1980). 2.06 DEPOSITION AS SUBSTANTIVE EVIDENCE When a person is unavailable to testify at trial, the deposition of that person may be used at the trial. A deposition is the sworn testimony of a witness taken before trial. The witness is placed under oath to tell the truth and lawyers for each party may ask questions. The questions and answers are recorded. The deposition of __________, which was taken on __________, 19____, is about to be presented to you. Deposition testimony is entitled to the same consideration and is to be judged, insofar as possible, in the same way as if the witness had been present to testify. [Do not place any significance on the behavior or tone of voice of any person reading the questions or answers.] Comment This instruction should be used only when testimony by deposition is offered as substantive evidence. The committee recommends that it be given immediately before a deposition is to be read. It need not be repeated if more than one deposition is read. If the judge prefers to include the instruction as a part of his or her instructions before evidence, it should be modified appropriately. 2.07 TRANSCRIPT OF TAPE RECORDING You are about to listen to a tape recording that has been received in evidence. Please listen to it very carefully. Each of you has been given a transcript of the recording to help you identify speakers and as a guide to help you listen to the tape. However, bear in mind that the tape recording is the evidence, not the transcript. If you hear something different from what appears in the transcript, what you heard is controlling. After the tape has been played, the transcript will be taken from you. Comment See United States v. Phillips, 577 F.2d 495, 501 (9th Cir.), cert. denied, 439 U.S. 831 (1978). The committee recommends that this instruction be given immediately before a tape recording is played so that the jury is alerted to the fact that what they hear is controlling. It need not be repeated if more than one tape recording is played. However, it would be well to remind the jury that the tape recording and not the transcript is the evidence and that they should disregard anything in the transcript that they do not hear. If the instruction is also to be given as part of the closing instructions, it should be modified appropriately. 2.08 LIMITED PURPOSE EVIDENCE The evidence [of ] [you are about to hear] [you have just heard] may be considered only for the limited purpose of and for no other purpose. Comment If this instruction is given during the trial, the committee recommends giving the bracketed material in paragraph 3 of Instruction 3.05 with the concluding instructions. See also InstructionsÊ1.04 and 2.09. 2.09 IMPEACHMENT BY CONVICTION OF CRIME The evidence that a witness has been convicted of a crime may be considered only as it may affect the believability of that witness and for no other purpose. Comment If this instruction is given during the trial, the committee recommends giving the bracketed material in paragraph 3 of Instruction 3.05 with the concluding instructions. See also InstructionsÊ1.04 and 2.08. 2.10 TESTS AND EXPERIMENTS Arrangements have been made to conduct a test or experiment. Observe the conditions under which that test or experiment is made. These conditions may or may not duplicate the conditions and other circumstances that existed at the time and place of the incident involved in this case. It is for you to decide what weight, if any, you give to the test or experiment. 2.11 USE OF INTERROGATORIES OF A PARTY Evidence is now to be presented to you in the form of answers of one of the parties to written interrogatories submitted by the other side. These answers have been given in writing and under oath, before the actual trial, in response to questions which were submitted in writing under established court procedures. The answers are entitled to the same consideration and are to be judged as to credibility and weight, and otherwise considered by you insofar as possible, as if the answers were made from the witness stand. Comment Use this oral instruction before interrogatories and answers are read to the jury. The attorney should warn the judge ahead of time and give the judge an opportunity to give this oral instruction. This oral instruction is not appropriate if answers to interrogatories are being used for impeachment only. Do not use this instruction for requests for admission under Fed. R. Civ. P. 36. The effect of requests for admission under the rule is not the same as the introduction of evidence through interrogatories. If an instruction is needed, a special one will have to be drafted. 3. GENERAL INSTRUCTIONS AFTER CLOSE OF EVIDENCE; CONCLUDING INSTRUCTIONS; CONSIDERATION OF EVIDENCE 3.00 COVER SHEET IN THE UNITED STATES DISTRICT COURT ___________ DISTRICT OF ___________ _____________________, ) ) Plaintiff, ) ) v. ) ) ) No. ___________ ) ____________________, ) ) Defendant. ) ) ) JURY INSTRUCTIONS DATED: __________________ _________________________________ UNITED STATES DISTRICT JUDGE 3.01 DUTIES OF JURY TO FIND FACTS AND FOLLOW LAW Members of the jury, now that you have heard all the evidence [and the arguments of the attorneys], it is my duty to instruct you on the law which applies to this case. [A copy of these instructions will be available in the jury room for you to consult if you find it necessary.] It is your duty to find the facts from all the evidence in the case. To those facts you will apply the law as I give it to you. You must follow the law as I give it to you whether you agree with it or not. You must not be influenced by any personal likes or dislikes, opinions, prejudices, or sympathy. That means that you must decide the case solely on the evidence before you. You will recall that you took an oath promising to do so at the beginning of the case. In following my instructions, you must follow all of them and not single out some and ignore others; they are all equally important. You must not read into these instructions or into anything the court may have said or done any suggestion as to what verdict you should return--that is a matter entirely up to you. Comment See InstructionÊ1.01 for preliminary instruction. 3.02 USE OF NOTES You may use notes taken during trial to assist your memory. Notes, however, should not be substituted for your memory, and you should not be overly influenced by the notes. Comment See Instruction 1.10 for preliminary instruction. 3.03 WHAT IS EVIDENCE The evidence from which you are to decide what the facts are consists of: 1. the sworn testimony of witnesses, on both direct and cross-examination, regardless of who called the witness; 2. the exhibits which have been received into evidence; and 3. any facts to which all the lawyers have agreed or stipulated. Comment United States v. Houston, 547 F.2d 104, 107 (9th Cir. 1976) (material facts to which the parties voluntarily stipulate are to be treated as "conclusively established"). 3.04 JURY TO BE GUIDED BY OFFICIAL ENGLISH TRANSLATION/INTERPRETATION Languages other than English have been used during this trial. The evidence you are to consider is only that provided through the official court [interpreters] [translators]. Although some of you may know the non-English language used, it is important that all jurors consider the same evidence. Therefore, you must base your decision on the evidence presented in the English [interpretation] [translation]. You must disregard any different meaning of the non-English words. Comment See Instruction 1.14 for preliminary instruction. 3.05 WHAT IS NOT EVIDENCE In reaching your verdict, you may consider only the testimony and exhibits received into evidence. Certain things are not evidence, and you may not consider them in deciding what the facts are. I will list them for you: 1. Arguments and statements by lawyers are not evidence. The lawyers are not witnesses. What they have said in their opening statements, closing arguments, and at other times is intended to help you interpret the evidence, but it is not evidence. If the facts as you remember them differ from the way the lawyers have stated them, your memory of them controls. 2. Questions and objections by lawyers are not evidence. Attorneys have a duty to their clients to object when they believe a question is improper under the rules of evidence. You should not be influenced by the objection or by the court's ruling on it. 3. Testimony that has been excluded or stricken, or that you have been instructed to disregard, is not evidence and must not be considered. [In addition some testimony and exhibits have been received only for a limited purpose; where I have given a limiting instruction, you must follow it.] 4. Anything you may have seen or heard when the court was not in session is not evidence. You are to decide the case solely on the evidence received at the trial. Comment See InstructionsÊ1.03, 1.04, and 1.06 for preliminary instructions. With regard to the bracketed material in paragraph 3, see Instructions 1.04, 2.08, and 2.09. 3.06 DIRECT AND CIRCUMSTANTIAL EVIDENCE Evidence may be direct or circumstantial. Direct evidence is direct proof of a fact, such as testimony by a witness about what the witness personally saw or heard or did. Circumstantial evidence is proof of one or more facts from which you could find another fact. You should consider both kinds of evidence. The law makes no distinction between the weight to be given to either direct or circumstantial evidence. It is for you to decide how much weight to give to any evidence. Comment See Instruction 1.05 for preliminary instruction. 3.07 CREDIBILITY OF WITNESSES In deciding the facts in this case, you may have to decide which testimony to believe and which testimony not to believe. You may believe everything a witness says, or part of it, or none of it. In considering the testimony of any witness, you may take into account: 1. the opportunity and ability of the witness to see or hear or know the things testified to; 2. the witness' memory; 3. the witness' manner while testifying; 4. the witness' interest in the outcome of the case and any bias or prejudice; 5. whether other evidence contradicted the witness' testimony; 6. the reasonableness of the witness' testimony in light of all the evidence; and 7. any other factors that bear on believability. The weight of the evidence as to a fact does not necessarily depend on the number of witnesses who testify. Comment See Instruction 1.07 for preliminary instruction. 3.08 OPINION EVIDENCE (Expert Witnesses) You have heard testimony from persons who, because of education or experience, are permitted to state opinions and the reasons for their opinions. Opinion testimony should be judged just like any other testimony. You may accept it or reject it, and give it as much weight as you think it deserves, considering the witness' education and experience, the reasons given for the opinion, and all the other evidence in the case. Comment See Fed. R. Evid. 602, 701-05. The committee recommends that this instruction be given only upon request. Since expert testimony is so common in modern jury trials, there is no good reason why it should be treated differently from other testimony. 3.09 CAUSATION Comment There is not a uniform causation standard for either federal or state claims. Separate causation instructions are included with specific federal actions covered in this work. See, for example, Instructions 8.02.03 and 9.01.03. State law on causation must be carefully reviewed for diversity or supplemental (pendent) claims. State standards vary widely and are subject to change. See, e.g., Mitchell v. Gonzales, 54 Cal. 3d 1041, 1 Cal. Rptr. 2d 913, 819 P.2d 872 (1991). The terms "proximate cause" and "legal cause" are not uniformly defined and should be used only with the correct definition for the issues before the court. See Comment to Instruction 7.01. 3.10 CHARTS AND SUMMARIES NOT RECEIVED IN EVIDENCE Certain charts and summaries that have not been received in evidence have been shown to you in order to help explain the contents of books, records, documents, or other evidence in the case. They are not themselves evidence or proof of any facts. If they do not correctly reflect the facts or figures shown by the evidence in the case, you should disregard these charts and summaries and determine the facts from the underlying evidence. Comment This instruction applies only where the charts and summaries are not received into evidence and are used for demonstrative purposes. See United States v. Johnson, 594 F.2d 1253, 1254-55 (9th Cir.), cert. denied, 444 U.S. 964 (1979). 3.11 CHARTS AND SUMMARIES IN EVIDENCE Certain charts and summaries have been received into evidence to illustrate information brought out in the trial. Charts and summaries are only as good as the underlying evidence that supports them. You should, therefore, give them only such weight as you think the underlying evidence deserves. Comment See Fed. R. Evid. 1006. 3.12 TWO OR MORE PARTIES--DIFFERENT LEGAL RIGHTS You should decide the case as to each [plaintiff] [defendant] [party] separately. Unless otherwise stated, the instructions apply to all parties. 3.13 COMMUNICATION WITH COURT If it becomes necessary to communicate with me during deliberations, you may send a folded note through the [marshal] [bailiff] [clerk] [law clerk], signed by a juror. Do not disclose the content of your note to the [marshal] [bailiff] [clerk] [law clerk]. Do not communicate with the court about the case except by a signed note. I will only communicate with you regarding the case in writing or in open court. Do not disclose any vote count in any note to the court. 3.14 DUTY TO DELIBERATE When you retire, you should elect one member of the jury as your foreperson. That person will preside over the deliberations and speak for you here in court. You will then discuss the case with your fellow jurors to reach agreement if you can do so. Your verdict must be unanimous. Each of you must decide the case for yourself, but you should do so only after you have considered all the evidence, discussed it fully and with the other jurors, and listened to the views of your fellow jurors. Do not be afraid to change your opinion if the discussion persuades you that you should. Do not come to a decision simply because other jurors think it is right. It is important that you attempt to reach a unanimous verdict but, of course, only if each of you can do so after having made your own conscientious decision. Do not change an honest belief about the weight and effect of the evidence simply to reach a verdict. 3.15 RETURN OF VERDICT After you have reached unanimous agreement on a verdict, your foreperson will fill in, date, and sign the verdict form or forms and advise the court that you have reached a verdict. Comment The judge may also wish to explain to the jury the particular form of verdict being used and just how to "advise the court" of a verdict. 4. INSTRUCTIONS DURING DELIBERATIONS 4.01 ADDITIONAL INSTRUCTIONS OF LAW At this point I will give you a further instruction. By giving a further instruction at this time, I do not mean to emphasize this instruction over any other instruction. You are not to attach undue importance to the fact that this was read separately to you. You shall consider this instruction together with all of the other instructions that were given to you. [Insert text of new instruction.] You will now retire to the jury room and continue your deliberations. Comment Use this oral instruction for giving a jury instruction to a jury while it is deliberating. If the jury has a copy of the instructions, send the additional instruction to the jury room. All attorneys must be given an opportunity to be present. Unless the additional instruction is by consent of both parties, both sides must be given an opportunity to take exception or object to it. If this instruction is used, it should be made a part of the record. The judge and attorneys should make a full record of the proceedings. See the Ninth Circuit's A Manual on Jury Trial Procedures, ¤Ê1.5.2 (1990). 4.02 CHANGED INSTRUCTION OF LAW I gave you instruction number in error. Therefore, it is withdrawn, and you shall not consider it for any purpose. As a substitute for instruction number , you will be governed in your deliberations by the following instruction: [Insert text of new instruction.] You shall consider this and all of the other instructions that were given you together as the instruction of the court, and you are not to attach undue importance to the fact that this was read separately to you. You will now retire to the jury room and continue your deliberations. Comment Either consent of counsel or opportunity to take exceptions should be given to counsel before giving this and its included instruction. If an instruction is withdrawn and no substitute instruction is given, this instruction must be modified accordingly. See the Ninth Circuit's A Manual on Jury Trial Procedures, ¤Ê1.5.4 (1990). 4.03 RETURN TO DELIBERATIONS AFTER POLLING The poll which has just been taken of you shows that your decision in this case may not be unanimous and that one or more of you may not have agreed with the verdict. Please return to the jury room and continue your deliberations. Try to reach agreement if you can. Do not be afraid to reexamine your own opinions and change your mind, but do not give up your honest beliefs just because others disagree with you or just to get the case over with. 4.04 DEADLOCKED JURY--CRIMINAL AND CIVIL Members of the jury, you have advised that you have been unable to agree upon a verdict in this case. I have decided to suggest a few thoughts to you. As jurors, you have a duty to discuss the case with one another and to deliberate in an effort to reach a unanimous verdict if each of you can do so without violating your individual judgment and conscience. Each of you must decide the case for yourself, but only after you consider the evidence impartially with your fellow jurors. During your deliberations, you should not hesitate to reexamine your own views and change your opinion if you become persuaded that it is wrong. However, you should not change an honest belief as to the weight or effect of the evidence solely because of the opinions of your fellow jurors or for the mere purpose of returning a verdict. All of you are equally honest and conscientious jurors who have heard the same evidence. All of you share an equal desire to arrive at a verdict. Each of you should ask yourself whether you should question the correctness of your present position. I remind you that in your deliberations you are to consider the instructions I have given you as a whole. You should not single out any part of any instruction, including this one, and ignore others. They are all equally important. You may now retire and continue your deliberations. Comment The committee recommends that a supplemental instruction to encourage a deadlocked jury to reach a verdict should be given with great caution. An earlier form of instruction for a deadlocked jury was approved by the Supreme Court in Allen v. United States, 164 U.S. 492, 501 (1896). However, "Allen" or "dynamite" jury instructions have been repeatedly criticized as constituting an unwarranted intrusion by the court upon the province of the jury. Before giving any supplemental jury instruction to a deadlocked jury, the committee recommends that the court review United States v. Nickell, 883 F.2d 824 (9th Cir. 1989); United States v. Seawell, 583 F.2d 416 (9th Cir.), cert. denied, 439 U.S. 991 (1978); United States v. Seawell, 550 F.2d 1159 (9th Cir. 1977); and the Ninth Circuit's A Manual on Jury Trial Procedures, ¤¤Ê1.5.6-1.5.7 (1990). 5. PROOF--BURDENS AND ELEMENTS OF PROOF (STANDARDIZED FORMAT) 5.01 BURDEN OF PROOF--PREPONDERANCE OF THE EVIDENCE When a party has the burden of proof on any claim [or affirmative defense] by a preponderance of the evidence, it means you must be persuaded by the evidence that the claim [or affirmative defense] is more probably true than not true. You should base your decision on all of the evidence, regardless of which party presented it. Comment See InstructionÊ1.12 for preliminary instruction. This instruction may not apply to cases based on state law. 5.02 BURDEN OF PROOF--CLEAR AND CONVINCING EVIDENCE When a party has the burden of proof on any claim [or affirmative defense] by clear and convincing evidence, it means you must be persuaded by the evidence that it is highly probable that the claim [or affirmative defense] is true. [The clear and convincing evidence standard is a heavier burden than the preponderance of the evidence standard.] [You should base your decision on all of the evidence, regardless of which party presented it.] Comment This instruction may not apply to cases based on state law. The bracketed sentence in the first paragraph should be given if the court instructs on both the preponderance of the evidence and clear and convincing evidence. In federal cases, the "highly probable" standard has been used in explaining the meaning of clear and convincing evidence. See, e.g., Colorado v. New Mexico, 467 U.S. 310, 316 (1984); Buildex Inc. v. Kason Indus., 849 F.2d 1461, 1463 (Fed. Cir. 1988). 5.03 ELEMENTS OF PROOF--ONE DEFENDANT--NO COUNTERCLAIM OR AFFIRMATIVE DEFENSE [On plaintiff's claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. ; 2. ; and 3. . If you find that each of these things has been proved, your verdict should be for the plaintiff [on the claim]. On the other hand, if any of these things has not been proved, your verdict should be for the defendant [on the claim]. 5.04 ELEMENTS OF PROOF--TWO OR MORE DEFENDANTS-- NO COUNTERCLAIM OR AFFIRMATIVE DEFENSE [On plaintiff's claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. ; 2. ; and 3. . If you find that each of these things has been proved against a defendant, your verdict should be for the plaintiff and against that defendant [on the claim]. On the other hand, if any of these things has not been proved against a defendant, your verdict should be for that defendant [on the claim]. 5.05 ELEMENTS OF PROOF--COMPLETE AFFIRMATIVE DEFENSE The plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. ; 2. ; and 3. . The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. ; 2. ; and 3. . If the plaintiff has failed to prove each of the things on which plaintiff has the burden of proof, your verdict should be for the defendant. If you find that each of the things on which plaintiff has the burden of proof has been proved, your verdict should be for the plaintiff, unless you also find that each of the things on which the defendant has the burden of proof has also been proved, in which event your verdict should be for the defendant. 5.06 ELEMENTS OF PROOF--CLAIM AND COUNTERCLAIM In this case, there is a claim by the plaintiff and a counterclaim by the defendant. On each, you may find for or against either party. The plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. ; 2. ; and 3. . The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. ; 2. ; and 3. . You may reach one of four results: 1. you may find for the plaintiff on plaintiff's claim and against the defendant on defendant's counterclaim; or 2. you may find for the defendant on defendant's counterclaim and against the plaintiff on plaintiff's claim; or 3. you may find for the plaintiff on plaintiff's claim and for the defendant on defendant's counterclaim; or 4. you may find against the plaintiff on plaintiff's claim and against the defendant on defendant's counterclaim. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] 6. VICARIOUS LIABILITY; INDEPENDENT CONTRACTORS 6.01 CORPORATIONS AND PARTNERSHIPS--FAIR TREATMENT All persons are equal before the law and a [corporation] [partnership] is entitled to the same fair and conscientious consideration by you as any other person. 6.02 LIABILITY OF CORPORATIONS--SCOPE OF AUTHORITY NOT IN ISSUE Under the law, a corporation is a person. It can only act through its employees, agents, directors, or officers. Therefore, a corporation is responsible for the acts of its employees, agents, directors, and officers performed within the scope of authority. 6.03 LIABILITY OF PARTNERSHIPS--SCOPE OF AUTHORITY NOT IN ISSUE A partnership can only act through its employees, agents, or partners. Therefore, a partnership is responsible for the acts of its employees, agents, and partners performed within the scope of authority. 6.04 AGENT AND PRINCIPAL--DEFINITION An agent is a person who performs services for another person under an express or implied agreement and who is subject to the other's control or right to control the manner and means of performing the services. The other person is called a principal. [One may be an agent without receiving compensation for services.] [The agency agreement may be oral or written.] 6.05 AGENT--SCOPE OF AUTHORITY DEFINED An agent is acting within the scope of authority if the agent is engaged in the performance of duties which were expressly or impliedly assigned to the agent by the principal. 6.06 ACT OF AGENT IS ACT OF PRINCIPAL--SCOPE OF AUTHORITY NOT IN ISSUE Any act or omission of an agent within the scope of authority is the act or omission of the principal. 6.07 BOTH PRINCIPAL AND AGENT SUED--NO ISSUE AS TO AGENCY OR AUTHORITY The defendants are sued as principal and agent. The defendant [principal's name] is the principal and the defendant [agent's name] is the agent. If you find against [agent's name], then you must also find against [principal's name]. However, if you find for [agent's name], then you must also find for [principal's name]. 6.08 PRINCIPAL SUED BUT NOT AGENT--NO ISSUE AS TO AGENCY OR AUTHORITY [Agent's name] was the agent of the defendant [principal's name], and, therefore, any act or omission of [agent's name] was the act or omission of [principal's name]. 6.09 BOTH PRINCIPAL AND AGENT SUED--AGENCY OR AUTHORITY DENIED [Defendant [alleged principal's name] is sued as the principal and the defendant [alleged agent's name] as the agent. [It is denied that any agency existed.] [It is [also] denied that [alleged agent's name] was acting within the scope of authority as an agent of [alleged principal's name].]] If you find that [alleged agent's name] [was the agent of [alleged principal's name]] [and] [was acting within the scope of authority], and if you find against [alleged agent's name], then you must also find against [alleged principal's name]. If you do not find against [alleged agent's name], then you must find for both [alleged principal's name] and [alleged agent's name]. If you find against [alleged agent's name], but do not find that [alleged agent's name] was acting within the scope of authority as an agent of [alleged principal's name], then you must find that [alleged principal's name] is not liable. 6.10 PRINCIPAL SUED, BUT NOT AGENT--AGENCY OR AUTHORITY DENIED The defendant [alleged principal's name] is sued as a principal. The plaintiff claims that [alleged agent's name] was acting as [alleged principal's name]'s agent. [Alleged principal's name] [denies that [alleged agent's name] was acting as [alleged principal's name]'s agent] [admits that [alleged agent's name] was acting as [alleged principal's name]'s agent] [and] [denies that [alleged agent's name] was acting within the scope of authority.] If you find that [alleged agent's name] [was the agent of [alleged principal's name] and] was acting within the scope of authority, then any act or omission of [alleged agent's name] was the act or omission of [alleged principal's name]. If you find that [alleged agent's name] was not acting within the scope of authority as [alleged principal's name]'s agent, then you must find for [alleged principal's name]. 6.11 INDEPENDENT CONTRACTOR--DEFINITION An independent contractor is a person who performs services for another person under an express or implied agreement and who is not subject to the other's control, or right to control, the manner and means of performing the services. One who engages an independent contractor is not liable to others for the acts or omissions of the independent contractor. Comment This instruction does not apply to non-delegable duties. 6.12 GENERAL PARTNERSHIP--DEFINITION A partnership is an association of two or more persons to carry on a business as co- owners. The members of a partnership are called partners. 6.13 GENERAL PARTNERSHIP--SCOPE OF PARTNERSHIP BUSINESS DEFINED A partner is acting within the scope of the partnership business when doing anything which is either expressly or impliedly authorized by the partnership or which is in furtherance of the partnership business. 6.14 GENERAL PARTNERSHIP--ACT OF PARTNER IS ACT OF ALL PARTNERS An act or omission of a partner within the scope of the partnership business is the act or omission of all partners. 6.15 GENERAL PARTNERSHIP--LIABILITY OF PARTNER--NO ISSUE AS TO PARTNERSHIP, AGENCY, OR SCOPE OF AUTHORITY The defendants [names of partners] are partners. [Name of partner] was acting on behalf of the partnership and within the scope of authority. Therefore, if you decide for the plaintiff, your verdict must be against all of the partners. 6.16 PARTNERSHIP--EXISTENCE ADMITTED--SCOPE OF PARTNERSHIP BUSINESS IN ISSUE--EFFECT The defendant [acting partner] and the defendant [nonacting partner] are partners. It is denied that [acting partner] was acting within the scope of the partnership business. If the defendant [acting partner] was acting within the scope of the partnership business, and if you find against [acting partner], then you must find against [both] [all] defendants. If you find for [acting partner], then you must find for [all] [both] defendants. If you find against [acting partner], but you do not find that [acting partner] was acting within the scope of the partnership business, then you must find for the defendant [nonacting partner]. 6.17 PARTNERSHIP--EXISTENCE OF PARTNERSHIP IN ISSUE--EFFECT The defendant [acting partner] and the defendant [nonacting partners] are sued as partners. It is denied that any partnership existed. If you find that [acting partner] and [nonacting partners] were partners and that [acting partner] was acting within the scope of the partnership business, and if you find against [acting partner], then you must find against [both] [all] defendants. If you find against [acting partner], but you either find there was no partnership or that [acting partner] was not acting within the scope of the partnership business, then, in either case, you must find for the defendant [nonacting partners]. If you find for [acting partner], then you must find for [both] [all] of the defendants. 7. DAMAGES 7.01 DAMAGES--PROOF If you find for the plaintiff [on plaintiff's claim], you must determine plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. Damages means the amount of money which will reasonably and fairly compensate the plaintiff for any [injury] [and] [or] [property damage] you find was [proximately] [legally] caused by the [ ] of the defendant. You should consider the following: [Here insert types of damages. See Instruction 7.02-- MEASURES OF TYPES OF DAMAGES] [You may not include any amounts for the purpose of punishing the defendant or setting an example.] [You may not include damages that are speculative, only possible, or that are based on guesswork.] Comment There is not a uniform causation standard for federal or state claims. Depending on the case, the trial judge may use "proximate" cause, "legal" cause, or some other standard of causation. See Comment to Instruction 3.09. See, for example, Instructions 8.02.03, 8.03.03, 9.01.03, and 9.02.03. If particular damages or types of damages are not disputed, the court may wish to add a paragraph beginning: "Any damage award should include the following: ...." If liability is not disputed, omit the first sentence of the instruction. Use the last two bracketed sentences only where, under the evidence and damage instructions, there is a risk that a jury might improperly award either punitive damages or speculative damages. 7.02 MEASURES OF TYPES OF DAMAGES [The nature and extent of the injuries.] [The [disability] [disfigurement] [loss of enjoyment of life] experienced [and which with reasonable probability will be experienced in the future].] [The [mental,] [physical,] [emotional] pain and suffering experienced [and which with reasonable probability will be experienced in the future].] [The reasonable value of necessary medical care, treatment, and services received to the present time.] [The reasonable value of necessary medical care, treatment, and services which with reasonable probability will be required in the future.] [The reasonable value of [wages] [earnings] [earning capacity] [salaries] [employment] [business opportunities] [employment opportunities] lost to the present time.] [The reasonable value of [wages] [earnings] [earning capacity] [salaries] [employment] [business opportunities] [employment opportunities] which with reasonable probability will be lost in the future.] [The reasonable value of necessary [household help] [services other than medical] [and] [expenses] [________________________________] required to the present time.] [The reasonable value of necessary [household help] [services other than medical] [and] [expenses] [________________________________] which with reasonable probability will be required in the future.] [The reasonable value of necessary repairs to any property which was damaged.] [The difference between the fair market value of any damaged property immediately before the occurrence and its fair market value immediately thereafter.] [The reasonable value of necessary repairs to any property which was damaged plus the difference between the fair market value of the property immediately before the occurrence and its fair market value after it is repaired.] [The lesser of the following: 1. the reasonable cost of necessary repairs to any property which was damaged plus the difference between the fair market value of the property immediately before the occurrence and its fair market value after it is repaired; or 2. the difference between the fair market value of the property immediately before the occurrence and the fair market value of the unrepaired property immediately after the occurrence.] [Such sum as will reasonably compensate for any loss of use of any damaged property during the time reasonably required for its [repair] [replacement].] Comment Insert only the appropriate paragraph or paragraphs into Instruction 7.01. Additional paragraphs may have to be drafted to fit other types of damages. Particular claims may have special rules on damages. See, for example, Instructions 9.03.01, 9.04, 12.03.01, and 16.06.03. 