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Should I Register My Copyright?

A creative work receives copyright protection at the time of its creation, without the need to register it (or take any action). But you can register a copyrighted work with the the U.S. Copyright Office. So I often face the question of whether a business should take the time and expense to register a work. The U.S. Copyright Office provides some useful online resources about the advantages of registration. Circular 1, titled “Copyright Basics,” offers a general overview of copyright law and registration.

There are many good reasons and financial rewards for registering your work:

First and foremost, you cannot file a lawsuit for infringement if your work is not registered. You will have to register the copyright before any legal actions can proceed in court. Of course, you can always wait until right before suing to register your work, so this is not a huge advantage.

Second, it establishes a public record of your claim to copyright. By registering your work, you will create a definitive date that no one will be able to question. There are other ways to establish these dates (through metadata for online resources as an example), but a registration is one of the most definitive ways to establish a date.

Third, if you register your copyright within five years of its publication, that registration acts as evidence that you own your copyright and that it is valid.   Note that “publication” generally means distributing copies of your work to the public by selling, renting, lending, etc. This includes distributing copies to a group of people who further distributes the work.

Fourth, if you register your copyright within three months of its publication or before it is infringed, then you may be able to get statutory damages (the damages allowed by statute) and attorneys’ fees if you win your infringement case in court. Statutory damages can be an important tool because proving actual damages can be a difficult task. If you do not register your work until more than three months after its publication and after the infringement starts, you’ll be stuck with actual damages and profits.

Fifth, you get to request the U.S. Customs service to bar imports of infringing copies of your work. This can be an important tool to prevent foreign knockoffs from entering the country.

You can register your copyright at any time during its lifetime, but earlier is generally better. That being said, online entrepreneurs today tend to create tons of copyrighted works. It will not make sense to register all of your copyrights. And for companies with limited resources, taking the time and spending the money to register every work would almost certainly be a mistake. But you should certainly strongly consider registering the copyrights in any books, music, or significant videos that you create.

You should consider your plan for copyright registration as part of developing your overall intellectual property plan.

Trade Secrets

Keeping Your Trade Secrets Secret

Trade secrets are unlike other areas of intellectual property. There is no registration process, no applications to fill out, no government agency that administers them. Trade secrets – or more accurately, maintaining trade secrets – wholly rely upon the holder (i.e., you) taking reasonable steps as part of your business. That is why it is important to understand how to keep trade secrets a secret.

What Are Trade Secrets?

Generally speaking, a trade secret is information that (1) is not generally known to all, (2) has some actual or potential independent commercial value, i.e., there’s commercial value in the information because it is secret, and (3) is protected through reasonable efforts. Because trade secrets do not require registration or any kind of application, they are arguably an inexpensive form of intellectual property. This makes it an attractive form of intellectual property for entrepreneurs or startups that are strapped for cash.

What are “reasonable efforts,” and how much effort is enough?

With trade secrets, the key question is whether you have taken “reasonable efforts” to protect the information. I’m often asked to explain exactly what steps businesses need to take. Unfortunately, I have to give you a lawyer’s answer and say it depends. Like many things, what is reasonable varies on a case-by-case basis. This makes sense because, for example, it is much easier to keep a recipe secret than it is to keep a manufacturing process secret. The key is to understand that courts would analyze your efforts based on company practice, industry practice, and other factors.

One aspect of your trade secret program should be to make confidentiality and/or non-disclosure agreements a routine part of your business. These agreements require those who may have access to your trade secrets to keep that information confidential. You should have these agreements in place with employees and independent contractors (either as part of their overall agreements or as stand alone documents). Every business should also use confidentiality agreements before sharing sensitive information with suppliers, manufacturers, or distributors.

Entrepreneurs often ask me whether they should use “non-compete” agreements for their employees. Although these agreements are another layer of protection that might help protect trade secrets, they are rather dicey. Non-compete agreements are controversial because they limit the ability of former employees to continue to work in their chosen field (or at least in the same industry) for a period of time. Because they restrain people from pursuing their interests, courts tend not to like them. In California, for example, you can have all the non-compete agreements you want, but the courts will refuse to enforce them. Non-compete agreements also have business disadvantages, as they can make it harder for you to recruit the best talent. Before deciding to use non-compete agreements with employees, I strongly urge companies to consult with an employment lawyer.

