INTELLECTUAL PROPERTY RIGHTS

UNIT-1
INTELLECTUALPROPERTYRIGHTS
Introduction
Intellectual property (IP) is a term referring to creation of the intellect (the term used in studies of the
human mind) for which a monopoly (from greek word monos means single polein to sell) is assigned to
designated owners by law.Some common types of intellectual property rights (IPR), in some foreign
countries intellectualpropertyrights isreferredtoas industrialproperty,copyright, patent andtrademarks,
tradesecretsallthesecover music, literatureandotherartisticworks,discoveriesand inventionsand words,
phrases, symbols and designs.Intellectual Property Rights are themselves a form of property called
intangible property.

Although manyofthe legalprinciplesgoverning IP and IPR have evolved over centuries, it was not
until the 19th century that the term intellectual property began to be used and not until the late 20th century
that it became commonplace in the majority of the world.

TypesofIntellectualProperty
Thetermintellectualpropertyisusuallythought ofascomprisingfourseparatelegal fields:

1. Trademarks

2. Copyrights

3. Patents

4. Trade secrets

1. Trademarks and Service Marks:A trademark or service mark is a word, name, symbol, or
device used to indicate the source, quality and ownership of a product or service.A trademark is used in the
marketing is recognizable sign, design or expression which identifies productsor service ofa particular
sourcefromthoseofothers.Thetrademark owner can bean individual, businessorganization, or any legal
entity.A trademark may be located on a package, a label, a voucher or on the product itself.For the sake of
corporate identity trademarks are also being.

GeneralLogos:

TheTrademarkRegistration Logo
In addition to words, trademarks can also consist of slogans, design, or sounds. Trademark provides
guaranteeofqualityand consistencyoftheproduct or servicethey identify.
Companies expend a great deal of time, effort and money/ in establishing
consumer recognition of and confidence in their marks.

FederalRegistrationoftrademarks:
Interstate use of trademarks is governed by federal law, namely, the United States Trademark Act
(also called theLanham Act), found at 15 U.S.C1051et seq.Inthe United States,trademarks aregenerally
protected fromtheir date offirst public use. Registrationofa mark is not required to secure protection for a
mark, although it offers numerous advantages, such as allowing the registrant to bring an action in federal
court for infringement of the mark.

Applications for federal registration of trademarks are made with the PTO. Registration is a fairly
lengthy process, generally taking anywhere from twelve to twenty-four months or even longer. The filing
fee is $335 per mark (Present $225 per class) per class ofgoods or services covered bythe mark.

A trademark registration is valid for 10 years and may be renewed for additional ten year periods
thereafter as long as the mark is in used in interstate commerce.To maintain a mark the registrant is
required to file an affidavit with the PTO between the fifth and sixth year after registration and every ten
years to verifythe mark is in continued use. Marks not in use are then available to others.

Aproperly selected, registered and protected mark can beofgreat valueto acompanyor individual
desiring to establish and expand market share and better way to maintain a strong position in the
marketplace.
2. Copyrights: Copyright is a form of protection provided by U.S. law (17 U.S.C 101 et seq) to the
authors of "original works of authorship" fixed in any tangible medium of expression.The manner and
mediumoffixation are virtuallyunlimited.Creative expression may becaptured in words, numbers, notes,
sounds, pictures, or any other graphic or symbolic media. The subject matter of copyright is extremely
broad, including literary, dramatic, musical, artistic, audiovisual, and architectural works.Copyright
protection is available to both published and unpublished works.

Copyright protection is available for more than merely serious works of fiction or art. Marketing
materials, advertising copy and cartoons are also protectable.Copyright is available for original working
protectable by copyright, such as titles, names, short phrases, or lists of ingredients. Similarly, ideas
methods and processes are not protectable by copyright, although the expression of those ideas is.

Copyright protection exists automatically from the time a work is created in fixed form. The owner
of a copyright has the right to reproduce the work, prepare derivative works based on the original work
(such as a sequel to the original), distribute copies of the work, and to perform and display the work.
Violations of such rights are protectable by infringement actions. Nevertheless, some uses of copyrighted
works are considered “fair use” and do not constitute infringement, such as use of an insignificant portion
of a work for noncommercial purposes or parody of a copyrighted work.

Definition:

GeneralDefinitionofcopyright“Copyrightowner”,withrespecttoanyoneoftheexclusiverights
comprised inacopyright,referstotheownerofthatparticular right.

Federal Registration of Copyrights:The works are protected under federalcopyright law fromthe
time oftheir creation in a fixed form.Registration, however, is inexpensive, requiring onlya $30 (present
$85) filing fee, and the process is expeditious.In most cases, the Copyright Office processes applications
within four to five months.

Copyrighted works are automatically protected from the moment of their creation for a term
generallyenduring for theauthor’slifeplusanadditionalseventyyearsafter the author’sdeath.Thepolicy
underlying the long period of copyright protection is that it may take several year for a painting, book, or
opera to achieve its true value, and thus, authors should receive a length of protection that will enable the
work to appreciate to its greatest extent.

3. Patents:Apatent for an invention is the grant ofa propertyright to the inventor, issued bythe United
StatesPatent and Trademark Office. Generally, thetermofa newpatent is20 years fromthedateonwhich the
application for the patent was filed in the United States or, in special cases, from the date an earlier related
application was filed, subject to the payment of maintenance fees. U.S. patent grants are effective only
within the United States, U.S. territories, and U.S. possessions. Under certain circumstances, patent term
extensions or adjustments may be available.
The right conferred by the patent grant is, in the language ofthe statute and ofthe grant itself, “the right to
exclude others from making, using, offering for sale, or selling” the invention in the United States or
“importing”theinventionintotheUnitedStates.Whatisgrantedisnottherighttomake,use,offerfor
sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or
importing the invention. Once a patent is issued, the patentee must enforce the patent without aid of the
USPTO.

Therearethreetypesofpatents:

Utility patentsmay be granted to anyone who invents or discovers any new and useful process, machine,
article of manufacture, or composition of matter, or any new and useful improvement thereof;

Designpatentsmaybegrantedtoanyonewho inventsanew,original, andornamentaldesignforanarticle of

manufacture; and

Plant patents may be granted to anyone who invents or discovers and asexually reproduces any distinct
and new variety of plant.

FederalRegistrationof Copyrights:Patents are governed exclusively by federal law (35 U.S.C 100
et seq). To obtain a patent, an inventor must file an application with the PTO (the same agency that issues
trademark registration) that fully describes the invention.Patent prosecution is expensive, time consuming
and complex. Costs can run into the thousands of dollars, and it generally takes over two year for the PTO
to issue a patent.

Patent protection exists for twenty years from the date of filing of an application for utility and
patentsand fourteenyears fromthedateofgrant for designpatents.After thisperiodoftime, the invention fall
into the public domain and may be used by any person without permission.