7.03 DAMAGES--MITIGATION The plaintiff has a duty to use reasonable efforts to mitigate damages. To mitigate means to avoid or reduce damages. The defendant has the burden of proving by a preponderance of the evidence: 1. that plaintiff failed to use reasonable efforts to mitigate damages; and 2. the amount by which damages would have been mitigated. 7.04 DAMAGES ARISING IN THE FUTURE--DISCOUNT TO PRESENT CASH VALUE [Any award for future economic damages must be for the present cash value of those damages.] [Noneconomic damages [such as] [pain and suffering] [disability] [disfigurement] [and] [_____________] are not reduced to present cash value.] Present cash value means the sum of money needed now, which, when invested at a reasonable rate of return, will pay future damages at the times and in the amounts that you find the damages [will be incurred] [or] [would have been received]. The rate of return to be applied in determining present cash value should be the interest that can reasonably be expected from safe investments that can be made by a person of ordinary prudence, who has ordinary financial experience and skill. [You should also consider decreases in the value of money which may be caused by future inflation.] Comment There must be evidence to support this instruction. See Monessen Southwestern Ry. v. Morgan, 486 U.S. 330, 339-42 (1988). 7.05 PUNITIVE DAMAGES If you find for plaintiff, and if you award compensatory or nominal damages, you may, but are not required to, award punitive damages. The purposes of punitive damages are to punish a defendant and to deter a defendant and others from committing similar acts in the future. Plaintiff has the burden of proving that punitive damages should be awarded, and the amount, by a preponderance of the evidence. You may award punitive damages only if you find that defendant's conduct was malicious, or in reckless disregard of plaintiff's rights. Conduct is malicious if it is accompanied by ill will, or spite, or if it is for the purpose of injuring another. Conduct is in reckless disregard of plaintiff's rights if, under the circumstances, it reflects complete indifference to the safety and rights of others. If you find that punitive damages are appropriate, you must use reason in setting the amount. Punitive damages, if any, should be in an amount sufficient to fulfill their purposes but should not reflect bias, prejudice or sympathy toward any party. [Punitive damages may not be awarded against ____________________.] [You may impose punitive damages against one or more of the defendants and not others, and may award different amounts against different defendants.] [Punitive damages may be awarded even if you award plaintiff only nominal, and not compensatory, damages.] Comment Punitive damages are not available in every case. In diversity cases, look to state law for an appropriate instruction. If punitive damages are available, and evidence of defendant's financial condition is offered in support of such damages, the judge may be requested to instruct the jury during trial and/or at the end of the case about the limited purpose of such evidence. See Instructions 1.04, 2.08, and the bracketed material in 3.05. See Pacific Mut. Life Ins. Co. v. Haslip, ___ U.S.___, 111 S. Ct. 1032 (1991). 8. FEDERAL EMPLOYERS' LIABILITY ACT; FEDERAL SAFETY APPLIANCE ACT 8.01.01 PRELIMINARY JURY INSTRUCTION FOR FEDERAL EMPLOYERS' LIABILITY ACT (45 U.S.C. ¤¤Ê51 and 53) The plaintiff, , claims that while [he] [she] was employed by the defendant, , a railroad, [he] [she] suffered an injury caused by the negligence of the defendant. The defendant denies the plaintiff's claim. To help you understand the evidence while it is being presented, I will now explain some of the legal terms you will hear during this trial. Negligence is the failure to use reasonable care. Reasonable care is the degree of care that a reasonably prudent person would use under like circumstances. Someone can be negligent by doing something that a reasonably prudent person would not have done, or by failing to do something that a reasonably prudent person would have done. It is not enough, however, that someone be negligent because to be held responsible for an injury the person's negligence must also have been a cause of the injury. To be a cause of an injury, the negligence must have played some part, no matter how small, in bringing that injury about. The plaintiff claims that the defendant should be required to pay damages because its negligence was a cause of an injury suffered by the plaintiff. It is the plaintiff's burden to prove that by a preponderance of the evidence. The defendant, on the other hand, claims that the plaintiff was negligent and that the plaintiff's own negligence was a cause of the claimed injury. The defendant has the burden of proving that by a preponderance of the evidence. Should you determine that negligence of both the plaintiff and the defendant were causes of an injury, then you will reduce any amount of damages proportionally. 8.01.02 PRELIMINARY JURY INSTRUCTION FOR FEDERAL SAFETY APPLIANCE ACT (45 U.S.C. ¤Ê1 et seq.) The plaintiff also claims that while employed by the defendant the plaintiff suffered an injury which was caused by the defendant's violation of the Federal Safety Appliance Act. The defendant denies the plaintiff's claim. You will have to decide whether the defendant violated the Federal Safety Appliance Act and, if so, whether the violation was a cause of an injury to the plaintiff. To be a cause of an injury, the violation must have played some part, no matter how small, in bringing that injury about. It is the plaintiff's burden to prove these things by a preponderance of the evidence. Here, however, neither negligence of the plaintiff nor negligence of the defendant is of any concern. 8.02.01 FELA--ELEMENTS AND BURDEN OF PROOF [On the plaintiff's claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the defendant was negligent; and 2. the defendant's negligence was a [proximate] [legal] cause of an injury to the plaintiff. If the plaintiff has failed to prove each of these things, your verdict should be for the defendant. If, on the other hand, you find that each of these things has been proved, your verdict should be for the plaintiff. [The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was negligent; and 2. the plaintiff's negligence was a [proximate] [legal] cause of the plaintiff's own injury. If you find that each of the things on which the defendant has the burden of proof has been proved, you must reduce the amount of damages to which the plaintiff would otherwise be entitled.] Comment This instruction assumes the usual situation where the parties have stipulated that the defendant is a common carrier covered by the FELA and that the plaintiff was injured in the scope and course of employment with the defendant. If these issues are in dispute, the instruction must be modified accordingly. Use the second half of this instruction in conjunction with Instruction 8.02.06. 8.02.02 FELA--NEGLIGENCE DEFINED Negligence is the failure to use reasonable care. Reasonable care is the degree of care that reasonably prudent persons would use under like circumstances to avoid injury to themselves or others. Negligence is the doing of something which a reasonably prudent person would not do, or the failure to do something which a reasonably prudent person would do, under like circumstances. 8.02.03 FELA--[PROXIMATE] [LEGAL] CAUSE Negligence is a [proximate] [legal] cause of an injury or damage if it played any part, no matter how small, in bringing about the injury or damage. Therefore, even if the negligence operated in combination with the acts of another, or in combination with some other cause, the negligence was a [proximate] [legal] cause of the injury or damage if it played any part, no matter how small, in bringing about the injury or damage. Comment See Comment to Instructions 3.09 and 7.01 regarding causation. 8.02.04 FELA--PLAINTIFF'S COMPLIANCE WITH DEFENDANT'S REQUEST OR DIRECTIONS The plaintiff is not negligent simply because the plaintiff, upon the request or direction of the defendant, worked at a dangerous job, or in a dangerous place, or under dangerous conditions. 8.02.05 FELA--DAMAGES Comment See Instructions 7.01 and 7.02. 8.02.06 FELA--PLAINTIFF'S NEGLIGENCE--REDUCTION OF DAMAGES (45ÊU.S.C. ¤Ê53) If you find for the plaintiff but also find that the plaintiff's own negligence was a [proximate] [legal] cause of the plaintiff's injury, you must reduce the amount of damages to which the plaintiff would otherwise be entitled by the percentage of negligence you attribute to the plaintiff. [For example, if you attribute to plaintiff 10% of the total negligence which caused the plaintiff's injury, the amount you would otherwise award the plaintiff must be reduced by 10%. Of course, by using 10% as an example, I do not mean to suggest any figure to you. The percentage of plaintiff's negligence, if any, is for you to decide.] Comment Kopczynski v. The Jacqueline, 742 F.2d 555, 558 (9th Cir. 1984), cert. denied, 471 U.S. 1136 (1985) (discussing and applying FELA comparative negligence doctrine in a Jones Act case). See Taylor v. Burlington N. R.R., 787 F.2d 1309, 1316-17 (9th Cir. 1986) (traditional defense of assumption of risk is barred under FELA and cannot be revived in the form of comparative negligence). 8.03.01 FSAA--ELEMENTS AND BURDEN OF PROOF (45ÊU.S.C. ¤Ê1 et seq.) [On the plaintiff's claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the defendant violated Section of the Federal Safety Appliance Act; and 2. the violation was a [proximate] [legal] cause of an injury to the plaintiff. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] 8.03.02 FSAA--RELEVANT PROVISION OF THE ACT Section of the Federal Safety Appliance Act provides as follows: [Here insert the provision that the plaintiff claims has been violated.] 8.03.03 FSAA--[PROXIMATE] [LEGAL] CAUSE A violation of the Federal Safety Appliance Act is a [proximate] [legal] cause of an injury or damage if it played any part, no matter how small, in bringing about the injury or damage. Therefore, even if the violation operated in combination with the act of another, or in combination with some other cause, the violation was a [proximate] [legal] cause of the injury or damage if it played any part, no matter how small, in bringing about the injury or damage. Comment See Comments to Instructions 3.09 and 7.01 regarding causation. 8.03.04 FSAA--NEGLIGENCE Negligence plays no part in claims for violations of the Federal Safety Appliance Act. Therefore, the defendant may be liable even if it was not negligent. Similarly, the plaintiff's damages, if any, must not be reduced, even if the plaintiff was negligent. Comment This instruction may assist the jury in cases where the claim under the Federal Safety Appliance Act is coupled with a claim under the Federal Employers' Liability Act. 8.03.05 FSAA--DAMAGES Comment See Instructions 7.01 and 7.02. 9. JONES ACT AND OTHER ADMIRALTY CLAIMS Preliminary Comment These instructions were prepared for use in actions brought under maritime common law and the Jones Act, 46 U.S.C. ¤Ê688, by crew members against their employers. The instructions focus on the issues of negligence, contributory negligence, unseaworthiness, and maintenance and cure. They assume that plaintiff was injured while in the course of employment as a crew member of a vessel. Definitional sections for "crew member," "seaman," "vessel," "in the course of employment," and "in the service of the vessel" have not been included because of the infinite variety of situations that arise. For assistance in dealing with these terms, it is preferable to refer to cases with fact patterns similar to the case under consideration. See, e.g., Southwest Marine, Inc. v. Gizoni, ___ U.S. ___, 112 S. Ct. 486, 116 L. Ed. 2d 405 (1991) (discussing "crew member," "seaman," and "vessel"); McDermott Int'l v. Wilander, 498 U.S. 337 (1991) (discussing "seaman"). 9.01.01 JONES ACT--NEGLIGENCE CLAIM--ELEMENTS AND BURDEN OF PROOF--AFFIRMATIVE DEFENSE (46 U.S.C. ¤Ê688) [On the plaintiff's __________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the defendant was negligent; and 2. the defendant's negligence was a [proximate] [legal] cause of an injury to the plaintiff. If the plaintiff has failed to prove each of these things, your verdict should be for the defendant. If, on the other hand, you find that each of the things on which the plaintiff has the burden of proof has been proved, your verdict should be for the plaintiff. [The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was negligent; and 2. the plaintiff's negligence was a [proximate] [legal] cause of the plaintiff's own injury. If you find that each of the things on which the defendant has the burden of proof has been proved, you must reduce the amount of damages to which plaintiff would otherwise be entitled.] Comment See In re Hechinger, 890 F.2d 202, 208-209 (9th Cir. 1989), cert. denied, 498 U.S. 848, (1990); cf. Mohn v. Marla Marie, Inc., 625 F.2d 900 (9th Cir. 1980). Use the second half of this instruction in conjunction with Instruction 9.03.02. 9.01.02 JONES ACT--NEGLIGENCE DEFINED Negligence is the failure to use reasonable care. Reasonable care is the degree of care that reasonably prudent persons would use under like circumstances to avoid injury to themselves or others. Negligence is the doing of something that a reasonably prudent person would not do, or the failure to do something that a reasonably prudent person would do, under like circumstances. 9.01.03 JONES ACT--NEGLIGENCE CLAIM--[PROXIMATE] [LEGAL] CAUSE [The requirement of [proximate] [legal] cause for plaintiff's negligence claim is different from that for the unseaworthiness claim.] Negligence is a [proximate] [legal] cause of an injury or damage if it played any part, no matter how small, in bringing about the injury or damage. Therefore, even if the negligence operated in combination with the acts of another, or in combination with some other cause, the negligence was a [proximate] [legal] cause of the injury or damage if it played any part, no matter how small, in bringing about the injury or damage. Comment Where negligence and unseaworthiness are both claimed, it may be advisable to compare the causal requirements for each. See Lies v. Farrell Lines, 641 F.2d 765, 769 & n.7 (9th Cir. 1981). See Comments to Instructions 3.09 and 7.01 regarding causation. 9.01.04 JONES ACT--PLAINTIFF'S COMPLIANCE WITH DEFENDANT'S REQUEST OR DIRECTIONS The plaintiff is not negligent simply because the plaintiff, upon the request or direction of the defendant, worked at a dangerous job, or in a dangerous place, or under dangerous conditions. 9.02.01 JONES ACT--UNSEAWORTHINESS CLAIM--ELEMENTS AND BURDEN OF PROOF--AFFIRMATIVE DEFENSE (46 U.S.C. ¤Ê688) [On the plaintiff's ____________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the [name of vessel] was unseaworthy; and 2. the unseaworthy condition was a [proximate] [legal] cause of an injury to plaintiff. If the plaintiff has failed to prove each of these things, your verdict should be for the defendant. If, on the other hand, you find that each of the things on which the plaintiff has the burden of proof has been proved, your verdict should be for the plaintiff. [The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was negligent; and 2. the plaintiff's negligence was a [proximate] [legal] cause of the plaintiff's own injury. If you find that each of the things on which the defendant has the burden of proof has been proved, you must reduce the amount of damages to which plaintiff would otherwise be entitled.] Comment See In re Hechinger, 890 F.2d 202, 208-209 (9th Cir. 1989), cert. denied, 498 U.S. 848, (1990); Reinhart v. United States, 457 F.2d 151, 153-54 (9th Cir. 1972); cf. Mohn v. Marla Marie, Inc., 625 F.2d 900 (9th Cir. 1980). Use the second half of this instruction in conjunction with Instruction 9.03.02. 9.02.02 JONES ACT--UNSEAWORTHINESS DEFINED A vessel owner has a duty to provide and maintain a seaworthy vessel. [That duty cannot be turned over to anyone else.] A vessel is seaworthy if the vessel and all of its parts and equipment are reasonably fit for their intended purpose [and it is operated by a crew reasonably adequate and competent for the work assigned]. A vessel is unseaworthy if the vessel, or any of its parts or equipment, is not reasonably fit for its intended purpose [or if its crew is not reasonably adequate or competent to perform the work assigned]. Comment In re Hechinger, 890 F.2d 202, 207-209 (9th Cir. 1989), cert. denied, 498 U.S. 848 (1990) (definition of a seaworthy vessel). A shipowner has the duty to a seaman employed on the ship to furnish a vessel and appurtenances which are reasonably fit for their use. This includes maintaining a ship's equipment in proper operating condition. The failure of a piece of equipment under proper and expected use is sufficient to establish unseaworthiness. Lee v. Pacific Far E. Line, 566 F.2d 65, 67 (9th Cir. 1977). A vessel may be unseaworthy because of the presence of a violent or assaultive crew member. Pashby v. Universal Dredging Corp., 608 F.2d 1312, 1313-14 (9th Cir. 1979). Cf. Palmer v. Apex Marine Corp., 510 F. Supp. 72 (W.D. Wash. 1981). In Palmer, the court declined to find a vessel unseaworthy because of the vicious propensities of a seaman who fought with the plaintiff, when the nature of the fight did not indicate undue viciousness. In addition, the court found that the drunkenness of the boatswain did not render the vessel unseaworthy under the circumstances. A vessel must be fit for the use anticipated and must be able to withstand expected seasonable weather in the area where it is used. Nygaard v. Peter Pan Seafoods, Inc., 508 F. Supp. 151, 153 n.5 (W.D. Wash. 1981), remanded on other grounds, 701 F.2d 77 (9th Cir. 1983). 9.02.03 JONES ACT--UNSEAWORTHINESS--[PROXIMATE] [LEGAL] CAUSE [The requirement of [proximate] [legal] cause for plaintiff's unseaworthiness claim is different from that for the negligence claim.] Unseaworthiness is a [proximate] [legal] cause of injury or damage if it played a substantial part in bringing about injury or damage. Comment Where negligence and unseaworthiness are both claimed, it may be advisable to compare the causal requirements for each. See Lies v. Farrell Lines, 641 F.2d 765, 769 & n.7 (9th Cir. 1981); Litherland v. Petrolane Offshore Constr. Servs., 546 F.2d 129, 131-133 (5th Cir. 1977); Reinhart v. United States, 457 F.2d 151, 153-54 (9th Cir. 1972). 9.03.01 JONES ACT--NEGLIGENCE OR UNSEAWORTHINESS-- DAMAGES--PROOF If you find for the plaintiff [on plaintiff's [negligence] [or] [unseaworthiness] claims], you must determine plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. Damages means the amount of money which will reasonably and fairly compensate the plaintiff for any injury you find was [proximately] [legally] caused by the [- negligence of the defendant] [or] [unseaworthiness of the vessel]. You should consider the following: [Here insert types of damages. See Instruction 7.02-- MEASURES OF TYPES OF DAMAGES] [The cost of obtaining room and board on land, equivalent to that provided at sea, for those periods that the plaintiff would have worked aboard ship but for this injury.] Comment For a discussion regarding the extent to which punitive damages are available see Evich v. Morris, 819 F.2d 256, 258-259 (9th Cir.), cert. denied, 484 U.S. 914 (1987). The collateral source rule applies in cases brought under the Jones Act. See Folkestad v. Burlington N., Inc., 813 F.2d 1377, 1380 & n.3 (9th Cir. 1987). The last paragraph of the instruction outlines damages that are unique to the Jones Act. 9.03.02 JONES ACT--NEGLIGENCE OR UNSEAWORTHINESS-- PLAINTIFF'S NEGLIGENCE--REDUCTION OF DAMAGES If you find for plaintiff but also find that the plaintiff's negligence was a [proximate] [legal] cause of the plaintiff's injury, you must reduce the amount of damages to which the plaintiff would otherwise be entitled by the percentage of negligence you attribute to the plaintiff. [For example, if the negligence of the plaintiff made a 10% contribution to the plaintiff's injuries, the amount that you would otherwise award must be reduced by 10%. OfÊcourse, by using 10% as an example, I do not mean to suggest any figure to you. TheÊpercentage of plaintiff's contribution, if any, is for you to decide.] Comment 45 U.S.C. ¤Ê53. See Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 408-409 (1953); Kopczynski v. The Jacqueline, 742 F.2d 555, 557-558 (9th Cir. 1984), cert. denied, 471 U.S. 1136 (1985); Pan-Alaska Fisheries, Inc. v. Marine Const. & Design Co., 565 F.2d 1129, 1138 (9th Cir. 1977). 9.04 JONES ACT--MAINTENANCE AND CURE--WILLFUL OR ARBITRARY FAILURE TO PAY [On plaintiff's _____________________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was injured or became ill while in the service of the vessel; 2. maintenance and cure was not provided; and 3. the amount of maintenance and cure to which the plaintiff was entitled. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Maintenance is the cost of food and lodging, and transportation to and from a medical facility. [Plaintiff is not entitled to maintenance while hospitalized because hospitalization includes food and lodging.] Cure is the cost of medical attention, including the services of physicians and nurses as well as the cost of hospitalization, medicines and medical apparatus. The injury or illness need not be work-related so long as it occurs while in the service of the vessel. Neither maintenance nor cure may be reduced because of any negligence on the part of the plaintiff. Plaintiff is entitled to receive maintenance and cure from the date of departure from the ship to the time of maximum possible cure under the circumstances. Maximum possible cure is the point at which no further improvement in the plaintiff's medical condition may be reasonably expected. There can be no double recovery for plaintiff. If you find that the plaintiff is entitled to an award of damages under the negligence claim or under the unseaworthiness claim, and if you include either loss of wages or medical expenses in the damage award relating to either of these claims, then maintenance and cure cannot be awarded for the same period. [The plaintiff also claims the defendant willfully or arbitrarily failed to pay maintenance and cure when it was due. On this claim, the plaintiff must prove each of the following by a preponderance of the evidence: 1. the plaintiff was entitled to maintenance and cure; 2. the defendant willfully or arbitrarily failed to provide maintenance and cure; and 3. the defendant's failure to provide maintenance and cure resulted in injury to plaintiff. Where defendant's failure to provide maintenance and cure worsens plaintiff's injury, plaintiff may recover resulting damages and expenses, including pain and suffering, additional medical expenses and a reasonable sum for legal services to obtain maintenance and cure.] [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See Gardiner v. Sea-Land Serv., 786 F.2d 943, 945-946 (9th Cir.), cert. denied, 479 U.S. 924 (1986); Kopczynski v. The Jacqueline, 742 F.2d 555, 557-558 (9th Cir. 1984), cert. denied, 471 U.S. 1136 (1985). The shipowner's duty to provide maintenance and cure arises irrespective of whether the illness or injury is suffered in the course of the seaman's employment, and negligence on the seaman's part will not relieve the shipowner of responsibility. Vella v. Ford Motor Co., 421 U.S. 1, 4- 5 (1975). A plaintiff may not recover for maintenance and cure where the injury or illness results from the plaintiff's own willful misbehavior. See Omar v. Sea-Land Serv., 813 F.2d 986, 989-990 (9th Cir. 1987). Punitive damages may be available, in some circumstances, where payment for maintenance and cure is wrongfully denied. See Evich v. Morris, 819 F.2d 256, 258-259 (9th Cir.), cert. denied, 484 U.S. 914 (1987); Sample v. Johnson, 771 F.2d 1335, 1347 n.12 (9th Cir. 1985), cert. denied, 475 U.S. 1019 (1986). 10. TAX REFUND ACTIONS Preliminary Comment Taxpayers who sue for refunds are entitled to a jury trial. See 26 U.S.C. ¤Ê7422 and annotations. The situations giving rise to such suits are too diverse to provide model instructions for all cases. The general instructions found in chapter 5 can be applied to tax refund cases. Some modifications of those instructions may be necessary to fit a particular case. Tax refund cases often have narrow fact issues and lend themselves to verdicts by interrogatories to the jury. The model instructions offered in this section cover only a few issues specific to tax refund cases. 10.01 TAX REFUND ACTIONS--ELEMENTS AND BURDEN OF PROOF-- CLAIMED REFUND [On plaintiff's ____________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff is entitled to a refund; and 2. the amount of the refund due to plaintiff. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] 10.02 TAX REFUND ACTIONS--ELEMENTS AND BURDEN OF PROOF-- CLAIMED DEDUCTIONS [On plaintiff's ____________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff has a right to a deduction; and 2. the amount of the deduction. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] 11.00 CIVIL RIGHTS ACTIONS Preliminary Comment These instructions do not encompass changes made by the 1991 Civil Rights Act and codified, as pertinent to this section, at 42 U.S.C. ¤¤Ê1981, 1981a, and 1988. These instructions also do not address any issues regarding the retroactivity of the 1991 Act. 11.01 VIOLATION OF FEDERAL CIVIL RIGHTS--ELEMENTS AND BURDEN OF PROOF (42 U.S.C. ¤Ê1983) [On plaintiff's ________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the acts or omissions of the defendant were intentional; 2. the defendant acted under color of law; and 3. the acts or omissions of the defendant were the [proximate] [legal] cause of the deprivation of the plaintiff's rights protected by the Constitution [or laws] of the United States. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] 11.01.01 UNDER COLOR OF LAW DEFINED (42 U.S.C. ¤Ê1983) Acts are done under color of law when a person acts or purports to act in the performance of official duties under any state, county, or municipal law, ordinance, or regulation. [[The parties have stipulated that] [The court has found that] the defendant acted under color of law.] 11.01.02 EXCESSIVE FORCE--UNREASONABLE SEIZURE--LAWFUL ARREST (42 U.S.C. ¤Ê1983) The plaintiff claims the defendant, by using excessive force in making a lawful arrest, deprived the plaintiff of the Fourth Amendment constitutional right to be free from an unreasonable seizure. A law enforcement officer has the right to use such force as is reasonably necessary under the circumstances to make a lawful arrest. An unreasonable seizure occurs when a law enforcement officer uses excessive force in making a lawful arrest. Whether force is reasonably necessary or excessive is measured by the force a reasonable and prudent law enforcement officer would use under the circumstances. Comment See Graham v. Connor, 490 U.S. 386 (1989). 11.01.03 UNREASONABLE SEARCH--GENERALLY (42 U.S.C. ¤Ê1983) The plaintiff claims that the defendant intentionally deprived the plaintiff of the Fourth Amendment constitutional right to be free from an unreasonable search of the plaintiff's [person, home, automobile, office, etc.]. The plaintiff has the burden of proving by a preponderance of the evidence that the search was unreasonable. 11.01.04 UNREASONABLE SEARCH--EXCEPTIONS TO WARRANT REQUIREMENT--SEARCH INCIDENT TO LAWFUL ARREST (42 U.S.C. ¤Ê1983) A search is reasonable, and a search warrant is not required, if a search is conducted as an incident to a lawful arrest. Under this exception to the search warrant requirement, an arresting officer may search only the person arrested and the area within which that person might gain possession of a weapon or might destroy or hide evidence. Comment This instruction is not for use for automobile searches. 11.01.05 UNREASONABLE SEARCH--EXCEPTIONS TO WARRANT REQUIREMENT--CONSENT (42 U.S.C. ¤Ê1983) A search is reasonable, and a search warrant is not required, if a person in lawful possession of the area knowingly and voluntarily consents to the search. 11.01.06 UNREASONABLE SEARCH--EXCEPTIONS TO WARRANT REQUIREMENT--EXIGENT CIRCUMSTANCES (42 U.S.C. ¤Ê1983) A search is reasonable, and a search warrant is not required, if all of the circumstances known to the officer at the time, would cause a reasonable person to believe that entry or search was necessary to prevent [physical harm to the officer or other persons] [the destruction or concealment of evidence] [the escape of a suspect], and if there was insufficient time to get a search warrant. 11.02 QUALIFIED IMMUNITY (42 U.S.C. ¤Ê1983) Comment For purposes of section 1983, qualified immunity is immunity from suit. Whether a reasonable officer could have believed the officer's conduct was proper under established law is a question of law for the court and should be determined at the earliest possible point in the litigation. Hunter v. Bryant, ___ U.S. ___, 112 S. Ct. 534, 116 L. Ed. 2d 589 (1991) (per curiam); Act Up! Portland v. Bagley, No. 90-35888, 1993 WL 29109 at *3-*4 (9th Cir. 1993). 11.03.01 MUNICIPAL LIABILITY (42 U.S.C. ¤Ê1983) When a plaintiff is deprived of a constitutional right as a result of the official policy of a [city] [county], the [city] [county] is liable for the deprivation. 11.03.02 MUNICIPAL LIABILITY--OFFICIAL POLICY DEFINED (42ÊU.S.C. ¤Ê1983) "Official policy" means: [1. a rule or regulation promulgated, adopted, or ratified by the governmental entity's legislative body;] [2. a policy statement or decision that is officially made by the [city's] [county's] lawmaking officer or policy-making official;] [3. a custom that is a permanent, widespread, well-settled practice that constitutes a standard operating procedure of the [city] [county];] or [4. an act or omission ratified by the [city's] [county's] lawmaking officer or policy- making official]. Comment These definitions are selected examples of official policy drawn from the cited cases. The instruction may need to be adapted to the facts of a particular case. The court may need to instruct the jury about who are policy-makers as a matter of law. See Instruction 11.03.03. Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701 (1989); Monell v. Department of Social Servs. of New York, 436 U.S. 658 (1978); Redman v. County of San Diego, 942 F.2d 1435, 1443-44 (9th Cir. 1991), cert. denied, ___ U.S. ___, 112 S. Ct. 972 (1992); Los Angeles Police Protective League v. Gates, 907 F.2d 879, 887 (9th Cir. 1990); Thompson v. City of Los Angeles, 885 F.2d 1439, 1443 (9th Cir. 1989). 11.03.03 OFFICIAL POLICY MAKERS The acts or omissions of constitute official policy of the [city] [county] of . Comment Jett v. Dallas Indep. Sch. Dist., 491 U.S. 701 (1989). 11.03.04 MUNICIPAL LIABILITY--FAILURE TO TRAIN--ELEMENTS AND BURDEN OF PROOF [On the plaintiff's claim for failure to train,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the [city's] [county's] training program was not adequate to train its [officers] [employees] to respond properly to the usual and recurring situations with which they must deal; 2. the [city] [county] was deliberately indifferent to the need to train its [officers] [employees] adequately; and 3. the failure to provide proper training was the [proximate] [legal] cause of the deprivation of the plaintiff's rights protected by the Constitution [or laws] of the United States. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Merritt v. County of Los Angeles, 875 F.2d 765, 769-70 (9th Cir. 1989). 11.03.05 MUNICIPAL LIABILITY--DELIBERATE INDIFFERENCE DEFINED (42ÊU.S.C. ¤Ê1983) "Deliberate indifference" to the rights of others is the conscious or reckless disregard of the consequences of one's acts or omissions. Comment Redman v. County of San Diego, 942 F.2d 1435, 1442 (9th Cir. 1991), cert. denied, ___ÊU.S. ___, 112 S. Ct. 972 (1992). 11.04 DAMAGES FOR DEPRIVATION OF CIVIL RIGHTS--ACTUAL OR NOMINAL (42ÊU.S.C. ¤Ê1983) If you find for the plaintiff [on plaintiff's __________________ claim], you must determine plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. Damages means the amount of money which will reasonably and fairly compensate the plaintiff for the deprivation of civil rights [proximately] [legally] caused by the defendant. You should consider the following: [Here insert types of damages. See Instruction 7.02-- MEASURES OF TYPES OF DAMAGES] If you find for the plaintiff, but you find that the plaintiff has failed to prove actual damages, you shall return an award of nominal damages not to exceed one dollar. Comment See George v. City of Long Beach, 973 F.2d 706 (9th Cir. 1992); Floyd v. Laws, 929 F.2d 1390 (9th Cir. 1991). 