November 2006

YOU DON’T HAVE TO BE INTELLECTUAL TO UNDERSTAND INTELLECTUAL PROPERTY:  AN INTRODUCTION TO FIVE BASIC IP PRINCIPLES.

Jennifer Craft, Esq.

A highly regarded attorney once told me that he considered intellectual property to be a “black hole” that should be avoided at all cost, lest you get sucked in.  There’s a part of me that would like for everyone to think this way in order to maintain my intellectual façade, but with Paris Hilton declaring herself a brand and J.Lo touting herself as the greatest brander in entertainment, I suppose the cat is out of the bag – you don’t have to be intellectual to understand intellectual property. All you need is a solid grasp of a few basic principles.

1. WHAT’S THE DIFFERENCE BETWEEN A MARK, A COPYRIGHT AND A PATENT?

I was recently asked by a new client to “patent his logo.”  After all the synapses in my brain fired in unison, I realized that this client was in for a rude awakening – all that he thought he knew about IP, he didn’t, and I had to be the one to tell him.

Mark Defined:
A mark is a word, name, symbol, or device, or any combination thereof that is used (or which a person or entity has a bona fide intent to use) in commerce to identify and distinguish a person's goods and/or services from those manufactured or sold by others and to indicate the source of the goods and/or services. 15 U.S.C. §1127. Translation: a mark is a logo, brand name, or catch phrase used to differentiate your products or services from others and to designate source. If the mark is used in association with products or goods (for example, apparel, food and beverage or toys), the mark is a trademark. If the mark is used in association with services (for example, retail store services, customer service, or consultation services), the mark is a service mark. For example, the mark NIKE as placed on the hanging tag of a shirt sold at a sporting goods store is a trademark. The mark NIKETOWN as placed on store signage, advertising retail store services, is a service mark.

Copyright Defined:
A copyright is essentially a bundle of rights – the rights to reproduce, distribute copies, display, perform, and prepare derivative works. 17 U.S.C. §106. A work that can be the subject matter of a copyright is an original work of authorship fixed in any tangible medium of expression now known or later developed from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. 17 U.S.C. §102. Simply put, expressions of an idea are copyrightable. Examples include: literary, musical, dramatic, choreographic, pictorial, graphic, sculptural, audiovisual, architectural works and sound recordings. In contrast and as more fully discussed below, the underlying idea itself is not copyrightable. But, it is potentially patentable. For example, a computer program’s literal expression, such as website content or underlying source code, is potentially copyrightable. However, a computer program’s novel, non-obvious and useful approach to solving a particular problem is potentially patentable.

Other examples of copyrightable subject matter include manuscripts, blueprints, and photographs.

Patent Defined:
Typically, when people refer to a patent, they are referring to a utility patent. A utility patent is an issuance by the United States Patent and Trademark Office (USPTO) of any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof that enables the holder to exclude others from making, using, offering for sale or selling the subject matter of the issuance. 35 U.S.C. §101. In layman’s terms, issued patents protect your inventions or, as stated above, your ideas, so long as such inventions, ideas and the like are: (a) novel, (b) non-obvious and (c) useful. 35 U.S.C. §§101, 102 and 103.

While usefulness may be self-explanatory, novelty and non-obviousness may not be. Generally speaking “novelty” means new or at least different from any “prior art,” i.e., any prior description or embodiment of the claimed subject matter.  Additionally, even if your invention or idea is different from any prior art, it can still flunk the novelty test if you (or someone else) used, sold, offered for sale or published certain information with respect to your invention or idea more than one year from the filing of your patent application. “Non-obviousness” basically means that a person having ordinary skill in the art would not know how to solve the problem or produce the desired effect at which the invention, idea or the like is directed by using exactly the same mechanism.

Some examples of potentially patentable subject matter are: business processes, the chemical make-up of a pill that cures cancer, a machine that makes time travel possible, or a cyborg that could use that machine to travel back into time…well you get the idea.

The USPTO issues other types of patents, such as design patents. A design patent is an issuance by the USPTO of any new, original and ornamental design for an article of manufacture that enables the holder to exclude others from making, using, offering for sale or selling the subject matter of the issuance. 35 U.S.C. §171. Generally speaking, a utility patent encompasses the functional aspects of the claimed subject matter. On the other hand, a design patent encompasses the aesthetic or ornamental aspects. For example, your idea for a new type of bottle cap fastener can potentially be the subject matter of a utility patent, but the shape of the bottle itself can potentially be the subject matter of a design patent.

