False Marking Alert: Could International Product Sales, Shipments, Or Manufacturing Land You In Prison?

Do you manufacture, ship, or sell products abroad that contain the ® trademark registration symbol on the products, labels, or packaging?  If so, did you know that you may face criminal liability, imprisonment, fines, seizure of your products, injunctions, unfair competition claims, damages, and other liability if you failed to register your trademark in the foreign countries where you manufacture, ship, or sell the products?

“False marking” occurs when an unregistered trademark is represented as a registered trademark.  Internationally, the ® symbol is generally perceived to denote an existing trademark registration.  In some countries, it is a crime to falsely indicate that a trademark (or portion of a mark) is registered, or that goods or services are protected by a registered trademark or service mark, when they are not.  Examples of countries that impose criminal liability for false marking include, without limitation: Japan, Korea, Germany, India, and Brunei.  False marking under the laws of Japan, for instance, may result in imprisonment for up to three years.

In addition to potential criminal liability exposure, false marking may also result in severe civil penalties.  These penalties may far outweigh any perceived cost savings associated with a foreign manufacturer or cheaper overseas labor.  For example, China may impose a false marking fine of up to 20% of business volume or double the amount of profit earned, even if products are manufactured in China solely for export.  Chinese courts have imposed false marking fines, product seizures, injunctions, and damages against companies that manufacture goods in China for export, even though they were not selling the goods in China.

Before manufacturing, shipping, or selling products abroad, consult with an experienced trademark attorney about international trademark requirements.  Trademark laws and marking requirements vary from country to country.

If you have already manufactured, shipped, or sold products bearing the ® trademark registration symbol in any countries where the trademark is not registered, immediately consult with an experienced trademark attorney to discuss whether you may face criminal and civil liability exposure, and international trademark options and strategy to mitigate future risk.

Protect Your Artwork: Understanding the Visual Artists Rights Act

The Visual Artists Rights Act (VARA) is part of the U.S. Copyright Law and is found at 17 U.S.C. §106(A). This law went into effect in 1990 and grants certain rights to visual artists. It is akin to moral rights laws which have been in existence for many more years in European countries.

 

Works of art meeting applicable requirements provide the artist with certain rights in their works which are in addition to rights available to all authors under the Copyright Law. These rights are personal to the visual artist and exist irrespective of ownership in the work itself and ownership of copyright rights in the work.

 

Under VARA, a visual artist (called an author of visual art in the statute) has the right:

• to claim authorship of the work;
• to prevent use of the author's name on any visual art which the author did not create;
• to prevent any intentional distortion, mutilation or modification of the work which would be prejudicial to the author's honor or reputation.

In addition, an author of a work having a "recognized stature" has the right to prevent intentional or grossly negligent destruction of a work.

 

These artist's rights are subject to Fair Use exceptions and certain exceptions for works incorporated into or made part of a building. In addition, modification of a visual work of art which is a result of the passage of time or the inherent nature of the materials is not a violation of the artist's VARA rights, nor are modifications which are the result of conservation or public presentation, including lighting and placement, unless caused by gross negligence. 

  

The law is applicable to a "work of visual art" as defined in section 101 of the Copyright Law (17 USC§101) which specifies paintings, drawings, prints or sculptures, or still photographic images which exist in a single copy or a limited edition of 200 copies or less signed and consecutively numbered by the author. For sculptures, the limited edition is 200 or less multiple cast, carved or fabricated copies consecutively numbered by the author and bearing the signature or other identifying mark of the author. Aesthetic taste or value are not requirements for protection under the VARA Act.

 

Purchasers of visual works covered by the statute must obtain written waivers from the author if they wish to exercise any of the exclusive artist's rights enumerated under the VARA law. Absent such a waiver, the artist can effectively veto decisions about the work. This has been a contentious issue particularly with respect to public sculptures, site-specific art and commissioned works. Litigation has arisen from assertions of artist's rights violation occasioned by movement of a sculpture from a public park, removal of murals from a building lobby, removal of graffiti from a building wall, and destruction or modification of a public art installation.

 

The VARA rights extend for the lifetime of the author for works created after the effective date of the law (Dec. 1, 1990). For joint authors, the term is for the life of the last surviving author. For works created before the effective date of the law, the rights are coextensive with the usual copyright term.

