Category: Trademarks

Questions & Answers About Trademarks

How Should Advertising Legal Review Occur?

Post author By Austen Zuege

It is beneficial to have advertising undergo legal review prior to release. Such review should generally cover a number of different concerns, including false advertising, trademark infringement, right of publicity/privacy, copyright infringement, special considerations for regulated industries (i.e., industry-specific laws and regulations requiring certain disclosures, etc.), medium-specific requirements (for commercial email, phone marketing, TV/radio broadcasting, etc.), and more. The following addresses legal treatment in the USA. Laws may differ in other countries. Legal review of particular advertisements should be directed to a knowledgeable attorney in the relevant jurisdiction(s).

Establish Advertising Review Procedures

In general, have a procedure for advertising review before that advertising is released. Be clear about how such protocols apply to business-related social media or other online accounts, which are usually just another form of advertising. Also be clear how these procedures apply to vendors, consultants, and spokespersons operating on your behalf. You very well may be responsible and liable for their actions, and you should not assume they will automatically comply with the law or your own requirements. Periodically check to see that these protocols are actually being followed.

Make sure that appropriate documentation is created and maintained. For instance, require sufficient record-keeping to preserve any licenses, authorizations, releases, objective evidence supporting ad claims, and the like. Retain those records for a sufficient time and in a place where they can be located (by others) if and when needed. Online advertisements may be active for many years, and various portions of ads might be reused for later ones, so such records should ideally be kept as least as long as as the advertising material is in use.

The scope and thoroughness of advertising reviews should take into account the prominence and scope of the advertising. Major mass media ad campaigns deserve extra attention. Also, anything that “feels” questionable, or seems to push boundaries of legal or ethical acceptability, should also receive appropriate review. Lastly, focus should be drawn to things that are most material to prospective consumers.

Many laws regulating advertising exist because businesses often have incentives to be less than truthful or accurate. The point of marketing is to create demand, which can easily turn into a matter of lying or dubiously creating meaning out of nothing. Moreover, marketing and sales people, as individual employees or vendors, may feel pressured to put out legally prohibited or at least questionable content to satisfy management or others. People may also argue for a race to the bottom, pointing to questionable if not clearly illegal conduct by others as justification for doing the same—or worse. On top of that, some illegal advertisements go unpunished simply due to lack of resources by enforcement agencies and there may be arguments to try to get away with something on that basis. Advertising reviews should allow an opportunity to put a halt to efforts that run afoul of the law or that simply put a business in an undesired light (even if legal).

Trademarks

Trademarks should be legally cleared as part of initial selection. That is, make sure you select a mark that will not create a likelihood of confusion with one already in use by another entity. Trademark infringement can arise even if the marks are not identical and even if the goods and services are not the same. This is the best way to avoid infringement allegations. Of course, this is less about use of a mark in a specific advertisement than about overall branding strategies.

Another issue to consider in any given ad is proper usage of your own trademark(s). This is about maintaining rights in your own mark(s). Use your mark(s) consistently, as a source-identifying trademark (as an adjective rather than a noun or verb), and use appropriate symbols (®, ™, ^SM) or comparable trademark identifications (like “Reg. U.S. Pat. & Tm. Off.”). Even if marketing folks think it is appealing to misuse trademarks in an ad, doing so can damage trademark rights or even result in loss of trademark rights—sometimes called genericide.

The next issue to consider is any usage of someone else’s trademark(s). While comparative advertising is permissible, and nominative or descriptive fair use may apply, intentionally using someone else’s trademark or something confusingly similar to someone else’s mark should receive extra scrutiny. Use of comparative advertising has marketing benefits but also tends to heighten the risk of a legal dispute under trademark and/or advertising law.

To help reduce risks associated with comparative advertising, you should at a minimum make sure statements are not false or misleading (including both express statements and any implied meanings even if not the only possible interpretation), material information is not omitted, comparisons are fair (and not “apples to oranges”), and material support for claims is documented before making them. Consider also the context, and avoid anything that makes a competitor’s trademark more prominent than your own or that otherwise may confuse consumers about the source of the goods or services.

Also think about what you would think if the situation was reversed. That is, what if your competitor was using your trademark in the way you plan to use your competitor’s mark? Would you have concerns?

“Dilution” is another area of law that gives special additional rights to famous brands. Tarnishing or blurring the rights of a famous brand can give rise to liability. Advertising that looks like it rides on or nips at the coattails of a famous brand could give rise to dilution issues, potentially, even if it would not raise trademark concerns for an ordinary, non-famous brand.

False Advertising and Truth in Advertising

The Federal Trade Commission (FTC) has national authority to prevent unfair methods of competition and unfair or deceptive acts or practices in or affecting interstate and foreign commerce. Federal trademark law also allows private businesses to sue on certain false advertising claims. Additionally, states have various advertising, unfair competition, and deceptive trade practices laws. Most of these laws are somewhat open-ended. But, in general, they can apply to advertising and generally require that ads not be unfair or deceptive/misleading.

The standards for truthful advertising can be a little fuzzy. These matters are prone to judgment calls. But some of the most basic considerations and requirements are as follows (see also FAQs from the FTC).

Advertising claims must be substantiated by evidence in advance. It is not sufficient to make a statement based on a hunch that you can (try to) justify it later if needed. This is because advertisers imply that there is a reasonable basis for such a claim. Even statements in ads that later turn out to be true are legally prohibited if there is not a “reasonable basis” for the claims, meaning there is objective evidence that supports the claim. Tests or studies used to support advertising claims must be conducted using methods that experts in the field accept as accurate. They also must be commensurate with the advertising claims actually being made.

Mere “puffery” that reflects a purely subjective claim that consumers would not take seriously/literally is generally permissible without substantiation. For instance, a claim to offering “the best cup of coffee in the world” or that “our widgets are excellent” is often acceptable because consumers will recognize it as a purely subjective statement of opinion. But a claim with an objective (factual) component like “rated the best by most doctors” or “more consumers prefer our widgets to any other” or “our widgets last longer than the most popular brands” would not be seen as mere puffery by consumers. These latter types of objective advertising claims must be both true and substantiated. Context can also matter in these distinctions.

