What do you mean I can't display the picture I bought? Photographs and Copyrights

So you have a photograph which you purchased some years ago of a beautiful early morning harbor view.  This photo would be perfect as a wall display in your commercial real estate office on the waterfront.  You have an enlargement made of the photograph and hang it in your office for all to see.

Not long after the picture is put on display, you receive an email from an attorney representing the photographer who asserts that you have no right to publicly display the photograph or to make an enlarged version of it, and asks that you immediately take down the photograph and destroy it. 

Is such a demand legitimate?    Yes it is.              

The photograph you purchased is subject to copyright protection which has a variety of associated rights.   Your purchase of the photograph provides ownership of the physical copy but not the associated copyright.  The purchase of the photograph does not give you any rights of copyright unless specifically conveyed in a written agreement between you and the copyright owner, in this case the photographer. 

As the owner of the photograph, you may display the photograph for your own pleasure, such as display in your home or private office.  But public display of the photograph is a right of copyright reserved to the copyright owner unless separately contracted for.

What to do now?  Work out a settlement with the photographer which may entail paying some amount for the right to commercially display the photograph.  Or comply with the demand to take down the photograph and destroy the copy.

Photographs, works of art and other copyrightable works are protected by copyright from the moment they are created.  The photographer has the exclusive right to reproduce his or her photograph and to control use of the photograph.  Without permission from the photographer (or other copyright owner), you cannot copy (in hard copy or electronic form), sell, distribute, publicly display or create derivative works of the photograph.

If you are contracting with a photographer to create photos for you, you should be mindful of the rights of copyright you wish to acquire in addition to a physical copy of the photograph.  You may wish to acquire all rights of copyright or just some.  It is often easier to negotiate a transfer of copyright interest at the time of engaging the photographer when he or she is more likely to be eager for the business, rather than later when circumstances may make the transfer of copyright less appealing.

The situation is similar for other works of art.  Laws in other countries are generally similar but of course individual country laws must be reviewed in specific situations.

If you acquire a photograph from a stock photo organization, the rights for use of that photograph are usually specified in the terms of sale or license.

There can be many nuances to transactions involving photographs and other artistic or visual works, and therefore prior consultation with an experienced IP attorney would be prudent.

The Adoption of a Competitor's Trademarks as Search Terms In Google AdWords May Not Be Such a Great Idea

Google AdWords and similar services display highly prioritized links as search results when someone enters a predetermined search term into a search engine.  It wasn’t long after such services became available that companies realized that by using trademarks and product names of a competitor as search terms with such services, a company could greatly increase the likelihood that a party performing an online search for the competitor’s products or services could be diverted to the website for the potential economic benefit of one other than the trademark owner.   The practice of using a competitor’s trademarks and product names in this manner comes with some risk.

Typically, trademark infringement results when the use of a mark by one company in conjunction with its own products or services is reasonably likely to result in confusion in the marketplace with the use of a similar mark by another having superior trademark rights.  The question of whether there is a likelihood of confusion has typically been viewed as of the time of the acquisition of a product or service.  However, under a legal doctrine known as “initial interest confusion” courts have found parties liable for trademark infringement in circumstances where a potential consumer was initially confused as to the source of origin of the product or service, but where no confusion existed as of the time of the ultimate acquisition of the product or service.

In view of the adoption of the initial interest confusion doctrine by some courts, there is a risk that the use of the trademarks or product names of a competitor as search terms to increase the potential economic benefit of another could result in a cause of action for trademark infringement. For this reason, such practices are generally not recommended.

GOOGLE and ADWORDS are trademarks of Google Inc.

IP Owners Beware! A Con Artist May Be Behind that Official-Looking Letter

The World Wide Web promised an infrastructure for the free flow of information.  For Intellectual Property (IP) owners, this meant free, instant access to patent and trademark administrative details and status.  Unfortunately, the same types of people who call at inconvenient hours, professing to be from the “Revenue Service,” and demanding payment of a (fictitious) delinquent debt are using the same Web resources to target patent and trademark owners.  Despite efforts aimed at raising awareness in the IP community, scammers continue to produce sophisticated, official-looking communications that sometimes succeed in trapping the unwary.

Trademark owners have been the targets of several types of fraudulent schemes.  Here are some of the more common ones:

“Greetings from [a foreign country].  We have been asked by company ABC to register the mark XYZ as their brand name and their domain name.  But, we noticed XYZ is similar to your brand name. Let us know if you gave them permission.” 

