IDENTIFYING YOUR CLIENT’S INTELLECTUAL PROPERTY ISSUES FOR FUN AND PROFIT

PATENTS, TRADEMARKS AND COPYRIGHTS

PRESENTED AT THE LEGAL EAGLES LUNCH & LEARN SERIES

OF THE ATLANTA BAR

JULY 20, 2001

PRESENTED BY

Jason A. Bernstein

BERNSTEIN & ASSOCIATES, P.C.

INTELLIGENT INNOVATION MANAGEMENT^sm

Patent, trademark, copyright law and related BUSINESS matters

6600 Peachtree Dunwoody Road, N.E.
Embassy Row 400
Suite 495
Atlanta, Georgia 30328-1649

770-671-1755 TEL

770-671-1161 FAX

jbernstein@globaliplaw.com

www.globalIPlaw.com

SUMMARY TIP SHEET

1. Patents

A. Investigate statutory bars to patenting

i. Prior public disclosure--if so, put the recipient of the information under a nondisclosure agreement backdated to the disclosure date.

ii. Offer for sale—triggers time clock, even if made under nondisclosure agreement.

B. Do a patentability search.

C. File an application prior to any public disclosure or offer for sale.

D. Disclosure or offer for sale prior to filing loses most non-U.S. rights.

E. Disclosure or offer for sale more than one year prior to filing loses U.S. rights.

F. Provisional versus regular application:

i. Both must contain a full disclosure of the invention, we cannot add additional subject matter after filing.

ii. With a provisional, we can cut down on ~60% or so of the time drafting the application. Downside is sometimes the breadth and scope of the possible invention embodiments is compromised.

iii. Provisionals are commonly best used where the time for filing is very short, e.g., to beat a statutory deadline or when a product announcement is imminent.

2. Trademarks

A. Always do a trademark search before starting to use the mark.

B. Do a search at the time you are incorporating a new company.

C. Do a web search first, then a Trademark Office and Georgia trademark web search for initial clearance, followed by a more complete search.

D. The Corporations Division of the Secretary of State’s office does not do trademark searches nor approve/reject applications based on trademark principles

E. Georgia trademark registration provides $10,000 in statutory damages.

F. Need a registration in order to start franchising.

G. Consider state as well as federal registrations where local presence is substantial.

H. Use the mark as soon as it is cleared to establish common law rights.

I. Always have a written license agreement where the owner has permitted someone else to use the mark.

J. Never try to assign a trademark application that has been based on the applicant’s intent to use the mark until the Allegation of Use has been filed.

K. Always use the TM symbol next to the mark to establish that your client claims the mark as theirs. Use the ^® only after a federal registration has been obtained.

L. If your client is starting activity abroad, search the mark in the countries of interest. Do not let the local distributor file trademark applications for your client, either in their name or the company name. Make sure that your client files the applications early. Many countries have seniority based on who files first, rather than who uses first.

3. Copyrights

A. Nearly anything with a nominal amount of creativity is copyrightable.

B. File copyright applications preferably prior to first distribution or publication, or, within three months thereof in order to preserve statutory damage option. Even if late, you can still get a registration, but damages will be actual.

C. Registration is simple and inexpensive. Advise your client to register early and often.

E. For most countries, registration in the U.S. is sufficient for protection.

F. Minor changes to the copyrighted work will not avoid infringement.

G. Someone who independently creates the same work does not infringe.

H. Get an assignment from consultants as soon as possible. Do not rely on work-made-for-hire rules. Get assignment from joint author to avoid controversy.

I. Always ask your client if any aspect of the work was done by non-employees.

J. Get employees to sign a copyright (and other intellectual property) assignment as part of their employment agreement.

HOW TO PROTECT YOUR PATENTS, TRADEMARKS AND COPYRIGHTS INTERNATIONALLY

1. Introduction

A. This paper is designed to provide a basic understanding of patents, trademarks and copyrights, including the U.S. and foreign protection routes, options and strategies. Included throughout are tips on guiding your clients through the process and reducing stumbling blocks and increasing your awareness of traps. This paper is designed as a hands on tool, and, appropriate hyperlinks to website resources are provided for more information.