Outside the realm of contracts, there are other ways to keep your trade secrets secret. One easy way is to limit the people who have access to the information. The Coca-Cola Company limits its secret Coke recipe to only a couple of executives. You can also physically limit people from accessing your information. Kentucky Fried Chicken apparently locks its secret original recipe up in a safe that is buried under feet of concrete. Others make sure that, although their manufacturers produce their needed parts, no one manufacturer knows what the other manufacturers are producing or what end product such parts are being built for.

In the more typical context of a small business or startup, limiting access to confidential information will typically take the form of keeping sensitive information in locked drawers and limiting computer access to those with a need to know. This isn’t rocket science, it’s just a matter of taking some common-sense steps to protect your valuable information.

In addition to the methods above, consider marking your documents as confidential, keeping a log of who has access to the trade secret, setting up a security camera, buying a vault, etc. Again, depending on what type of trade secret you have and what industry you are in, the types of protection that is right for others may not be right for you. Keep in mind how your trade secret might be leaked and try to fill the gaps.

Overall, creating and maintaining safeguards to your company’s trade secrets are important aspects of your intellectual property strategy.  Examine how you are keeping your trade secrets secret during your intellectual property audit and form a trade secret strategy as part of your intellectual property management plan.

Inventions

Six Questions Every Entrepreneur Should Ask Before Filing A Patent Application

Patents are the most talked about intellectual property among the tech and startup communities. Many inventors, entrepreneurs, and businesses aspire to obtain a patent. Even the big banks, traditionally known for using trade secrets, are shifting their attention to patents. All this attention directed to patents is understandable. After all, a patent essentially grants a limited monopoly – it gives you the right to exclude others from making, using, selling, and importing into the U.S. your invention for 20 years.

But in my estimation, entrepreneurs put way too much stock in patents. The patent process could eat up a lot of time, money, and effort, so it is essential to understand the complexities of patents before jumping in. Here are six questions you should ask yourself before filing for a patent.

Is your invention patent-eligible?

You can’t patent laws of nature, physical phenomena, or abstract ideas. Although this limitations might seem simple enough, it is actually pretty darn complicated. The courts have been trying to work this issue out for the past seven or so years without too much clarity. Your best best in trying to understand this complicated question is to discuss it with an intellectual property attorney.

If your invention is patent-eligible, do you really need a patent?

Depending on your invention, your resources, and what benefits you want from your invention, trade secrets might be an alternative option. You can learn more about the pros and cons of each form of protection in my prior post about the differences between patents and trade secrets. In many cases, getting a patent will be an expensive and difficult process. You have to make sure the juice is worth the squeeze.

If you do need a patent, which type of patent should you get?

There are various patents, the most common being utility patents. Utility patents cover an invention’s structure and function – how something works or how something is performed. Unlike utility patents, design patents cover the appearance of an item. Think of Apple v. Samsung, which involves Apple’s design patents for its iPhone. Plant patents are less common and covers new and distinct varieties of plants.

Is there already a patent out there covering your invention?

A prior art search will help you find out whether someone else already has the idea patented. This can be a somewhat difficult task for entrepreneurs to complete without help, but an intellectual property attorney can hire companies (relatively cheaply) to run a search to find out if there is “prior art” that is likely to block you from obtaining a patent.

Do you know how to apply for a patent?

There are provisional patent applications, which do not grant a patent itself but can establish a “priority date” – or placeholder – for your subsequent, non-provisional application.  A non-provisional patent application begins the legal process in obtaining your patent. You can learn more about the process for obtaining a patent by reviewing our discussion of Patent Basics.

What plans do you have after obtaining a patent?

I’m guessing you probably think that getting a patent is a recipe for success.  Most inventors (and entrepreneurs) believe that patents are exceptionally valuable. The fact is that most patents aren’t valuable at all.  In fact, by some estimates, 97% of patents never make any money.

Before you go through the patent process, you should be thinking about how you will try to money with your patent.  For example, do you want to license your patent to obtain royalties?  Do you want to enforce your patent rights in court?  Do you know the risks and advantages involved?

Conclusion

Getting a patent for an invention is a long, expensive process.  Have a plan before jumping into the patent process. My suggestion is always to consult with an intellectual property attorney other than the person who will actually file your patent application to get an honest assessment of whether it is worth the cost.

Every Business Needs An Intellectual Property Audit

What is an intellectual property audit (“IP audit”), and why do you need one? Well, before you can protect something, you have to understand what you are protecting and how to protect it. An IP audit helps you understand your company’s IP and any IP-related issues and set forth a framework on protecting your IP.