The inventor is granted an exclusive but limited period of time within which to exploit the
invention.After the patent expires, any member of the public is free to use, manufacture, or sell the
invention.Thus, patent law strikes a balance between the need to protect inventors and the need to allow
public access to important discoveries.

4. Trade Secrets:A trade secret consists of any valuable business information.The business secrets are
not to be known bythe competitor.There is no limit to the type ofinformationthat can be protected as trade
secrets; For Example: Recipes, Marketing plans, financial projections, and methods of conducting
business can all constitute trade secrets.There is no requirement that atrade secret be unique or complex;
thus, even something as simple and nontechnical as a list of customers can qualify as a trade secret as long
as it affords its owner a competitive advantage and is not common knowledge.

Iftradesecretswerenot protectable,companieswould no incentiveto investtime, moneyandeffort in

research and development that ultimately benefits the public.Trade secret law thus promotes the
development of new methods and processes for doing business in the marketplace.

Protection of Trade Secrets:Although trademarks, copyrights and patents are all subject to
extensivestatutoryschemefor their protection,applicationandregistration,thereisnofederallawrelating
to trade secrets and no formalities are required to obtain rights to trade secrets.Trade secrets are protectable
under various state statutes and cases and by contractual agreements between parties.For Example:
Employersoften requireemployees to sign confidentialityagreementsin which employees agree not to
disclose proprietary information owned by the employer.

If properly protected, trade secrets may last forever. On the other hand, if companies fail to take
reasonable measures to maintain the secrecy ofthe information, trade secret protection may be lost.Thus,
disclosure of the information should be limited to those with a “need to know” it so as to perform their
duties, confidential information should be kept in secure or restricted areas, and employees with access to
proprietary information should sign nondisclosure agreements.If such measures are taken, a trade secret can
be protected in perpetuity.

Another method bywhichcompanies protect valuable information is byrequiring employee to sign

agreements promising not to compete with the employer after leaving the job.Such covenants are strictly
scrutinized by courts, but generally, if they are reasonable in regard to time, scope and subject matter, they
are enforceable.

AGENCIES RESPONSIBLE FOR INTELLECTUAL PROPERTY

REGISTRATION
UnitedStatesPatentsandTrademarkOffice:
Theagencychargedwithgrantingpatentsandregistering trademarks istheUnitedStatesPatent and
Trademark Office (PTO), one of fourteen bureaus within the U.S. Department of Commerce.The PTO,
founded more than two hundred years ago, employs nearly 700 (present 1000 employs) are working.At
present it is located in 18 building in Arlington, Virginia.Its official mailing address is Commissioner of
Patentsand Trademarks, Washington, DC 20231.

The PTO is physically located at 2900 Crystal Drive in Arlington, Virginia.Its web site is
http://www.uspto.govandoffersawealthofinformation, including basic informationabouttrademarksand
patents, fee schedules, forms, and the ability to search for trademarks and patents.Since 1991, under the
Omnibus Budget Reconciliation Act, the PTO has operated in much the same way as a private business,
providing valued products and services to customers in exchange for fees that are used to fully fund PTO
operations.

It uses no taxpayer funds.The PTO plans to move all of its operations to Alexandria, Virginia, by
mid-2005.The PTO is one of the busiest of all government agencies, and as individuals and companies
begin to understand the value of intellectualproperty, greater demands are being made on the PTO.

Legislation passed in 1997 established the PTO as a performance-based organization that is

managed by professionals, resulting in the creation of a new political position, deputy secretary of
commerce for intellectualproperty.Inbrief, thePTOoperatesmore like abusinesswithgreaterautonomy over
its budget, hiring, and procurement.U.S patents issued its first patent in 1790.Since 1976 the text and
images of more than three million are pending for registration.The PTO is continuing its transition filing
for both trademarks and frompaper to electronic filing for bothtrademarks and patents.
 The PTO is led by the Under Secretary of Commerce for Intellectual Property and Director of the
United States Patent and Trademark Office (the “Director”), who is appointed by the President.The
Secretary of Commerce appoints a Commissioner for Patents and a Commissioner for Trademarks.
Citations to many cases in this text will be to “U.S.P.Q”., a reference to United States Patent Quarterly, a
reporter of cases decidedby the Trademark Trial andAppeal Board (TTAB) as well as patent and copyright
cases.

INTERNATIONALORGANIZATIONS,AGENCIESANDTREATIES
There are a number of International organizations and agencies that promotethe use and protection
of intellectual property.Although these organizations are discussed in more detail in the chapters tofollow, a
brief introduction may be helpful:

International Trademark Association (INTA) is a not-for-profit international association

composed chieflyoftrademark ownersand practitioners.It is a globalassociation.Trademark ownersand
professionals dedicated in supporting trademarks and related IP in order to protect consumers and to
promote fair and effective commerce.More than 4000 (Present 6500 member) companies and law firms
more than 150 (Present 190 countries) countries belong to INTA, together with others interested in
promoting trademarks.INTA offers a wide variety of educational seminars and publications, including
many worthwhile materials available at no cost on the Internet (see INTA’s home page at
http://www.inta.org). INTA members have collectively contributes almost US $ 12 trillion to global GDP
annually.INTA undertakes advocacy [active support] work throughout the world to advance trademarks and
offers educational programs and informational and legal resources of global interest.Its head quarter in New
York City, INTA also has offices in Brussels, Shanghai and Washington DC and representative in Geneva
and Mumbai.This association was founded in 1878by17 merchants and manufacturers who sawa need for
an organization.The INTA is formed to protect and promotethe rights oftrademark owners, to secure useful
legislation (the process of making laws), and to give aid and encouragement to all efforts for the
advancement and observance of trademark rights.

World Intellectual Property Organization (WIPO) was founded in 1883 and is specialized
agencyofthe United Nationswhose purposesareto promote intellectualpropertythroughout the world and to
administer 23 treaties (Present 26 treaties) dealing with intellectual property.WIPO is one of the 17
specialized agencies of the United Nations.It was created in 1967, to encourage creative activity, to
promote the protection ofIntellectualPropertythroughout the world.More than175 (Present 188) nations are
members of WIPO.Its headquarters in Geneva, Switzerland, current Director General of WIPO is
FrancisGurry took chargeonOctober 1, 2008.Thepredecessorto WIPOwasthe BIRPI [Bureaux for the
Protection of Intellectual Property] it was established in 1893.WIPO was formally created by the
convention (meeting) establishing the world intellectual Property organization which entered into force on
April 26 1970.

Berne Convention for the Protection of Literary and Artistic Works (the Berne
Convention) An International copyright treaty called the convention for the protection of Literary and
Artistic workssignedatBerne,Switzerlandin1886undertheleadershipofVictorHugotoprotectliterary
and artistic works.It has more than 145 member nations.The United States became a party to the Berne
Conventionin1989.TheBerne ConventionisadministeredbyWIPOand is basedonthepreceptthat each member
nation must treat nation must treat nationals of other member countries like its own nationals for purposes
of copyright (the principle of “nation treatment”).In addition to establishing a system of equal treatment
that internationalized copyright amongst signatories, the agreement also required member states to provide
strong minimum standards for copyrights law.It was influenced by the French “right of the author”.