The FTC especially scrutinizes health & fitness and safety claims, for instance, and advertising directed at children (especially those under age 13) is also regulated more. Claims and implications that products are made in the USA, and “green” or environmental-friendliness claims also tend to be areas of frequent concern. Competitors may also take issue with false or misleading comparative advertising claims, which are discussed above with respect to trademarks. Certain types of claims may also implicate other agencies or laws, such as the Food & Drug Administration (FDA), which has other requirements for certain drugs and cosmetics and associated advertising.

Warranties and guarantees are subject to special legal requirements. Some of these pertain to how they are advertised. Others pertain to disclosure requirements for stating the terms and conditions as well as making those available pre-sale.

Endorsements and testimonials, including those by “influencers”, can raise many questions about whether their use is truthful and not misleading. The FTC provides an endorsement guide that is worth consulting. Some common concerns involve failing to disclose that someone is a paid endorser/influencer or misleading consumers about an endorser’s use or familiarity with the product or service in question (or lack thereof).

Copyrights

Copyright clearance is an important part of advertising review. Materials used in ads like photos, graphics, text, etc. that are not completely original creations require permission to be used. Unauthorized use may constitute copyright infringement. Copyright clearance should involve obtaining and documenting—in writing—authorization for use of any copyrighted materials that are used, including legally reasonable verification that the materials are uncopyrighted or have fallen into the public domain.

There are many nuances about who owns copyright and what is permissible to do with someone else’s copyrighted work. When vendors or consultants are involved, and they often are when it comes to ad copy, you do not automatically own the copyright just because you paid for it. There can be implied licenses. But new, unexpected, or gradually expanded use might exceed an implied license. Also, there are many myths about what is legally permitted. For instance, there is no bright-line legal rule that says changing 10% of a copyrighted work or four things in a work—or some other percentage or number—avoids infringement liability.

When you get a license, make sure the scope covers your intended use. It is fairly easy to slip up and get the wrong license, or misunderstand the scope of the license you paid for. Also, consider getting an indemnity from the party licensing materials to you.

Fair use may apply, sometimes. But that is a context-specific, multi-factor analysis without any bright lines. And in the advertising context, the commercial nature of the use is a factor explicitly counted against a finding of fair use by statute. It is true that parody and criticism can occur even in a commercial advertisement as a fair use. Yet such things may only support fair use if they parody or criticize the particular work in question as opposed to merely using it without authorization to parody or criticize something else. There is a tendency for claims of “fair use” to be overused and unjustified in the context of commercial advertisements. Many times, you simply need authorization, such as a paid license.

And, no, just because something was available on the Internet does not mean that is can be freely used in an advertisement.

Rights of Publicity and Privacy

The rights of publicity/privacy are potentially implicated any time advertising materials contain a person’s name or likeness without their consent or authorization. These issues most often arise in the context of the unauthorized commercial use of photos or videos that depict famous people or celebrities or that thrust a private person into the public spotlight.

Review of advertising should include verification that their is an appropriate release from any persons whose name or likeness is used. A release of this sort is sometimes called a “model release”. Although in other industries this might go by other names or be included within another agreement, such as a “materials release” in film or TV productions.

Bear in mind, however, that having a copyright license to a photo, video, or the like is not enough, alone, to clear any right of publicity/privacy issues. These releases and copyright licenses often need to come from different people. For instance, a copyright license or assignment for a photograph would often come from the photographer while the publicity/privacy release would come from the person(s) appearing in that photograph (or a parent/guardian).

Some states have laws limited rights of publicity for deceased people. There can also be exceptions for references to public figures, although those exceptions probably will not apply to commercial advertisements that give the impression of an endorsement or approval.

If obtaining stock images, consult the terms of a license to see if a model release is included. If not, use of the stock photo may still give rise to issues. For example, sometimes a minor celebrity’s likeness might appear in a stock photo unintentionally. Or, as another example, if your intended use would tend to portray the person depicted in a false light, such as implying that the person has a disease, committed wrongdoing, or would embarrass them, there may be a claim for invasion of privacy or a similar “false light” claim.

Disclaimers

A disclaimer may be helpful but is not a “get-out-of-jail-free” card. Use of a disclaimer will not undo otherwise false, misleading, or confusing ad content. That is to say a disclaimer is only helpful to the extent it is actually effective on the viewing audience. This is something you can generally only speculate about in advance. Accordingly, while a disclaimer may be worthwhile, it may be a helpful exercise to ignore any such disclaimer as part of an initial legal review and consider the other content of the advertisement as if the declaimer was not present at all.

Email Advertisements and Anti-SPAM Law

The CAN-SPAM Act governs commercial advertising emails. Those are emails whose primary purpose is commercial. Emails whose primary purpose is to provide transactional or relationship content (which facilitates an already agreed-upon transaction or updates a customer about an ongoing transaction) or other content (which is neither commercial nor transactional or relationship, such as political campaign information) is not covered by the federal CAN-SPAM laws. States also have various email marketing laws but those are mostly preempted by federal law and therefore inapplicable to commercial emails (except for fraud and deception issues).

General requirements for compliant email advertising, as explained in an FTC guide, include:

Accurately identify the person or business who initiated the message and do not use false header information
Don’t use deceptive subject lines
Clearly and conspicuously disclose that your message is an advertisement (not required if the recipient has previously expressly opted-in to such emails)
Include your valid physical postal address
Include a clear and conspicuous explanation of how the recipient can unsubscribe (opt out) from future messages, such as a reasonably prominent, working “unsubscribe” link
Honor unsubscribe (opt out) requests promptly
Make sure vendors and employees are following the law

Some additional guidance is available in the FTC’s “Candid answers to CAN-SPAM questions.”

One area that can give rise to issues involves use of purchased email lists. Despite the fact that vendors sell them does not mean that it is legal for you to use them in any and every possible way for mass email marketing purposes. It still matters how you send email messages and the specific content of those messages. For instance, use of a purchased list should not override a prior opt-out request. But, on the other hand, use of purchased email lists is not expressly prohibited under CAN-SPAM and prior consent (that is, an opt-in) is not required, so long as the sender (initiator) of the message clearly and conspicuously identifies a commercial email as an advertisement.

In practical terms, mass email service providers may have their own policies that are more restrictive that any applicable laws. Such providers are sensitive to spam reports and may take action to block you or terminate your account if too many complaints are received. That could happen even if complaints fail to allege anything illegal or are baseless (such as a spam report by someone who expressly opted in). For instance, some providers prohibit the use of their services or platform to send emails to purchased email lists—even if laws do not specifically prohibit doing so.

