Intellectual Property:Claiming Your Creative Rights

December 10, 2014

Andre Castaybert, Esq.Castaybert PLLC

Samantha Rothaus, Esq.Gottlieb, Rackman & Reisman, P.C.

Jason Wachter, Esq.Gottlieb, Rackman & Reisman, P.C.

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Sponsored by the

Neighborhood Entrepreneur Law Project

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City Bar Justice Center

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This presentation is provided for informational purposes only and does not constitute legal advice.

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Presentation Overview

What is Intellectual Property? Trademarks Copyright Patents Trade Secrets Common Pitfalls Resources Questions

What is it and how do I obtain rights?}

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What Is Intellectual Property?

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What is Intellectual Property?

Idea, information or knowledge that can be incorporated into a tangible form

Asset, just like a car or bank account, that needs to be protected and respected

Same product or idea can be protected by multiple forms of IP

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How many types of IP Are in a Coca-Cola Bottle?

Utility Patent in “tamper resistant cap design”

Trademark in logos on label Copyright in text on label

Trade Dress and Design Patent covering bottle shape

Trade secret: the formula

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Four Main Types of Intellectual Property

Trademarks Copyrights Patents Trade Secrets

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Trademarks

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What is a Trademark?

Any “word, name, symbol or device, or combination thereof” that is used: To identify and distinguish goods or services from those

manufactured, sold or offered by others, and To indicate the source of the goods and services.

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Why Are Trademarks Legally Protected?

Help consumers by allowing them to: Distinguish among goods and services Seek out desired sources of goods Avoid undesirable sources

Help business owners and grow commerce Protect goodwill developed by businesses Encourage investment and creativity

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What Legal Rights Do Trademarks Provide?

Trademark law generally grants: exclusive trademark rights to the first user of a particular distinctive symbol to identify a given category of goods or

services in the geographic areas in which it is used

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What Can Be a Trademark?

Words Logos and designs Letters and/or numbers Slogans Color on a particular product or service Product and package configurations (called

“trade dress”) Sounds Fragrance applied to goods

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What Cannot Be Used As Trademarks?

Marks that are “confusingly similar” to another pre-existing trademark used on the same type of goods or services

Marks that are: Deceptive Immoral or scandalous Disparaging Suggestive of a false connection with a Person, Institution, Belief or

Symbol Certain other categories…

Marks that are functional Example: Rolls-Royce front grille ruled non-functional – served no

function Example: Pink color of Pepto Bismol ruled functional – color was

soothing to patients

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A Trademark Must Be Distinctive

“Distinctiveness” is measured along a spectrum: Inherently Distinctive Marks

Can automatically be used as trademarks Fanciful Marks: Has no meaning other than as the identifying symbol for a

particular brand Examples: KODAK, EXXON, PEPSI

Arbitrary Marks: Existing word that bears no relation to the associated product Examples: APPLE for computers, YAHOO! for a search engine, CAMEL for cigarettes

Suggestive Marks: Mark that hints at the characteristics of the product, but interpretation requires a degree of imagination (i.e., the mark is indirectly descriptive)

Examples: COPPERTONE, GREYHOUND, MUSTANG

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Distinctiveness Spectrum:

Marks Capable of Becoming Distinctive Descriptive Marks

Marks that appear to describe the product they identify Marks that appear to describe the geographical location from which the

goods or services emanate Marks that are primarily merely a surname Marks that are laudatory or commonly used in connection with the

relevant type of goods or services Examples: CHAP STICK, KENTUCKY FRIED CHICKEN Descriptive Marks can only be protected if they have achieved

“Secondary Meaning”

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Distinctiveness Spectrum:

“Secondary Meaning” of Descriptive Marks Exists if consumers mentally associate or recognize the

words of the mark as denoting a single source for the product

Can prove secondary meaning through a consumer survey or by circumstantial evidence such as the length and manner of use, volume of sales under the mark and advertising expenditures

prima facie evidence of secondary meaning (under federal trademark law): evidence of 5 years of exclusive and continuous use prior to the date of application for registration

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Distinctiveness Spectrum:

Marks That Can Never Be Distinctive Generic Marks

The basic names by which categories of products are known Examples: TEE SHIRT, RESTAURANT, COFFEE SHOP

Marks can lose their distinctiveness and become generic This happens if the majority of consumers come to view the mark

as indicative of a type of product rather than as a brand Examples: ASPIRIN, ZIPPER, LINOLEUM, THERMOS,

BRASSIERE, ESCALATOR, YO-YO

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Choosing a Trademark

Best trademarks are fanciful, arbitrary or suggestive.

