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Session 109 It's a Copyright, It's a Trade Secret, It's a Patent: Protections That Can Be Used to Cover Your Products and Services Wednesday, October 29,

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Presentation on theme: "Session 109 It's a Copyright, It's a Trade Secret, It's a Patent: Protections That Can Be Used to Cover Your Products and Services Wednesday, October 29,"— Presentation transcript:

1 Session 109 It's a Copyright, It's a Trade Secret, It's a Patent: Protections That Can Be Used to Cover Your Products and Services Wednesday, October 29, 2014 09:00 AM - 10:30 AM Speakers: Audra Dial, Partner, Kilpatrick Townsend & Stockton LLP Thomas Feix, Senior Corporate Counsel - Patent, The Clorox Company Margo Lynn Hablutzel, Advisor, CCM/Legal, Computer Sciences Corporation Joseph “Casey” Mangan, Corporate Counsel, Allstate Insurance Company With thanks to Ana Ayrempour, J.D., of Allstate Insurance Company, for her invaluable assistance. 1

2 The Four Main Types of Intellectual Property: Trade Secrets: Secret technologies Patents: Inventions Trademarks: Designations of origin Copyrights: Original works of creativity

3 Trade Secrets Trade Secret Elements:  Secret  Gives a business a competitive advantage  Can protect ideas, methods, formulations  Must take reasonable efforts to maintain secrecy Protection is against theft by others Lost if confidentiality is breached legally Reverse engineering can legally destroy protection Protection can be indefinite if confidentiality is maintained 3

4 Trade Secret Theft Normally – State Court Matter - UTSA Federal Crime - Economic Espionage Act of 1996  Prosecuted by the DOJ o Jail time o Fines 4

5 The Defend Trade Secrets Act of 2014 (S. 2267) (Senators Coons (D-DE) and Hatch (R-UT)) Amends the Economic Espionage Act (EEA) to provide for a private, civil cause of action for trade secret misappropriation Original (but not exclusive) federal jurisdiction; no preemption of state law Tracks substantive elements of Uniform Trade Secret Act; adds an “interstate commerce” requirement Plaintiff may seek ex parte order for court’s seizure of evidence used to commit or facilitate trade secret theft Senate Judiciary Committee held debate on this bill during September 2014 Recent Trade Secret Legislation 5

6 HR 5233, Trade Secrets Federal Protection Act, was approved on September 17, 2014 by Judiciary Committee of U.S. House of Representatives Original (but not exclusive) federal jurisdiction; no preemption of state law Tracks substantive elements of Uniform Trade Secret Act; adds an “interstate commerce” requirement Also allows ex parte seizure application Recent Trade Secret Legislation 6

7 2014 Legislation Status First time for bicameral, bipartisan legislation on a federal cause of action for trade secret misappropriation Senate Judiciary Committee held debate on The Defend Trade Secrets Act of 2014 (S. 2267) bill during September 2014 HR 5233, Trade Secrets Federal Protection Act, was approved on September 17, 2014 by Judiciary Committee of U.S. House of Representatives Momentum building with broad-based industry support 7

8 Trade Secrets vs. Patents Trade Secrets  Potentially unlimited duration  Not suitable for anything that can be reverse engineered  Must actively ensure that secret stays confidential  Protection only against theft Patents  Broader protection  Limited duration (20 years)  Require publication of invention 8

9 Purpose of Patent System: Incentives/Promote Progress of Useful Arts  Invent and Innovate  Invest in Technological Development  Promote Disclosure Quid Pro Quo (i.e., Consideration: Something for Something) 9

10 Nature of a Patent: A patent is a grant Right to exclude others  Making  Using  Selling  Offering for sale Does not grant owner right to make, use or sell 10

11 Types of Patents: Utility Patents Design Patents Plant Patents 11

12 When to File: Before Publication, Use, Sale or Offered for Sale  Rights in many foreign countries lost otherwise  Limited grace period still available in US under AIA 12

13 Why Get Utility Patents? Protect Against Infringers  Exclude others  Generate royalty income by licensing  Infringement remedies include damages, injunction Defensive Purposes  Prevent another from procuring a patent on same invention  Deter others from bringing suit in view of ability to counterclaim  Obtain rights of others by cross licensing Recognition as Leader in Developing New Technology Term of protection ends 20 years from filing 13

14 Basic Conditions for Patentability: Utility Novelty Unobvious Best Mode Described 14

15 Utility Patents –Patentable Subject Matter Statutory subject matter under 35 U.S.C. §101 includes any new and useful Process Machine Manufacture Composition of Matter or any new and useful improvement to the above 15

16 Three Specific Exceptions to §101’s Broad Patent Eligibility Principles Laws of Nature Physical Phenomena Abstract Ideas 16

