1. Nuts & Bolts: Intellectual Property Napa County Women Lawyers July 12, 2017
Christopher J. Passarelli
SR. Intellectual Property Attorney
DICKENSON, PEATMAN & FOGARTY
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2. Disclaimer
This is made available for general informational purposes only and none of the information provided herein should be considered to constitute legal advice.

3. Agenda Forms of Intellectual Property Patent Copyright Trade Secrets
Trademarks and Branding
Geographical Indications, Certification Marks

4. Forms of Intellectual Property
Patent
Utility Patent, Design Patent
Plant Patent, PVPA
Copyright
Trade Secrets
Trademarks, Service Marks and Trade Dress
This is made available for general informational purposes only and none of the information provided herein should be considered to constitute legal advice.

5. Constitutional Basis
Article I, Section 8, Clause 8 Grants to Congress the power "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries."

6. Patents
35 U.S.C. §§ 101, et seq.
Processes, machines, articles of manufacture, and compositions of matter which are:
Novel
Useful
Nonobvious
Design Patent – protection for ornamental aspects of a product or package. .

7. Copyright
17 U.S.C. § 101, et seq.
Creative works fixed in a tangible medium of expression
Rights: Reproduction, Distribution, Derivative Works, Public Display, Public Performance
Federal law applies
Term: (Depends) Often lasts for the lifetime of the author plus 70 years

8. Copyright - Issues Protectability Creativity Requirement Functionality
Ownership – Who owns the copyright?
When and How to Register? - Litigation
Publication/Statutory Damages

9. Copyright Ownership Author/Creator owns the copyright
Web page, label, photographs, etc.
Exception: Employee in the course of employment
Commissioned Works
 Obtain Assignment of Rights!

10. Copyright in the Alcohol Beverage Industries
Label
Packaging
Website
Photographs
Hot Issues: Unauthorized Dealers, Social Media

11. Trade Secrets Definition
Business formulae, compiled information, and devices or processes which, though neither copyrighted nor patented, or not even novel, are kept as "trade secrets" of the user. Any secret information used in the conduct of the plaintiff's business which is of some competitive advantage to him, and which is not disclosed to the public, might be included.
Witkin, 7 Summary of California Law, at p  
Equity provides a remedy where the information is kept secret and it is improperly obtained by the defendant. Id. at 5306.
Outstanding summary in Witkin

12. Trade Secret Statutes
Uniform Trade Secrets Act (UTSA) Defend Trade Secrets Act of U.S.C. § 1836, et seq. California Trade Secrets Act (CTSA) – Cal. Civ. Code § 3426 –

13. Trade Secrets California Trade Secrets Act (CTSA)
“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 the public or to other persons who can obtain economic value from its disclosure or use; and
Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.”
CA Civil Code § (d)
KEYS:
1. Economic value
2. Secrecy
3. Competitive advantage

14. Trade Secrets vs. Other Intellectual Property
PROS
Potentially infinite duration
No disclosure requirement – MUST not disclose!
No need to file or register
No novelty requirement
Less expense early in life
CONS
Subject to potential reverse engineering
“Reasonable” efforts to maintain secrecy
Inadvertent disclosure
Misappropriation
No presumption - Must identify & prove existence without (disclosing the trade secret)
Enforcement is potentially costly over time
Coca cola formula over 100 years old – stored in a bank vault

15. Trade Secrets Protection
Trade Secret Checklist - Key Areas
Identification
Documentation*
Procedures – Audit, Plan, Repeat
Label, Segregate, Secure
Educate: Orientation, Employment Manual, NDA, Memoranda, Exit Interview
Involuntary or Inadvertent Disclosure
BUT N.B., As Discussed at recent ABA Chicago Conference: Documentation increases probability of Misappropriation

16. Trade Secrets Examples
Customer list
Suppliers
Production/Manufacturing inputs and processes
Financial Data
Consumer Information
BUT N.B., As Discussed at recent ABA Chicago Conference: Documentation increases probability of Misappropriation

17. Trade Secrets Misappropriation
CA Civil Code §
Acquisition of a trade secret by someone who knows or has reason to know it was acquired by improper means, including by:
Theft
Bribery
Misrepresentation
Breach of duty; or
Inducement of breach of duty to maintain secrecy.
Use or disclosure without consent after acquisition by improper means.
Statute of limitations - Three (3) years. Cal. Civ. Code §