Why Every Business Needs An Intellectual Property Audit

From building a product to building a brand name, your company is likely creating a slew of potential IP that can be a great asset to your business. There are four primary areas of IP: patents, copyrights, trademarks, and trade secrets. An IP audit will help identify which areas your creations fall into and what systems and procedures you will need to put in place to make sure that you have adequate protection.

IP protection involves more than just applying for a patent or registered copyright or trademark. Think about all the people that are in contact with your IP – from co-founders, employees, and contractors to third-party manufacturers and distributors. The IP audit will necessarily involve looking at license agreements, employment agreements, database access, publications, etc., that involve your products, services, or brand name.

The 5 Parts Of An Intellectual Property Audit

There are five parts to an IP audit: (1) identifying existing procedures in protecting your IP, (2) identifying relevant personnel involved in your IP, (3) assessing your written agreements, (4) assessing your IP portfolio, and (5) assessing your risk-avoidance practices.

First, consider what procedures or systems you have in place to protect your IP.   Do you have a system to identify innovations or creations within your company? Do you have a way to obtain legal protection for your IP? Do you have employees signing confidentiality agreements? These are just some questions to ask in determining whether you have systems and procedures in place for IP protection. Note that systems and procedures may vary from company to company based on the company’s needs.

Second, identify the people involved in your IP. Think of those in your marketing arm or development team. Make sure they understand that what they are creating may be proprietary. For example, if you have a secret recipe, make sure that access to that recipe is limited to only essential personnel and that those people understand that they have to safeguard it. Clear communication is key.

Third, do you have any written agreements with employees or contractors regarding protecting your IP? Think of confidentiality agreements and non-compete clauses. Confidentiality (or non-disclosure) agreements prohibit unauthorized disclosure of information. Non-compete clauses – which are enforceable in only certain states – limit a former employee’s scope of employment either by industry, geography, etc., for a certain amount of time. There are also assignment clauses, which allow you to obtain legal rights in the IP that your employees are creating. In other words, employees agree to assign (or transfer) their IP rights to your company.

Fourth, assess your IP portfolio. Take inventory of all the intangible assets of your business and determine what areas of IP your assets may fall into. Then, assess how they are currently being protected. Have you filed applications for trademark or copyright registration? Do you have patentable assets that you want patented? Are you using reasonable efforts to keep your trade secrets secret?

Finally, assess your risks. Although protecting your IP from infringement by others is very important, making sure that you have systems in place to avoid infringing others’ IP is equally important. The last thing you want while running your business is a complaint served on you alleging IP infringement. In the patent area, have a patent attorney conduct a prior art search and analyze competitors’ patent portfolios to determine whether there are any concerns of patent infringement. For trademarks, list down all of the important trade names you are using and conduct a search on the Patent and Trademark Office database to determine any potential infringement. For copyright, assess the photos, music, videos, and other expressive works that you’re using and make sure that you have the necessary licenses. For trade secrets, make sure that new employees aren’t bringing in any confidential information from their former employers. These are just a list of examples that illustrate preventative measures you can take to minimize the risk of infringing others’ IP.

Learn More

Overall, you should make an intellectual property audit a major priority within your company. With regular audits, you’ll be able to identify your company’s strengths and weaknesses when it comes to IP and create solutions to mitigate risks that make you vulnerable to IP infringement. If you would like to learn more, you can download a free copy of The Entrepreneur’s IP Planning Playbook.

Dressed For Success – How to Use Trade Dress To Protect Your Brand

We’ve written quite a bit about trademarks, which generally involve words, names, or symbols on your product, but what about the packaging or total look of your product?  Can how you present your product be protected under intellectual property laws as well?  Yes, it can.

Trade dress law protects your product’s overall image and appearance.  This includes the product’s packaging, presentation, and shape and design – hence the “dress.”  Think about a bottled beverage you last purchased at a store:  its size, shape, color, texture, and graphics are features that may be protected.   The shape of a Coca-Cola bottle is a popular (and successful) example of trade dress.  Looking merely at the bottle’s shape, a consumer can identify that that product is from the Coca-Cola Company.