 

The rights provided under the VARA law do not apply to any reproduction, depiction, portrayal or other use of a work in, upon or in connection with any item that is a work made for hire or any one of the items enumerated in footnote [1].

 

The rights of the author may not be transferred, but those rights may be waived so long as the waiver is in a written instrument signed by the author. If there is a joint work of visual art prepared by two or more authors, a waiver of rights made by one author waives the rights for all the authors.

 

An important aspect of this law is that ownership of the VARA rights is distinct from ownership of any copy of the work or ownership of a copyright or any exclusive right under copyright in that work. Transfer of ownership of any copy of the work of visual art or of a copyright or any exclusive right under a copyright does not constitute a waiver of the VARA rights. A waiver of rights by the author with respect to a work of visual art does not constitute a transfer of ownership of any copy of the work or of ownership of any right of copyright.

 

The Golden Rule with respect to dealing with a work of visual art is to have a written agreement signed by the artist and purchaser which spells out the rights of ownership and copyright acquired by the purchaser, any waivers under VARA and any rights retained by the artist.

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[1] 17 USC§101 A work of visual art does not include -
 A. (i) any poster, map, globe, chart, technical drawing, diagram, model, applied art, motion picture or other audiovisual work, book, magazine, newspaper, periodical, data base, electronic information service, electronic publication, or similar publication;
 (ii) any merchandising item or advertising, promotional, descriptive, covering, or packaging material or container;
 (iii) any portion or part of any item described in clause (i) or (ii).

The Layered Look: Copyrights and Visual Arts

People are generally aware that a painting, photograph, sculpture or other works of art are subject to copyright protection but many are less aware that copyright has many layers of possible protection which can present legal traps for the unwary.

An original work of art which may be a painting, photograph or sculpture, is subject to copyright from the time of creation of the work.  The copyright is owned by the artist or creator unless the work was produced as a work for hire where the creator is an employee acting within the scope of his or her employment duties, or by written agreement between the creator and a party who commissioned or ordered the work.

The exclusive rights of copyright for a visual work include:

• The right to make copies;
• The right to make derivatives;
• The right to distribute copies;
• The right to publicly display the work; and
• The right to reproduce the work on any article or item.

Here are a few examples to ponder in relation to these rights.

A photograph may itself be a separately copyrightable work apart from an original work being photographed.  For example, an old master painting may not itself be the subject of a copyright by reason of its age but a photograph of that master painting can be a copyrightable work of the photographer, or other owner if a work for hire.  The copyright owner of the photograph is entitled to control its copying and public display.

What if you wish to photograph a painting that is copyrighted?  Without permission of the copyright holder such a photograph will be a violation of copyright.

The risks of infringing a copyrighted work are heightened by today's ease of electronic transmission by use of the Internet, social media, cell phones, etc. What if you photograph a copyrighted painting or sculpture and post it on your Facebook page?  That posting can be considered copying and also considered a public display, both of which are violations of the owner's copyright, if done without permission.

Another right of copyright is the right to publicly display a copyrighted work or copies of that work.  Say you purchased an Ansel Adams photograph of a Yosemite landscape, you may display that photograph for your own enjoyment or within you usual social circle but you have no right to publicly display that photograph unless you were granted that right of public display by the copyright owner.

What if you take a copyrighted photograph and Photoshop it into an altered image?  As one of the rights of copyright is to make derivative works, your Photoshopped image would be a non-authorized derivative and also an unauthorized copy of the original work.

Can you put a commercial photo of your favorite band on a tee shirt?  You cannot (absent permission) since the copyright owner has the right to reproduce the photo on any item.

Liability for copyright infringement can be significant.  An owner of a registered copyright can claim damages based on actual provable economic loss or more often statutory damages which can be in the range of $750.00 to $30,000 for each infringement, as a Court may determine.  In cases of willful infringement, a Court can award costs and attorney's fees.  A court may also issue an injunction against ongoing infringement.

In a case of willful infringement under certain circumstances generally relating to commercial piracy of copyrighted works, there can be criminal liability for copyright infringement with penalties including fines and/or imprisonment.  
A defense to an assertion of copyright infringement is the right of fair use of the copyrighted work, which generally allows non-commercial use or copying for purposes of criticism, comment, news, teaching, scholarship and the like.