18. Trade Secrets Remedies
Injunctive Relief: Court orders defendant to cease violation and to preserve secrecy. Note potential First Amendment limitations. Cal. Civ. Code §
Damages: Compensation for economic harm. Includes Plaintiff’s losses and the defendant's profits derived from misappropriation.
Punitive damages - Up to twice the actual damages in the event of willfulness. Cal. Civ. Code §
Attorneys' Fees: Discretionary where defendant acted willfully or maliciously, or where plaintiff brought suit in bad faith. (Also available for a motion to terminate an injunction made or resisted in bad faith.) Cal Civ. Code §

19. Trade Secrets Litigation
Classic Alcohol Beverage Industry Paradigm: Secrecy in Practices (Europe) v. Free Information Flow (U.S.) Trade Secrets are more conducive to commercial industry than to academia, where ideas are more freely shared to spur rapid innovation…
Question: Are winemaking techniques proprietary?

20. Trade Secrets Litigation
WINE INDUSTRY CASES
Kendall-Jackson v. Steele (Lake County Superior Court, 1992)
Trade secret: Winemaking process - KJ Vintner’s Reserve
“Slightly sweet” chardonnay (“Off dry”)
Technique: Stop fermentation before natural grape sugar converts to CO₂
Trade secret formula filed in Court - under seal
30 day trial. Result: Permanent injunction. Cannot be used or divulged by winemaker to subsequent employers or clients.
KEY: Developed at the winery. Ergo, Formula belongs to winery, not winemaker.

21. Trade Secrets Litigation
WINE INDUSTRY CASES
Domaine Serene v. Rynders (Oregon Federal District Court, 2009)
Trade secret: Winemaking process – Coeur Blanc (white wine from Pinot Noir grapes)
Technique: Pressing clear juice off of colored skins (not new)
Rynders was at-will, contract employee and under Employee Incentive Agreement
DS alleged breach of confidentiality, loyalty, fiduciary duty and misappropriation of trade secrets.
Alleged theft of computer files and documents
Settled out of court

22. Trade Secrets Litigation
Domaine Serene v. Rynders (Oregon Federal District Court, 2009)
Winemaker Tony Rynders’ written statement to the News-Register in McMinnville regarding private settlement with Domain Serene:
“While I am not at liberty to discuss the details, I can state:
a) That the matter has been resolved to the satisfaction of both parties...
b) That the parties have agreed to disagree on whether Domaine has (or does not have) any confidential, proprietary or trade secret information with respect to the white Pinot Noir wine it makes, but may make no further disclosure, comment or statement; and
c) ...[A]greed not to make or consult on the making of white Pinot Noir wine for three years.”

23. Trade Secrets Drafting Considerations
1.      Confidentiality.  Neither Winemaker nor Client will disclose or use, either during or after the Term, any proprietary or confidential information of the other party, or of a party for whom Winemaker performs services, without the party's prior written permission except to the extent necessary to the performance of Winemaker's Services.  Proprietary or confidential information includes, but is not limited to:
the written, printed, graphic or electronically recorded materials;
business plans, customer lists, operating procedures, trade secrets, design formulas, know-how and processes, computer programs and inventories, discoveries and improvements of any kind; and
(c) information belonging to customers and suppliers of Client about whom Winemaker gained knowledge as a result of Winemaker’s Services to Client. 
A party will not be restricted in using any material that is publicly available, already in that party's possession or known to the party without restriction, or which is rightfully obtained by the party from other sources.
Can tweak this language to be more one-sided, favoring client (winery or winemaker).