2. Patents

A. Patentable subject matter: New, useful process, machine, or composition of matter, or any new and useful improvement. Now, computer programs and methods of doing business are patentable so long as they produce a “useful, concrete and tangible result.”

B. Types of patents

i) Utility: Protects the functional aspects of an invention.

ii) Design: Protects the ornamental, nonfunctional aspects of an invention (e.g., the ornamental shape of the curved Coca-Cola bottle).

iii) Plant: Protects one who has invented or discovered and asexually reproduced any distinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings, other than a tuber-propagated plant or a plant found in an uncultivated state.

C. You can get a patent, unless:

i) the public knows about or the invention has been publicly used in the United States, earlier than one year prior to your filing of a U.S. patent application;

ii) a foreign government grants you a foreign patent on an application covering the same invention which you filed more than one year prior to filing your U.S. patent application;

iii) anyone publishes any article anywhere in the world disclosing the features of the invention more than one year prior to filing your patent application;

iv) another publishes, patents, or invents the same invention prior to the earliest date on which you reduced your invention to practice;

v) you have abandoned the invention, or you “suppress or conceal” it; or

vi) you did not yourself invent the subject matter for which you seek a patent.

D. Standards for patentability: The invention must be:

i) novel (i.e., new, not been done before), and,

ii) useful, and,

iii) nonobvious (i.e., not obvious to one of ordinary skill in that technology area at the time the invention was made).

E. Patent Duration: The U.S. government grants patents for a term of 20 years from the filing date (14 years from issue date for design patents). The patent is effective from the day it issues. If the patentee fails to pay maintenance fees 3.5, 7.5 and 11.5 years after the patent issues, the patent will become unenforceable. Tip: Before concluding that your client cannot sell their product or service because of the existence of a patent, see if the patent is still valid. Maintenance fees may not have been paid, or, the Patent Office or a court may have invalidated it. This information will not normally be on the face of the patent. Caution: Even if the maintenance fees have not been paid and the patent has recently been declared expired, the patentee has a period of time in which to pay the maintenance fee and a penalty and the patent will be reinstated.

F. How to obtain

i) First, have a patentability search done. Initial screening searches can be done at several websites, for free. See, http://patents.uspto.gov/access/search-adv.html; and www.patents.ibm.com/advquery.html. But, it is advisable to have a qualified patent searcher do the search because the U.S. patent system is based on structural classification, not just keyword. So, if the word you use for the structure is different than the Patent Office’s, an existing patent might be missed in web-based search strategy.

ii) Have a patent attorney prepare a patent application based on the inventor’s description of the invention.

iii) The current government filing fee is a minimum of $710 for companies with 500 or more employees, or, $355 for small companies, individuals, and nonprofit organizations.

iv) Timing: From the filing to issue can take between 1-3 years, with most non-software and non-biotechnology inventions taking about 1.5- 2 years to issue.

G. Rights Provided: A patent enables the patentee the right to exclude others from making, using, selling or offering for sale the patented invention in the U.S. A U.S. patent will not protect the invention in foreign countries.

H. Enforcement/Remedies

i) In order to enforce the patent, you must sue in federal court, as patent law is exclusively federal jurisdiction.

ii) Injunctive relief can be obtained.

iii) Damages may be awarded in the amount of lost profits, but not less than a reasonable royalty.

iv) Enhanced damages may be awarded if the infringer was aware of the patent and nevertheless continued to infringe (i.e., “willful infringement”).

v) Attorneys fees may be awarded in the case of willful infringement.