It would be safe to assume that copyright attaches to most paintings, photographs, sculptures and other visual arts and you should seek permission for any intended commercial activity. Permission may be sought directly from the copyright owner or most conveniently from various licensing organizations which exist for the purpose of providing such permissions.  Usually the permission is for a fee in an amount which depends upon the extent of intended use of the work. Well known licensing organizations for the visual arts include Corbis, Getty Images, Artists Rights Society (ARS), and stock photo companies, among others.

That’s Patentable? The Far-Reaching Definition of an “Invention”

U.S. patent law provides that “Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor,” 35 U.S. Code §101. This leaves open a broad range for potential patent protection. The categories of a “machine, manufacture, or composition of matter” provide for many traditional concepts of an invention, such as devices, chemicals or other physical objects. Focusing on these physical items as being invention ignores the “process” category. The process (or method) type of patent has been used to cover a broad range of technologies – from manufacturing techniques to medical procedures. It is this category’s open-endedness which has presented a number of extraordinary patent opportunities as well as a fair share of headaches.

Concerns that method patents may be used to cover broader concepts than is appropriate has caused many to struggle to determine what types of technologies should be allowed to receive patents. The myriad court decisions and United States Patent and Trademark Office rules in the past few decades alone have created a complicated thicket of patent eligibility rules. Despite these issues some interesting ideas and non-traditional concepts have been granted patents. While some might argue that such patents are not appropriate, the Patent Office’s willingness to grant such patents introduces some leeway into determining what might be patentable and that might otherwise be overlooked.

In some cases, patents have been issued for processes used to play card games. One patent that has reached a particular level of notoriety (or infamy) is US 5,662,332. This patent covers a method of playing trading card games where each player constructs a deck of cards. The claims include coverage for “designating the [card] being brought into play by rotating the [card] from an original orientation to a second orientation.” Further claims cover a rotating, or ‘tapping,’ to make players are aware the trading card is in use.

Patent protection has also been awarded to methods involved in the presentation used in computer games. Patent US 6,935,954 was awarded for a sanity system used in a video game where the “character may experience hallucinations as a result of the sanity level.” During game play, the sanity level of the game character is modified based on a character reaction and an amount of character preparation. As the game continues, game play is impacted by varying game effects according to the game character sanity level.

In another patent, US 8,082,499, the graphical interface for an interactive dialog is presented. A dialog choice indicator is shown which has a number of directional choices. Dialog responses corresponding to a particular emotion are then provided in a consistent location/direction.

In 2014, the U.S. Supreme Court decided CLS Bank International v. Alice Corp which invalidated claims that were determined to be drawn to an abstract idea. In response to this case, the USPTO has adjusted their stance regarding patentable subject matter and has rejected many applications held to be too “abstract”. However, this has not prevented the Patent Office from still issuing patents directed to some intriguing methods.

Patent US 8,920,245 is directed to a video game award method. According to the claimed method, the player is awarded a digital gaming object while playing a first game and is then able to use the digital gaming object within a different game.

A language-based video game method is protected by US 8,825,492. In this method, the game display shows an animated portion of a human head related to speech to show a pronunciation of selected text. The text is then transformed into a non-textual form which can be used by the avatar to overcome at least one challenge, for example, a letter of the alphabet may be transformed into a rope which can be used to overcome a rock climbing challenge.

In another post-Alice patent, protection extends beyond graphic displays. US 8,721,415 covers a computer-based solitaire game with stack-based pay table. The player is provided a payout which is calculated based on a per-card payout award and the actual number of cards transferred during the game.

These examples demonstrate that patentable inventions can be made in non-traditional fields. Simply because an invention is not incorporated in a physical object, such as a motor or a chemical composition, or relates to an industrial process, doesn’t mean that patent protection is unavailable. While care must be taken to ensure the claims comply with patentable subject matter restrictions, great opportunities still exist for patenting concepts which might otherwise be overlooked. 

What Can Go Wrong – It's Just A Non-Disclosure Agreement

A Non-Disclosure Agreement (“NDA”), also known as a Confidentiality Agreement, is an agreement that precludes the use of confidential information provided by one party (a “Disclosing Party”)  to another party (a “Receiving Party”) for any purpose other than that expressly contemplated by the agreement.  Such agreements are routinely used in business. For example, when one party desires to enter into discussions with another party with respect to a potential business relationship or transaction, it is frequently necessary for the disclosing party to communicate confidential business and/or technical information to the other party in furtherance of the relationship or transaction. 