Madrid Protocol It is a legal basis is the multilateral treaties Madrid (it is a city situated in Spain)
Agreement concerning the International Registration of Marks of 1891, as well as the protocol relating to
the Madrid Agreement 1989.The Madrid system provides a centrally administered system of obtaining a
bundle of trademark registration in separate jurisdiction.The protocol is a filing treaties and not substantive
harmonization treaty. It provides a cost-effective and efficient way for trademark holder.It came into
existence in 1996.It allows trademark protection for more than sixtycountries, including all25 countries of
the European Union.

Paris Convention The Paris convention for the protection of Industrial Property, signed in Paris,
France, on20th March1883, wasoneofthe first IntellectualPropertytreaties, after adiplomaticconference in
Paris, France, on 20 March 1883 by Eleven (11) countries.According to Articles 2 and 3 of this treaty,
juristic (one who has through knowledge and experience of law) and natural persons who are eithernational
of or domiciled in a state party to the convention.The convention is currently still force.The substantive
provisions of the convention fall into three main categories: National Treatment, Priority right and
Common Rules.

An applicant for a trademark has six months after filing an application in any of the more than 160
member nations to file a corresponding application in any of the other member countries of the Paris
Convention and obtain the benefits of the first filing date.Similar priority is afforded for utility patent
applications, although the priority period is one year rather than six months.The Paris Convention is
administered by WIPO.

North American Free Trade Agreement (NAFTA) came into effect on January 1, 1994, and is
adhered to by the United States, Canada, and Mexico.The NAFTA resulted in some changes to U.S.
trademark law, primarily with regard to marks that include geographical terms.The NAFTA was built on
the success of the Canada-U.S Free Trade Agreement and provided a compliment to Canada’s efforts
through the WTO agreements by making deeper commitments in some key areas.This agreement has
brought economic growth and rising standards of living for people in all three countries.

General Agreement on Tariffs and Trade (GATT) was concluded in 1994 and is adhered to by
most of the major industrialized nations in the world.The most significant changes to U.S intellectual
property law fromGATT are that nonuse ofa trademark for three yearscreatesa presumption the mark has
been abandoned and that the duration of utility patent is now twenty years from the filing date of the
application (rather than seventeen years from the date the patent issued, as was previously the case).
THEINCREASINGIMPORTANCEOFINTELLECTALPROPERTYRIGHTS
❖ ProtectingIntellectualPropertyRights
❖ Technologyhasledto increaseawarenessabouttheIP
❖ Someindividualsandcompaniesofferonlyknowledge. Thus,computerconsultant,advertising
agencies, Internet companies, and software implementers sell only brainpower.
❖ Domainnamesand moving imagesarealso beprotected
❖ MorethanfiftypercentofU.S.exportsnowdependonsomeformofintellectualproperty protection.
❖ TherapiditywithwhichinformationcanbecommunicatedthroughtheInternethasledto increasing
challenges in the field of intellectual property.
❖ ThemostvaluableassetsacompanyownsareitsIntellectualpropertyassets
❖ Companiesmustactaggressivelytoprotectthesevaluableassetsfrominfringement(breaching, violation
of law) or misuse by others
❖ Thefield ofintellectualpropertylawaimstoprotect thevalueofsuch investments

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 UNIT-2
TRADEMARKS
Introduction
Although there was some use of trademarks or symbols in the Middle East and Far East several
centuries ago, contemporary (modern) trademark law can be traced back to use of trademarks during the
medieval period in Europe by merchants who sought to distinguish the goods they sold fromthose sold by
others by applying a mark or symbol to their goods.By viewing the mark, purchasers would immediately
beableto identifythecraftspersonthat madethegoodsand makean informed decisionabout thequalityof the
material.The use of symbols by medieval craftspeople to distinguish and identify their goods is the direct
antecedent for the modern use of trademarks.

DefinitionofTrademark:
The modern definition of trademark is that “it is a word, name, symbol, or device or a combination
thereof, used by a person [including a business entity], or which a person has a bonafide intention touse,
to identify and distinguish his or her goods from those manufactured by others and to indicate the
source of those goods.”

PURPOSEANDFUNCTIONOFTRADEMARK
Trademarks perform two critical functions in the marketplace: [1] they provide assurance that
goods are of a certain quality and consistency, and [2] they assist consumers in making decisions about
the purchase of goods. The main purpose oftrademark isto show the difference about the qualityofgoods
and service For example: If a trademark such as NIKE could be counterfeited (imitating) and used by
another on inferior merchandise (goods), there would be no incentive for the owners of the NIKE mark to
producehigh-qualityshoesand to expend money establishing consumer recognitionoftheproductsoffered
under the NIKE marks.

Thus, protection of trademarks results in increased completion in the marketplace, with both the
producer of goods and services and the consumer as the ultimate beneficiaries.Business benefit because
they can reap the rewards of their investment in developing and marketing a product with one fearing
anotherbusinesswilldeceiveconsumer byusingthesameoraconfusinglysimilar mark forlikegoods,and
consumers benefit because theyare able to identify and purchase desired and qualitygoods.

The value inherent in achieving consumer loyalty to a particular product or service through the
maintenance of consistent qualityof the products or service offered under a mark is called goodwill.

❖ theyidentifyonemaker’sgoodsorservicesanddistinguishthem fromthoseofferedbyothers
❖ Theyindicatethatallgoodsorservicesofferedunderthemarkcomefromasingleproducer,
manufacturer,or“source”
❖ Theyindicatethatallgoodsor servicesofferedunderthemarkareofconsistentquality and
 ❖ Theyserve asanadvertisingdevice so that consumers linkaproductorservice beingofferedwitha mark

TYPESOFMARKS
Therearefourdifferenttypesofmarks.Theyare:

1. Trademark

2. Servicemark

3. Certificationmark

4. Collectivemark

Trademark&Servicemark
The term trademark thus refers to some physical and tangible good, and service mark refers to an
intangible service, in common usage the term trademark is often used to refer to marks for both goods and
service.The key point in this legal description is that a trademark is a visual mark that may use any
combination of letters and imageryto aid a company in differentiating itself fromother entities.

The purpose of a trademark is to visually represent a person, company, or product, and trademark
should bedesignedto provideeasyand definiterecognition.Thetermmarkwillbeusedasa synonymfor
bothtrademarkandservice marks.Thefederalstatute((law)anact passedbya legislative body) governing
trademark law, the U.S. Trademark Act (Lanham Act, found at 15 U.S.C 1051 et seq.) itself states that the
term mark includes any trademark, service mark, collective mark, or certificate mark.