I. International protection routes

i) PCT

(1) Process

(a) File a single application

(b) U.S. or European examination will occur

(d) The applicant then instructs the PCT office to file the PCT application in the designated countries or regions (e.g., Europe, Africa)

(e) Translations will be required in certain countries

(f) The application is filed in each country and filing and examination fees will be required

(g) Many countries have annuities due annually in order to keep the application pending

(h) You can delay the request to have the application examined for some time in order to evaluate commercializability in that country and whether the U.S. Patent Office is likely to issue a patent

(i) does not produce a patent, just an examination report

ii) Directly filing in the countries in which protection is desired

J. Timing

i) With PCT or direct national filings, you usually must file within 12 months of the first filing (e.g., the U.S. filing date). Filing within the one year entitles the inventor to backdate the foreign filing date to the first filing date. Many countries base priority on who is the first to file the application (the U.S. is a “first to invent” country). A public disclosure of the invention, by the inventor or another party, after the first filing date and before the actual foreign filing date would not have an adverse effect on the foreign applications only if the foreign applications are filed within the one year period.

ii) Most countries do not permit you to file a foreign application if the invention has been publicly disclosed or offered for sale prior to the date of the first filing (“absolute novelty” standard). Some countries define a barring publication or use as one which occurred in that particular country, applying a “relative novelty” standard.

K. Strategies

i) PCT (Patent Cooperation Treaty) recommended when:

(1) Unsure of commercial value

(2) Unsure of patentability

(3) Cost deferral important (can file the application in English). The deadline to file translations of the application into the local language is extended for an additional 18 months beyond the 12 months provided by the Paris Convention. Translation costs can run into the thousands of dollars for each language.

(4) Likely that no Patent Office examination will be received within one year of filing (e.g., biotech, software areas)

(5) Disadvantages

(a) Higher end cost because of the PCT International stage filing and examination

(b) Will take longer to obtain protection compared to direct national filing

ii) Direct national filing recommended when:

(1) Only a few countries are of interest

(2) Obtaining protection as soon as possible is important

(3) Cost deferral is less important

(4) Possible licensee or distributor wants you to get a patent as fast as possible to provide market exclusivity advantage

(5) Infringement is highly likely or existing

(6) Tip: If you are trying to protect a software invention, European Patent Office has more liberal laws than Spain and Switzerland. Thus, it would be better not to file separate patent applications in these two countries.

3. Trademarks

A. Definition: Trademarks serve as a designation of the source of a product or service and serve as an indication of the quality of that product or service. See the U.S. Trademark Laws at 15 U.S.C. §1051 et seq., www4.law.cornell.edu/uscode/15/ch3.html .

B. Types of trademarks: Word (“The Home Depot”), slogan (“It’s the Real Thing”), logo (the UPS logo), artwork (the Wise potato chip owl), sound (the NBC chimes), color (pink for fiberglass insulation), product configuration (the Coca-Cola bottle), and trade dress (IHOP’s rooftop design and color). Tip: Just having a domain name (“URL”—universal resource locator) and using it as the company’s Internet “address,” is not likely to be valid trademark use. To establish valid use which would support a trademark registration, use the URL in the body of the website or in advertising as a trademark. See, for example, amazon.com., priceline.com, etc.

C. Unregistrable marks: Descriptive (unless the mark has been used for five years, establishing “secondary meaning”) generic, geographically misdescriptive (e.g., Vidalia™ onions not originating in Vidalia, Georgia), scandalous or offensive terms.

D. Benefits of federal trademark registration: Marks registered on the Principal Register provide constructive notice in all fifty states of the existence of the mark, regardless of whether the product is actually sold in a particular area. Registered marks provide the owner with the exclusive right to use the registered mark on or in connection with the named products and service and the ability to exclude those marks which would be “likely to cause confusion” with the registered mark.

E. Registrations are issued for ten years, and are renewable for additional ten year periods indefinitely, as long as the trademark is still in use by the owner. E.g., Coca-Cola has been a registered mark for over one hundred years.

