THE ABC'S OF IP

Our founding fathers believed that the free flow of knowledge would be essential to the economic, cultural, and technological growth of our country. They also believed that there would be no incentives for creators of new knowledge if there were no mechanisms to protect them. Thus, Article I, Section 8, of the Constitution establishes patent protection for creators of inventions furthering the progress of science and the useful arts, and copyright protection for authors of writings. Pursuant to that mandate Congress promulgated patent laws, copyright laws and trademark laws. Trademarks may also be protected under state law and the common law. Trade secrets are protected under most of the states' laws and the common law. The Right to Privacy and the Right of Publicity are protected under some state laws and the common law.

Patents

Federal law establishes protection for a new invention via a "Utility" patent and protection for a new ornamental design via a "Design" patent. Patentable inventions can fall into various categories, such as apparatus or devices for accomplishing some purpose, methods or processes for accomplishing some purpose, compositions or articles of matter. Ornamental designs can take various forms, e.g., the design for the tread of a tire, the design of the graphics on the upper of a running shoe, the pattern of sterling silver tableware, the shape of a detergent bottle, etc.

A utility patent has a fixed term. At present it is 20 years from the filing date of the patent application for applications filed after June 8, 1995 or the longer of either 20 years from the application filing date or 17 years from the patent's issue date for applications filed before June 8, 1995. Design patents are granted for a period of 14 years. Once the patent on an invention or design has expired, anyone is free to make, use, or sell the invention or design. It is then said to be in the "public domain."

Every patent is based on an application filed in the United States Patent and Trademark Office (PTO) on behalf of the inventor(s). The application includes a detailed description of the invention, the background and objects of the invention, drawings (if appropriate) showing the invention, a detailed specification of the best mode and embodiment of the invention, at least one "claim" and an abstract of the invention. The claim defines the boundaries of the monopoly provided by the patent, and is perhaps the most important part of the patent at least as far as the patent owner is concerned.

A utility patent requires that the invention as set forth in the claim(s) must be new, useful, and unobvious. To meet the novelty requirement, the claimed invention must not have been known or used by others in this country or patented or described in a printed publication anywhere before the applicant invented it. Moreover, if the invention was patented by another or described in a printed publication anywhere more than one year before the application date, or if the invention was in public use or on sale in the U.S. for more than one year before the application date, it cannot be patented. The non-obvious requirement is met if the claimed invention is sufficiently different from existing technology and knowledge so that, at the time that it was made it would not have been obvious to a person having ordinary skill in the particular art to which it pertains. The policy behind the novelty and unobviousness requirements is that a patent, being a legal monopoly, should only be granted for real advances in the art.

It is a common practice for patent applicants to have a search conducted prior to filing for a patent. This search can provide some indication as to whether the invention could be patented, and also whether someone else has a patent which would be infringed by making, selling or using the invention. Such "preexamination" searches have been traditionally performed by hand at the public search room of the PTO. However, there is growing confidence in computerized searches, particularly for certain types of high-tech inventions. Several commercial vendors, e.g., IBM, provide computerized searching through the World Wide Web or the Internet. The PTO has also made the abstracts of all U.S. utility patents from 1976 to date available for searching at its website "www.uspto.gov" and has made its APS search engine available for use at various libraries and other institutions around the country.

Every patent application is examined by a patent examiner, who reviews it for compliance with formalities, and then makes a search of prior knowledge or teachings (referred to as "prior art"), as evidenced by existing patents or other publications, to determine the patentability of the asserted invention. The examiner usually conducts the search by hand, and in some cases by a computerized database, referred to as the Automated Patent System (APS).