Phone and Broadcast Advertisements

The Federal Communications Commission (FCC) has authority over phone and TV/radio broadcasts. There are additional rules and regulations that apply to advertisements and commercial messages in those formats. For instance, randomly dialed robocalls are generally prohibited. In addition, the FTC maintains a “do not call” registry for telemarketing that must be honored.

Consumer Privacy and Handicap Accessibility

There is also a growing body of laws regulating collection and retention of consumer data, particularly at the state level (e.g., California’s CCPA) and in foreign countries—like GDPR in Europe and PIPEDA in Canada. But some federal laws may apply too. These laws can be implicated by online advertising, for instance. Collection and use of personally identifying consumer information should be scrutinized. In some cases, even laws involving biometric information privacy could be implicated. The sale, purchase, and/or exchange of consumer personal information to or from brokers, business partners, or other third parties and the collection of online ad or web page tracking data are of particular significance here.

Additionally, consider whether online advertisements implicate laws requiring accessibility for persons with disabilities. These can arise from state or federal law, potentially. General online accessibility standards and best practices are useful here, and might be worthwhile to implement even if not strictly required by law for certain commercial advertisements. Bear in mind, however, that “accessibility” is something of a moving target and is not defined by bright lines.

When working with vendors and contractors, be aware that they may try to push compliance burdens onto you via contractual terms. This might even extend to situations where vendors are selling services or tools that cannot conceivably be used in a legally compliant manner, or at least not in ways with any practical value to the advertiser.

Have an invention you would like to patent? Have a brand you would like to register as a trademark? Concerned about infringing someone else’s intellectual property? Is someone else infringing your IP? Need representation in an IP dispute? Austen is a patent attorney / trademark attorney who can help. These and other IP issues are his area of expertise. Contact Austen today to discuss.

Tags Copyright Infringement, False Advertising, Right of Publicity/Right of Privacy, Trademark Infringement

Agreements Copyrights Patents Q&A Trademarks

How Can I Correct An Assignment?

Post author By Austen Zuege

Assignments of intellectual property (IP) such as for patents, trademarks, and copyrights are sometimes signed and then an error is later discovered. This is often due to a clerical or typographical error or other inadvertent mistake. For instance, there might be a typo in the number identifying a given patent, patent application, trademark registration, or trademark application in a schedule listing many. It is possible—and beneficial—to correct an assignment to fix such errors, which can then allow correction of any prior recordation of the original assignment. But how can such a correction properly be made? There are a few different possibilities, including using mark-ups or creating a new corrective document.

Marking-Up and Approving Corrections

One approach suggested by the U.S. Patent & Trademark Office (USPTO) (in MPEP 323 & 323.01(b) and TMEP 503.06(b)) and the U.S. Copyright Office (in Compendium 2308.1) for making corrections to an assignment is to have each of the parties conveying the property in question, that is, all of the assignor(s), make and approve corrections on the original signed assignment. This involves the following steps:

Cross out the incorrect text or number (using strikethrough or a conventional proofreader’s delete/dele/deleatur mark through the text with a protruding loop)
Write in the the correct text or number next to the crossed-out information (ideally immediately above it) using printed or typed lettering; use a caret mark or similar line or arrow to show the proper place of insertion, if helpful (a suggested practice if the only or best available space for newly inserted material is in a nearby area spaced from the crossed-out information, such as at a page margin)
Have each and every assignor initial (or fully sign) and date the marked-up corrections; full signatures are also acceptable and are appropriate if multiple signatories have the same initials; if the assignee originally signed the document then the assignee should initial/sign and date the changes too

An example excerpt of a marked-up patent assignment document to correct an error on the original is provided below. In this example, the city of residence (Paris) of one inventor-assignor was incorrect and has been crossed out and the correct city name (Neuilly-sur-Seine) written immediately above it (using deleatur and caret proofreading symbols). Both of the two inventor-assignors (Joe Public/J.P. and Jane Doe/J.D.) have initialed and dated the marked-up change.

Scanned excerpt of example marked-up corrections of error on patent assignment with dated inventor-assignor initials — Excerpt of example marked-up corrections of error on patent assignment with dated inventor-assignor initials

An advantage of marking up the original assignment is that doing so leaves no doubt that terms of the original assignment are still effective. The mark-ups make explicitly clear what specifically has been corrected. The initials and dates also clarify who approved the corrections and when. With the error in the original corrected, the chances that anyone might later cast doubt on the assignment due to that error are reduced or eliminated.

The retroactive (nunc pro tunc) effect of the corrections to the date of the original transfer of rights is inherent in the nature of marking-up and initialing/signing (and dating) changes on the original assignment document. This might be significant if something occurred between the time the original was signed and the time the error was discovered and corrected. For instance, if the original assignment with the error was already recorded, making marked-up corrections on the original facilitates recording the corrected document while making clear what specifically has changed. The USPTO and the Copyright Office do not expunge or delete the previously recorded document, but instead further record corrected document(s) while noting that it is a corrective recordation. Although, uniquely, the Copyright Office will allow substitution of a corrected assignment within ten (10) business days of the original submission.

Keep in mind, however, that many aspects of assignments are a matter of state (or foreign) contract law, not USPTO or Copyright Office administrative procedure or even U.S. Federal patent, trademark, or copyright statutory law. Under black letter U.S. contract law, and presumably that of most other countries, it is not permitted to unilaterally modify or alter a contract after it has been signed. That may make the original voidable and may even be considered forgery, unless the assignment expressly permits a particular change (like later inserting application filing details). But having initials/signatures next to the changes from all the parties that originally signed the assignment removes doubt about their recognition of an error in the original and the fact that the correction/amendment was later made with their knowledge and approval. Although any material changes negatively affecting rights of the assignee or others will merit further attention, despite assignor approval.

However, if an error is identified in an assignment document before all parties have signed or provided notice to the assignee, it is usually preferable to discard the erroneous draft and provide a new copy with all the errors corrected for signature. Marked up corrections are not needed in that scenario, because the assignment with the error was not yet effective.

Newly-Created Corrective Assignment

Marking up and approving corrections to the original assignment is not those only way to correct errors. An alternative approach is to create a new corrective assignment document and have it signed by all the parties (meaning at least all the assignors). Federal agency guidebooks, in MPEP 323.01(b) (for patent assignments), TMEP 503.06(b) (for trademark assignments), and Compendium 2308.1 (for copyrights), recognize the possibility of such an approach for correcting previously-executed assignments.

