BASICS OF INTELLECTUAL PROPERTY 2013 Spring Client Seminar Presented by: Don Kelly, Member Evans & Dixon LLC 211 North Broadway, Suite 2500 St. Louis, Missouri 63102 314-621-7755; 314-621-3136 Fax www.evans-dixon.com The Basics of Intellectual Property 1. Categories of Intellectual Property a. Trademarks; b. Copyrights; c. Trade Secrets; d. Patents; and e. Celebrity Rights? 2. Patents a. A patent is an exclusionary property right; a patent owner has the right to exclude others from making, using, selling, offering to sell or importing a product covered by the invention. b. So having a patent prevents someone from making, using, selling, offering to sell or importing into the US you invention? i. Wrong! c. What does a patent do? i. Nothing! Having a patent by itself will not stop anyone from practicing the covered invention. ii. The owner’s right to practice the invention does not give the owner the right to make, use or sell the invention. 1. How can this be? d. Sources of patent rights i. United States Constitution; ii. 35 U.S.C. §§1-376; iii. Regulations of the United States Patent & Trademark Office (USPTO); iv. Manual of Patent Examination Procedure (MPEP); and v. Court Decisions. 3. Types of Patents a. Design Patents b. Plant Patents c. Utility Patents i. 35 U.S.C. §101 ii. Processes; iii. Machines; iv. Manufacturers; and v. Composition of matter. 4. Requirements for obtaining a patent a. Novel; i. No patent if: 1. Invention was known or used by others in this country 2. Or patented or described in a printed publication in this or foreign country; 3. Before invention by applicant 4. The invention is patented or described in printed publication in U.S. or foreign country 5. Or is in public use or on sale in this country 6. More than one year prior 7. Date of the application. 8. (Also known as a “statutory bar.”) Does not matter if you can show prior invention. b. Useful; and c. Non-obvious in light of prior art. i. 35 U.S.C. § 103(a) 1. An invention may be obvious in view of a single prior art reference or in view of a combination of those references. 5. How Patents Interrelate with other forms of intellectual property a. Design Patents → Trade Dress b. Trade Secrets → Patents c. Patents kill Trade Secrets 6. Ownership of Patent Rights a. Barring an agreement to the contrary, it is the inventors that own the patent b. Any of the joint owners may make, use, offer to sell, or sell the patented invention without the consent of and without accounting to the other owners. 7. Public Disclosure and Patent Rights a. US Patents Application - must be filed within one year of disclosure b. Foreign Patent Application - must be filed prior to publication 8. Patent Application Process a. Conceive → Prototype/Test? → Search Prior Art? → b. Prepare and File Application → Wait → Receive Office Action → Respond to office Action → c. Receive Final Office Action → Respond/Appeal/File Continuation Application 9. Trademarks a. Definition of a trademark: any word, letter, symbol or design, or combination thereof, which identifies and distinguishes the source of the goods of one entity from those of another entity. b. Types of Trademarks i. Word: Nestle, Busch, Oracle, Marlboro, Nabisco, McDonald’s; ii. Word and Design; iii. Symbol; iv. Slogan 1. Don’t leave home without it; 2. Just do it; 3. Be all that you can be; 4. Think outside the bun. c. Trademarks and Service Marks i. Trademarks serve to distinguish goods ii. Service marks serve to distinguish services 1. Not always conceptually clear e.g. McDonald’s golden arches is a design service mark for restaurant services 2. Trademarks and service marks are often generically referred to as marks or trademarks. d. Non-traditional Trademark i. Trade dress: the overall appearance of a product or its packaging 1. Packaging wrappers or containers 2. Design or shape of product ii. Elements: size, shape, color, color combinations, texture, graphics, sales techniques, theme of a restaurant e. Trade Dress i. Must: 1. Serve as a source indicator ii. Be non-functional (cannot affect cost, quality or ability to effectively compete in a non-reputational way) – Ex. Clear oil bottles iii. Features described in patents – functional f. Trademark rights can also attach to product/packaging design or configuration g. Non-traditional Trademarks i. Sound ii. Color iii. Fragrance iv. Design of a business establishment h. Other kinds of marks i. Collective marks are used in commerce by members of an association or organization to indicate affiliation or membership. ii. Certification marks are used in commerce by a party other than the owner (but with the owner’s permission) to certify a quality of a good or service. E.g., U,L., Good Housekeeping, union labels. 