This area of intellectual property law serves the same purpose as a trademark in that it distinguishes your product from others (i.e., prevents the likelihood of consumer confusion).  It tells consumers the source or origin of the product.   Like a trademark, trade dress must be distinctive.  It has to identify the product’s particular source.  Check out our blog post Trademark Basics For Entrepreneurs and Small Businesses for a refresher on categories of distinctiveness.

In addition to being distinctive, trade dress must also be non-functional.  In other words, the feature must not be essential to the product’s use or purpose or affect its cost or quality.  After all, like a trademark, trade dress is not intended to protect functionality (patents) or expression (copyrights) – it is to protect consumers and legitimate competition.

You can apply registration with the U.S. Patent and Trademark Office (“PTO”).  The process is similar to that for trademarks.   There is a Principal Register for strong trade dress (those that are inherently distinctive or have secondary meaning) and a Supplemental Register for weaker ones.  The examining attorney will determine whether your proposed trade dress is distinctive and non-functional.  The attorney can refuse to register your trade dress on either or both grounds, although refusal usually is based on the latter.

Under the federal Lanham Act, a registered trade dress comes with significant legal benefits such as those that come with a registered trademark.  Remedies include monetary relief (e.g., damages the owner experienced given the infringement, the accused party’s profits based on the infringement, the cost of the lawsuit, attorney’s fees) and equitable relief (e.g., an injunction to have the accused stop using its infringing design).

Just like trademarks, trade dress can be a vital tool for your business especially when first starting out.  Make sure to consider this form of protection in your intellectual property management plan.  The earlier you plan on creating a distinctive and non-functional trade dress, whether in the form of product packaging or product design, the earlier you can start obtaining exposure for your product and gaining consumer recognition.

Copyright Isn’t Just For Authors And Performers

Many people think of copyright law as only being relevant to authors an performers.  Those people would be wrong. You don’t have to be a singer, a writer, or a singer-song writer to have copyrightable assets. Every company and individual may be creating work that is eligible for copyright protection. As a startup company, understanding what can be protected under copyright protection is important to your business. It will help you prevent infringement of your work and avoid infringement of others’ works.

What Does Copyright Protect?

A copyright protects only original works of authorship fixed in any tangible medium of expression.  In other words, the work must be distinguishable from those that came before it and be sufficiently stable or permanent in form to be perceived, reproduced, or otherwise communicated.  There are generally three requirements for a work to be original:  (1) independent creation, (2) expressive contribution, and (3) modicum of creativity.  In plain English, the work has to be independently created; the choices in making the work cannot be limited by functional purposes; and the work cannot be a copy from someone else.

Under federal law, original work can take many forms, including literature, music (including words), dramas (including music), pantomimes and choreography, pictures, graphics, sculptures, movies, audiovisual works, sound recordings, and architecture.

What Does Copyright Not Protect?

However, copyright law does not protect facts; it does not protect function; it does not protect something that has only one or very few ways of expression.  This is because copyright is intended to protect the expressive arts.  It does not protect ideas, procedures, processes, systems, methods of operation, concepts, principles, or discoveries, regardless of how it is described, explained, illustrated, or embodied in an original work.

For example, consider your grandma’s recipes or the recipes of your “foodie” friend.  If those recipes are merely lists of ingredients, they are not protected by copyright.  This is because such recipes are functional – they describe procedures for making food.  Now, if those recipes are in a book, that book as a whole is copyrightable because it is an expressive original work that is fixed to a tangible medium (a book).

How Might Copyright Be Relevant For Your Business?

The discussion above should demonstrate that you are probably creating quite a bit of information that is protected by copyright law in your business. Most business are creating graphics and also potentially creative written works (e.g., books, pamphlets, etc.). Beyond the obvious examples, one example is computer software.  Computer software is highly functional but may involve some copyrightable expressions. That is one reason why you see tech companies in the news suing on patent infringement and copyright infringement of software.

As this discussion demonstrates, businesses need to have a general understanding of intellectual property law so that you can better assess the avenues you can take in protecting your company’s interests.

Copyright is not just for those in entertainment. Copyright law offers protection for a multitude of works that your company may be creating. In your intellectual property audit, make sure that you identify what types of works your company is creating, assess whether the works are copyrightable, and determine whether you want to seek copyright protection for them.

Trademark

The Value Of An Incontestable Trademark

Let’s say that you have a trademark that has been registered on the U.S. Patent and Trademark Office’s (“PTO”) Principal Register and that you have used your mark for a consecutive 5 years after registration without anyone successfully challenging your trademark. Your mark may then be declared “incontestable,” which is a significant asset to your business. (For more information on trademark registration, check out Trademark Basics in our Entrepreneur’s Intellectual Property Academy.)

