Transcript Trademarks - Indianapolis Bar Association

IP Basics
For the Solo/Small Firm
John M. Bradshaw
[email protected]
Type of IP
• Patent
What it Protects
Inventions
• Trademark
Identity/Brands
• Copyright
Original Works of
Authorship
• Trade Secret
Valuable Information
Why Obtain Patents?
• To protect market share
• To use as a defensive weapon in
case of patent infringement
claim by another against you:
cross-licensing offer
Patents: Utility & Design
• Utility Patent – protects the functional
features of an invention.
– Has written “claims”.
• Design Patent – protects the ornamental
features of a product.
– No written “claims”; rather the drawings define
the scope of protection.
Keep Inventions Secret Before Filing
Disclosure of an invention to one not under
a duty of confidentiality to you prior to
filing a patent application starts a one year
deadline clock running in the U.S. and
prohibits foreign filing in most countries
Basic Requirements of Patentability
Prior Art Is Key
New
Not obvious to one of
ordinary skill in the art to
which the invention
pertains
Typical Sequence of Events
1.
2.
3.
4.
5.
6.
7.
Invention first conceived (may or may not be
prototyped)
Patentability search
File U.S. patent application (begins “patent pending”)
a) Provisional utility
b) Regular utility
Foreign patent filings within one (1) year of first U.S.
filing (provisional or regular utility)
Launch product in the marketplace
Patent application issues as a patent—start marking
products with patent number(s)
Patent expires—stop marking products with patent
number(s)
Invention Notebooks & Disclosures
•
•
•
•
•
•
•
•
Reason: prove a date of invention earlier than your U.S. patent
application filing date (presumptive date of invention).
“Corroboration”: Must be signed and dated by a witness, who:
1. Is NOT a co-inventor;
2. Understands the technology; and,
3. Has confidentiality obligation (fellow employee).
Be detailed; show alternative versions
Show testing results or summaries
No breaks or gaps
Tamper evident book: bound to show no pages added or
removed
“Diligence” is good.
“Abandoned, suppressed or concealed” is bad.
“Prior Art” (pre-existing technology) Includes:
•
•
•
•
•
•
Earlier patents & applications
Earlier publications, including, but not limited to:
– Journal articles
– Brochures & ads
– Product catalogs
Your own activity more than one (1) year before filing
date:
– Offer for sale
– Sale
– Public use
– Publication, Website, Catalog, Brochure
Earlier products/methods offered, sold or used in U.S.
Earlier invention by others in the U.S.
Public knowledge
“Nonobviousness”
•
•
•
•
•
No single item of prior technology (“prior art”) has all the features
claimed: “new” test is met
May not use hindsight – evaluate as of the time that the invention was
made.
Evaluate from the perspective of a person of “ordinary” skill in the field.
Supreme Court: “The combination of familiar elements according to
known methods is likely to be obvious when it does no more than yield
predictable results”.
Other considerations in this “flexible” test include:
–
–
–
–
–
•
Commercial success
Long felt need satisfied
Copying by others
Others tried but failed to solve problem
Praise for the invention
Suggestion or motivation to combine prior art is not required, but if it
exists, then that undermines patentability so long as there is a
reasonable expectation of success.
Foreign Patent Filing
Where to file?
– Usual path is to file a PCT application
designating all PCT member countries and then
decide (30 months after the priority filing date for
the first application on the invention) where you
would like to nationalize
 Where you are doing business (manufacturing or
selling)
 Where you want to license the patent to competitors
 “A good hockey player plays where the puck is, a
great hockey player plays where the puck is going
to be.” -Wayne Gretzky
Scope of Legal Rights
• How broad are patents?
Utility Patent: defined by the written claims.
Design Patent: “substantially similar” in the
eyes of the ordinary observer to the patent’s
drawings.
Duty of Candor to the Patent Office
•
•
•
Must always be truthful.
Must disclose prior art that you know about
and that is “material”.
Do not omit material information (e.g.,
person signing an affidavit in favor of your
patent application is being paid by you as a
consultant).
Infringement: How to Avoid
•
Do not copy a competitor’s product.
•
If you do copy:
•
With legal advice, “design around” their claims.
•
Having your own improvement patent can be used as a negotiating tool,
but is not a defense.
•
Avoid other copying pitfalls such as trade dress and copyrights.