F. Trademarks are proper adjectives and are always capitalized. Trademarks always modify a noun: e.g., Macintosh™ computers. Never say: “We sell Macintoshes.”

G. Proper use of the trademark symbols:

i) If the mark is not yet federally registered with the U.S. Trademark Office, use the ™ symbol for products, ^sm for services.

ii) If the mark is federally registered, use the “®” symbol.

iii) If there is a state registration only, use the ™ or ^sm symbols.

H. Scope of protection:

i) A U.S. registration will provide the owner the exclusive right to use the mark in connection with the goods or services described in the registration in the entire U.S. The owner can protect its right to use the mark in areas of the country even where the owner is not actually using the mark. This is because the registration serves as constructive notice to others.

ii) If the mark is not registered, the owner can protect its use only in the geographic areas in which the mark is actually being used (plus, possibly, the “zone of natural expansion” of the business/market).

I. How to obtain

i) Use of the mark, preferably with the ™ or ^sm symbol next to it, commences accrual of common law rights and goodwill in the mark.

ii) Tip: Always have a trademark search done prior to adopting and using the mark commercially. With so many registrations and trademarks being used, the likelihood of another mark existing which is likely to be confused by your client’s mark is increasing. Encourage your client to avoid the pain of changing a trademark after it has been launched on the product by having an opinion provided on both the use and registrability of the desired trademark. Be aware of dilution issues of famous trademarks. Consider the new Federal Anti-Dilution Statute and Ringling Bros. Barnum & Bailey Combined Shows, Inc. v. Utah Division of Travel Development, No. 98-2004, (U.S. cert den. Oct. 4, 1999) (“The Greatest Snow on Earth”).

iii) While there is no requirement to do a search, it is highly advisable. Nearly 300,000 trademarks are filed annually, so the market is crowded. You can do your own initial screening search for trademarks. However, the official databases often do not have the most recently filed applications, and, the search engines have been known to miss marks. So, use the websites as only a first step. Always have a full trademark search done by a competent searcher prior to recommending or adopting a trademark. Searches on the U.S. Trademark Office database can be done at http://www.uspto.gov/web/menu/tm.html. Searches on the Georgia registration database can be done at www.sos.state.ga.us/corporations/marksearch.htm. Both databases are free. Be aware that if someone files a trademark application even one day before you do, it can be a substantial problem to overcome, and, you likely will not know it until 6-8 months after the application has been filed. The applicant will likely have spent considerable sums on advertising, public relations and marketing by that point and would appreciate having the best and most recent search information on which to rely.

iv) Register the mark with the U.S. Trademark Office. Tip: Substantial changes in the trademark application and post-registration process became effective October 30, 1999. See www.uspto.gov/web/offices/com/sol/notices/fr990908.htm.

v) Tip: Prior to organizing your client’s new company, do a trademark and a domain name search. The Secretary of State does not do a trademark search when it incorporates a company, it only does a name conflict search, which is not thorough enough for you to rely on it for availability of a trademark for use or registration.

vi) Consider Georgia State registration, too. Registration is fast, easy, and provides $10,000 in statutory damages. Useful where there will be substantial sales of the product or the service in the state.

(See, O.C.G.A. 10-1-450

www.ganet.org/services/ocode/ocgsearch.htm)

vii) You can file an application based on an “intent to use” the mark. Issuance of the registration requires proof of use. Tip: Since you have several years in which to establish use, filing an intent-to-use application will get you in line sooner and be effective against someone who later files or later begins use of the mark. Thus, even if you are not 100% sure you will be using the mark, or, even if you won’t be using the mark for a year or two, file the application to establish an early filing date.

J. Enforcement. Lawsuit. If the mark is registered with the U.S. Trademark Office, Lanham Act jurisdiction attaches and an action for infringement may be brought in federal court. See http://fedlaw.gsa.gov/fedfra23.htm for the Lanham Act online. If only a state registration is possessed, or, if only common law rights by usage exist, state court is usually the appropriate court.