“Incontestability” is a term of art and comes with significant benefits.   The Lanham Act, the federal law governing trademarks, states that registration of an incontestable trademark provides conclusive evidence of:

  • The validity of the registered trademark;
  • The validity of the registration of the trademark;
  • The trademark holder’s ownership of the trademark; and
  • The trademark holder’s exclusive right to use the trademark in business.

After obtaining incontestable status, a trademark is immune from many legal challenges, being subject to only a limited number of defenses involving abandonment, functionality, fraud, and illegally.

So how do you seek incontestable status? First, make sure that you meet the requirements for incontestability: (1) Registration of your trademark on the Principal Register, (2) Continuous use of your mark in commerce for 5 years after the date of registration, and (3) Your mark is still in use.

Second, file a “Declaration of Incontestability of a Mark under Section 15” with the PTO. You can file a declaration to claim incontestability within one year after the 5-year period of continuous use. The form is available via the PTO’s Trademark Electronic Application System: https://teas.uspto.gov/postreg/sect15/.

You will need your registration number, date of registration, and background information as to your mark. You will need to declare that (1) there has been no successful challenge to your ownership of your trademark or to your right to register the mark, (2) there is no proceeding involving your trademark rights in court or before the PTO, and (3) you have been using your mark for a consecutive 5 years after the date of registration and are still using your mark. You will also need to pay a filing fee. If there are any problems with your declaration, the PTO will notify you in writing to which you must respond within the required time to avoid abandoning your declaration.

After submitting the signed declaration to the PTO, the PTO will update its record to acknowledge receipt of your declaration and send you a notice of acknowledgement, thereby providing notice to the public of your incontestability declaration. Note that the PTO’s record of your declaration doesn’t conclusively prove that your mark is incontestable – that issue will be determined if you’re in court because of your trademark.

Your trademark is a very important aspect of your business. And, if your trademark is eligible for incontestability, consider filing a declaration to strengthen your mark and minimize legal challenges down the road.

Trademark

Trademark Basics For Entrepreneurs And Small Businesses

Intellectual Property (“IP”) law doesn’t just cover innovative works. It also protects a business’s marketing efforts. Many small businesses or entrepreneurs focus on obtaining protection for their actual product – which is important – but they forget to also take advantage of the available protections for their brand.

Depending on your future plans for your business, obtaining a trademark may be a good avenue to protect your efforts. This is especially true if you aspire to have a regional or national presence. You would want your name to be known and protected so that consumers can distinguish between your business and a “knock-off” one.

Like any IP protection, planning for trademark protection should start early. This is especially true for trademarks because the strength of your trademark depends on consumer perception – and that necessarily requires building rapport with consumers. After all, how will someone understand that a certain mark is your company’s if he or she hasn’t seen it?

What Is A Trademark?

Essentially, a trademark is a mark used to indicate the source of goods. The purpose of a trademark is to prevent the likelihood of consumer confusion. The mark provides information about the specific good based on the business’s association with that mark. For example, if you wanted a cup of coffee and saw a shop with a particular green logo (i.e., Starbucks), that logo would likely trigger certain information about the company and the product based on the business’s association with that particular mark. You then have certain expectations based on your knowledge. Triggered by the mark, that relationship between the consumer and the business is key.

A trademark can be in the form of words, names, symbols, or devices that an entity uses or intends to use to distinguish its goods from others. Although the most common form is verbal, a trademark can also be a shape, sound, color, or even scent. Just recently, toy company Hasbro registered for a trademark on the scent of Play-Doh. The law on non-verbal or non-graphic trademarks is not as developed as that for the common forms, but companies are always pushing the envelope to get protection.

The Different Kinds Of Trademarks

When deciding on trademark protection, understand that there are different categories of trademarks and each category vary in terms of protection.

A generic mark receives no protection because it does not identify the source of goods or distinguish the goods from others.   Such a mark would include a genus, a natural reference, or a class of products. Think of goods that you refer to with a particular name regardless of the company that makes it. For example, back in the day, Xerox launched a massive advertising campaign to teach consumers that Xerox was not a verb but a particular company machine. Consumers were using the word “Xerox” regardless of what machine they were using. This was risky for Xerox because that meant consumers were no longer identifying “Xerox” with the company, but rather just using it as a generic word.