10. Functions of a Trademark a. Indicates source or origin of goods or services; b. Assures consumers of the quality of goods bearing the mark; and c. Creates business goodwill and brand awareness. 11. Trademark vs. Trade Name a. Trade name: identifies a company or business; for example, Kraft b. Trademark: identifies the goods or services of that company c. Selecting a trade name or trademark A critical decision for: i. New businesses and their lenders; and ii. Existing businesses d. It’s all about i. Reducing risk ii. Protecting good will/customer relationships iii. Finding and preserving business value e. Be aware: i. Trade names can infringe upon other similar trade names ii. Trade names can infringe upon similar marks iii. Marks can infringe upon similar trade names iv. Domain names can infringe trade names and trademarks f. Process of Selecting a Trade Name or Trademark i. Just because the secretary of state's office advises that a corporate name is available, that does NOT mean that the same name is available as a trademark or service mark. ii. In fact, in Missouri, more than one company can use the same fictitious name. iii. New businesses are fragile 1. Cannot afford to engage in trademark disputes- even when they are right. 2. It is expensive to change advertising, signs, letterhead, etc. 3. It is costly to lose good will or overcome confusion among customers due change of name. 4. Consider insurance covering IP 12. Process of Selecting a Trademark a. Brainstorming b. Registrability c. Availability d. Registration i. First area of concern: Strength of mark (Initial Protectability) ii. Second area of concern: Registrability or right to use 13. Mark Strength a. Not all marks are created equal. b. Some marks are considered stronger than others based upon uniqueness. c. Some marks are considered weaker because they merely describe the relevant goods or services. d. The weaker the mark, the more likely others will also be allowed to use the mark or portions of it i. Strengths of Marks 1. Generic 2. Descriptive 3. Suggestive 4. Arbitrary 5. Fanciful ii. Descriptive vs. Suggestive 1. Suggestive marks are automatically protectable and registrable. 2. Descriptive marks may be protected and registered only upon a showing of secondary meaning. iii. Mark Strength 1. Highest level of protection is for “fanciful” aka “coined” or “inherently distinctive” 2. Surnames/Descriptive marks/Geographically descriptive marks – may acquire distinctiveness over time. 3. Geographically misdescriptive – not registrable iv. Generic Marks – never protectable e. Mark Strength and the Internet i. Choosing a domain name: ii. Protectability v. Search Engine Optimization iii. A domain name by itself is merely an address iv. Domain name may become a trademark - the PTO does not easily grant registrations for domain names 14. Selecting an Appropriate Trademark a. Two Common Errors i. Selecting weak marks for adoption and use ii. Failing to “clear” marks for adoption and use 15. Right to Use/Registrability a. Trademark Searches – a way to find out what’s out there i. Goal is to reduce risk of having to lose or change mark later ii. The search firm cost of a search is inexpensive ~ $775/ with a design $1,500 iii. Searches can be done quickly 1-3 days. iv. Attorneys’ fees for reviewing a search: v. ~ $500 -$1,000. vi. If client wants written opinion as to availability or non-availability of mark, then cost will run from low thousands on up. vii. The overall costs are peanuts in comparison to a dispute of costs to change signs, labels, letterhead, etc. b. International screening search c. Country-specific search i. Trademark registers (federal and state) ii. Common-law uses iii. Internet, domain names iv. Corporate name d. Trademark Availability i. A trademark is not available if: 1. The mark or a confusingly similar mark is already federally registered or is the subject of a pending federal registration (assuming that the application is ultimately accepted); or 2. The mark or a confusingly similar mark is already being used in the same market in connection with similar goods or services. 16. How are Trademark Rights Obtained? a. In the US rights to a mark are obtained either: i. By use; and ii. Enhanced by registration. 17. Protection of Trademarks a. Trademarks are subject to both state and federal law i. Compare to other types of intellectual property b. Common Law i. Bound by the geographic area in which the product or service is marketed. ii. Can have two or more entities using same mark! iii. Internet vs. geographic boundaries (increased chance of TM dispute) iv. Protection generally begins only after the product or service is actually available for sale on the market. v. Rights can be lost after deciding on a mark and before bringing a product to market if someone begins commercial sales first.