Protecting Your Intellectual Property: an Introduction

Protecting Your Intellectual Property: An Introduction

Cynthia E. Kernick

Protection is the driver for creativity.

The creative nature of mankind drives not only the economy but also the quality of life. Whether the creativity manifests itself in the development of useful articles (such as machinery to produce new goods) or it adds beauty in the nature of art and books, it must be protected in order to be encouraged. Without protection, there is no economic driver to support creativity and invention. There are four critical ways to protect creative develop- ments: patent, trademarks, copyright, and trade secrets. The selection of the appropriate methodology depends upon the subject of what is being protected. In this age of high technology, sophisticated business enterprises ex- Cynthia E. Kernick is a partner of Reed Smith LLP in its Pittsburgh pend great sums to acquire, develop, and protect new and office. She graduated, cum laude, from innovative methods to enhance their competitive position, Duquesne University School of Law in as well they should. But many smaller companies do not 1985, received the Order of the Barrister, and was Article Editor of the Duquesne have a good grasp of what should or should not be done Law Review. Ms. Kernick concentrates her to protect their investments. This article provides a brief practice in patent litigation and other types overview of the vehicles available to use as protection. of intellectual property litigation, and speaks and writes frequently on patent issues. She also is an Adjunct Professor at the University of TRADEMARK RIGHTS • A trademark is, by defini- Pittsburgh School of Law, where she teaches tion, used to protect a name, logo, or other indicator of Patent Litigation. This article is based on a paper the author prepared for a seminar the source or origin of goods. 15 U.S.C. §1127. In similar sponsored by the ABA’s Tort Trial & Insurance fashion, service marks are used to protect a name, logo or Practice Section. She can be reached at other indicator of the source or origin of services. Id. This [email protected]. is the only significant distinction and rules related to protection and enforcement are the same for both. Indeed, a

The Practical Lawyer | 49 50 | The Practical Lawyer April 2007 given “name, logo, or other indicator” frequently is • Is constructive notice of the registrant’s claim used by its owner as both a trademark and a service to ownership of the mark for those products or mark. The two are commonly referred together as services; and “trademarks” and this convention is adopted in this • Renders the mark incontestable after five article. Each is protected by federal statutory law― years. 15 U.S.C. §1051 et seq. (known as the “Lanham 15 U.S.C. §1057(b), §1072, §1065 (respectively). Act”)―as well as common law and state law. Each When a mark becomes “incontestable,” it is enti- state of the United States has its own trademark tled to an enhanced level of protection, including, laws and trademark registration procedure that re- e.g., that it may no longer be challenged as being lates to intrastate use of a trademark in each state. “merely descriptive.” Those laws and procedures are not addressed here- Despite the fact that trademark rights are based in because federal protection is generally preferable on use, it is possible to file a federal trademark ap- and relates to use of a mark in interstate commerce plication based only upon a bona fide intent to use a and results in protection in all 50 states. This article mark in interstate commerce, without actual use at focuses instead on the federal protection of trade- the time the application is filed. 15 U.S.C. §1051(b). Once the application has been allowed by the PTO, marks. the applicant must later submit evidence of actual The scope of what can serve as an indicator of use to complete the registration. The applicant has a source or origin is extremely broad. A trademark may six-month period in which to file proof of actual use be any “word, name, symbol, or device, or any com- of the mark. 37 C.F.R. §2.88(a). The applicant may bination thereof.” 15 U.S.C. §1127. Color may be ask for additional six-month periods of time, not to registered as a trademark, as can sounds, scents, and exceed a total of 24 months. 37 C.F.R. §2.89(c). other “non-traditional” symbols. Qualitex v. Jacobson Prods., 514 U.S. 159 (1995); In re Clarke, 17 U.S.P.Q. What Is Protectable? 2d (BNA) 1238 (T.T.A.B. 1990) (holding that scented To gain trademark protection, the word, sym- fragrance can serve as a trademark for yarn). bol, or other chosen indicator must be used in Trademarks can, but are not required to be, interstate commerce “to identify and distinguish registered with the United States Patent and Trade- [the trademark owner’s] goods, including a unique mark Office (“PTO”). If registered, as discussed product, from those manufactured or sold by oth- below, the breadth and ease of protection afforded ers and to indicate the source of the goods, even if to the mark is somewhat greater than for non-reg- that source is unknown.” 15 U.S.C. §1127. (In the istered marks. case of a service mark, the mark must be used in Trademark rights are acquired through actual the sale or advertising of services “to identify and use, 15 U.S.C. §1051, in interstate commerce. The distinguish the services of one person, including PTO confirms trademark rights through registra- a unique service, from the services of others and tion, 15 U.S.C. §1052, which also gives the trade- to indicate the source of the services, even if that mark owner certain procedural and substantive ad- source is unknown.” 15 U.S.C. §1127.) vantages. Registration of a mark with the PTO Company names used merely to identify busi- • Is prima facie evidence of the exclusive right nesses (as opposed to goods and services) gener- to use the mark throughout the United States ally are not considered trademarks because they in connection with certain products and ser- typically do not serve the requisite source-identify- vices; ing function in connection with a particular good Protecting Intellectual Property | 51 or service. Company names are often protected • Those that have acquired secondary meaning. through state incorporation laws or through the Inwood Laboratories v. Ives Laboratories, 456 U.S. unfair competition provision of section 43(a) of the 844, 851, n.11 (1982) (explaining that a mark Lanham Act, 15 U.S.C. §1125(a), if they do not acquires secondary meaning when, “in the otherwise qualify for trademark protection. minds of the public, the primary significance of [the mark] is to identify the source of the Standards For Protection product rather than the product itself ”); or Under the Lanham Act, not all trademarks are • Those that are generic. E.g., King-Seeley Thermos entitled to the same degree of protection under Co. v. Aladdin Industries, Inc., 321 F.2d 577 (2d the law. Although protection may be extended to Cir. 1963). marks capable of identifying and distinguishing a Generic terms are never protectable as marks. Ab- product’s source, not all trademarks perform this ercrombie, supra, 537 F.2d at 9 (stating that not only function to the same degree. More distinctive and will the PTO deny registration for a generic mark, unique trademarks provide better source-identifying but also that the Lanham Act provides for a previ- information to consumers and are easier to protect. ously registered mark to be cancelled at any time Novice trademark owners often mistakenly believe if it becomes generic. 