24. Trade Secrets Drafting Considerations
Require: *Assignment of Rights*
Agreement itself and its terms should be Confidential
Require notification (advance, if possible) in the event of disclosure
If disclosure is required – require reasonable efforts to seek confidential treatment
Require recipient to keep records of all trade secrets developed or subject to assignment
Prohibit removal of TS info from the premises
Prohibit hindering/preventing access to TS info (e.g., IT access)
Require return of TS materials upon termination
Require written disclosure of anything developed while with the company
Require disclosure/assignment inventions, etc. developed within 6 mos. – 1 year (inc. patent applications)
Take heed: Cal. Lab. Code § 2870

25. Trade Secrets Criminal Law
Economic Espionage Act of Criminal Penalties
18 U.S.C. § Economic Espionage
Foreign government beneficiary
Maximum individual sentence/fine: 15 years imprisonment/$5 million.
Maximum organizational fine: Not more than the greater of $10 million or 3 times the value of the stolen trade secret.
18 U.S.C. § Trade Secrets Theft (Industrial Espionage)
Beneficiary must be anyone other than the owner of the misappropriated trade secret(s)
Maximum individual sentence/fine: 10 years imprisonment/$250,000 or an alternative fine based on gain/loss figures.
Maximum organizational fine: $5 million

26. Trade Secrets Criminal Law
Economic Espionage Act of 1996
Criminal Forfeiture The court may order the violator to forfeit to the United States any (1) property constituting, or derived from, any proceeds the person obtained directly or indirectly, as the result of the violation, or (2) property used, or intended to be used, in any manner or part, to commit or facilitate the commission of the violation.
Civil Proceedings – Injunctive Relief In a civil action, the Attorney General may obtain appropriate injunctive relief to prevent the offense. The District Courts of the United States have exclusive original jurisdiction of civil actions.

27. Trade Secrets Recent Developments
Defend Trade Secrets Act of 2016 – 18 U.S.C. 1836, et seq.
Enacted May 11, 2016
Concurrent federal jurisdiction in trade secret cases
Previously: Exclusive recourse via state UTSA framework
Problem addressed: Lack of “uniformity” – e.g., Uniform nationwide corporate nondisclosure policies
Goal: Bring Trade Secret law in line with federal law applicable to other forms of IP
Effect: Increased court powers (e.g., preservation orders), statute of limitations, damages
Purported Benefit: Clear path to federal court.
Pitfalls: e.g., Whistleblower immunity

28. Trade Secrets DTSA 2016 Cases
Henry Schein, Inc. v. Cook, 191 F.Supp. 3d 1072 (N.D. Cal. 2016) - First temporary restraining order under DTSA prohibiting an ex-employee from soliciting customers of the plaintiff.
Dalmatia Import Group, Inc. v. FoodMatch Inc. et al., Case no. 16-cv (E.D. Pa. Feb. 24, 2017) –
Federal jury awarded Dalmatia $2.5 million for misappropriation of trade secrets, trademark infringement and counterfeiting - $500,000 of which was allocated to the DTSA claim based on Foodmatch's misappropriation of Dalmatia's fig jam recipe

29. Trade Secrets Hot Topics
Data Breach
The Cloud
Public Access via Agency FOIA/Sunshine Act Requests
Trans-Pacific Partnership

30. Trademark/Service Mark: What is it?
15 U.S.C. §1051, et seq.
A trademark can include a:
Word, Phrase, Slogan
Symbol, Logo
Picture, Image, Photograph
Color, Shape, Smell
Product or Packaging (aka Trade Dress)
 Virtually anything that serves as an Indication of Source

31. Trademark Policy Considerations
Easy reference
Business asset development
Indication of Source
Consistent quality
Prevent False Advertising
Prevent Confusion
Prevent Unfair Competition
 Protect the Consumer

32. Trademark How they Arise
In the U.S., trademarks arise from use in commerce.
In much of the world, the rightful owner is the first to file a trademark application.

33. Trademark Pitfalls Generic usage Abandonment Crowding of the field
How to lose your trademark rights:
Generic usage
Abandonment
Crowding of the field
Naked Licensing
Illegal Activities

34. Trademark Distinctiveness
Trademark strength is based on distinctiveness – the ability to indicate source.
Generic – not protected
Descriptive – informational, protected if the mark achieves secondary meaning
Suggestive
Arbitrary
Fanciful
 A mark can become generic and lose its ability to function as a trademark.

35. Trademark Generic Terms
Trademarks that became generic:
Aspirin
Cellophane
Dry Ice
Heroin
Kerosene
Linoleum
Thermos
Trampoline
Videotape

36. Trademark Notice – 15 U.S.C. § 1111
Supercript or subscript:
TM, SM or ®
Registered in the U.S. Patent and Trademark Office; or
Reg. U.S. Pat. & Tm. Off.
Notice of claimed rights/deterrent effect
Effect on profits and damages recovery – w/o notice of registration, need to show D’s actual notice of registration
Improper use of ® federal registration notice may be deemed fraudulent.