ACertificationmark
A citification mark is a word, name, symbol, device, or combination thereof, used by one person to
certify that the goods or services of others have certain features in regard to quality, material, mode of
manufacture,orsomeother characteristic(orthattheworkdoneonthegoodsor serviceswas performed by
members of a union or other organization).For example:Hallmark, ISO mark and in U.S Underwriters
Laboratory seals of approval (Underwriters Laboratory is the largest and best known independent, not for
profit testing laboratory in the world based in Northwood, Illinois, UL conducts safety and quality tests on
a broad range of products, from firedoor’s to CCTV cameras seals of approval).

CollectiveMark
A collective mark is one used by a collective membership organization, such as a labor union,
fraternity, or professional society, to identify that the person displaying the mark is a member of the
organization.Thus, the FUTURE FARMERS OF AMERICA and AMERICAN BAR ASSOCIATION
marks indicate membership incertainorganizations.Acompanymayuseseveralmarks ForExample: the word:
COCA-COLA, the stylized WAVE DESIGN, and the slogan“THINGS GO BETTER WITH
COKE”.Allofthese marksare used onone product and allare protected bythe Coca-Cola Company.On
someoccasions, companiesuse house marksto establishrecognition in awiderangeofproductsorservice.
ACQUISITIONOFTRADEMARKRIGHTS
In most foreign countries, trademark rights arise from registering the mark with a governmental
entity.The law in the United States is quite different: trademark rights arise from adoption and use of a
mark.Apersonusing a mark may have valid and enforceable rights in a mark even thoughthe mark is not
registered with the PTO, such an owner will have priority even over a subsequent user who has secured a
federalregistrationfor a markwiththe PTO.The“use”requiredto establishtrademarkrights is morethan token
use,itmust be public use, while actual sales of products or services are not required, a certain level ofpresale
activityis required. Forexample: Sales within a company or to personal friends are insufficient to show
use, while soliciting [plead for something] and accepting order is usually sufficient to show
commercialuse.Thus, apersonusinga mark mayhave validandenforceablerights ina markeventhough the
mark is not registeredwiththePTO.Suchanowner willhavepriorityevenover asubsequent user who has
secured a federal registration for a mark with the PTO.

Establishing a date of first use is critical for atrademark owner because priorityoftrademark rights is
measured form this date.Ifone party first used of mark on September 15, 2015 and another first used a
similar mark on October 15, 2015, the prior, or senior, user will be able to preclude the junior user from
using a confusingly similar mark.

For a mark to be registrable, it must be based on use in commerce, meaning the type of commerce
that can be regulated by Congress.Generally, the use is based on interstate commerce or commerce between
states (although itcould bebased on commerce between theUnited State and aforeign country). A purely
intrastate use does not provide a basis for federal registration of a mark.A purely intrastate use does not
provide a basis for federalregistration of a mark.The requirement of interstate (within one state) commerce
is satisfied if the goods or services are advertised in more than one state, offered to citizens of morethan
one state, oroffered onthe Internet, which is considered use in commerce because it is available to a
national audience through the use of telephone lines.

The general rule is that acquisition oftrademark rights stem fromuse, there is one exception to this
rule: the intent-to-use application.Until 1989, the United States was one of only two countries in the
world that required thata mark be in actual use before an owner could file an application to register it. After
an applicant had begun using the mark and then filed an application, the PTO might refuse registrationofthe
markonthe basis it was confusingly similar to aprior markor wassubject to someother defect.The applicant
would then have invested substantial money and time in developing the mark, in using it in commerce,
marketing and advertising, and in applying for registration, only to be told the mark wasunregistrable.To
remedy this situation, the Trademark Law Revision Act of1988allowed personsto file applications for
marks based on a bona fide intent to use the mark in commerce in the future.If the PTO determines the
mark is unregistrable, the applicant will not have expended any sums other than the PTO filing fee and can
readily file another application for a new mark.Once the mark proceeds to registration, priority is measured
from the date the intent-to-use-application was filed, even though that filing date may precede actual use in
commerce by more than three years.

Minimalortokenusecannotserveasthebasisforsecuringormaintainingaregistration,ensuring
thatanownerdoesnotreserveor“warehouse”amarkbymakingonlysporadicuseofitwiththeintentto
block others from using it rather than having a true commercial intent to exploit the mark for sales.The
PTO desires to clear its records of unused marks, or “deadwood”, so that such unused marks may be
available byothers.The use required is “bonafide use of a mark in the ordinary course of trade, and not
made merely to reserve a right in a mark”, 15 U.S.C 1127.

COMMON LAW RIGHTS, FEDERAL REGISTRATION UNDER THE LANHAM

ACT, LAWS AND TREATIES GOVERNING TRADEMARKS, AND STATE
TRADEMARK RIGHTS

CommonLawRights
The United States, trademark rights arise from use of a mark.It is not necessary to secure permission
or registration fromany governmental entityto acquire trademark rights.A partywhois using a mark without
any such governmental registration is said to have a common law trademark, it can be enforced in any
geographical area in which the mark is used.

FederalRegistration
Althoughthereisnorequirementthatatrademarkownerapplyforasecurefederalregistrationof
markwiththePTO,registrationonthePTO’sPrincipalRegister doesoffer severaladvantages:

❖ nationwide constructive use effective fromthe filing date ofthe application (the publicassumed to
have notice that the registrant has nationwide priority in the use of its mark as ofthis date)
❖ nationwidenoticetothepublicofan owner’sclaimtoamark,therebyprecludingalateruserfrom
claimingitusedamarkingoodfaithinaremoteterritoryandshouldbeabletocontinueuse;
❖ theabilitytobar importanceofgoodsbearinginfringingtrademarks
❖ the right under the Paris Conventiontoobtaina registration in various foreigncountries based upon
the U.S. registration;
❖ therighttobringanactioninfederalcourtfortrademarkinfringementandrecoverlostprofits,
damages,costs,andpossiblytripledamagesandattorney’s fees
❖ incontestable status of the registration after five years of continuous use subsequent to the
registration
❖ theright tousetheregistrationsymbolwiththemark
❖ apossiblebasistoclaimprioritytoanInternetdomainnameand
❖ prima facie (literally, “on its face”) evidence of the validity of the registration,the registrant’s
ownership of the mark, and the registrant’s exclusive right to use the mark in connection with the
identified goods and services.
LawsandTreatiesGoverningTrademark

Thereareseverallawsandtreatiesgoverningtrademark, including the

following:

Lanham Act The federal statute governing trademark rights is the Lanham Act (also called the United
States Trademark Act and found at 15 U.S.C § 1051 et seq.), enacted in1946 and named for Congressman
Fritz Garland Lanham (D.Tex.), the then chair of the House Patent Committee (which also proposed
legislation relating to trademarks) who introduced the legislation.In addition to providing for federal
trademark protection, the Lanham Act also includes statutes prohibiting unfair competition.The Lanham
Act has been amended numerous times.Perhaps the most significant amendment occurred with the
Trademark Law Revision Act of 1988, which provided the following two critical changes: allowing for a
trademark application based on the applicant’s intent to use a mark in the future.Rules of practice and
procedure relating to trademarks are found at Title 37 of the Code of Federal Regulation (C.F.R).