15 U.S.C. §1064(3)). Thus, in direct contrast to what many trademark owners that consumers more easily relate to and recognize believe, the more descriptive a mark is, the less pro- a more descriptive trademark. This is based on the tection it is afforded. assumption that a name that provides information “Inherently distinctive” marks can further be about a product’s characteristics will be easier for subdivided into marks that are “arbitrary or fanci- consumers to remember. This is a false premise. ful” or marks that are “suggestive” marks. Abercrom- Consumers merely relate a descriptive mark to the bie, supra, 537 F.2d at 9. The former are the stron- identification of the goods or services and not to gest and include either coined words or words that the origin of those goods and services. Descriptive are not typically associated with the product. Such marks are not much more than mere names of the marks are strong because they tend not to describe goods and, in such circumstances, would not be en- the product, but rather to serve as an indicator of titled to protection. the source of the goods. Well known examples in- The more distinctive (and non-descriptive) a clude “Kodak” for photographic supplies, “Apple” mark is, the greater its ability to identify the source for computers, and “Exxon” for oil and gas prod- of the goods or services. This distinctiveness is thus ucts. associated with the “strength” of the mark. Aber- “Suggestive” marks are not quite as strong as crombie & Fitch Co. v. Hunting World, Inc., 537 F.2d arbitrary or fanciful marks. These suggest a quality 4 (2d Cir. 1976) (announcing a spectrum of dis- or attribute of the product for which the mark is tinctiveness). A mark or name’s strength is divided used. For example, “Coppertone,” when used for into three broad groups in descending order of suntan oil, is suggestive of a dark tan, presumably strength: the goal of consumers using the product. Similarly, • Those that are inherently distinctive. Two Pesos “Chicken of the Sea” tuna is suggestive of seafood, v. Taco Cabana, 505 U.S. 763, 768 (1992) (ex- and perhaps of tender white meat. plaining that a mark is inherently distinctive if A mark that is not inherently distinctive can- its “intrinsic nature serves to identify a particu- not be given federal protection, 15 U.S.C. §1052(e), lar source”); unless it has, through widespread use and public 52 | The Practical Lawyer April 2007 recognition, become primarily indicative of the cause they are generally regarded as identifying the source of the goods (or services), rather than mere- source of the product, rather than the name of the ly describing the goods (or services) themselves. 15 individual. U.S.C. §1052(f) permits registration of trademarks The third category of terms—generic—can that were merely descriptive if they “become dis- never be protected under trademark law. Generic tinctive of the…goods in commerce.” The mark is terms are not entitled to trademark protection be- then said to have acquired distinctiveness which, in cause the terms used are so common or so descrip- trademark lingo, is “secondary meaning.” Marks tive that all competitors should be free to use them. are not registrable unless they acquire second- But cf., Jerre B. Swann, Genericism Rationalized, 89 ary meaning and can be broken down into three Trademark Rep. 639 (1999). Because generic terms groups: merely refer to a category of goods or services, they • Descriptive marks; do not serve to identify source or origin of products • Geographic marks; and or services. It is for this reason that generic marks • Surnames. cannot be registered. Examples of generic terms See 15 U.S.C. §1052(e) (1), (2) and (4) respectively. include “cellophane,” “aspirin” and “escalator.” See “Descriptive” marks are those that describe a DuPont Cellophane Co. v. Waxed Products Co., 85 F.2d characteristic or quality of the goods or services. 75 (2d Cir. 1936), cert. denied, 299 U.S. 601; Bayer These terms are generally viewed as being avail- Co. v. United Drug Co., 272 F. 505 (S.D.N.Y. 1921); able for. public use because they are necessary to and Haughton Elevator Co. v. Seeberger, 85 U.S.P.Q. 80 advertise goods or services. Because of the adverse (Comm’r Pat. & Trademarks 1950), respectively. effect on competition, descriptive terms are only The mark “escalator” provides a cautionary tale. available as trademarks if the advertising and use It originally was a coined term and clearly one by a single seller is so extensive that the word be- that was fanciful or at the very least, suggestive. Its comes associated with that seller in the minds of owner failed to police the mark, allowing moving the consuming public. stairs to be generally referred to as “escalators.” As “Geographic” marks also must have acquired a result, the mark fell into generic use and was no secondary meaning before trademark protection longer subject to protection. can exist. 15 U.S.C. § 1052(e), (f). These include those having a geographic locale included within Term Of Rights the mark, such as “Louisville Slugger” baseball bats Unlike most other forms of intellectual proper- and “Philadelphia” brand cream cheese. However, ty protection, trademark rights may continue indef- once a geographic mark has become associated initely as long as the mark is not abandoned or does with the source of the product, as opposed to the not become generic. (The provision for renewal of geographic locale, the mark has acquired secondary registration, 15 U.S.C. §1059 places no limitation meaning and qualifies for trademark protection. on the number of times a registration can be re- Similarly, surnames are entitled to trademark newed.) If the mark continues to identify source, protection if the user can establish secondary mean- consumers theoretically benefit from this indefinite ing. Id. For example, “Jim Beam” whiskey, “Calvin protection. Additionally, because a corporation Klein” jeans, and “Louis Vuitton” luggage all de- potentially has an infinite lifetime, it has a strong rive from the names of the respective founders of interest in continued protection for the duration of the organizations producing those products. These business. Although registration of a trademark ini- names now have acquired secondary meaning be- tially is for only a 10-year term, it can be renewed Protecting Intellectual Property | 53 every 10 years if the mark is still in use in interstate Another common misconception is that reser- commerce. 