A U.S. patent gives its owner the right to exclude others from making, using, selling or importing the patented invention in the United States during the term of the patent. Anyone who does any of those proscribed acts without permission of the owner is an infringer - even if the infringer did not copy the patented invention or even know about it. Thus, copying is not required to find patent infringement. The determination of whether something infringes a utility patent is accomplished by reading the claims of the patent on the accused device or process. If at least one claim "reads on" the accused device or process, infringement exists. By "reading on" it is meant that every element found in at least one claim is found in the accused device or process. Even if an element called for in a claim is not found in the accused device, infringement may still exist if the accused device includes some element that is equivalent to the missing element.

Patent law provides various remedies for patent infringement such as an injunction to prevent the infringer from continuing to infringe, and monetary damages. In some cases these damages may be the profits that the patent owner would have made but for the infringement. In no case will damages be less than a reasonable royalty. If the infringement is deemed willful or deliberate, treble damages may be awarded. In special circumstances, the patent owner may also be able to recover his/her/its attorneys fees.

Copyrights

Copyright protects various types of original works of authorship, such as literary works (fiction or non-fiction prose, poetry, computer programs, catalogs and other advertisement text, computer software, etc.); musical works (instrumentals, songs, advertising jingles, etc.); dramatic works (plays, operas, skits, etc.), pictorial, graphic, and sculptural works (photographs, drawings, maps, cartoons, etc.); motion pictures and other audio-visual works (movies, television shows, games and other interactive media works, etc.); and sound recordings (recordings of words, music, or other sounds). A great deal of the works which appear on the Internet are combinations of these type of works. Such combined works are commonly referred to as "multi-media" works.

Copyright arises automatically when an "original" work is "fixed in a tangible medium of expression." Originality means that the author created the work and didn't copy it from anything else. Only minimal creativity is required. Novelty, uniqueness or artistic merit is not required. Moreover, a work can include some "preexisting" material(s) and still be considered to be original and hence copyrightable. However, the copyright on the new work only covers the original material added by the author, not any of the preexisting material(s). A work is "fixed in a tangible medium of expression" when made sufficiently stable to permit it to be perceived, reproduced or otherwise communicated for a period more than transitory duration. Thus, when the Hypertext Markup Computer Language used to create an Internet web page, is recorded on the hard drive of the server, it is fixed, and a copyright on that web page comes into being. In fact, even placing a work in a computer's RAM is considered to be of sufficient duration to constitute fixing.

Any copyright created in the United States can be enforced in court if there is registration of the copyright claim in the U.S. Copyright Office. Only the author or the owner of the copyright is permitted to register the copyright. The registration of the copyright requires the filing of the appropriate copyright form, a payment of $30.00, a deposit of one copy of the work, if unpublished, and two copies of the work, if published, in the Copyright Office. Assuming that the formalities are met and it appears to the Copyright Office that the work is copyrightable subject matter, a Certificate of Registration will be issued to the copyright owner (the "claimant").

Copyright protects against copying the "expression" in a work, as opposed to the "idea" of the work. "Expression" is not necessarily limited to the exact words, graphics or computer code used, but can be some level of abstraction below the mere concept of the work. Thus, the difference between "expression" and "idea" may be one of the most difficult concepts in copyright law to determine, and is particularly dependent upon the facts of the situation on a case-by-case basis.

The owner of a copyright has five exclusive rights in the work. Those rights are: the right to copy, duplicate, transcribe or imitate the work in a fixed medium (the "Reproduction" right"); the right to modify the work to create a new work, called a "derivative work" (the "Modification" right); the right to distribute copies to the public by sale, rental, lease, or loan (the "Distribution" right); the right to recite, play, dance, act or show the work at a public place or to transmit it to the public (the "Public Performance" right); and the right to show a copy of the work directly or by means of film, slide, or television image at a public place or to transmit it to the public (the "Public Display" right). Anyone who violates any of the exclusive rights of the copyright owner during the term of the copyright is an infringer.

