nbi ip pres - home.business.utah.edu€¦ · web viewby. kenneth e. horton. parsons behle &...

INTELLECTUAL PROPERTY LAW

by

Kenneth E. HortonParsons Behle & Latimer

201 South Main Street, Suite 1800P.O. Box 45898

Salt Lake City, UT 84145-0898Phone: (801) 532-1234

E-Mail: [email protected]

I. INTRODUCTION

Organizations invest significant resources in creating and developing new ideas,

expecting that successfully applying the new ideas to products and services will provide

advantages over their competitors in the marketplace. The potential value of any new idea

depends on:

the ability to protect the idea from unauthorized use by others; and

the freedom to use the idea in a commercial environment without violating the rights of others.

The legal system provides mechanisms for establishing enforceable property rights in

certain aspects of new ideas. The term “intellectual property” refers to any product of the human

mind or intellect which the legal system recognizes a property right. Intellectual property rights

fall into four general categories:

trade secret rights;

patent rights;

trademark rights; and

copyrights.

1© Kenneth E. Horton5/23/23 1:48 AM

The following text outlines basic information regarding intellectual property (IP) laws

and the accompanying rights.

II. FUNDAMENTALS OF INTELLECTUAL PROPERTY LAW

A. Trade Secret

1. What is a Trade Secret?

Trade secret rights are defined under federal and state law, and the specifics differ from

jurisdiction to jurisdiction. For example, under the Uniform Trade Secrets Act, which many

states have adopted, a trade secret is information:

not generally known to others, e.g., is secret. The secrecy need not be absolute. Information known to more that one—but not all—of a number of competitors can still be regarded as a secret;

subject to efforts to maintain its secrecy such that the information is not ascertainable by others using “proper means.” Such efforts must be reasonable under the circumstances. Courts have found measures such as, advising employees of the existence of a trade secret, limiting access to a trade secret on a “need to know” basis, and controlling plant access to be reasonable efforts. Courts have generally not required that extreme or unduly expensive measures be taken. “Proper means” include observation of an item in public use or on public display, obtaining the trade secret from published literature; and

affording its owner an economic advantage, actual or potential, that derives from not being generally known by others and is not readily obtainable by others using “proper means.”

2. What Subject Matter Can Be Protected As A Trade Secret?

Information protectable as a trade secret is very broad. Protectable information includes

—but is not limited to—technical information such as a formulas, patterns, compilations,

programs, devices, methods, techniques and processes, as well as business information such as


customer lists and business plans. There is no requirement that the information be new, novel, or

reduced to tangible form.

General business knowledge is not protectable as a trade secret. The right of an

individual to follow and pursue a particular occupation for which he or she is best trained is a

fundamental right. One who has worked in a particular field cannot be compelled to erase from

his or her mind all the general skills, knowledge, and expertise acquired through his or her

experience.

3. What Rights Are Conferred By Owning A Trade Secret?

The owner of a trade secret has the right to prevent others from disclosing or using the

trade secret.

4. How Are Trade Secret Rights Acquired and Maintained?

Trade secret rights are acquired and maintained by taking reasonable precautions to keep

the information “secret.” The following are generally considered as important, but not

definitive, when maintaining trade secret protection:

educating employees regarding the value of trade secrets and the responsibilities and duties of protecting trade secret information;

identifying trade secret information;

labeling and controlling documents containing trade secret information;

providing physical security for all tangible forms of trade secret information (locked gates, doors, cabinets, desks);

restricting access to computer systems, e.g., by passwords; and

controlling disclosure of trade secret information to others by disclosing proprietary information only under the provisions of a confidentiality agreement.


5. Commercial Use Of Trade Secret Information

To commercially utilize a trade secret, the trade secret owner will need to disclose the

trade secret to certain individuals, such as employees, suppliers, and other parties. Such

disclosure should only be made when necessary and only under the provisions of a

confidentiality agreement whereby the recipient agrees to:

use reasonable measures to protect the confidentiality of the trade secret information;

refrain from disclosing the trade secret information to others; and

use the information only for the limited purpose for which the trade secret owner has disclosed the information.

IMPORTANT NOTE:A trade secret can be lost forever if the required characteristic of “secrecy” or of “not being generally known” is destroyed by an unprotected disclosure of the trade secret.