15 U.S.C. §1058. vation of a trade name in a state, approval by the Secretary of State of the designation as a corpo- The Registration Symbol rate name, or filing of a fictitious name registration A trademark owner cannot use the notice ® confers trademark or service mark rights. It does on the goods or in connection with his or her ser- not. Only a filing with the PTO is valid to register a vices until the trademark is registered federally. trademark. 15 U.S.C. §1111. Once the mark is registered, the Finally, most people believe that they have an owner has a strong incentive to place the ® adja- unfettered right to use their own last name on any cent the trademark, because no profits or damages time of goods or services. This is wrong. A person can be awarded in the absence of such notice unless simply does not have an absolute right to use his or the infringer had actual notice of the registration. her own surname for commercial purposes. Findlay, The public is also notified that the mark is federally Inc. v. Findlay, 218 N.E. 2d 531 (N.Y.1966), cert. denied, registered. Until the mark has been registered, the 385 U.S. 930 (1966). For example, Tom McDonald user should use “TM” for trademarks or “SM” for could not enter the fast food hamburger business service marks. and begin selling “McDonald’s” hamburgers. Us- ing that name in conjunction with hamburgers is a Common Misconceptions trademark of the McDonald’s Corporation. If Tom One prominent misconception involving trade- McDonald was permitted to sell his “McDonald’s” mark protection concerns the requirements regard- hamburgers, consumers would likely be confused ing the use of a mark. Trademark protection does as to the source of “McDonald’s” hamburgers. He not exist unless and until the mark is used, in com- likely could sell “Tom McDonald’s” hamburgers, merce, in conjunction with goods or services. A albeit without the use of the golden arches. How- trademark user cannot “reserve” a trademark for ever, Tom’s brother, Ronald, may find it difficult to some indefinite future use.Blue Bell, Inc. v. Farah Mfg., do the same. 508 F.2d 1260, 1267 (5th Cir. 1975) (“Mere adop- tion of a mark without bona fide use, in an attempt COPYRIGHT • Copyright is used to protect the to reserve it for the future, will not create trademark expression of an idea if that expression is fixed in rights”). However, there is a provision analogous to some type of tangible medium. It cannot be used reservation of a mark that is applicable during a to protect the mere idea itself. The statute specifi- limited period in which a prospective user intends cally states: “In no case does copyright protection... to use the mark. Only by filing under this intent-to- extend to any idea, procedure, process, system, use provision can a limited-time reservation occur, method of operation, concept, principle, or dis- and this type of application requires a subsequent covery....” 17 U.S.C. §102(b). Similarly, a copyright affidavit confirming bona fide use. The applicant is cannot protect simply a name or slogan. It excludes granted a six-month period in which to file an affi- protection for mere words, short phrases and ideas. davit of use; however, he or she may request exten- For example, a copyright cannot be obtained on a sion of this time in additional six-month periods. mathematical formula explained in a math text, In no event may the statement of use be filed more even though the text itself could be protected as than 36 months after notice that registration would a literary work. 17 U.S.C. §102(b) excludes certain be allowed. See 37 C.F.R. §§2.88 and 2.89. categories, not protecting an “idea, procedure, process, system, method of operation.” 54 | The Practical Lawyer April 2007

The current Copyright Act was passed in 1976 • Pictorial, graphic, and sculptural works, such (17 U.S.C. §101 et seq.). It has, however, been as paintings, photographs, posters, and maps; amended and substantially changed numerous • Sculpture or ornamental designs of useful times since its passage. The Software Protection objects, such as lamps; Act of 1980, for example, confirmed that comput- • Motion pictures and other audiovisual works; er programs are a proper subject matter for copy- • Sound recordings; architectural works. right protection to the extent that they embody an • The categories are interpreted broadly to in- author’s original creation and the Berne Conven- clude the protection of similar categories. 17 U.S.C. tion Implementation Act, effective March 1, 1989, §102(a). enabled the United States to become a signatory country to the Berne Convention for the Protec- Standards For Protection tion of Literary and Artistic Works, a multilateral The standards for copyright protection are not agreement governing international copyright rela- difficult to meet. The work must be original and tions for more than 100 years. In 1998, the Sony fixed in a tangible medium of expression. 17 U.S.C. Bono Copyright Term Extension Act amended the §102(a). Copyright Act to extend the life of copyright to 70 A work is “original” for purposes of copyright years for individual authors and 95 years for works law if it is the author’s own, as opposed to some- made for hire. There are many other amendments thing he borrowed from someone else. Feist Publi- too numerous to discuss herein. The evolution of cations v. Rural Telephone Service, 499 U.S. 340, 369 copyright is long and curious and, in large part, (1991). The degree of originality required, how- there are no easy or cut-and-dry answers to many ever, is very minimal. Feist declares Section 102(a)’s copyright questions. There are, however, some very requirement of originality to be “not particularly basic principles that can be applied. stringent,” so that originality will be found in all but a “narrow category of works in which the creative What Is Protected? spark is utterly lacking or so trivial as to be virtually The types of works for which copyright protec- nonexistent.” Id. at 358-59. For example, Photog- tion is available are extremely varied. Copyright rapher A may take a breathtaking picture of San protection extends to “original works of authorship Francisco at night. A second photographer, B, may fixed in any tangible medium of expression, now come only moments later, stand at the exact same known or later developed, from which they can be spot, and take a second picture of San Francisco. perceived, reproduced, or otherwise communicat- Even though each picture may for all practical pur- ed, either directly or with the aid of a machine or poses appear identical, each photographer has tak- device.” 17 U.S.C. §102(a). More specifically, copy- en an “original” picture for purposes of copyright right protection can extend to law, and each picture would be capable of copy- • Literary works, including books and other right protection. textual matter, such as magazine articles; The second requirement for copyright protec- • Computer programs and data bases; tion is that the work be “fixed in any tangible medi- • Musical works, including lyrics and music to um of expression.” 17 U.S.C. §102(a). Until a work songs; is fixed, it is not protected by federal copyright. A • Dramatic works, which generally mean plays; work is “fixed” in a tangible medium of expression • Pantomimes and choreographic works, such as when it is embodied in a copy as phonorecord, or ballets and dances; is sufficiently permanent or stable to permit it to be Protecting Intellectual Property | 55