A descriptive mark, which describes a product or service, grants better protection. Similar to a generic mark, it can refer to broad classes of things and thus may not be helpful in distinguishing a good/service from others. However, if consumers view the mark as having a secondary meaning, then the descriptive mark may obtain legal protection. This is a big reason why, as a small business, you may want your marketing efforts from the outset to tie your mark to your company.

A suggestive mark does not describe the good or service being sold but suggests a characteristic or quality of the product with the help of the consumer’s imagination. Thus, a suggestive mark is “inherently distinctive” and receives relatively strong trademark protection relative to a descriptive mark.

A fanciful or arbitrary mark is unrelated to the good or service being sold and so receives the strongest trademark protection. The mark may not make sense, may be made up, or may be an established word that is entirely unrelated to the good/service being offered (e.g., Apple).

Like other IP, trademark is governed by specific laws. They are protected under common law, state law, and federal law. You can obtain trademark protection through different avenues including being the first to use your trademark and registering your trademark on the state or federal level. However, it is important to note that there are certain requirements to obtain protection. Thus, early planning for trademark protection is important. Include trademarks in your IP management plan and speak to an IP attorney to see what trademark protection best fits your business’s needs.

Protecting Trade Secrets

Four Basic Steps To Protect Your Trade Secrets

Trade secret protection offers a powerful tool for businesses and entrepreneurs to use to protect their valuable, confidential commercial information. There is no filing process, and you don’t need the approval of any government entity to protect these rights. These rights arise automatically. But there is a catch: your trade secrets are protected only if you take reasonable steps to ensure that they remain confidential.

What you need to do to demonstrate that you have taken reasonable steps is not always clear and will likely vary depending on how valuable the asset is. Here are some sensible steps (with the help of some fun movie quotes) that you should take to preserve your trade secrets.

“You Better Lock It Up” – Wedding Crashers

One of the most obvious steps you need to take is to take reasonable steps to lock up physical copies of the trade secret. One easy step to take is to store any physical copies of all your trade secrets in a single file cabinet that you keep locked. Ideally, that cabinet would then be within an office that is only accessible to a limited number of people.

There is simply no reason to keep any physical copies of trade secrets out in the open except when you are actively using these documents or other items. Regardless of whether this will result in you losing your legal protection, leaving these documents out and available for prying eyes increases that chances that you might have to incur the cost of a legal proceeding to enforce your trade secrets.

“My Voice Is My Passport, Verify Me” – Sneakers

I’m perpetually amazed that people in this day and age have computers, smart phones, and tablets that are not password protected. If your computer, tablet, or phone is not password protected, you should stop reading this right now and set up passwords. Seriously, this post will still be here once you are done.

Beyond using passwords to protect your devise, use passwords to limit access to online services and any external storage devices. If your computer is protected, but you have an unencrypted flash drive sitting around with the information on it, you haven’t achieved much.

Although it should go without saying, don’t have your passwords written down on a piece of paper sitting on your desk. With the ballooning use of online services and passwords, it can be hard to keep track, so I certainly understand the need to keep a record of your passwords somewhere. But why not keep them in a document on your computer that is protected by an ultra-strong password that you use only to protect that file.

“You’re On A Need To Know Basis, And You Don’t Need To Know” – The Rock

As an entrepreneur, you are probably pretty good at segmenting your audience, prospects, and leads to make sure they get the right information. You need to take a similar approach with who has access to your trade secrets. You should create buckets for your trade secrets and only let the people who need to know the particular trade secret have access to the information.

Your sales team likely does not need to know the secret sauce of your products or services. Similarly, your product development team does not need to know your sales-related trade secrets (including lists of sales leads).

“Non-Disclosure Agreement. Aren’t You Gonna Read It?” – Spy Game

Anyone who gets access to your trade secrets should sign an agreement that includes a non-disclosure clause before they get access to the information.

Your company should have written agreements with all employees and independent contractors that include non-disclosure agreements. Using written agreements with employees and contractors has a number of other advantages, including defining who owns any creative works or innovations and ensuring they can’t claim an ownership interest in your business. But one of the primary advantages of written agreements with employees is the ability to limit their ability to share confidential information.

Your company should also use non-disclosure agreements with any third party who will be given access to confidential information. As an example, if you run an SEO company, you should not share any of your “secret” approach with a potential client, until there is a non-disclosure agreement in place. These types of non-disclosure agreements are commonplace in the marketplace, and your company should employ them consistently.