17 Costs and Timing Generally expensive to procure and maintain utility patent rights  Application prep and prosecution costs anywhere from $10,000 to $100,000 or more depending on complexity  Official Fees payable upon filing (large entity) is $1,600  Total Maintenance fee payable over patent term is $12,600 Timing  Average time to receive first Office Action is 18.9 Months  Total pendency before final disposition (e.g., Allowance) is 27.5 months  This number jumps to 37.9 months when RCEs are filed 17

18 Costs and Timing Options to consider for Quicker Allowance Track One Prioritized Examination (PE) Program  Cost: $4,140 undiscounted fee (50% discount for small entity)  Timing: final disposition within 12 months  Current allowance rate is 46% to file Accelerated Examination (AE) Program:  Must lower fee than PE ~ $140  Requires a pre-examination search document and support document  Restrictions on number of claims and time to respond to office actions Patent Prosecution Highway (PPH) First Action Interview Pilot Program 18

19 Recent Supreme Court Patent Decisions Alice Corp. v. CLS Bank International (June 19, 2014) Limelight Networks, Inc. v. Akamai Technologies, Inc. (June 2, 2014) 19

20 Alice Corp. v. CLS Bank International Issue: Statutory subject matter under 35 U.S.C. § 101 Subject: Patent for mitigating settlement risk Held: Patent invalid for claiming “abstract idea” Courts to use two-step approach:  – 1. Determine whether claims directed to patent- ineligible concept (e.g., abstract idea)  – 2. If yes, then search for inventive concept in the claim that transforms the nature of the claim into a patent-eligible application 20

21 Takeaways from Alice Decision Still no well-defined standards for what qualifies as an “abstract idea” or “significantly more” Despite narrow holding Alice did establish clear rule that had previously been subject to debate: “mere recitation of a generic computer cannot transform a patent-ineligible abstract idea into a patent-eligible invention”  Need to incorporate new functionality  Improving speed/efficiency is not enough 21

22 Post-Alice Exam Statistics in Software Art Units On June 25th, the PTO issued preliminary examination instructions to assist examiners when evaluating subject matter eligibility of claims involving abstract ideas, particularly computer-implemented abstract ideas, in view of Alice Corp. Drastic increase in 101 rejections: Number of actions in the business-method art units with 101 rejections issued in a two week period in July (78%) was nearly three times that in a two week period in January (24%) Reductions in Allowances: The proportion of allowance issued in business-method art units has also dramatically dropped since January (from an average of 23.6% to 4.5%) 22

23 Limelight Networks, Inc. v. Akamai Technologies, Inc. Issue: Induced infringement under 35 U.S.C. § 271(b) Subject: Patent for content-delivery network Held: When no direct infringement has occurred, there is no induced infringement when “the performance of all the patent’s steps is not attributable to any one person” Takeaway: There still exists an infringement liability loophole since the Federal Circuit’s decision in Muniauction prevents a finding of direct infringement when two parties cooperatively infringe a method patent, but when neither controls the other 23

24 Special Topic: Coexistence of Patents and Trade Dress McAirlaids Inc. V. Kimberly-Clark (4th Cir. June 25, 2014) Georgia–Pacific Consumer Products LP v. Kimberly– Clark Corp., et al., (7 th Cir. July 28, 2011) 24

25 McAirlaids Inc. v. Kimberly-Clark Issue: Utility Patents in the Context of Trade Dress and the Functionality Doctrine Subject: Patented pressure-fusion embossing process for making a cellulose fiber product (bathroom tissue, paper towels, diapers) and the trade dress for a specific embossed dot pattern on the resulting product Held: Genuine issue of material fact regarding functionality of trade dress remained and that summary judgment was inappropriate. Court recognized:  utility patent serves as strong evidence of functionality  Rebuttable presumption of nonfunctionality created by McAirlaids’ federal registration for its dot pattern  Utility patent only covered process and not the specific embossed dot pattern  The parties products could incorporate different embossed patterns  Conflicting evidence as to functionality 25

26 Georgia-Pacific Consumer Prods., LP V. Kimberly-Clark Corp Issue: Whether GP’s Quilted Diamond Design as embossed on toilet paper was functional and therefor invalid as a trademark. Another case involving Utility Patents in the Context of Trade Dress and the Functionality Doctrine Subject: Utility patents covering process for making toilet paper, design patents covering Quilted Diamond design and a registered trade mark for the Quilted Diamond Design Held: Quilted Diamond design is functional and therefor trade mark for the design is invalid. Summary judgment granted in favor of KC Courts look to five factors to determine whether a design is functional:  Existence of a utility patent (yes)  The utilitarian properties of the item’s unpatented design elements (N/A)  Advertising statements (Yes, “quilted to absorb” and “quilted for exceptional softness and comfort”)  Difficulty in creating alternative designs (GP utility patent disclosed Quilted Diamond design as preferred embodiment)  Effect of the design on the product’s quality or cost (N/A) 26