Overlap Between Marks, Copyrights and Patents:
A common error is to regard the above forms of intellectual property as mutually exclusive.  To the contrary, some things can be simultaneously protected under mark, copyright and patent law.  Accordingly, you have various options with respect to filing mark, copyright and/or patent application(s) with respect to the same subject matter. For instance, the shape of a bottle can potentially: (a) function as a mark or indicia of source differentiating the contents of your bottle from others, (b) be the subject matter of a copyright, and/or (c) be the subject matter of a design patent. There are numerous pros and cons with respect to filing one type of application over another or filing all three types of applications (if possible). For instance, a mark registration can potentially last forever, whereas both copyrights and patents have limited terms, as more fully discussed below. Because the standards for establishing a mark, copyright and patent infringement claim are all different, it may behoove you to explore multiple forms of protection. Needless to say, there are numerous factors that should be carefully considered.  Unfortunately, this article is published in a magazine as opposed to the five-pound treatise that would be required to fully explore this issue.  The important thing is that you understand that these issues exist so that you can spot the red flags as they pop up.

2. DO I HAVE TO OBTAIN A MARK OR COPYRIGHT REGISTRATION, OR BE ISSUED A PATENT IN ORDER TO OWN A MARK, COPYRIGHT OR PATENT?

The short answer is no with respect to marks and copyrights, but yes with respect to patents.

No Need to Register a Mark to Own a Mark:
Generally speaking, you own certain mark rights the moment you use the mark if that mark is not likely to be confused with any other mark, whose use predates yours. I say “certain mark rights,” because ownership of a mark is limited to the scope of goods/services that are being offered under the mark. For example, while Mitsubishi may own the mark MIRAGE in association with automobiles, the MGM owns the same mark MIRAGE in association with casino services.

If a mark is left unregistered, however, your rights may be limited not only with respect to the scope of goods/services, but also with respect to ownership rights geographically. For instance, if you are using the mark XYZ in association with legal services in Nevada and have decided not to file any mark applications, your scope of protection, generally speaking, is limited to such legal services within a certain geographical area in the state of Nevada and a reasonable expansion thereof. Accordingly, if another person decided to use the mark XYZ in association with legal services in New York, even though she started using the mark XYZ after you, she would arguably be permitted to do so because your ownership rights may not extend to New York.

Benefits of Obtaining Mark Registration.
Why then, would anyone spend the time and money to get a mark registration? There are numerous benefits of federally registering your mark, such as:

 

·                    Constructive notice to the public of the registrant’s claim of ownership of the mark. 15 U.S.C. §1072.

·                    Nationwide presumption of ownership of the mark in association with the goods/services listed in the registration. 15 U.S.C. §§1057(b) and 1115. Additionally, in instances where, among other requirements, the registrant can show the registrant has continued to use the mark during the five years after the mark became registered, the mark may be considered incontestable so long as the appropriate documents are filed and fees are remitted in a timely manner. 15 U.S.C. §§1065 and 1115(b). If incontestable, the presumption of ownership becomes a conclusive assumption of ownership, which can be rebutted only in limited circumstances, e.g., fraud.

·                    The ability to bring an action concerning the mark in federal court. 15 U.S.C. §1121.

·                    Additional statutory remedies. Generally speaking, if a mark owner can successfully establish mark infringement the remedies available to the owner include injunctive relief and actual damages caused by the infringement, such as loss of profits and loss of goodwill. In addition to the foregoing, if the mark at issue is a federally registered mark (and proper notice of ownership has been given, as more fully discussed below), the available remedies include attorney’s fees and treble damages. 15 U.S.C. §1117.

With respect to registered state marks, note that the Nevada Revised Statutes for the most part contain similar language to the applicable federal statutes. NRS 600.350, 600.430 and 600.435.

No Need to Register a Copyright to Own a Copyright:
With respect to copyrights, you own a copyright the moment the work is fixed in a tangible medium of expression. For instance, the moment you record a song on a CD or write lyrics onto sheet music, you own the copyright to the works. Note that you can own the copyright with respect to the performance of the song as well as the copyright with respect to the lyrics. Needless to say, as with marks, you do not need a copyright registration in order to own a copyright.

Benefits of Obtaining a Copyright Registration:
There are, however, several advantages to owning a copyright registration, such as the following:

 

·                    Registration establishes a public record of the copyright claim.

·                    Before an infringement suit may be filed in court, registration is necessary for works of U.S. origin. 17 U.S.C. §411(a).