North American Free Trade Agreement (NAFTA) came into effect on January 1, 1994, and is
adhered to by the United States, Canada, and Mexico.The NAFTA resulted in some changes to U.S.
trademark law, primarily with regard to marks that include geographical terms.The NAFTA was built on
the success of the Canada-U.S Free Trade Agreement and provided a compliment to Canada’s efforts
through the WTO agreements by making deeper commitments in some key areas.This agreement has
brought economic growth and rising standards of living for people in all three countries.

Madrid Protocol It is a legal basis is the multilateral treaties Madrid (it is a city situated in Spain)
Agreement concerning the International Registration of Marks of 1891, as well as the protocol relating to
the Madrid Agreement 1989.The Madrid system provides a centrally administered system of obtaining a
bundle of trademark registration in separate jurisdiction.The protocol is a filing treaties and not substantive
harmonization treaty. It provides a cost-effective and efficient way for trademark holder.It came into
existence in 1996.It allows trademark protection for more than sixtycountries, including all25 countries of
the European Union.

Trade-Related aspectsofIntellectualProperty Rights (TRIPs)isan international agreement

administered by the World Trade Organization(WTO) that sets down minimum standards for many forms
of intellectual property(IP) regulation as applied to nationals of other WTO Members. It was negotiated at
the end of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT) in 1994.

TheDohadeclarationisa WTOstatement thatclarifiesthescopeofTRIPS, stating forexamplethatTRIPS can

and should be interpreted in light of the goal "to promote access to medicines for all."Specifically, TRIPS
requires WTO members to provide copyright rights, covering content producers including performers,
producers of sound recordings and broadcasting organizations; geographical indications, including
appellations of origin; industrial designs;integrated circuit layout-designs;patents;new plant
varieties;trademarks;tradedress;andundisclosedor confidentialinformation.TRIPSalso specifies enforcement
procedures, remedies, and dispute resolution procedures.
TrademarkLawTreatyImplementationAct(TLTIA) effective inlate1998 simplified several
requirements relating to trademark registration and maintenance.For example: at present, the applicant
need only submit one specimen showing how a mark is used rather than three, as was previouslyrequired.
Additionally, a trademark applicant need no longer state the manner in which the mark is used.Finally,
TLTIA established a six month grace period for filing a renewal for a trademark registration.

Federal TrademarkDilution Act TheFederalTrademark Dilution Act of 1995 is aUnited States

federallaw whichprotectsfamous trademarks fromusesthat dilutetheirdistinctiveness,eveninthe absence
ofany likelihood ofconfusionor competition. It went into effect onJanuary16, 1996. Thisact has been largely
supplanted by the Trademark Dilution Revision Act of 2006 (TDRA), signed into law on October 6, 2006.

Anticybersquatting Consumer ProtectionAct. 15 U.S.C. §1125(d), isan American law enacted

in1999thatestablishedacauseofactionforregistering,traffickingin,orusinga domain
nameconfusinglysimilarto,ordilutiveof,a trademark orpersonalname. Thelawwasdesignedto thwart
“cybersquatters” who register Internet domain names containing trademarks with no intention of creating a
legitimate web site, but instead plan to sell the domain name to the trademark owner or a third party. Critics
of the ACPA complain about the non-global scope of the Act and its potential to restrict free speech, while
others dispute these complaints. Before the ACPA was enacted, trademark owners relied heavily on the
Federal Trademark Dilution Act (FTDA) to sue domain name registrants. The FTDA was enacted in 1995
in part with the intent to curb domain name abuses. The legislative history of the FTDA specifically
mentions that trademark dilution in domain names was a matter of Congressional concern motivating the
Act. Senator Leahy stated that “it is my hope that this anti-dilution statute can help stemthe use of
deceptive Internet addresses taken by those who are choosing marks that are associated with the products
and reputations of others”.

CATEGORIESOFMARKS
Although marks can consist of words, symbols, designs, slogans, or a combination thereof, not
every term is protectable.Even among marks that are protectable, some marks are stronger than other.In
determining strengthofmarks, courtsrecognize severalcategoriesofmarks.Inascending orderofstrength and
protectability, the five categories are:

❖ A Generic Mark Generic "marks" are devices which actually name a product and are incapable of
functioning as a trademark. Unlike descriptive marks, generic devices will not become a trademark
even if they are advertised so heavily that secondary meaning can be proven in the mind of
consumers. The rationale for creating the category of generic marks is that no manufacturer or
service provider should be givenexclusive right to use wordsthat generically identifya product.A
valid trademark can become generic if the consuming public misuses the mark sufficiently for the
mark to become the generic name for the product. The prime examples of former trademarks that
became the generic name for a product are ASPIRIN, XEROX and CELLOPHANE.

❖ A Descriptive mark (or more properly, "merely descriptive marks") are devices which merely
describe the services or goods on which themark is used. If a device ismerely descriptive, itis not
 a mark at all, since it does not serve to identify the source of the goods or services. No trademark
rights are granted to merely descriptive marks. Misdescriptive marks are equally weak. Asexplained
in connection with suggestive marks above, descriptive marks are often difficult to distinguish from
suggestive marks. Suggestive marks require some imagination, thought, or perceptionto reacha
conclusion as to the nature ofthe goods. Descriptive marksallow one to reach that conclusion
without such imagination, thought or perception. Putting this distinction into practice can be very
difficult. Merely descriptive marks can be registered federally on the Supplemental Register (see the
Bit Law discussion on federal registration of trademarks for more information).The descriptive
mark will not register in PTO until the consumer links the mark with a single source. That learned
association is called Secondary meaning or acquired distinctiveness.The PTO assumes that
secondary meaning has been acquired after five years of consecutive and exclusive use of a
mark.Secondary meaning can be demonstrating a significant level of advertising, sales an consumer
survey evidence, to prove that when consumer encounter a mark.
For Example: The following imaginary marks could be considered merely descriptive forcomputer
peripherals:

✓ FASTBAUDformodems(describingthequicknessofthemodem);

✓ 104KEYfor computerkeyboards(describingthenumber ofkeysonakeyboard);

✓ LIGHT forportablecomputers(describingthecomputer'sweight);and

✓ TUBELESSforcomputermonitors(evenifmisdescriptiveforamonitorthatcontains tubes).