•
CGL policy coverage for “advertising injury” normally does NOT apply to
patents.
•
Patent infringement specialty insurance is available if your situation
qualifies.
– Look for patent numbers on the product; and,
– Do a formal patent search; and,
– Get a formal legal opinion.
Working With Patents
• Design Around – it’s good to have options
– Avoids an injunction against your product line
– Strengthens your settlement bargaining position
– Weakens opponent’s damages case even if you
do not settle
Infringement: Bad Things Can Happen
• Injunction:
– Stop selling order from a court
– Destruction of infringing inventory
• Pay damages caused to plaintiff
– Plaintiff’s profits that it lost
– Price erosion
– Reasonable royalties
– Other theories of damage…
• Turn over infringing profits to the plaintiff (design patents only)
• Damages/profits tripled in exceptional case (e.g., jury finding
that infringement was “willful”)
• Pay “court costs”
• Pay opponent’s attorneys’ fees in exceptional case (often several
million dollars)
Practical Pointers
• Get present assignments of inventions & “conceptions”:
“agree to assign and hereby do assign”.
– From all employees
– From all non-employees
– All consultants
– All computer programmers
• File applications on important products to protect market
share.
• Be aware of and respect competitors’ patents.
Trademarks
•
•
•
•
•
How, where, and when to obtain rights.
How broad are trademark rights.
Infringement: how to avoid.
Bad things that can happen.
Practical pointers.
Trademarks
• Branding is source identification for your goods and
services
• Trademark (goods) or Service Mark (services):
word(s), font, logo, symbol, slogan, or sound for
your goods or services that identify quality and/or
you as the source.
• Trade Dress: distinctive appearance of the product
or the place where services are provided, e.g.,
packaging, coloring, décor, and/or form of the
product that acts as a brand.
Trademarks are an Investment
Through use and
reputation, marks
increase the
recognition value of
your company as:
1) The source of your
goods and services,
and
2) The quality of your
goods and services
Famous or wellrecognized marks can
increase the value of
your business:
• Through their use as
collateral for loans;
• Because they can
create revenue through
licensing; and
• Through their use as
measures of consumer
goodwill toward your
business
Trademark Examples
iPod
Apple
Nike
501
Dockers
Service Mark Examples
AT&T
Allstate
Trade Dress Examples
House Marks and Product Marks
• House mark: your company’s overall
identifier or brand (e.g., “Kodak® ”).
• Product mark: a mark associated with a
particular product or product line (e.g.,
“Kodacolor® ”).
Trademarks
• Common law rights – obtained by merely
using the mark in the marketplace.
Note: If you are manufacturing or selling in another country, you
should obtain a registration there. Only common law countries such
as the U.S., the U.K., and Canada recognize use-based rights
• Federal registration – enhances rights and
guarantees use of federal court for any
disputes.
– Based on actual use; or
– Based on a bona fide intent to use.
Federal Registration
Some Advantages to Having a Registration
•
Nationwide rights, even if your business currently is only local or regional.
•
Legal presumption that you own the rights for the goods/services stated in your
registration.
•
Gives the Trademark Office evidence to help you by rejecting later applications
that conflict.
– Allows you to “reserve” the rest of the country.
– Can save you money and avoid litigation.
•
Needed for U.S. Customs and for some counterfeit seizure enforcement.
•
Others include:
– Foreign trademark “priority” if filed within 6 months of U.S. filing.
– Identifiable assets for loan collateral, future sale of the business,
charitable donation, etc.
– Foreign registration required to protect yourself from infringement
in a non-common law country.
Term Of Trademark
• Lasts as long as trademark continues to be
used and renewed every 10 years: could be
forever.
• Rights can be lost if:
– Expressly abandon the mark.
– Mark becomes generic ( “aspirin”, “escalator”).
– Stop using and do not intend to reuse; this is
presumed after three years.
– Mark is not policed against encroachment by
others.
Typical Sequence of Events
1. Choose mark (preliminarily)
a) Strongest marks: arbitrary or fanciful
e.g., Apple® for computers
b) Strong marks: suggestive
e.g., Lands End® for outdoor sportswear
c) Weak marks: descriptive
e.g., Muscular Dystrophy Association® for
charitable services related to muscular
dystrophy diseases
d) Unprotectable marks: generic
e.g., aspirin for painkilling drug
Typical Sequence of Events
2. Search:
a) Free initial search: www.uspto.gov
b) Formal search by an attorney.