Conduct clearance searches for your proposed brand before you devote resources to it. Someone else may already be using the same name, or

a confusingly similar one. Conducting a clearance search will help you to avoid conflicts.

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How Do You Obtain Trademark Rights In a Mark?

Trademark rights arise from use of the mark in commerce There must be a bona fide sales of goods or services

bearing the mark to consumers, or other use of the marks in a way intended to come to the public’s attention.

In general, it’s advisable to begin using your trademark before applying to register it.

Additional/enhanced rights from registration

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Protecting Trademarks

Apply for state or federal registration Use the ® for federally registered marks

and the ™ or SM for unregistered marks Police third party uses of your trademark Exercise quality control over your

trademark

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Trademark Registration

Federal Registration Not required Available if trademark is used in multiple

states or in the U.S. and a foreign country State Registration

Also not required Limited in geographic scope to the state

where registered

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Some Benefits of Federal Registration

Federal registration creates nationwide rights After five years of continuous use, it becomes

“incontestable” Can file “intent-to-use” applications:

Allows an applicant to apply for registration of a trademark prior to actually using it on products or services. However, a registration will not issue until the trademark is ultimately used in the marketplace.

Can use the ® symbol to put the public on notice In a willful infringement claim, the trademark owner may be

awarded up to three times the amount of the infringer’s profits, plus the trademark owner’s costs and attorneys fees

Can record the trademark registration with U.S. Customs to prevent counterfeit/unauthorized goods bearing the trademark from entering the country

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Federal Registration: Key Info Mark must be applied for within particular class(es)

of goods/services. Goods/services must be specified

Identify whether the application is based on the mark’s actual “use in commerce” or “intent to use”

USPTO may issue an office action after review There is a 30-day “opposition” period after the

USPTO approves and publishes the application From application to registration, process can take

from 4 months to 5 years Registration can be renewed every 10 years,

indefinitely (as long as mark is in use)

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Recent Trademarks in the News

Converse “Chuck Taylor” shoes Washington Redskins controversy Counterfeiting implications associated with 3D

printing technology

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Copyrights

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What Is A Copyright?

Copyright protects original expression that is fixed in a tangible medium.

A copyright owner receives certain exclusive rights with respect to the copyrighted work.

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What is Copyrightable?

Literary works Musical works Dramatic works Choreographic works Pictoral, graphic and sculptural works Motion picture and other audiovisual works Sound recordings Software Architectural works

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What is not Copyrightable?

Ideas (only “tangible expressions” of an idea are protected)

Facts Functional elements

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Who Owns Copyright?

General rule: The person who creates the work owns the copyright.

Exception: The copyright for a “work made for hire” is owned not by the person who created the work, but by the employer or other person who commissioned it. For example, software company owns the source

code written by its software developers

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Copyright Owners’ Exclusive Rights

Reproduce the work (make copies) Create derivative works (modify it) Distribute copies of the work to the public (sell it) Perform or publicly display the work

Any of these rights can be transferred (either by assignment or license) by the copyright owner to someone else.

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Copyright v. Public Domain

Under federal law, works created after January 1, 1978 receive copyright protection for the “life of author plus 70 years”

“Public Domain” refers to works that are no longer, or never were, protected by copyright Public domain works can be used by

anyone

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How Does One Obtain a Copyright?

Copyright rights attach automatically upon the original expression being fixed in a tangible medium For example, as soon as a story is written or a song is

recorded

No registration required, but: Registration conveys certain advantages

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Benefits of Federal Registration

Registration puts the world on notice of the owner’s copyright claim.