12. AGE DISCRIMINATION 12.01.01 PRELIMINARY JURY INSTRUCTION FOR AGE DISCRIMINATION CASES--DISPARATE TREATMENT (29 U.S.C. ¤Ê623) The plaintiff, , seeks damages against the defendant, , for [describe the alleged discriminatory act] based on age discrimination. The defendant denies age discrimination. To help you understand the evidence that will be presented in this case, I will explain some of the legal concepts for you. It is unlawful for an employer to discriminate against any employee because of that employee's age when the employee is 40 years of age or older. The plaintiff has the burden of proving by a preponderance of the evidence that plaintiff was 40 years of age or older at the time of [describe the alleged discriminatory act] and that age was a [motivating] factor in the defendant's decision to [describe the alleged discriminatory act]. The defendant contends [that age is a part of a bona fide occupational qualification] [that the treatment of the plaintiff was in compliance with a bona fide [seniority system] [benefit plan]]. The defendant has the burden of proving [this] [these] defense[s] by a preponderance of the evidence. [To establish the defense of bona fide occupational qualification the defendant has the burden of proving that [employees over the age qualification would be unable to perform the job safely and efficiently] [or] [that it was impossible or highly impractical to consider the qualifications of each older employee] and that the bona fide occupational qualification is reasonably necessary to the operation of the business.] [To establish that the plaintiff was [describe the alleged discriminatory act] in compliance with a bona fide seniority system, the defendant has the burden of proving that the system has legitimate goals and that the defendant uses the employees' length of service as the primary consideration in selecting employees who will not be [describe the alleged discriminatory act].] [To establish that the plaintiff was [describe the alleged discriminatory act] in compliance with a legitimate employee benefit plan, the defendant has the burden of proving that the benefit plan existed and that the defendant followed the terms of the plan and that defendant had a legitimate, non-discriminatory reason for [describe the alleged discriminatory act].] If you find that the defense has been proved, then you will find for the defendant. On the other hand, if you find that the plaintiff has proved plaintiff's claim of age discrimination and no defense has been proved, then you will find for the plaintiff and determine what, if any, damages the plaintiff sustained. Comment The words "motivating factor" apply in Title VII cases. See Civil Rights Act of 1991, Pub. L. No. 102-166, 105 Stat. 1071, ¤Ê107. It is possible that the courts will be guided by this standard in ADEA cases. See Comment to Instruction 12.01.02. 12.01.02 AGE DISCRIMINATION--DISPARATE TREATMENT ELEMENTS AND BURDEN OF PROOF--DISCHARGE Plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was discharged; 2. the plaintiff was 40 years of age or older at the time of discharge; and 3. the plaintiff's age was a [motivating] factor in the defendant's decision to discharge the plaintiff. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment If defendant offers a bona fide employee benefit plan defense (see Instruction 12.01.06), then add the following element: "4. If you find that the treatment of the plaintiff was part of a bona fide employee benefit plan, plaintiff must also prove that the provisions of the defendant's employee benefit plan were used to discriminate in a non-fringe benefit aspect of the employment relationship." See American Ass'n of Retired Persons v. Farmers Group, 943 F.2d 996 (9th Cir. 1991), cert. denied, ___ U.S. ___, 112 S. Ct. 937 (1992). Add appropriate paragraphs similar to those in Instructions 5.03, 5.04, or 5.05. This instruction and Instruction 12.01.03 refer to common examples of age discrimination. For other acts of age discrimination relating to compensation, terms, and conditions of employment, modify the instructions accordingly. 29 U.S.C. ¤Ê623(a). See Comment to Instruction 12.01.01. 12.01.03 AGE DISCRIMINATION--DISPARATE TREATMENT ELEMENTS ANDÊBURDEN OF PROOF--FAILURE OR REFUSAL TO HIRE-- NO AFFIRMATIVE DEFENSE Plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was not hired; 2. the plaintiff was 40 years of age or older at the time of the [failure] [refusal] to hire; and 3. the plaintiff's age was a [motivating] factor in the defendant's decision not to hire. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment This instruction and Instruction 12.01.02 refer to common examples of age discrimination. For other acts of age discrimination relating to compensation, terms, and conditions of employment, modify the instructions accordingly. 29 U.S.C. ¤Ê623(a). See Comment to Instruction 12.01.01. 12.01.04 AGE DISCRIMINATION--DISPARATE TREATMENT-- AFFIRMATIVE DEFENSE--BONA FIDE OCCUPATIONAL QUALIFICATIONS The defendant contends that age is a part of a bona fide occupational qualification. The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. that the occupational qualification is reasonably necessary to the operation of the business; and 2. [that defendant had reasonable cause to believe that all or substantially all persons over the age qualification would be unable to perform the job safely and efficiently] [or] [that it was impossible or highly impractical to consider the qualifications of each older employee.] Comment See 29 U.S.C. ¤ 623(f)(1). 12.01.05 AGE DISCRIMINATION--DISPARATE TREATMENT-- AFFIRMATIVE DEFENSE--BONA FIDE SENIORITY SYSTEM The defendant contends that the treatment of the plaintiff was based upon a bona fide seniority system. The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the seniority system had legitimate goals and was not designed to discriminate on the basis of age; and 2. it used the employee's length of service as the primary consideration in selecting the employees who will not be [describe the alleged discriminatory act]. Comment See 29 U.S.C. ¤ 623(f)(2)(A). 12.01.06 AGE DISCRIMINATION--DISPARATE TREATMENT-- AFFIRMATIVE DEFENSE--BONA FIDE EMPLOYEE BENEFIT PLAN The defendant contends that the treatment of the plaintiff was part of a bona fide employee benefit plan. The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the employee benefit plan was bona fide, that is, it existed and provided for and paid benefits to employees; and 2. the defendant followed the terms of the plan. Comment See 29 U.S.C. ¤ 623(f)(2)(B). The statute lists retirement insurance and pension plans as examples of covered plans. Simple fringe benefit plans such as severance pay policies, lay-off benefits, and accrued sick leave payments may not qualify for this exemption. See Comment to Instruction 12.01.02. 12.02.01 PRELIMINARY JURY INSTRUCTIONS FOR AGE DISCRIMINATION CASES--DISPARATE IMPACT The plaintiff, , seeks damages against the defendant, , for age discrimination. The defendant denies age discrimination. To help you understand the evidence that will be presented in this case, I will explain some of the legal concepts for you. The plaintiff claims that while defendant's [employment practice] [selection criterion] appears to treat people of different ages equally, it has the effect of discriminating against persons 40 years of age or older. The plaintiff has the burden of proving through statistical evidence that the defendant's [employment practice] [selection criterion] caused the exclusion of plaintiff from a [job] [promotion] because of plaintiff's age. [The plaintiff also has the burden of proving that defendant's [employment practice] [selection criterion] was not based on business necessity, or if it was based on business necessity that another [employment practice] [selection criterion] without a similarly discriminatory effect would serve the defendant's legitimate business interests and the defendant refused to adopt such alternate [employment practice] [selection criterion].] The defendant claims that its [employment practice] [selection criterion] was based on business necessity. The defendant has the burden of proving this defense by a preponderance of the evidence. If you find the defense has been proved, then you will find for the defendant unless you find the plaintiff has proved by a preponderance of the evidence that another [employment practice] [selection criterion] without a similarly discriminatory effect would serve the defendant's legitimate business interests and the defendant has refused to adopt such alternate [employment practice] [selection criterion].] Comment In instructing on business necessity, review the Comments to Instructions 12.02.02 and 12.02.03 on burden of proof. Use the paragraph in this instruction which corresponds with the decision on which party bears the burden of proof on this issue. This instruction was drafted on the assumption that a disparate impact claim, where there is a factual dispute, is a question for the jury. It is unclear, however, whether a disparate impact claim is a question of law to be determined by the court or a question of fact to be determined by the trier of fact. In light of the 1991 Civil Rights Act, the court should consider whether a disparate impact instruction is appropriate. Cf. H.R. Rep. No. 102-40(I), 102 Cong., 2d Sess., pt. I, at 72 n.66 (1991) (At least with regard to Title VII and the Americans With Disabilities Act actions, "compensatory and punitive damages may not be sought with regard to claims based on the disparate impact theory ... [so] a jury trial would not be available for such claims."). In cases based on both disparate impact and disparate treatment theories, courts have suggested the propriety of disparate impact instructions when the plaintiff has made out a prima facie disparate impact case. See MacPherson v. University of Montevallo, 922 F.2d 766, 772 (11th Cir. 1991); Lowe v. Commack Union Free School Dist., 886 F.2d 1364, 1368-70, 1374, 1380 (2d Cir. 1989), cert. denied, 494 U.S. 1026 (1990); Massarsky v. General Motors Corp., 706 F.2d 111, 125 (3d Cir.) cert. denied, 464 U.S. 937 (1983); Iervolino v. Delta Air Lines, Inc., 796 F.2d 1408, 1419- 20 (11th Cir. 1986) (Where plaintiff failed to specifically address disparate impact theory at the pretrial conference, court did not abuse its discretion by refusing to instruct the jury on that theory.), cert. denied, 479 U.S. 1090 (1987); Monroe v. United Air Lines, Inc., 736 F.2d 394, 404 n.3 (7th Cir. 1984) (court correctly instructed jury on disparate impact and disparate treatment claims), cert. denied, 470 U.S. 1004 (1985); Allison v. Western Union Telegraph Co., 680 F.2d 1318, 1322-23 (11th Cir. 1982) (both disparate impact and disparate treatment theories properly submitted to the jury). A unanimous Supreme Court recently noted a question of whether "a disparate impact theory of liability is available under the ADEA," Hazen Paper Co. v. Biggins, ___ U.S. ___, 113 S. Ct. 1701, 1706 (1993) (dictum), and three justices questioned "incorporating in the ADEA context the so- called `disparate impact' theory of Title VII of the Civil Rights Act of 1964 .... [W]e have not yet addressed the question whether such a claim is cognizable under the ADEA, and there are substantial arguments that it is improper to carry over disparate impact analysis from Title VII to the ADEA." Id. at 1710. (Kennedy, Rehnquist, Thomas, JJ., concurring). 12.02.02 AGE DISCRIMINATION--DISPARATE IMPACT--ELEMENTS AND BURDEN OF PROOF Plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was [not hired] [describe other specific act asserted as discrimination]; 2. the plaintiff was 40 years of age or older at the time of the [failure to hire] [describe other specific act asserted as discrimination]; 3. the defendant had a specific [employment practice] [selection criterion] which caused plaintiff to be excluded from [a job] [describe other specific act asserted as discrimination] because of plaintiff's age; and 4. the defendant's [employment practice] [selection criterion] had a substantial disparate impact on persons 40 years of age or older [and] [5. if the defendant presents a business necessity defense, see Comment]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See Comment to Instruction 12.02.01. This following element should be included if the defendant presents a business necessity defense and if the plaintiff has the burden of disproving this defense. "5. [That defendant's [employment practice] [selection criterion] was not based on business necessity, or if it was based on business necessity that another [employment practice] [selection criterion] without a similarly discriminatory effect would serve the defendant's legitimate business interests and the defendant has refused to adopt such alternate [employment practice] [selection criterion].]" This fifth element is included when the defendant has produced evidence that its disparate [employment practice] [selection criterion] is based on legitimate business reasons, such as job relatedness or business necessity. While the ADEA statute is silent on who has the burden of proof on the issue of business necessity, the courts have held the plaintiff bears the ultimate burden of disproving business necessity. Wards Cove Packing Co. v. Atonio, 490 U.S. 642 (1989); Rose v. Wells Fargo & Co., 902 F.2d 1417, 1424 (9th Cir. 1990). This instruction was drafted on the assumption that courts might be guided in ADEA cases by the standards in Title VII cases. However, a unanimous Supreme Court recently noted a question of whether "a disparate impact theory of liability is available under the ADEA." Hazen Paper Co. v. Biggins, 113 S. Ct. 1701, 1706 (1993) (dictum). See Comment to Instruction 12.02.01. However, if a trial judge decides that a disparate impact theory is appropriate, the judge should examine the Civil Rights Act of 1991 which, in response to the Wards Cove decision, amended Section 703 of the Civil Rights Act of 1964 to provide that the defendant shall demonstrate business necessity and thus appears to have placed the burden of proving business necessity on the defendant. 42 U.S.C. ¤Ê2000 e-2 (k)(1)(A). Therefore, if the defendant has the burden of proving business necessity in an ADEA case and the defendant presents a business necessity defense, give Instruction 12.02.03 and add the following element to 12.02.02: "5. If you find that the defendant has proved that the defendant's [employment practice] [selection criterion] was based on legitimate business reasons, plaintiff must also prove that [an employment practice] [a selection criterion] without a similarly discriminatory effect would serve the defendant's legitimate business interests and the defendant has refused to adopt the [employment practice] [selection criterion]." See Comment to Instruction 12.02.03. 12.02.03 AGE DISCRIMINATION--DISPARATE IMPACT--AFFIRMATIVE DEFENSE--BUSINESS NECESSITY The defendant contends that its [employment practice] [selection criterion] was based on legitimate business reasons. The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the [employment practice] [selection criterion] is job related for the position in question; and 2. the [employment practice] [selection criterion] is consistent with business necessity. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment A business necessity defense may not be used as a defense against a claim of intentional discrimination. 42 U.S.C. ¤Ê2000e-2(k)(2). See Comment to Instruction 12.02.02. 12.03.01 AGE DISCRIMINATION--DAMAGES--COMPENSATORY-- REDUCTION--MITIGATION If you find for the plaintiff [on plaintiff's ________________________________ claim], you must determine plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. Damages means the amount of money which will reasonably and fairly compensate the plaintiff for any loss of [pay] [wages] [benefits] you find was [proximately] [legally] caused by the discriminatory act of the defendant. You should consider the following: [The plaintiff's damages include back pay, that is [back wages] [lost pay] [and employee benefits] plaintiff would have received from the date the defendant [discharged] plaintiff to the [date of trial] [date plaintiff [declines] [accepts] reinstatement].] [You must deduct any wages or other earnings plaintiff received from other employment from the date the defendant [discharged] plaintiff to the [date of trial] [date the plaintiff [declines] [accepts] reinstatement.]] [You must deduct any severance pay [and] [pension benefits] received after the [discharge].] [If the defendant proves by a preponderance of the evidence that plaintiff unjustifiably failed to take a new job of like kind, status and pay which was available to plaintiff, or failed to make reasonable efforts to find a new job, you should subtract from these damages any amount plaintiff could have earned in a new job after the discharge.] [The plaintiff's damages also include front pay, that is, the loss of future [wages] [pay] [and employee benefits] from the defendant.] [You must deduct from any front pay any wages or other earnings [and employee benefits] plaintiff would receive after the date of trial using reasonable mitigation efforts.] Comment See Instructions 7.01-.04. An award of front pay is appropriate if the court first determines that reinstatement is not feasible. Cassino v. Reichhold Chems., 817 F.2d 1338, 1346 (9th Cir. 1987), cert. denied, 484 U.S. 1047 (1988). 12.03.02 AGE DISCRIMINATION--DAMAGES--LIQUIDATED If you find the plaintiff is entitled to recover compensatory damages, and if you find the plaintiff has proved by a preponderance of the evidence that the defendant acted willfully, the plaintiff is entitled to receive, in addition to compensatory damages, liquidated damages in an amount equal to the [back wages] [lost pay] [and employee benefits] you have awarded plaintiff. A defendant's conduct is willful if the defendant knew or showed reckless disregard for whether the [describe the alleged discriminatory act] was prohibited by the law. Comment See Trans World Airlines v. Thurston, 469 U.S. 111 (1985); Gilchrist v. Jim Slemons Imports, 803 F.2d 1488, 1494-95 (9th Cir. 1986); Cassino v. Reichhold Chems., 817 F.2d 1338, 1348 (9th Cir. 1987). 29 U.S.C. ¤Ê626(b) incorporates the liquidated damages provision of the Fair Labor Standards Act, 29 U.S.C. ¤Ê216(b). Hazen Paper Co. v. Biggins, 113 S. Ct. 1701, 1708-09 (1993) (A unanimous court noted court of appeals confusion about the meaning of the term "willful" and reaffirmed that "[t]he standard of willfulness that was adopted in Thurston--that the employer either knew or showed reckless disregard for the matter of whether its conduct was prohibited by the statute ..." applies to all disparate treatment cases under the ADEA. (citing McLaughlin v. Richland Shoe Co., 486 U.S. 128 (1988))). 13. LABOR (INCLUDING FAIR REPRESENTATION) 13.01 LMRA ¤Ê301--DUTY OF FAIR REPRESENTATION--ELEMENTS AND BURDEN OF PROOF--HYBRID CLAIM [On the plaintiff's claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the union [describe conduct] the plaintiff's claim against the employer as required by the collective bargaining agreement; 2. the union's conduct toward the employee was [arbitrary] [in bad faith] [dishonest] [discriminatory] [hostile]; and 3. the employer [describe employer's conduct] in violation of the collective bargaining agreement. If you find that each of these things has been proved, your verdict should be for the plaintiff and against both defendants. On the other hand, if any of these things has not been proved, your verdict should be for the defendants. Comment See Vaca v. Sipes, 386 U.S. 171 (1967); Chauffeurs, Teamsters and Helpers, Local No. 391 v. Terry, 494 U.S. 558 (1990); Hines v. Anchor Motor Freight, 424 U.S. 554 (1976). A union is not liable for merely negligent conduct when the challenged act involves an exercise of the union's judgment rather than a ministerial act. However, a union may be liable for negligent or arbitrary conduct when the challenged act involves a procedural or ministerial act, or involves a failure to raise a meritorious, substantive argument. Peters v. Burlington N. R.R., 931 F.2d 534, 538-39 (9th Cir. 1990); Moore v. Bechtel Power Corp., 840 F.2d 634, 636-37 (9th Cir. 1988). In those cases where the challenged conduct of the employer is the discharge of the employee without just cause, the court may use the following definition of "just cause": "Just cause means a cause based on a reasonable ground and exercised in good faith." See Scott v. Anchor Motor Freight, 496 F.2d 276, 281 (6th Cir.), cert. denied, 419 U.S. 868 (1974). 13.02 LMRA ¤Ê301--DUTY OF FAIR REPRESENTATION--HYBRID CLAIM--DAMAGES If you find for the plaintiff [on plaintiff's claim], you must determine the plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. Damages means the amount of money that will reasonably and fairly compensate the plaintiff for any injury you find was [proximately] [legally] caused by the defendants. You should consider the following: [Here insert types of damages. See Instruction 7.02-- MEASURES OF TYPES OF DAMAGES] After you have determined the amount of damages, you must apportion them between the employer and the union. The employer is responsible only for damages that are caused by its breach of the collective bargaining agreement. The union is responsible only for any increase in damages that is caused by its breach of the duty of fair representation. Comment See Vaca v. Sipes, 386 U.S. 171 (1967); Bowen v. United States Postal Serv., 459 U.S. 212 (1983). Typically, the employer's liability covers the period from the time of the employer's action until the time when appropriate union handling of the employee's claim would have provided relief, while the union's liability generally covers the period from the time of the union's breach of its duty to the time the wrong is rectified through court action. See Bowen, 459 U.S. at 223-24. See Comments to Instructions 3.09 and 7.01 regarding causation. 14.00 ANTITRUST (15 U.S.C. ¤ 1, et seq.) Preliminary Comment These sources may be helpful: American Bar Association Antitrust Section, Sample Jury Instructions in Civil Antitrust Cases (A.B.A., Chicago, IL, 1990). This source contains instructions for Sherman Act ¤ 1 and ¤ 2 and antitrust patent instructions. Includes instructions on certain defenses and exemptions with appendix of sample special verdict interrogatories. 3 Devitt, Edward J., Federal Jury Practice and Instructions, Civil (4th ed., West Publishing Co., 1987), ch. 90, pp. 430-534, Antitrust--Private Action for Treble Damages. Fifth Circuit District Judges Association, Pattern Jury Instructions (Civil Cases) (West Publishing Co., 1992), Instructions 6.1 and 6.2, pp. 65-75. Instruction 6.1 deals with Sherman Act ¤ 1, price fixing, including alternative "Rule of Reason" instruction. Instruction 6.2 deals with tying agreements-- defense and justification. Eleventh Circuit District Judges Association, Pattern Jury Instructions (West Publishing Co., 1990), Federal Claims Instructions 1.1 and 1.2, pp. 21-32. Instruction 1.1 covers conspiracy to fix prices and includes an alternative "Rule of Reason" instruction. Instruction 1.2 covers tying agreements. 3 Sand, Leonard B, Modern Federal Jury Instructions (Matthew Bender, 1984, 1992), ch.Ê79, ¦¦79.01 - 79.08, Restraint of Trade; ch. 80, ¦¦ 80.01 - 80.03, Monopolization; ch. 81, ¦¦ 81.01 -81.04, Patent Based Antitrust Claims. 15. TRADEMARK 15.00 PRELIMINARY INSTRUCTION--TRADEMARK The plaintiff, ______________, seeks damages against the defendant, _______________, for [trademark] [mark] infringement. The defendant [denies infringing the [trademark] [mark]] [and] [contends the [trademark] [mark] is invalid]. To help you understand the evidence that will be presented in this case, I will explain some of the legal terms you will hear during this trial. DEFINITION OF A [TRADEMARK] [MARK] A [trademark] [mark] is a word, a name, a symbol, a device, or a combination of them that indicates the source of goods or services. The [owner] [assignee] [licensee] of a [trademark] [mark] has the right to exclude others from using that [trademark] [mark]. [HOW A [TRADEMARK] [MARK] IS OBTAINED] A person acquires the right to exclude others from using a [trademark] [mark] by being the first to use it in the marketplace. Rights in a [trademark] [mark] are obtained only through commercial use of the mark. The owner of a [trademark] [mark] has the right to exclude others unless the [trademark] [mark] has been abandoned. [TRADEMARK INTERESTS] [The owner of a [trademark] [mark] may transfer, give or sell to another person the owner's interest in the [trademark] [mark]. This type of [agreement] [gift] is called an assignment, and the person who receives the owner's interest is called an assignee. An assignee has the right to exclude others from using the [trademark] [mark]. To be enforceable, the assignment must be in writing and signed. It must also include the goodwill of the business connected with the mark.] [The owner of a [trademark] [mark] may also enter into an agreement that permits another person to use the [trademark] [mark]. This type of agreement is called a license, and the person permitted to use the [trademark] [mark] is called a licensee.] A trademark [owner] [assignee] [licensee] may enforce the right to exclude others in an action for [infringement] [or] [insert applicable form of unfair competition from 15 U.S.C. ¤ 1125(a)]. [[TRADEMARK] [MARK] REGISTRATION] [Once the owner of a mark has obtained the right to exclude others from using the [trademark] [mark], the owner may obtain a certificate of registration issued by the United States Patent and Trademark Office. Thereafter, when the owner brings an action for infringement, the owner may rely solely on the registration certificate to prove that the owner has the right to exclude others from using the [trademark] [mark] in connection with the type of goods or services specified in the certificate.] THE PLAINTIFF'S BURDEN OF PROOF In this case, the plaintiff, ______________, contends that the defendant, ____________, has infringed plaintiff's [trademark] [mark]. The plaintiff has the burden of proving by a preponderance of the evidence that plaintiff is the owner of a valid [trademark] [mark] and that the defendant infringed that [trademark] [mark]. Preponderance of the evidence means that you must be persuaded by the evidence that it is more probably true than not true that the defendant infringed the plaintiff's [trademark] [mark]. [DEFENDANT'S BURDEN OF PROOF] [The defendant contends that [the registered [trademark] [mark] is [invalid] [,] [the [trademark] [mark] has been abandoned] [or] [insert other affirmative defense]. The defendant has the burden of proving by a preponderance of the evidence that [the registered [trademark] [mark] is [invalid] [,] [the [trademark] [mark] has been abandoned] [or] [insert other affirmative defense].] [Preponderance of the evidence means that you must be persuaded by the evidence that it is more probably true than not true that the [registered [trademark] [mark] is invalid] [or] [insert other affirmative defense].] Comment See generally 15 U.S.C. ¤Ê1051, et seq. This instruction is tailored to fit a classic trademark infringement case. If the case involves trade dress, trade name, or other unfair competition claims, this instruction will require modification. The statute now protects both actual and intended use of a trademark. 15 U.S.C. ¤Ê1051(b). In a case involving merely intended use of a trademark, these instructions must be tailored to fit the case. Throughout these instructions, wherever the term "mark" is used, the more specific terms "trademark," "service mark," or "collective mark" may be substituted as appropriate. A trademark infringement case can be brought under three different causes of action: (1) statutory trademark infringement, (2) common law trademark infringement, and (3) unfair competition. 15.01.01 DEFINITION OF MARKS--GENERALLY (15 U.S.C. ¤Ê1127) A mark is a word, name, symbol, or device or any combination thereof used to identify and distinguish goods or services and to indicate their source. [A mark used on or in the sale of goods is known as a trademark.] [A mark used in the sale of services is known as a service mark.] [A mark used by a collective group is known as a collective mark.] Comment Under the statute, mark is defined to include a certification mark as well. See Instructions 15.03.06-.07. 15.01.02 TRADEMARK INTERESTS--OWNER The law entitles the owner to exclude others from using a [trademark] [mark]. A person acquires the right to exclude others from using the [trademark] [mark] by being the first to use it in the marketplace. The owner of a [trademark] [mark] may enforce the right to exclude others in an action for [infringement] [or] [insert applicable form of unfair competition from 15 U.S.C. ¤Ê1125(a)]. Comment See La Societe Anonyme des Parfums LeGalion v. Jean Patou, Inc., 495 F.2d 1265, 1271-72 (2d Cir. 1974) (first user has enforceable right as long as he intends to continue exploiting the mark commercially); United Drug Co. v. Theodore Rectanus Co., 248 U.S. 90, 97 (1918) ("the right to a particular mark grows out of its use, not its mere adoption"); Pan Am. World Airways v. Panamerican Sch. of Travel, 648 F. Supp. 1026, 1030 (S.D.N.Y.), aff'd, 810 F.2d 1160 (2d Cir. 1986) (rights not dependent on registration, but on use, which must be continuous and deliberate). A licensor may also acquire ownership rights to a mark through a licensee's first use of the mark, even if the owner has never personally used the mark, as long as the licensor retains control over the nature and quality of the goods or services sold by the licensee. Turner v. HMH Publishing Co., 380 F.2d 224, 228 (5th Cir. 1967), cert. denied, 389 U.S. 1006 (1967). See 15 U.S.C. ¤Ê1055; seeÊalso Instruction 15.01.04. InÊsuch a case, this instruction should be revised accordingly. 15.01.03 TRADEMARK INTERESTS--ASSIGNEE (15 U.S.C. ¤Ê1060) The owner of a [trademark] [mark] may [transfer] [sell] [give] to another the owner's interest in the [trademark] [mark], that is, the right to exclude others from using the mark. This [transfer] [sale] [gift] is called an assignment, and the person to whom this right is [transferred] [sold] [given] is called an assignee. [The assignment must be in writing and signed.] To be enforceable, the assignment must include the goodwill of the business connected with the mark. An assignee may enforce this right to exclude others in an action for [infringement] [or] [insert applicable form of unfair competition from 15 U.S.C. ¤Ê1125(a)]. [Plaintiff is an assignee.] Comment E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1289 (9th Cir. 1992) ("The purpose behind requiring that goodwill accompany the assigned mark is to maintain the continuity of the product or service symbolized by the mark and thereby avoid deceiving or confusing customers.") Whether goodwill is transferred is a factual finding. Id. For transfer of goodwill requirement, see 1 J. Thomas McCarthy, Trademarks and Unfair Competition ¤Ê18:1B (2d ed. 1984). In a case brought under the Lanham Act, a signed writing is necessary for an assignment to be valid. 15 U.S.C. ¤Ê1060. A signed writing is not required to prove an assignment in a common law trademark infringement claim. McCarthy, supra, ¤Ê18:1D. 15.01.04 TRADEMARK INTERESTS--LICENSEE The owner of a [trademark] [mark] may enter into an agreement that permits another person to use the [trademark] [mark]. This type of agreement is called a license, and the person permitted to use the [trademark] [mark] is called a licensee. A license agreement may include the right to exclude others from using the [trademark] [mark]. A licensee may enforce this right to exclude others in an action for [infringement] [or] [insert applicable form of unfair competition from 15 U.S.C. ¤Ê1125(a)]. [Plaintiff is a licensee.] Comment Although assignments must be written under 15 U.S.C. ¤Ê1060, a license can be oral. The owner of a trademark may include the right to sue for trademark infringement in a license of trademark rights. The licensee's right to sue originates from the license and is governed by the terms of the licensing agreement. See DEP Corp. v. Interstate Cigar Co., 622 F.2d 621 (2d Cir. 1980) (Because the plaintiff was not the owner of the trademark, it did not have standing to sue under the Lanham Act. Furthermore, any interests the plaintiff had in the matter would be governed by the terms of the licensing agreement). See also Quabaug Rubber Co. v. Fabiano Shoe Co., 567 F.2d 154 (1st Cir. 1977) (the license granted the licensee "the right to enforce the licensed trademark rights against infringers in the United States"). 15.01.05 TRADEMARK INTERESTS--MERCHANT OR DISTRIBUTOR A [merchant] [distributor] may own a [trademark] [mark] that identifies products the [merchant] [distributor] sells even though the products are manufactured by someone else. Comment See Big O Tire Dealers v. Goodyear Tire & Rubber Co., 408 F. Supp. 1219 (D.ÊColo. 1976), modified on other grounds, 561 F.2d 1365 (10th Cir. 1977), cert. dismissed, 434 U.S. 1052 (1978). 15.02.01 INFRINGEMENT OF A MARK--GENERALLY (15 U.S.C. ¤Ê1114(1)) The [owner] [assignee] [licensee] may enforce the right to exclude others from using the [trademark] [mark] in an action for [trademark] [mark] infringement. Anyone who, without the consent of the [owner] [assignee] [licensee], uses a [trade mark] [mark] in connection with the sale of [goods] [services] in a manner likely to cause confusion as to the source of the [goods] [services] infringes that [trademark] [mark]. 