 

NDAs can be either unidirectional or reciprocal.  A unidirectional NDA contemplates disclosure of confidential information from only one of the parties to the other.  A reciprocal NDA contemplates the disclosure of confidential information from each party to the other and obligates each receiving party to maintain in confidence the other’s confidential information upon the terms set forth in the Agreement. 

Things Can Go Wrong

It should not come as a great surprise that from time to time, a party will utilize a form of NDA they have found on the Web, an NDA that may have been appropriate from some other transaction or an NDA provided by the other party without a lot of consideration for the content of the agreement.  This can be a colossal mistake.  Perhaps, since NDAs have a well understood premise – i.e. that the receiving party should hold the received information in confidence – these agreements are dealt with more casually than some other agreements.

 

I am reminded of a situation in which a potential client advised he had disclosed quite a bit of his confidential technical information to a large company.  He was considering granting a know-how license that would permit the large company to utilize his “confidential information.”  When I inquired whether an NDA had preceded the disclosure of his information to the potential licensee I was assured that this had been addressed by his office manager.  As it turned out, an NDA had in fact been signed, although upon review of the NDA, it was discovered that the signed NDA was a unidirectional NDA that protected confidential information disclosed by the potential licensee.  The NDA included no limitations with respect to the use or further disclosure of the information already disclosed by the potential client.

 

The complexity appropriate to any NDA can vary considerably based on the contemplated business relationship or transaction.  The provisions in any NDA should be commensurate in complexity with the transaction under consideration. One would seldom need a 20 page NDA for a small value transaction. 

Terms For Consideration

Some terms to consider when entering into an NDA are listed below:

1. What uses should be permitted by a receiving party with respect to a disclosing party’s confidential information?
2. Should the NDA be unidirectional or reciprocal?
3. How long should the receiving party be required to maintain the received information as Confidential Information?
4. Who, at the receiving party, should have have access to the confidential information of the disclosing party?
5. What information of a disclosing party should not be considered Confidential Information even if so designated by the Disclosing Party? Typically, the recipient of information deemed confidential by a disclosing party is not bound to retain the information in confidence if the information is publicly known, already known to the recipient or if the information falls within certain other classifications of information  for which no expectation of confidentiality would be appropriate.
6. When is the NDA terminable by a party and what are the obligations of the parties upon termination of the Agreement with respect to the return or destruction of a party’s Confidential Information?
7. Should the receiving party be precluded from using information obtained from a disclosing party to fashion or amend patent claims in a pending patent application of the receiving party?
8. Other terms involving ownership of information, disclaimers with respect to accuracy or completeness of disclosed information, injunctive relief in the event of a breach by a receiving party, non-solicitation of employees of the other party, governing law and arbitration provisions, among others may be appropriate for specific circumstances.

Generally, it is recommended that NDAs be prepared or reviewed by counsel prior to execution.

Copyright and Trademark Protection for Your Logo Artwork

Trademark owners should consider applying to register copyright rights in their logo artwork, in addition to trademark registration.  A logo may qualify for a copyright registration if it is sufficiently original and creative.

A copyright registration for logo artwork may provide a number of strategic advantages.  The owner of a copyright registration may file suit in federal court for infringement of copyright rights in logo artwork, even if the logo is not covered in U.S. trademark registration (e.g., if a trademark application is pending, a trademark registration was declined, or a trademark registration lapses or is deemed abandoned based on 3 years of non-use or other grounds).  A U.S. copyright registration (or rejected application) is required before filing suit for copyright infringement.

Remedies for copyright infringement may include:

1. A federal injunction; 
2. An order to impound, destroy, or otherwise dispose of infringing articles; 
3. Actual damages plus any additional profits of the infringer or, alternatively, statutory damages up to $30,000 per infringed work; 
4. Enhanced statutory damages up to $150,000 per work infringed willfully; 
5. An order to pay costs; and 
6. Attorney fees to the prevailing party

Willful copyright infringement may also result in criminal liability.

Copyright infringement may sometimes be easier to prove than trademark infringement.  To prove trademark infringement, the trademark owner must show that there is a reasonable likelihood of confusion, which involves analysis of multiple factors and may be subjective.  To prove copyright infringement, the copyright owner must show that copyrightable elements were copied, which may be satisfied by proving access to the infringed work plus “substantial similarity.”