27 Takeaways Utility patent protection, design patent protection and trade dress protection may coexist if carefully planned Conduct analysis of product’s functional and non functional aspects prior to seeking IP protection Utility patents should focus on functional aspects (be careful how you characterize the functional aspects) Seek design and trade dress protection on non functional aspects Marketing and advertising should support and not thwart design and trade dress protection efforts 27

28 Design Patents 28

29 What do Design Patents Protect? Design patents cover the design embodied in or applied to an article of manufacture (or a portion thereof) and not the article itself State another way, design patents cover the design for an article, not to the design of an article The design for an article consists of the visual characteristic embodied in or applied to an article Shape Surface Ornamentation Both 29

30 What Design Patents Won’t Protect: Utilitarian appearance and lack of ornamental features (usually PTO threshold) Functional (usually an issue enforcement proceeding) Hidden in use -- design never intended to be noticed 30

31 Why Get U.S. Design Patents? Design patents are inexpensive, with no post- grant fees Design patents can be obtained in as quickly as 3-6 months with advance planning and expedited examination Design patents last for 14 years from issuance 31

32 Patenting Product Designs DESIGN PATENT – an inexpensive way to: Control the product configuration Control the sale of replacement parts Create a barrier to market entry by a competitor Create the possibility of creating perpetual Trade Dress rights that can protect the product configuration forever 32

33 Costs and Timing For a normal, one embodiment design, with no significant legal issues  Cost: $2,000 to file, $4,000 to grant  Timing: One to two years For an expedited application, again one embodiment design, with no significant legal issues  Cost: $4,000 to file (includes $800 petition fee, petition, and the cost of a patent search)  Timing: Three to six months 33

34 Considerations to Maximize Design Protection Things to remember: 1)The drawings define the scope of the claim 2)The patented design must be a three dimensional object 3)Unnecessary elements in design patent drawings provide unnecessary non- infringement positions 4)Design patents can give your client the time to create protectable trade dress rights (i.e., satisfy showing of acquired distinctiveness) 34

35 Tips to Maximize Design Protection Use broken lines to show Unclaimed environment Boundaries  Broken lines may be converted to solid lines during prosecution and vice versa  May not be possible to add (new) broken lines in broadening continuation applications. See In re Owens (Fed. Cir. March 26, 2013) 35

36 Tips to Maximize Design Protection Use break lines to cover different sizes 36

37 Tips to Maximize Design Protection Cover different design elements of interest in multiple embodiments May lead to restriction, which is not necessarily bad  Can defer cost of filing divisional cases until parent case is allowed  Patent term begins at date of issuance

38 Tips to Maximize Design Protection If color is important to the design, determine how it should be protected  Broadest coverage is to claim contrast (solid black surface shading used to represent the color black as well as color contrast)  Line for color to cover all shades  Submit color drawings for protection of a very specific color

39 Test for Infringement of a Design Patent To an ordinary observer, giving the attention of a purchaser, the patented and accused designs are substantially the same such as to deceive such a purchaser, in light of the prior art  Gorham v. White, 81 U.S. 511 (1871), as modified by Egyptian Goddess, Inc. v. Swisa, Inc., 2008 U.S. LEXIS 20104, Case No. 2006-1562 (Fed. Cir. Sep. 22, 2008) 39

40 Test for Design Patent Infringement Egyptian Goddess eliminated the point of novelty test (the accused design must also “appropriate[d] the novelty in the patented device which distinguishe[d] it from the prior art) Has Egyptian Goddess provided a broader scope for all design patent holders as predicted? 40

41 Selected Post-Egyptian Goddess Cases Arc'Teryx Equip., Inc. v. Westcomb Outerwear, Inc., (D. Utah Nov. 4, 2008) Richardson v. Stanley Works, Inc., (Fed. Cir. 2010) Apple Inc. v. Samsung Electronics Co., (N.D. Cal. Aug. 24, 2012) Sofpool, LLC v. Kmart Corp., (E.D. Cal. May 30, 2013) 41

42 Arc'Teryx Equip., Inc. v. Westcomb Outerwear, Inc. First case to apply the new ordinary observer test Held: No infringement.  The ordinary observer would find the claimed zipper design to have two sections, while defendant’s zipper has three sections. The court made only passing reference to the prior art 42

43 Richardson v. Stanley Works, Inc. “Egyptian Goddess allows courts to ignore and discount unprotectable functional elements and still apply the overall design comparison of the modified observer test” Finding of non-infringement affirmed 43