6. How Are Trade Secret Rights Enforced?

a. Misappropriation of Trade Secrets

Trade secret rights are violated by misappropriation of the trade secret, which is:

acquisition of a trade secret of another by a person who knows (or has reason to know) that the trade secret was acquired by “improper” means; or

disclosure or use of a trade secret of another without consent by a person who:

used improper means to acquire knowledge of the trade secret;

knew (or had reason to know) that the trade secret had been acquired by improper means, or had been acquired by accident or mistake.

“Improper means” include theft, bribery, misrepresentation, inducement to breach a duty

to maintain secrecy, and/or espionage, as well as similar methods. Discovery of the trade secret

of another by “proper means” is not misappropriation.


b. Enforcement

Trade secret rights can be enforced by suit in civil court and/or by criminal prosecution.

i. Civil Action

An owner may seek relief for misappropriation of a trade secret in civil court. The civil

court may grant the following equitable relief to prevent violation of trade secret rights.

A temporary restraining order (TRO) preserves relative positions of the litigating parties until a decision on a motion for preliminary injunction.

A preliminary injunction preserves the relative positions of the litigating parties until trial.

A permanent injunction prohibits use of the trade secret information for a given period of time.

A civil court, on a proper showing that the trade secret rights have been misappropriated, may

also award the compensatory and punitive monetary damages.

ii. Criminal Prosecution

Many states have criminal statutes that dictate the penalty for theft of trade secrets.

Many of these criminal statutes may have been superseded under the Supremacy Clause of the

U.S. Constitution since the federal government adopted the Economic Espionage Act of 1996,

under which theft of trade secrets is a federal criminal offense.

The Economic Espionage Act provides the following penalties:

individuals committing an offense can be imprisoned up to 10 years and be fined up to $500,000; and

business organizations can be fined up to $5,000,000.


B. Patent Law Basics

1. What is a Patent?

A patent:

is a property right granted by the federal government, that extends within the territorial boundaries of the U.S;

lasts for specific period of time; and

gives its owner the right to exclude others from making, using, or selling the invention “claimed” in the patent.

The patent system is designated by the U.S. Constitution to promote investment and

progress in science and the useful arts by allowing inventors to profit from their inventions. In

exchange for the right of exclusion granted by the patent, the inventor must publicly disclose

how to make and use his or her invention so it may be used freely by the public after the patent

expires.

There are three types of patents: plant patents, design patents, and utility patents. Plants

patents protect plants and design patents protect the design—not function—of an item. The

utility patent is the most common patent awarded and is what most people think of when they

hear the term patent. The following material focuses primarily on utility patents.

A patent must contain:

At least one “claim” that sets forth the limitations legally defining the patented invention, e.g.,

A composition, comprising a mixture of:(i) component A;(ii) additive B; and (iii) additive C.


A “specification” disclosing the invention in detail, including how to make and use the invention. The claims are interpreted in view of the description of the invention in the specification.

IMPORTANT NOTEThe claims legally define the scope of the patent rights and not what is described in the specification. Subject matter that is disclosed in the patent specification, but not claimed, is not part of the patented invention and may deemed to be dedicated to the public.

2. What Subject Matter Can Be Protected By A Patent?

a. Patentability

To be patentable, an invention must fall within one of the statutory classes of inventions

as well as be novel, useful, and non-obvious.

b. Statutory Classes of Invention

U.S. law recognizes several statutory classes of subject matter for which patents may be

granted:

Processes. A process is a way of doing or making something that involves more than purely mental steps.

Machines. A machine is a device or apparatus for accomplishing a task, e.g., a photocopier, an electric motor, a jet engine.

An article of manufacture. An article of manufacture is an item made by a machine or by human hands, e.g., a shoe or an automobile dashboard.

A composition of matter. A composition of matter is a chemical composition, e.g., a chemical compound such as a thermoplastic resin composition.

Some examples of subject matter that courts have deemed to not fit into any of the statutory

classes of patentable subject matter include:

mental processes, e.g., a method of meditation;

laws of nature, e.g., gravity;

pure mathematical algorithms; and


naturally occurring articles or phenomena, e.g., an element such as gold or silver.

c. Utility

To be patentable, an invention must also be useful; in other words, it must have a utility

and accomplish at least one of its intended purposes.