❖ A Suggestive mark are marks that suggest a quality or characteristic ofthe goods and services.
Despite the fact that suggestive marks are not as strong as fanciful or arbitrary marks, suggestive
marks are far more commondue to the inherent marketing advantage oftying a mark to the product
in a customer's mind. Suggestive marks are often difficult to distinguish from descriptive marks
(described below), since bothare intendedto refer tothegoodsand services inquestion. Suggestive
marks require some imagination, thought, or perceptionto reacha conclusion as to the nature ofthe
goods. Descriptive marks allow one to reach that conclusion without such imagination, thought or
perception. Putting this distinction into practice clearly is one of the most difficult and disputed
areas of trademark law.

Thefollowingmarkscanbeconsideredsuggestive:

✓ MICROSOFT(suggestiveofsoftwarefor microcomputers)
✓ NETSCAPE (suggestiveofsoftwarewhichallows traversingthe"landscape"ofthe
✓ Internet)

✓ SILICONGRAPHICS(suggestiveofgraphicorientedcomputers)
❖ Arbitrary Marks An arbitrary mark utilizes a device having a common meaning that has no
relation to the goods or services being sold.

Examplesofarbitrarymarksinclude:

✓ APPLE (for computers)

✓ LOTUS(forsoftware)
✓ SUN(forcomputers)
✓ CROWN(ForTelevision)

❖ Fanciful Marks are devices which have been invented for the sole purpose of functioning as a
trademarkand have noothermeaningthanactingasa mark.Fancifulmarksareconsideredto bethe
strongest type of mark. Examples of fanciful marks are:
EXXON, KODAKandXEROX.

PROTECTABLEMATTER

Slogans,LettersandNumbers
A word or other groupings of letters is the most common type of mark For Examples: APPLE,
SILICON, GRAPHICS, NETSCAPE, IBM, NBC.Slogans from advertising campaigns are also used as
trademarks. Example slogans which have strong trademark rights attached For Example:

Nike
Alphanumeric symbols (lettersand numbers) maybeprotectable as longastheyare not merelydescriptive.
Ifthe numbers or letters describe something about the product or service offered under the mark, however,
they will not be registrable unless proof of secondary mining is shown.Thus, the mark “VT220” for
computer hardware peripherals was held merely descriptive and unregistrable because “VT” Video
Terminal and 220 was a mere model number.

LogosandSymbols
Logos are probably the next most common form of mark. A logo can be described as a design which
becomes a mark when used in close association with the goods or services being marketed. The logo mark
does not need to be elaborate; it need only distinguish goods and services sold under the mark from other
goods and services. Examples of logo marks are:

McDonald'sdoublearches:
NBC'speacockstyledesign:

AppleComputer'sApple:

NamesofperformingArtists
A mark thatmerely serves to identify an artist or entertainer isnot registrable.However,if the owner of the
mark has controlled the quality of the goods or services, and the name of the artist or group has been used
numerous times on different records (thereby representing an assurance of quality to the public), the name
maybe registered as a trademark, Thus, GOO GOO DOLLS and BOB BYLAN have beenregistered for
musical sound recordings.

DomainNames
Domain names, for example, www.ibm.com, are registrable as trademark or service marks only if they
function as an identification of the source of goods and service.Thus, www.oakwood.comhas been
registered for real estate leasing service and www.eilberg.comwas refused registration because the mark
merely indicated the location on the Internet where the applicant’s web site appeared and it did not
separately identify the applicant’s legal services.Another complication with domain name registration is
that the PTO has held that businesses that create a web site for the sole purpose of advertising their own
productsorservices cannot register a domain name used to identify that activity.Thus, www.amazon.comis
registered for providing online chat rooms and bulletin boards.It is not registered in connection with
offering books or other goods for sale.

ShapesandContainers
A product or container shape can also serve a source identifying function and therefore can be an
enforceabletrademark. Aproductor container shape mayalso besubject to adesignpatent (seetheBitLaw
discussion of design patents to see an analysis of the similarities and differences between designpatents
andtrademarkprotectionforproduct shapes). Historically, trademarkprotectionwas not grantedto product
shapes until the consuming public recognized the shape as indicating the source of the product. In other
words, the product shape was required to obtain secondary meaning. However, recent court decisions may
mean that an inherently distinctive product shape can be a protectable trademark even before secondary
meaning is obtained. Examples of product shapes and configurations that likely enjoy trademark status
include:

Coca-colaBottle
Apple’sIpod

TradeDress
Trade dress is the overall commercial image (look and feel) of a product or service that indicates or
identifies the source of the product or service and distinguishes it from those of others. It may include the
design or configuration ofa product;the labeling and packaging ofgoods; and/or the décoror environment in
which servicesare provided. Trade dresscan consist ofsuchelementsassize, shape, color and textureto the
extent such elements are not functional. In many countries, trade dress is referred to as “get-up” or “product
design”.Only nonfunctional trade dress can be protected.Because trade dress is often protected through the
law of unfair competition.

Color
The color of an item can alsofunction as a trademark. The Supreme Court heldinthe 1995 case of Qualitex
Co. v. Jacobson Products Co., 115 S.Ct. 1300 (1995) that the green-gold color of a dry cleaning press pad
can function as a trademark. Before this decision, the argument was often made that color alone could not
be considered a trademark, since granting trademark status to colors would soon lead to the depletion of the
number of colors available for an object. The Court in Qualitex rejected arguments based on this depletion
theory, reasoning that alternative colors would usually be available for competitors. In those cases where
alternative colors were not available, courts could deny trademark protection in those circumstances where
color depletion may actually occur

Fragrances,Sounds,andMovingImages
A sound can also be a trademark or a service mark. The three tone chime of NBC has been registered as a
service mark. Sound trademarks recently were in the news when Harley-Davidson announced that it was
attempting to register the exhaust sound of a Harley- Davidson motorcycle with the U.S. Patent and
Trademark Office (USPTO). Harley-Davidson was reacting to moves by competitors to duplicate the
Harleysound incompeting motorcycles.Hearingsin frontoftheUSPTOhave beenscheduledto determine
whether Harley-Davidson can register the sound. A fragrance can function as trademark if it is distinctive
and not functional.For example: in In re Clarke, 17 U.S.P.Q.2d 1238 (T.T.A.B.1990), a floral fragrance
was allowed as a trademark for sewing thread and embroidery yarn and was not functional when used in
connection with those goods.The roar of the MGM lion and Woody Woodpecker’s distinctive laugh are
also registered.Finally, theInternet has givenrise to applications for marksthat consist ofmoving images,
such as Microsoft company’s spinning EXPLORER GLOBE.

DesignandOrnamentation
Adesigncanfunctionasatrademarkaslongasitisdistinctiveratherthanmerelyfunctionalor
ornamental. Somedesignsareprotectedontheirown,suchasNike’sfamous“swoosh”design,the
alligator that appears on shirts, and Betty Crocker’s spoon.If the design is merely back ground material,
however, and does not create a separate commercial impression, or if it consists solely of some simple
geometric shape,such as an oval orsquare, itcannot be protected withoutproof of secondary meaning. For
example, the PTO refused registration oftwo parallel colored bands placed at the top ofsocks as pure
ornamentation.Merelydecorativesubject matterandpureornamentationcannot beregisteredbecausethey do
not identify and distinguish goods or services and thus cannot function as trademark.