15.02.02 FALSE DESIGNATION OF ORIGIN AND FALSE DESCRIPTION (15ÊU.S.C. ¤Ê1125(a)) Any person who makes commercial use of any [word] [term] [name] [symbol] [or combination thereof] [false or misleading [designation of origin] [description or representation of fact]]: [which is likely to cause confusion as to 1. [the origin of that person's goods or services] 2. [that person's affiliation, connection or association with another person] 3. [endorsement or approval of the goods or services by another person]] [, or] [which misrepresents in advertising the nature, characteristics, qualities, or geographic origin of [his] [her] [another person's] goods or services] is liable to any person who [is] [or] [is likely to be] damaged by the [false designation of origin] [or] [false description]. [A person may recover for false [designation of origin] [description] even though the person is not the [owner] [assignee] [licensee] of a [trademark] [mark] for the [word] [term] [name] [symbol] [or combination thereof] used by another person.] Comment See 1 Jerome Gilson, Trademark Protection and Practice ¤ 7.01 (1992) (Congress made it clear that a claimant under section 43(a), 15 U.S.C. ¤Ê1125(a), who did not own a federal registration would be entitled to the identical remedies now available to registrants); ¤Ê7.02[5] (section 43(a), 15 U.S.C. ¤Ê1125(a), does not mention need for plaintiff to own a valid federal registration); ¤ 7.02[8] (section 43(a), 15 U.S.C. ¤Ê1125(a), permits a "person" doing business anywhere, including outside the locality falsely described to pursue an action; person need only believe that there is a likelihood of being damaged by a false or misleading description or representation of fact). See also 2 J. Thomas McCarthy, Trademarks and Unfair Competition ¤Ê27:3 (2d ed. 1984) (one need not be the "owner" or "registrant" of a mark to have standing to assert an infringement claim under ¤ 43(a) of the Lanham Act). But see Halicki v. United Artists Communications, 812 F.2d 1213, 1214 (9th Cir. 1987) (section 43(a), 15 U.S.C. ¤Ê1125(a), is confined to injury to a competitor; movie producer had no standing to allege claim under ¤ 43(a), 15 U.S.C. ¤Ê1125(a), that movie theaters falsely advertised rating of movie); Smith v. Montoro, 648 F.2d 602, 605 (9th Cir. 1981) (to recover for violation under section 43(a), 15 U.S.C. ¤Ê1125(a), it is not necessary that mark be registered; party must have reasonable interest to be protected against false advertising) (citing New W. Corp. v. NYM Co. of California, 595 F.2d 1194, 1198 (9th Cir. 1979)). 15.03.01 - TRADEMARK REGISTRATION (15 U.S.C. ¤¤Ê1057, 1115) The owner of a [trademark] [mark] may obtain a certificate of registration issued by the United States Patent and Trademark Office and may rely on that certificate to prove the right to exclude others from using the [trademark] [mark]. 15.03.02 TRADEMARK--DEFINED (15 U.S.C. ¤Ê1127) A trademark is any [word] [name] [symbol] [device] [, or any combination thereof,] used by a person to identify and distinguish such person's goods from those of others, and to indicate the source of the goods[, even if that source is generally unknown]. A person who uses the trademark of another may be liable for damages. [ is a person as that term is used in these instructions.] Comment For definition of person, see Instruction 6.02. 15.03.03 SERVICE MARK--DEFINED (15 U.S.C. ¤Ê1127) A service mark is any [word] [name] [symbol] [device] [, or any combination thereof,] used by a person to identify and distinguish such person's services from those of others, and to indicate the source of the services [, even if that source is generally unknown]. [Titles, character names, and other distinctive features of radio or television programs may be registered as service marks even though the goods of sponsors are advertised.] A person who uses the service mark of another may be liable for damages. [ is a person as that term is used in these instructions.] Comment For definition of person, see Instruction 6.02. 15.03.04 COLLECTIVE TRADEMARK--DEFINED (15 U.S.C. ¤Ê1127) A collective trademark is any [word] [name] [symbol] [device] [, or any combination thereof,] used by [a cooperative] [an association] [, or other collective group or organization] to identify and distinguish its goods from those of others, and to indicate the source of the goods [, even if that source is generally unknown]. A person who uses the collective trademark of [a cooperative] [an association] [, or other collective group or organization] may be liable for damages. [ is a person as that term is used in these instructions.] Comment For definition of person, see Instruction 6.02. 15.03.05 COLLECTIVE SERVICE MARK--DEFINED (15 U.S.C. ¤Ê1127) A collective service mark is any [word] [name] [symbol] [device] [, or any combination thereof,] used by [a cooperative] [an association] [, or other collective group or organization] to identify and distinguish its services from those of others, and to indicate the source of the services [, even if that source is generally unknown]. A person who uses the collective service mark of [a cooperative] [an association] [, or other collective group or organization] may be liable for damages. [ is a person as that term is used in these instructions.] Comment For definition of person, see Instruction 6.02. 15.03.06 CERTIFICATION MARK--GOODS--DEFINED (15 U.S.C. ¤Ê1127) A certification mark is any [word] [name] [symbol] [device] [, or any combination thereof,] which its owner permits others to use to certify [a good's [origin] [material] [mode of manufacture] [quality] [accuracy] [fill in other certifiable characteristics]] [that the work or labor on the goods was performed by members of a union or other organization]. A person who uses a certification mark without the owner's permission may be liable for damages. [ is a person as that term is used in these instructions.] Comment For definition of person, see Instruction 6.02. 15.03.07 CERTIFICATION MARK--SERVICES--DEFINED (15 U.S.C. ¤Ê1127) A certification mark is any [word] [name] [symbol] [device] [, or any combination thereof,] which its owner permits others to use to certify [a service's [origin] [quality] [accuracy] [fill in other certifiable characteristics]] [that a service is performed by members of a union or other organization.] A person who uses the certification mark without the owner's permission may be liable for damages. [ is a person as that term is used in these instructions]. Comment For definition of person, see Instruction 6.02. 15.03.08 UNREGISTERED MARK--COMMON LAW Comment An instruction should be drafted according to the relevant state common law. The language of Instruction 15.03.02 draws on the Lanham Act language, which was drafted to reflect the common law of trademarks. Accordingly, Instruction 15.03.02 may be a good approximation of the common law in the given state. 15.03.09 TRADE DRESS--DEFINED (15 U.S.C. ¤Ê1125(a)) Trade dress is the non-functional physical detail and design of a product or its packaging, which [indicates] [or] [identifies] the product's source and distinguishes it from the products of others. Trade dress includes color schemes, textures, sizes, designs, shapes, and placements of words, graphics, and decorations on a product or its packaging. A trade dress is non-functional if, taken as a whole, the collection of trade dress elements [is not essential to the product's use] [or] [does not affect the cost or quality of the product] even though certain particular elements of the trade dress may be functional. A person who uses the trade dress of another may be liable for damages. [ is a person as that term is used in these instructions.] Comment 1 J. Thomas McCarthy, Trademarks and Unfair Competition ¤ 7:26 (2d ed. 1984). For definition of person, see Instruction 6.02. It is reversible error to fail to give an instruction defining non-functionality in a trade dress case. Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 842-43 (9th Cir. 1987). Inwood Lab. v. Ives Lab., 456 U.S. 844, 850 n.10 (1982) ("In general terms, a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article."); Vuitton Et Fils S.A. v. J. Young Enters., 644 F.2d 769, 774 (9th Cir. 1981) ("Functional features of a product are features `which constitute the actual benefit that the consumer wishes to purchase, as distinguished from an assurance that a particular entity made, sponsored, or endorsed a product.'" (quoting International Order of Job's Daughters v. Lindeburg & Co., 633 F.2d 912, 917 (9th Cir. 1980), cert. denied, 452 U.S. 941 (1981))). In some circuits, functionality is treated as an affirmative defense. See, e.g., Stormy Clime Ltd. v. ProGroup, Inc., 809 F.2d 971, 974 (2d Cir. 1987); Vaughan Mfg. Co. v. Brikam Int'l, 814 F.2d 346, 349 (7th Cir. 1987). "In this [Ninth] circuit, however, we have placed the burden of proof on the plaintiff." Rachel v. Banana Republic, Inc., 831 F.2d 1503, 1506 (9th Cir. 1987); accord Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 516 (9th Cir. 1989), cert. denied, 493 U.S. 872 (1989). Although this instruction treats the trade dress of a product, the cases suggest that services might also have a protectible trade dress. See Two Pesos, Inc. v. Taco Cabana, Inc., ___ U.S. ___, 112 S. Ct. 2753, 120 L. Ed. 2d 615 (1992); Fuddruckers, 826 F.2d 837. 15.03.10 TRADE NAME/COMMERCIAL NAME--DEFINED (15 U.S.C. ¤Ê1127) A [trade name] [commercial name] is any word or words used by a person to identify such person's [business] [vocation] [or] [occupation]. A [trade name] [commercial name] symbolizes the reputation of a person's [business] [vocation] [or] [occupation] as a whole. [By comparison, a [trademark] [mark] identifies a person's goods or services.] Any person who uses the [trade name] [commercial name] of another may be liable for damages. [ is a person as that term is used in these instructions.] Comment For burden of proof in a trade name case, use Instruction 15.04.04. Accuride Int'l v. Accuride Corp., 871 F.2d 1531, 1534-35 (9th Cir. 1989) ("Trade names symbolize the reputation of a business as a whole. In contrast, trademarks and service marks are designed to identify and distinguish a company's goods and services.... As a practical matter, courts are rarely called upon to distinguish between trade names, trademarks and service marks. Trade names often function as trademarks or service marks as well.... Perhaps because of this functional overlap, the same broad standards of protection apply to trademarks and trade names."). 15.04.01 INFRINGEMENT--REGISTERED TRADEMARK--ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê1114(1)) On plaintiff's claim for [trademark] [mark] infringement, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. [describe plaintiff's symbol or term] has been registered as a [trademark] [mark] on the principal register in the United States Patent and Trademark Office; 2. [plaintiff is the registrant of that [trademark] [mark];] [plaintiff is the [assignee] [licensee] of the registrant of that [trademark] [mark];] and 3. defendant used [describe symbol or term used by defendant] without the consent of the plaintiff [or registrant] in a manner that is likely to cause confusion among ordinary purchasers as to the source of the [goods] [services]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment The statute requires that the mark be either (1) used in commerce or (2) placed on goods intended to be used in commerce. 15 U.S.C. ¤Ê1114(1). Because the "commerce" requirement is jurisdictional, that element need not go to the jury. Use Instruction 15.04.07 for the factors to consider in assessing likelihood of confusion. For cases involving a licensee plaintiff, see Instruction 15.01.04. 15.04.02 INFRINGEMENT--UNREGISTERED (OR INVALIDLY REGISTERED) TRADEMARK--IDENTICAL MARK--ELEMENTS AND BURDEN OF PROOF On plaintiff's claim for [trademark] [mark] infringement, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. [plaintiff] [owner] began use of [describe symbol or term] on or about [insert date] as a [trademark] [mark] for [goods] [services]; 2. defendant began to use the mark after that date in an area where [plaintiff] [owner] was selling the [goods] [services]; 3. defendant's use of [describe symbol or term] was without the consent of the plaintiff [or the owner]; 4. [describe symbol or term] [is inherently distinctive] [or] [has acquired secondary meaning]; and 5. defendant's use of [describe symbol or term] is likely to cause confusion among ordinary purchasers as to the source of the [goods] [services]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment This instruction should be tailored to reflect the common law in the given state. See Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 517 (9th Cir.), cert. denied, 493 U.S. 872 (1989); Big O Tire Dealers v. Goodyear Tire & Rubber Co., 408 F.ÊSupp. 1219 (D. Colo. 1976), modified on other grounds, 561 F.2d 1365 (10th Cir. 1977), cert. dismissed, 434 U.S. 1052 (1978). Two Pesos, Inc. v. Taco Cabana, Inc., U.S. , 112 S. Ct. 2753, 2757, 120 L.ÊEd. 2d 615 (1992) ("[I]t is common ground that ¤Ê43(a) [15 U.S.C. ¤Ê1125(a)] protects qualifying unregistered trademarks and that the general principles qualifying a mark for registration ... are for the most part applicable in determining whether an unregistered mark is entitled to protection under ¤Ê43(a)."). The statute requires that the mark be either (1) used in commerce or (2) placed on goods intended to be used in commerce. 15 U.S.C. ¤Ê1114(1). Because the "commerce" requirement is jurisdictional, that element need not go to the jury. Use Instruction 15.04.08 for the definition of secondary meaning. Use Instruction 15.04.07 for the factors to consider in assessing the likelihood of confusion. If the defendant contends that the unregistered mark is invalid, proving validity becomes part of the plaintiff's burden. Use Instruction 15.05.02. 15.04.03 INFRINGEMENT--UNREGISTERED (OR INVALIDLY REGISTERED) TRADEMARK--SIMILAR MARK--ELEMENTS AND BURDEN OF PROOF On plaintiff's claim for [trademark] [mark] infringement, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. [plaintiff] [owner] began use of [describe plaintiff's symbol or term] no later than [insert date] as a [trademark] [mark] for [goods] [services]; 2. defendant began to use [describe defendant's symbol or term] after that date in an area where [plaintiff] [owner] was selling the [goods] [services]; 3. defendant's use of [describe defendant's symbol or term] was without the consent of the plaintiff [or the owner]; 4. [describe plaintiff's symbol or term] [is inherently distinctive] [or] [has acquired secondary meaning]; and 5. defendant's [trademark] [mark] [describe defendant's symbol or term] is so similar in [appearance] [sound] [meaning] to plaintiff's [trademark] [mark] that its use is likely to cause confusion among ordinary purchasers as to the source of [goods] [services]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment This instruction should be tailored to reflect the common law in the given state. Beer Nuts, Inc. v. Clover Club Foods Co., 805 F.2d 920, 926 (10th Cir. 1986). See Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 517 (9th Cir. 1989); Big O Tire & Rubber Co., 408 F. Supp. 1219, 189 U.S.P.Q. 17 (D. Colo. 1976), modified on other grounds, 561 F.2d 1365, 195 U.S.P.Q. 417 (10th Cir. 1977), cert. dismissed, 434 U.S. 1052 (1978). Two Pesos, Inc. v. Taco Cabana, Inc., U.S. , 112 S. Ct. 2753, 2757, 120 L. Ed. 615 (1992) ("[I]t is common ground that ¤Ê43(a) [15 U.S.C. ¤Ê1125(a)] protects qualifying unregistered trademarks and that the general principles qualifying a mark for registration ... are for the most part applicable in determining whether an unregistered mark is entitled to protection under ¤Ê43(a)."). The statute requires that the mark be either (1) used in commerce or (2) placed on goods intended to be used in commerce. 15 U.S.C. ¤Ê1114(1)(a)-(b). Because the "commerce" requirement is jurisdictional, that element need not go to the jury. Use Instruction 15.04.08 for the definition of secondary meaning. Use Instruction 15.04.07 for the factors to consider in assessing the likelihood of confusion. If the defendant contends that the unregistered mark is invalid, proving validity becomes part of the plaintiff's burden. Use Instruction 15.05.02. 15.04.04 UNFAIR COMPETITION--LIKELIHOOD OF CONFUSION-- WORD OR DEVICE--ELEMENTS AND BURDEN OF PROOF (15ÊU.S.C. ¤Ê1125(a)(1)) On plaintiff's claim for unfair competition, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. defendant used [describe symbol or term] [on] [or] [in connection with] [goods] [services] [or] [a container for goods]; 2. the use of [describe symbol or term] is likely to [cause confusion] [or] [cause mistake] [deceive] as to [the origin of the defendant's [goods] [services];] [the [affiliation] [connection] [association] of the defendant with another person;] [the [sponsorship] [approval] of the defendant's [goods] [services] [commercial activities] by another person;] and 3. plaintiff was [or is likely to be] damaged by the actions of defendant. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Congress has stated that a person "shall be liable in a civil action by any person who believes that he or she ... is likely to be damaged." 15 U.S.C. ¤Ê1125(a)(1). It is not clear whether the quoted language refers to injunctive relief or to monetary damages. Accuride Int'l v. Accuride Corp., 871 F.2d 1531, 1534-35 (9th Cir. 1989) ("Trade names symbolize the reputation of a business as a whole. In contrast, trademarks and service marks are designed to identify and distinguish a company's goods and services.... As a practical matter, courts are rarely called upon to distinguish between trade names, trademarks and service marks. Trade names often function as trademarks or service marks as well.... Perhaps because of this functional overlap, the same broad standards of protection apply to trademarks and trade names.") In order to obtain relief under Section 1125(a) for trade names or unregistered trademarks, plaintiff may be required to make additional showings of distinctiveness or secondary meaning. See Two Pesos, Inc. v. Taco Cabana, Inc., ___ U.S. ___, 112 S. Ct. 2753, 2757, 120ÊL.ÊEd. 2d 615 (1992). Use Instruction 15.04.07 for the factors to consider in assessing likelihood of confusion. 15.04.05 UNFAIR COMPETITION--TRADE DRESS INFRINGEMENT-- ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê1125(a)) On plaintiff's claim for trade dress infringement, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. [plaintiff] [owner] began to use [describe plaintiff's trade dress] no later than [insert date] as a trade dress for [goods] [services]; 2. defendant began to use [describe defendant's trade dress] after that date in an area where [plaintiff] [owner] was selling the [goods] [services]; 3. defendant's use of its trade dress was without the consent of the plaintiff [or the owner]; 4. plaintiff's trade dress is non-functional; 5. plaintiff's trade dress [is inherently distinctive] [or] [has acquired secondary meaning]; and 6. defendant's trade dress is likely to cause confusion among ordinary purchasers as to the source of plaintiff's and defendant's [goods] [services]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment It is reversible error to fail to give an instruction defining non-functionality in a trade dress case. Fuddruckers, Inc. v. Doc's B.R. Others, Inc., 826 F.2d 837, 842-43 (9th Cir. 1987). Non- functionality is defined in Instruction 15.03.09. Two Pesos, Inc. v. Taco Cabana, Inc., U.S. , 112 S. Ct. 2753, 2761, 120 L.ÊEd. 2d 615 (1992) "[P]roof of secondary meaning is not required ... where the trade dress at issue is inherently distinctive ...."). Use Instruction 15.04.07 (tailored to fit a trade dress case) for the factors to consider in assessing likelihood of confusion. 15.04.06 UNFAIR COMPETITION--LIKELIHOOD OF CONFUSION--FALSE OR MISLEADING REPRESENTATIONS--ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê1125(a)(1)) On plaintiff's claim for unfair competition, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. defendant used in commerce a [false designation of origin] [false description of fact] [misleading description of fact] [false representation of fact] [misleading representation of fact] [on] [or] [in connection with] any [goods] [services] [or] [container for goods]; 2. the use of the [false designation of origin] [false description of fact] [misleading description of fact] [false representation of fact] [misleading representation of fact] is likely to [cause confusion] [or] [cause a mistake] [deceive] as to [the origin of the defendant's [goods] [services];] [the [affiliation] [connection] [association] of the defendant with another person;] [the [sponsorship] [approval] of the defendant's [goods] [services] [commercial activities] by another person;] and 3. plaintiff was [or is likely to be] damaged by the actions of defendant. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Congress has stated that a person "shall be liable in a civil action by any person who believes that he or she ... is likely to be damaged." 15 U.S.C. ¤Ê1125(a)(1). It is not clear whether the quoted language refers to injunctive relief or to monetary damages. Inwood Lab. v. Ives Lab., 456 U.S. 844, 858 (1982) (Section 1125(a) "prohibits a broader range of practices than does [Section 1114]."). Use Instruction 15.04.07 for the factors to consider in assessing likelihood of confusion. 15.04.07 LIKELIHOOD OF CONFUSION--FACTORS (15 U.S.C. ¤¤Ê1114(1), 1125(a)(1)) You may consider the following factors in determining whether the use of the [trademark] [mark] by the defendant is likely to cause confusion concerning the source of the plaintiff's or the defendant's [goods] [services]: 1. whether the plaintiff's [trademark] [mark] is strong or weak depending on its distinctiveness or public recognition. 2. whether the defendant has used the plaintiff's [trademark] [mark] on the [same] [or] [related] [goods] [or] [services]. 3. whether the [trademark] [mark] used by the defendant is similar to the defendant's [trademark] [mark] in [appearance] [sound] [or] [meaning]. 4. whether the evidence shows the use by the defendant of the plaintiff's [trademark] [mark] has led to actual confusion. 5. whether the evidence shows that the defendant knowingly adopted the plaintiff's [trademark] [mark] to identify similar [goods] [services]. [6.] [whether the [goods] [services] of the plaintiff and the defendant are likely to be sold in the same or similar stores or outlets.] [7.] [whether the [goods] [services] sold by the plaintiff and the defendant [are expensive] [or] [whether the consumers of such [goods] [services] have expertise in the field].] [8.] [whether the plaintiff is [expanding] [diversifying] [his] [her] [its] product lines to compete with others providing the [same] [or] [related] [goods] [or] [services].] [9.] any other factors that bear on likelihood of confusion. Comment The Ninth Circuit has set forth a variety of tests for determining the likelihood of confusion. Academy of Motion Picture Arts and Sciences v. Creative House Promotions, 944 F.2d 1446, 1454 n.3 (9th Cir. 1991); compare J.B. Williams Co. v. Le Conte Cosmetics, 523 F.2d 187 (9th Cir. 1975), cert. denied, 424 U.S. 913 (1976) (six-factor test), Century 21 Real Estate v. Sandlin, 846 F.2d 1175, 1179 (9th Cir. 1988) (six-factor test), with Rodeo Collection, Ltd. v. West Seventh, 812 F.2d 1215, 1217 (9th Cir. 1987) (five-factor test) with AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979) (eight-factor test). The Ninth Circuit has reaffirmed the continuing validity of AMF in noting that subsequent cases were not intended to negate any of the AMF factors. See Accuride Int'l v. Accuride Corp., 871 F.2d 1531, 1533 & n.1 (9th Cir. 1989); E. & J. Gallo Winery v. Gallo Cattle Co., 967 F.2d 1280, 1290-91 (9th Cir. 1992) (AMF's "list of factors, while perhaps exhausting, is neither exhaustive nor exclusive. Rather, the factors are intended to guide the court in assessing the basic question of likelihood of confusion. The presence or absence of a particular factor does not necessarily drive the determination of a likelihood of confusion." (footnote and citation omitted)). Use numbered paragraphs 1-5 for elements of the Ninth Circuit's five-factor test. For the Ninth Circuit's six-factor test, use numbered paragraphs 1-6. Use numbered paragraphs 1-8 for the Ninth Circuit's eight-factor test. Because these lists are "neither exhaustive nor exclusive," Gallo, 967 F.2d at 1290, the ninth element has been included. 15.04.08 SECONDARY MEANING--PLAINTIFF'S BURDEN OF PROOF A [symbol] [term] that is not inherently distinctive is entitled to legal protection only if the [symbol] [term] acquires a secondary meaning that distinguishes the [goods] [services] it represents from the [goods] [services] of another [manufacturer] [merchant] [service provider]. A [symbol] [term] acquires a secondary meaning when it has been used in such a way that its primary significance in the minds of the prospective purchasers is not the [product] [service] itself, but the identification of the [product] [service] with a single source. You may consider the following when you determine whether [describe symbol or term] has achieved a secondary meaning: 1. whether the people who purchase the [product] [service] that bears the claimed [trademark] [mark] associate the [trademark] [mark] with the [owner] [assignee] [licensee]; 2. to what degree and in what manner the [owner] [assignee] [licensee] may have advertised under the claimed [trademark] [mark]; 3. whether the [owner] [assignee] [licensee] successfully used this [trademark] [mark] to increase the sales of its [product] [service]; 4. the length of time and manner in which the [owner] [assignee] [licensee] used the claimed [trademark] [mark]; 5. whether the [owner's] [assignee's] [licensee's] use of the claimed [trademark] [mark] was exclusive; 6. whether the defendant intentionally copied the [owner's] [assignee's] [licensee's] [trademark] [mark]; and 7. any other factors that bear on secondary meaning. The plaintiff has the burden of proving secondary meaning. The mere fact that the plaintiff is using [describe symbol or term], or that the plaintiff began using it before the defendant, does not mean that the [trademark] [mark] has obtained secondary meaning. There is no particular length of time that a [trademark] [mark] must be used before it obtains a secondary meaning. Comment See 1 Jerome Gilson, Trademark Protection and Practice ¤ 2.09 (1992) (discussing the concept of secondary meaning); Clamp Mfg. Co. v. Enco Mfg. Co., 870 F.2d 512, 517 (9th Cir. 1989) (evidence of use and advertising over a substantial period of time is sufficient to establish secondary meaning); Transgo, Inc. v. AJAC Transmission Parts Corp., 768 F.2d 1001, 1015 (9th Cir. 1985), cert. denied, 474 U.S. 1059 (1986) (discussing factors to be considered in determining whether a secondary meaning has been achieved). 15.04.09 UNFAIR COMPETITION--MISREPRESENTATION BY WORD OR DEVICE--ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê1125(a)(2)) On plaintiff's claim for unfair competition, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. defendant used [describe symbol or term] [on] [or] [in connection with] [goods] [services] [or] [container for goods] in a commercial [advertisement] [promotion]; 2. the use of [describe symbol or term] misrepresented the [nature, characteristics, qualities] [geographic origin] of [defendant's] [or] [another person's] [goods] [services] [or] [commercial activities]; and 3. plaintiff was [or is likely to be] damaged by the misrepresentation. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Congress has stated that a person "shall be liable in a civil action by any person who believes that he or she ... is likely to be damaged." 15 U.S.C. ¤Ê1125(a)(2). It is not clear whether the quoted language refers to injunctive relief or to monetary damages. 15.04.10 UNFAIR COMPETITION--FALSE ADVERTISING--ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê1125(a)(2)) On plaintiff's claim for unfair competition, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. defendant made a [false designation of origin] [false description of fact] [misleading description of fact] [false representation of fact] [misleading representation of fact] [on] [or] [in connection with] any [goods] [services] [or] [container for goods] in a commercial [advertisement] [promotion]; 2. the use of the [false designation of origin] [false description of fact] [misleading description of fact] [false representation of fact] [misleading representation of fact] misrepresented the [nature, characteristics, qualities] [geographic origin] of [defendant's] [or] [another person's] [goods] [services] [or] [commercial activities]; and 3. plaintiff was [or is likely to be] damaged by the misrepresentation. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Congress has stated that a person "shall be liable in a civil action by any person who believes that he or she ... is likely to be damaged." 15 U.S.C. ¤Ê1125(a)(2). It is not clear whether the quoted language refers to injunctive relief or to monetary damages. 15.04.11 INDUCING INFRINGEMENT--ELEMENTS AND BURDEN OF PROOF A person is liable for [trademark] [mark] infringement by another if the person intentionally induced another to infringe the [trademark] [mark]. The plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. [direct infringer] infringed the plaintiff's [trademark] [mark]; and 2. defendant intentionally induced [direct infringer] to infringe plaintiff's [trademark] [mark]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Inwood Lab. v. Ives Lab., 456 U.S. 844, 853-54 (1982) ("[I]f a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer is contributorily responsible for any harm done as a result of the deceit [by the direct infringer]."); Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1382 (9th Cir. 1984) (Liability for trademark infringement may extend beyond those who actually perform the acts of infringement. One who intentionally induces another to infringe a trademark or supplies, knowing or having reason to know the materials supplied will be used to infringe a trademark, is contributorily liable for trademark infringement.). 15.04.12 CONTRIBUTORY INFRINGEMENT--ELEMENTS AND BURDEN OF PROOF A person is liable for [trademark] [mark] infringement by another if the person [sells] [supplies] goods to another knowing or having reason to know that the other person will use the goods to infringe the plaintiff's [trademark] [mark]. The plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the defendant [sold] [supplied] goods to [insert name of direct infringer]; 2. [insert name of direct infringer] used the goods defendant [sold] [supplied] to infringe plaintiff's [trademark] [mark]; and 3. defendant knew or should have known [insert name of direct infringer] would use the goods to infringe plaintiff's [trademark] [mark]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Inwood Lab. v. Ives Lab., 456 U.S. 844, 853-54 (1982) ("[I]f a manufacturer or distributor intentionally induces another to infringe a trademark, or if it continues to supply its product to one whom it knows or has reason to know is engaging in trademark infringement, the manufacturer is contributorily responsible for any harm done as a result of the deceit [by the direct infringer]."); Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1382 (9th Cir. 1984) (Liability for trademark infringement may extend beyond those who actually perform the acts of infringement. One who intentionally induces another to infringe a trademark or supplies, knowing or having reason to know the materials supplies will be used to infringe a trademark, is contributorily liable for trademark infringement.) Mini Maid Servs. Co. v. Maid Brigade Sys., 967 F.2d 1516, 1521 (11th Cir. 1992) (Although Inwood Laboratories involved relationship between manufacturers and retailers, its analysis is equally applicable to relationship between franchisor and franchisees.) Hard Rock Cafe Licensing Corp. v. Concession Servs., 955 F.2d 1143, 1148 (7th Cir. 1992) ("[I]t is not clear how the doctrine applies to people who do not actually manufacture or distribute the good that is ultimately palmed off as made by someone else. A temporary help service, for example, might not be liable if it furnished ... the workers [the direct infringer] employed to erect his stand, even if the help service knew that [the direct infringer] would sell counterfeit goods."). 2ÊJ. Thomas McCarthy, Trademarks and Unfair Competition ¤ 25:2 (2d ed. 1984) (discussion of contributory infringement). 15.05.01 MARK INVALIDITY--REGISTERED TRADEMARK-- AFFIRMATIVE DEFENSE--DEFENDANT'S BURDEN OF PROOF It is a defense to an action for infringement that the plaintiff's registered [trademark] [mark] is invalid. A [trademark] [mark] is invalid if: [it [is] [has become] a generic [word] [or] [term]]; [it is a merely descriptive [word] [or] [term]]; [it is a deceptively misdescriptive [word] [or] [term]]; [it is a primarily geographically descriptive [word] [or] [term]]; [it is a deceptively misdescriptive geographical [word] [or] [term]]; [it is primarily a surname]. The defendant has the burden of proving invalidity of the [trademark] [mark] by a preponderance of the evidence. [Add appropriate concluding paragraph from Instructions 5.03, 5.04, or 5.05.] Comment Use this instruction for a registered mark. If the mark is unregistered, use Instruction 15.05.02. 15 U.S.C. ¤¤ 1115(b)(2) and 1064(3) (generic word or term can be canceled as a trademark). 15 U.S.C. ¤ 1052(e) (mark which is merely descriptive or deceptively misdescriptive cannot be registered on principal register). If the mark at issue has been registered on the Lanham Act Principal Register, the defendant has the burden of proving invalidity. Vuitton et Fils S.A. v. J. Young Enters., 644 F.2d 769, 775-76 (9th Cir. 1981) ("[U]nder the Lanham Act, registration and entry of a trademark on the Principal Register ... shifts the burden of proof from the plaintiff, who would have to establish his right to exclusive use in a common law infringement action, to the defendant who must introduce sufficient evidence to rebut the presumption of plaintiff's right to such protected use.... [T]he presumption of validity of a registered trademark [is] overcome by ... a preponderance of the evidence.... [T]he burden of proof [is] on the party asserting invalidity.") See 15 U.S.C. ¤ 1115(a) (registration is prima facie evidence of the validity of the mark, its registration, the registrant's ownership of the mark, and registrant's exclusive right to use the mark, subject to conditions or limitations stated in the certificate). See also 15 U.S.C. ¤1057(b); 15 U.S.C. ¤ 1072. 