For instance, if errors in a signed assignment are lengthy/voluminous, there is little available space to mark-up corrections, or the number of signatories does not leave enough space to add all their initials and dates, then a preparing and signing a new corrective assignment might be preferable to mark-ups. But if the original assignment containing the error was already recorded, or there has already been some reliance on that original assignment, any new “corrective” assignment may need its terms written to explicitly be retroactive to the effective date of the original. It is helpful if the title is identified as a “corrective” assignment too—although more than just the title should be changed. But the effort to create a new corrective document might be greater than using mark-ups.

A retroactive assignment is called a nunc pro tunc assignment, which is latin for “now for then”. These are widely used to correct errors in a prior assignment. The USPTO’s electronic assignment recordation systems EPAS and ETAS even have a special option for these, allowing the earlier date to be specified.

The USPTO describes a nunc pro tunc patent assignment recordation request as “[a] request to record an assignment, which includes documentation of transactions which occurred in the past but have not been made a matter of record in the USPTO.” This description implicitly treats nunc pro tunc patent assignment recordations as being (only) for corrective, confirmatory, or supplementary assignments. It means such a recordation request normally requires attaching additional documentation supporting the earlier claimed date of transfer or assignment (that is, the effective date prior to the execution date on which the new assignment document was fully signed).

The USPTO describes a nunc pro tunc trademark assignment as “an assignment that was prepared recently and is being recorded now, but the actual transfer occurred in the past. It is a complete transfer of ownership of trademark rights from the assignor/ (conveying party) to the assignee/ (receiving party). Use this conveyance type if the document being recorded was prepared after the time when ownership was actually transferred and after the time it should have been prepared and recorded, and has a retroactive effect. The execution date is usually later than when the actual transfer of ownership occurred.”

Lastly, if an error is identified in an assignment document before all parties have signed or provided notice to the assignee, it is usually preferable to discard the erroneous draft and provide a new copy with all the errors corrected for signature. A nunc pro tunc assignment or other explicit terms to provide a new, retroactive corrective assignment are not needed, because the assignment with the error was not yet effective.

Standing Limitations on Retroactive Patent Assignments

Corrective patent assignments, when necessary, should be completed before commencing a lawsuit for infringement. Courts generally do not allow nunc pro tunc patent assignments to provide retroactive standing to sue for infringement. The execution date on which a nunc pro tunc patent assignment was signed—or the date on which the last signature was obtained if multiple parties sign on different dates—is normally the effective date that controls for matters affecting standing. According to one district court, this also means that any subsequent assignments in a chain of title that were executed before a corrective nunc pro tunc assignment require further corrective action as well, because other purported assignments downstream in the chain were ineffective when executed (nemo dat quod non habet — one cannot give what one does not have). Clearing up chain-of-title issues before bringing suit allows the intended plaintiff(s) to be named, averting a possible ground for dismissal of the lawsuit due to the absence of a necessary party.

But not all nunc pro tunc assignments implicate standing. Minor corrections and supplemental terms may be given retroactive effect. At least one district court has held that correcting a drafting error in a prior assignment with respect to identification of a patent intended to be assigned did not deprive the assignee of standing in a pending lawsuit. And the Federal Circuit has held that retroactively adding the right to sue for pre-assignment infringement does not affect standing.

Practical Tip

There is an old saying that the best time to plant a tree was twenty years ago but the second best time is now. This provides a good analogy here. For assignments, the best way to correct them is to carefully check the information in them to fix any errors before they are presented for signature. In other words, be diligent and try to avoid errors from the start! That sometimes means verifying information provided by others, such as to ensure that legal names are used not nicknames or assumed names, corporations have not merged, dissolved, or changed names, addresses are current, etc. But the next best time to correct errors is as soon as they are discovered. Fortunately, there are ways to do that. Although doing so can become more difficult as time passes. For example, the original signatories can die, dissolve (if a corporation), or become uncooperative, and issues of standing can arise and later chain-of-title corrections might also become necessary that require additional corrective efforts.

Austen Zuege is an attorney at law and registered U.S. patent attorney in Minneapolis whose practice encompasses patents, trademarks, copyrights, domain name cybersquatting, IP agreements and licensing, freedom-to-operate studies, client counseling, and IP litigation. If you have patent, trademark, or other IP issues, he can help.

Contact Austen

Tags Assignments, Copyrights, Patent Prosecution, Trademark Prosecution

Q&A Trademarks

How Does a Trademark Office Action Extension of Time Work?

Post author By Austen Zuege

For U.S. federal trademark applications, the standard deadline to make a response to an office action is three (3) months from the date the office action was sent. Failing to respond by the deadline will result in abandonment of the trademark application. However, it is possible to obtain an extension of time to respond.

How to Obtain a Trademark Extension of Time

An extension of time to take action following a trademark office action—whether non-final or final—requires filing an explicit request for an extension by the original 3-month deadline and paying an official fee (currently $125 if filed electronically). The official fee is a fixed amount and it does not matter how many classes of goods or services are in the application. The extension is basically automatically granted upon filing the request and paying the fee. It provides a single 3-month extension of the original deadline to make a substantive response or appeal. In other words, after obtaining an extension the applicant is able to substantively respond to the office action, or to appeal from a final office action, up to six (6) months from the date the office action was sent.

Only one extension of each office action deadline is possible, however. Six (6) months is the maximum period to take action when such a response is necessary. Although it is still possible to separately obtain extensions for each of the different deadlines associated with different office actions.

Also, the extensions discussed here only apply to office action response deadlines. For instance, extensions of time to file a statement of use (SOU) following allowance of an intent-to-use (ITU) application are treated differently—those are for six (6) month periods and up to five (5) such extensions are available.

Additionally, the shortened 3-month response deadline, and the possibility of requesting a 3-month extension of time, will only arise for post-registration office actions beginning October 7, 2023. Until then, post-registration office actions will have 6-month response deadlines.

Extensions Inapplicable to Madrid Protocol Extensions

For Madrid Protocol extension applications based on foreign priority rights the response deadline for an office action is instead always six (6) months. There are no extensions available to that 6-month response deadline in Madrid Protocol extension trademark applications.

Missed Deadlines

If a response deadline is missed, it may be possible to file a petition to revive an application with the payment of an official fee. Alternatively, an applicant can often re-apply and start the application process over again after abandonment.