“perceived, reproduced, or otherwise communicat- assume that no registration is required to secure ed for a period of more than transitory duration.” protection. This is true in a broad sense, but federal When a work consists of sounds or images that are registration is preferred because it grants some pro- being transmitted, it is “fixed” if a fixation is being cedural advantages and is a mandatory predicate to made simultaneously with transmission. 17 U.S.C. commencing a suit for infringement of copyright. §101. A work may be fixed, for example, by typ- A registration provides prima facie evidence of ing, writing, electronically recording, photograph- copyright validity, permits filing of an infringement ing, painting or sculpting. Examples of a tangible action, and permits an award of statutory damages medium of expression include a piece of paper, a and attorneys’ fees in an infringement action. 17 CD Room or DVD, a phonorecord, a cassette tape, U.S.C. §§410(c), 411, 412 (respectively). photographic film, canvas, clay, or stone. The Copyright Symbol Scope Of Right It is no longer necessary under the Berne Con- A copyright gives the owner of the copyrighted vention for a copyright notice ©owner/date to be work the exclusive right to copy, reproduce, distrib- applied to a work first published after March 1, ute, publish, perform, or display the work and the 1989. However, a copyright notice is still required right to make derivative works based on the origi- on works first published before March 1, 1989, but nal copyrighted work. 17 U.S.C. §106. For example, under certain circumstances, copyrights previously only the copyright owner of a book may make cop- having fallen into the public domain for failure to ies for sale, and only the copyright owner of a com- comply with notice requirements can be restored. puter program may make copies of that program Even when not required, it is still prudent to place a for sale. A “derivative work” of the original work is copyright notice on a work as soon as possible after one based upon or incorporating the original work. creation because it may deter copying and elimi- For example, the author of a novel would have the nate certain defenses in an infringement action that exclusive right to make a motion picture based on would reduce the copyright owners’ damages. that novel, and a motion picture company would have to purchase those rights if it wished to make Term Of Rights such a film. Copyright protection exists for certain pre-de- Ownership initially vests in the author of the fined periods and cannot be extended or renewed. work. 17 U.S.C. §201(a). A “work made for hire” is Its duration depends upon the status of the author prepared by an employee within the scope of em- of the copyrighted work. Individual or joint authors ployment, or a work prepared by a first party for are protected for the author’s life plus 70 years. 17 a second party in which the parties sign a written U.S.C. §302(a). A work made for hire is given pro- agreement that the work being prepared is a work tection for 95 years from the date of publication made for hire. 17 U.S.C. §101. For such works, the or 120 years from the date of creation, whichever employer or commissioner is deemed to be both expires first. 17 U.S.C. §302(c). the author at law and owner of the work. General Considerations Who Grants The Rights? It is important to think of a given work as Copyright protection exists as soon as an origi- having both tangible and intangible rights. These nal work is fixed in a tangible medium of expres- rights are separate, and it is possible that, even at sion. 17 U.S.C. §102(a). Because of this, many the moment of creation, the owner of the tangi- 56 | The Practical Lawyer April 2007 ble work may not be the owner of the intangible which is not protected. In copyright infringement rights. Transfer of ownership of a material object cases, some courts have stated that the line between in which the copyrighted work is fixed, such as a expression and idea may be determined by refer- book, does not transfer ownership of any of the ring to the purpose the work is designed to serve: author’s exclusive copyright rights, such as the right when the work is of utilitarian nature, the purpose to reproduce copies of the book. The rights may or function of the work constitutes its idea, where- be transferred separately and the intangible rights as everything that is not necessary to the purpose may be narrowly parsed (i.e., the right to copy may or function is part of the expression of the idea. be transferred separately from the right to make Whelan Associates v. Jaslow Dental Laboratory, Inc., 797 derivative works). The owner of a copy of a book F.2d 1222 (3d Cir. 1986), cert. denied, 479 U.S. 1031 can sell that particular book even though the copy- (1987). More recent decisions, however, undertake right owner has exclusive rights of distribution. a significantly more involved analysis of computer This is often referred to as the First Sale doctrine. software infringement and filter out various - ele 17 U.S.C. §109. ments of programs to determine what is and what Transfer of an exclusive right of copyright must is not protected. Computer Management Assistance Co. v. be in a written instrument to be effective. 17 U.S.C. Robert F. DeCastro, Inc., 220 F.3d 396 (5th Cir. 2000). §202. (“Ownership of a copyright...is distinct from Securing patent protection for computer software, ownership of any material object in which the work together with copyrights and other protections, may is embodied.”) However, non-exclusive rights may be the best method to protect computer software. be transferred without a written instrument and transfer may be implied depending on the actions PATENT RIGHTS • Patent rights are protected of the copyright owner and the transferee of the by federal law―Title 35, United States Code―as non-exclusive right. interpreted by federal courts, most specifically the Unlike the trademark owner, who may only use United States Court of Appeals for the Federal Cir- the ® notice if the mark is registered, and the patent cuit. A patent is a grant made exclusively by the owner, who may only give notice of his patent after PTO after consideration of an application by an issuance, the copyright owner may use the © notice applicant (inventor). Patent protection is limited even without registration. 17 U.S.C. §§401(c), 204. to “any new and useful process, machine, manu- The owner cannot extend the term of copyright facture, or composition of matter, or any new and protection by reprinting the work without changes useful improvement thereon.” 