15.05.02 MARK INVALIDITY--UNREGISTERED TRADEMARK-- PLAINTIFF'S BURDEN OF PROOF The defendant contends that the plaintiff's [trademark] [mark] is invalid. A [trademark] [mark] is invalid if: [it [is] [has become] a generic [word] [or] [term]]; [it is a merely descriptive [word] [or] [term]]; [it is a deceptively misdescriptive [word] [or] [term]]; [it is a primarily geographically descriptive [word] [or] [term]]; [it is a deceptively misdescriptive geographical [word] [or] [term]]; [it is primarily a surname]. The plaintiff has the burden of proving the validity of the [trademark] [mark] by a preponderance of the evidence. Comment Use this instruction for an unregistered mark. If the mark is registered, use Instruction 15.05.01. If the mark at issue is simply a common law mark, the plaintiff has the burden of proving by a preponderance that it is valid. See Vuitton et Fils S.A. v. J. Young Enters., 644 F.2d 769, 775-76 (9th Cir. 1981). If defendant contends that plaintiff's mark is invalid, validity becomes an element of plaintiff's burden. See Instructions 15.04.02 and 15.04.03. 15.05.03 MARK INVALIDITY--GENERIC MARKS--DEFINITION No one may own trademark rights to a [word] [term] that is a generic name. A [word] [term] is generic if its [primary significance] [primary meaning] [principal significance] [principal meaning] to the prospective purchasers is the [product] [service] and not the [producer of the product] [provider of the service]. [[Words] [Terms] that originally are [trademarks] [marks] may, over time, be adopted by the public as the common name for the [product] [service] and become generic. If a [word] [term] becomes generic, the owner of the [trademark] [mark] cannot exclude others from using the [word] [term] or recover damages for the use. [Examples of words that have lost trademark protection because they became generic names of products they identified include "aspirin", "thermos" or "cellophane."]] Comment A generic name of a product can never function as a trademark to indicate origin. 1ÊJ.ÊThomas McCarthy, Trademarks and Unfair Competition ¤ 12:1 (2d ed. 1984). See also 1ÊJerome Gilson, Trademark Protection and Practice ¤ 2.02 (1992). Generic terms are not entitled to protection under the Lanham Act. 815 Tonawanda St. Corp. v. Fay's Drug Co., 842 F.2d 643, 647 (2d Cir. 1988). 15 U.S.C. ¤ 1064(3) ("The primary significance of the registered mark to the relevant public, rather than purchaser's motivation, shall be the test for determining whether the registered mark has become a generic name of goods... in connection with which it has been used."); see also 15 U.S.C. ¤ 1115(b)(4) (infringing defendant can successfully avoid liability if the mark is useful only to describe the product, that is, only useful as a generic description). Bayer Co. v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921) (the term "aspirin" lost its distinctive meaning identifying the Bayer company's particular product but came to be a generic description of the underlying drug.); DuPont Cellophane Co. v. Waxed Prods. Co., 85 F.2d 75 (2d Cir.) (public had come to identify all such plastic material by the term "cellophane," a term that was suggestive if not fanciful when first coined by the plaintiff), cert. denied, 299 U.S. 601 (1936); King- Seeley Thermos Co. v. Aladdin Indus., 321 F.2d 577, 579-81 (2d Cir. 1963) (the term "thermos" has become generic, a synonym for "vacuum-insulated"). Park 'N Fly, Inc. v. Dollar Park and Fly, Inc., 718 F.2d 327, 331 (9th Cir. 1983) (unless defendant shows evidence that to consuming public the primary significance of the challenged mark is to denote the good or service offered, and not the source of that good or service, it has failed to bring forth sufficient evidence to find the challenged mark is generic), rev'd on other grounds, 469 U.S. 189 (1985). 15.05.04 MARK INVALIDITY--LACK OF DISTINCTIVENESS--MERELY DESCRIPTIVE MARKS--DEFINITION An owner of a [trademark] [mark] may not exclude others from using a [word] [term] which is merely descriptive of [goods] [services] unless the [word] [term] has acquired a secondary meaning because the prospective purchasers have begun to consider the [trademark] [mark] as an indication of the source of the [goods] [services]. A [trademark] [mark] is merely descriptive if it is understood by prospective purchasers to describe only the [functions] [characteristics] [use] [or] [ingredients] of the [goods] [services]. Comment See Instruction 15.04.08 on secondary meaning. 15 U.S.C. ¤ 1052(e)(1) (cannot be registered). See generally 1 J. Thomas McCarthy, Trademarks and Unfair Competition ¤Ê11:18 (2d ed. 1984) (if the mark clearly does not tell the potential customer only what the goods are, their function, characteristics, use or ingredients, then the mark is not "merely descriptive"). In Re Entenmann's Inc., 15 U.S.P.Q. 2d 1750, 1751 (TMTAB 1990) (To be "merely descriptive" a term need not describe with absolute exactness an ingredient of the product. Thus, OATNUT on bread does not tell exactly what type of nut bread, but it is nonetheless descriptive since it informs buyers with the required degree of particularity of two important ingredients.). In Re Omaha Nat. Corp., 819 F.2d 1117, 1119 (Fed. Cir. 1987) (Descriptiveness is tested from the viewpoint of the average purchaser, which would also include professional business purchasers. If corporate users of banking services understand that "First Tier" describes a certain class of banks, then that term is descriptive even if consumers would not understand the term. Descriptiveness is not determined by its meaning only to the class of regular customers with the largest head count.) See Bada Co. v. Montgomery Ward & Co., 426 F.2d 8, 11-12 (9th Cir.) (test of descriptiveness of a word is its meaning to that class of buyers who are prospective purchasers; need of secondary meaning for valid mark which is merely descriptive), cert. denied, 400 U.S. 916 (1970). 15.05.05 MARK INVALIDITY--DECEPTIVELY MISDESCRIPTIVE MARKS-- DEFINITION An owner of a deceptively misdescriptive [trademark] [mark] may not exclude others from using it [unless it has acquired secondary meaning]. A [trademark] [mark] is deceptively misdescriptive if: 1. the [word] [term] does not accurately describe the character, quality, function, composition or use of the [goods] [services]; and 2. prospective purchasers are likely to believe the [word] [term] describes the [goods] [services] or their character, quality, function, composition, or use and the [word] [term] is likely to affect the decision to purchase the [goods] [services]. Comment Use Instruction 15.04.08 for the definition of secondary meaning. In re Budge Mfg. Co., 857 F.2d 773, 775 (Fed. Cir. 1988) (descriptive mark consisted of words that falsely suggest seat covers contained wool, that prospective purchasers were meant to believe the words were meant to be an accurate description, and presence of wool in seats would be a material factor to a consumer's purchase decision). See concurring opinion by Judge Nichols objecting to focus on "prospective purchasers" rather than a reasonable purchaser. Id. at 778-779. 15 U.S.C. ¤ 1052(e)(1) (deceptive mark cannot be registered). 15 U.S.C. ¤ 1052(f) (deceptively misdescriptive mark can be registered if mark has become distinctive). See generally 1 J. Thomas McCarthy, Trademarks and Unfair Competition ¤Ê11:19 (2d ed. 1984). 15.05.06 MARK UNENFORCEABILITY--ABANDONMENT--AFFIRMATIVE DEFENSE--DEFENDANT'S BURDEN OF PROOF (15 U.S.C. ¤ 1127) The [owner] [assignee] [licensee] of a [trademark] [mark] cannot exclude others from using the [trademark] [mark] if it has been abandoned. The defendant contends that the [trademark] [mark] has become unenforceable because the plaintiff abandoned it. The defendant has the burden of proving abandonment by [a preponderance of the] [clear and convincing] evidence. The [owner] [assignee] [licensee] of a [trademark] [mark] has abandoned the right to exclusive use of the [trademark] [mark] when the [owner] [assignee] [licensee] discontinues its use, intending not to resume using it. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment The defendant has the burden of proving abandonment. Where the defendant proves two consecutive years of non-use, the burden shifts to the plaintiff to go forward with evidence to prove that circumstances do not justify the inference of intent not to resume use. Exxon v. Humble Exploration Co., 695 F.2d 96, 99 (5th Cir. 1983). See 1ÊJ. Thomas McCarthy, Trademarks and Unfair Competition ¤ 18:15 (2d ed. 1984) (licensor will be deemed to have abandoned the trademark if the licensee is given uncontrolled or naked use of the trademark). The Ninth Circuit has not determined the standard of proof that must be met in proving abandonment. In Edwin K. Williams & Co. v. Edwin K. Williams & Co.-East, 542 F.2d 1053, 1059 (9th Cir. 1976), cert. denied, 433 U.S. 908 (1977), the court commented: "[A] person who asserts insufficient control must meet a high burden of proof." In Roulo v. Russ Berrie & Co., 886 F.2d 931, 938 (7th Cir. 1989), cert. denied, 493 U.S. 1075 (1990), the Seventh Circuit held that abandonment of a trade dress was a separate affirmative defense on which the defendant had the burden of proof by a preponderance of the evidence. See Cerveceria Centroamericana, S.A. v. Cerveceria India, Inc., 892 F.2d 1021, 1023 (Fed. Cir. 1989) (in a cancellation proceeding, abandonment must be proven by a preponderance of the evidence). But see 1 McCarthy, supra, ¤ 17:3 (abandonment must be proved by clear and convincing evidence). 15.05.07 CONTINUOUS PRIOR USE WITHIN REMOTE GEOGRAPHIC AREA--AFFIRMATIVE DEFENSES (15 U.S.C. ¤Ê1115(b)(5)) An owner of a registered [trademark] [mark] may not exclude others who began using [that] [a confusingly similar] [trademark] [mark] in a geographic area, without knowledge of the owner's prior use of [the] [a similar] [trademark] [mark] elsewhere, and before the owner had [applied for registration of the] [registered the] [published the registered] [trademark] [mark]. The defendant contends that defendant has the right to use the [trademark] [mark] within the [specify geographic region] area. The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the [defendant] [defendant's assignor] [defendant's licensor] continuously used the [trademark] [mark], without interruption, in [insert geographic region where defendant claims prior use]; 2. the [defendant] [defendant's assignor] [defendant's licensor] began using the [trademark] [mark] without knowledge of the plaintiff's prior use elsewhere; and 3. the defendant used the [trademark] [mark] before the plaintiff [applied for registration of the] [registered the] [published the registered] [trademark] [mark]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Defendant has the burden of pleading and proving the elements of this defense. Philip Morris, Inc. v. Imperial Tobacco Co., 251 F. Supp. 362, 379 (E.D. Va. 1965), aff'd, 401 F.2d 179 (4th Cir. 1968), cert. denied, 393 U.S. 1094 (1969); 2ÊJ. Thomas McCarthy, Trademarks and Unfair Competition ¤Ê26.18 (2d ed. 1984). "Continuous" means lack of interruption. Casual Corner Assocs. v. Casual Stores of Nevada, 493 F.2d 709, 712 (9th Cir. 1974). The dimensions of the geographic area are a question of fact, determined in terms of the relevant zones of sales, advertising, and reputation as of the date of plaintiff's registration. Consolidated Freightways Corp. v. Consolidated Forwarding, 156 U.S.P.Q. 99 (N.D. Ill. 1967); McCarthy, supra, ¤Ê26:18 at 327. 15.06.01 TRADEMARK DAMAGES--ACTUAL OR STATUTORY NOTICE (15ÊU.S.C. ¤ 1111) In order for plaintiff to recover damages, the plaintiff has the burden of proving by a preponderance of the evidence that defendant had either statutory or actual notice that plaintiff's [trademark] [mark] was registered. Defendant had statutory notice if: [1. plaintiff displayed with the [trademark] [mark] the words "Registered in U.S. Patent and Trademark Office"] [or] [2. plaintiff displayed with the [trademark] [mark] the words "Reg. U.S. Pat. & Tm. Off."] [or] [3. plaintiff displayed the [trademark] [mark] with the letter R enclosed within a circle, thus ¨]. 15.06.02 TRADEMARK DAMAGES--ACTUAL DAMAGES (15 U.S.C. ¤ 1117(a)) If you find for plaintiff on plaintiff's [infringement] [unfair competition] claim [and find that the defendant had statutory notice or actual notice of the plaintiff's registered [trademark] [mark]], you must determine plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. Damages means the amount of money which will reasonably and fairly compensate the plaintiff for any [injury] [and] [or] [property damage] you find was [proximately] [legally] caused by the defendant's infringement of the plaintiff's registered [trademark] [mark]. You should consider the following: [the [injury to] [loss of] the plaintiff's reputation] [the [injury to] [loss of] plaintiff's goodwill, including injury to the plaintiff's general business reputation] [the loss of plaintiff's sales as a result of the defendant's infringement] [the loss of plaintiff's profits] [the expense of preventing customers from being deceived] [the cost of future advertising which is reasonably required to correct any public confusion caused by the infringement] [any other factors that bear on plaintiff's actual damages]. Comment 2 J. Thomas McCarthy, Trademarks and Unfair Competition ¤ 30:27 (2d ed. 1984) (discussing recovery of plaintiff's actual damages). 1a Jerome Gilson, Trademark Protection and Practice ¤ 8.08[2] (1992) (listing examples of recoverable damages). Thelen Oil Co. v. Fina Oil & Chem. Co., 962 F.2d 821 (8th Cir. 1992) (trademark owner entitled to infringer's profits, costs of the action, and whatever additional damages trademark owner can prove resulted from infringer's misuse of trademark). Defendant may argue that plaintiff's loss in sales may be caused by other market factors and not as a result of defendant's infringement. If defendant makes such an argument, an appropriate instruction should be drafted. See Instructions 7.02, 7.03, and 7.04. 15.06.03 TRADEMARK DAMAGES--PROFITS (15 U.S.C. ¤ 1117(a)) In addition to actual damages, the plaintiff is entitled to any profits earned by the defendant that are attributable to the infringement. You may not, however, include in any award of profits any amount that you took into account in determining actual damages. Profit is determined by deducting all expenses from gross revenue. Gross revenue is all of defendant's receipts from using the [trademark] [mark] in the sale of a [product] [service]. The plaintiff has the burden of proving a defendant's gross revenue by a preponderance of the evidence. Expenses are all [operating] [overhead] and production costs incurred in producing the gross revenue. The defendant has the burden of proving the expenses [and the portion of the profit attributable to factors other than use of the infringed [trademark] [mark]] by a preponderance of the evidence. Unless you find that a portion of the profit from the sale of the [goods] [services] using the [trademark] [mark] is attributable to factors other than use of the [trademark] [mark], you shall find that the total profit is attributable to the infringement. Comment "[C]ourts have not awarded both damages based upon plaintiff's lost sales and defendant's profits attributable to sales under the infringing mark.... Recovery of both would be an inappropriate double recovery ... as recovery of the infringer's profits in all likelihood will compensate for the sales the plaintiff has lost." 1a Jerome Gilson, Trademark Protection and Practice ¤Ê8.08[2] (1992). Century Distilling Co. v. Continental Distilling Corp., 205 F.2d 140, 148-49 (3d Cir.) (trademark owner not permitted double recovery by an award of profits and an assessment of damages for lost sales), cert. denied, 346 U.S. 900 (1953). See also Borg-Warner Co. v. York- Shipley, Inc., 293 F.2d 88, 95 (7th Cir.) (discussing and analyzing calculation of damages), cert. denied, 368 U.S. 939 (1961). Louis Vuitton S.A. v. Spencer Handbags Corp., 765 F.2d 966, 973 (2d Cir. 1985) (defendant's own statements as to profits provided sufficient basis for calculation of defendant's profits under 15 U.S.C. ¤ 1117(a)). Polo Fashions, Inc. v. Dick Bruhn, Inc., 793 F.2d 1132, 1135 (9th Cir. 1986) (court awarded receipts from sales pursuant to 15 U.S.C. ¤ 1117(a)). American Honda Motor Co. v. Two Wheel Corp., 918 F.2d 1060, 1063 (2d Cir. 1990) (plaintiff entitled to amount of gross sales unless defendant adequately proves amount of costs to be deducted from it). Texas Pig Stands, Inc. v. Hard Rock Cafe Int'l, 951 F.2d 684, 694 (5th Cir. 1992) ("[T]he trial court has wide discretion to increase or reduce the amount of profits recoverable by the plaintiff `[i]f the court shall find that the amount of recovery based on profits is either inadequate or excessive ... according to the circumstances of the case.'" (quoting 15 U.S.C. ¤Ê1117(a))). 2 J. Thomas McCarthy, Trademarks and Unfair Competition ¤ 30:26 (2d ed. 1984) (discussing computation of defendant's profits from infringing sales). Some courts hold that an award based on defendant's profits requires proof that the defendant acted willfully or in bad faith. See, e.g., ALPO Petfoods v. Ralston Purina Co., 913 F.2d 958, 968 (D.C. Cir. 1990); Foxtrap, Inc. v. Foxtrap, Inc., 671 F.2d 636, 641 (D.C. Cir. 1982); Frisch's Restaurants v. Elby's Big Boy of Steubenville, Ohio, 849 F.2d 1012, 1015 (6th Cir. 1988); Maier Brewing Co. v. Fleischmann Distilling Corp., 390 F.2d 117, 123 (9th Cir.), cert. denied, 391 U.S. 966 (1968). Gilson, supra, ¤ 8.08[3] (listing examples of costs and deductions that defendant may show). The defendant may also raise a defense that the purchasers bought goods bearing the infringing mark for reasons other than the appeal of the mark, and that the infringement had no cash value in sales made by the defendant. Id. If such a defense is raised, an appropriate instruction should be drafted. 15.06.04 TRADEMARK DAMAGES--INTENTIONAL INFRINGEMENT (15ÊU.S.C. ¤Ê1117(b)) If you find that the defendant infringed the plaintiff's [trademark] [mark], you must also determine whether the defendant used the [trademark] [mark] intentionally, knowing it was an infringement. [You will answer this question on the special interrogatory form.] Comment It is not clear whether this question, or the question of extenuating circumstances, must be submitted to the jury. 15 U.S.C. ¤Ê1117(b). Any award of treble damages depends on these findings. Id. In the area of patent infringement, there is some authority for submitting the issue of willfulness to the jury. See Shiley, Inc. v. Bentley Lab., 794 F.2d 1561, 1568 (Fed. Cir. 1986) (applying 35 U.S.C. ¤Ê284), cert denied, 479 U.S. 1087 (1987). See Instruction 16.04.07. Hard Rock Cafe Licensing Corp. v. Concession Servs., 955 F.2d 1143, 1149 (7th Cir. 1992) (to be willfully blind, a person must suspect wrongdoing and deliberately fail to investigate); Chanel, Inc. v. Italian Activewear of Florida, 931 F.2d 1472, 1476 (11th Cir. 1991) (willful blindness could provide requisite intent or bad faith; determination of willful blindness depends on the circumstances and will generally be a question of fact for the factfinder after trial); VMG Enters. v. F. Quesada & Franco, Inc., 788 F. Supp. 648, 662 (D. Puerto Rico 1992) (treble damages granted when defendant's infringing actions are deemed to have been made "knowingly and willfully"); Polo Fashions v. Rabanne, 661 F. Supp. 89, 98 (S.D. Fla. 1986) (in absence of extenuating circumstances, profits are to be trebled where counterfeiting is intentional and knowing). A court may enter judgment for a damage award under 15 U.S.C. ¤ 1117(a) upon a finding of willfulness as well. Sealy, Inc. v. Easy Living, Inc., 743 F.2d 1378, 1384 (9th Cir. 1984) (district court found that conduct constituted willful and deliberate, bad faith infringement of plaintiff's trademarks that was intended to and in fact did result in deception of the public); Friend v. H.A. Friend and Co., 416 F.2d 526, 534 (9th Cir. 1969) (defendant's acts must be willful and calculated to trade upon the plaintiff's goodwill); Gorenstein Enters. v. Quality Care-USA, Corp., 874 F.2d 431, 436 (7th Cir. 1989) (15 U.S.C. ¤ 1117(a) provisions regarding treble damages and reasonable attorney's fees are properly invoked when infringement is deliberate); Quaker State Oil Ref. Corp. v. Kooltone, Inc., 649 F.2d 94, 95 (2d Cir. 1981) (jury finding that infringement was deliberate and willful); Sun Prods. Group v. B & E Sales Co., 700 F. Supp. 366, 388 (E.D. Mich. 1988) (court in "exceptional cases" may award attorney fees to the prevailing party under 15 U.S.C. ¤ 1117(a); legislative history clearly suggests that "exceptional cases" would involve cases in which the infringement is malicious, fraudulent, willful, or deliberate). 16. PATENTS 16.00 PRELIMINARY JURY INSTRUCTION FOR PATENT CASES The plaintiff, , the owner of a patent, seeks damages against the defendant, , for patent infringement. The defendant denies infringing the patent and contends it is invalid. To help you understand the evidence that will be presented in this case, I will explain some of the legal terms you will hear during this trial. DEFINITION OF A PATENT A patent is a legal document issued by the United States to the inventor. The inventor, as the owner of the patent, has the right to exclude any other person from making, using, or selling the invention covered by the patent anywhere in the United States for 17 years from the date the patent was issued. An invention is a new, useful, and nonobvious process, machine, or product. An invention is also a new, useful, and nonobvious improvement of a process, machine, or product. [Not every invention can be patented. Before an invention can be patented certain conditions must be met.] [Inventions that involve processes, machines, manufactures, and compositions of matter, and any improvement thereof, can be patented.] [The invention must be new, useful, and, even though new, it must have been nonobvious at the time it was invented.] [Novelty and nonobviousness are judged against everything publicly known before the invention, as shown in earlier patents and other published material. This body of public knowledge is called "prior art."] [PATENT INTERESTS] [The patent owner may transfer, sell, or convey to another person the owner's property interest in the patent, that is, the right to exclude others from making, using, or selling the invention. The person to whom this right is transferred is called an assignee. One who owns a patent as patentee or assignee, having the right to exclude others from making, using, or selling what is claimed, may agree to let another do one or more of those acts. This is called a license, and the person allowed to do the set of acts is a licensee. A licensee does not possess any part of the patentee's right to exclude others unless it is a special form of license known as an exclusive license.] [HOW A PATENT IS OBTAINED] [The law makes a patent a kind of bargain between the inventor and the Government, who represents the public. The patent will be granted in exchange for a full disclosure of the invention. This is a further condition on the grant. The disclosure is made in an application for a patent filed in the Patent and Trademark Office, which keeps the application secret until the patent is issued. The application, in addition to some formal parts, contains a specification that describes the invention and explains what it is, how it works, and how to make or to use it to enable others to practice it. The specification concludes with one or more claims particularly pointing out what the applicant claims to have invented. The application also usually contains drawings which illustrate one or more devices containing the invention to aid one's understanding of the written description. The patent office examines the application in order to determine whether the claimed invention is new, useful, and nonobvious. The record before the patent examiners is called the prosecution history.] [THE SIGNIFICANCE OF CLAIMS] [The purpose of the examination of the application by the Patent and Trademark Office is not just to see that the description is adequate to understand the invention and to enable one to practice it, but also to see that what the application is claiming meets the conditions for patentability--that is, whether it is new, useful, and nonobvious in view of the prior art. Examination is also to assure that the claims are supported by the specification. These separate paragraphs at the end of the specification, called claims, are in fact definitions of what the patent covers--what its limits are--and the claims alone determine what is or is not an infringement of the patent. Claims have been compared to the description in a deed to land, which points out what the boundaries are. Within those boundaries, one who enters without permission of the owner is a trespasser. One who comes within the scope of a claim is comparable to a trespasser and is called an infringer. In law, patent infringement is a form of trespass.] [THE PATENT RIGHT AS PROPERTY] [The law says that "patents shall have the attributes of personal property." One such attribute is that they can be bought and sold. If an inventor makes an agreement with someone, an employer, for example, to sell his patent right and records an assignment in the Patent and Trademark Office before an application is issued as a patent, the Patent and Trademark Office will issue the patent directly to the assignee and it will own the patent. Otherwise it is issued to the applicant.] [THE PROSECUTION HISTORY] [In examining a patent application, an Examiner in the Patent and Trademark Office makes a search in the prior art to determine whether the invention as claimed is or is not new and nonobvious. The Examiner advises the applicant by an "Office Action" of what was found and whether the Examiner has "allowed" any claim. More often than not, the initial action is a rejection of all claims. The applicant then responds, sometimes amending claims or submitting new ones and this may go on for some time, even for several years, until the Examiner is satisfied. The papers built up in this procedure become the prosecution history. It may later be very important in determining just what the claims mean and what they cover--that is to say, what has been patented. All of this material becomes available to the public when the patent issues.] PLAINTIFF'S BURDEN OF PROOF In this case, the plaintiff, , contends that the defendant, , has infringed claims , , and of U.S. Patent . The plaintiff has the burden of proving by a preponderance of the evidence that the accused [product] [process] [apparatus] [composition] infringes one or more claims of the patent. Preponderance of the evidence means that you must be persuaded by the evidence that it is more probably true than not true that the claim[s] of the patent [was] [were] infringed. Based on the evidence submitted to you, you will be asked to find whether or not the accused [product] [process] [apparatus] [composition] infringes at least one of the claims of the patent. LIABILITY FOR INFRINGEMENT One who makes, uses, or sells a patented invention within the United States during the term of the patent, infringes the patent, unless licensed by the patentee. This is called direct infringement. A person may be a direct infringer without knowing about the patent or intending to infringe it. Each claim is treated as a separate patent. A patent is infringed if any claim is infringed. To determine infringement, you must look at the words of each claim separately. The words of the claim set out the requirements of the patented invention. To find infringement, you must find that each and every one of these requirements, usually called "elements" or "limitations," is found in the accused [product] [process] [apparatus] [composition] either exactly or by a substantial equivalent. [A patent may also be infringed by [actively inducing infringement] [and] [contributorily infringing].] [INDUCING INFRINGEMENT] [A person who purposely or intentionally persuades a direct infringer to make, use, or sell the invention without the patent owner's consent is liable for inducing patent infringement. No one can be liable for inducing patent infringement by another person, unless that other person directly infringes the patent.] [CONTRIBUTORY INFRINGEMENT] [A person who sells a material component of a patented invention, knowing that the component was especially made for use in an infringement of the patent and that the component is not a staple article of commerce, is liable for contributory infringement. A person cannot be liable for contributory infringement unless someone else directly infringes the patent.] [DEFENDANT'S BURDEN OF PROOF] [The defendant contends that the patent is invalid. A patent is presumed to be valid. The defendant has the burden of proving by clear and convincing evidence that the patent is invalid. The clear and convincing evidence standard is a heavier burden than the preponderance of the evidence standard. Clear and convincing evidence means that you must be persuaded by the evidence that it is highly probable that the asserted facts that would make the patent invalid are true. The defendant has this heavier burden because of the presumption that the United States Patent and Trademark Office issued a valid patent.] Comment See generally 35 U.S.C. ¤¤ 101-03, 111-12, 154, 261, 271-72, 282, 301-07. The committee recommends that this preliminary instruction be given after the jury has been sworn and before the attorneys' opening statements. It might be repeated before giving specific instructions at the end of the trial. The committee's suggested definition of "clear and convincing" evidence is based on Buildex Inc. v. Kason Indus., 849 F.2d 1461, 1463 (Fed. Cir. 1988). 16.01.01 INVENTION DEFINED (35 U.S.C. ¤¤Ê101, 103) [An invention is a new, useful, and nonobvious [product] [process] [apparatus] [composition].] [An invention is a new, useful, and nonobvious improvement of a [product] [process] [apparatus] [composition].] [A product is something which is produced by physical act or labor.] [A [process] [method] is a way to produce a specific result by an act or series of acts which change an object into a different state or thing.] [An apparatus is an appliance or device designed for a particular use and produced by physical act or labor.] [A composition is matter formed by the intermixture of two or more ingredients. A composition possesses new properties not found in these ingredients separately.] Comment As used in patent law, process and method are used interchangeably. See Comment to Instruction 16.05.05. Throughout these instructions, the committee has bracketed these terms so that the court may choose which term it prefers. 16.01.02 PATENT INTERESTS--OWNER (35 U.S.C. ¤¤Ê111-112) A patent is a property right granted by the United States. To obtain this right, the inventor must file a patent application and be granted a patent by the Patent and Trademark Office. The patent gives its owner the right to exclude others from making, using, or selling the invention anywhere in the United States for a 17-year period. The patent owner may enforce this right to exclude others in an action for patent infringement. Comment 35 U.S.C. ¤¤ 261, 281. 16.01.03 PATENT INTERESTS--ASSIGNEE (35 U.S.C. ¤Ê261) The patent owner may transfer, sell, or convey to another person all or part of the owner's property interest in the patent, that is, the right to exclude others from making, using, or selling the invention. The person to whom this right is transferred is called an assignee. An assignee may enforce this right to exclude others in an action for patent infringement. [The plaintiff is an assignee of the '_ _ _ patent.] [The plaintiff has the burden of proving by a preponderance of the evidence that the plaintiff is an assignee of the '_ _ _ patent.] Comment Calgon Corp. v. Nalco Chem. Co., 726 F. Supp. 983, 986 (D. Del. 1989) ("[T]he only transfers that qualify as an assignment are transfers of: (1) entire patent ...; (2) an undivided, fractional portion of all rights embraced by the ... patent (such as a 30% interest); or (3) all the rights embraced by [the] ... patent to any specified part of the United States." (citing Waterman v. Mackenzie, 138 U.S. 252, 255 (1891))). Carl Schenck, A.G. v. Nortron Corp., 713 F.2d 782, 784 (Fed. Cir. 1983) ("Patents and licenses are exemplifications of property rights."). Construction of patent license and assignment agreements is governed by state law. Lear, Inc. v. Adkins, 395 U.S. 653 (1969). 16.01.04 PATENT INTERESTS--EXCLUSIVE LICENSEE UNDISPUTED An exclusive licensee may bring an action for patent infringement. The plaintiff is an exclusive licensee. Comment Where the status of the plaintiff as an exclusive licensee is disputed, see Instruction 16.01.05. 