Contact Austen

Tags Trademark Prosecution, Trademarks

Copyrights Patents Q&A Trade Secrets Trademarks

What Should I Do If Another Business is Infringing My IP?

Post author By Austen Zuege

An appropriate response to infringement (or misappropriation) will depend on which type(s) of intellectual property (IP) rights are involved. While some forms of infringement can be enforced by the government, prosecutors rarely take up disputes between competitor businesses. This leaves it up to the IP owner to pursue a civil remedy. Therefore, the first step is generally to conduct your own investigation to ascertain your IP ownership rights, ascertain the identity of the infringing party or parties, preserve evidence of the infringement, and perform a legal analysis to confirm that the conduct in question is prohibited by law. Following an investigation, a cease & desist (demand) letter could be sent, a lawsuit initiated, or possibly other action taken.

Tip: Consider implementing a proactive monitoring program to search for and identify potential infringement of your IP. No one else will identify infringement for you.

As part of your initial investigation of infringement, the legal analysis should consider:

do you have a chain of title to the IP (that is, can you prove ownership)?
does the conduct fall within the scope of your enforceable exclusive rights or is the conduct permitted by law (such as a “fair use” under copyright law)?
did the other party have permission? , perhaps impliedly
what jurisdiction(s) is the infringer located in?
what remedies are available for the type of infringement involved?

Following an initial investigation, which should be performed with the assistance of a knowledgeable attorney, it is common to send a cease & desist or other demand letter. This puts the infringer on notice of the claim of infringement, which can remove innocent infringer defenses going forward, trigger the accrual of damages, etc. A letter might be sent to a publisher, distributor, web host, etc. as well, which can have significance under safe harbor provisions for some types of IP. If a letter is ineffective, or simply not desired, litigation or certain non-litigation action should be considered.

As to litigation, patent and copyright actions are handled exclusively by U.S. federal courts and generally require having a patent or copyright registration (at least for copyrightable United States works) before filing suit. Trademark, trade secret, cybersquatting, and false advertising actions can sometimes be brought in either federal or state court. A trademark registration is not required to bring suit in the U.S. A statute of limitations or equitable limits may apply, such as a 3-year limit for copyright infringement claims and a 6-year limit on back damages for patent infringement.

Remedies may be available outside of courts as well, though often without monetary recovery. For example, administrative agencies such as Customs & Border Protection and the International Trade Commission can block or exclude importation of infringing goods, and a copyright small claims action may be available. Online platforms and marketplaces may also have their own IP dispute resolution procedures and mandatory arbitration (e.g., UDRP, URS) may apply to domain name disputes.

With some exceptions, many IP rights are generally enforceable on a jurisdictional or territorial basis. If infringement implicates activities in another country, the available remedies and requirements to pursue a claim can vary widely and you may need to consult competent foreign legal counsel.

Many IP disputes reach settlements, though it cannot be assumed that parties will be able to reach a pretrial settlement. When considering bringing an infringement or misappropriation suit, bear in mind that awards of attorney’s fees are not always available or likely. The cost to pursue an IP lawsuit might exceed the monetary recovery, though the benefits of stopping infringement or misappropriation may still be worth the unrecoverable expenses of a suit in some situations.

Contact Austen

Tags Copyright Infringement, Infringement, Patent Infringement, Trade Secret Misappropriation, Trademark Infringement

Copyrights Patents Q&A Trade Secrets Trademarks

What Should I Do to Avoid Infringing Anyone Else’s IP When Releasing a New Product?

Post author By Austen Zuege

Here is a common scenario. Your business is planning to release a new product but wants to avoid infringing anyone else’s IP. What should you do? To avoid infringing anyone else’s IP, you should consider proactive clearance or freedom-to-operate (FTO) efforts, ideally before the new product is commercially launched. Such efforts are not legally mandated but should be tailored to your businesses’ risk tolerance in light of the typical costs of patent, trademark, copyright, and trade secret litigation. The scope of these efforts will depend upon the type of IP involved. Specific efforts may also depend on where you are planning to release the product, geographically. The following discussion focuses on the USA.

General Tips

Consider implementing overarching policies and protocols to reduce IP infringement (or misappropriation) risks. Educate and supervise staff accordingly. Do not simply assume that employees will already understand or care about IP infringement and misappropriation risks.

Make reasonable efforts to avoid infringement, including proactive clearance/FTO efforts where appropriate. But accept, as a cost of doing business, that despite those efforts there will always remain some risk that a “troll” will make an IP infringement claim of dubious merit. Failing to make reasonable efforts will just make it easier for others to target you with infringement claims that are expensive to defend.

When making goods or materials at the request of a customer (e.g., private label goods), be cautious of harsh and potentially predatory indemnity or warranty terms in purchase agreements. These can come into play if the customer is requesting infringement—either intentionally or merely negligently—while passing all infringement liability onto your business. You might be agreeing to assume IP infringement risks that far exceed the commercial value of the contract. This is also concern where infringement liability may depend on customer actions outside your control.

It is also recommended to obtain a business insurance policy with coverage for unintentional trademark and copyright infringement (e.g., “advertising injury” coverage without major exclusions). However, patent infringement coverage is not found in typical general business policies and is uncommon (because its cost/benefit tradeoff is rarely attractive).

Patents

For patents, the most common type of patent infringement has essentially a strict liability character and infringement does not depend on whether you had actual knowledge of the other party’s patent(s). However, though knowledge and intent (willfulness) can impact damages. Also, indirect infringement—a category of certain types of infringement—may require knowledge of the patent and that your activities infringe.

Consider a pre-launch patent FTO study that initially involves a search for any potentially conflicting patents, followed by a legal analysis. Proactively performing a patent FTO study allows you to find potentially problematic patents before they find you. That makes possible certain risk reduction efforts, such as an opinion of counsel, a design around, seeking a license, etc.

Trademarks

For trademarks, infringement has essentially a strict liability character and infringement does not depend on whether you had actual knowledge of the other party’s trademark. Liability can arise if there is a likelihood of confusion, even in the absence of any actual confusion by consumers. Trademark infringement does not have to be willful to result in a damages award. Also, there is a presumption that a trademark owner can obtain an injunction against use of an infringing mark.

When adopting new branding, it is not unusual for a first-choice mark (and second-choice…) to be already taken by another business. Many marks are already taken by others, which limits the universe of marks freely available for your business’ use at the time of adoption. It may be preferable to select a different mark from the start than to later re-brand, because re-branding tends to become more burdensome, costly, and disheartening as time passes.