35 U.S.C. §101. An and using a later-dated copyright notice. abstract idea or a mere concept is not patentable, The fact that a computer software program has nor are theoretical or abstract discoveries or any been granted copyright registration does not neces- nontechnical arts like social science and theoreti- sarily ensure complete protection for all aspects of cal mathematics. The limitation to the “useful arts” the program. Copyright does not protect ideas or stems from the Constitution of the United States. non-expressive elements of the program. 17 U.S.C. It provides in Article I, §8, cl. 8 that Congress shall §102(b); Baker v. Selden, 101 U.S. 99 (1880). Elements have the power “To promote the Progress of Sci- such as the structure, sequence, and organization ence and useful Arts, by securing for limited Times of the program may or may not be protected un- to Authors and Inventors the exclusive Right to their der copyright law depending on whether they are respective Writings and Discoveries.” Before 1999, protected as the expression of the idea in the soft- there was a dispute as to the nature and extent that ware program, or whether they are the idea itself, business method patents should be patentable, but Protecting Intellectual Property | 57 since then the decision by the United States Court machines, articles of manufacture, compositions of of Appeals for the Federal Circuit in State Street matter, and processes. 35 U.S.C. §100(b). The first Bank confirmed that business method patents are three of these are typically referred to generally as appropriate subject of patentability. State Street Bank “product” or “apparatus” claims and the last as a & Trust Co. v. Signature Financial Group, Inc., 149 F.3d process or method claims. See Caterpillar Inc. v. De- 1368, 1375 (Fed. Cir. 1998), cert. denied, 525 U.S. troit Diesel Corp., 961 F.Supp. 1249, 1252 (N.D. Ind. 1093 (1999). The upshot, unfortunately, has been a 1996), aff’d without opinion, 194 F.3d 1336 (Fed. Cir. wave of business method patents, many of margin- 1999). Inventions that have been implemented in al value. The sheer numbers of them have slowed computer software can typically form the basis of down the prosecution of business method patents either a “process” or “machine” type patent. within the PTO and some business method applica- “Articles of manufacture” generally refer to tions are expected to take as long as a decade after products manufactured by machines and include all the filing of an application to issue into a patent. artificial items that are not found in substantially the Once a patent issues, it grants the patent owner same form in nature, and that are neither machines the exclusive right to exclude others from making, nor compositions of matter. Donald S. Chisum, using, selling, offering to sell, and importing the in- Chisum on Patents, §1.02 [3] (Matthew Bender 2006). vention or certain of its components defined by the “Compositions of matter” are formed by the inter- patent grant. The basic patent term for applications mixture of two or more ingredients. generally refer filed on or after June 8, 1995 is 20 years from the to new compounds created by humans. W. Robin- filing date of the application. Patents granted from son, The Law of Patents for Useful Inventions, 278-79 applications filed before June 8, 1995 have terms (1890). These include chemical compounds, mix- of 17 years from issuance date or 20 years from tures, alloys, and drugs, as well as improvements on the filing date, whichever is greater. Once the term such compositions or composite articles. expires, the public is free to practice the invention. 35 U.S.C. §154(a)(2). Utility Patents An important aspect of the Patent Statute in- The Patent Statute limits patentable inventions volves understanding what is meant by the term to those that are “new and useful,” thus creating the “invention.” In some ways, the Patent Statute isn’t requirement of utility. 35. U.S.C. §101. Examples particularly helpful because it defines “invention” as of “inventions” that fail to meet the utility require- an “invention or discovery.” 35 U.S.C. §100(a). The ment include new chemical compounds that have “invention,” as that term is used in Patent Statute, no known use; incredible inventions, such as “per- lies somewhere between the conception of the idea petual motion machines,” which thermodynamic and the physical application of that idea. A patent theory suggests are an impossibility; or other ma- attorney describes the invention in the specification chines that fail to conform to known scientific prin- of the patent and defines the scope of protection by ciples, and when the applicant is unwilling or un- the language of the claims contained at the end of able to demonstrate that the invention will work. the patent itself. Like metes and bounds in a property deed, the claims of a patent are meant to map Novelty out the boundaries of the patentee’s invention. The ultimate test or key to patentability of an There are three types of patents: utility, design, invention is largely reduced to the issue of novelty and plant. The subject matter of the claims of a of the invention. The concept of novelty requires utility patent are broken down further and include that the invention must be new; that is, different 58 | The Practical Lawyer April 2007 from a prior device or process. The Patent Statute Non‑Obviousness specifically defines patentable inventions as “any new Perhaps the most difficult area of the patent and useful process, machine, manufacture, or com- statute involves the concept of obviousness. A pat- position of matter, or any new or useful improve- entee is not entitled to a patent if the differences ment thereon.” 35 U.S.C. §101. If every element of between his invention and anything prior are such the invention can be found in a single prior device that at the time the invention was made, the inven- or printed publication, novelty is lacking and the tion as a whole would have been obvious to one invention is unpatentable. In the language of pat- of ordinary skill in that area. 35 U.S.C. §103. The ents, this is known as “anticipation.” An invention problem with the obviousness determination oc- is “anticipated” if the invention was known or used curs in applying what seems to be a simple concept by others in this county or patented, or described in to the facts of a given case. a printed publication in this or a foreign county, be- Obviousness is based on several factual deter- fore the invention thereof by the applicant for the minations that include the scope and content of the patent or more than one year before the filing of prior art (i.e., what was known in the field that is the application for a patent. 