16.01.05 PATENT INTERESTS--EXCLUSIVE LICENSEE DISPUTED (35 U.S.C. ¤Ê261) A patent owner may enter into an agreement that permits another person to make, use, or sell the patented invention for [a fixed period of time] [or] [specify other restriction]. This type of agreement is called a license. Such an agreement may also contain a promise that others, including the patent owner, will be excluded from making, using or selling the patented invention [within that period of time] [or] [specify other restriction]. This type of agreement is called an exclusive license. An exclusive licensee may bring an action for patent infringement against any person who makes, uses, or sells the invention [within the period of time covered by the agreement] [or] [specify other restriction]. Comment Spindelfabrik Suessen-Schurr v. Schubert & Salzer, 829 F.2d 1075, 1081 (Fed. Cir. 1987) ("A patent license agreement is in essence nothing more than a promise by the licensor not to sue the licensee."), cert. denied, 484 U.S. 1063 (1988); Sanofi, S.A. v. Med-Tech Veterinarian Prods., 565 F. Supp. 931, 936-37 (D.N.J. 1983) (exclusive license contains promise that others will be excluded). [A] transfer of (1) all rights under the patent, (2) an undivided (e.g., 30%) interest in the patent, or (3) all patent rights as to any specified part of the United States is an assignment. A "transfer" of fewer rights than these is a license and not an assignment. Waterman v. MacKenzie, 138 U.S. 252, 255 (1891). Various types of limitations or restrictions may be placed on the patent rights transferred. See, e.g., Atari Games Corp. v. Nintendo of Am., Inc., 897 F.2d 1572, 1578 (Fed. Cir. 1990) (restriction on quantity of units licensee may sell and restriction on export); Barr Rubber Prods. Co. v. Sun Rubber Co., 277 F. Supp. 484, 506 (S.D.N.Y. 1967), aff'd, 425 F.2d 1114 (2d Cir. 1970) (owner of a patent for method of casting plastic may license use of the process to make hobbyhorses). Dreamlite Holdings Ltd. v. Kraser, 705 F. Supp. 98, 101-102 (E.D.N.Y. 1988) (An exclusive licensee "could sue the patentee for infringement within the area of the license" where agreement with patentee conveyed, in part, "the exclusive right to defend and enforce the Patent and to prevent [its] infringement."). 16.02.01 INFRINGEMENT GENERALLY (35 U.S.C. ¤Ê271(a)) Anyone who, without the patent owner's permission, makes, uses or sells any [product] [process] [apparatus] [composition] defined by at least one valid claim of a patent before the patent expires, infringes that patent. The [product] [process] [apparatus] [composition] which allegedly infringes the plaintiff's patent is referred to as the "accused" [product] [process] [apparatus] [composition]. In deciding whether the plaintiff's patent has been infringed, you must determine whether the accused [product] [process] [apparatus] [composition] comes within any of the claims in the plaintiff's patent. This means that the combination of [steps] [elements] that are recited in a claim in the plaintiff's patent must also be found in the accused [product] [process] [apparatus] [composition]. In making this determination, you must consider each claim separately. [A patent is infringed if the accused [product] [process] [apparatus] [composition] contains every element of at least one claim of the patent. This type of infringement is called literal infringement.] [Even if there is no literal infringement, a patent is [also] infringed if the accused [product] [process] [apparatus] [composition] performs substantially the same (1) function in substantially the same (2) way to achieve substantially the same (3) [result] [qualities] as at least one claim of the patent. This type of infringement is called [infringement under the doctrine of equivalents].] Comment Read Corp. v. Portec, Inc., 970 F.2d 816, 822 & n.2 (Fed Cir. 1992) (discussing the doctrine of equivalents). Do not use the fourth paragraph unless plaintiff raises the claim of infringement under the doctrine of equivalents and presents evidence on all three elements of the doctrine: function, way (or means), and result. Lear Siegler, Inc. v. Sealy Mattress Co., 873 F.2d 1422, 1425 (Fed. Cir. 1989) ("The party asserting infringement must present `evidence and argument concerning the doctrine [of equivalents] and each of its elements.'" (citation omitted) (emphasis supplied by the Lear court).) Where the product is a chemical mixture or compound, use "qualities" instead of "result" in the last paragraph. See Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 609 (1950); Atlas Powder Co. v. E.I. du Pont De Nemours & Co., 750 F.2d 1569, 1579 (Fed. Cir. 1984). 16.02.02 LITERAL INFRINGEMENT To determine whether the accused [product] [process] [apparatus] [composition] literally infringes at least one claim of plaintiff's patent, you must compare the accused [product] [process] [apparatus] [composition] with each claim allegedly infringed. If you find by a preponderance of the evidence that each [element] [step] of at least one claim is found in the accused [product] [process] [apparatus] [composition], then it has literally infringed plaintiff's patent claim, even if the accused [product] [process] [apparatus] [composition] includes additional [elements] [steps] beyond those in the claim. 16.02.03 LIMITATION ON LITERAL INFRINGEMENT (REVERSE DOCTRINE OF EQUIVALENTS) If you find the accused [product] [process] [apparatus] [composition] falls within the literal words of one or more claims, it still would not infringe the claim if it is so far changed in principle that it performs the same or a similar function in a substantially different way. Therefore, to find literal infringement, you must find by a preponderance of the evidence both of the following: 1. the accused [product] [process] [apparatus] [composition] literally infringes one or more claims of the plaintiff's patent; and 2. the accused [product] [process] [apparatus] [composition] performs the same or a similar function in substantially the same way. Comment The reverse doctrine of equivalents is a defense that may be raised to a claim of literal infringement. See Moleculon Research Corp. v. CBS, Inc., 872 F.2d 407, 409 (Fed. Cir. 1989). It does not appear, however, that this is an affirmative defense on which defendant bears the burden of proof. The cases describe defendant's burden as one of "going forward." Smithkline Diagnostics v. Helena Lab. Corp., 859 F.2d 878, 889 (Fed. Cir. 1988) ("[Defendant] may establish the fact of noninfringement by carrying its burden of going forward to show its device `has been so far changed in principle that it performs the same or similar function in a substantially different way.'" (citation omitted)); SRI Int'l v. Matsushita Elec. Corp., 775 F.2d 1107, 1123-24 (Fed. Cir. 1985) ("When a patentee establishes literal infringement, the accused infringer may undertake the burden of going forward to establish the fact of non-infringement under the reverse doctrine of equivalents. If the accused infringer makes a prima facie case, the patentee, who retains the burden of persuasion on infringement, must rebut that prima facie case." (emphasis added)). Although the reverse doctrine of equivalents is an equitable doctrine, its application may depend on factual questions appropriate for a jury to decide. See Scripps Clinic & Research Found. v. Genentech, 927 F.2d 1565 (Fed. Cir. 1991) (factual questions underlying application of reverse doctrine of equivalents defeated summary judgment). 16.02.04 INFRINGEMENT BY APPLICATION OF THE DOCTRINE OF EQUIVALENTS If [an element] [a step] disclosed in the patent is not present in an accused [product] [process] [apparatus] [composition], infringement may still exist by application of the doctrine of equivalents. On plaintiff's claim for infringement under the doctrine of equivalents, plaintiff has the burden of proving by a preponderance of the evidence each of the following: 1. the accused [product] [process] [apparatus] [composition]: a. has substantially the same overall function, b. operates in substantially the same way, and c. achieves substantially the same [result] [qualities] as the [product] [process] [apparatus] [composition] disclosed in the patent claim; and 2. every element of the patent claim either is literally present, or has some substantially equivalent corresponding element in the accused [product] [process] [apparatus] [composition]. If you find that each of these things has been proved, the accused [product] [process] [apparatus] [composition] infringes that claim. If one or more elements of a claim are not substantially performed as to function, way, and [result] [qualities], then there is no infringement under the doctrine of equivalents. Comment Do not use this instruction unless plaintiff raises the claim of infringement under the doctrine of equivalents and presents evidence on all three elements of the doctrine: function, way (or means), and result. Lear Siegler, Inc. v. Sealy Mattress Co., 873 F.2d 1422, 1425 (Fed. Cir. 1989) ("The party asserting infringement must present `evidence and argument concerning the doctrine [of equivalents] and each of its elements.'" (citation omitted) (emphasis supplied by the Lear court).) Notwithstanding Lear, the Federal Circuit may not hold strictly to this three-step equivalency analysis. See Malta v. Schulmerich Carillons, Inc., 952 F.2d 1320, 1326 (Fed. Cir. 1991) ("[W]hile comparison of function/way/result is an acceptable way of showing that a structure in an accused device is the `substantial equivalent' of a claim limitation, it is not the only way to do so."). In Malta, the court held that evidence must show not only (1) what the function, way, and result of the claimed invention and of the accused device are, but also (2) why these functions, ways, and results are similar. Id. at 1327 & n.5. Without sufficient evidence on the second requirement, the jury finding of infringement could not stand. Id. Becton Dickinson and Co. v. C.R. Bard, Inc., 922 F.2d 792, 798 (Fed. Cir. 1990) ([A]ll limitations in a claim are material and must be met exactly or equivalently in an accused device to find that the accused device works in the same way."); Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931, 935 (Fed. Cir. 1987) ("[T]he district court correctly relied on an element-by-element comparison to conclude that there was no infringement under the doctrine of equivalents...."). When construing the claim, and particularly when applying the doctrine of equivalents, it is important that the claim not be interpreted to include any of the prior art. Senmed, Inc. v. Richard- Allan Medical Indus., 888 F.2d 815, 821 (Fed. Cir. 1989) ("[A] claim cannot be given a range of equivalents so wide as to cause the claim to encompass anything in the prior art."). Although the application of this "prior art limitation" is a matter of law for the trial judge, there may be fact issues for the jury as to what the prior art is. Wilson Sporting Goods Co. v. David Geoffrey & Assocs., 904 F.2d 677, 683 (Fed. Cir. 1990) ("This issue--whether an asserted range of equivalents would cover what is already in the public domain--is one of law...."); Loctite Corp. v. Ultraseal Ltd., 781 F.2d 861, 870 (Fed. Cir. 1985) (applied as question of law). Regarding prior art, see 35 U.S.C. ¤Ê102. Where the product is a chemical mixture or compound, use "qualities" instead of "result" in the last paragraph. See Graver Tank & Mfg. Co. v. Linde Air Prods. Co., 339 U.S. 605, 609 (1950); Atlas Powder Co. v. E.I. du Pont De Nemours & Co., 750 F.2d 1569, 1579 (Fed. Cir. 1984). 16.03.01 CLAIMS IN GENERAL (35 U.S.C. ¤Ê112) A patent claim defines in words the boundaries of the invention so that the public will know what the invention is and can avoid infringing it. [As I explained earlier,] patent claims are comparable to the description in a deed to land. The description points out where the boundaries are. A person who crosses boundaries without the owner's permission is a trespasser. In patent law, infringement is a form of trespass, and a person whose [product] [process] [apparatus] [composition] infringes the scope of a valid claim is comparable to a trespasser and is called an infringer. Comment General Foods v. Studiengesellschaft Kohle mbH, 972 F.2d 1272, 1274 (Fed. Cir. 1992) (general explanation of patent claims in terms of boundaries). 16.03.02 INTERPRETATION OF CLAIMS In determining whether the accused [product] [process] [apparatus] [composition] infringed a claim of the patent, you must first resolve the questions of fact to determine how to interpret the words used in the claim. You must decide whether: 1. the ordinary meaning of [insert disputed term] is [plaintiff's interpretation] or [defendant's interpretation]; 2. the inventor used the term [insert disputed term] in the specification [, in other claims in the patent,] and in the prosecution history to mean [plaintiff's interpretation] or [defendant's interpretation]; and 3. persons of ordinary skill in the art understand the term [insert disputed term] to mean [plaintiff's interpretation] or [defendant's interpretation]. Comment This instruction was drafted on the assumption that in the useage at bar there is a factual dispute underlying the interpretation of one or more words in the claim, which would be an issue for the jury to decide. Presently there is conflicting opinion in the Federal Ciricuit on whether construction or interpretation of a term in a claim is a question of law to be determined by the trial court or a question of fact to be determined by the trier of fact. Compare Tol-O-Matic v. Proma Produkt-Und Marketing Gesellschaft m.b.H., 945 F.2d 1546, 1550 (Fed. Cir. 1991) ("When the meaning of a term in a patent claim is unclear, subject to varying interpretations, or ambiguous, the jury may interpret the term en route to deciding the issue of infringement.") with Read Corp. v. Portec, Inc., 970 F.2d 816, 822-23 & n.3 (Fed. Cir. 1992) (the court should interpret the claim and then instruct the jury on what the claim means, explicitly disagreeing with Tol-O-Matic). Accordingly, this instruction should be used with caution. See Marsh-McBirney, Inc. v. Montedoro- Whitney Corp., 882 F.2d 498, 504 (Fed. Cir. 1989) ("Claim construction is a matter of law; however, interpretation of the claim may depend on evidentiary material about which there is a factual dispute."); Johnston v. IVAC Corp., 885 F.2d 1574, 1579-80 (Fed. Cir. 1989) ("Where ... no underlying fact issue must be resolved, claim interpretation is a question of law .... [A] mere dispute over the meaning of a term does not itself create an issue of fact. This is true even where the meaning cannot be determined without resort to the specification, the prosecution history or other extrinsic evidence provided upon consideration of the entirety of such evidence the court concludes that there is no genuine underlying issue of material fact .... [A]ny broad statement in our precedent which could be read to say that a disagreement over the meaning of a term in a claim ipso facto raises an issue of fact is not the law of this circuit ...."). See also Senmed, Inc. v. Richard-Allan Medical Indus., 888 F.2d 815, 818 (Fed. Cir. 1989) ("Construction of claim scope (claim interpretation), however, is a question of law for decision by the trial judge on motion for JNOV .... That a jury has answered a legal question [i.e., interpreted a claim] may not in itself require reversal."). If the trial judge determine that there is no underlying factual issue to be submitted to the jury, the judge should explain to the jury the court's interpretation of the claims. Jamesbury Corp. v. Litton Indus. Prods., 756 F.2d 1556, 1564-65 (Fed Cir. 1985); Structural Rubber Prods. v. Park Rubber Co., 749 F.2d 707, 721 (Fed. Cir. 1984). Smithkline Diagnostics v. Helena Lab. Corp., 859 F.2d 878, 882 (Fed. Cir. 1988) ("To ascertain the meaning of the claims, we look to the claim language, the specification, and the prosecution history .... Also relevant are the other claims and expert testimony .... Moreover, the claims should be construed as one skilled in the art would construe them."). Claims must also be interpreted in light of the prior art. Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 667 (Fed. Cir.) ("We must construe claims `in the light of the claim language, the other claims, the prior art, the prosecution history, and the specification.'" (quoting SRI Int'l v. Matsushita Elec. Corp., 775 F.2d 1107, 1118 (Fed. Cir. 1985))), cert. denied, 488 U.S. 968 (1988). 16.03.03 LIMITATION ON INTERPRETATION OF CLAIMS (PROSECUTION HISTORY ESTOPPEL) The claims must be consistent with all the limitations to the claims that the patent owner added by amendment or argument in order to obtain the patent, as shown in the prosecution history. [For example, if a patent applicant represented to the Patent Examiner that a term in a claim meant something specific, and the Examiner would not have allowed the patent without that representation, then the patent owner cannot say that the term means anything different from what was represented to the Examiner.] The prosecution history contains the entire record of the proceedings in the Patent and Trademark Office, including all written arguments or statements made to convince the Patent Examiner that the [product] [process] [apparatus] [composition] is patentable. It also includes any amendments to the patent claims. Therefore, you must determine from the prosecution history whether [insert element or interpretation] was [added] [abandoned] in order to obtain the patent, and whether the Patent and Trademark Office would have issued the patent absent that [addition] [interpretation]. Comment This instruction relates to claim interpretation, which is currently the subject of dispute within the Federal Circuit. See Comment to Instruction 16.03.02. It should be used with caution, therefore, and only when there are disputed issues of fact underlying application of the estoppel doctrine. Id. Prosecution history estoppel, however, arises only in the application of the doctrine of equivalents; it is irrelevant if there is literal infringement. Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565, 1571 (Fed. Cir. 1983); Biodex Corp. v. Loredan Biomedical, Inc., 946 F.2d 850, 862 (Fed. Cir. 1991) ("It is technically correct that ... the doctrine of prosecution history estoppel is `irrelevant' to determination of literal claim scope."); Water Technologies Corp. v. Calco, Ltd., 658 F. Supp. 961, 976 (N.D. Ill. 1986) ("Under the law, if there is literal infringement, then file wrapper estoppel [prosecution history estoppel] is not even applicable or relevant."). 4 Donald S. Chisum, Patents ¤¤ 15.02 & 15.03(2)(e) (1991) (A patentee may not change the claims so as to recapture subject matter intentionally surrendered to obtain the original patent); Shepard v. Carrigan, 116 U.S. 593 (1886) ("where an applicant for a patent to cover a new combination is compelled by the rejection of his application by the patent office to narrow his claim by the introduction of a new element, he cannot after the issue of the patent, broaden his claim by dropping the element which he was compelled to include in order to secure his patent."); Tee-Pack, Inc. v. St. Regis Paper Co., 491 F.2d 1193, 1199 (6th Cir. 1974) ("[A] patentee may not recapture what he has abandoned intentionally at the insistence of the Patent Office in order to secure a patent."). Biodex, 946 F.2d at 862-63 ("There is a clear line of distinction between using the contents of the prosecution history to reach an understanding about disputed claim language and the doctrine of prosecution history estoppel which `estops' or limits later expansion of the protection accorded by the claim to the patent owner under the doctrine of equivalents when the claims have been purposefully amended or distinguished over relevant prior art to give up scope.... `[T]he two uses of the prosecution history must not be confused.'" (citations omitted)). 16.03.04 DEPENDENT CLAIMS (35 U.S.C. ¤Ê112) The patent includes dependent claims. A dependent claim incorporates each of the limitations of a previous claim but also contains additional limitations not found in the other claim. [If you find that an independent claim is not infringed, then you must find claims dependent on it are not literally infringed.] [If you find that an independent claim has been infringed, you must separately determine whether a dependent claim has been infringed.] Comment See Marsh-McBirney, Inc. v. Montedoro-Whitney Corp., 882 F.2d 498, 504 (Fed. Cir. 1989) (provides useful example of difference between independent and dependent claims). Wahpeton Canvas Co. v. Frontier, Inc., 870 F.2d 1546, 1552 n.9 (Fed. Cir. 1989) ("One may infringe an independent claim and not infringe a claim dependent on that claim. The reverse is not true. One who does not infringe an independent claim cannot infringe a claim dependent on (and thus containing all the limitations of) that claim."). The Federal Circuit suggests that even if an independent claim was not infringed, the claims dependent on it may be infringed by application of the doctrine of equivalents. See Wilson Sporting Goods Co. v. David Geoffrey & Assocs., 904 F.2d 677, 685-86 (Fed. Cir. 1990). Although the asserted range of equivalents for the independent claim encompassed prior art, the dependent claims were narrower than the independent claims. Therefore, the dependent claims could have a range of equivalents that did not include prior art and could be infringed by an equivalent product. Id. 16.03.05 MEANS PLUS FUNCTION CLAIMS (35 U.S.C. ¤Ê112) Patent claim designates [a] [an] [physical part] [component] [assembly of parts] as a "means" for performing a specific function, [specify function]. The "means" claim is infringed only if: 1. the function of the accused device is identical to that disclosed in the patent; and 2. the [structure] [component] [material] which performs that function is the same as, or the equivalent of, the [structure] [component] [material] disclosed in the patent. Comment Intellicall, Inc. v. Phonometrics, Inc., 952 F.2d 1384, 1388 (Fed. Cir. 1992) (setting forth the two-part test); Intel Corp. v. U.S. Int'l Trade Comm'n, 946 F.2d 821, 841 (Fed. Cir. 1991) ("To meet a means plus function limitation literally, an accused device must (1) perform the identical function claimed for the means element, and (2) perform that function using the structure disclosed in the specification or an equivalent structure."). Spindelfabrik Suessen-Schurr v. Schubert & Salzer Maschinenfabrik AG, 829 F.2d 1075, 1085 (Fed. Cir. 1987) ("A finding of literal infringement of a claim expressed in terms of a series of means for performing particular functions ... involves interpreting the claim to define the recited function. If, as a threshold matter, the recited functions are not performed by the accused device, there can be no literal infringement. On the other hand, if an accused device is found to perform the recited functions, one must determine under ¤Ê112 para. 6 whether the means by which the accused device performs each function is the same as or equivalent to the means disclosed in the specification for performing each function."), cert. denied, 484 U.S. 1063 (1988). Johnston v. IVAC Corp., 885 F.2d 1574, 1580 (Fed. Cir. 1989) ("[S]ection 112 ¦ 6 operates to cut back on the types of means which could literally satisfy the claim language.") 16.04.01 DIRECT INFRINGEMENT (35 U.S.C. ¤Ê271(a)) A patent owner may enforce the right to exclude others from making, using, or selling the patent invention in an action for patent infringement. Anyone who, without the owner's consent, makes, uses, or sells in the United States any [product] [process] [apparatus] [composition] that is legally protected by at least one claim in the owner's patent is liable for [direct] infringement of the patent. A person may [directly] infringe a patent without knowing of the patent or intending to infringe it. Good faith is not a defense to a claim of [direct] infringement. Comment 35 U.S.C. ¤¤ 271, 281. 16.04.02 PLAINTIFF'S ELEMENTS AND BURDEN OF PROOF--DIRECT INFRINGEMENT On plaintiff's claim for patent infringement, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff is the [owner] [assignee] [exclusive licensee] of the '_ _ _ patent; and 2. the defendant infringed one or more claims of the patent by making, using, or selling the accused [product] [process] [apparatus] [composition] without the plaintiff's consent. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Use Instruction 5.01 for the definition of "preponderance of the evidence." 16.04.03 INDUCING INFRINGEMENT (35 U.S.C. ¤Ê271(b)) A person who intentionally induces a direct infringer to make, use, or sell an invention without the patent owner's consent is liable for patent infringement. Comment See Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464, 1469 (Fed. Cir. 1990) (to establish active inducement, the evidence must show an "actual intent" to induce an infringement). But see Manville Sales Corp. v. Paramount Sys., 917 F.2d 544, 553-54 (Fed. Cir. 1990) (plaintiff must prove that the defendant has a "specific intent" or, alternatively, that the defendant "knew or should have known his actions would induce actual infringements" (emphasis added)). Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 668 (Fed. Cir.) ("Although section 271(b) does not use the word `knowing,' the case law and legislative history uniformly assert such a requirement.... While proof of intent is necessary, direct evidence is not required; rather, circumstantial evidence may suffice." (citations omitted)), cert. denied, 488 U.S. 968 (1988)). 16.04.04 PLAINTIFF'S ELEMENTS AND BURDEN OF PROOF--INDUCING INFRINGEMENT On plaintiff's claim for inducing infringement, the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff was the [owner] [assignee] [exclusive licensee] of the '_ _ _ patent; 2. the defendant intentionally [persuaded] [induced] another person to make, use, or sell the accused [product] [process] [apparatus] [composition] without the plaintiff's consent; and 3. the accused product infringed one or more of the plaintiff's claims. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Use Instruction 5.01 for the definition of "preponderance of the evidence." 16.04.05 CONTRIBUTORY INFRINGEMENT (35 U.S.C. ¤Ê271(c)) A person who sells a material component of a patented invention, knowing that the component was [especially made] [or] [especially adapted] for use in the infringement of the patent and that it is not a staple article [or] [commodity] of commerce suitable for substantial noninfringing use, is liable for contributory infringement. A staple article of commerce is a component that is suitable for substantial noninfringing use. An item is not a staple article [or] [commodity] of commerce if it was [especially made] [or] [especially adapted] for use in an infringement of the patent and is not suitable for substantial noninfringing use. A person cannot be liable for contributory infringement unless the evidence shows that another person directly infringed the patent. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] 16.04.06 PLAINTIFF'S ELEMENTS AND BURDEN OF PROOF-- CONTRIBUTORY INFRINGEMENT [On plaintiff's claim for contributory infringement,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the plaintiff is the [owner] [assignee] [exclusive licensee] of the '_ _ _ patent; 2. the defendant sold a material component of the patented invention; 3. the defendant knew at the time of the sale that the component was [especially made] [or] [especially adapted] for use in the infringement of the '_Ê_Ê_ patent; 4. the defendant knew at the time of the sale that the component was not a staple article of commerce suitable for substantial noninfringing use; and 5. the component was used in the accused [product] [process] [apparatus] [composition] by a direct infringer without the plaintiff's consent. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Use Instruction 5.01 for the definition of "preponderance of the evidence." 16.04.07 WILLFUL INFRINGEMENT (35 U.S.C. ¤Ê284) The plaintiff alleges that the defendant's alleged infringement of the plaintiff's patent was willful. If you find that the defendant has infringed one or more claims of the plaintiff's patent, you will be asked in the verdict form whether such infringement was willful. To prove that the defendant acted willfully, the plaintiff has the burden of proving each of the following by clear and convincing evidence: 1. the defendant actually knew of the plaintiff's patent; and 2. the defendant lacked any reasonable basis for believing either (a) that the plaintiff's patent was invalid or (b) that the defendant's [product] [process] [apparatus] [composition] did not infringe one or more claims of the plaintiff's patent. In deciding whether the defendant acted reasonably, you must consider the totality of the circumstances [, including, but not limited to] [whether the defendant exercised due care to avoid infringing the patent] [whether the defendant obtained and reasonably relied on competent legal advice before beginning its allegedly infringing activities, or before continuing its activities after knowledge of the patent] [whether the defendant made a good faith effort to design around the patent, rather than copy the patented invention]. Comment This instruction is to be used when the plaintiff has alleged willful infringement. Exemplary damages cannot be awarded by the court unless the jury finds the infringement was willful. 35 U.S.C. ¤Ê284; Shiley, Inc. v. Bentley Lab., 794 F.2d 1561, 1568 (Fed. Cir. 1986) ("[I]f a jury finding of willful infringement is not overturned on a motion for JNOV, the court has discretion to award increased damages on the basis of the jury's finding; if the jury finding is that willful infringement did not occur and that finding is not overturned on a motion for JNOV, no basis for assessing increased damages for willful infringement exists ...."), cert. denied, 479 U.S. 1087 (1987). See Instruction 16.06.04. Use Instruction 5.02 for the definition of clear and convincing. Ortho Pharmaceutical Corp. v. Smith, 959 F.2d 936, 944-45 (Fed. Cir. 1992) (seeking legal advice); King Instrument Corp. v. Otari Corp., 767 F.2d 853, 867 (Fed. Cir. 1985) (totality of circumstances; effort to design around the patent), cert. denied, 475 U.S. 1016 (1986); Gustafson, Inc. v. Intersystems Indus. Prods., 897 F.2d 508, 510 (Fed. Cir. 1990) (actual knowledge of patent); E.I. Du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1440 (Fed. Cir.) (clear and convincing standard), cert. denied, 488 U.S. 986 (1988); State Indus. v. Mor-Flo Indus., 883 F.2d 1573, 1581 (Fed. Cir. 1989) ("To establish willful infringement, a plaintiff must prove by clear and convincing evidence that the defendant acted with no reasonable basis for believing it had the right to do so."), cert. denied, 493 U.S. 1022 (1990). 16.05.01 DEFENSE OF INVALIDITY--GENERALLY It is a defense to an action for infringement that the patent claim is invalid. The law presumes that the claims of a patent issued by the United States Patent Office are valid. In this case, the defendant contends that one or more of the patent claims are invalid because [insert alleged ground for invalidity]. Whether or not you find that the accused product infringed the '_ _ _ patent, you must determine whether any of the patent claims are invalid. The defendant has the burden of proving by clear and convincing evidence that a claim is invalid. Comment For the definition of clear and convincing evidence, see Instruction 5.02. The Supreme Court observed that it "will usually be the better practice" for a district court to examine patent invalidity regardless of whether it concludes the patent was infringed. Sinclair & Carroll Co. v. Interchemical Corp., 325 U.S. 327 (1945). It is unclear, however, whether a court must determine patent validity if it concludes the patent is not infringed. Nestier Corp. v. Menasha Corp.-- Lewisystems Div., 739 F.2d 1576, 1580-81 (Fed. Cir. 1984) ("`While the better practice is to treat both the validity and infringement issues, particularly in view of the public interest in the validity issue, it is not always necessary to do so. Where, as here, non-infringement is clear and invalidity is not plainly evident, it is appropriate to treat only the infringement issue.'" (citations omitted) (quoting Lockwood v. Langendorf United Bakeries, 324 F.2d 82 (9th Cir. 1963)). See Donofrio, The Disposition of Unreviewable Judgments by the Federal Circuit, 73 J. Pat. [& Trademark] Off. Soc'y 462, 478-80 (1991). In fact, the Supreme Court recently condemned the Federal Circuit's practice of vacating a district court's invalidity conclusion where the circuit court determined that the patent was not infringed. Cardinal Chemical Co. v. Morton Intern., Inc., 1993 WL 155665 (U.S.). 16.05.02 INVALIDITY--ANTICIPATION/LACK OF NOVELTY (35 U.S.C. ¤Ê102) The defendant contends that one or more of the patent claims are invalid because the plaintiff's alleged invention is not new or novel but was anticipated by a single prior invention. A claim is invalid if it is anticipated by a previously existing invention. Anticipated means the plaintiff's alleged invention is not new or novel. Anticipation occurs when all of the elements of the alleged invention are united in a single prior invention and operate in the same manner to perform the same function. [A claim was anticipated and is invalid if: [1. the patent owner was not the inventor of the [product] [process] [apparatus] [composition] for which the patent was issued.] [2. the patent owner was not the first inventor of the [product] [process] [apparatus] [composition] for which the patent was issued.] [3. the patent owner was not diligent in filing the patent application.]] Comment Continental Can Co. USA v. Monsanto Co., 948 F.2d 1264, 1267 (Fed. Cir. 1991) ("Anticipation ... requires that the identical invention that is claimed was previously known to others and thus is not new."); Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1576 (Fed. Cir. 1991) ("Invalidity for anticipation requires that all of the elements and limitations of the claim are found within a single prior art reference. There must be no difference between the claimed invention and the referenced disclosure, as viewed by a person of ordinary skill in the field of the invention." (citations omitted)). Definitions of each of the numbered paragraphs can be found in Instructions 16.05.02.01, 16.05.02.02, and 16.05.02.03, which follow. 