44 Apple Inc. v. Samsung Electronics Co. Jury verdict of design patent infringement The jury was instructed to use the modified ordinary observer test and told that "[w]hen the claimed design is visually close to prior art designs, small differences between the accused design and the claimed design may be important in analyzing whether the overall appearances of accused and claimed designs are substantially the same" 44

45 Sofpool, LLC v. Kmart Corp. The court did not specifically consider the prior art Held: No infringement  By applying the ordinary observer test of Egyptian Goddess the court ruled "no reasonable juror could find that an ordinary observer would conclude that the taller, more elegant accused pool embodies the squat pool plaintiff patented, or any colorable imitation thereof" 45

46 Damages 35 U.S.C. 284. Damages  Same damages as for utility patent  Injunction, money damages, attorney’s fees  Reasonable royalty, price erosion, incremental profit 35 U.S.C. 289. Additional Remedy…  Infringer’s total profit for sale of an article including the design  Not less than $250  Cannot recover profit twice – in other words you can’t get 284 and 289 damages, and you can’t multiply 289 damages 46

47 Trademarks – What Are They? Common synonym = Brand Name Distinguishes your goods from others and indicates their source (even if unknown) TM’s identify products (i.e., goods) SM’s identify services Trade Names identify businesses 47

48 Trademarks – What Are They? Any word, name, symbol, or device used to identify the origin or source of goods or services Rights arise through use of mark Protection can be perpetual, so long as use exists Registration is advised, but not required Clearance searches are recommended before adopting a new mark 48

49 Trademarks v. Other IP Rights Patents/©’s come from US Constitution – TM’s derive from common law and federal statute TM’s perpetual; Patents/©’s have fixed lives TM’s, Patents and ©’s are independent rights, can co-exist, and can apply to same product (e.g., personal computer) TM’s - Use it or lose it – Patents: No requirement to use, but must describe sufficiently to allow others to make use – ©’s: Registration alone allows owner to challenge substantially similar works if infringer had access 49

50 Trademarks v. Other IP Rights “The asserted doctrine is based upon the fundamental error of supposing that a trade-mark right is a right in gross or at large, like a statutory copyright or a patent for an invention, to either of which, in truth, it has little or no analogy” *** “In truth, a trade-mark confers no monopoly whatever in a proper sense, but is merely a convenient means for facilitating the protection of one's good-will in trade by placing a distinguishing mark or symbol -- a commercial signature -- upon the merchandise or the package in which it is sold” United Drug Company v. Rectanus, 248 U.S. 90, 97-98 (1918) 50

51 Purpose of Trademarks Identify Origin – TM’s help consumers identify goods – TM’s make marketplace more competitive by lowering search costs Quality Assurance – Assures consumer he/she is getting anticipated quality – Challenges TM owner to maintain consistent quality 51

52 Purpose of Trademarks Symbols of Goodwill – TM’s allow producer (and not competitor) to enjoy benefits of desirable product – TM’s used over time can generate enormously valuable goodwill (e.g., Coca-Cola, GE, Cheerios) 52

53 Trademark Trademarks are ranked (and protected) as follows:  Coined (Exxon) > arbitrary (Apple) > suggestive (Dove) > descriptive (Vision Center) > generic (aspirin)  Strongest marks are the most distinctive 53

54 Trademarks Can Expire Lack of use. Too much improper use – e.g., former trademarks include: cellophane, escalator, zipper, aspirin, thermos, yo-yo  These marks became the generic name of the category, rather than a brand name for goods from one source. 54

55 What Is Trade Dress? “a combination of any elements in which a product is presented to a buyer” including the shape and design of the product  Art Attacks Ink “essentially [a business’] total image and overall appearance”  Blue Bell Bio-Medical Trade Dress creates a visual impression that functions like a trademark 55

56 3 Common Forms of Trade Dress Product Packaging  (e.g., Wheaties Box) Product Design or Product Configuration  (e.g., Rubik’s Cube or Goldfish crackers) Websites  (e.g., Google Home Page)

57 Protecting Trade Dress Trade dress is protectable under federal trademark and unfair competition law (“Lanham Act” at 15 U.S.C. Sec. 1051, et seq.) – Trade dress is registrable as a trademark/service mark in the USPTO – “Common law” trade dress is also protectable 57

58 Trade DressProtection - Challenges Identifying what comprises the trade dress Functionality – competitive fairness  (see Qualitex and TrafFix) Distinctiveness Issues (Inherent versus Acquired Distinctiveness)  (See Taco Cabana and Wal-Mart) Ornamentation – merely decorative features are not protectable (TMEP 1202.03(a)) Consistent use

59 10 Tips for Developing Protectable Trade Dress Develop distinctive designs  (i.e., flourishes) Search and clear the design Avoid functional designs Review utility patents – trade dress and utility patents don’t mix  But, design patents do Do not develop utilitarian advertising 59