The (duration) term of a copyright depends upon who created the work, when it was created, and when it was first publicly distributed (i.e., "published"). The term for works created after January 1, 1978 is the life of the author plus seventy years, unless the work is a "work made for hire." The term of a work made for hire is either 95 years from first publication or 120 years from the date of creation, whichever expires first. A work made for hire is generally deemed to be a work created by an employee within the scope of his or her employment. The employment relationship can be found to exist is various circumstances and is largely fact dependent.

Generally, the copyright is owned by the person(s) who authored the work, unless it is a work made for hire. In that case the author (and owner) of the work is the employer. The copyright law also includes another form of a work made for hire. This applies to nine specific types of specially commissioned works, e.g., a contribution to a collective work, an audio-visual work, a test, etc. Specially commissioned works will be deemed to be works made for hire and owned by the commissioning party if there is a written agreement stating that the work is to be so treated and is signed by the creator of the work.

A copyright owner whose work has been infringed can recover actual damages or, in some cases, statutory damages. Statutory damages may be in the range of $750 to $30,000. If the infringement is deemed innocent the damages may be reduced, but in no case less than $200. If, however, the infringement is deemed willful statutory damages may be assessed as high as $150,000 per infringement. In addition the courts can grant injunctions to prevent or restrain further infringement, and can order the impoundment and destruction of the infringing copies. If the work was registered in the Copyright Office prior to the infringement or within 90 days of first publication, the copyright owner may also be reimbursed for his/her/its counsel fees incurred in a successful suit against an infringer. Thus, infringement of a copyright bears potentially substantial liability for the infringer.

Securing ownership of the copyright(s) or a license to use a copyrighted work, will avoid the danger of infringement. Ownership in the copyright can be accomplished by virtue of a written document, called an "assignment." This document must be signed by the transferor and can transfer all or only some of the intellectual property rights in the work. A license is merely the right to use the copyright and is typically much more limited than an assignment. A license need not be written, although it is certainly a good idea to have it memorialized in a document signed by both parties.

One doesn't need a license to use a copyrighted work in three circumstances: (1) if the work is already in the public domain; (2) if the use is deemed to be "fair use"; or (3) if the material of the work used is factual or an idea. Works in the public domain are those works whose copyrights have already expired, or which have entered the public domain by failure of the copyright owner to include the required copyright notice. Under the 1909 Copyright Act copyrights had a term of 28 years, and could be renewed for another 28 years. After the expiration of the original term (or the renewal term, if applicable) the copyright expired and the work entered the public domain. Under the 1976 Copyright Act, and which is applicable now, the duration of a copyright, as noted above, is the life of the author plus seventy five years unless the work is a work made for hire. However, under the 1976 Act, publication of a work after January 1, 1978 (but prior to March 1, 1989) without the required copyright notice placed the work in the public domain, except for some very special circumstances excusing the failure. The required copyright notice consisted of three elements, © , the name of the copyright owner, and the year date of first publication. Since March 1, 1989 use of a copyright notice is optional, although still advisable. Thus, a work created after that date is covered by copyright, even if it doesn't bear a copyright notice when published.

Fair use is a defense to copyright infringement and is frequently found to exist if the use is for critical, comment, news reporting, teaching, scholarship or research. The determination of whether the use is fair or not is accomplished on a case-by-case basis, taking into account the numerous factors. Those factors are: the purpose and character of the use (courts are more likely to find the use is fair where it is for non-commercial purposes); the nature of the copyright work (courts are more likely to find the use is fair where the copied work is factual); the amount and substantiality of the work copied (courts are more likely to find the use is fair where what is used is a small amount, qualitatively, of the protected work); and the effect on the potential market for the work (courts are more likely to find the use is fair where the new work doesn't substantially reduce, e.g., act as a substitute for, the market for the copyrighted work).

So-called "moral rights" of artists are not protected by copyright. However, certain works of visual art are protected federally under the Visual Artists Rights Act (VARA). In particular, VARA limits modification of certain works of fine arts, e.g., a single work or no more than 200 consecutively numbered copies, and the use of the artist's name without permission of the artist. VARA does not apply to "works made for hire." An action for a violation of VARA can be brought by the artist, even if the artist no longer has copyright rights in the work, e.g., the artist has sold or otherwise transferred his/her rights in the work.