Some examples of inventions that are not useful or do not have utility:

inoperable inventions—when the nature of the claimed invention creates reasonable skepticism as to the operability of the invention and the inventor is unable to provide sufficient proof of operability, e.g., a “perpetual motion machine.”

immoral inventions—inventions deemed to be immoral, e.g., (up until the mid-1970s) gambling devices.

d. Novelty

To be patentable, an invention must also be new or novel. In other words, it must differ

in some way from all prior developments that are publicly available to, or known by, the public.

Moreover, the claimed invention cannot have been:

known or used by others prior to the date the claimed invention was invented; or

described in a printed publication prior to the date the claimed invention was invented.

A claimed invention is not novel if all elements or limitations recited in the claims of the patent

have been disclosed in a single “prior art” reference.

e. “Statutory Bar”

Under U.S. law, an inventor has a one year “grace period,” following:

patenting or description of the invention in a printed publication in any country; or

public use or sale of the invention in the U.S.;


during which to file a patent application directed to the invention. If a patent application is not

filed prior to expiration of the one year grace period, the inventor is barred from obtaining a

valid U.S. patent covering the invention.

IMPORTANT NOTE:In countries other than the U.S., this requirement is absolute. In many foreign countries there is no “grace period” and making the invention available to the public prior to filing a patent application automatically bars the inventor from obtaining a patent.

f. Priority of Invention

Under U.S. law, an inventor may not obtain a patent for his or her invention if it was

made by another who had not abandoned, suppressed, or concealed the invention. Priority of

invention in the U.S. is determined on the basis of who is “first to invent” and not who is “first

to file” a patent application, as in foreign countries.

Resolving a dispute regarding priority of invention in the U.S. involves a procedure

known as a patent “interference,” where the parties are given the opportunity to provide

evidence to establish their respective dates of invention. The party that can establish the earlier

date of invention is awarded a patent and the other party often gets nothing.

IMPORTANT NOTE: In countries other than the U.S., priority of invention is determined on the basis of who is first to file the application.

g. Unobviousness

Another hurdle that must be crossed to obtain a patent is that the invention must not be “obvious.” Whether an invention is obvious depends on several factual inquiries:

the scope and content of the prior art;

the difference between prior art and the claimed invention; and

the level of ordinary skill in the art to which the invention pertains.


Based on the results of these factual inquiries, a legal determination is made as to whether the

claimed invention would have been obvious to a person of ordinary skill in the art.

3. What Rights Are Conferred By Owning A Patent?

A patent gives the owner the right to exclude others from making, using or selling the

invention claimed in the patent. It is the right to exclude which is the important right granted by

the patent.

IMPORTANT NOTE:A patent DOES NOT give the patent owner an affirmative right to practice the invention the invention claimed in the patent. A patent only grants the owner to right to exclude others.

4. How Are Patent Rights Acquired and Maintained?

U.S. patent rights are acquired by “filing” and successfully “prosecuting” a patent

application in the U.S. Patent & Trademark Office (the Patent Office or PTO).

a. Patent Application

A complete patent application includes:

a specification and at least one claim;

drawings, if necessary to describe the invention;

a declaration by the inventors; and

a filing fee.

An application filed with only the first two parts can still obtain a filing date, which is important

for priority purposes. The application, however, is not considered complete without the latter

two parts.

b. Format for U.S. Patent Applications

A patent application often contains the following parts:


Title. A short and specific title of the invention.

Abstract. A brief abstract disclosing the gist of the technical disclosure in a short format.

Summary of the Invention. A brief summary indicating the nature and substance of the invention.

Reference to Drawings. The specification must include a brief description of each drawing, if included in the specification.

Detailed Description of the Invention. The specification must include a written description of the invention, including the manner of making and using the invention, in such clear, concise, and exact terms as to “enable” any person skilled in the art to make and use the invention. The “best mode” or method contemplated by the inventor for carrying out his invention must be set forth.

Claims. The application must conclude with at least one claim “particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.”

c. Enablement

The description in the specification must “enable” a person skilled in the art of the

invention to make and use the invention without “undue experimentation.”

