Posted Friday, May 20, 2016 by Daniel Mills
When a trademark applicant sets up a social media account on Twitter in order to advertise or promote its business via a social-networking website, is it the applicant or Twitter that is providing the service of “creating an on-line community for users” interested in the applicant’s business? The answer is Twitter!
Thus began a recent decision by the TTAB that upheld a refusal to register SAY IT YOUR WAY application by FTD for its Twitter account for “Creating an on-line community for registered users to participate in discussions, get feedback from their peers, form communities, and engage in social networking featuring information on flowers, floral products and gifts.” (International Class 042)
The decision cited a recent update to Section 1301.04(h)(iv)(C) of the Trademark Manual of Examining Procedure(“TMEP”)in April 2016. The section states:
Some applicants may mistakenly mischaracterize their services as ‘social networking’ because they assume that advertising or promoting their non-social-networking services via a social-networking website means they are providing social-networking services. For instance, an applicant may mistakenly file an application for ‘online social-networking services’ and provide a Facebook® webpage as a specimen when, in fact, they operate a pet store and are only using the Facebook® website to advertise the pet store and communicate information to and messages with actual and potential customers. Such a specimen is not acceptable for the social networking services since it does not demonstrate that the applicant is providing these services
FTD’s position was that it’s use of Twitter created a sub-community within the Twitter universe, but the Board was not convinced that this use constituted “creating on online community” and held that Twitter is creating the service of on online community, not FTD. the Board noted that FTD “does not provide a platform by which its followers can create a profile, establish a homepage, and attract further followers.” Furthermore the Board agreed with the examining attorney that FTD was Applicant “simply acting to further the sale of its flowers, floral products and gifts by using its Twitter account to engage with consumers and potential consumers and promote its retail services.”
So the lesson here is that simply using a social media site even if that use is detailed, voluminous, and integrated into a business’s marketing plan, is not the same as creating a separate online community that creates a registrable trademark for that service.
Posted Wednesday, May 18, 2016 by Jim Ruttler
Some of the Worlds largest companies are interested in buying your patents for prices you set. The Industry Patent Purchase Program (IP3) is a new method to create a secondary market for patents. Google, Apple, IBM, Microsoft, Facebook, Adobe, Honda, Hyundai, Kia, Verizon, Cisco, and many others are pooling resources and accepting patents for sale through AST. If accepted, sellers will receive payment within a few months.
Google did this alone about a year ago and apparently was successful enough that now the whole industry wants in on the purchases. Patents were sold to Google under this program for between $3k and $250k each depending upon the invention and interest.
This new program plus some recent court developments are indications that the patent market is about to come back to life, and I believe in a bigger way than anytime before.
Posted Sunday, May 15, 2016 by Jim Ruttler
Ever since the Supreme Court Alice decision, the Patent Office and the lower level District Courts have been over-reaching and invalidating software related patents. Now for the second time, the Federal Circuit has taken the lower courts to task by confirming that software continues to be eligible.
In Enfish v. Microsoft, the Federal Circuit Court of Appeals reversed the lower district court’s finding that Enfish’s database claims were ineligible and invalid. Instead, the Appeals Court found that the self-referential database claimed in Enfish was clearly the type of subject matter that remains eligible as compared to business method type claims.
The Court reasoned that software that improves the functionality of a computing device is different than a business method that is implemented on a computer. Thus, the former types of inventions remain patentable, which is very good news for patent owners and inventors worried about the Alice decision.
Patent law is stabilizing with this decision and 2016 will likely mark a continued strengthening of patent rights for technical inventions.
Posted Thursday, May 12, 2016 by Daniel Mills
Yesterday, President Obama signed the Defense of Trade Secrets Act (DTSA) into law. The DTSA is actually part of an existing set of laws known as the Economic Espionage Act of 1996 and the Economic Espionage Penalty Enhancement Act of 2012. What the DTSA adds to the existing statute is, among other things, it creates a private civil cause of action that allows any injured party the standing to sue for substantial damages for misappropriation of a trade secret.
In addition to the ability to bring a suit, it provides a mechanism for court ordered seizure of materials or items to prevent unlawful dissemination of a trade secret. This is an extremely powerful tool that companies can use to seize a laptop from a dishonest employee, for example. However, with great power, comes great responsibility and the law creates and a narrow scope of such power. More on that later.
To begin, the DTSA creates a criminal cause of action for theft of a trade secret and provides an increased penalty. Section 1832 states:
(a) Whoever, with intent to convert a trade secret, that is related to a product or service used in or intended for use in interstate or foreign commerce, to the economic benefit of anyone other than the owner thereof, and intending or knowing that the offense will, injure any owner of that trade secret,knowingly–
(1) steals, or without authorization appropriates, takes, carries away, or conceals, or by fraud, artifice, or deception obtains such information;
(2) without authorization copies, duplicates, sketches, draws, photographs, downloads, uploads, alters, destroys, photocopies, replicates, transmits, delivers, sends, mails, communicates, or conveys such information;
(3) receives, buys, or possesses such information, knowing the same to have been stolen or appropriated, obtained, or converted without authorization;
(4) attempts to commit any offense described in paragraphs (1) through (3); or
(5) conspires with one or more other persons to commit any offense described in paragraphs (1) through (3), and one or more of such persons do any act to effect the object of the conspiracy, shall, except as provided in subsection (b), be fined under this title or imprisoned not more than 10 years, or both.
(b) Any organization that commits any offense described in subsection (a) shall be fined not more than the greater of $5,000,000 or 3 times the value of the stolen trade secret to the organization, including expenses for research and design and other costs of reproducing the trade secret that the organization has thereby avoided.
