Have You Protected Your Trademarked Names on the New Domain Name Structure?

| March 24, 2014

If you haven’t yet protected all of your trademarks from violation in the newly expanding Internet domain name space, the time to act is now.

The Internet is in the early stages of the biggest change since it was founded as the number of global Top-Level Domains (gTLDs) explodes from just 22 to more than 1,300. Rapidly disappearing are the days of .com, .net, maybe .biz being sufficient gTLDs for most companies to cover their trademarked names.

Now we are entering an era with a plethora of domains available, from .company to .guitars, .systems to .buzz and hundreds in between.

Already, the Internet Corporation for Assigned Names and Numbers (ICANN)’s Trademark Clearinghouse has noted that “unknown entities” have pre-reserved domains for a significant percentage of trademarked UK companies. While similar data isn’t available for the United States, there’s no reason to believe it would be much different.

Obviously, you need to walk a careful line here. Registering your company’s name with 1,300 domain extensions could become a costly undertaking. On the other hand, allowing trademark dilution by ignoring potential confusion among arguably useful domains could be more costly.

The good news is that ICANN is now open for what it terms “Sunrise Period Registration” through its Web site at http://trademark-clearinghouse.com. There, you can submit your trademarks, provide proof of their validity, and protect yourself against potential infringers.While the first few of these Sunrise Dates have come and gone, the  majority are still in the future so there’s time to get your trademarks registered before someone poaches them and publishes them online.

If that happens, the ICANN procedures have what appear to be  well-thought-out protection and recovery mechanisms in place, but they will of course cost you money and time.

Protection of Trade Secrets Requires Pro-Active Effort, Less Reliance on “Inevitable Disclosure”

| March 24, 2014

In a recent trade secrets case, a Massachusetts Superior Court judge issued a ruling that should serve as a stark reminder to all companies that rely on trade secrets to protect their vital business data and processes. In a related development, some recent cases in other jurisdictions have raised the question of whether it is safe to rely on the doctrine known as “inevitable disclosure” to respond to perceived trade secret theft threats.

Judge Cornelius J. Moriarty of the Massachusetts Superior Court granted summary judgment on a trade secret misappropriation claim because the plaintiff company apparently did nothing to protect its claimed trade secrets. (Read the ruling here.) In this case, C.R.T.R., Inc. vs. Jimmy Lao, Plaintiff C.R.T.R. was unable to prove that it either had a policy protecting trade secrets or a written agreement with the defendant that would have prohibited their disclosure.

Often, companies rely on the notion that if an employee with access to trade secrets leaves the company to go to work for a competitor, it is inevitable that the employee will reveal or make use of trade secrets in the new position. However, whether it is safe to rely on that concept may be at least in part a matter of how state law treats the idea of “threatened trade secret misappropriation.”

In one case heard in the Northern District of Illionis court (Lumenate Technologies, LP v. Integrated Data Storage, LLC (N.D. Ill. 11/11/13)), the court allowed the argument based on the state statute that explicitly bans “the threatened misappropriation of trade secrets”.

A few weeks later, in an Ohio case (Exal Corp. v. Roeslein & Associates, Inc. (N.D. Ohio 12/27/13)), the court ruled against an inevitable disclosure argument. The judge found that the state statute prohibiting threatened misappropriation couldn’t be triggered by a mere suspicion. There must, the court said, be a demonstrable risk of misappropriation.

The point of these cases — and there are many similar to it occurring around the country — is that if you want to count on trade secret protection to guard confidential data, you need to:

  1. Have in place a clear policy for how employees are to deal with such information; and,

  2. Ensure that all employees have signed employment and/or other agreements that spell out expectations and consequences with respect to handling confidential company information.

 

Patent Trolls Like Intellectual Ventures Must Be More Closely Regulated, But How?

| March 24, 2014

Patent trolls are the bane of the existence of American industry. These companies and individuals shop around for patents and patent portfolios to acquire for the sole purpose of using litigation and the threat of litigation to monetize their underlying ideas. They have no interest in the utility, social value or commercial viability of the underlying intellectual property.

Essentially, a patent troll gambles that even if a patent it owns has few if any real applications and therefore is of dubious commercial value, it will be able to squeeze settlements out of those it accuses of infringement.