Consider a pre-launch trademark clearance that initially involves a search for any potentially conflicting trademarks, followed by a legal analysis. Such a search should encompass all the relevant jurisdictions (e.g., all countries where your brand or mark will be used). Registration is not required to have enforceable trademark rights in the U.S. So a clearance search should ideally assess possible unregistered marks too.

Copyrights

For copyrights, there must be unauthorized copying of protected expression. Though there can be risks from copying that happens though inattention or negligent conduct. Fair use limits the copyright owner’s exclusive rights, but fair use will not always apply (and usually won’t when simply making commercial use of a work rather than making critical commentary about the work). There are many misconceptions about copyright law. For instance, just because something is available on the Internet does not make it “fair game” for your business’ use—even if denoted as being “free” or “royalty free”.

Have an awareness of copyright infringement risks. Also be aware of the ways that employees might commit infringement. For instance, employees posting materials to online platforms under via company accounts can present copyright infringement risks. Consider ways to educate employees about copyright and supervise employee activities.

Perform copyright clearance for any materials that you did not wholly create yourself that you plan to use, and obtain written permission or a license or assignment of ownership. Retain records of written authorizations. And make sure that you adhere to the terms of any license. Also consider seeking an indemnity for any licensed materials, because you could be licensing materials that are themselves infringing.

Trade Secrets

For trade secrets, there must be misappropriation of secret materials. Though there can be risks from misappropriation that happens though inattention or negligent conduct. However, trade secret misappropriation will generally only arise if your business had received secret information from someone else. This could occur by hiring an employee who knows confidential information from a prior employer.

For trade secrets, review any non-disclosure agreements (NDAs) in place and consider clean room or other protocols if any confidential materials were or will be received by staff.

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Tags Copyrights, Freedom-to-Operate (FTO) & Clearance, Patents, Trade Secrets, Trademarks

Agreements Copyrights Patents Q&A Trade Secrets Trademarks

How Can My Business Acquire and Own IP Rights?

Post author By Austen Zuege

Some intellectual property (IP) rights arise automatically under certain circumstances while others require affirmative action.

PRACTICAL TIP: Think about IP early to avoid waiving potential rights and consider the benefits of optional protections.

Copyrights

Copyright attaches automatically to the author when a new creative work (e.g., text, photo, etc.) is fixed in a tangible medium of expression. Registration is not required for copyright to exist. Copyright ownership is also independent of possession and ownership of a copy of a work—even the “original” or sole copy.

Trademarks

Trademark rights can arise through use of a mark to identify the source of goods or services, provided that the mark is distinctive. Registration is not required to have enforceable trademark rights in the U.S. However, registration of a mark, particularly a federal registration on the Principal Register, helps to secure rights through the entire country and over time can limit the possibility for others to challenge the trademark rights in the registration.

Trade Secrets

Trade secret rights can attach to information that derives economic value from not being generally known and not being readily ascertainable so long as you take reasonable measures to keep it secret, meaning the existence of trade secret rights depends on the affirmative steps you take to maintain secrecy.

Patents

Patent rights require applying for and then obtaining a patent following an examination to determine if the invention satisfies criteria for patentability, which include novelty and nonobviousness. In the U.S., a patent must be applied for within one year of any disclosure, public use, or commercialization of the invention by the inventor. In most other countries, a patent must be applied for before any public disclosure.

International Considerations

Patent and trademark rights are territorial and rights in the U.S. will generally not provide exclusive rights abroad. Copyright and trade secret rights may have international enforceability in both the U.S. and some foreign jurisdictions.

Assignments and Licenses

IP rights can also be obtained from others via assignment (i.e., a transfer of ownership) or licensing (i.e., authorization to use the IP without a transfer of ownership). For many types of IP, assignments must be in writing and/or satisfy other criteria to be valid. Trademark rights are tied to underlying customer goodwill and cannot be assigned apart from that goodwill. A “naked” assignment of a trademark without associated goodwill can result in abandonment, as can licensing without quality control.

Employee- and Vendor-Created IP and Joint Development

When employees create things that may be subject to IP rights, the general rule—with some exceptions (notably for copyrightable works made for hire created by an employee within the scope of his or her job duties)—is that the employee rather than the employer is the owner. Businesses wanting to obtain ownership of employee-created IP should consider a written agreement (e.g., employment agreement) that establishes either an obligation to assign IP (to be followed later by execution of an assignment) or a prospective assignment of expected future IP.

When hiring a vendor to create or develop something, or jointly developing something with a business partner, consider who will own the IP at the outset. Merely paying for development will not automatically result in the transfer of ownership of vendor-created IP. Joint development can raise complex questions about who will own what, and ownership of particular IP may depend on which person(s) or entity contributed to that particular subject matter in the absence of a written agreement.

A common mistake is to ignore ownership of IP rights until there is infringement or a big business deal. Attempting to “fix” or alter IP ownership after the fact is usually much more complicated than sorting that out from the start of a vendor/partner/employee relationship (or even at the start of a particular project).

Online Resources:

IP Guides from blue over gray
U.S. Patent & Trademark Office
U.S. Copyright Office
World Intellectual Property Organization

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Tags Copyrights, Patents, Trade Secrets, Trademarks

Q&A Trademarks

How Do I Protect My Business’ Name and Logo?

Post author By Austen Zuege

Trademark law can protect a brand name (in words), graphical logo, or the like—a “mark”—used to identify the source of goods or services. But not all marks are protectable. It is not unusual for a first-choice mark (and second-choice…) to already be taken or simply not be protectable. The following is an explanation of the basics of how a business’ name and logo can be protected under trademark law.

The first step is to select a mark that is distinctive enough to be protectable. Generic terms (or functional aspects) are never entitled to protection under trademark law. Merely descriptive terms are not protectable but descriptive marks can potentially develop “secondary meaning” and acquire distinctiveness in consumers’ minds over time, through extensive use and promotion, so as to become protectable. Suggestive, arbitrary, or fanciful marks are inherently distinctive and thus always protectable. Arbitrary and fanciful marks have the greatest legal strength, in conceptual terms.