·                    If registered before or within five years of publication, registration will establish prima facie evidence in court of the validity of the copyright and of the facts stated in the certificate of registration. 17 U.S.C. §410.

·                    If registration is made within three months after publication of the work or prior to an infringement of the work, certain statutory damages and attorney’s fees will be available to the copyright owner in court actions. 17 U.S.C. §§411(b) and 412.

Need to be Issued a Patent in Order to Own a Patent:
Unlike with marks and copyrights, in order to own a patent, you must be issued that patent.  Upon filing an application, the claimed subject matter is examined. If approved, a patent is issued by the USPTO.  Basically, until you apply for your patent, your invention is potentially just another great idea without legal protection.  I say “potentially” because, although not fully discussed in this article, even if your invention isn’t shielded by patent protection, it can arguably be shielded by trade secret protection.  Moreover, trade secret protection may even be the preferred means of protection, especially considering the fact that trade secret protection can potentially last in perpetuity, while patent protection cannot.

3. HOW MUCH DOES IT COST TO FILE A MARK, COPYRIGHT OR PATENT APPLICATION, AND IF I GET A MARK OR COPYRIGHT REGISTRATION OR AN ISSUED PATENT, HOW LONG DOES IT LAST?

Mark Fees:
Federal Mark Application – the USPTO filing fee for a mark per class begins at $275, depending on the method of filing and the claimed goods/services. Note that the identification of goods/services claimed in your application must be categorized in one of 45 classes.  For instance, apparel items are in Class 25, whereas retail store services featuring apparel are in Class 35.  In addition to the filing fees there are additional fees and costs to consider, such as: (a) the legal fees associated with preparing and filing an application and (b) whether not you want to protect just the textual aspects of the mark, the text and design and/or just the design, which may result in, at a minimum, three separate mark applications.  More information about fees can be found online at http://www.uspto.gov/main/howtofees.htm.

Nevada Mark Application – the Nevada Secretary of State filing fee for a mark per class begins at $100. Note that the filing fee for a basic application is $100 per mark, per class. To expedite the application within 24 hours costs an additional $50 per mark per class, $500 for 2 hours and $1,000 for 1 hour. There are additional fees and costs to consider, such as: (a) the legal fees associated with preparing and filing an application, and (b) fees associated with maintaining your registration. More information about fees can be found online at http://www.sos.state.nv.us/comm_rec/fees/index.htm.

Duration of a Mark Registration:
Once your mark becomes registered, the registration can potentially last in perpetuity. Having said that, you must continue to use the mark in order to continue to own the mark and you must, at a minimum, timely file certain documentation attesting to your continued use of the mark as well as remit fees in order to maintain and renew your registration. While there are excusable periods of time wherein an absence of such use may not necessarily be considered abandonment, generally speaking, once you have stopped using the mark for a certain period, you have abandoned your ownership of the mark and any registration can be subject to cancellation.

Copyright Fees:
The Copyright Office filing fee per application begins at $15, depending on the type of work claimed in the application as well as if a special handling fee is requested. Note that the filing fee for a basic copyright application is $45. In addition to the filing fees, there are other fees and costs to consider, such as: (a) the legal fees associated with preparing and filing an application, and (b) filing fees associated with any requests for reconsideration. More information about current fees can be found online at http://www.copyright.gov/docs/fees.html.

Duration of a Copyright:
Calculating the duration of your copyright can actually be quite complicated. I’ve stared at my fair share of flowcharts, which in my opinion is the perfect example of how an attorney can overcomplicate an already complicated issue. Most works that I have encountered have been created after January 1, 1978 and assuming this is the case, the term of a copyright can be calculated in the following manner:

·                    If the author is an individual, the copyright lasts for the life of the author plus 70 years (if the work was authored by more than one individual, it is the life of the last surviving author plus 70 years).

·                    If the work is an anonymous or pseudonymous work the copyright lasts for 95 years from the date of publication or 120 years from the date the work was first created, whichever comes first.

·                    If the author is an employer or commissioner of a work for hire, the copyright lasts for 95 years from the date of publication or 120 years from the date the work was first created, whichever comes first.  17 U.S.C. §302.

For works created or published before January 1, 1978, the duration of your copyright can range from either already expired to 95 years from the date of publication. For further information on calculating the duration of your copyright, see Circular 15a, which can be found online at http://www.copyright.gov/circs/.