60 10’ish Tips for Developing Protectable Trade Dress Consider color as trade dress Proceed with caution in the USPTO Maintain trade dress rights through consistent use Develop advertising campaign and commit to it for the longer run Do “look for” advertising Consider design patents 60

61 Trade Dress Cases Supreme Court Cases  Two Pesos, Inc. v. Taco Cabana, Inc. (1992)  Qualitex Co. v. Jacobsen Products Co., Inc. (1995)  Wal-Mart Stores, Inc. v. Samara Bros., Inc. (2000)  TrafFix Devices, Inc. v. Marketing Displays, Inc. (2001) 61

62 Trade Dress Issues: Product Design Product Design/Configuration:  Can never be inherently distinctive – must demonstrate acquired distinctiveness under §2(f) (Wal-mart v. Samara Bros.)  Utilitarian (functional) product features are not protectable trade dress

63 Trade Dress Issues: Functionality Morton-Norwich Functionality Factors:  utility patent that discloses the utilitarian advantages of the design sought to be registered  advertising touting the utilitarian advantages of the design  availability of alternative designs, and  whether the design results from a comparatively simple or inexpensive method of manufacture

64 Trade Dress: Georgia-Pacific Decision The quilted diamond design was found functional The Georgia-Pacific utility patents and advertising both touted the utilitarian benefits of the quilted design

65 Examples of Registered Trade Dress: Product Design/Configuration Herman Miller, Inc. Cinnabon, Inc. (Supplemental)

66 Trade Dress: Registered Product Design/Configuration Apple Inc. Reg. No. 3,457,218 Apple Inc. Reg. No. 3,470,983 Apple Inc. Reg. No. 3,475,327

67 Trade Dress – Product Designs held Not Protectable TARGET, IONIC PRO, LLC, SYLMARK INC, ET AL. Sun Water Sys. v. Vitasalus, Inc.

68 Trade Dress Distinctiveness: Product Packaging Product Packaging:  May be inherently distinctive for goods or services  If not inherently distinctive, requires showing of acquired distinctiveness (Wal-mart v. Samara)  Sometimes difficult to determine whether trade dress is product design or packaging  In close cases, trade dress should be classified as product design for which secondary meaning is always required

69 Examples of Protectable Trade Dress Wolf Appliance, Inc.McDonald’s Corporation

70 Examples of Trade Dress Enforcement Red Bull GmbH v. Matador Concepts, Inc.

71 Not Protectable Trade Dress Nora Beverages, Inc. v. The Perrier Group of America, Inc. Under the circumstances of the case, the court noted that "the presence of the prominent and distinctive labels alone negates any possibility of a likelihood of confusion"

72 Recent Developments 72

73 B&B Hardware v. Hargis Industries S.Ct. granted certiorari on 7/1/2014 B&B sued for trademark infringement claiming that Hargis’ use of SEALTITE for “self-drilling and self-taping screws” infringed B&B’s SEALTIGHT trademark for fasteners used in the aerospace industry The TTAB sustained B&B’s opposition in view of likelihood of confusion 73

74 B&B Hardware v. Hargis Industries D.Ct. and 8 th Circuit - TTAB decision has no preclusive effect on LOC issue in an infringement proceeding because it is not an Article III court S. Ct. will review:  (a) whether the TTAB’s finding of LOC precludes Hargis from re-litigating the issue in an infringement proceeding where LOC is an element; and  (b) if issue preclusion does not apply, whether district court was obliged to defer to the TTAB’s finding of LOC absent strong rebuttal evidence 74

75 Hana Financial v. Hana Bank Sup. Ct. granted cert. on 6/23/14 on issue of whether “tacking” is an issue of fact for jury or of law for court Hana Financial alleged that “Hana Bank” infringed its trademark rights Hana Bank argued that it could tack “Hana Overseas Korean Club” to its later use of “Hana World Center” and that “Hana World Center” could then be tacked to “Hana Bank”  Tacking doctrine permits a party to “tack” the use of an older mark onto a new mark for priority purposes; however, marks must be “legal equivalents” D. Ct. held that tacking is a factual question and submitted it to the jury which ruled for Hana Bank Ninth Circuit affirmed, but indicated the result would perhaps be different if tacking were considered a legal issue 75

76 Pom Wonderful v. Coca-Cola Decided 6/12/14 Pom sued Coca-Cola under the Lanham Act, which prohibits false and misleading statements about a product, because Coca-Cola’s labeling of a product as “pomegranate blueberry favored blend of five juices” was misleading, as it only contains 0.3% pomegranate juice and 0.2% blueberry juice Coca-Cola argued that the FDA approved the label and that the approval precluded any claims under the Lanham Act 76