Company ABC is most likely fictitious.  If you write back saying you did not give ABC permission to pursue these registrations, you will be given the opportunity to pursue domain name and trademark applications in that country.  Even if legitimate filings result, you may be paying excessive fees.

“Greetings from the United States Trademark Registration Office (USTRO).  Upon payment of this invoice for $395, we will register your trademark XYZ with the U.S. Customs and Border Patrol.  In addition, we will monitor your mark with our proprietary search engine and alert you to possible third party infringement.  We look forward to your prompt payment.”

“USTRO” sounds a lot like “USPTO,’ the acronym for the United States Patent and Trademark Office.  While the USPTO is a U.S. government agency, the USTRO is a private firm in Los Angeles offering expensive and possibly unnecessary registration services.  Variations of this scam have come from sources such as the “United State Trademark Agency” or the “Trademark Monitoring Service” with offers to monitor the progress of your trademark application for you or to provide trademark renewal reminder services, neither of which have much value and would be duplicative of the efforts of your trademark counsel.

“You are cordially invited to have us list your trademark in the TM REGISTER / The International Trade Marks and Service Marks Catalog.”

This is an invitation to extract a hefty sum from your bank account in exchange for the opportunity to include your trademark in a publication that no one looks at and that has no value.

On the patent side, there have been similar efforts:

“The international patent application cited above has been Published in the WIPO Gazette.  This form is an offer to register your international patent application in our internet database and access to all database services.”

This offer appears in the form of a very official-looking invoice from “World Patent & Trademark Services,” or “World Patent & Trademark Organization,” or “World Intelligent Property Office,” etc.  The latter is particularly devious because of its similarity to the legitimate “World Intellectual Property Office” (WIPO).  When you file an international patent application, it does get published in the WIPO Gazette, so that part of their letter is true.  In fact, that’s where they got the administrative details of your international patent application that may be printed in their letter, perhaps along with the abstract or a representative figure from your application.  It may even have a fancy seal embossed into it.  Those who are taken in by this “offer” may have their international patent application included in a database that no one looks at, in exchange for hundreds or even thousands of dollars.

We’ve seen fewer attempts to take advantage of U.S. patent applicants with similar offers, but vigilance is always called for. 

The bottom line: if you’re in doubt, contact your IP attorney with any suspicious correspondence - he or she will be able to quickly assess its validity and help you avoid such costly and valueless schemes.

 

 

 

 

 

 

Jointly Owned Inventions and Patents

Difficulties can arise with respect to jointly owned inventions and patents if a written agreement is not in place which specifies the rights and responsibilities of the respective joint owners.  Do not rely on oral understandings or ignore the matter of joint ownership.

Joint inventions typically arise in one of two ways.  In one instance joint ownership can arise for an invention made by two or more persons.  If there is no obligation to assign the invention to a single entity, such as the employer of the inventors, ownership of the jointly made invention is jointly held by the two or more inventors.  In another instance, joint inventions can arise when two or more companies or other organizations work together on a project.  For example, a university and research sponsor may collaborate on a development project, or two or more parties may collaborate on a joint development project.  In the absence of an agreement between the parties to the joint activity, inventions and patents resulting from the joint project are jointly owned by the parties.  By statute (35 U.S.C.§261, 262), each co-owner of a joint invention or patent can act independently of the others and without accounting to the others.  The result of such potential independent action can often thwart the effective utilization or licensing of the jointly owned technology and associated inventions and patents.

It is therefore essential to have a written agreement between the joint owners which sets forth rights and responsibilities of each of the parties.  Such an agreement should specify respective ownership interests, responsibility for control of patent filing, prosecution and maintenance activities, sharing of patent expenses, sharing of royalty or other income, management of licensing or other transactions in respect of the jointly owned intellectual property and management of litigation relating to the joint intellectual property.  In the absence of an appropriate agreement, each owner could compete with the other co-owners and attempt to separately license or exploit the invention.  In addition, no co-owner has any obligation to account to any of the other co-owners with respect to the sharing of income from the jointly owned invention, or otherwise.

Ownership of an invention and any resulting patent is a matter of state law and any dispute regarding ownership would be a matter for resolution by state court action, unless there is diversity or other federal court jurisdiction.  Such disputes often involve interpretation of  an agreement to assign invention rights, interpretation of a consulting agreement under which an invention arose, or interpretation of an employment agreement under which an invention is said to have arisen.