SerializedLiteraryandMovieTitles
The title of a single book or movie title is generally not protectable.The title ofa serialized work, such as
THE BRADY BUCH or NEWSWEEK, however, can be protected as a trademark or service mark.

Insignia
Flags, coats of arms, and other insignia of the United States or any state or any foreign nation cannot be
registered.

PictureandDrawings
Picturesor drawingsofacharacterorsceneareoftenused astrademarksorservicemarks.

Corning'sPinkPanther

SunMicrocomputer,Inc.'sDuke

MSN's Butterfly

ApplesAutomator
SELECTINGANDEVALUATINGATRADEMARK

SelectingaMark
The selectionofmarkoccursina varietyofways.

❖ companies hold contests and encourages employees to create a mark for a new product lineor
service
❖ Companiesengagesophisticatedresearch
❖ Branding firmsthatwillconductsurveysandcreateamarkandalogoordesignforthe company.
❖ Therearenamecreationsoftwareprogramsthathelpindividualsandcompaniescreate marks

Once the mark is selected, it must be screed and evaluated for use and registrability, if failed then it
leads to wastage in expenditure of time and money in advertising, using, and applying for a mark that is
rejected for registration bythe PTO or, in the worst case scenario, might subject the owner to damages for
trademark infringement and unfair competition.

ReviewingaProposedMark
Onceamarkisselected,itshouldbecarefullyscrutinizedtoensurethatitwillnotbeexcludedfrom protection under
the Lanham Act.

❖ Firstlythey have check whether the mark contains scandalous (giving offence to moralsensibilities
and injurious to reputation)
❖ Whetherconsentfromalivingpersonwillberequired,
❖ Whetherthe mark isgeneric,
❖ Whetheritisstatutorilyprotected
❖ Whetherthemarkisdescriptiveofsomefeatureofthegoodsandservicesofferedunderthemark,
❖ Italsoseethatthemarkincludesforeignterms
❖ Manylawfirmsspecializingintrademarkworkuseaquestionnaireform ordatasheettogather
questionnaire form or data sheet to gather basic information from clients about their marks

THETRADEMARKSEARCH

Scopeofsearch
❖ Thereareavarietyofsourcesthatcanbereviewed tolocatepotentiallyconflictingmarks
❖ Thereare literally millionsof marksregisteredorapplied for at thePTO, andthousandsofjournals, trade
magazines, directories, telephone books, Internet sources, state records, and state trademark
registrationsthat might containother marksorbusiness names, acomputerassistedoronline search is
the most effective method of searching.
❖ Both LEXIS and WESTLAW, the computer-assisted legal research system, offer access to vast
databases that may point out conflicts.
❖ OneofthebestknowndatabasesisTRADEMARKSCANproductOFThomson&Thomson.
Conductingthetrademarksearch
Thetrademarksearchingisatwo-step process:

❖ a preliminary search is conducted of the records of the PTO to make a quick determination as to
whether the mark maybeavailable or whether there is conflict that wouldprecludeuseofthe mark. It
is also called a knockout search.
❖ If the results of the preliminary or knockout search indicate a mark may be available, a
comprehensive search of other sources (including state trademark records, telephone directories,
Internet records, and trade journals) is then conducted.

StepOne:ThePreliminarySearch

There are a variety of sources that can be used to conduct an initial trademark search, including
online subscription services, CD-ROM, the Patent and Trademark Depository Libraries, and the PTO
website search services.Following are some resources commonly used for conducting a preliminary search:

ElectronicDatabaseandCD-ROM

❖ TRADEMARKSCAN is a database owned byThomson &Thomson, a renowned trademark search

firm, which provides information on all active registered trademarks and service marks.The
TRADEAMRKSCAN database is primarily used as a quick screening tool to determine the
availability of a new mark.
❖ DIALOG is another database offered by Thomson & Thomson.Its database includes trademarks
fromtheUnitedStatesplus numerous foreigncountriesaswellaspatent andcopyright information. It
provides online training and practice and free practice searching at the following web site:
http://training.dialog.com/onlinecourses/trademarks/.
❖ SAEGIS is an entire suite of services provided by Thomson & Thomson that allows online
worldwide trademark searching as well as searching of domain name registries and websites to
locate common law uses of proposed marks.
❖ TRADEMARK.COM isanonline searchserviceoffered byMicro PatentLLC, offeringa varietyof
searchable databases, including federal marks, and common law uses of potentially conflicting
marks.
❖ LEXIS and WESTLAW, the computer-assisted research system, offer access to vast trademark
databases that may disclose potentially conflicting marks.

Many law firms subscribe to one or more of these services so they can perform an initial screening
search in-house.

PTO Web Site: Perhapstheeasiest and least expensivewayto conduct a verypreliminary search is to
review the records of the PTO (http://www.uspto.gov) and it free public searching called Trademark
Electronic Search System (TESS).

StepTwo:TheComprehensive Search
 A separate professional trademark search firms are existing for the companies when their need of
searching the trademark.These companies review the records of the PTO (go through existing and
pending application) , review state trademark office records for state trademark registration, and they
perform a “common law” search of various journals, directories, press releases, domain names and
Internet references to locate unregistered names and mark.

These professional search firms can save considerable time and money and more importantly,
provide a more thorough search than that which an individual can conduct on his or her own, they also
check foridenticalandphoneticallyequivalent marksforsimilargoodsandservicesandwillalso check for
foreign equivalents.They will charge for the searching of the marks.The report is typically divided into
three sections: results gained from reviewing PTO registrations and applications; results gained from
reviewing state trademark records; and the common law results.