Trademarks

A trademark is any name, symbol, slogan, or logo which is used by a business to identify the goods provided by it. For example: the trademark WORD is used by Microsoft Corporation to identify its word processing software and distinguish that software from other vendors' word processing software. If services are provided under a mark, the mark is referred to as a "service mark." A name for a business, be it corporate or fictitious, is referred to as a "tradename." A tradename can also function as a trademark or service mark if it is used on the goods or in connection with the services provided by the business so that the consuming public associates that name with the goods or services and not with the business per se. The law of trademarks and service marks is essentially the same.

Trademark law is designed to protect the trademark owner's goodwill and reputation by giving the owner the exclusive right to use the mark on the type of goods or services for which the owner is using the mark. If the mark is to be used in interstate commerce or has been used in interstate commerce, federal trademark protection is available under the Lanham Act. Many states, including Pennsylvania, have trademark registration statutes. Moreover, all states protect unregistered trademarks under the common law.

To be a viable mark it must be capable of distinguishing the owner's goods or services from the goods or services of others. A mark that merely describes a class of goods rather than distinguishing the mark's owner's goods from goods provided by others is not protectable. Generic terms are ones that define the product/service rather than the source of origin or sponsorship for the product/service. Generic terms do not, and cannot, function as a trademark and will not be protected. Many, if not most, dictionary words by themselves are generic when applied to the particular product or services to which they seemingly relate. For instance, words like "soap" or "napkin" would not qualify as a trademark for soap or napkins. In addition to words or terms that have always been generic, there are words or terms that initially functioned as a trademark but later become generic; usually through continuous improper use of the mark to define the product rather than the source of origin. Examples of words that initially were important trademarks but that subsequently became generic are: aspirin, cellophane and escalator. At the other end of the spectrum from generic terms are the so-called "arbitrary" or "fanciful marks." An arbitrary or fanciful mark is one that has been invented for the sole purpose of functioning as a trademark without having or suggesting any relationship with the specific product or service in connection with which it is used. These tend to be the strongest and most easily enforceable marks. KODAK and EXXON are examples of marks that fall into this category. However, such legally outstanding trademarks may have little marketing value unless heavily promoted.

The great majority of marks fall within the "descriptive" or "suggestive" category. Marks which are merely descriptive of a product are not inherently distinctive. They do not inherently identify a particular source, and cannot be protected unless they acquire what is known as "secondary meaning." "Secondary meaning" means that the consuming public associates the mark with a single supplier, not with the goods or services, and is typically acquired through a large amount of promotion, advertising, or sale over a sufficiently long period of time. For instance, the mark HERSHEY has a strong secondary meaning, although it also is descriptive in the sense of being a geographic word, i.e., the name of a city. Suggestive marks are marks that, while having some connection with a product or service, do not necessarily conjure up what the product or service is. They require some imagination on the part of the consumer to draw a connection between the mark and the type of product/service embodied in the mark. For instance, a mark such as BAN for a deodorant or CYCLONE for a fence in this class. The significance of the difference between a descriptive and a suggestive mark is that a suggestive mark is registrable without the necessity of proving secondary meaning. Moreover, such a mark can at times be enforced at common law without a showing of secondary meaning. On the other hand, where a descriptive mark is involved, it is necessary to show that the mark has acquired secondary meaning.

Under the common law the first user of a mark in a geographic area acquires trademark/service mark rights in that area. Actual use of the mark on the goods or in connection with the services provided is required before any rights are acquired. Common law marks are enforceable even without registration. In fact, the Lanham Act includes provisions establishing a federal unfair competition cause of action that can be used to enforce common law trademark and service mark rights.