Issues of enablement are most often seen in software and biotechnology inventions. A

software application, such as for a machining process that fails to disclose a necessary element

(the control program for the machine) that is not publicly available, would probably not be

enabling if developing the control program would take many months or more to develop.

On the other hand, patents for manufactured goods would not necessarily be invalid for

lack of enablement if certain details of the production process that provide consistent uniformity

of the size of a part are not described. The line between what is required for enablement and

what need not be included—and therefore what can be kept as a trade secret—is often fuzzy.


d. Best Mode

The patent application must also set forth the “best mode” contemplated by the inventor

for carrying out the invention. This requirement prevents someone from obtaining the benefits

of obtaining a patent without describing the preferred ways of practicing the invention.

Desire to keep certain information a secret—whether as a trade secret or not—is no

excuse if such information contains the best mode of practicing the invention. For example,

failing to disclose a specific material (e.g., a plastic having a particular hardness that provided

superior performance when used in a patented coupler) violates the best mode requirement even

though the material was thought to be the trade secret of a third party.

e. Duty of Candor and Good Faith

All persons—including inventors and attorneys—associated with the patent application

have a “duty of candor and good faith” when dealing with the Patent Office. They must disclose

to the Patent Office any information of which they are aware that is material to the examination

of the application. These persons must also not mischaracterize facts pertaining to the invention

or the prior art. This duty of disclosure serves the public interest by ensuring that the Patent

Office is aware of and evaluates all information material to patentability before deciding on

whether to grant a patent.

This duty of good faith extends to both material information and to prior art. Thus, the

duty includes disclosing information such as previous sales, use, or publication of the invention,

even though that may affect patentability. “Prior art” includes publications, patents, written

descriptions, articles sold by others, etc. Information is “material” if there is substantial

likelihood that a reasonable patent examiner would consider it important when examining the


patent application. Information may be relevant even if it does not—by itself—constitute a basis

for barring issuance of the inventor’s claims. Information is not material if it is merely

cumulative to material already considered by the examiner.

There is no requirement that the inventor conduct an independent search for prior art

before filing a patent application. If such a search is done, however, any material information

found must be disclosed to the Patent Office.

f. Stages of Patent Prosecution

Examination

After filing, each application is assigned to a particular examiner for review. The

examiner is typically a person having a background in that technical area. Prior to enactment of

the American Inventors Protection Act of 1999 (“AIPA”) on November 29, 1999, pending

applications were maintained in secret by the Patent Office. Patent applications filed on or after

the effective date set forth in the APIA—November 20, 2000—will generally be published after

18 months from the earliest filing date unless the application is no longer pending or is subject to

a secrecy order.

Appeal

If the examiner does not allow the application, the applicant has the opportunity to appeal

by filing an appeal within the Patent Office. The appeal is reviewed by a board of three senior

patent examiners.

Review by Court

If dissatisfied with the decision of this three-panel board of examiners, the applicant has

an opportunity to have the decision reviewed by a court.


Allowance

When the claims are patentable and all formal requirements have been met, the examiner

allows the application. Subsequently, the Patent Office grants the application by issuing it as a

patent.

Term

If filed after June 8, 1995, a U.S. patent has a term or length beginning on the issue date

and ending twenty (20) years from the earlier of:

the U.S. filing date of the application; or

the filing date of the earliest filed U.S. application to which priority is claimed.

This 20 year term can be modified or extended pursuant to the AIPA for untimely delays in the

Patent Office while the application is pending.

If filed prior to June 8, 1995, a U.S. patent has such a 20 year term or a term of 17 years

from the date the patent issued, whichever is longer.

Maintenance Fees

Issued patents are kept in force by paying maintenance fees, due at 3.5 years, 7.5 years,

and 11.5 years, respectively, after the issue date of the patent. If the maintenance fee is not paid,

the patent rights are lost and the patent can no longer be enforced.

5. How Are Patent Rights Enforced?

a. Patent Infringement

i. Direct Infringement

Federal law provides that a patent is directly infringed when a person or organization:

makes, uses, or sells the invention claimed in the U.S. patent; or

imports the claimed invention into the U.S.;


without authorization, during the term of the patent.