A common problem is that businesses select marks that are not conceptually strong enough to merit exclusive rights as trademarks. Businesses people are frequently drawn to descriptive or generic terms because they require less initial investment to obtain consumer recognition. But the tradeoff is that generic and descriptive marks are considered conceptually “weak” and offer less or no legal exclusivity. In this respect, business and marketing considerations can be in tension with legal considerations under trademark law. If exclusive trademark rights are important to your business, make sure you select a mark that is good enough in legal terms to be protectable under trademark law.

Keep in mind that a mark must be one specific thing. Materially different spellings or visual depictions potentially reflect use of different marks. It is possible to have multiple different marks that are each in use, potentially even simultaneously with the same goods or services. But consistency in usage is important. This generally means settling on the exact mark or marks that will be used and sticking to those decisions.

Secondly, trademark rights generally go to the senior user. This means many marks are already taken by others, which limits the universe of marks freely available for your business’ use at the time of adoption. If your business’ mark creates a likelihood of confusion with an existing mark, the prior user will have superior rights. There can be a likelihood of confusion even if there are differences between the respective marks or goods/services, and evidence of actual confusion in the market is not required. Also, a protectable but weak mark, such one that resembles numerous other coexisting marks, will have more limited scope of exclusivity than a stronger mark.

Geographically separate but otherwise similar uses of trademarks can sometimes coexist. Although businesses operating on the Internet tend to encompass wide geographic areas of use without much opportunity for separation. Moreover, a prior user might consent to coexistence in some circumstances—often subject to certain conditions to avoid confusion, such as agreements limiting the scope of the goods/services with which a mark is used. But, in general, the possibility of coexistence or consent is very context-specific and cannot simply be assumed to be possible.

Trademark rights in the U.S. arise from commercial use of a mark. “Common law” rights can accrue automatically through use of a mark but are generally limited to the geographic area in which the mark is actually used. Registering a mark has benefits, and a federal registration on the Principal Register can secure rights over the entire country and can be used to prevent unauthorized importation of goods bearing the mark. Federal registration generally requires use in interstate commerce, territorial commerce, or foreign/tribal commerce (with a limited exception if a foreign registration exists).

Trademarks are also territorial. Rights in one country generally provide no exclusivity in another. But most countries have no use requirement; many follow a first-to-file system and may provide little or no rights based on use alone.

After adoption of a mark, use it properly and consistently, and monitor for potential infringing uses. Additional steps can also be taken to enhance protection of a trademark.

Trademark rights can potentially last indefinitely if still in use but can be abandoned through nonuse without intention to resume. Federal rights are presumptively abandoned after three years of nonuse. A branding “refresh” or other changes to a mark may result in the loss of existing trademarks rights and/or registrations and be treated as the adoption of a new mark or marks. Moreover, reduction in the goods and services with which a mark is used can lead to partial abandonment (just as expansion of use can potentially lead to new infringement risks).

Useful Tips:

Use care when selecting a mark to avoid having to later re-brand, which becomes more burdensome over time. Identify and evaluate potentially conflicting existing marks as part of initial mark selection. In doing so, consider all jurisdictions and scenarios under which your business plans to operate, including likely future expansion as to goods/services and geographic areas. A trademark legal clearance can help identify potentially conflicting marks and associated infringement risks.
Registration of an Internet domain name, a corporate name (trade name), an assumed name (d/b/a), or even all of them, does not alone establish any exclusive rights in a brand or mark under trademark law.

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Tags Trademarks

Q&A Trademarks

What is the Process to Register a Trademark?

Post author By Austen Zuege

The process to register a trademark (or service mark) involves submitting an application, which is then substantively examined and a registration is ultimately either issued or refused. Post-registration action is required to maintain a registration, which can potentially last indefinitely provided that the registered mark is still in use. Both federal and state trademark registrations are available in the USA, and registration is also available in foreign countries. In many jurisdictions, including for U.S. federal applications, marks are published for potential opposition by others prior to registration. Trademark registrations are also subject to cancellation (or expungement, etc.) under certain circumstances.

Federal registrations are handled by the U.S. Patent & Trademark Office (USPTO), which oversees two registers: the Principal Register and the Supplemental Register. Only registration on the Principal Register establishes a presumption of exclusive rights in a mark.

Not all Registrations are Equal in the U.S.: Federal trademark registration on the Principal Register is almost always preferable to state registration because much more expansive national rights are obtained, which is significant in the age of the Internet. Also keep in mind that a federal registration on the Supplemental Register does not by itself establish exclusive rights, although it can block a later conflicting registration. The value of state-level registrations varies. Some state trademark registrations provide no presumption of exclusive rights.

Basic Requirements of a Federal U.S. Trademark Application

A U.S. federal trademark application must identify the mark, the associated goods and/or services, and a filing basis.

Identification of Mark

The identification of the mark establishes what, exactly, constitutes the mark, which can include words (e.g., in “standard characters”) and/or graphical elements (e.g., color, stylized typeface/font, design element(s)), depending on the nature of the mark. Importantly, a mark must be one specific thing. Different spellings or different visual depictions potentially represent different marks. A trademark application must be limited to one mark, with any other potential marks pursued in separate applications.

Identification of Goods and Services

The goods and services must be identified and grouped according to a classification system, with filing fees calculated based on the number of classes of goods/services included. There is some skill involved in wording these identifications of goods and services appropriately. One important consideration is that for U.S. federal registrations it is not possible to simply “reserve” a mark, that is, merely to block others from using it. Use of the mark with all the identified goods and services must have already occurred or at least be intended in the future. Therefore, crafting a proper identification of goods and services requires first understanding how the applicant is currently using and/or legitimately intends to use the mark.

Filing Basis

As to filing bases, first, an application can be based on actual use in commerce, that is, the mark is already in use. Evidence of use in the form of a “specimen” must be submitted with such an application and the date of first use in commerce must be specified.

Alternatively, a federal application can be filed based on a bona fide intent-to-use (ITU). In this case, the mark has not yet been used in commerce but the applicant has a good faith intention to do so. The ITU application filing date establishes constructive use in commerce. But a statement of use (with a specimen) is still eventually required in an ITU application in order to obtain a registration—with paid extensions of time the applicant has up to about three years to do so.

Federal U.S. registrations based upon prior foreign registrations and applications as well as Madrid Protocol extensions based on a foreign application or registration are also possible.

Lastly, it is possible for a given application to include multiple filing bases. This is most common when a mark has already been used with some but not all goods or services, but use with the further goods/services in the future is intended. It is also common when priority to a foreign trademark registration or application is involved.