16.05.02.01 INVENTOR LISTED ON THE PATENT WAS NOT INVENTOR (35 U.S.C. ¤Ê102(f)) The defendant contends that the inventor listed on the patent was not the inventor of the [product] [process] [apparatus] [composition] for which the '_ _ _ patent was issued. The claims of a patent are invalid if the listed inventor did not invent the patented [product] [process] [apparatus] [composition]. 16.05.02.02 INVENTOR LISTED ON THE PATENT WAS NOT FIRST INVENTOR (35 U.S.C. ¤Ê102(a), (e) & (g)) The defendant contends that the inventor listed on the patent was not the first inventor of the patented [product] [process] [apparatus] [composition]. One is not the first inventor if one invents the [product] [process] [apparatus] [composition] after: [1. that invention was known or used by other persons in the United States ;] [2. that invention was described in a patent or other printed publication anywhere in the world ;] [3. that invention was described in another person's United States patent application, which application was ultimately granted;] [or] [4. that invention was made or reduced to practice in the United States by another person who did not abandon, suppress or conceal it.] Comment Regarding the priority of inventions, the trial judge may need to further instruct and submit to the jury such issues as an invention's date of conception and reduction to practice, the exercise of reasonable diligence in reducing an invention to practice, and the abandonment, suppression, or concealment of an invention. 35 U.S.C. ¤Ê102(g). 16.05.02.03 PATENT OWNER WAS NOT DILIGENT IN FILING APPLICATION (35 U.S.C. ¤Ê102(b) & (d)) The defendant contends that the [plaintiff] [patent owner] was not diligent in filing the application for the '_ _ _ patent. A patent owner is not diligent in filing a patent application if: [1. the invention was patented or described in a printed publication anywhere in the world more than one year before the patent owner filed the application.] [2. the invention was in public use or on sale in the United States more than one year before the patent owner filed the application.] [3. the invention was patented by the patent owner in a foreign country more than one year before the patent owner filed the application in the United States.] 16.05.03 INVALIDITY--OBVIOUSNESS (35 U.S.C. ¤Ê103) The defendant contends that one or more of the patent claims are invalid because the alleged invention that the patent claims was obvious. A claim to an obvious invention is invalid. An alleged invention is obvious if the invention would have been obvious to a person having ordinary skill in the art relevant to the invention at the time the invention was made. Prior art means technology and information that was publicly available before the date of the alleged invention. A person of ordinary skill in the relevant art is one who would be expected to be working to solve problems related to the alleged invention at the time the invention was made. The court must determine whether an invention claimed in a patent was obvious. In order for the court to make this determination, you must decide: 1. what was the scope and content of the prior art at the time the alleged invention was conceived; 2. what were the differences, if any, between the prior art and the alleged invention, that is, what does this alleged invention add to what was already known; and 3. what was the level of ordinary skill in the prior art at the time the alleged invention was made. In making these three determinations, you should also consider such surrounding circumstances as: [1. whether the alleged invention was commercially successful;] [2. whether the alleged invention satisfied a long felt need in the art;] [3. whether others were unsuccessful in making the alleged invention;] [4. whether the alleged invention was copied by others in the art;] [5. whether the alleged invention received praise from others in the art;] [6. whether the alleged invention departed from accepted principles of the art.] Comment Obviousness is a question of law with underlying factual inquiries. Sakraida v. Ag Pro, Inc., 425 U.S. 273, 280 (1976) ("The ultimate test of patent validity is one of law, but resolution of the obviousness issue necessarily entails several basic factual inquiries." (citations omitted)); In re Hayes Microcomputer Products, Inc. Patent Litigation, 982 F.2d 1527, 1539 (Fed. Cir. 1992) ("Obviousness is a legal determination that may be submitted to the jury with proper instruction."); In re Vaeck, 947 F.2d 488, 493 (Fed. Cir. 1991) ("Obviousness is a legal question ... though based on underlying factual findings."). Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17-18 (1966) ("Under ¤ 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved.... Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented"); Continental Can Co. USA v. Monsanto Co., 948 F.2d 1264, 1270 (Fed. Cir. 1991) (citing Graham's obviousness test); Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 1546 (Fed. Cir. 1984) (considering objective evidence of obviousness based on factors enunciated in Graham). 1 Donald S. Chisum, Patents, G1-12 (1992) (defining "level of ordinary skill" as "the skill ... of a person who would be expected to solve the type of problem in question rather than that of a person who ordinarily uses the product or process."). 16.05.04 INVALIDITY--INSUFFICIENT SPECIFICATION (35 U.S.C. ¤Ê112) The defendant contends that one or more of the patent claims are invalid because the specification is insufficient. If the specification is insufficient as to any claim, that claim is invalid. In order to be sufficient, the specification must: 1. provide a written description of the invention; 2. describe the manner and process of making the invention; 3. describe the manner and process of using the invention; 4. disclose the best mode contemplated for carrying out the invention; and 5. contain one or more claims particularly pointing out and distinctly claiming the subject matter that the patent owner regards as the invention. The description in the specification must be in such terms as to enable any person skilled in the art to which the invention pertains, or with which it is most nearly connected, to make and use the invention from the description without unreasonable experimentation or additional skill. Comment See, e.g., In re Wands, 858 F.2d 731, 736-37 (Fed. Cir. 1988) ("Enablement is not precluded by the necessity for some experimentation .... However, experimentation needed to practice the invention must not be undue experimentation."); United States v. Telectronics, Inc., 857 F.2d 778, 785 (Fed. Cir. 1988) ("A patent may be enabling even though some experimentation is necessary; the amount of experimentation, however, must not be unduly extensive."), cert. denied, 490 U.S. 1046 (1989). 16.05.05 INVALIDITY--[PROCESS] [METHOD] CLAIMS (35 U.S.C. ¤Ê102) The defendant contends that one or more of the plaintiff's patent claims are invalid because [it is] [they are] not a [process] [method] protected by the patent laws. A [process] [method] is a way to produce a specific result by an act, or series of acts, which change an object into a different state or a thing. A claim is valid if it is a new discovery that advances the prior art and describes and discloses the [process] [method]. The inventor need not know why or how the [process] [method] works. On the other hand, a claim that [merely explains an existing [process] [method] invented by someone else] [or] [merely discovers the scientific theory behind an existing [process] [method]] is invalid because ideas, theories, and scientific principles cannot be patented. Comment Commentators refer to these claims variously as "process" claims, "method" claims, and "product-by-process" claims. See Parker v. Flook, 437 U.S. 584, 588 (1978); Gottschalk v. Benson, 409 U.S. 63, 71 (1972); 2 Donald S. Chisum, Patents ¤Ê8.05 (1992) ("A `product-by-process' claim is one in which the product is defined at least in part in terms of the method or process by which it is made. Most decisions hold that such a claim is infringed only by a product made through a substantially identical process ...."). The definition of a process is derived from Diamond v. Diehr, 450 U.S. 175, 180-82, (1981) (citing Cochrane v. Deener, 94 U.S. 780, 787-88 (1877)). Fromson v. Advance Offset Plate, Inc., 720 F.2d 1565, 1570 (Fed. Cir. 1983) (inventor need not comprehend scientific principles on which practical effectiveness of invention rests). For patentability of process involving mental participation as compared with that which has physical steps, consult Parker v. Flook, 437 U.S. at 594 ("Respondent's process is unpatentable ... not because it contains a mathematical algorithm ... but because once that algorithm is presumed to be within the prior art, the application ... contains no patentable invention.... [T]he discovery of ... a phenomenon cannot support a patent unless there is some other inventive concept in its application."); Diamond v. Diehr, 450 U.S. at 187-88 (while laws of nature and abstract ideas are not patentable, "an application of a law of nature or mathematical formula to a known structure or process may well be deserving of patent protection."). 16.06.01 PATENT--COMPENSATORY DAMAGES (35 U.S.C. ¤Ê284) If you find for the plaintiff on plaintiff's infringement claim, you must determine plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. Damages means the amount of money adequate to compensate for any infringement, but in no event less than the amount of money the plaintiff would have received if the defendant had been paying the plaintiff a reasonable royalty for using the patent during the period of infringement. The law does not permit the award of a greater sum than the monetary loss the plaintiff suffered as a result of the defendant's infringement. Comment State Indus. v. Mor-Flo Indus., 883 F.2d 1573, 1580 (Fed. Cir. 1989) (reasonable royalty is not based on infringer's profit margin, but on hypothetical negotiations between willing licensor and licensee), cert. denied, 493 U.S. 1022 (1990); Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 673 (Fed. Cir.) (infringer's profits are not measure of patent owner's damages), cert. denied, 488 U.S. 968 (1988). 16.06.02 PATENT--DAMAGES--REASONABLE ROYALTY (35 U.S.C. ¤Ê284) You may award the plaintiff a reasonable royalty. A royalty is the amount of money a[n] [assignee] [licensee] is required to pay to a patent owner for each article the [assignee] [licensee] [made] [used] [sold] under the patent [assignment] [license]. A reasonable royalty is the amount of money that a willing patent owner and a willing, prospective [assignee] [licensee] would have agreed upon at the time of the infringement for [an assignment] [a license] to [make] [use] [sell] the invention. [The determination of a reasonable royalty does not depend upon the actual willingness of the parties to this lawsuit to engage in such negotiations.] A reasonable royalty may exceed the alleged infringer's actual profit. In determining a reasonable royalty, you may consider the following: 1. [whether there was an established royalty before the date of infringement. An established royalty is based on what the plaintiff received from actual [assignees] [licensees] for [making] [using] [selling] the invention.] 2. [royalty rates paid for comparable patented inventions.] 3. [whether the plaintiff had a policy and marketing practice of refusing to grant licenses.] 4. [the commercial relationship between the plaintiff and the defendant, such as whether they are competitors.] 5. [the value of the invention as a source of additional sales of related products.] 6. [the duration of the patent period remaining.] 7. [the established profitability of the product made under the patent, its commercial success, and its current popularity.] 8. [advantages of the patented invention over modes or devices previously used.] 9. [the nature of the invention and the benefits to users of the invention.] 10. [the extent to which the defendant has made use of the invention.] 11. [the portion of the profit or selling price normally allowed for use of the invention or similar inventions in comparable businesses.] 12. [the portion of the profit credited to the patented invention, as distinguished from non-patented elements, the manufacturing process, business risks, significant features or improvements added by the defendants.] 13. [the impact of the respective bargaining positions of the parties due to anticipated collateral sales of non-infringing products, the desire to maintain market position, and the desire to enter a new market.] Comment Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970), modified and aff'd, 446 F.2d 295 (2d Cir. 1971) (court offers comprehensive list of evidentiary facts generally relevant to determination of reasonable royalty); Nickson Indus. v. Rol Mfg. Co., 847 F.2d 795, 799 (Fed. Cir. 1988) (reasonable royalty should be based on evidence not conjecture). An established royalty rate generally sets the minimum which the plaintiff should recover for patent infringement. However, to recover under a pure established royalty theory, the plaintiff must meet strict criteria. Rude v. Westcott, 130 U.S. 152 (1889). With the recognition of the reasonable royalty theory, full compliance with the Rude criteria is not so critical; now established royalty is used as a factor in determining a reasonable royalty. 5 Donald S. Chisum, Patents ¤ 20.03[2][b] (1992). 16.06.03 PATENT--DAMAGES--LOST PROFITS (35 U.S.C. ¤Ê284) You may award the plaintiff the amount of profits the plaintiff lost because of diverted sales, price erosion, [and] [or] increased costs. To establish lost profits, the plaintiff must show a reasonable probability that, but for the infringement, the plaintiff would have [made some or all of the infringer's sales] [charged higher prices] [and] [or] [incurred lower expenses]. Lost profits may be shown by [1.] [the demand for the patented product;] [2.] [absence of acceptable non-infringing substitutes;] [3.] [the plaintiff's manufacturing and marketing capability to meet the demand for the product]. The amount of profit the plaintiff would have made may be measured by multiplying the profit lost on the diverted sales by the total sales the plaintiff would have had the capability to manufacture and market. [Even if only a portion of a patented invention is made up of the patented [product] [process] [apparatus] [composition], damages are based on the entire profit derived from the product, if the evidence shows that a major part of the commercial value of that product depends upon the patented invention.] Comment State Indus. v. Mor-Flo Indus., 883 F.2d 1573, 1577 (Fed. Cir. 1989) (standard way of proving lost profits), cert. denied, 493 U.S. 1022 (1990); Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 673 (Fed. Cir.) (plaintiff must show causation to recover lost profits), cert. denied, 488 U.S. 968 (1988). While some older cases required apportionment in cases in which the patented feature was but one part of the infringed product, most recent cases allow recovery based on the value of the entire product or apparatus. TWM Mfg. Co. v. Dura Corp., 789 F.2d 895, 901 (Fed. Cir.), cert. denied, 479 U.S. 852 (1986); Paper Converting Mach. Co. v. Magna-Graphics Corp., 745 F.2d 11, 22-23 (Fed. Cir. 1984). If absence of acceptable non-infringing substitutes is not shown, lost profits may be proved by market share. The plaintiff must prove its share of the market for its product and the non- infringing substitute. The plaintiff may recover lost profits based on the same share of the defendant's total sales. State Indus., 883 F.2d at 1577-78. 16.06.04 PATENT--DAMAGES--PUNITIVE DAMAGES NOT ALLOWED If you find for the plaintiff, you may not award the plaintiff more than the monetary loss the plaintiff suffered as a result of the infringement. You may not include an additional amount for the purpose of punishing the defendant or setting an example. Comment Although a jury may not award punitive damages, the court may increase the damage award based on a jury finding of willful infringement. See Comment to Instruction 16.04.07. 16.06.05 PATENT--DAMAGES--SPECULATIVE DAMAGES NOT ALLOWED If you find for the plaintiff, you may not include damages that are speculative, only possible, or that are based on guesswork. Comment See Instruction 7.01. 17. COPYRIGHT 17.00 PRELIMINARY INSTRUCTION--COPYRIGHT The plaintiff, ______________, the owner of a copyright, seeks damages against the defendant, _______________, for copyright infringement. The defendant denies infringing the copyright [and contends that the copyright is invalid]. To help you understand the evidence that will be presented in this case, I will explain some of the legal terms you will hear during this trial. DEFINITION OF COPYRIGHT Copyright is the exclusive right to copy. The owner of a copyright has the right to exclude any other person from reproducing, preparing derivative works, distributing, performing, displaying, or using the work covered by copyright for a specific period of time. Copyrighted work can be a literary work, musical work, dramatic work, pantomime, choreographic work, pictorial work, graphic work, sculptural work, motion picture, audiovisual work, sound recording, architectural work, mask works fixed in semiconductor chip products, or a computer program. [Facts, ideas, procedures, processes, systems, methods of operation, concepts, principles or discoveries cannot themselves be copyrighted.] [The copyrighted work must be original. An original work that closely resembles other works can be copyrighted so long as the similarity between the two works is not the result of copying.] [COPYRIGHT INTERESTS] [The copyright owner may [transfer] [sell] [convey] to another person all or part of the owner's property interest in the copyright, that is, the right to exclude others from reproducing, preparing a derivative work, distributing, performing, displaying, or using the copyrighted work. To be valid, the [transfer] [sale] [conveyance] must be in writing. The person to whom a right is transferred is called an assignee. One who owns a copyright may agree to let another reproduce, prepare a derivative work [of], distribute, perform, display, or use the copyrighted work. [To be valid, the [transfer] [sale] [conveyance] must be in writing.] The person to whom this right is transferred is called an exclusive licensee. The exclusive licensee has the right to exclude others from copying the work [to the extent of the rights granted in the license.] [HOW COPYRIGHT IS OBTAINED] [Copyright automatically exists in a work the moment it is created. The owner of the copyright may register the copyright by delivering to the Copyright Office of the Library of Congress a copy of the copyrighted work. After examination and a determination that the material deposited constitutes copyrightable subject matter and that legal and formal requirements are satisfied, the Register of Copyrights registers the work and issues a certificate of registration to the copyright owner.] PLAINTIFF'S BURDEN OF PROOF In this case, the plaintiff, ______________, contends that the defendant, ____________, has infringed plaintiff's copyright. The plaintiff has the burden of proving by a preponderance of the evidence that the plaintiff is the owner of the copyright and that the defendant copied original elements of the copyrighted work. Preponderance of the evidence means that you must be persuaded by the evidence that it is more probably true than not true that the copyrighted work was infringed. LIABILITY FOR INFRINGEMENT One who [reproduces] [prepares derivative works] [distributes] [performs] [or] [displays] a copyrighted work during the term of the copyright, infringes the copyright, unless licensed by the copyright owner. [To prove that the defendant infringed the copyright, the plaintiff may show that the defendant had access to the plaintiff's copyrighted work and that there are substantial similarities between the defendant's work and the plaintiff's work [and that the defendant's work was not independently created].] [Copyright may also be infringed by [vicariously infringing] [and] [contributorily infringing].] [VICARIOUS INFRINGEMENT] [A person is liable for copyright infringement by another if the person has a financial interest and the right and ability to supervise the infringing activity, whether or not the person knew of the infringement.] [CONTRIBUTORY INFRINGEMENT] [A person is liable for copyright infringement by another if the person knows or should have known of the infringing activity and [induces] [causes] [or] [materially contributes to] the activity.] [DEFENDANT'S BURDEN OF PROOF] [The defendant contends that there is no copyright infringement. There is no copyright infringement where the [defendant makes fair use of a copyrighted work by reproducing copies for criticism, comment, news reporting, teaching, scholarship, or research] [plaintiff has abandoned ownership of the copyrighted work].] Comment See generally 17 U.S.C. ¤Ê101 et seq. 17.01 COPYRIGHT--DEFINED (17 U.S.C. ¤ 106) Copyright is the exclusive right to copy. The owner of a copyright has the exclusive right to: [1.] [reproduce the copyrighted work [in] [copies] [sound recordings]]; [2.] [prepare derivative works based upon the copyrighted work]; [3.] [distribute [copies] [sound recordings] of the copyrighted work to the public by [sale or other transfer of ownership] [or] by [rental] [lease] [lending]]; [4.] [perform publicly a copyrighted [literary work,] [musical work,] [dramatic work,] [choreographic work,] [pantomime work,] [motion picture] [or] [specify other audiovisual work]]; and [5.] [display publicly a copyrighted [literary work,] [musical work,] [dramatic work,] [choreographic work,] [pantomime work,] [pictorial work,] [graphic work,] [sculptural work,] [the individual images of a motion picture] [or] [specify other audiovisual work]]. The term "owner" includes [the author of the work] [an assignee] [an exclusive licensee]. Comment Note that there are exceptions to these "exclusive" rights. See, e.g., 17 U.S.C. ¤¤ 107-120. 17.01.01 COPYRIGHT INTERESTS (17 U.S.C. ¤ 501) An owner of copyright is entitled to exclude others from copying the work. An owner may enforce the right to exclude others in an action for copyright infringement. Comment 17 U.S.C. ¤ 106. 17.01.02 COPYRIGHT INTERESTS--JOINT AUTHORS (17 U.S.C. ¤ 201(a)) An owner of copyright is entitled to exclude others from copying a joint work. AÊjoint work is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole. An owner of copyright in a joint work may enforce the right to exclude others in an action for copyright infringement. Comment 17 U.S.C. ¤¤ 101, 106, 501. 17.01.03 COPYRIGHT INTERESTS--AUTHORS OF COLLECTIVE WORKS (17ÊU.S.C. ¤ 201(c)) An owner of copyright is entitled to exclude others from copying a collective work. A collective work is a work [such as [a periodical issue] [anthology] [encyclopedia]] in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole. The person who assembles the contributions of independent works into a collective whole is the author and is entitled to copyright. Copyright in a collective work is distinct from copyright in the separate contributions to the work. An owner of copyright in a collective work may enforce the right to exclude others in an action for copyright infringement. Comment 17 U.S.C. ¤¤ 101, 106, 501. 1 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 5.02 (1992). 17.01.04 COPYRIGHT INTERESTS--WORK MADE FOR HIRE (17 U.S.C. ¤Ê201(b)) An owner of copyright is entitled to exclude others from copying a work made for hire. A work made for hire is one which is prepared by an employee in carrying out the employer's business. The employer owns the copyright [unless the employer and employee have agreed otherwise in writing]. An owner of copyright in a work made for hire may enforce the right to exclude others in an action for copyright infringement. Comment 17 U.S.C. ¤¤ 101, 106, 501. Community for Creative Non-Violence v. Reid, 490 U.S. 730, 739-740 (1989) (Congress used the words "employee" and "employment" in 17 U.S.C. ¤ 101 to describe the conventional relationship of employer and employee.). 17.01.05 COPYRIGHT INTERESTS--ASSIGNEE--WRITTEN INSTRUMENT (17ÊU.S.C. ¤ 201(d)(1)) An owner of copyright may [transfer] [sell] [convey] to another person all or part of the owner's property interest in the copyright, that is, the right to exclude others from copying the work. To be valid, the [transfer] [sale] [conveyance] must be in writing. The person to whom this right is transferred is called an assignee. [The assignee may enforce this right to exclude others in an action for copyright infringement.] [The plaintiff is an assignee of the copyright.] Comment 17 U.S.C. ¤ 204(a). "A `transfer of copyright ownership' is an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license." 17 U.S.C. ¤ 101. Ownership of a copyright may also be transferred in whole or in part by any means of conveyance or by operation of law, and may be bequeathed by will or pass as personal property by the applicable laws of intestate succession. 17 U.S.C. ¤ 201(d)(1). If the transfer occurred by operation of law, it need not be in writing. Valente-Kritzer Video v. Pinckney, 881 F.2d 772, 775 (9th Cir. 1989) (letter reserving author's right to comment on agreement not a memorialization of agreement giving producer exclusive right to negotiation; execution must be in writing), cert. denied, 493 U.S. 1062 (1990). 17.01.06 COPYRIGHT INTERESTS--EXCLUSIVE LICENSEE (17 U.S.C. ¤ 201(d)(2)) An owner of copyright may [transfer] [sell] [convey] to another person any of the exclusive rights comprised in the copyright. [To be valid, the [transfer] [sale] [conveyance] must be in writing.] The person to whom this right is transferred is called an exclusive licensee. The exclusive licensee has the right to exclude others from copying the work [to the extent of the rights granted in the license]. An exclusive licensee is entitled to bring an action for damages for copyright infringement. [The plaintiff is an exclusive licensee of the copyright.] Comment 17 U.S.C. ¤¤ 101, 204(a). 3 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 12.02[B] (1992). Section 201(d)(2) of Title 17 provides: "Any of the exclusive rights comprised in a copyright ... may be transferred ... and owned separately. The owner of any particular exclusive right is entitled, to the extent of that right, to all of the protection and remedies accorded to the copyright owner by this title." (Emphasis added.) The bracketed language in the fourth sentence-- "to the extent of the rights granted in the license"--should not be needed in the typical case, in which the extent of the license and its applicability to the alleged infringing activity will have been established in pretrial proceedings. An exclusive license must be in writing if it was granted after 1978. 3 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 10.03[A] (1992). If it was granted prior to 1978, however, an exclusive license may be oral or implied by conduct. Id. at ¤ 10.03[B][1]. See also Effects Assocs. v. Cohen, 908 F.2d 555, 557 (9th Cir. 1990) (exclusive licenses must be in writing despite purported customary practice in the motion pictures industry not to have written licenses), cert. denied, ___ U.S. ___, 111 S. Ct. 1003, 112 L. Ed. 2d 1086 (1991). "A `transfer of copyright ownership' is an assignment, mortgage, exclusive license, or any other conveyance, alienation, or hypothecation of a copyright or of any of the exclusive rights comprised in a copyright, whether or not it is limited in time or place of effect, but not including a nonexclusive license." 17 U.S.C. ¤ 101. 17.01.07 COPYRIGHT INTERESTS--DERIVATIVE WORK (17 U.S.C. ¤ 101) An owner is entitled to copyright protection of a derivative work. The term derivative work refers to a [translation] [musical arrangement] [dramatization] [fictionalization] [motion picture version] [sound recording] [art reproduction] [abridgement] [condensation] [, or any other form in which a work may be recast, transformed, or adapted] that is based upon one or more preexisting works. [A work consisting of editorial revisions, annotations, elaborations, or other modifications which, as a whole, represent an original work of authorship, is a derivative work.] Copyright protection of a derivative work extends only to the contribution of the author of the derivative work. The owner of a derivative work may enforce the right to exclude others in an action for copyright infringement. Comment 17 U.S.C. ¤ 103. "[A] work will be considered a derivative work only if it would be considered an infringing work if the material which it has derived from a preexisting work had been taken without consent of a copyright proprietor of such preexisting work. It is saved from being an infringing work only because the borrowed or copied material was taken with the consent of the copyright owner of the prior work, or because the prior work has entered the public domain." 1ÊM. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 3.01, at 3-3 to 3-4 (1992). In order to qualify for a separate copyright as a derivative work the additional material injected in a prior work or the manner of rearranging or otherwise transforming a prior work must constitute more than a minimal contribution. 1 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 3.03 (1992). 17.01.08 COPYRIGHT INTERESTS--COMPILATION (17 U.S.C. ¤ 101) An owner is entitled to copyright protection of a compilation. A compilation is a work formed by the collection and assembling of preexisting materials or of data that are selected, coordinated, or arranged in such a way that the resulting work as a whole constitutes an original work of authorship. The owner of a compilation may enforce the right to exclude others in an action for copyright infringement. Comment The term "compilation" includes collective works. 17 U.S.C. ¤ 101. 17.02.01 COPYRIGHT--SUBJECT MATTER (17 U.S.C. ¤ 102) Original works of authorship [fixed] [produced] in any tangible [medium] [form] of expression from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device are protected by the Copyright Act. Works of authorship include [the following categories]: [1.] [literary works;] [2.] [musical works, including any accompanying words;] [3.] [dramatic works, including any accompanying music;] [4.] [pantomimes;] [5.] [choreographic works;] [6.] [pictorial works;] [graphic works;] [sculptural works;] [7.] [motion pictures] [and other audiovisual works;] [8.] [sound recordings;] [9.] [architectural works;] [10.] [mask works fixed in semiconductor chip products;] [11.] [computer programs]. [Copyright protection for an original work of authorship does not extend to any [idea] [procedure] [process] [system] [method of operation] [concept] [principle] or [discovery], regardless of the form in which it is described, explained, illustrated, or embodied.] Comment 17 U.S.C. ¤Ê901 et seq. Facts are not copyrightable; compilations of facts may be copyrightable. Feist Publications v. Rural Tel. Serv. Co., ___ U.S. ___, 111 S. Ct. 1282, 1287, 113 L.ÊEd. 2d 358 (1991). Original means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity. Id. (citing 1 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤¤ 2.01[A], [B] (1990)). Originality does not signify novelty; a work may be original even though it closely resembles other works so long as the similarity is fortuitous, not the result of copying. To illustrate, assume that two poets, each ignorant of the other, compose identical poems. Neither work is novel, yet both are original and, hence, copyrightable. A factual compilation is eligible for copyright if it features an original selection or arrangement of facts, but the copyright is limited to the particular selection or arrangement. Id. at 1290. H.R. Rep. No. 1476, 94th Cong., 2nd Sess., 54 ("The term `literary works' does not connote any criterion of literary merit or qualitative value: it includes catalogs, directories and similar factual, reference, or instructional works and compilations of data. It also includes computer data bases, and computer programs to the extent that they incorporate authorship in the programmer's expression of original ideas, as distinguished from the ideas themselves."). 17.02.02 COPYRIGHT--SUBJECT MATTER--COMPUTER PROGRAM DEFINED (17 U.S.C. ¤ 101) A computer program is a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result. Comment See 17 U.S.C. ¤ 117 for exceptions. 17.03.01 INFRINGEMENT GENERALLY Anyone who copies original elements of a copyrighted work during the term of the copyright without the owner's permission infringes the copyright. Comment See Feist Publications v. Rural Tel. Serv. Co., ___ U.S. ___, 111 S. Ct. 1282, 1296, 113 L. Ed. 2d 358 (1991) (the two elements that must be proved to establish infringement are: "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original"). 17.03.02 COPYRIGHT INFRINGEMENT--ELEMENTS AND BURDEN OF PROOF [On plaintiff's ____________ claim,] plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. plaintiff is the owner of a valid copyright; and 2. the defendant copied original elements of the copyrighted work. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Feist Publications v. Rural Tel. Serv. Co., ___ U.S. ___, 111 S. Ct. 1282, 1296, 113ÊL. Ed. 2d 358 (1991) (the two elements that must be proved to establish infringement are: "(1)Êownership of a valid copyright, and (2) copying of constituent elements of the work that areÊoriginal"). North Coast Indus. v. Jason Maxwell, Inc., 972 F.2d 1031, 1033 (9th Cir. 1992) ("ToÊestablish copyright infringement, the holder of the copyright must prove both valid ownership of the copyright and that there was infringement of that copyright by the alleged infringer..."; if ownership of a valid copyright is established, plaintiff must establish infringement by showing both access and substantial similarity between the copyrighted work and the alleged infringing work). 17.03.03 VICARIOUS INFRINGEMENT--ELEMENTS AND BURDEN OF PROOF A person is liable for copyright infringement by another if the person has a financial interest and the right and ability to supervise the infringing activity whether or not the person knew of the infringement. [On plaintiff's ___________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. plaintiff is the owner of a valid copyright; 2. [direct infringer] copied original elements of the copyrighted work; 3. defendant had a financial interest in the infringing activity of [direct infringer]; and 4. defendant had the right and ability to supervise the infringing activity of [direct infringer]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See Sony Corp. v. Universal City Studios, 464 U.S. 417, 437-38 (1984) (vicarious and contributory infringement are legitimate theories of liability). Gershwin Publishing Corp. v. Columbia Artists Management, 443 F.2d 1159, 1162 (2d Cir. 1971) (one need not have knowledge that direct infringer is engaging in infringing conduct to be held vicariously liable). Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304, 307 (2d Cir. 1963) (vicarious liability exists "[w]hen the right and ability to supervise [the infringer] coalesce with an obvious and direct financial interest in the exploitation of copyrighted materials" (emphasis added)); Gershwin, 443 F.2d at 1162 ("a direct financial interest" (emphasis added)); Southern Bell Tel. and Tel. v. Associated Tel. Directory Publishers, 756 F.2d 801, 811 (11th Cir. 1985) ("a financial interest" (emphasis added)); RCA/Ariola Int'l v. Thomas & Grayston Co., 845 F.2d 773, 781 (8th Cir. 1988) ("[a]n obvious and direct financial interest" (emphasis added)). 17.03.04 CONTRIBUTORY INFRINGEMENT--ELEMENTS AND BURDEN OF PROOF A person is liable for copyright infringement by another if the person knows or should have known of the infringing activity and [induces] [causes] [or] [materially contributes to] the activity. [On plaintiff's ____________claim,] plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. plaintiff is the owner of a valid copyright; 2. [direct infringer] copied original elements of a copyrighted work; 3. defendant knew or should have known of [direct infringer's] infringing activity; and 4. defendant [induced] [caused] [or] [materially contributed to] [direct infringer's] infringing activity. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417, 439-42 (1984) (Manufacturer and seller of home videos was not liable for contributory infringement even though it had constructive knowledge that recorders likely to be used by some purchasers to make unauthorized tapes of copyrighted movies. By analogy to contributory infringement in patent law, one cannot be held liable simply for selling items that could be used in infringement but that also have substantial noninfringing uses. In Sony, recorders could also be used for "time shifting" programs, which is a fair use.). Gershwin Publishing Corp. v. Columbia Artists Management, 443 F.2d 1159, 1162 (2d Cir. 1971) (classic statement of contributory infringement). Cable/Home Communication Corp. v. Network Prods., 902 F.2d 829, 845 (11th Cir. 1990) (the standard of knowledge is objective: to know or have reason to know that the product in question is copyrighted and that defendants were violating the copyright laws; "[c]ontributory liability necessarily must follow a finding of direct or primary infringement."). 3 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 12.04[A] [1] & [2] (1992). Demetriades v. Kaufmann, 690 F. Supp. 289, 293 (S.D.N.Y. 1988) ("[J]ust as benefit and control are signposts of vicarious liability, so are knowledge and participation the touchstones of contributory infringement."). 17.03.05 COPYING--ACCESS AND SUBSTANTIAL SIMILARITY If you find by a preponderance of the evidence that the defendant had access to the plaintiff's copyrighted work and that there are substantial similarities between the defendant's work and original elements of the copyrighted work [and that the defendant's work was not independently created], you shall find copying. Comment If the defendant has made a claim of independent creation, you may use the bracketed part. See generally Transgo, Inc. v. Ajac Transmission Parts Corp., 768 F.2d 1001, 1018 (9th Cir. 1985) (discussion of access, substantial similarity and independent creation), cert. denied, 474 U.S. 1059 (1986). See Granite Music Corp. v. United Artists Corp., 532 F.2d 718, 720-21 (9th Cir. 1976) (showing of access and showing of similarity permits inference of copying). A showing of access and substantial similarity creates a presumption of copying. The defendant has the burden to rebut or meet the presumption with evidence of independent creation. See Walker v. University Books, Inc., 602 F.2d 859, 864 (9th Cir. 1979) (demonstration of access and substantial similarity establishes a prima facie case of copyright infringement); Original Appalachian Artworks, Inc. v. Toy Loft, Inc., 684 F.2d 821, 829 (11th Cir. 1982) ("proof of access and substantial similarity raises only a presumption of copying which may be rebutted by the defendant with evidence of independent creation"); Benson v. Coca-Cola Co., 795 F.2d 973, 974 (11th Cir. 1986) (proof of access and similarity is insufficient to affirmatively establish infringement; elements of access and similarity raise a presumption of infringement which may be rebutted by proof of independent creation); Keeler Brass Co. v. Continental Brass Co., 862 F.2d 1063, 1065-66 (4th Cir. 1988) (prima facie case shifts burden of going forward but not burden of persuasion). The burden of proof, however, remains at all times with the plaintiff and does not shift to the defendant. Overman v. Loesser, 205 F.2d 521, 524 (9th Cir.), cert. denied, 346 U.S. 910 (1953); see Fed. R. Evid. 301. But see Kamar Int'l v. Russ Berrie and Co., 657 F.2d 1059, 1062 (9th Cir. 1981) (copying may be established by showing access and substantial similarity; burden then shifts to the defendant to prove that the work was not copied but independently created); John L. Perry Studio, Inc. v. Wernick, 597 F.2d 1308, 1309 (9th Cir. 1979) (burden of persuasion shifts to alleged infringers to show independent creation); Transgo, 768 F.2d at 1018 (burden shifts to the defendant to prove independent creation). On whether a striking similarity between works may by itself demonstrate access, see Selle v. Gibb, 741 F.2d 896, 901 (7th Cir. 1984) (striking similarity is one piece of circumstantial evidence tending to show access); Baxter v. MCA, Inc., 812 F.2d 421, 423 (9th Cir.) (access may be inferred from "striking similarity"), cert. denied, 484ÊU.S. 954 (1987); and 3ÊM. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 13.02[B] (1992). 17.03.06 SUBSTANTIAL SIMILARITY--EXTRINSIC TEST; INTRINSIC TEST Works are substantially similar if: 1. the ideas in plaintiff's copyrighted work and the defendant's work are substantially similar; and 2. the expression of ideas in plaintiff's copyrighted work and the expression of ideas in defendant's work are substantially similar. The test for expression of ideas is whether an ordinary reasonable person would find the total concept and feel to be substantially similar. Comment There is no bright-line rule regarding substantial similarity. Baxter v. MCA, Inc., 812 F.2d 421, 425 (9th Cir.), cert. denied, 484 U.S. 954 (1987). The plaintiff must show that the plaintiff's and the defendant's works are substantially similar in both the ideas and the expression of those ideas. Berkic v. Crichton, 761 F.2d 1289, 1291-92 (9th Cir.), cert. denied, 474 U.S. 826 (1985). Paragraph 1 of the instruction is known as the extrinsic text. Paragraph 2 is known as the intrinsic test. The extrinsic test does not depend on the responses of the trier of fact, but on specific criteria which can be listed and analyzed. Sid & Marty Krofft Television Prods. v. McDonald's Corp., 562 F.2d 1157, 1164 (9th Cir. 1977). For the extrinsic test, "analytic dissection and expert testimony are appropriate." Id. "[T]his question may often be decided as a matter of law." Id. See also North Coast Indus. v. Jason Maxwell, Inc., 972 F.2d 1031 (9th Cir. 1992); Pasillas v. McDonald's Corp., 927 F.2d 440 (9th Cir. 1991); Shaw v. Lindheim, 919 F.2d 1353 (9th Cir. 1990). The extrinsic test for computer programs requires analytic dissection of various standard components such as screens, menus, and keystrokes. Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1475 (9th Cir.), cert. denied, ___ U.S. ___, 113 S. Ct. 198, 121 L. Ed. 2d 141 (1992). The intrinsic test must be applied cautiously where there is a very small amount of protectible work in the product. Cooling Sys. & Flexibles v. Stuart Radiator, 777 F.2d 485, 492-93 (9th Cir. 1985). In such a case, the jury should be instructed to limit its review to protectible material and the instructions should adequately explain which material is protectible in determining substantial similarity. Harper House, Inc. v. Thomas Nelson, Inc., 889 F.2d 197, 207 (9th Cir. 1989). 17.04.01 COPYRIGHT--AFFIRMATIVE DEFENSE--FAIR USE (17 U.S.C. ¤ 107) Defendant contends that defendant made fair use of the copyrighted work for the purpose of [criticism,] [comment,] [news reporting,] [teaching,] [scholarship,] [research,] [other]. The defendant has the burden of proving this defense by a preponderance of the evidence. In determining whether the use made of the work was fair, you shall consider the following factors: 1. the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; 2. the nature of the copyrighted work; 3. the amount and substantiality of the portion used in relation to the copyrighted work as a whole; 4. the effect of the use upon the potential market for or value of the copyrighted work; and 5. any other factors that bear on the issue of fair use. [Add appropriate concluding paragraph from Instructions 5.03, 5.04, or 5.05.] Comment See Harper & Row Publishers v. National Enters., 471 U.S. 539, 540-41 (1985) (presenting an analysis of the factors). Supermarket of Homes v. San Fernando Valley Bd. of Realtors, 786 F.2d 1400, 1408-09 (9th Cir. 1986) ("fair use" is an affirmative defense). 17.04.02 COPYRIGHT--AFFIRMATIVE DEFENSE--ABANDONMENT The defendant contends that copyright does not exist in the work because the plaintiff abandoned the copyright. The plaintiff cannot claim ownership of the copyright if it was abandoned. Defendant has the burden of proving each of the following by a preponderance of the evidence: 1. plaintiff intended to surrender ownership rights in the work; and 2. an overt act of the plaintiff evidenced that intent. Mere inaction [, or publication without a copyright notice,] does not constitute abandonment of the copyright; however, [this may be a factor] [these may be factors] for you to consider in determining whether the plaintiff has abandoned the copyright. Comment The bracketed portion pertaining to publication without copyright notice should be used if the copyright infringement action is brought under the 1909 Act. Abend v. MCA, Inc., 863 F.2d 1465, 1482 & n.21 (9th Cir. 1988) (abandonment is an affirmative defense in copyright infringement), aff'd, 495 U.S. 207 (1990). Forfeiture of copyright may occur as a consequence of publication without proper copyright notice and is effectuated by operation of law regardless of the intent of the copyright owner; abandonment occurs only if the copyright owner intends to surrender rights in the work. 3 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤ 13.06 (1992). 17.05.01 COPYRIGHT--DAMAGES (17 U.S.C. ¤ 504) If you find for the plaintiff [on plaintiff's ____________ claim], you must determine plaintiff's damages. Plaintiff has the burden of proving damages by a preponderance of the evidence. An infringer of a copyright is liable for the copyright owner's actual damages and any profits of the infringer. Comment See 17 U.S.C. ¤ 504 for the relationship between actual and statutory damages. The question of willful infringement and innocent infringement is discussed in 17 U.S.C. ¤Ê504(c). See 3 M. Nimmer & D. Nimmer, Nimmer on Copyright ¤Ê14.04[C] (1992) (discussing whether statutory damages are to be set by judge or jury). 17.05.02 COPYRIGHT--DAMAGES--ACTUAL DAMAGES (17 U.S.C. ¤ 504(b)) The copyright owner is entitled to recover the actual damages suffered as a result of the infringement. Actual damages means the amount of money adequate to compensate the copyright owner for the reduction of the market value of the copyrighted work caused by the infringement. The reduction in the market value of the copyrighted work is the amount a willing buyer would have been reasonably required to pay to a willing seller at the time of the infringement for the use made by the defendant of the plaintiff's work. Comment See Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 512-13 & n.6 (9th Cir. 1985) ("`Actual damages' are the extent to which the market value of a copyrighted work has been injured or destroyed by an infringement."). See also Sid & Marty Krofft Television Prods. v. McDonald's Corp., 562 F.2d 1157, 1172-74 (9th Cir. 1977) (discussion of difference between actual damages for reduction in value and infringer profits). 17.05.03 COPYRIGHT--DAMAGES--PROFITS (17 U.S.C. ¤ 504(b)) In addition to actual damages, the copyright owner is entitled to any profits attributable to the infringement. You may not include in an award of profits any amount that you took into account in determining actual damages. Profit is determined by deducting all expenses from gross revenue. Gross revenue is all of defendant's receipts from the [use] [sale] of a [product] [work] containing or using the copyrighted work. Expenses are all [operating] [overhead] and production costs incurred in producing the gross revenue. Unless you find that a portion of the profit from the [use] [sale] of a [product] [work] containing or using the copyrighted work is attributable to factors other than use of the copyrighted work, the total profit is attributable to the infringement. The plaintiff has the burden of proving gross revenue by a preponderance of the evidence. The defendant has the burden of proving the expenses [and the portion of the profit attributable to factors other than the copyrighted work] by a preponderance of the evidence. Comment Eales v. Environmental Lifestyles, Inc., 958 F.2d 876, 881 (9th Cir.) ("Any doubt as to the correctness of the profit calculation should ... be resolved in favor of the plaintiff."), cert. denied, ___ U.S. ___, 113 S. Ct. 605, 121 L. Ed. 2d 541 (1992). See Sid & Marty Krofft Television Prods. v. McDonald's Corp., 562 F.2d 1157, 1175-77 (9th Cir. 1977) (Sneed, J., concurring) ("[W]hether plaintiffs are entitled either to (1) the greater of either damages or profits, or (2) both damages and profits ... has its roots in the conflict between the statutory language, which appears to contemplate a cumulative recovery, and the legislative history, which indicates that Congress envisioned an alternative recovery. This circuit ... expressly adopted the alternative recovery, and we are constrained to follow that decision here.") But see i.d. at 1179-81 (Carter, J., dissenting) (footnotes deleted). See also Frank Music Corp. v. Metro-Goldwyn-Mayer, Inc., 772 F.2d 505, 514-15 (9th Cir. 1985) (discussing calculation and proof of profits attributable to infringement). See also Taylor v. Meirick, 712 F.2d 1112, 1119-21 (7th Cir. 1983) (court notes potential for "double counting" or "double recovery" in copyright cases in calculation of profits and actual damages, i.e., lost sales). 18. SECURITIES ACT 18.00 SECURITIES ACT--PRELIMINARY INSTRUCTION The plaintiff claims to have suffered a loss caused by the defendant's violation of the securities laws. To help you understand the evidence while it is being presented, I will now explain some of the terms and concepts that may be referred to during this trial. A security is an investment in an enterprise with the expectation of profit from the efforts of other people. Some common types of securities are [stocks,] [bonds,] [debentures,] [warrants,] [and] [investment contracts]. A broker buys and sells securities for clients for a commission. A dealer buys securities and resells them to clients. An individual or a corporation can be a broker, a dealer, or both. The buying and selling of securities is controlled by the securities laws. One who violates the securities laws is liable for damages caused by the violation. In particular, the securities laws prohibit [misrepresentation of material facts] [omission of material facts] [and] [false registration] in connection with the purchase and sale of securities. [A representative of a broker or dealer may also buy and sell securities for or to clients. If a representative violates the securities laws, the broker or dealer may also be liable as a controlling person. A controlling person is one who possesses the power to direct or cause the direction of the management or policies of another.] [A controlling person may be excused from liability by proving that [he] [she] [it] acted in good faith and did not induce the act that violated the securities laws.] 18.01.01 SECURITIES ACT--MISREPRESENTATION--ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê77e, RULE 10b-5) [On plaintiff's claim __________________,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the defendant [made an untrue statement of a material fact] [or] [omitted a material fact necessary under the circumstances to keep the statements that were made from being misleading] in connection with the trading of securities; 2. the defendant acted knowingly; 3. the defendant [used] [or] [caused the use of] an [instrumentality of interstate commerce] [mail] [telephone] [or] [________________________] in connection with the trading of securities [whether or not the [instrumentality of interstate commerce] [mail] [telephone] [or] [___________________] was used to make an untrue statement or a material omission]; 4. the plaintiff reasonably relied on [defendant's untrue statement of a material fact] [defendant's failure to state a necessary material fact] in [buying] [or] [selling] [or] [not selling] securities; and 5. the plaintiff suffered damages as a result. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See 15 U.S.C. ¤Ê78j(b) and 17 C.F.R. ¤Ê240.10b-5. See Instruction 18.01.03 for definition of knowledge. In McGonigle v. Combs, 968 F.2d 810, 817 (9th Cir. 1992), cert. dismissed, ___ U.S. ___, 113 S. Ct. 399 (1992), the court confirmed the showing required, as outlined above, for the establishment of a 10b-5 claim. 18.01.02 SECURITIES ACT--MISREPRESENTATIONS OR OMISSIONS AND MATERIALITY--DEFINITIONS (15 U.S.C. ¤Ê77e, RULE 10b-5) [Whether a statement is true] [and] [whether a fact is material] depends on the facts as they existed at the time the statement was made. A fact stated or omitted is material if a reasonable buyer or seller of securities would consider the fact important in deciding whether or not to buy or sell a particular security. Comment The standard for materiality was developed in TSC Indus. v. Northway, Inc., 426 U.S. 438, 449 (1976) (whether a reasonable shareholder would "consider it important" or whether the fact would have "assumed actual significance"). Although the Ninth Circuit adopted both formulations from TSC Indus., the "assumed actual significance" formulation was used most recently. See McGonigle v. Combs, 968 F.2d 810 (9th Cir. 1992) (assumed actual significance), cert. dismissed, ___ U.S. ___, 113 S. Ct. 399 (1992); Grigsby v. CMI Corp., 765 F.2d 1369 (9th Cir. 1985) (adopted both formulations). 18.01.03 SECURITIES ACT--KNOWLEDGE--DEFINITION (15 U.S.C. ¤Ê77e, RULE 10b-5) A defendant acts knowingly when [the defendant makes an untrue statement [with the knowledge that the statement was false] [or] [with reckless disregard for whether the statement was true]] [or] [the defendant omits necessary information [with the knowledge that the omission would make the statement false or misleading] [or] [with reckless disregard for whether the omission would make the statement false or misleading]]. [Reckless means highly unreasonable conduct that is an extreme departure from ordinary care.] Comment The element of scienter was developed in Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976), reh'g denied, 425 U.S. 986 (1976). In Nelson v. Serwold, 576 F.2d 1332, 1337 (9th Cir.), cert. denied, 439 U.S. 970 (1978), the court interpreted the Ernst & Ernst decision as only eliminating negligence as a basis for liability. The court found that Congress intended SectionÊ10(b) to reach both knowing and reckless conduct. Id. at 1337. "Recklessness," in the context of SectionÊ10(b) and Rule 10b-5, was defined by the Ninth Circuit in Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1569 (9th Cir. 1990), cert. denied, ___ U.S. ___, 111 S. Ct. 1621 (1991). See Comment to Instructions 18.02.01 and 18.02.03. 15 U.S.C. ¤Ê78j(b); SEC Rule 10b-5, 17 C.F.R. ¤Ê240.10b-5 (1991). 18.02.01 SECURITIES ACT--EXCESSIVE TRADING (CHURNING)-- ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê77e, RULE 10b-5) [On plaintiff's _________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. the trading in plaintiff's brokerage account was excessive in light of the plaintiff's investment objectives; 2. the defendant exercised control over the trading in the account; 3. the defendant acted [with intent to defraud] [or] [with reckless disregard of plaintiff's investment objectives]; 4. the defendant [used] [or] [caused the use of] an [instrumentality of interstate commerce] [mail] [telephone] [or] [_________________________] in connection with the trading in plaintiff's account; and 5. the plaintiff suffered damages as a result. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See 15 U.S.C. ¤Ê78j(b) and 17 C.F.R. ¤Ê240.10b-5. See also Mihara v. Dean Witter Co., 619 F.2d 814, 821 (9th Cir. 1980); Nesbit v. McNeil, 896 F.2d 380, 382 (9th Cir. 1990) (elements of "churning" under 10b-5; no single factor or test identifies excessive trading). "Recklessness," in the context of ¤Ê10(b) and rule 10b-5, was defined by the Ninth Circuit in Hollinger v. Titan Capital Corp., 914 F.2d 1564 (9th Cir. 1990), cert. denied, ___ÊU.S. ___, 111 S. Ct. 1621 (1991). While the phrase "willful and reckless" was used in Mihara and Nesbit, the committee believes that the Hollinger definition of "recklessness" accurately sets forth the standard and definition for liability in the rule 10b-5 context for both misrepresentation and churning cases. See Comments to Instructions 18.01.03 and 18.02.03. See Comment to Instruction 18.06 regarding special instructions on "Churning" damages. 18.02.02 SECURITIES ACT--EXCESSIVE TRADING (CHURNING)-- CONTROL--DEFINITION (15 U.S.C. ¤Ê77e, RULE 10b-5) A broker exercises control over trading in an account when [the client has authorized the broker to trade without first consulting the client] [or] [the client has not authorized the broker to trade and the broker trades] [or] [the client, without exercising independent judgment, routinely follows the broker's recommendations]. Comment See Follansbee v. Davis, Skaggs & Co., 681 F.2d 673, 676-78 (9th Cir. 1982); Mihara v. Dean Witter & Co., 619 F.2d 814, 821 (9th Cir. 1980). 18.02.03 SECURITIES ACT--EXCESSIVE TRADING (CHURNING)-- INTENT TO DEFRAUD--RECKLESS--DEFINITION (15 U.S.C. ¤Ê77e, RULE 10b-5) [Intent to defraud is an intent to deceive or cheat.] [Reckless means highly unreasonable conduct that is an extreme departure from ordinary care.] Comment "Recklessness" was defined by the Ninth Circuit in Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1569 (9th Cir. 1990), cert. denied, ___ U.S. ___, 111 S. Ct. 1621 (1991). While the phrase "willful and reckless" was used in Mihara and Nesbit, the committee believes that the Hollinger definition of "recklessness" accurately sets forth the standard and definition for liability in the sectionÊ10(b) and rule 10b-5 context for both misrepresentation and churning cases. See Comments to Instructions 18.01.03 and 18.02.01. 18.03 SECURITIES ACT--AGENT AND PRINCIPAL (15 U.S.C. ¤Ê77e, RULE 10b-5) Comment Use Instructions 6.04 Agent and Principal, Definition; 6.05 Agent--Scope of Authority Defined; and 6.06 Act of Agent is Act of Principal--Scope of Authority Not in Issue if there are no issues regarding the principal-agent relationship. If there is an issue regarding the existence of the relationship or scope of authority, use 6.09 Both Principal and Agent Sued--Agency or Authority Denied; 6.10 Principal Sued, But Not Agent-- Agency or Authority Denied; and 18.03.01 Securities Act--Liability of Controlling Person--Elements and Burden of Proof (15 U.S.C. ¤Ê77e, RuleÊ10b-5). Note, however, that the relationship between a controlling person and a controlled person is not necessarily a principal-agent relationship. See Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1574 (9th Cir. 1990) (no authority exists in the statutory scheme to restrict definition of controlling person to exclude independent contractors; court refused to distinguish between registered representatives who are employees or agents and those who might be independent contractors in determining who was a "controlling person"), cert. denied, ___ U.S. ___, 111ÊS.ÊCt. 1621 (1991). 18.03.01 SECURITIES ACT--LIABILITY OF CONTROLLING PERSON-- ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê77e, RULEÊ10b-5) On plaintiff's claim against [controlling person], plaintiff has the burden of proving by a preponderance of the evidence that defendant [controlling person] possessed, directly or indirectly, the power to direct or cause the direction of the management and policies of [controlled person]. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See 15 U.S.C. ¤¤Ê78o(a)(1), 78t(a); 17 C.F.R. ¤Ê230.405; Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1567-78 (9th Cir. 1990), cert. denied, ___ U.S. ___, 111 S. Ct. 1621 (1991). For good faith defense, see Instruction 18.03.02. This instruction may need to be supplemented with instructions regarding respondeat superior liability. See Instructions 6.04 through 6.10. Use this instruction with instructions on rule 10b-5 misrepresentation and excessive trading. 18.03.02 SECURITIES ACT--AFFIRMATIVE DEFENSE OF BROKER OR DEALER (15 U.S.C. ¤ 77e, RULE 10b-5) If you find that the defendant [insert name of broker or dealer] is a controlling person, you must consider whether the defendant induced a violation and acted in good faith. The defendant has the burden of proving each of the following by a preponderance of the evidence: 1. the defendant did not directly or indirectly induce the violation; and 2. the defendant maintained and enforced a reasonable and proper system of supervision and internal control. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment This instruction is to be used only for a controlling person who is a broker or dealer. 15 U.S.C. ¤ 78t(a) (Section 20(a) of the 1934 Act (Liability of Controlling Persons)); Hollinger v. Titan Capital Corp., 914 F.2d 1564, 1575-76 (9th Cir. 1990), cert. denied, ___ÊU.S. ___, 111 S.ÊCt. 1621 (1991). The defendant has the burden of establishing its good faith. Hollinger, 914 F.2d at 1575-76. Hollinger also holds that Section 20(a) does not supplant respondeat superior liability under the common law. Id. at 1578. 18.04 SECURITIES ACT--FALSE OR MISLEADING REGISTRATION STATEMENT--ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê77e, SECTION 11) [On plaintiff's _________________ claim,] the plaintiff has the burden of proving each of the following by a preponderance of the evidence: 1. [the registration statement misrepresented a material fact] [or] [the registration statement omitted material facts making it misleading]; 2. the defendant [insert appropriate language from 15 U.S.C. ¤Ê77k(a)]; and 3. the plaintiff suffered damages as a result. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See 15 U.S.C. ¤¤Ê77k(a), 77k(e). The specifics of a false registration statement may make additional instructions necessary. See Ernst & Ernst v. Hochfelder, 425 U.S. 185, 208 (1976) (issuer has absolute liability under 15 U.S.C. ¤Ê77k for damages resulting from a material misstatement or omission). For materiality definition, see Instruction 18.01.03. Securities Act of 1933, ¤Ê11, 15 U.S.C. ¤Ê77k. 18.05.01 SECURITIES ACT--AFFIRMATIVE DEFENSE OF WAIVER-- ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê77e) The defendant contends that plaintiff waived the right to complain of defendant's conduct. The defendant has the burden of proving by a preponderance of the evidence that, at the time, the plaintiff knew the plaintiff had a right to complain of defendant's conduct and voluntarily or intentionally gave up that right. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See Hecht v. Harris, Upham & Co., 430 F.2d 1202, 1208 (9th Cir. 1970) (waiver is the voluntary or intentional relinquishment of a known right); Royal Air Properties v. Smith, 312 F.2d 210, 213-14 (9th Cir. 1962), appeal after remand, 333 F.2d 568, 570-72 (1964) (common law defenses applicable to judicially-created private right of action under 10(b)). For a general discussion on restrictions of waiver clauses in brokerage agreements, see Louis Loss, Fundamentals of Securities Regulations, at 1024-34 (2d ed. 1988). 18.05.02 SECURITIES ACT--AFFIRMATIVE DEFENSE OF ESTOPPEL-- ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê77e) The defendant contends the plaintiff is [barred] [estopped] from complaining of defendant's conduct. The defendant has the burden of proving, by a preponderance of the evidence, that: 1. the plaintiff knew [describe facts that constitute basis for claim]; 2. the defendant did not know the plaintiff had objections to [describe facts that constitute basis for claim]; 3. [the plaintiff intended that the defendant act upon the plaintiff's [acts] [omissions]] [or] [the defendant had a right to believe the plaintiff's [acts] [omissions] were to be acted upon]; and 4. the defendant relied upon the plaintiff's [acts] [omissions] to the defendant's injury. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See Stewart v. Ragland, 934 F.2d 1033, 1041 (9th Cir. 1991) (four elements of estoppel claim). 18.05.03 SECURITIES ACT--AFFIRMATIVE DEFENSE OF RATIFICATION- -ELEMENTS AND BURDEN OF PROOF (15 U.S.C. ¤Ê77e) The defendant contends the plaintiff ratified defendant's conduct. The defendant has the burden of proving, by a preponderance of the evidence, that the plaintiff communicated to defendant, by words or actions, that plaintiff accepted and approved of the conduct. [Add appropriate concluding paragraphs from Instructions 5.03, 5.04, or 5.05.] Comment See Royal Air Properties v. Smith, 312 F.2d 210, 213-14 (9th Cir. 1962), appeal after remand, 333 F.2d 568, 570-72 (9th Cir. 1964) (common law defenses applicable to judicially-created private right of action under 10(b)). 18.06 SECURITIES ACT--DAMAGES (15 U.S.C. ¤Ê77e) Comment See Instruction 7.01 for format. The measure and type of damages should be drafted to fit the facts and law in each particular securities case. See also 7.03, Mitigation, and 7.04, Damages, Arising in the Future--Discount to Present Cash Value. Damages in "Churning" Cases. There are two different types of damages in churning cases. A plaintiff may recover excessive commissions, that is, the difference between commissions paid and commissions that would have been reasonable on transactions during the pertinent time period. Nesbit v. McNeil, 896 F.2d 380, 387 (9th Cir. 1990). A plaintiff may also recover for portfolio losses. Hatrock v. Edward D. Jones, 750 F.2d 767, 773-73 (9th Cir. 1984). Dividend income may be used to offset portfolio losses. Arrington v. Merrill, Lynch, Pierce, Fenner & Smith, Inc., 651 F.2d 615, 621 (9th Cir. 1981). However, excessive commissions should not be offset by portfolio gains made on the investments. Nesbit v. McNeil, 896 F.2d at 385. 19.00 CIVIL RICO Preliminary Comment These sources may be helpful: American Bar Association Litigation Section, Business Torts Litigation Committee, Model Jury Instructions for Business Tort Litigation (2d ed., A.B.A., Chicago, IL, 1987), ch. 5, pp. 165-192. This source contains instructions on the Racketeer Influenced and Corrupt Organizations (RICO) Act. 3 Devitt, Edward J., Federal Jury Practice and Instructions (4th ed., West Publishing Co., 1987), ch. 100, p. 826-843, "Civil Actions Under Racketeer Influenced and Corrupt Organizations (RICO) Act." This source contains RICO instructions and sample interrogatories, with case notes and commentary of use by individual circuits. Fifth Circuit District Judges Association, Pattern Jury Instructions (Civil Cases) (West Publishing Co., 1992), Instruction 8.1, pp. 81-97. This is a RICO instruction. This source also contains suggested RICO jury interrogatories. Eleventh Circuit District Judges Association, Pattern Jury Instructions (West Publishing Co., 1990), Instruction 4.1, pp. 51-54, "Civil RICO." This is an instruction for actions under 18 U.S.C. ¤ 1963(c). 4 Sand, Leonard B., Modern Federal Jury Instructions (Matthew Bender, 1984, 1992), ch. 84, ¦¦ 84.01 - 84.06. This source contains instructions defining elements of violations under RICO (18 U.S.C. ¤ 1962(a),(b),(c),(d)) as currently interpreted by federal courts. Editorial commentary notes the differences among individual circuit courts and cites to relevant cases.