A further issue relating to a jointly owned patent arises if there is to be litigation alleging infringement of the joint patent..  All co-owners must jointly sue the infringing party.  An agreement among the co-owners may specify that one party can manage such litigation although the other co-owners must usually be named as parties to suit jurisdictional requirements.

Bottom line – have a written agreement with all co-owners.

Patent and Copyright Protection for Software API

Recently the United States Court of Appeals for the Federal Circuit had a chance to weigh in on the IP protections afforded software. When deciding Oracle v. Google (Oracle America, Inc. v. Google Inc.), the Court concluded that Google violated Oracle’s copyright in the Java API. The court reasoned that the “declaring code and the structure, sequence, and organization of the 37 Java API packages” were entitled to copyright protection. Some viewed this as a reversal of the perception that API’s were not copyrightable.

API’s (or application program interfaces) are critical elements in modern software that allows programs to interact. The API describes how one program can call to another. This is often seen as a functional requirement for compatibility. By enabling one program to use features from another program, programmers can avoid recreating large amounts of code. Using similar APIs allows programs to be more easily ported from one system to another. Additionally, APIs can encourage development by third party programmers by making interoperability easier which can lead to a richer software environment that is more appealing to customers.

While the Court’s decision revolved mostly around copyright issues, the court acknowledged the potential relationship with patent laws and indicated that computer software may be covered by both copyright and patent laws.

Copyright protection has the potential to be extremely problematic. However, patent protections are equally problematic. In truth, both forms of protection have inherent balancing factors. Patents require going through the U.S. Patent and Trademark Office application process which ensures patents meet certain requirements, such as novelty, subject matter, non-obviousness, etc. This makes seeking patent protection a large investment in both time and money. In contrast, copyright protection may be seen as considerably easier to get as there is no substantive examination process. Additionally, a copyright’s duration is considerably longer than a patent’s.

However, these differences are offset by the associated scope of protection afforded by copyrights and patents. Where copyrights are limited to a specific expression, patents may have a broader coverage for the underlying structure and functionality of the software. This can make working around a patent claim considerably more difficult than avoiding a copyrighted expression.

Software programs are currently deemed eligible for protection from both copyright and patent laws. To some, this may seem counter-intuitive since software is often considered functional since it has instructions for a process. Copyrights do not protect procedures; whereas, patents do (although neither extends protections to cover abstract ideas). However, this reasoning overlooks the fact that software programs can be viewed as having distinct aspects: namely an expressive aspect and a functional aspect.

Even when a program is written in order to provide a particular result, there can still be a variation (or expression) in the way the program is written. For example, there are a number of programing contests where programmers attempt to make the least understandable program. These obfuscated code contest entries produce functioning programs despite being nearly indecipherable as written.

Generally, programmers are encouraged to follow best practices so that anyone who later works with the program can easily understand the nature of the code. This still leaves room for personal style and expression. Returning to the API, the declaration is typically defined as a short command line call for each function. In practice there is limited room for personal expression. A function to return the larger of two integers would be expected to be written as “max (int a, int b)” or as “maximum (int a, int b).” Though the options are varied, using a declaration of add (int a, int b) for such a function would be highly unusual.

One allegation against Google is that the copying of the API is an attempt to gain the benefit of the existing Java environment in order to leech off of the work originally done to establish the Java platform. While this particular fact pattern has the potential to create problems for people hoping to maintain legacy software environments, there appears to be little risk to developers working with an existing platform. This case does not involve the use of the API in programs intended to operate with the Java platform but rather the attempt to create a replacement of the Java platform. Furthermore, the Federal Circuit emphasized the significance of the copying of the structure and organization of the API packages – not simply the use of the API.

Ultimately, this issue is now in the hands of the U.S. Supreme Court who have been asked to take up the case. Some are concerned that given the Supreme Court’s track record against software protection, the Supreme Court may make a ruling which proves problematic for software protection. It is still unlikely they will totally do away with the dual protections of copyright and patents for software, if they take up the case.

Patents In the Shark Tank

My family and I enjoy watching Shark Tank. It’s a mix of business, technology, humor and, in some cases, is a testament to the entrepreneurial spirit of people. Of course, we realize it is mainly about entertainment. It doesn’t mean, however, that there aren’t some learning opportunities to be had.