One of the largest and most egregious examples of this behavior is Intellectual Ventures, a Bellevue, WA based firm that boasts a portfolio of some 70,000 patents it has acquired during its 14 years in business. It has realized $3 billion in patent licensing fees, but has passed on to the inventors behind the patents just $500 million.

Last year, IV began filing its own lawsuits. Previous to that, they set up a dummy corporation, assigned the patent(s) to the new company and then sued on behalf of the shell. This was a mere legal fiction, of course; the benefits of the suit ultimately went to IV and its shareholders.

This behavior jeopardizes the value and public perception of intellectual property protection. This, in turn, is clearly damaging to American industry both at home and abroad. It is difficult to see any social good being performed by companies like IV but regulating them is a challenge. To find a way to do so without unnecessarily handicapping inventors who can’t afford to monetize their inventions directly will be tricky waters indeed.

But unless Congress can find a way to deal with this scourge, patent protection will fall into greater and greater misuse and disrepute. It behooves the lawmakers to at least begin looking into this issue with greater depth and purpose.

http://www.theverge.com/2014/2/4/5375304/intellectual-ventures-goes-to-trial-against-google-and-motorola

Cut Visual Artists in on Profits of Original Works When Resold, Copyright Office Urges Congress

| December 18, 2013

The United States Copyright Office has reversed a long-standing policy and is urging Congress to pass new legislation that would provide visual artists with a royalty payment upon the resale of their copyrighted work.   This approach recognizes that a visual artist should be paid when a unique work appreciates in value.  This is an about-turn for the US which, previously, has never allowed visual artists to receive a royalty after the first sale of a work.

In a report  issued this month, the Copyright Office recommended that painters, illustrators, sculptors, photographers and the like be awarded a royalty when their work is resold at a profit.   Others, like authors, have always benefited from an ongoing stream of income from their works because a work or authorship can be reproduced endlessly and each first sale results in a payment to the author — some visual works, such as paintings, are unique and their value resides in the uniqueness.  As recently as 1992 the Copyright Office had decided the policy of awarding visual artists the same ability to collect an ongoing payment — a right known world-wide as droit de suite — was not a good idea, despite being the norm in dozens of other countries.

The office is now urging Congress to “consider ways to rectify the problem” by ensuring artists have a financial stake in the re-sale of their works; hence being able to enjoy the long-term increase in value associated with unique pieces.

Two years ago, a bill sponsored by New York Democratic Rep. Jerry Nadler was defeated. New legislation based on that bill, known as the Equity for Visual Artists Act, is now wending its way through Congress

A California law that had the same effect as the pending legislation was struck down as unconstitutional in 2012 by a federal judge because it attempted to impact sales outside California and thus violated the commerce clause.

 

Recent Changes in U.S. Patent Law May Make Patenting Long-Held Trade Secrets Easier

| December 10, 2013

The Leahy-Smith America Invents Act (AIA) which went into effect in March contains a little-discussed provision that could greatly strengthen the value and patentability of long-held trade secrets.

In published notes on the new law, the U.S. Patent and Trademark Office has indicated that it will no longer consider secret sales and secret use of an invention as disclosed prior art. This change will enable companies and inventors to commercially exploit inventions without disclosing them in a patent and then patent them when it is economically preferable.

Many inventors prefer to use trade secrets rather than patents to protect their ideas and inventions because doing so does not require them to disclose anything about the new development to protect it from competitive use. Previous Patent law and procedures often led to the rejection of attempted patents for trade secrets because their previous implementation and sale rendered them ineligible under the “prior art” exception.

Here is the relevant language, taken from Federal Register Vol 78, No. 31, p. 11062 which contains public comments and USPTO responses from the legislation’s consideraiton process.

“A patent is precluded under AIA 35 U.S.C. 102(a)(1) if ‘‘the claimed invention was  patented, described in a printed publication, or in public use, on sale, or otherwise available to the public before the effective filing date of the claimed invention.’’ AIA 35 U.S.C. 102(a)(1) contains the additional residual clause ‘‘or otherwise available to the public.’’

Residual clauses such as ‘‘or otherwise’’ or ‘‘or other’’ are generally viewed as modifying the preceding phrase or phrases.

“Therefore, the Office views the ‘‘or otherwise available to the public’’ residual clause of the AIA’s 35 U.S.C. 102(a)(1) as indicating that secret sale or use activity does not qualify as prior art.”