77 Pom Wonderful v. Coca-Cola Lower courts agreed with Coca-Cola and ruled that Pom could not sue because the FDA’s rules superseded other claims S. Ct. disagreed and allowed Pom to proceed with its Lanham Act claim No statutory text or principle precluded Lanham Act suits of this nature Competitors may bring claims that challenge food and beverage labels that are regulated by the FDA 77

78 McDonald’s Corp. v. McSweet Decided 9/29/14 TTAB sustained McDonald’s opposition to application for MCSWEET for gourmet pickled vegetables, finding:  Likelihood of confusion  Likelihood of dilution Bd. determined that McDonald’s had proven through extraordinary sales and advertising spend that it owned a family of “Mc” marks (i.e., Mc + generic or descriptive term) 78

79 McDonald’s Corp. v. McSweet Witnesses testified that customers spontaneously insert “Mc” before food items purchased at the restaurants, even when in error Bd. found “Mc” family famous, with sales since 1955 through 14,000 restaurants and with advertising that at times focused on the “Mc” element as the central advertising message Similarities in meaning, appearance and commercial impression made confusion likely Goods are sufficiently related to meet the LOC test Channels are similar enough, in that some restaurant providers sell through supermarkets where MCSWEET items are sold (even though McDonald’s didn’t) Bd. found “Mc” family is famous and had been before use of MCSWEET mark, and that almost all of the 6 “blurring” statutory fame factors cut in favor of McDonalds 79

80 McDonald’s v. McSweet Survey evidence from McDonald’s found persuasive  Opposer's survey demonstrated "a substantial degree of association” between MCSWEET and McDonald’s and the "Mc" marks: "67% or two out of three individuals who encounter the MCSWEET term associate it with Opposer, McDonalds and its 'MC' marks."  Board found that the mark MCSWEET "is likely to impair the distinctiveness” of Opposer’s family of “Mc” marks and is therefore likely to cause dilution by blurring within the meaning of Section 43(c) 80

81 Nationstar Mortgage v. Ahmad Decided 9/30/14 TTAB sustained a fraud claim for the first time since 2009 Bose decision Bd. found the financial services cited in the in-use application were fraudulent Fraud must be proven with clear and convincing evidence Statements made on good faith belief are not fraud Applicant’s testimony that was evasive and inconsistent – given his knowledge of state licensing requirements -- was problematic Overall, Ahmad’s testimony was not credible nor corroborative of his positions taken in litigation Bd. also found fraud was committed knowingly and with intent to deceive Bd. Bd. distinguished Bose in which there was a nuanced question of trademark law on which the applicant had made a mistake which was not fraud 81

82 Nationstar Mortgage v. Ahmad Fact that applicant – a non-attorney – filed his application without counsel was no excuse  Declaration makes clear that the statements made in the application if untrue are subject to criminal penalties Conclusion: Bd sustained opposition and thus declined to consider the additional opposition grounds of likelihood of confusion and lack of bona fide intent 82

83 Right of Publicity The Right of Publicity is the right to control the commercial use of one’s identity Elements:  “name, image and likeness” Survives death in some states (not NY) Laws vary by state  California: Life + 95 years after death  Indiana: Life + 100 years after death


85 The Northern District of Illinois ruled that this is constitutionally protected free speech because there was no commercial transaction involved. On appeal, the 7 th Circuit held: The advertisement did not merely congratulate Michael Jordan but also promoted the grocery stores by use of their logo and slogan. As such, it constituted image advertising, which is a form of “commercial speech”. This decision defeated Jewel’s First Amendment defense and permitted Jordan’s case against the supermarket chain to proceed under Illinois publicity law. Jordan v. Jewel Food Stores, Inc., 12-1992, 2014 WL 627603 (7th Cir. Feb. 19, 2014) FACTS: Ad was published in a commemorative issue of Sports Illustrated. It reads: “A Shoe In! After six NBA championships, scores of rewritten record books and numerous buzzer beaters, Michael Jordan's elevation in the Basketball Hall of Fame was never in doubt! Jewel– Osco salutes # 23 on his many accomplishments as we honor a fellow Chicagoan who was “just around the corner” for so many years.”

86 Just Last Week: 86

87 Sivero v. Fox Television Frank Sivero played mumbling Mafioso Frankie Carbone (ostensibly based on real-life gangster Angelo Sepe) in Martin Scorsese’s 1990 gangster epic Goodfellas. He is suing Fox Television, arguing that the Fat Tony hechman Louie (who first appeared on The Simpsons in 1991) is clearly modeled on his Goodfellas character. – Reportedly the voice was modeled after Joe Pesci’s character Sivero is seeking $250 million in compensation for unauthorized use of the likeness. Sivero was recently successful in having his likeness pulled from promotion by Deli Belly in Southern California for its “Frank Carbone” sandwich. He allowed photos to be taken while he ate there for souvenir purposes but not to be used in advertising. 87