As a patent attorney, my ears perk up a bit when I hear a shark ask about patents or patent applications or when the team seeking investment (the “contestant?”) mentions either having a patent or having applied for a patent. I have previously written about the differences between having obtained a patent and having applied for a patent. When this issue comes up on Shark Tank, I point it out to my wife and daughter but they just roll their eyes and say “we know, we know.”

When patents come up on Shark Tank, there isn’t an in-depth discussion of what the issued claims cover or what scope of coverage is being pursued. The show isn’t set up for that type of analysis and, I will admit, would be deadly boring if ever there was such a discussion. It is surprising to me, however, that sometimes the sharks consider having or not having patent protection (pending or issued – it doesn’t seem to matter) is important to whether or not they will invest without having any idea as to the scope of protection. Again, merely saying one has a patent or a pending application, without providing an understanding of what the claims cover, might give a potential investor some comfort but it really doesn’t convey any useful information.

Recently, Funbites came on seeking an investment. Funbites sells a device that cuts kids’ food into different shapes. During the pitch, Funbites told the sharks that they had an issued patent and they were ultimately successful in landing a shark. It’s not clear that having a patent helped land a shark, however, looking at the device, I wondered what the patent claims covered.

It didn’t take too much research to find Funbites’ U.S. Patent 8,695,220 (‘’the ‘220 patent”) with the not-so-fun-sounding title “Hand-Held Food Cutter with Shape Imparting Device.” As we know, however, it is the patent’s claims that determine the scope of coverage, i.e., its strength, as they define what others cannot make, use or sell without possibly being liable for infringement.

There are some general rules when it comes to claim interpretation:

1. broad claims are better than narrow (more specific) claims; 
2. long claims are narrower than short claims; and 
3. it’s easier to avoid infringing a narrow claim. The second rule is true because long claims include more components and make it more specific as to what the claim covers. The third rule tends to be true because, generally, infringement can be avoided by not including one or more component recited in a claim and, as there are more components in a long claim, it’s likely something can be removed or changed.

The ‘220 patent includes 14 claims with claim 1 being the only independent claim – and it is pretty long and, therefore, narrow. This is not surprising as it may have been necessary for the claim to be more specific in order to overcome the prior art cited against it during its examination in the Patent Office. The evolution of a claim during its pendency in the Patent Office will have to be the topic of a separate article. Suffice it to say that they obtained a patent but it’s narrow.

So, where does that leave us? Someone wanting to compete with Funbites or understand the scope of coverage will read the ‘220 patent and review claim 1. This review would probably include determining what components are “specific” and, therefore, might be changeable to make a cutting device that would not infringe the claim.

Without reciting the whole claim here, there are a number of terms in the claim that could be removed or changed in a competing device such that the competing device would likely not infringe. For example, the claim requires “an arcuate convex shaped bottom edge that is beveled for cutting the food” and “bottom edges” of second walls that are “V-shaped cutting edges” and where “bottom edges” of “vertical end walls only are beveled along an inner surface thereof.” (emphasis added). What if the competing device has a bottom edge that is not an “arcuate convex” shape and is not “beveled for cutting?” What if something different than a “V-shaped cutting edge” is provided? What if the vertical end walls are not beveled only “along an inner surface?” It may be arguable that these changes take the competing device out from the scope of the claim.

There are certainly other aspects of the claim that might be changed to avoid its infringement and the foregoing was not meant to be an exhaustive list. It does seem, however, that there are points that could be changed in order to avoid being accused of infringement. Generally, however, when considering whether a device is “cleared” with respect to an issued patent it’s highly recommended that you consult with an experienced patent attorney.

I recognize that the sums of money that the sharks are investing on the show are relatively small and that there isn’t a lot of time for due diligence including patent portfolio review. I would expect that their larger deals include a comprehensive review of the IP positions of the parties. I just want the reader to understand that merely saying one has a patent or has applied for a patent doesn’t necessarily mean that a strong position has been staked out and that it doesn’t take that much to make such a determination.

DISCLAIMER: These are just the personal opinions and musings of one who watches too much television and thinks too much, sometimes, about patents. No one should rely on this analysis as to the relative strength or weakness of any patent discussed herein nor should anyone base any business decisions on the opinions expressed herein.

Starting a New Company? Protect Your Intellectual Property Now or Maybe Never

When getting a startup off the ground and in the course of ongoing operations, it is important to take care of some fundamental housekeeping matters.  The failure to do so can result in problems that could be costly and/or difficult to resolve later.