Once a potential trademark/service mark is proposed, it is a common, and well advised practice, to have a search conducted to determine the availability of that mark, (i.e., if some other entity is using that mark on some goods or service). The search can be accomplished through a commercial trademark search service, such as Thompson and Thompson, or directly through the records of the relevant state and federal agencies, or through other sources. Commercial search services generally offer the most comprehensive searches available and even include common law searches and registered Internet domain names. Unfortunately, too many times no search is made, with the result that the mark selected for subsequent use has previously been adopted and/or used by another, which could prevent the acquisition of trademark rights therein and also subject the subsequent user to a potential suit for infringement. Moreover, even when a search is made it is frequently too limited in scope to be of any value. For example, it is a very common practice when a business is started to have a search made of the corporate and/or fictitious name records of the state in which the business will operate to see if the proposed corporate or tradename is available for use in that state. Even if that name had not been previously registered by another in the state that does not mean that the use of that name for the business or as a trademark/service mark for the goods/services of the business can be used with impunity. In particular, if that name/mark is a federally registered trademark or common law trademark of another which has been used in the state, the subsequent user will be exposed to a suit for trademark/service mark infringement, and could be enjoined from the continued use of the tradename even though its use is authorized by the state.

The most effective trademark protection is obtained by filing a trademark registration application in the PTO. An application to register a trademark/service mark can be filed before use, based on a bona fide intention to use that mark (called an "Intent-To-Use" application), or after use in interstate commerce (called a "Use" application). While one can apply to register a mark prior to its use, no rights in the mark are obtained until there has been actual use of the mark by the business. This means that for a trademark, the mark must be applied to the goods or on packaging for the goods that have been introduced into commerce. For a service mark, use on advertising or other promotional material in connection with the provision of the service(s) in commerce will suffice.

Federal law also protects unregistered (common law) trademarks, but such protection is limited to the geographic area in which the mark is actually being used. State trademark protection under common law is obtained simply by adopting a trademark and using it in connection with goods or services. This protection is limited to the geographic area in which the trademark is actually being used. State statutory protection is obtained by filing an application with the state trademark office.

A trademark that so resembles one already in use as to be likely to cause confusion or mistake is not registrable or protectable under federal law. In order to determine if there is a likelihood of confusion, the PTO (and courts) ask: Would an appreciable number of the relevant class of consumers be confused as to the source of origin of the goods/services by the use of the respective marks? If that class of purchasers would be likely to think that the goods/services sold under the respective marks came from the same source (or from different sources that are in some way connected, affiliated or sponsored), a likelihood of confusion exists, and the mark is not registrable.

Any person who uses a mark in connection with goods or services in a way that is likely to cause confusion is an infringer. The basic test for infringement is the same as for registrability, i.e., a "likelihood of confusion." Moreover, it isn't necessary to prove actual confusion, as long as confusion is likely to occur. Instances of actual confusion are generally considered strong proof of a likelihood of confusion. Confusing similarity of the marks doesn't require exact identity. Criteria for determining likelihood of confusion are the degree of similarity in pronunciation or sound, appearance, and meaning of the mark, and/or similarity of the respective goods/services. Intent to infringe is frequently considered as evidence of a likelihood of confusion.

A trademark owner can obtain an injunction against any confusing use of the trademarks by another, and can collect damages for such infringement.

Trade Secrets

The law of trade secrets, unlike patents and copyright, is not regulated by any federal statute, but rather exists under the common and/or statutory law of the states. On April 19, 2004, the Uniform Trade Secret Act went into effect in the Commonwealth of Pennsylvania. Unlike the definition of a trade secret under the prior law, the definition of a trade secret under the UTSA does not require that information be "used in one's business" or that it provide the user "an opportunity to obtain an advantage over competitors who do not know or use it."

The USTA defines a trade secret as: " . . . including a formula, drawing, pattern, compilation including a customer list, program, device, method, technique or process that (1) derives independent economic value, actual or potential, from not being generally known to, and not being 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." Thus, the new focus is on independent economic value of the information, regardless whether that information actually is being used by the trade secret claimant, and on taking reasonable steps to maintain its secrecy.