Direct infringement can occur either literally or under the doctrine of equivalents.

ii. Literal Infringement

This type of infringement occurs when the accused product or process literally satisfies

every limitation or element of the patent claim.

iii. Infringement Under the Doctrine of Equivalents

This type of infringement is an equitable doctrine existing in the absence of literal

infringement. If a portion of the accused product or process fails to literally satisfy a limitation

of the patent claim, that portion may be held to satisfy the claim limitation under the doctrine of

equivalents if it is not an insubstantial difference, e.g., it performs:

substantially the same thing;

in substantially the same way;

to obtain substantially the same result;

as the corresponding limitation in the claim.

The doctrine of equivalents, however, is not without limits. The doctrine of “prosecution

history estoppel” bars a patentee from asserting subject matter surrendered during prosecution of

a patent as an “equivalent” of a claimed limitation. The prior art also limits the doctrine of

equivalents.

iv. Indirect Infringement

Only when direct infringement has been found, can indirect infringement exist since

without direct infringement there can be no indirect infringement. In indirect infringement,

there can be both infringement by inducement and contributory infringement.


Infringement by inducement occurs when a party actively induces another to infringe a

patent. Contributory infringement occurs when a party sells a material for use in practicing a

patented invention, provided that:

the material is an important part of the invention;

the seller knows that the material is specially made or adapted for using to infringe the patent; and

the material is not a staple article or commodity suitable for a substantial, non-infringing use.

b. Defenses to Infringement

Several defenses to patent infringement exist and include:

The patent is not infringed. Arguing that none of the above reasons for infringement exist.

The patent is invalid. The accused party proves invalidity by showing that—based on the patentability criteria above—the examiner made an error in allowing the claims of the application.

The patent is unenforceable. A valid patent may be rendered unenforceable by “inequitable conduct” by an applicant or his or her attorney during his or her efforts to obtain the patent, e.g., they breached their duty of candor and good faith.

The First User Defense. A patent is not infringed if a person (i) acting in good faith (ii) reduced the subject matter to practice (iii) at least one year before the effective filing date of the patent and (iv) commercially used the subject matter of the patent prior to its effective filing date. This defense was added by the AIPA in 1999.

c. Enforcement of Patent Rights

A patent owner (or licensee) may seek relief for infringement by action in civil court. A

civil court may grant the following equitable relief to prevent patent infringement:

A temporary restraining order (TRO);

A preliminary injunction; or


A permanent injunction.

A civil court may also award compensatory damages, including “lost profits.” Punitive

monetary damages are available, especially where the infringer “willfully” infringes the patent.

The punitive damages include tripling the compensatory damages, as well as awarding attorney

costs.

C. Trademark Law Basics

1. What is a Trademark?

A trademark is a word, name, symbol, or device, used to:

identify and distinguish goods from those manufactured and sold by others; and

indicate the source of the goods.

a. Other “Marks”

A service mark is a distinctive mark used in connection with services.

A certification mark is a mark used with a product or service to certify that the product

or service is of a specific quality, material, region of origin, or other characteristic.

A collective mark is a mark used by members of a cooperative, an association, or other

collective group to indicate membership in that group.

Service marks, certification marks, and collective marks are protected in the same

manner as trademarks.

b. Trade Names

A “trade name” is a name used to identify a business, such as a legal corporate name, and

is not a trademark. Trademarks are used in connection with the sale of goods, whereas trade


names are used to identify businesses. A term can function both as a trade name and as a

trademark.

2. What Type of Subject Matter Can Be Protected As A Trademark?

To be protected as a trademark, it must be capable of identifying and distinguishing the

goods (or services) bearing the word, name, symbol or device from other goods (or services).

Most trademarks are:

words, e.g., LEXAN is a trademark of General Electric and is used in connection with the sale of polycarbonate resins; or

symbols, e.g., the MICROSOFT monogram is a trademark of Microsoft Corporation and is used in connection with the sale of software.