Incorporation
Steps should be taken to incorporate early.  The entity form and jurisdiction should be discussed with legal counsel so that appropriate tax and legal issues can be considered.  When more than one individual is involved, the terms of an operating agreement that address contingencies and matters of corporate control should be discussed at the outset. Some firms offer special fee arrangements for startups which can be attractive.  This firm, through the PRETI FLAHERTY BUSINESS LAUNCH PAD ™, assists in the formation of new ventures under certain guidelines.

Employment Agreements
All employees, members and key individuals of the company should be required to execute confidentiality and assignment agreements.  These agreements should address basic obligations to the company including the obligation to maintain sensitive company information in confidence, the obligation to assign intellectual property to the company, an identification of pre-existing intellectual property of the individual, non-compete obligations, non-solicitation obligations with respect to customers and other employees and assurances that the employment will not conflict with any prior obligations of the employee.  A failure to enter into such agreements upon the formation of a company with key personnel can result in claims that the company does not own its intellectual property or claims that the company does not possess the exclusive rights to its intellectual property.

Consulting Agreements
Frequently, startups need to rely on other parties for expertise in specialized areas.  Prior to the commencement of work with any consultants, a consulting agreement should be put in place that provides, in addition to a work statement that addresses the specifics of the undertaking and compensation arrangements, obligations of confidentiality of company information and information developed in the course of the undertaking, a right of use with respect to any intellectual property of the consultant embodied in the deliverables, obligations to assign intellectual property developed pursuant to the agreement, an agreement not to solicit employees of the company and assurances that the undertaking does not conflict with any prior obligations assumed by the consultant.  Absent an express agreement with consultants, disputes regarding the ownership and use of intellectual property developed by the consultant can arise.

Filing of Patent Applications on Inventions
As a result of changes in the patent law over the last several years, the party who first files a patent application for a particular invention in the US typically has superior rights over parties that file later. For this reason it is advantageous to pursue the filing of patent application on subject matter that is perceived to be of commercial value as soon as the basic ideas are sufficiently defined when patent protection is available.  When a startup pursues funding, a sale of the company or an initial public offering, it is inevitable that one of the checklist questions that will be asked is whether patent protection has been pursued so as to establish a barrier to entry of the marketplace by competitors. Frequently, the initial patent application filed will be a provisional patent application in recognition that the technology may evolve in the initial one-year period after the filing of the provisional application by which time a non-provisional application must be filed to preserve the priority date of the provisional application.  A failure to file a patent application within specified periods can result in a bar to a later filing and a loss of an ability to pursue patent protection which can detract from the perceived value of the company.

Name Clearance and Filing of Trademark Applications for Significant Trademarks
Prior to formalizing and registering a corporate or other entity, a name clearance search should be undertaken to determine if objections are likely to be raised by others with respect to the use or registration of the name by other business entities.  The costs associated with such clearance searches are generally considerably lower than the costs associated with changing a corporate name and rebranding activities that must be undertaken if a name change is later required due to a conflict with a preexisting business. Since at the outset most startups will not have used any marks in interstate commerce, they should consider filing applications for federal registration of significant trademarks based on an ”intent to use” the mark(s) in the future.  If it is determined by the U.S. Patent and Trademark Office that a mark is registrable, a Notice of Allowance is issued.  Once the mark is used in interstate commerce, a statement of use is filed and the registration is issued.   The inattention to the filing of trademarks can result in the adoption and registration of the marks by others and an inability to use the marks in conjunction with the business of the company.
 
Use of Non-Disclosure Agreements
Discussions with parties outside the company should be undertaken pursuant to non-disclosure agreements.  Such agreements obligate the recipient of confidential company information to maintain the information in confidence and limit the use of such information solely to the limited purpose specified in the agreement.  The failure to utilize non-disclosure agreements when disclosing sensitive company information to other parties can result in the loss of the right to file patent applications on inventions of the company in certain circumstances, the use of the company information in a manner adverse to the company, or the public disclosure of information that the company desired to maintain in confidence.

Should a startup pursue external funding or get to a point at which it is considering a liquidity event, due diligence investigations will be pursued to ascertain whether the company has taken appropriate steps to protect its intellectual property assets. A failure to assure that the above-identified housekeeping matters have been appropriately addressed can adversely affect the valuation of the company or the ability to achieve desired funding.