3. File U.S. registration application
4. Use mark in the marketplace (can occur at
any stage in the process)
5. Consider foreign filing of trademarks
a)
b)
c)
d)
Where you manufacture
Where you sell
Where you intend to manufacture or sell
Where you license or intend to license
Foreign Trademarks: Choices
• Mosaic v. Monolithic
approaches
• Will you use the mark in
commerce for more
than 5 years?
ANSWER:
Where your markets are (or will be in the future).
•PRIORITIZE COUNTRIES:
Priority filing within 6 months of first filing in any country;
Later use may dictate later filing in second tier priority countries.
How broad are trademark rights?
• Prevent same mark (mark + goods/services).
• Prevent “likelihood of confusion”.
• If the mark is “famous” (e.g., Coca-Cola®),
prevent “dilution”.
Choose a Protectable Trademark
• Protectable marks are distinctive – the more
unique the better the legal protection
Spectrum of Distinctiveness/ Strength
(example for tanning lotions)
Arbitrary or fanciful –
SEX KITTEN®
Suggestive –
AUSTRALIAN GOLD®
Descriptive –
BRONZE FACES®
Generic –
tanning lotion
“Likelihood of Confusion”- Test Considers:
1.
2.
3.
4.
5.
Similarity of the marks being compared
Similarity of the goods / services
Strength of the earlier mark
Channels of trade (wholesale, retail, etc.)
How much care is used in the purchasing
decision
6. Proof of actual confusion in the market, if any
7. Bad faith intent to confuse, if any
Infringement: How to avoid
•
•
•
•
Do not copy a competitor’s mark
Choose an arbitrary or fanciful mark
Take care in selecting your mark
Search for earlier marks.
– Especially the federal trademark register.
• Be willing to change if a likelihood of
confusion with a prior mark becomes
apparent
Minimize Infringement Threat
• “Advertising Injury” coverage for defense of
infringement lawsuits against you is common
in commercial general liability policies
– Check your CGL to ensure that you have this
coverage
– Check the “exceptions” in the policy
– Shop around for a new CGL policy if you do not
currently have this coverage
– Consider obtaining special trademark
infringement insurance if your circumstances
qualify for such insurance
Infringement: Bad Things Can Happen
• Injunction:
– Stop selling order from a court
– Destruction of infringing inventory
•
•
•
•
Turn over infringing profits to the plaintiff
Pay damages caused to plaintiff
Pay “court costs”
Exceptional cases: pay opposing party’s
attorneys’ fees (often over $1 million dollars)
Practical Pointers
• Use ™ to identify a trademark and SM to
identify a service mark if the marks are not
registered.
• Once federal registration is obtained, must
use ® to designate that the mark is federally
registered (notice provision).
– Failure to do so can prevent recovery of money
damages from an infringer.
– Do not use ® before a registration issues or you
could be liable for false marking.
Practical Pointers
• Use trademarks as adjectives.
– Example: “The Kodak® camera is the highest
quality product that you can buy.”
– Or better yet: “The Kodak® brand camera is the
very best …”.
• Never use as a verb or a noun:
– Example: “Please xerox this document.”
– Example: “Please ride the escalator.”
• Search before committing to a mark.
Practical Pointers
• Use trademarks prominently.
– Capital letters when used in text
– Can also use bold or other font when used in text
• Police your marks against encroachment by
others.
– Register for watch service—U.S. and foreign
– Perform periodic checks of the Internet
Practical Pointers
• Consider consciously developing a trade dress through:
– Unique color schemes
– Unique packaging
– Unique product shapes
– Unique décor
– Memorable characters (e.g., Geico gecko)
– Extending the theme across multiple products
– Must have “look for” advertising
in order to build trade dress rights
(e.g., “What can Brown® do for you?”)
• Federally register trade dress (not merely more conventional word
or logo marks).
– Federal registration for trade dress is even more important than
for trademarks because the existence of trade dress rights can be
difficult (read: expensive) to prove without a registration.
• Expressly promote your trade dress as a brand in your advertising:
– Example: “Look for the yellow bottle with a red cap® brand as the
sign of quality that you deserve.”