A copyright registrant may record a copyright registration with U.S. Customs and Border Protection (CBP), to enable CBP to monitor and take action to protect against infringing imports and gray market goods.

It is beneficial to promptly apply for copyright registration.  If the copyright owner files a copyright application no later than three months after the work is first “published,” the owner may elect statutory damages (up to $30,000 per infringed work or up to $150,000 per willfully infringed work) and receive attorney fees in a copyright infringement action, even if infringement occurred before the application filing date.  These remedies are not available to copyright owners who file a copyright application after an act of infringement has occurred outside of the three month grace period.

Trademark rights in a logo may be perpetual as long as the logo remains in use.  However, trademark rights and registrations may be abandoned by non-use (3 years of non-use may be deemed an abandonment of trademark rights).  Federal trademark rights and “incontestability” status may be abandoned by non-use or by allowing a U.S. trademark registration to lapse.  In comparison, copyright rights and registrations are not dependent upon proof of continued use of a logo.  A copyright registration does not require periodic registration renewal filings and evidence of continued use, unlike a trademark registration.  Copyright rights in a logo created after January 1, 1978 may endure for 70 years after the author’s death (unless the logo was a “work made for hire,” in which case copyright rights may endure until the earlier of 95 years after publication or 120 years after creation).

In summary, the owner of a logo may be able to take advantage of valuable rights and remedies under both trademark and copyright laws.  Consultation with an experienced trademark and copyright attorney is advisable.

Is Your Trademark Registration Stuck in the Past? A USPTO Pilot Program May Allow You to Modernize It

On Sept. 1, 2015, the United States Patent and Trademark Office (USPTO) rolled out a new pilot program that may help trademark registrants breathe new life into older registrations. 

Normally, once a trademark has been registered for particular goods/services, it is not possible to later amend those goods/services beyond the scope of the current identification.  But technology evolves, and goods or services may be phased out in favor of modern counterparts.  In the past, a registrant for a mark applied to outdated goods/services had to file a new application, thus giving up an earlier date of use.

Under the new pilot program, a registrant may petition the Director of the USPTO to amend the respective goods/services beyond the scope of the current identification.  But, the petitioner must show that it no longer uses the respective mark with any of the original goods/services and that the newly recited goods/services are the result of newly evolved technology in the manner or medium by which products and services are offered for sale or provided to customers.  The registrant must delete the old, original goods/services in favor of the newly evolved goods/services.

This pilot program is not available to those whose applications are still pending.  Also, it is not available to those who continue to use the subject mark with some or all of the original goods/services; registrants who use the mark on “old” and “new” goods/services must file a new application for the “new” goods/services.

The petition itself has certain specific filing requirements, including a request for amendment, fees, specimens, and dates of first use of the mark with respect to the amended goods/services.  The petition must be filed through the Trademark Electronic Application System (TEAS).  The procedural details can be found on the USPTO web site, and registrants unfamiliar with practice before the USPTO are recommended to rely on the services of an experienced trademark attorney.

In announcing this pilot program, the USPTO has suggested it is proceeding with caution to avoid causing harm to other users of a relevant mark.  Before an amendment under the program is approved, an examining attorney must perform a new search for conflicting uses.  Petitioners must agree to not file an affidavit or declaration of incontestability under §15 of the Trademark Act as to the amended goods/services for a period of five years from the amendment.  Also, once an amendment has been approved, it will be published by the USPTO and third parties who believe they may be harmed by the amendment will have a thirty day period in which to comment.

The USPTO has provided on its web site a number of example amendments that would be acceptable under this pilot program, as well as some that would not be allowed.  Key points to keep in mind are that the original goods/services are no longer in use due to the evolution of technology and that the new goods/services must pertain to the same subject matter as the original. 

As an interesting example, the USPTO points out that “streaming of audio material in the nature of music” in International Class 38 would not be an acceptable replacement for “phonograph records featuring music” in International Class 9.  The proposed use is to identify a telecommunications-provider service as opposed to identifying the source of content.  “Providing on-line music, not downloadable” in International Class 41 would be an acceptable amendment in this case.

In an era of rapid technological evolution, the USPTO’s pilot program offers trademark registrants a useful tool for preserving valuable rights.