35 U.S.C. §102(a) and directly applicable to the invention), the differences (b). An invention will also be deemed unpatentable between the prior art and the patent claims at issue, because of lack of novelty, or because the inventor and the level of ordinary skill in the pertinent art. has lost the right to a patent through what is gener- In addition, consideration may be given to factors ally referred to as a statutory bar. 35 U.S.C. §102. suggestive of non‑obviousness, such as commercial With this in mind, in considering whether to success of the invention, long felt but unresolved obtain patent protection, more so than either needs, and failure of others to solve the problem, copyright or trademark, timing is everything. The need to be considered. See Graham v. John Deere Co., inventor will not be able to patent his invention, 383 U.S. 1 (1966). Obviousness is not determined even if otherwise patentable, if it was described with the benefit of hindsight. Many ingenious in- in a printed publication in the United States or a ventions cause one to say, “That looks so simple, foreign country, or was on sale, offered for sale, or now why didn’t I think of that?” Regardless of how in public use in the United States for more than obvious an invention may appear after its develop- one year before the date on which the patent ap- ment, the test for obviousness is whether the inven- plication was filed. This limitation is intended to tion as a whole would have been obvious at the time encourage early disclosure of inventions, to prevent the invention was made. the patentee from withdrawing that which the public has justifiably come to believe has entered the Scope Of Rights public domain, and to prevent the patentee from The grant of a patent gives the patentee the commercially exploiting his invention beyond the right to exclude others from making, using, selling, term of the patent grant. Most foreign countries do offering for sale, and importing the patented inven- not have a grace period and thus anyone contem- tion and certain of its components in the United plating filing a foreign patent must consider filing States for the term of the patent. This right ex- the application before publishing or commercial- tends, under certain conditions, to imported prod- izing the invention. ucts made overseas by a U.S. patented process. A patent is thus a negative right because it is the right to exclude others. Protecting Intellectual Property | 59

It is important to understand that the patent does There can be only one “claim” for a design pat- not give the patentee the right to practice his own ent, and the scope of it is shown in the ornamental invention. The patentee’s invention may be an im- elements depicted in the drawings of the patent it- provement on an earlier device that is also patented. self. When there is a claim of infringement under a If its claims are sufficiently broad, this prior patent, design patent, the analysis differs from that under known as a “dominating” patent, may prevent the a utility patent. Both require a determination of second patentee from practicing (i.e., making, using, whether each element of the claim of the patent selling, offering for sale or importing) his invention. is present in the accused product but a design pat- The invention of the triode (an evacuated elec- ent requires that this consideration be made by use tron tube containing an anode, a cathode, and a of the “ordinary observer” test. This is to say that control grid) easily illustrates this. In order to invent there can only be infringement: the triode, the inventor was required to experiment “If, in the eye of the ordinary observer, giving such with and modify the diode (an electron tube con- attention as a purchaser usually gives, two designs taining an anode and a cathode). The diode was are substantially the same, if the resemblance is already the subject of a patent granted to another such as to deceive an ordinary observer, inducing party. Even though the triode added elements to him to purchase one supposing it to be the other, the diode, it nonetheless contained every element the first one patented is infringed by the other.” of the diode patent and the diode patent would See Gorham Mfg. Co. v. White, 81 U.S. (14 Wall.) 511, have prevented the inventor of the triode from 528 (1872). In this limited regard, a consideration making, using, selling, offering for sale, or import- of infringement of a design patent is similar in ing his own invention. To resolve this problem, the some regards to copyright infringement (the test two inventors entered into a cross‑licensing agree- for which hinges on substantial similarly of the two ment, whereby each was granted permission to op- works) and trademark infringement (which is con- erate under the other’s patent. cerned with the improper substitution of a good or service of a third party for that made by the owner Design Patents of the trademark.). A person may obtain a patent on any new, original, non-obvious and ornamental design for Plant Patents a product (article of manufacture). U.S. Patent & New varieties of plants may also be subject to Trademark Office,Manual of Patent Examining Proce- patent protection. The primary requirement is that dure, ch. 1500 (Thomson/West, 8th ed. 2006). The the new plant be “asexually reproducible,” mean- critical distinction between design and utility pat- ing that it is reproduced through means other than ents is that of ornamentation versus functionality. seeds, such as through the rooting of cuttings, lay- To qualify for utility patent protection, an invention ering, budding or grafting. 35 U.S.C. §161. A plant must be useful. A design, on the other hand, may patent gives the owner the right to exclude others not be patentable if its form is dictated solely by from “asexually reproducing the plant or selling or functional considerations. Thus, whether a design using the plant so reproduced.” is patentable is determined primarily by its appearance and ornamental qualities. It should be noted Common Misconceptions that an invention may support both a utility patent A number of misconceptions concerning pat- and a design patent but the scope of protection un- ent protection have persisted over the years, one der each type of patent will vary. being that patent rights exist as soon as a patent 60 | The Practical Lawyer April 2007 application is filed. In fact, patent rights do not ex- that are reasonable under the circumstances to ist until the patent issues, which usually occurs two maintain its secrecy.” to three years from the date the application is filed. Trade secret protection lasts for as long as the Also, once the patent issues, the patent rights do trade secret is kept “secret” and is not publicly dis- not operate retroactively. Those who made, used, closed. One of the best examples of a long-lived sold, offered to sell, or imported an invention while trade secret is the “Classic” Coca‑Cola formula, the application was pending, but discontinued such which remains a trade secret today, despite many practices when the patent was issued, cannot be years of commercial sales and many attempts by held liable for “past” patent infringement. Coke’s competitors to reverse engineer the formula. Another misconception involves the effect of marking