Trade secrets do not require any registration process for protection. However, to be protectable it is essential that whatever the trade secret, its subject matter must not be readily ascertainable by others, using proper means, and must derive actual or potential economic value by not being readily ascertainable. That which is protectable as a trade secret includes substantially anything which can give an owner an advantage over his or her competitors. For example, trade secrets have been found in business information, customer lists, both retail and wholesale, technological information, such as formulas for a chemical compound, a process of manufacturing, treating or preserving material, a pattern for a machine or other device, and computer programs. The fact that a trade secret may or may not be patentable subject matter does not prevent the information relating to the trade secret from being protectable as a trade secret providing it meets the required factors for protection.

Trade secret protection can be maintained only for as long as the trade secret remains secret. This means that as soon as the trade secret is made known to the public in any way the trade secret is lost.

The owner of a trade secret has the right to keep others from misappropriating and using the trade secret. One cannot stop a competitor from using what is one's trade secret if the competitor didn't misappropriate it, e.g., if the competitor independently developed it, reverse-engineered it, etc. Typically one demonstrates misappropriation by some breach of a duty or of a confidential relationship. That confidential relationship may arise by contract, e.g., an employee taking his previous employer's secret process to a competitor, a consultant who breaches a confidentiality agreement, etc., or may arise by operation of law, e.g., industrial espionage, etc. With regard to the last example, utilizing the Internet to gain access to another's computer system as part of industrial espionage may constitute a trade secret violation, if any trade secrets or proprietary know-how are taken.

Right to Privacy & Right of Publicity

There are areas of law that specifically deal with the right of the individual to control his/her image and reputation, and in that regard are akin to intellectual property. These are the so-called "Right To Privacy" and the "Right Of Publicity." Invasion of either of these rights typically occurs via the unauthorized use of the image, likeness, name or description of a person in print or some electronic media, e.g., radio or television. Since the Internet and its World Wide Web provide an easily accessible medium for conveying textual and graphic information to a virtually world wide audience, it is expected that many future claims for invasion of the rights of privacy and/or publicity will be based on some Internet activity.

The Right To Privacy is the right of an individual to be left alone. There are four types of recognized invasions of this right. Those invasions are the so-called torts of "intrusion", "public disclosure of private facts", "false light", and "appropriation." Intrusion occurs when the private affairs and the seclusion of an individual are invaded, either physically or otherwise, and is redressable if the intrusion would be offensive to a reasonable person. This tort does not require any publication of the private affairs of the victim. The tortious invasion of the Right To Privacy by public disclosure of private facts does, however, require publication, and is only redressable if the matter publicized would be offensive to a reasonable person and would not be of legitimate public interest or concern. Moreover, the publication must be to more than a few persons. The tortious placing of a person in a "false light" requires the tortfeasor to publicly place the aggrieved person in a light that would be offensive to a reasonable person. To recover for an invasion of this right the individual placed in the false light must show that the tortfeasor knew that the matter published was false, or else acted with reckless disregard in publishing the material placing the person in the false light. Tortious appropriation constitutes a violation of the right of an individual not to have his or her name or likeness appropriated by another for commercial gain.

The Right Of Publicity gives the individual the right to control his name, face, image or voice for commercial purposes. In short, it protects an individual's property right in his or her persona. A violation of this right occurs when an individual's name, likeness or identity has been misappropriated by another for commercial purposes. The victim in such a case is entitled to recover for the unauthorized economic gain by the tortfeasor. Many states recognize the Right Of Publicity as a common law cause of action, while in other states it is statutory. In some states, the right is personal so that it may only be asserted by the individual wronged during his/her life. In other states the right is descendable and can be asserted by the heirs of the wronged individual. In some states the right is also assignable.