88 COPYRIGHTS © 88 Used by permission of Dave Kellett. ©2014 Dave Kellett. All Rights Reserved.

89 Copyrights Protects original works of authorship  Books, movies, music, pictures, program code, dance  Creation must be reduced to a “fixed medium of expression” – written, recorded, etc. – not just ideas Works are protected upon creation Registration is advised, but not required  Use of © does not require registration Conveys a “bundle” of rights, including reproduction, distribution, performance, creation of derivative works, and others Assignment of copyrights must be done in writing. Each right may be assigned separately. 89

90 Examples of Creativity Literary works –  books, newspapers, periodicals, manuscripts Dramatic works –  plays, musicals, operas  movies, television shows Art –  paintings, sculptures, maps Music  Composition  Recording Architectural works –  building plans 90

91 Specifics of Copyright ©Protection Copyright term –  Life of author plus 70 years  95 years from publication for a work made for hire (corporate authorship) Note: Due to changes in copyright law, there is a recognized cutoff of 1923 – creations prior to that are in the public domain Some special situations, such as newly discovered works in EU which can be protected for 25 years. 91

92 Plagiarism and Infringement “If you steal from one author it's plagiarism; if you steal from many it's research.” Wilson Mizner Plagiarism is a form of infringement “Fair Use” is a defense to charges of infringement – the purpose and character of your use – the nature of the copyrighted work – the amount and substantiality of the portion taken, and – the effect of the use upon the potential market Infringement is not based upon quantity but value: – There is no “10% Rule” – Harper & Row v. Nation Enterprises, 471 U.S. 539 (1985) – Gerald Ford’s memoir – use of 300-400 words out of 500 pages was not “fair use”. 92

93 Overlapping IP Protection An ornamental design may be protected by copyright as a work of art and also may be the subject of a design patent. Where a copyrighted artistic representation identifies a product or service, it also may be the subject of a trademark. In some instances, an industrial design can span patent, trademark and copyright protection. Some protection schemes require you to choose 93

94 THE COCA COLA CONTOUR BOTTLE In 1915, Alexander Samuelson and Earl R. Dean designed the original "hobble skirt" contour bottle The first design patent on the bottle, D63,657, was granted on December 26, 1923, to the bottle manufacturer 94

95 The Coca-Cola Bottle The Coca-Cola Company received a second design patent for the contour bottle on March 24, 1937, preventing imitation of the bottle for another 14 years. The bottle became so well known that it became synonymous with the Coca-Cola product. The Coca-Cola Company sought and obtained a federal trademark registration for its contour bottle on April 12, 1960, enabling the company to safeguard the bottle design indefinitely. 95

96 OTHER IP RIGHTS IN PLAY – COCA COLA Trademark:  Bottle, COCA-COLA, COKE Copyright:  Bottle, keychain, advertising Trade secret:  The formula (SHHH! It’s a secret!) Right of publicity:  Use of sports figures 96

97 Exclusionary Strategy Defined A strategic process that utilizes a combination of barriers to prevent or slow competitive entry into product areas XYZ Corp plans to own AND Present view of XYZ products and technologies as Sustainable, Enforceable, and Exclusive 97

98 Importance of Exclusionary Strategy In order to win with an innovation strategy the innovation must be sustainable History has shown that innovations with at least a one year lead time will usually dominate market share for many years even against preferred products 98

99 Elements of Exclusion Competitive Threat Products Launch Timing Cost Marketing IP Exclusionary horizon Competitive Threat Competitive Threat Competitive Threat 99

100 Exclusionary Rating 100

101 Align Exclusionary Strategy with Product Development Timeline DiscoveryOpportunity Assessment DevelopmentCommercializationMarket Intro Consumer Insights Technical Insights Product Ideas Opportunities Identified No exclusionary efforts IP Landscape (identify Competitive & White Spaces) Identify potential partners, Licenses Analysis of competition Initial Marketing plan Initial regulatory plan Brainstorm ideas and workarounds Capture and prioritize invention disclosures Evaluate Launch Timing & Costs Advantages Combine 4 Exclusionary Elements into Holistic Strategy Develop competitive response scenarios to test strategy Begin Freedom-to- Operate activities Monitor competitive activity Execute Strategy by filing patents (early and often) and TMs Conduct IP Gap analysis and capture & file on inventions as appropriate Execute Strategy by filing design patents, TMs, registrations, etc. Consider and implement marketing plans to develop protectable trade dress (piggy back on exclusivity from design patents if possible) Actively monitor competitive activity and adjust strategy accordingly Consider continuing patent filing strategy to address IP gaps (both utility and design) Consider “fast Lane” patent prosecution options Actively monitor competitive activity and adjust strategy accordingly Consider continuing patent filing strategy to address IP gaps (both utility and design) Consider trade dress registration 101