the product for which patent protection Standards For Protection is sought. It is permissible to use “Pat. Pending” or A variety of widely accepted factors are gener- “Pat. Applied for” once an application has been ally considered in determining the existence of a filed; however, marking the product in this manner trade secret. One involves the extent to which the only serves notice that a patent application is on information is known outside of the trade secret file. Patent rights do not exist until the patent is ac- owner’s business. If the practice for which trade tually granted, and marking the product with “Pat. secret protection is claimed has been widely used No. ____” before issuance is improper. throughout the industry, there is less likelihood that a trade secret exists. TRADE SECRETS • There is no federal trade se- The extent to which the trade secret is known cret law, only state trade secrets law. However, many by employees and others involved in the owner’s states have accepted the Uniform Trade Secrets Act business is another important factor. The more ex- (“UTSA”), or some variation thereof. (The states tensive the knowledge, the less likely trade secret not adopting some form of the UTSA are Mas- protection exists. sachusetts, New Jersey, New York, North Carolina, Another consideration is the extent of measures and Texas.) According to a widely accepted defini- taken by the trade secret owner to guard the se- tion, a trade secret includes “any formula, pattern, crecy of the information. If the owner fails to take device or compilation of information which is used adequate precautions to protect the information as- in a person’s business, and which gives the person serted to be a trade secret, it is less likely that infor- an opportunity to obtain an advantage over com- mation will be accorded trade secret protection. petitors who do not know or use it.” Another defi- A further factor to be considered is the value nition comes from section 1 of the Uniform Trade of the information to the trade secret owner and to Secrets Act itself, which says: his competitors. By definition, a trade secret must “Trade secret” means information, including a be of some value to the owner, to the extent that formula, pattern, compilation, program, device, it allows him or her to achieve an advantage over method, technique, or process, that: (1) derives competitors. The greater this value, the greater the independent economic value, actual or potential, likelihood that trade secret protection exists. from not being generally known to, and not being Yet another factor is the amount of time, effort readily ascertainable by proper means by, other and money expended by the trade secret owner in persons who can obtain economic value from its developing the information. The greater the invest- disclosure or use, and (2) is the subject of efforts ment, the more likely trade secret protection exists. Protecting Intellectual Property | 61

Finally, the ease or difficulty with which the work to some tangible form, at least by putting it information could be independently developed or in writing. This requirement of tangible form is not properly acquired through reverse engineering by required to obtain trade secret protection. others is important in determining the existence of A trade secret “legend” may, but does not neces- a trade secret. Discovering a trade secret in this way sarily, protect a trade secret. It is essential to deter- is acceptable, provided the product or device being mine whether adequate steps were taken to ensure reverse engineered was not improperly obtained. the secrecy of the trade secret. A typical trade se- Common Misconceptions cret “legend” is as follows: Some believe that trade secret and patent protec- “This document contains confidential and proprie- tion may co-exist. But issuing a patent eliminates tary trade secret information which is the property any claim by the patentee to trade secret protec- of ______. Its contents may not be copied, repro- tion in the material actually disclosed by the pat- duced, distributed, or otherwise disclosed without ent. The rights in the disclosed material are then the express permission of ______.” limited to those granted by the patent statutes, and Unlike other forms of intellectual property pro- depend upon the scope of the patent claims. Mate- tection, a notice provision is not a requirement for rial that was not disclosed may still be protected by collecting damages for trade secret misappropria- trade secret law. Theft of trade secrets will not be excused even tion. All that is required is that the trade secret if it later becomes lawful to obtain the informa- owner take “reasonable” measures to maintain the tion that once was protected as secret. The test for secrecy. whether there was theft of protected information will be whether it was unlawful at the time the se- CONCLUSION • This summary is not intended crets were obtained (although their later availability to be all‑inclusive; it is merely an overview of the may have an impact on damages). Similarly, if a types of protection available for creative works and trade secret invention later becomes the subject of inventions. Choosing the appropriate method for a patent, a party who previously misappropriated protection of a name, expression of an idea, or in- the trade secret will not be excused by claiming that vention may implicate patents, trademarks, copy- the trade secret has now become public by virtue of rights, and trade secrets to maximize the protection the issued patent. Trade secret protection is the only form of in- of technological investments. The choice will vary tellectual property protection that extends to ideas. depending on the industry, the technology or ex- For protection under patent, trademark, or copy- pression, and care must be taken to consider the right theories, the owner must have reduced the best method. 62 | The Practical Lawyer April 2007

PRACTICE CHECKLIST FOR Protecting Your Intellectual Property: An Introduction