Copyrights
• What is a copyright? – “original works of authorship
fixed in any tangible medium of expression …”
• Only the “expression” is protectable, not the
underlying idea itself.
• Ideas, methods, discoveries and machines are not
copyrightable (they may be patentable).
• Titles and slogans are not copyrightable (they may
be trademarks) – but logo artwork is copyrightable.
• Pure information is not copyrightable (phone book;
raw data).
Examples Of Copyrightable Materials
• Text and/or pictures:
– Product catalogs
– Brochures
– Manuals
– Product packaging
• Engineering drawings
• Computer software
(code, graphics)
• Content of a web site
• Advertisements
• Audiovisual works
(videos)
• Sound recordings
• Architectural works
(home/building designs)
• Any other original work of
authorship “expressed” in
a tangible medium of
expression
Copyrights Are Most Helpful to Your Business if
Registered Early
• Copyrights automatically come into being
when the work is created.
• Registration is not required, but is strongly
recommended (particularly if value or creation
time/effort/expense is great).
– Without registration, you have few legal rights.
Federal Copyright Registration – How To Obtain
• Fill out a simple form and send it to the U.S.
Copyright Office along with the required fee
(currently $45) and two copies of the work.
• Registration of computer programs also
requires certain pages of source code.
• Code pages can be selected to preserve trade
secrets.
• Forms and instructions are available at
www.loc.gov/copyright.
Federal Copyright Registration
• Has several advantages:
– Provides proof of creation date
– Required before bringing copyright infringement action in
court
– If registration is applied for within 5 years of publication,
registration will establish a legal presumption of validity
and ownership.
– If registration is made within 3 months after publication or
prior to infringement, statutory damages and attorneys’
fees are available to copyright owner.
– Otherwise, only award of actual damages and profits is
available to copyright owner—no attorneys’ fees.
Typical Sequence of Events
1. Obtain present assignment of rights prior to
beginning work in order to establish
ownership rights (“agree to assign and
hereby do assign”).
2. Work created
3. File U.S. copyright registration application.
4. Publish the work in the marketplace.
Copyright Duration
• For works originally created on or after
January 1, 1978, a copyright lasts for:
– 70 years after the last surviving author’s death,
unless …
– If “work for hire” or if anonymous, then 95 years
from publication or 120 years from creation,
whichever is shorter.
Copyright Notice
• Notice is optional, but strongly recommended.
Extensive use of the notice helps show willful
infringement (possible increased money damages
from an infringer).
• Notice = Symbol + Year of 1st publication + Name of
owner:
– Examples:
 © 2010 Jones Industries, Inc.
 Copyright 2010 Jones Industries, Inc.
• Notice required to obtain statutory damages and
attorneys’ fees
How Broad Are Copyright Rights?
• Prevents copying of the “protectable expression” in
a “substantially similar” work.
• OK to copy merely the “idea”.
• Proof of copying (a jury question):
– Access to the plaintiff’s work.
– Substantially similar expression.
• True independent creation is not copying, even if
you obtain identical end results.
Infringement: How to Avoid
• Do not copy a competitor’s work.
• If you want to copy a competitor’s idea:
– Quarantine your creators from the earlier work;
– Be able to prove no access or copying, but rather independent
creation:





Strict “no copy” instructions;
Legal opinion to state only “the idea” to the creators;
Maintain time records;
Use an independent vendor to do the development;
Videotape the creative process.
• Searching is of little value here.
• Most CGL policies include “advertising injury” coverage that
covers copyright infringement. Be sure to check your policy to
ensure that you have this coverage with no exclusions therefor.
Infringement: Bad Things Can Happen
• Injunction:
– Stop selling order from a court.
– Destruction of infringing inventory.
•
•
•
•
Turn over infringing profits to the plaintiff.
Pay damages caused to plaintiff.
Pay “court costs”.
Normal case: pay opposing party’s attorneys’ fees
(often several hundred thousand dollars)(BUT: only
for the plaintiff if it timely registered).
Practical Pointers
• Just because you paid for it does not mean
that you own it.
– Employees (W-2), no problem.
– Others are often entitled to retain ownership of
copyrights unless they sign a written agreement
that they will assign copyrights to you.
– A simple letter agreement is better than nothing.
 “XYZ agrees to assign and hereby does assign all
copyrights in the Project to Jones Industries, Inc.”