Other trademarks can be used, such as:

sounds, e.g., the sound of three chimes was used as a service mark of NBC in connection with broadcast services;

shapes, e.g., the goldfish shape is a trademark of Pepperidge Farm Incorporated and is used in connection with the sale of crackers;

smells, e.g., Celia Clarke, d.b.a. Clarke’s OSEWEZ, obtained federal registration of “a high impact, fresh floral fragrance reminiscent of Plumeria blossoms” as a trademark for use in connection with the sale of sewing thread and embroidery yarn; and

colors, e.g., a particular color of green-gold was registered as a trademark of Qualitex Company and is used in connection with the sale of dry cleaning press pads.

a. “Functionality Doctrine”

Trademarks cannot be used to protect a useful product feature or function of the product.

Rather, patent law protects and encourages invention by granting inventors exclusive rights over

such functional features. If functional features could be used as trademarks, one could enjoy

exclusive rights with respect to such features forever.


b. Degrees of “Distinctiveness”

An identifying mark can obtain trademark status by being distinctive, e.g., it is

“inherently distinctive” or it has acquired distinctiveness through “secondary meaning.”

There are several degrees of distinctiveness:

Protectable as a trademark for being inherently distinctive.

arbitrary or fanciful marks have no inherent meaning in relation to the goods.

for example: “LEXAN” for polycarbonate resin“EXXON” for petroleum products“KODAK” for cameras

suggestive marks hint at but do not describe a quality or characteristic of the goods.

for example: “IVORY” for white soap“CATERPILLAR” for tractors

Protectable as a trademark only if “secondary meaning” has been established by demonstrating that consumers recognize the trademark as denoting only one seller or source of the trademarked goods, i.e., that using the descriptive mark has acquired the characteristics of a distinctive mark.

descriptive marks describe a quality or characteristic of the goods.

for example: “BEER NUTS” for salted nuts “PIG SANDWICH” for a pork sandwich

With no distinctiveness, a mark is not protectable as a trademark.

generic names, e.g, the name of a particular category or class of thing

for example: “CHABLIS” for a wine

3. What Rights Are Conferred By Trademark Ownership?

The owner has the exclusive right to use the trademark in connection with the sale of

particular goods (or services). The owner also has the right to exclude others from using the


same or similar mark in a manner that would create a “likelihood of confusion” in the

marketplace. These rights allow the trademark to perform several functions:

protects the public from confusion and deception;

identifies the seller’s goods and distinguishes them from the goods sold by others;

signifies that all goods bearing the mark come from or are controlled by a particular source; and

symbolizes the “good will,” i.e., consumer satisfaction and preference, that a business has built up.

4. How Are Trademark Rights Acquired?

Trademark rights are acquired by actual—or intent touse a mark to identify the goods

or services of a particular seller. Ownership is governed by priority of use. Subject to limited

exceptions, the first seller to use a particular mark in the sale of goods is the owner.

a. Basis for Obtaining Trademark Protection

Trademark rights are protectable under federal and state statutes, as well as under the

common law.

b. Trademark Registration

Trademarks can be registered with state and federal governments to establish ownership.

Registration does not create the underlying right in the trademark.

c. Advantages of Federal Registration of Trademark

Federal trademark registration confers several advantages:

federal jurisdiction for infringement;

evidence of the validity of the mark, of the registrant’s ownership of the mark, and of the registrant’s right to use the mark; and

constructive notice to the entire U.S. of the owner’s rights in the mark.


d. Application For Federal Trademark Registration

An application for federal registration must include:

a written application that includes the name of the applicant;

a name and address for communications;

a drawing of the mark sought to be registered;

an identification of the goods or services (the applicant must specify the goods or services with which particular mark is used or intended to be used);

a basis for filing:

actual use : date of first use in U.S. interstate or foreign commerce and a specimen of the mark as used; or

intent to use : a claim in good faith of intent to use mark in U.S. interstate or foreign commerce;

verified statement;

one specimen of the mark;

signature by the applicant; and

a filing fee.

e. Examination

A Trademark Examining Attorney will search and determine whether the mark meets the

statutory requirements for trademark registration, including:

whether the mark consists of proper subject matter; and

whether the mark is similar to an existing mark such that its use would be likely to cause confusion, mistake, or to deceive.

i. “Likelihood of Confusion”

Likelihood of confusion asks whether using the same trademark or two similar

trademarks by two different parties would cause confusion among the purchasing public as to the


source of the goods. Actual confusion is not required, but there must be more than a mere

possibility of confusion.