The Examination Process

Trademark office examination involves a search for conflicting registrations and an analysis of whether the applied-for mark meets applicable legal criteria. This is called trademark “prosecution”. Applicants can respond to any refusal sent in an “office action” by making amendments and arguments. Appeals from refusals are also possible. Additionally, even if a trademark examiner believes a mark is registrable, third parties can oppose registration and can later challenge an issued registration.

Federal registrations can take anywhere from a matter of months to years to obtain, provided that the mark is registrable at all. The timeline tends to be longer when there is a refusal (for instance, based on a prior conflicting registration or application) or an opposition to registration is lodged. State registrations may take only a matter of days to weeks, provided the mark is registrable. Foreign registration timelines vary widely.

Helpful Tips:

Although U.S. applicants can apply for registration themselves, subject to identity verification, legal advice from a knowledgeable attorney can help in obtaining the best and most appropriate coverage. Foreign trademark applicants are generally required to hire a licensed U.S. attorney.
Registrations of word marks in “standard characters” are usually the broadest because they do not include any limiting claim as to color, font, or other graphical elements in a mark that includes one or more words. On the other hand, words that are unregistrable in standard characters alone can sometimes become registrable when distinctive graphical elements are added as part of a “composite” mark that includes both word(s) and graphical element(s).
Consider the effect of expanded, reduced, or otherwise changed use of a mark over time. Such changes may may suggest pursuing one or more additional registrations. Some changes may also affect the ability to maintain an existing registration (e.g., due to a substantial changes to a graphical logo or ceasing use with certain goods/services).
State-level registration might be worthwhile if usage does not qualify for federal registration, such as purely local usage that is not part of interstate commerce.
Trademark registrations are territorial. A registration in one country will generally not provide exclusive rights in any other country. Consider foreign registration(s) if a mark is or will be used in multiple countries.
Registrations are generally even more important in other countries, where trademark rights are often determined on a first-to-register basis—sometimes without regard to priority of actual use.
- For example, unrelated companies concurrently using similar brands in two different countries but later expanding to a common third country can sometimes lead to disputes.
- As another example, outsourced manufacturing can also sometimes lead to trademark disputes. Export-only manufacturing in a foreign country of goods having trademarks applied to them may still be considered trademark use under foreign law (e.g., “OEM” manufacturing in China), even without any local commercial sales in that foreign country.

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Tags Trademark Prosecution, Trademarks

Copyrights Patents Q&A Trade Secrets Trademarks

How Can I Protect the Design of My Business’ Products?

Post author By Austen Zuege

Intellectual property (IP) rights might allow a business to obtain exclusive rights in some or all aspects of a product. Such IP rights can potentially include patents, trademarks (i.e., trade dress), copyrights, and trade secrets. But the types of IP that might apply will vary depending on the context of the product involved, and may require affirmative action to secure and maintain IP rights.

Consider patentability before any public disclosure or commercialization of a product in order to avoid potential loss of patent rights. Although other types of IP protection might be available, exclusivity in the design of a new useful product is first and foremost a question of potential patent protection.

Patent Protection

Patents can provide exclusive rights for a limited time in exchange for disclosure of an invention. An inventive product—and/or a process or method associated with making or using it—can be protected with a utility patent. However, a patent application must be filed within one year of public disclosure or commercialization (or, in other countries, before any public disclosure). The invention must also satisfy three criteria for patentability: utility, novelty, and non-obviousness. The latter two criteria depend on the scope and content of the prior art. A patentable invention cannot already be known and must represent a non-trivial advance over what was already known. These assessments are made in an absolute sense. Prior art is not limited to commercially available products. And it does not matter whether or not the inventor actually knew about the relevant prior art.

The ornamental appearance of a useful article can be protected with a design patent if the ornamental design is novel and non-obvious. Design patents can cover surface ornamentations for an article of manufacture, the ornamental shape or configuration of an article of manufacture itself, and combinations of those categories. Abstract designs (e.g., a picture standing alone) are not patentable.

Trade Dress / Trademark Protection

Trade dress (a form of trademark protection) may also protect the distinctive, nonfunctional appearance of a product or its packaging. However, trade dress protection only arises in aspects of product configuration that serve as a trademark to allow consumers to identify the source of the product. Trade dress never protects functional aspects of product configuration or packaging. In other words, it is limited to aspects that relate to the manufacturer or seller’s reputation and not to the usefulness of the thing itself.

In the U.S., trade dress protection requires achieving acquired distinctiveness once secondary meaning has developed in the minds of consumers based upon substantially continuous exclusive use for a sufficient period of time (generally a minimum of five years). Trade dress will not provide exclusive rights in product configuration at the time of a new product’s launch, though it might for packaging.

Copyright Protection

Copyright might apply to certain aspects of products, such as product labels or decorative graphics applied onto a product. But copyright will not protect useful or functional parts, only those creative aspects that are conceptually separable and capable of existing apart from the useful or functional parts. For example, a lamp that incorporates a sculpture could have copyright protection in the sculptural elements but purely functional electrical components that allow the lamp to illuminate would not have copyright protection. The text of software code can be copyrightable but not the functionality enabled by software (which might be patentable instead).

Trade Secret Protection

Trade secret protection will not apply to publicly visible or readily ascertainable aspects of a product. But things like the “secret formula”, manufacturing methods, or aspects of embedded software might be protectable as trade secrets if they are not generally known and not readily ascertainable and you take reasonable measures to keep such things secret.

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Tags Copyrights, Design Patents, Patents, Trade Dress, Trade Secrets

Copyrights Patents Q&A Trade Secrets Trademarks

What Are Typical IP Litigation Costs?

Post author By Austen Zuege

Intellectual property (IP) litigation tends to be relatively expensive compared to other types of lawsuits. There are many reasons for that. Though the complexity of the legal issues involved and a tendency for extensive pre-trial discovery and use of expert witnesses contribute to the total costs.

Below are graphs showing average costs through various stages of a an infringement or misappropriation lawsuit in the U.S. A summary graph compares average costs for “small” patent, copyright, trademark, and trade secret cases with less than $1,000,000 at risk. There are also individual graphs for patent, copyright, trademark, and trade secret cases with different amounts at risk, that is, with different amounts of potential damages for infringement or misappropriation (in U.S. dollars). All data comes from the 2021 AIPLA Report of the Economic Survey.