Patent Fees:

With respect to utility patents, there are two types of patent applications that can be filed – a provisional patent application and a non-provisional patent application.  The USPTO filing fee for a provisional patent begins at $200 (though if you are deemed a “small entity,” the filing fee begins at $100) and the USPTO filing fee for a non-provisional patent begins at $300 (if you are deemed a “small entity,” the filing fee beings at $150).  A provisional patent is potentially a less complicated application that does not involve as many formalities as a non-provisional patent.  However, within one year of filing your provisional patent application, you must file for a non-provisional patent in order to claim the benefit of the filing date of the provisional patent application. 

With respect to design patents, the USPTO filing fee begins at $200 (though if you are deemed a “small entity,” the filing fee is $100).

There are additional fees and costs to consider, such as: (a) the legal fees associated with preparing and filing an application, (b) fees associated with the number of claims set forth in your application, and (c) fees associated with the volume of your application. More information about current fees can be found online at http://www.copyright.gov/docs/fees.html

Term of a Patent:

If filed on or after June 8, 1995, the term of a utility patent is 20 years from the filing date of the application of which you are claiming the benefit, so long as the applicable documentation is filed and fees are remitted to maintain the issued patent. 35 U.S.C. §154(b).  If filed before June 8, 1995, the term of a utility patent is the greater of 20 years from the filing date of the application or 17 years from the date the patent was issued. 35 U.S.C. §154(c). 

The term of a design patent is 14 years from the date the patent was issued.  35 U.S.C. §173. 

4. WHEN DO I FILE FOR A STATE MARK REGISTRATION AND WHEN DO I FILE FOR A FEDERAL MARK REGISTRATION?

Typically, the decision between filing an application for federal mark registration versus state mark registration is dependent on use.  Among other criteria and generally speaking, in order to file for a federal mark registration, you must be using (or have a bona fide intent to use) the mark in commerce, namely interstate commerce. 15 U.S.C. §1127. While purely intrastate use does not provide a basis for federal registration, if the intrastate use directly affects a type of commerce that Congress may regulate, this may constitute sufficient use.

The following are some examples of uses that have been held to constitute use in commerce:

·                    A mark used in association with online services. America, Inc. v. Bucci, 42 USPQ2d 1430 (S.D.N.Y. 1997), aff'd, 152 F.3d 920 (2d Cir. 1998) (Table), cert. denied, 525 U.S. 834 (1998).

·                    A mark used in association with restaurant services rendered at a single location, but serving interstate travelers. Larry Harmon Pictures Corp. v. Williams Restaurant Corp., 929 F.2d 662, 18 USPQ2d 1292 (Fed. Cir. 1991), cert. denied 502 U.S. 823 (1991).

·                   A mark used in association with a hotel located in only one state, but serving out-of-state guests, having offices in many states, and advertising in national magazines. In re G.J. Sherrard Co., 150 USPQ 311 (TTAB 1966).

Use can be made either by you or a related company.  A related company can be a subsidiary, licensee, or some other entity, so long as you (as the mark owner) maintain control over the nature and quality of the goods/services offered under the mark by the related company. 15 U.S.C. §§1055 and 1127.

Specifically, with respect to licensees, this notion of control becomes particularly important. Namely, if you (as the mark owner) have no control over the nature and quality of your licensee’s goods/services, you can lose your ownership rights not only in respect to the mark, but also in respect to your application or registration for the mark (if the sole basis of your application or registration was based on your licensee’s use).  Barcamerica International USA Trust v. Tyfield Importers, Inc., 289 F.3d 589 (9th Cir. 2002).

There are various other factors to consider, such as whether or not there is a third person using a mark that is likely to be confused with your mark in another geographical area. If you are aware that that person’s use pre-dates your use, filing a federal mark application for such a mark may potentially be considered fraud against the USPTO. Namely, when you file a federal mark application, you must sign a declaration in support of the application that states, for the most part the following: “to the best of his/her knowledge and belief, no other person, firm, corporation, or association has the right to use the mark in commerce, either in the identical form thereof or in such near resemblance thereto as to be likely, when used on or in connection with the goods/services of such other person, to cause confusion, or to cause mistake, or to deceive.”

Note that the standard is not actual confusion, but a likelihood of confusion.  For more information about the likelihood of confusion standard, see AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir.1979) and In re E.I. duPont de Nemours & Co., 476 F.2d 1357, 177 USPQ 563 (CCPA 1973).

Accordingly, if the option of filing a federal mark application is unavailable due to such a scenario, the alternative is to file state mark application(s). At least with respect to Nevada, the declaration in support of a state mark application is similar to the federal mark application, but with respect to the state of Nevada and not nationwide.