So for corporate offenders, the damages start at $5M and only go up. It is not hard to imagine a trade secret that is the result of millions of dollars in R&D. These cost would be added to the amount that is 3X the value of the stolen secret.
WHISTLE BLOWER PROTECTION
The DTSA grants immunity to an individual who discloses a trade secret in confidence to a Federal, State, or local government official and solely for the purpose of reporting or investigating a suspected violation of law. Furthermore, employers must provide notice to all employees of this immunity in any contract or agreement that governs the use of a trade secret or other confidential information. Under the DTSA an employee includes any individual performing work as a contractor or consultant for an employer. An employer can be considered in compliance with the new notice provision if there is a reference to a policy document rather than including the entire immunity provisions in each agreement. Nowhere in the statute is there an exception for small businesses. When does this apply – Now! The notice requirement will “apply to contracts and agreements that are entered into or updated after the date of enactment of this subsection.” Therefore, because President Obama singed this into law yesterday, as of May 12, 2016 employers must begin providing notice under the law.
EX PARTE SEIZURE OF PROPERTY
One of the most powerful (and controversial) sections of the law grant the ability to have the government seize “property necessary to prevent the propagation or dissemination of the trade secret.” In order to get such an order, the damaged party must first show that another less drastic remedy, such as injunction, would be “inadequate to achieve the purpose… because the party …would evade, avoid, or otherwise not comply with” the less drastic remedy. In addition to this requirement, the statue also mandates that without the seizure, “immediate and irreparable injury will occur”, and the harm to the person or entity seeking the seizure “outweighs the harm to the legitimate interests” of the alleged thief, and “substantially outweighs the harm to any third party” that might be harmed by the seizure. Finally, the person or entity seeking he seizure must not publicize the requested seizure.
Another key of the DTSA is the codified definitions it contains. First, it does not materially change the definition of a trade secret that has been part of the Uniform Trade Secrets Act that has been adopted by most states. Even though it is not different it bears repeating here for context.
“Trade Secret” means information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (i) derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.(A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public another person who can obtain economic value from the disclosure or use of the information.
“Misappropriation” means—(A) acquisition of a trade secret of another by a person who knows or has reason to know thatthe trade secret was acquired by improper means; or(B) disclosure or use of a trade secret of another without express or implied consent by a personwho—(i) used improper means to acquire knowledge of the trade secret;(ii) (ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was—(I) derived from or through a person who had used improper means to acquire the trade secret; (II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or(III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or(iii) before a material change of the position of the person, knew or had reason to know that—(I) the trade secret was a trade secret; and(II) knowledge of the trade secret had been acquired by accident or mistake;
“Improper Means”(A) includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means; and(B) does not include reverse engineering, independent derivation, or any other lawful means of acquisition.
The application and interpretation will take years to mature and test. In fact, the DTSA requires that within two years the Federal Judicial Center shall develop best practices for the seizure of information, the storage of seized information, and the securing of seized information.
If you have a business, and you have any kind of advantage over your competition, then you have trade secrets worth protecting. At Ruttler Mills, we offer provide practical legal advice and tools to help you establish, maintain, and enforce protection of your trade secrets.
Posted Wednesday, May 4, 2016 by Daniel Mills
Anyone who has been through the trademark process or is considering it will eventually be faced with providing proof of Use in Commerce? But what exactly is Use in Commerce in trademark law. This post is meant to offer a guide to help sort it out.
First, what is commerce within the context of the law? The Lanham Act (which is the basis of trademark law in the US) defines commerce as “all commerce which may lawfully be regulated by Congress.” Although that does not include all commerce, in today’s Internet centered marketplace, suffice to say that if you have a website that sells your goods or services, then you are engaged in commerce that Congress regulates. If you engage interstate commerce, you qualify. If your goods are transported across state lines, you qualify.
But the more important question is Use in Commerce, so again, let’s turn to the Lanham Act:
The bona fide use of a mark in the ordinary course of trade, and not merely to reserve a right in a mark. For purposes of this chapter, a mark shall be deemed to be in use in commerce—(1) on goods when—(A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto, or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale, and (B) the goods are sold or transported in commerce, and (2) on services when it is used or displayed in the sale or advertising of services and the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce with the services.
Let me break this down and translate.The Use has to be bona fide, in other words, it can’t be just a token offering to get through the registration process. Such token use has been used many times to get a registration, only to be the basis of a later cancellation. It is never worth it to build a structure on quicksand, so too it is never worth it to get a trademark registration based on false use. Eventually you will be sunk.
When it comes to determining what is use, it is helpful to separate goods from services, as in the definition from the Act. Showing use in commerce on goods is relatively straight forward. First, the mark has to be associated with the goods, the easiest way to do that is to:
Put the mark right on the goods
Put it on the packaging of the goods
Put it on point of sale displays, labels, or tags
If none of that is practical, then on documents that always accompany the goods
The second step is, and this is the important part, is then you have to sell or transport the goods in commerce. Without this second step, you have merely advertised the goods and that is never enough to satisfy the requirement.
When it comes to services, advertising is OK, but the service must actually be performed in commerce, or in interstate or foreign transactions. For example, if you are a dentist and you have a trademark for your service, then merely advertising the service is not enough, you actually have to perform the service that you are advertising. That may sound obvious or even silly, but a search through trademark cancellation proceedings will show that many trademark applicants have gotten this wrong.
This is one of the most common issues I get hired to sort out by the do-it-yourselfer. The sad fact of the matter is that is costs as much, and in some cases more, to fix the problem than it would have been to hire me to file the entire application it in the first place. So when thinking of doing it yourself, think of the time and expense associated with a mistake for which you will have no recourse. We offer simple, reasonable, flat fees for trademark applications and most other trademark work.