K. Infringement test: Infringement will be found if the subject mark is “likely to cause confusion” with the registered mark in the mind of the relevant consumer.

L. Remedies

i) Injunction

ii) Damages

iii) Attorneys fees possible where infringement is willful.

M. Foreign Trademark Protection

i) Filing in a country that is a member of the Paris Convention (e.g., the U.S.) enables you to file foreign applications and the foreign filing date will be backdated to the first filing date, if the foreign application is filed within six months of the first filing.

ii) Tip: Consider foreign filing within six months of the U.S. filing date in order to obtain the earliest possible filing date in the countries of interest. This is important because many countries base the owner’s rights on who files first, compared to the U.S., which bases rights on who uses the mark first. Note: you can file a trademark application at any time, even after the six month window of priority filing has passed.

iii) Trademarks are typically protected on a country by country basis. Exceptions:

(1) European Community Trademark: a single application will cover the 15 current EU member countries. Tip: Costs are lower with a CTM application if protection in more than 2-3 countries is desired.

(2) Madrid Agreement (the U.S. is not a member): once a national of a member country has registered a trademark in its home country, the trademark may be registered in all member countries by depositing its certificate of registration with the Central Registration Bureau in Berne, Switzerland.

iv) Usually registration is required. U.S., Canada and the Philippines require use of the mark before registration.

v) Common law rights based solely on use are rare: they exist in common law countries, e.g., U.S., Australia, Canada and the U.K.

vi) Tip: If your client is planning to protect a mark internationally, have searches done in each region or country in order to:

(1) find existing marks, and

(2) ensure that the translated mark is not embarrassing, degrading or misleading. Many trademarks which sound great for the U.S. wind up being very poor choices for other countries.

vii) Tip: There are several commercial trademark watch service which will monitor new trademark applications and registrations for those that are similar to your client’s mark. Such services are usually relatively inexpensive, depending on how many marks are to be monitored.

4. Copyrights

A. Copyright protects the expression of an idea, not the idea itself. Copyright exists from the moment the expression of someone’s idea is fixed in a tangible medium. Copyright is a bundle of rights. The owner of copyright has the exclusive rights to do and to authorize any of the following:

i) to reproduce the copyrighted work in copies or phonorecords;

ii) to prepare derivative works based upon the copyrighted work;

iii) to distribute copies or phonorecords of the copyrighted work;

iv) in the case of literary, musical, dramatic, and choreographic works, to perform the copyrighted work publicly;

v) to display the copyrighted work publicly; and

vi) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.

B. Subject matter (see http://www.loc.gov/copyright/title17.)

17 USC § 102. Subject matter of copyright: In general

Copyright protection subsists, in accordance with this title, in original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. Works of authorship include the following categories:

(a) literary works;

(b) musical works, including any accompanying words;

(d) pantomimes and choreographic works;

(e) pictorial, graphic, and sculptural works;

(f) motion pictures and other audiovisual works;

(g) sound recordings; and

(h) architectural works.

In no case does copyright protection for an original work of authorship extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in such work.

i) Note: Copyrightable artwork can serve as a trademark if it is used to identify and distinguish the product or service.

C. Scope of protection

i) Duration: Life of the author plus 70 years, or, for a work made for hire: 95 years.

ii) Software: human-readable and machine-executable form of the computer program, and related manuals and documentation are protectable by copyright. The methods and algorithms within the program are not; but, may be patentable. Source code and object code are protected against literal copying in the U.S., as is the “look and feel.” Foreign protection is more limited. Tip: for software, always register the copyright, and consider patents prior to registration (because registration can place the work in a publicly available place, starting the one year bar for filing in the U.S. and eliminating the ability to file abroad).

iii) The work must be original (i.e., created independently). A subsequent independent creator of the same work can also get protection, if that author did not know about or have access to the first created work.