Reserving a Corporate Name or Registering a Trade Name is Different than Registering a Mark:
Additionally (and this will likely shock many of you), merely because you reserved your corporate name with, or received stamped Articles of Incorporation or Organization from, the Nevada Secretary of State does not mean that you are free to use the mark embodied in your corporate name.  

For instance, suppose you want to use Coca Cola Energy Drink Company as the name of your company and sell energy drinks under the mark COCA COLA. While the Nevada Secretary of State may permit you to reserve or file Articles of Incorporation for the corporate name Coca Cola Energy Drink Company, this does not mean that somehow the Nevada Secretary of State has conferred upon you any ownership rights with respect to the mark COCA COLA in association with energy drinks in the state of Nevada or otherwise.

Additionally, registering your trade name is not the same thing as registering your mark. I imagine, as I write this, many of you rushing to your files to figure out whether or not you checked off the correct box on the pre-printed Nevada Secretary of State form.  Note that there are three separate boxes for registering a trade name, trademark and service mark. Some of you are patting yourself on the back, while others, I am certain, are shaking their heads, having spent time and money on protecting your trade name as opposed to protecting your mark. Not all is lost. As stated above, mark rights are engendered by use and not registration. What’s the difference, you ask, between a trade name and a mark? While a mark, as stated above, is your logo, brand name or catch phrase, your trade name is the name of your business. NRS 600.310. Now, certain textual elements of a trade name can also be a mark, but the two are not the same.  For instance the Coca Cola Company is a trade name, whereas, COCA COLA as placed on a soda can is a mark (or more specifically, a trademark).  Now that you know the difference, check your boxes accordingly.

5. WHEN DO I USE THE TM, SM, ®, © AND PATENT PENDING?

I have, in my humble opinion, saved the best for last. The number one most frequently asked question I get is “when do I use the TM, SM, ®, © and Patent Pending?” There is almost nothing worse than having a great evening of watching football absolutely ruined by a commercial promoting tourism in some exotic city in which the TM (as opposed to the proper SM) appears after a mark.

As many of you have already guessed, the TM is improperly used in this example because the mark is not a trademark.  A trademark is a mark used in association with a good. A service mark is a mark used in association with a service – for example, tourism.  The SM should be used accordingly.  In hopes of at least ensuring that my personal football viewing pleasure is not ruined every time I turn on the TV, you need only be mindful of the following easy guidelines:

TM
Use a superscript TM when using a mark that has not yet become federally registered in association with goods. Regardless of whether or not you have a pending federal application, you can use the superscript TM after your mark in association with goods.

SM
Use the superscript SM when using your mark that has not yet become federally registered in association with services. Regardless of whether or not you have a pending federal application, you can use the superscript SM after your mark in association with services.

®
Use the superscript ® when using your federally registered mark in association with the goods or services that are listed in your certificate of registration.  Note that there are two databases in which your mark can be listed – the Principal Register and Supplemental Register. Regardless of which database your mark is listed, you can use the ®.

The ® may not be used with marks that are not actually registered in the USPTO. Even if an application is pending, the ® may not be used until the mark is in fact registered. Moreover, state mark registrations do not entitle you to use the ®.

Note that deliberate improper use of the ®, that is intended to deceive or mislead the public may be considered fraud. Additionally, absence of any notice of ownership may lessen your ability to recover certain damages, particularly in cases of willful infringement.

©
Use the legend: “© [year of publication] [owner name] All Rights Reserved” when you are using your copyrightable work. Note that the © can be replaced with the word “Copyright” or “Copr.”

Patent Pending

Use “Patent Pending” or “Patent Applied For” only when in fact you have an active pending patent application (provisional or otherwise) with the USPTO with respect to the claimed subject matter.  Once the patent is issued, use “Patent” followed by the patent number.

Note that, as with marks, you may incur certain penalties as well as lessen your ability to recover damages if you improperly use or misuse such markings.

CONCLUSION

To sum it all up:

Jennifer K. Craft is an associate with the law firm of SANTORO, DRIGGS, WALCH, KEARNEY, JOHNSON & THOMPSON.  She graduated from the University of Arizona with joint J.D. and M.B.A. degrees. Her practice focuses primarily in the fields of technology and intellectual property.  Prior to joining Santoro, Driggs, Walch, et al., she was Associate General Counsel for Agassi Enterprises and Alliance Sports Management and Corporate Counsel for Sunbelt Communications.  For more information about Ms. Craft, go to www.santorodriggs.com or email her at jcraft@nevadafirm.com.