Federal registration required before you can sue for infringement.

Certain damage awards and recovery of attorneys fees are only available if the work is registered before infringement occurs or within three months after it is first published.

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Obtaining a Federal Registration

File with the U.S. Copyright Office: Properly completed application form $35 for online filing, $50 - $65 for paper filing, depending on form

used Non-returnable copy(ies) of the work – specifics vary by type of

work

Benefits of online registration: Lower fees Faster processing time (3 months v. 10 months) Online status tracking

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Protecting Your Copyrights

Always have an express written agreement with everyone.

Place a proper copyright notice on all copies of all works.

Federally register works no later than three months after the work is created.

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Proper Copyright Notice

Not required to obtain copyright protection Proper notice:

© [year of first publication] [name of the copyright owner]

© 2011 XYZ Recording Studio Inc.

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Fair Use Defense “Fair use” can be asserted as a defense to

copyright infringement. Four considerations to whether this defense applies: The purpose and character of the infringing use

Educational or commercial? Is it “transformative”? The nature of the protected work

Fiction or non-fiction? Level of creativity/uniqueness? The amount and substantiality of the portion taken

A small portion or nearly all of it? The effect of the infringing use on the potential market

Will the infringing work replace or disrupt the market for the protected work?

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Recent Copyrights in the News

Aereo case Google Books dispute with authors/publishers

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Patents

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What is a Patent?

A patent is a legal right granted by the government giving the patent owner the right to exclude others from: Making, Using, Offering to sell, Selling, or Importing into the U.S.

the invention claimed in the patent, subject to the conditions and requirements under patent law.

Term: From the issue date of the patent until 20 years after the filing date of the patent.

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What is a Patent?

Patent Rights are “negative rights” A patent grants a right to exclude others from practicing

the patented invention. A patent does not grant an affirmative right to practice the

invention. Inventor may not have the right to practice the invention.

Reasons for that might include: State or federal law (such as FDA regulations) may not permit it. Invention licensed or assigned.

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What Can Be Patented?

Whoever invents or discovers: any new and useful process, machine, manufacture, or

composition of matter or any new and useful improvement thereof may obtain a patent therefor, subject to the conditions and requirements under patent law (called “statutory subject matter”).

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What Can Be Patented? (cont’d)

These 4 categories (process, machine, manufacture and composition of matter) taken together include practically “everything under the sun made by man.”

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What Can Not Be Patented?

Laws of nature, natural phenomenon, and abstract ideas E.., mathematical algorithms (by themselves)

But inventions that incorporate mathematical algorithms constitute patentable subject matters if applied to produce a “useful, concrete and tangible result” without preempting other uses of the mathematical principle are patentable

Patentability of business methods and processes has faced heightened scrutiny in recent years.

Living matter But living matter that has been altered to have characteristics it would not

have naturally are patentable.

Naturally occurring articles But, e.g., a synthesized version of a naturally occurring compound, and a

purified chemical compound not found in nature is patentable.

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What Are The Requirements For Patentability?

Utility Novelty (and other statutory bars) Non-obviousness Adequacy of disclosure

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Utility Requirement

There must be some identifiable benefit and the invention must be capable of use.

This standard is not stringent Invention must work to meet its goal. The goal may not be illegal, immoral or contrary to the

public good.

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Novelty Requirement

The invention must be new. Basic idea is to:

prevent the patenting of inventions that have entered the public domain prior to the patent applicant’s invention date

Ensure that in most cases the first person to make the invention gets the patent

“Statutory bar” provisions Primarily intended to encourage inventors to file their

patent applications in a timely manner

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Non-Obviousness Requirement

At the time the invention was made: The invention must not have been obvious To a person of ordinary skill in the pertinent art Who has knowledge of all the pertinent prior art

“Prior Art” – information in the art that is publicly known

Non-obviousness does not require any minimum amount of advancement of the art

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Adequacy of Disclosure

Three Basic Requirements for Adequacy of Disclosure: “claiming” requirement

Include one or more “claims” that clearly describe the invention and set forth its constituent elements

“enablement” requirement Describe how to make and use the invention with sufficient clarity,

precision and detail to enable a person “skilled in the relevant art” to make and use the invention without undue experimentation

“best mode” requirement Set forth the best mode that the applicant contemplates for carrying

out the invention as of the application filing date

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What Is The Basic Process For Obtaining A Patent?