The issue of likelihood of confusion arises in each of two contexts:

obtaining federal registration of a trademark; and

establishing the right to use a trademark.

Determination that the use of a mark will cause a likelihood of confusion is based on

consideration of all the circumstances involved in the marketing of the respective goods or

services or in the operation of the respective businesses.

Even if the Trademark Examining Attorney is satisfied to the contrary, a trademark

application can be opposed by another who believes that there is such a likelihood.

f. Refusal to Register

If the Examiner refuses registration of the trademark, the applicant has a period of six

months to reply or amend his or her application. The procedure may be repeated until the

examiner finally refuses to register the mark – leading to an appeals process -- or the applicant

fails to reply or amend the application, leading to abandonment.

g. Publication

If the Examiner grants registration of the mark, the mark is published in the Official

Gazette of the PTO.

h. Opposition

Anyone who believes that he or she would be harmed by registration of a mark published

in the Official Gazette may oppose registration of the mark by submitting reasons why

registration should be refused.


i. Issue

If no one successfully opposes registration, the PTO will issue the trademark registration

on a use-based application or will issue a Notice of Allowance for an application based on intent

to use. The applicant has 6 months (extendable to 36 months) following such Notice to file a

“statement of use” supported by evidence of actual use. If the requirements are met, the PTO

will then issue a registration.

j. Cancellation

Any person who believes that he or she will be damaged by the continued existence of a

registered trademark may file a petition to cancel the registration by submitting reasons of such

damage.

k. Loss of Trademark Rights

Trademark rights can be lost through “abandonment” of the mark. Once abandoned, a

trademark becomes part of the public domain and is free for all to use. There are several ways to

abandon a mark:

Intentional Abandonment.

Uncontrolled Licensing. Licensing use of a mark without adequate control over the goods sold or services.

Trademark Becomes Generic. A distinctive trademark degenerates into a generic name if the principle significance of a trademark to the purchasing public becomes its denomination of a class of product or service, rather than as an identifier of a single source of a product or service. For example:

“aspirin” (formerly a trademark of Bayer Co.);

“escalator” (formerly a trademark of Otis Elevator, canceled after 50 years of use); and

“cellophane” (formerly a trademark of DuPont Cellophane Co.).


l. Marking

The superscript “TM” is an assertion of ownership in a mark.

The superscript “SM” is an assertion of ownership in a service mark.

The superscript “®” indicates federal registration of a mark.

5. How Are Trademark Rights Enforced?

a. Trademark Infringement

Infringement occurs via an unauthorized use of another’s trademark or of a similar mark

that is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation,

connection, or association of the user with the trademark owner.

i. Counterfeiting

Counterfeiting is intentionally making or selling a product with a reproduction of a

genuine trademark to deceive customers into believing that they are getting genuine

merchandise.

ii. Likelihood of Confusion

Determining whether a likelihood of confusion exists is made by examining the facts of

the dispute in view of several considerations:

the strength of the plaintiff’s mark;

the relatedness of the goods;

the similarity between the marks;

evidence of actual confusion;

marketing channels used;

sophistication of the buyers;

defendant’s intent in selecting the mark; and


likelihood of expansion of the respective product lines.

Some examples of marks held to be confusingly similar:

“OCTACOMM” and “OCTOCOM” for computer services;

“DOUGIES” and “HUGGIES” for disposable diapers;

“ROACH MOTEL” and “ROACH INN” for insect traps; and

“THINKER TOYS” and “TINKERTOY” for toys.

b. Enforcement of Trademark rights

Trademark rights are enforced by action in civil court and by criminal prosecution.

i. Civil Action

A trademark owner may seek relief for trademark infringement in civil court. Section 32

of the Lanham Act provides a civil cause of action for infringement of those trademarks that are

federally registered. Section 43(a) of the Lanham Act protects against deceptive commercial

practices and protects against infringement of a trademark, regardless of whether the trademark

is registered.

The civil court may grant equitable relief to prevent trademark infringement:

Temporary restraining order (TRO);

Preliminary injunction; and

Permanent injunction.

The civil court may also award compensatory damages for actual harm, such as lost

profits and costs.