102 Scenarios 102

103 Scenario 1 – The New Widget (upstream product innovation discovery work) You are in-house counsel at XYZ Corp, a consumer products company that manufactures widgets. A “Skunk Works” faction within the product development group of XYZ Corp has come up with an idea for a new product innovation platform that would leverage and expand use of its core widget technology into new consumer product areas. At present, XYZ Corp’s widget technology is protected by a combination of patents and trade secrets (primarily process know-how). The new product innovation platform would require one or more enabling technologies not currently within the core competence of XYZ Corp’s R&D department. XYZ Corp has decided on a parallel path forward: (1) do all the new product innovation platform work in-house; (2) collaborate with an external partner having expertise in one of the identified enabling technologies to support a second development option for the new product innovation platform work. What should you be thinking about? 103

104 Scenario 2 – Product Launch The product innovation platform work was successful and now the product launch team of XYZ Corp wants to bring the first of the new manufacturing products to market. The new manufacturing product has both new functional features and a new appearance. The product launch team has come to you as in-house counsel and they are in the midst of naming the product, putting together marketing materials, and will be showing off the product at the upcoming Widget World Expo. They are having a custom-built display case made for the Expo, and are sending out a prototype to be mounted inside. What should you be thinking about? 104

105 Scenario 3 – One Year Later The new manufacturing product has now been in market for about 12 months and a competitor has answered with a competitive response that is beginning to take away sales. In order to boost sales, XYZ Corp is interested in using characters that children can relate to. Disney licensed its copyrights (and trademarks) for the movie “Toy Story” to XYZ Corp, allowing XYZ Corp to use characters and scenes from the movie in a series of posters for the new product. Hoping to get its employees excited and involved in the process, XYZ Corp decides that it will invite its employees to submit paintings of Buzz Lightyear from Toy Story, with the understanding that the employee with the best painting would be offered a contract to paint all the Toy Story characters as an entire series. XYZ Corp urges its employees to use their own interpretation, but to make sure that the Buzz Lightyear in each painting is very recognizable as “everybody’s Buzz Lightyear”. Continued on next slide 105

106 Scenario 3 – continued Jenny, an employee at XYZ Corp, printed out several photos of Buzz and used her recollections of the movie to paint Buzz Lightyear. Jenny’s interpretation of Buzz was chosen to be the winner. XYZ Corp offered Jenny a contract to do the series, but Jenny read through the terms and declined. XYZ Corp then awarded the contract to employee James. XYZ gave James the painting made by Jenny and asked him to “clean it up.” James did so, and now all the paintings are completed just in time for the new product launch. Jenny is enraged that James “stole” her painting and copied it. Jenny has a copyright registration on her painting. What should you be thinking about? Should XYZ Corp be worried? 106

107 Scenario 4 – Advertising XYZ’s marketing team is putting together an advertisement. Mary from marketing is interested in using individuals from the community in the ad in order to make the brand approachable. She is on a tight schedule and asks you if she needs to do anything before filming the members of the community she has chosen to be in the commercial. Mary also needs music for the commercial and she loves Adam Levine’s distinct voice. Jessica is on Mary’s marketing team and was ecstatic to realize that her neighbor’s cousin is a singer and sounds exactly like Adam Levine. Jessica suggests that they reach out to the cousin and have him perform a song for the commercial. What should you be thinking about? Are there any concerns Mary and Jessica (or XYZ) should have about this commercial? 107

108 GLAD® Force Flex® Case Study 108

109 109

110 GLAD® Force Flex® Case Study Rating ~ HighGLAD StrategyCompetitive Position Outcome Launch Timing First to market Significant manufacturing complexity and capital a hurdle to competitive entry Not technology driven Significant retooling needed to develop competitive product. GLAD Force Flex grew the trash bag category and product out performed all other trash bags at launch. A Branded competitor launched a thicker bag with a FLEX type trademark and embossed grid design on bag to compete after 1 year but ultimately discontinued product. Near term: Unexpected result was Katrina and resultant spike in resin costs (GLAD felt less impact than Competitors due to lower resin usage) Long term: product now off patent, GLAD remains vigilant in enforcing its trademark rights Cost GLAD’s Technology was a “costovation” … less resin = less cost Expected response was thicker (=stronger) bag, a significant cost disadvantage. Product/ Consumer Visible superior puncture resistance (reason to believe) Huge opportunity to establish trade dress via “look for” advertising. Slight advantage in equity around toughness of bags using traditional film technology. Intellectual Property Process know how 12 utility patents and 1 design patent granted at launch with more applications pending 2 registered word marks and registered trade dress on product configuration No competitive IP. Opportunity for competition to make thicker bag without infringing. 110

111 Thank you! 111

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