37. Trademark Registration
Benefits of federal registration:
Nationwide constructive use
Presumption of ownership, validity
Use of ® acts as a deterrent
Federal Court jurisdiction
+5 Minutes of sleep every night!

38. Federal Registration Process
Filing – Current Use v. Intent to Use
Examination
Office Actions & Information Requests
Publication for Opposition
Allowance for Registration
Issuance of Registration Certificate
Continued Use/Incontestability
Renewal
No Attorney Required? (57% v. 83% success)

39. Registration State Trademark
Alternative to federal registration
PROS:
Easier to obtain
No interstate commerce requirement
No Publication for Opposition
CONS:
No Presumption of ownership, validity
Cannot use “®”
Will not necessarily prevent third parties from achieving federal registration

40. Trademark Use
Must be used on or in connection with the goods or services
Affixed to the goods (e.g., label) or their packaging
Website use in proximity to a means for ordering the goods or services
Means to Request a Quote

41. Trademark Clearance
#1 Misconception: The Secretary of State cleared my mark
Preliminary Search v. Full Search
Common Law Use by third parties
Willful infringement issue
Tip: Bring alternatives
Tip: Do your own search first
No Search Is Perfect

42. Conflicting Marks
Pseudo Marks – may be assigned to marks that have alternative spellings or meanings. Used as an additional search tool.
E.g., YOU ARE GREAT v. URGR8
Phonetic Equivalents – alternative spellings
E.g., KWIXTART v. QUICK START
Foreign Equivalents – foreign translations
E.g., EL JEFE v. THE BOSS

43. Trade Dress Definition
Total image or overall design or appearance of a product or its packaging.
Includes size, shape, color, color combinations, texture and graphics
All features be considered together, not separately
Function elements NOT protectable
OK if certain components are functional if the overall combination of features is not.
Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992)

44. Trade Dress Packaging Trade Dress
For single product or product line/family of products
Product Trade Dress
Product Configuration can serve as trade dress if it is inherently distinctive.
Computer Care v. Service Systems Enterprises, Inc., 982 F.2d 1063, 1067 (7th Cir. 1992)
Examples:
Coca Cola, Maker’s Mark

45. Recent Developments: Alcohol - Related goods
Virtually all alcohol beverage products are considered related goods
Beer/Wine/Distilled Spirits/Energy Drinks
White Oak Vineyards & Winery v. White Oak Spirits LLC, Case No. 2:14-cv (CACD 2015)
Vodka and wine found to be related goods.

46. Recent Developments: Scandalous Marks
Matal v. Tam, 582 U.S. ___ (2017) -“The Slants”
Decided June 19, 2017
Affirmed In Re Tam, 808 F.3d 1321 (Fed. Cir.
2015).
Held 8–0, that the Lanham Act's prohibition
against registering "disparaging" trademarks with
the USPTO violates the First Amendment freedom
of speech.
Paves the way for an end to WA Redskins disputes.

47. Geographical Indications
Appellations of Origin
American Viticultural Areas (AVA)
Conjunctive Labeling Requirements
E.g., Oakville - Napa Valley
Misconception: TTB approved my label!

48. Certifications Certification Marks - Certifies nature or origin. E.g.,
Location or origin,
Materials of construction
Method or mode of manufacture of goods or provision of services
Quality assurance
Accuracy of the goods or services; and
Union or other organization standards.

49. Certifications Examples: Cannot certify yourself!
Organics: CCOF, USDA Organic, Oregon Tilth
Sustainability: SIP Certified, Certified California Sustainable Winegrowing (CCSWP)
Cannot certify yourself!
The certifier cannot engage in production or marketing of the certified goods or services but must be competent to certify that any user has met the requirements.

50. Thank you! CHRISTOPHER J. PASSARELLI CP@DPF-LAW.COM | WWW.DPF-LAW.COM
Sr. intellectual property Attorney
DICKENSON, PEATMAN & FOGARTY
1455 FIRST STREET, STE | NAPA, CA
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