building asset value in trademarks and copyrights presented by alec p. rosenberg arent fox llp...
TRANSCRIPT
Building Asset Value In Trademarks and Copyrights
Presented by
Alec P. Rosenberg
Arent Fox LLP
Washington, DC | New York, NY | Los Angeles
Part I:
Developing Rights
Definitions – Trademarks
• Trademark/Service Mark: word, name, symbol or device used to identify and distinguish the goods or services of a business from those offered by others
• Trade dress: a distinctive, nonfunctional feature of a label, package, advertisement, web site or other object that identifies and distinguishes goods or services
• Certification Mark: a word, name, symbol or device used by a person other than its owner to certify regional or other origin, material, mode of manufacture quality, accuracy, or other characteristics of such person’s goods or services
• Collective Mark: a trademark or service mark used by members of a cooperative, association, or other group or organization including marks indicating membership
Definitions – Copyrights
• Copyright: A bundle of exclusive rights granted by government for a limited time to protect an original, “fixed” expression of an idea.
• Examples of Copyrightable Subject Matter: Literary and Musical Works Movies and other Audio-Visual Works Factual Compilations Software Translations Paintings Photographs Architectural designs
Developing Trademark Rights
• Use in Commerce = Common Law Rights
• Benefits of Federal Registration
Constructive Notice
Rebuttable Presumption of Validity, Ownership and Exclusive Right to Use
Federal Jurisdiction and enhanced relief available
Incontestability After 5 Years
Nationwide and International Priority
• Registration may be based on Actual or Intended Use
• Process
Selection
Search and Clearance
Use / Registration
Proper Use and Licensing
Monitoring and Enforcement
Developing Copyright Rights
• Rights Accrue Upon Creation and Fixation of “Original Works of Authorship” Only Minimal Creativity Required
Selection and Arrangement of Facts, Not Facts Themselves
• Author = Owner Works Made for Hire
Joint Works
• Benefits of Registration Constructive Notice
Federal Jurisdiction
Potential for Evidentiary Benefits and Enhanced Damages
Part II:
Strengthening and Protecting Rights
Maximizing the Value of Trademarks
• Pick Strong, Distinctive Marks
• The Strength of a Mark and Scope of Protection Available is Affected By The Degree of Inherent Distinctiveness
• Spectrum of Inherent Distinctiveness
Coined
Arbitrary
Suggestive
Descriptive
Generic
• Acquired Distinctiveness (aka “Secondary Meaning”)
Examples of Coined Marks
• Kodak
• Exxon
• Verizon
Examples of Arbitrary Marks
• Apple
• Camel
• Saturn
Examples of Suggestive Marks
• Wrangler
• Coppertone
• Sparkle (for glass cleaner)
• Samson (for hair care products)
KEY: Some Imagination Required
Examples of Descriptive Marks
• Steak N Brew
• Raisin Bran
• Bank of America
• Bufferin
• The Dollar Store
KEY: Identify, Describe, Characterize a Quality, Attribute, Ingredient, etc.
Proper Trademark Usage
• Trademark Rights May Be Lost Through Improper Use
Use Trademarks as Proper Adjectives Avoid the Possessive or Plural Form
Display Marks in a Distinctive Manner
Display a TM, SM, or ® Symbol with Marks
Display Marks in a Consistent Format
Never Permit Unauthorized Use of Marks
Strategies for Enhancing Trademark Value
• Monitoring
• Enforcement
• Licensing (Quality Control is Critical)
• Family of Marks Doctrine
• U.S. and Int’l Trademark Registration
Strategies for Enhancing Copyright Value
• Exploit Range of Copyrightable Subject Matter
• Proper Content Clearance
• Register Important Works Made for Hire
• Careful Licensing (Exclusive License = Assignment)
• Consider Registering Websites (and Updating Regularly)
Websites and Domain Names
• Domain Name Selection Consider Seeking Trademark Protection Consider Defensive Registration
• Enforcement Techniques Domain Names: UDRP vs. ACPA Copyrights: Notice and Takedown (DMCA)
• Key Words and Pop-Ups
• Website Content and Programming (i.e., hyperlinks)
• Content Clearance and Copyright Registration
Part III:
Using Trademarks and Copyrights to Obtain Financing
• Relatively Recent Phenomenon
• Exploits Fullest Economic Potential of IP
• Blend of State Law / UCC and Federal Law
• Careful Due Diligence is Critical
Trademarks and Copyrights As Security For Financing
18
Valuation of Trademarks and Copyrights
• Context is Key Mergers / Acquisitions Bankruptcy / Reorganization Inter-company Transfers Litigation / Damages Tax Licensing Loan Securitization
• Important Overlapping Concepts Goodwill (image / reputation, probability of continuing patronage,
intangibles giving going concern advantage over start-up)
Intangible Assets (precisely identifiable, legally owned, traceable, provable, and quantifiable)
Intellectual Property (trademarks, patents, copyrights, trade secrets, software, domain / web assets)
Valuation Methodologies
• Cost Approach Historical or Replacement Cost “Substitution, not “Earnings” Value ” = Generally a Low Value Best Suited to Very Young, Experimental Assets
• Market Approach Compares Actual Market Transactions Requires Accessible, Reliable Data concerning Similar Assets
• Income Approach Considers Reasonable Future Income Stream (DCF Analysis) Challenge is Separating IP Income Stream from Business as a
Whole Requires Multiple Predictions / Estimates
• Relief From Royalty Approach Subset of “Income Approach” – Measures NPV of Royalties
Company Saves Through Ownership of IP Combinations of Real World Info (i.e., Royalty Rate) and
Predictions (i.e., Future Income Streams)
Considerations When Valuing Trademarks
• Only Government-Sponsored Monopoly That Is Endlessly Renewable
• Mark May Be the Brand, So Value of Mark = Value of Brand
• Trademarks Cannot Travel Alone – They Require Associated Goodwill
• What Are You Valuing? (Mark / Brand Only, or also All Related Assets)
• KEYS: Is it really a trademark, and does it work? Would others want to use it to distinguish their goods / services? Would someone pay for a license to do so?
Considerations When Valuing Copyrights
• Long Term of Protection Generally: Life + 70
Works Made For Hire: 95 from Publication or 120 From Creation
• Keys Consider Specific Work In Question
Consider Current Value Based on (a) Licensing and (b) Internal Use / Benefits
Consider Potential New Future Uses
Security Interests in Trademarks / Copyrights
• Careful, Thorough Due Diligence Check Licenses: Can Only Pledge What is Owned Check USPTO and Copyright Office / International?
• Trademarks Rule Against Assignments-In-Gross
Best Practice is to Make Dual Filings (State and USPTO)
Intent-To-Use Applications = Pledge vs. Assignment
• Copyrights Federal Law Preempts, But Dual Filings Recommended
Unregistered Copyrights
• A Note About Domain Names Property vs. Conditional Contractual Right
Alec P. RosenbergPH: [email protected]
Arent Fox PLLC1050 Connecticut Ave., N.W.Washington, DC 20036
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