Conclusion

By taking reasonable steps to protect your confidential information, you can ensure that your trade secrets remain protected. Your intellectual property attorney can help you decide and implement the proper steps to keep your trade secret a secret and out of the public domain.

Intellectual Property Infringement

Intellectual Property Infringement

So you’ve perfected your intellectual property rights by taking all the right steps involved in intellectual property planning. Now what? If your intellectual property ends up having value for the market, there is a good chance you will discover that someone else is using your idea, innovation, or creative work. This is intellectual property infringement.

What is Infringement?

Intellectual property infringement is the unauthorized sale, duplication, or use of products or materials that are protected intellectual property. Infringement is defined by Federal and State law, depending on the intellectual property right at issue. Patents and copyrights are protected by Federal law, so infringement is defined by those same laws. Generally, these statutes define infringement as the unauthorized making, using, or selling of the protected intellectual property (or a copy of a copyrighted work).

Trademark rights and trade secrets have both state law protection (referred to as common law protection) and protection under Federal laws. As a result of their hybrid nature, infringement can be defined by both state and federal law. The Federal laws apply the same in every state, while the state law protections can vary somewhat between states.

Remedies For Infringement

A intellectual property owner may will generally have the right to bring a civil lawsuit against someone who is infringing. Because there are Federal laws that protect each form of intellectual property, most intellectual property infringement cases are handled in federal court. Infringers can face multiple penalties that serve a variety of purposes.

Payment of damages to the intellectual property owner. The most common remedy for intellectual property infringement is an award of damages to the plaintiff. A money judgment is generally intended to compensate the intellectual property owner for the damage they have suffered in the form of lost sales, lost claims, or a loss to its reputation.

Enhanced damages to punish the infringer. In some instances, a court can impose damages that are beyond the damage suffered by the intellectual property owner. These enhanced damages are mean to serve as a punishment for the party that has infringed. These enhanced damages are not common, as they are intended to punish entities that have engaged in particularly bad conduct.

Payment of attorney fees and costs. In some instances, a court will require the infringing party to pay the costs incurred by the intellectual property owner in brining and litigating the case. Under the Patent Act, for example, a judge can require the losing party to pay attorney fees in an “exceptional case.” As with enhanced damages, these awards are not the normal practice, but they can provide an additional penalty.

An injunction that prevents further infringement. In some cases, the intellectual property owner will be able to obtain an order to require the infringing party to stop using or selling the protected intellectual property right. These types of orders are least common in the case of patents, as courts have generally decided that the better course is to require infringers to pay ongoing royalty payments to the owners.

Destruction of the protected material. In some cases, courts will order the infringer to destroy the protected material. An obvious example of this is in the trade secret case. If an infringer is unlawfully using a protected trade secret, one of the common remedies is to force the infringing party to destroy the protected material (e.g., the customer list).

In some instances, IP theft cases that can result in criminal charges. The Economic Espionage Act of 1996 considers certain types of trade secret theft a federal crime. Similarly, many states treat the “theft” of a trade secret as a crime under state law. Counterfeiting and piracy are criminal acts. They can be reported to the FBI’s Internet Crime Complaint Center when the products are sold online. When the products are imported from outside the country, the U.S. Customs and Border Patrol or the National Intellectual Property Rights Coordination Center can be contacted.

Examples of Infringement In The News

Infringement cases are rarely front-page news, but they sometimes end up breaking through the clutter. A few years ago, Disney sent Florida daycare centers Cease and Desist letters, when these establishments painted their walls with images of Mickey Mouse, Minnie Mouse, and Goofy Dog. There is no question that these characters are protected Disney trademarks. Disney sent these cease and desist letters to request that the daycare centers stop infringing the trademarks. Cease and desist letters can be the beginning stages of an upcoming lawsuit.

Another famous infringement case involved A & M Records and Napster a few years ago. Napster was a website that allowed users to exchange and download copyrighted songs. A & M records accused Napster of stealing music and making it available. They filed a copyright infringement against Napster, who in the end had to pay millions to recording companies and music artists.

Conclusion

Infringement lawsuits are complicated and can be expensive and time consuming. At Klinck LLC, we work with clients to handle intellectual property infringement cases efficiently and cost-effectively. If you’d like more information, you can set up a consultation with Robert Klinck.

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