Practical Pointers
• Get assignments of copyrights.
– From all employees (employment agreements)
– From all non-employees
– All consultants
– All computer programmers
– All photographers, videographers
– Ad agencies
 Their photographers
 Their other vendors
Practical Pointers
• Register copyrights for anything that a
competitor might knock off.
– It’s cheap.
– It’s easy.
• Register copyrights promptly.
– Eligibility for reimbursement of attorneys’ fees
creates huge leverage.
 Legal fees for suit often reach hundreds of
thousands of dollars.
Practical Pointers
• Review your insurance policy for “advertising
injury” coverage for copyright infringement.
– Check the “exceptions” in the policy too.
Trade Secrets
= information
Neither the form of the information nor the
media on which the information is
stored matters: written; human
memory; electronic; physical sample,
etc.
Trade Secrets
• Under Indiana law, a trade secret is information
including a formula, pattern, compilation, program,
device, method, technique, or process that:
– (1) derives independent economic value, actual or
potential, from not being known or readily ascertainable
by proper means by other persons who can obtain
economic value from its disclosure or use; and
– (2) is the subject of efforts that are reasonable under the
circumstances to maintain its secrecy
Trade Secrets
• Under Indiana law, a trade secret is information
including a formula, pattern, compilation, program,
device, method, technique, or process that:
– (1) derives independent economic value, actual or
potential, from not being known or readily
ascertainable by proper means by other persons
who can obtain economic value from its disclosure
or use; and
– (2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy
Trade Secrets
• Under Indiana law, a trade secret is information
including a formula, pattern, compilation, program,
device, method, technique, or process that:
– (1) derives independent economic value, actual or
potential, from not being known or readily
ascertainable by proper means by other persons
who can obtain economic value from its disclosure
or use; and
– (2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy
Trade Secrets
• Under Indiana law, a trade secret is information
including a formula, pattern, compilation, program,
device, method, technique, or process that:
– (1) derives independent economic value, actual or
potential, from not being known or readily
ascertainable by proper means by other persons
who can obtain economic value from its disclosure
or use; and
– (2) is the subject of efforts that are reasonable
under the circumstances to maintain its secrecy
Examples of Trade Secrets
• Manufacturing methods,
jigs, processes
• Formulas
• Customer lists
• Customer preferences
• Material composition
• Computer code
• Engineering drawings,
specs, changes
• Pricing, cost & profit
information
• Data compilations
• Information re:
regulatory approval
• Failures; what did not
work
• Bids
• Lab notebooks, meeting
minutes
• Legal information
• Vendor & raw material
identification, pricing,
etc.
• Testing and QC
procedures
Examples Of Efforts That Are “Reasonable” to
Maintain Secrecy
• Confidentiality agreements
Courts look at what efforts
– Vendors and contractors
you undertook – be active,
– Employees
not passive.
– Visitors
• Security alarms, systems
• Restrict computer access (user groups, limited authorization,
passwords)
• Legends on documents: “Confidential” or “Trade Secret”
• Limit tours and other access
• Visitor sign-in log
• Compartmentalize information: access given on a “need to
know” basis
Trade Secrets
• Trade Secret Owner has right to recover
money and stop misappropriation of trade
secret.
• No trade secret violation if:
– Information is in the public domain (known or
“readily ascertainable”)
– Someone independently develops
– Information is obtained through reverse
engineering
Misappropriation
• Trade Secret information is
“misappropriated” (i.e., infringed) if
improperly:
1.
2.
3.
4.
Acquired;
Used;
Disclosed; or
Any combination of the above.
Confidentiality Agreements
• Before disclosing your ideas or information to a company/person
for its consideration, consider having a representative sign a
confidentiality agreement.
• Disclose only on a need to know basis.
• Reclaim possession of documents afterwards.
• Preserve foreign patent rights; reduce likelihood of
theft/misappropriation of the invention; create evidence of prior
invention for subsequent inventorship disputes.
• Confidentiality agreements typically include a general description
of your work, language indicating that company agrees not to
disclose or use your work without your permission, and signature
lines for both parties.
• Beware: duration clauses (“this Agreement shall be for a term of
three (3) years…”) create a strong argument that the information
is no longer confidential thereafter.
Questions:
John M. Bradshaw
[email protected]