• A trademark is used to protect a name, logo, or other indicator of the source or origin of goods. 15 U.S.C. §1127. In similar fashion, service marks are used to protect a name, logo, or other indicator of the source or origin of services. 15 U.S.C. §1053. • The scope of what can serve as an indicator of source or origin is extremely broad. A trademark may be any “word, name, symbol, or device, or any combination thereof.” 15 U.S.C. §1127. • Trademarks can, but are not required to be, registered with the United States Patent and Trademark Office (“PTO”). Registration of a mark with the PTO: __ Is prima facie evidence of the exclusive right to use the mark throughout the United States in connection with certain products and services; __ Is constructive notice of the registrant’s claim to ownership of the mark for those products or services; and __ Renders the mark incontestable after five years. • Under the Lanham Act, not all trademarks are entitled to the same degree of protection under the law. The more distinctive (and non-descriptive) a mark is, the greater its ability to identify the source of the goods or services. A mark or name’s strength is divided into three broad groups in descending order of strength: __ Those that are inherently distinctive. “Inherently distinctive” marks can further be subdivided into marks that are “arbitrary or fanciful” or marks that are “suggestive” marks; __ Those that have acquired secondary meaning; or __ Those that are generic. • Unlike most other forms of intellectual property protection, trademark rights may continue indefi- nitely as long as the mark is not abandoned or does not become generic. (The provision for renewal of registration, 15 U.S.C. §1059 places no limitation on the number of times a registration can be renewed.) • A trademark owner cannot use the notice ® on the goods or in connection with his or her services until the trademark is registered federally. 15 U.S.C. §1111. • One prominent misconception involving trademark protection concerns the requirements regarding the use of a mark. Trademark protection does not exist unless and until the mark is used, in commerce, in conjunction with goods or services. A trademark user cannot “reserve” a trademark for some indefinite future use. • Finally, most people believe that they have an unfettered right to use their own last name on any kind of goods or services. This is wrong. A person simply does not have an absolute right to use his or her own surname for commercial purposes. • Copyright is used to protect the expression of an idea if that expression is fixed in some type of tangible medium. It cannot be used to protect the mere idea itself. Copyright protection can extend to __ Literary works, including books and other textual matter, such as magazine articles; __ Computer programs and data bases; __ Musical works, including lyrics and music to songs; __ Dramatic works, which generally mean plays; Protecting Intellectual Property | 63

__ Pantomimes and choreographic works, such as ballets and dances; __ Pictorial, graphic, and sculptural works, such as paintings, photographs, posters, and maps; __ Sculpture or ornamental designs of useful objects, such as lamps; __ Motion pictures and other audiovisual works; __ Sound recordings; architectural works. • The copyrighted work must be original and fixed in a tangible medium of expression. 17 U.S.C. §102(a): __ A work is “original” for purposes of copyright law if it is the author’s own, as opposed to something he borrowed from someone else. The degree of originality required, however, is very minimal; __ A work is “fixed” in a tangible medium of expression when it is embodied in a copy as phonorecord, or is sufficiently permanent or stable to permit it to be “perceived, reproduced, or otherwise communicated for a period of more than transitory duration.” • A copyright gives the owner of the copyrighted work the exclusive right to copy, reproduce, distrib- ute, publish, perform, or display the work and the right to make derivative works based on the original copyrighted work. • Copyright protection exists as soon as an original work is fixed in a tangible medium of expression. Federal registration is preferred because it provides prima facie evidence of copyright validity, permits filing of an infringement action, and permits an award of statutory damages and attorneys’ fees in an infringement action. 17 U.S.C. §§410(c), 411, 412 (respectively). • It is no longer necessary under the Berne Convention for a copyright notice “©owner/date,” to be applied to a work first published after March 1, 1989. • Copyright protection exists for certain pre-defined periods and cannot be extended or renewed. • Patent protection is limited to “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereon.” An abstract idea or a mere concept is not patentable. Nor are theoretical or abstract discoveries or any nontechnical arts like social science and theoretical mathematics. • Once patent issues, it grants the patent owner the exclusive right to exclude others from making, using, selling, offering to sell, and importing the invention or certain of its components defined by the patent grant. The basic patent term for applications filed on or after June 8, 1995 is 20 years from the filing date of the application. • The Patent Statute limits patentable inventions to those that are “new and useful,” thus creating the requirement of utility. 35. U.S.C. §101. • The ultimate test or key to patentability of an invention is largely reduced to the issue of novelty of the invention. The concept of novelty requires that the invention must be new; that is, different from a prior device or process. The inventor will not be able to patent his or her invention, even if otherwise patentable, if it was described in a printed publication in the United States or a foreign country, or was on sale, offered for sale, or in public use in the United States for more than one year before the date on which the patent application was filed. • Obviousness is based on several factual determinations that include: __ The scope and content of the prior art (i.e., what was known in the field that is directly applicable to the invention); __ The differences between the prior art and the patent claims at issue; and 64 | The Practical Lawyer April 2007

__ The level of ordinary skill in the pertinent art. • The grant of a patent gives the patentee the right to exclude others from making, using, selling, offering for sale and importing the patented invention and certain of its components in the United States for the term of the patent. • A person may obtain a patent on any new, original, non-obvious, and ornamental design for a product (article of manufacture). The critical distinction between design and utility patents is that of ornamentation versus functionality. Whether a design is patentable is determined primarily by its appearance and ornamental qualities. • New varieties of plants may also be subject to patent protection. The primary requirement is that the new plant be “asexually reproducible.” • There is no federal trade secret law, only state trade secrets law. However, many states have accepted the Uniform Trade Secrets Act (“UTSA”), or some variation thereof. (The states not adopting some form of the UTSA are Massachusetts, New Jersey, New York, North Carolina, and Texas.) According to a widely accepted definition, a trade secret includes: “any formula, pattern, device or compilation of information which is used in a person’s business, and which gives the person an opportunity to obtain an advantage over competitors who do not know or use it.” • Trade secret protection lasts for as long as the trade secret is kept “secret” and is not publicly disclosed. One of the best examples of a long-lived trade secret is the “Classic” Coca‑Cola formula, which remains a trade secret today, despite many years of commercial sales and many attempts by Coke’s competitors to reverse engineer the formula.

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