The Trademark Counterfeiting Act makes trademark counterfeiting a federal crime.


D. Copyright Law Basics

1. What is a Copyright?

A copyright:

is a property right granted by the government of a country and applies within the territorial boundaries of that country;

protects the “writings” of “authors” from unauthorized copying; and

lasts for limited period of time.

Copyright protects the manner in which an idea is expressed and does not protect the

underlying idea or thoughts. The copyright laws are constitutionally intended to promote

progress in science and the useful arts by allowing authors to protect their writings from

unauthorized copying, while allowing the underlying ideas to be freely used and disseminated by

the public.

2. What Type of Subject Matter is Protectable By Copyright?

The term “writings” of “authors” has been interpreted broadly, so that copyright

protection is applicable to original works that are fixed in any tangible medium of expression.

“Original works” means that the work is the author’s own product and not the result of copying. It does not require novelty, cleverness, or esthetic merit.

“Fixed in a tangible medium of expression” means that there is a physical embodiment of the work, regardless of the form, manner or medium of fixation.

Examples of works of authorship that can be copyrighted:

books;

motion pictures;

music;

works of art;


promotional literature; and

computer software.

3. What Rights Are Conferred By Copyright Ownership?

The owner of copyright has the exclusive right to:

reproduce the work in copies;

prepare derivative works based on the copyrighted work;

publicly perform the work;

publicly display the work; and

distribute copies of the work.

These exclusive rights expire on:

traditionally the 50th anniversary of the author’s death; or

in the case of a work made for hire, 75 years from publication or 100 years from creation, whichever is shorter.

In October of 1998, legislation was passed and signed by the President which extended this 50

year term to 75 years. These terms can be renewed under certain circumstances.

a. Limitations on Owners’ Rights

An owner’s rights are not absolute. Under the doctrine of “fair use,” copyrighted

material may be used without previous authorization of the copyright owner for purposes of:

criticism;

news reporting;

teaching;

scholarship; and

research.

In general, courts have not found commercial use of copyrighted materials to be fair use.


4. How is a Copyright Acquired?

Copyrights attach upon creation of the work. The author of the work, except in the case

of a work made for hire, is the owner of the copyright.

a. Work Made for Hire

A work made for hire is a work made for an employer by an employee or by a contractor

under a written contract. The employer is, therefore, the owner of a work made for hire. If a

non-employee (contractor) prepares a copyrightable work, the contract must specifically provide

that the copyright resides in the entity contracting for the work.

b. Notice

At one time, the law required that a notice of the year of publication and ownership

(similar to the form “Copyright © 1999 National Business Institute”) be affixed to the

copyrighted work (with a “P” substituted for the “C” in the circle if the work is a sound

recording). Such marking is no longer required for copyrighted works, but remains useful with

respect to overcoming a defense based on unintentional infringement.

c. Registration

Copyrights can be registered with the federal government. A copyright registration,

however, does not create the underlying copyright.

Federal registration requires filing a form with the U.S. Copyright Office (the Copyright

Office) and depositing a copy of the work for public inspection with the Copyright Office. For

copyrighted works originating in the U.S., federal registration of the work provides certain

advantages in federal suits for copyright infringement.


5. How Are Copyrights Enforced?

a. Infringement

To establish copyright infringement, the plaintiff—either the owner or a licensee—must

prove:

ownership of a valid copyright; and

copying of the work by the defendant.

Copying may be inferred from by showing (i) access by the defendant to the protected work and

(ii) substantial similarity between the defendant’s work and the protected work.

b. Enforcement of Copyrights

i. Civil Action

Copyright owners may seek relief for infringement by civil action. The civil court may

grant the following equitable relief to prevent violation of copyright:

Temporary restraining order;

Preliminary injunction;

Permanent injunction; or

Impounding infringing copies and equipment used to make infringing copies for confiscation and/or destruction.

The civil court may also award compensatory damages to the copyright owner for any

actual harm suffered.


Under federal law, a person who willfully infringes a copyright for purposes of

commercial advantage or private financial gain may be found guilty of criminal copyright

infringement and subjected to fine and/or imprisonment.


nbi ip pres - home.business.utah.edu€¦ · web viewby. kenneth e. horton. parsons behle &...

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