Invention Conception of Invention Reduction to Practice

File patent application Receive USPTO correspondence – Notice of Missing

Parts; Restriction Requirements; Office Actions; Notice of Allowance

Respond to USPTO correspondence Receive Notice of Allowance Pay issue fee Application Issues into Patent

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A Word About Types of Patents

We have been discussing “utility patents” These are the most common type

There are actually 3 types of patents: Utility patents Design patents Plant patents

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Design Patents

May be obtained on any new and non-obvious ornamental design for an article of manufacture.

Protects only the appearance of an article, but not its structural or functional features.

A design patent has a term of 14 years from grant, and no fees are necessary to maintain a design patent in force.

Examined in the same way as a utility patent.

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5/14/2007 9

Design Patent (D-500,000)

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Plant Patents

Provides a right to exclude others from asexually reproducing, selling or using the claimed patent in exchange for public disclosure of the technology described and shown in the patent specification for a period of 20 years from the filing date.

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How Valuable Are Patents In Practice?

Patents can be extremely valuable. Patents can serve as a “shield” rather than, or in

addition to, a “sword”

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Patents In Your Business

Be proactive with patents in your business Identify potentially patentable inventions Weigh the pros and cons of seeking patent protection for each

potentially patentable invention Include patent markings on your patented products and services Be careful with assertions of patent infringement made against your

business Could be subject to:

Injunction Triple damages

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Trade Secrets

What is Trade Secrets Misappropriation Law?

Protects a firm’s interest in information that the firm has developed which is both confidential and commercially valuable.

Protects such “trade secrets” against unauthorized acquisition, use, or disclosure by others, i.e., misappropriation, even though they are neither patented or copyrighted nor patentable or copyrightable.

The UTSA Definition of Trade Secret The Uniform Trade Secret Act “UTSA,” enacted

by all states and the District of Columbia, except New York and Massachusetts, defines a trade secret as: information, including a formula, pattern, compilation, program,

device, method, technique, or process; that derives independent economic value, actual or potential,

from not being generally known to, or readily ascertainable through appropriate means, by other persons who might obtain economic value from its disclosure or use; and

is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Trade Secrets in New York

New York courts have adopted definition from Restatement of Torts

Section 757 —“a trade secret consists of a formula, process, device

or compilation which one uses in his business and which gives him

an opportunity to obtain an advantage over competitors who do not

know or use it.”

Unlike UTSA, New York courts have held that trade secrets must

usually consist of ‘‘a process or device for continuous use in the

operation of business.’’

Abstract ‘‘marketing concepts,’’ ‘‘new product ideas,’’ and ‘‘business

possibilities or goals’’ may not qualify for trade secret protection.

Examples of Trade Secrets

R&D information Design drawings Production machinery Source code IT system architecture Blue prints Product designs Manufacturing processes

Cost/price/margin data Business plans Market plans /research

/studies/analyses Customer lists Customer information Customer support services

What constitutes misappropriation?

Wrongful acquisition, retention, or use Wrongful disclosure of specifically identified

information: That has actual or potential economic value; Is not generally known to the relevant public; And that has been the subject of reasonable

measures to maintain secrecy.

Defenses to Trade Secrets Misappropriation Generally

Competitor had previously or is already used the matter in question in its business before the alleged misappropriation

The information had been widely circulated or published before the alleged misappropriation

The information can be readily obtained from public sources

Reasonable Precautions

Fact intensive / case by case Efforts to label Efforts to secure and maintain security

Limited distribution: vaults, passwords, codes Employee training and reminders NDAs Confidentiality agreements Noncompetes

Preliminary and Permanent Injunctive Relief The threat of misappropriation may be sufficient

to obtain an injunction, even before use. Need to meet the requirements for an injunction.

Likelihood of success on the merits Irreparable harm Balance of equities in favor of plaintiff / clean hands

The misappropriator cannot base a request to terminate the injunction based on improper publication of the trade secrets

Injunctive relief after trial to remove “lead time advantage”

Remedies: Monetary Damages

Monetary damages Lost profits Loss of revenue Price erosion Cost of efforts to minimize consequences of theft

Unjust enrichment: disgorgement of unjust gains Reasonable royalty

Criminal penalties 18 U.S.C.§1832 Theft of Trade Secrets

Fined and/or imprisoned up to 10 years

Economic Espionage Act (1996) Provides criminal penalties for misappropriation of trade secrets “related

to or included in a product that is produced for or placed into interstate commerce”

Foreign and Economic Espionage Penalty Enhancement Act of 2012 Greater penalties if misappropriation is to benefit foreign government Maximum fine for individual perpetrator increased from $500,000 to $5

million Maximum fine for organizations is changed from $10 million to “the

greater of $10 million or 3 times the value of the trade secret to the organization, including expenses for research and design and other costs of reproducing the trade secret that the organization has thereby avoided”

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Pros and Cons of Trade Secrets

Pros No acquisition costs Immediate protection Can be protected

indefinitely (as long as secret)

Need not be unique Possible civil and criminal

penalties for theft

Cons Burden of maintaining

secrecy Cannot stop others who

independently develop May be subject to patent by

third party Theft of trade secret difficult

to prove

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Common Pitfalls

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Common Pitfalls

Registered IP rights may need maintenance For example, federally registered trademark: File “Declaration of

Use” between years 5 and 6, and renew registration every 10 years.

Additional fees may apply

Keep track of who you permit to use your IP Enter into written license agreements

Protect your IP vis-à-vis your employees Require employees to keep confidential information secret “Work made for hire” / patent assignment agreements for

employees who develop content or create inventions for your business

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Common Pitfalls

Be respectful of other people’s IP rights Try to develop your own content Check for restrictions or limitations on use before using

someone else’s content BUT… parody and “fair use” doctrines may permit some use

Parody example: Spaceballs movie as Star Wars parody Fair Use examples: “Our sports store sells Nike and Adidas brand

shoes,” magazine poll of favorite characters on Mad Men

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Common Pitfalls

Keep your trade secrets a secret Label documents as “CONFIDENTIAL” Lock or password protect files “Need to know” disclosures Use written agreements with employees and third parties

Be wary of the internet and try to rely on “official” sources when finding information

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Resources

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Resources

U.S. Patent & Trademark Office: http://www.uspto.gov Trademark Basics: http://www.uspto.gov/trademarks/basics/index.jsp Inventors Resources: http://www.uspto.gov/inventors/index.jsp

International Trademark Association (INTA): www.inta.org http://www.inta.org/TrademarkBasics/Documents/INTATMBasicsBrochure.pdf

U.S. Copyright Office: http://www.copyright.gov Copyright Basics: http://www.copyright.gov/circs/circ01.pdf

USPTO’s list of NY IP Resources: http://www.uspto.gov/inventors/state_resources/new_york.jsp

NY Trademark Registration Form: http://www.dos.ny.gov/corps/index.html

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Resources

BBB Guide to Finding a Lawyer in NYC: http://newyork.bbb.org/how-to-find-a-lawyer-in-nyc/

NY State Bar Association Lawyer Referral: http://www.nysba.org/Content/NavigationMenu/PublicResources/NeedaLawyer/Hire_an_Attorney.htm

New York City Bar Lawyer Referral: http://www.abcny.org/get-legal-help/overview

Intellectual Property:Claiming Your Creative Rights

QUESTIONS?

*For a copy of these presentation materials, please contact the Neighborhood Entrepreneur Law Project at nelp@nycbar.org, for an electronic copy, or (212) 382-6633, for a hard copy to be mailed to you.