TRADEMARKREGISTRATIONPROCESSES

Preparingtheapplication
❖ Once a mark has been selected and evaluated for use and registrability, an application for
federalregistration of the /mark should be prepared and filed.
❖ Anapplication isprovided by PTO
✓ The name oftheapplicant
✓ Thecitizenship oftheapplicant
✓ Theaddressofthe applicant
✓ Theaddressofthe applicant
✓ Anidentificationofthegoodsand orservicesoffered underthemark
✓ Adrawingofthemark
✓ Averificationordeclarationsigned bytheapplicant oragentorattorney
❖ Theapplication isbased onactualuseofthemarkortheowner’sintent to usethe mark.
❖ The process of moving an application through the PTO is called prosecution [(law)the institution
and conduct of legal proceedings against a defendant for criminal behavior]
❖ Theapplicationmustbe inEnglish.
❖ ElectronicallyfiledapplicationareprovidedbythePTO
❖ Selfapplicationisalsobepreparedasthelettersize(namely8½inchesby11inches)paper, typewriter,
double-spaced, with margins ofat least 1 ½ inches at the left and top ofthe pages.
❖ Theapplicationshouldbe writtenononlyone sideofthepaper.
❖ The filing and prosecutionoftrademark applicationaregoverned bytheTMEP [Trademark Manual of
Examination Procedure]
❖ ThePTOintroducedonelectronicfilingsystemin 1998.
❖ TheTrademarkElectronicApplicationSystem[TEAS]. Permitsapplicantstofilenumerous
documents electronically.
❖ PTOconsiderstheelectronicallyfileddocumentaftertransmission.
Theapplicant
❖ The mark can be made only by the owner of the mark or, in the case of intent –to-use application,
by a person who has a bonafide to use the mark in commerce.
❖ Applicationmaybenaturalpersonsorbusinessentitiessuchascorporation,partnership,association,
unions or other organization.
❖ Governmententitiessuchasnations,statesmunicipalitiesandothergovernmental bodies.
❖ Theapplicant namemustbeincorrect legalform
❖ Amarkshouldbeidentifiedintheapplicationbythenamesetforthinitsarticlesofincorporation.
❖ Clientsoftenmakemistakes intheir corporatenamesorinthe punctuation
❖ Thecertificateofregistrationwillissueinthenameoftheapplicationassetforth inthe application
❖ If theapplicationisaperson orbusinessthatconductsbusinessunderafictitious[fake]business name, the
application will be rejected.
❖ TheapplicantisapartnershipForexample:“BalboaGardensPartnership”,theapplicationshould
bemadebythepartnershipitselfandthestateinwhichthepartnershipwas organized.
❖ Atrademarkor servicemarkapplicationisusuallyfiledinthenameofoneparty.
❖ ThePTOhasbeenreluctant[unwilling]toacceptapplicationbyjointapplicants.
❖ Ajointventureorapartnershipcannotbejointapplicants

IdentificationofGoodsorServices
The application must identifythe goods and/or services offered orto be offered under the mark that
isthesubject oftheapplication.Carefulconsiderationmust begivento draftingthispartoftheapplication. Goods
and services are categorized by the PTO into forty-five separate classes, called International Classes
because many other nations use this same classification system established by WIPO.Until 1973, the PTO
used a different classification scheme, called the United States Classification Scheme.Each class requires a
filing fee of $335.

A detailed listing of the International Classes with numerous examples is found in Chapter 1400 of
TMEP, available onthe PTO’swebsite.Ifa mark is used for more than one classofgoodsor services, the
applicant may either file a combined application, listing all of the goods and services.Some attorneys prefer
to file separate application believing that a defect in regard to one class of goods or services in a combined
applicationwill hold up registration for the mark in all class.

The PTO requires that the identification of goods or services be as clear, accurate and concise as
possible. Once the application filed, no other item can be added in the process of registration, a separate
application should be applied.

REGISTRATION
❖ Aregistrationwillissueabouttwelve weeksafterpublication inthe officialgazette
❖ Ifnonoticeofoppositionisfiledtotheapplication
❖ ForanITU[Intent-to-Use]applicationregistrationwilloccurafterpublicationintheofficialGazette.
❖ ThePTOwillissueacertificateofregistration forthemark
❖ Thetermoftheregistrationispresentlytenyearsfromthedatethemarkisregistered[for registration issued
before November 16, 1989, the term is twenty years]
❖ “TM”forTrademark&SMforservicemark.
ASAMPLEREGISTRATIONCERTIFICATE

FIRSTUSE1-19-2007;INCOMMERCE1-19-2007.

NOCLAIMISMADETOTHEEXCLUSIVERIGHTTOUSE"ONEMINUTE",APARTFROM THE
MARK AS SHOWN.
THE COLOR(S) BLACK, RED, WHITE, GOLD,YELLOW, RUST AND MAGENTA IS/ARE
CLAIMED AS A FEATURE OF THE MARK.

THE MARKCONSISTSOFTHE WORDING"THEONEMINUTEZONE",WITH

THELETTERS"ONE"FORMINGBOTH"ONE"ANDPARTOFTHEWORD"ZONE",ANDASUND
ESIGN
RADIATINGOUTFROMTHECENTEROFTHELETTER"O".THECOLORSBLACK,RED,
WHITE,GOLD,YELLOW,RUSTANDMAGENTAARECLAIMEDASAFEATUREOFTHE
MARK. THEWORDS "THE"AND "MINUTE"ARE INTHE COLOR BLACK, THE LETTER
"Z"ANDTHELETTERS"ONE"AREINTHECOLORREDANDOUTLINEDINTHECOLOR
WHITE,THECENTEROFTHESUNDESIGN INTHELETTER "O" ISINTHECOLORWHITE,
THEOUTERSUNDESIGNISINTHECOLORGOLD,ANDTHELINESRADIATINGFROM THE
SUN DESIGNARE IN THE COLORSYELLOW, GOLD, RUSTAND MAGENTA.

SER. NO. 76-683,444, FILED 10-29-2007.

JOHNGARTNER,EXAMININGATTORNEY

*Note:Thesealwillbeagold,embossedsealsimilartowhatappearsonthecurrentcoverbind.
 REQUIREMENTSTOMAINTAINYOUR FEDERAL
TRADEMARK REGISTRATION

WARNING:YOURREGISTRATIONWILLBECANCELLEDIFYOUDONOT

FILETHEDOCUMENTSBELOWDURINGTHESPECIFIEDTIMEPERIODS.

Requirementsinthe First/TenYears
* What andWhentoFile:

● FirstFilingDeadline:YoumustfileaDeclarationofUse(orExcusableNonuse)betweenthe 5th and

6th years after the registration date.See 15 U.S.C. §1058. If the declaration is accepted, the
registration will continue in force for the remainder of the ten-year period from the registration
date, unless cancelled by an order of the Commissioner for Trademarks or a federal court.

●
Second Filing Deadline: You must file a Declaration of Use (or Excusable Nonuse) and an
ApplicationforRenewalbetweenthe9thand10thyearsaftertheregistrationdate.See15
U.S.C. §1059.

RequirementsinSuccessiveTenYearPeriods
* What andWhentoFile:

●
You must file a Declaration of Use (or Excusable Nonuse)andanApplication for Renewal
between every 9th and 10th-year period calculated from
mtheregisstration date.

GracePeriodFilings*

The above documents will be accepted astiimelyiiffiled six-months after the deadlines listedabove with the
payment of an additional fee.

*ATTENTION MADRID PROTOCOL REGISTRANTS: The holder of an international registration

with an extension of protection to the United States under the Madrid Protocol must also timely file the
Declarations of Use (orExcusableNonuse) referencedabove at the USPTO based on the U.S. registration
date (not theinternationalregistrationdate).However,thegraceperiodsfortheseregistrations are different, as
is the time period for filing the declarations of use due every ten years after the registration date. The
declarations due everyten years must be filed within six-months before expirationofthe tenyear period.In
addition,thereis nograce period for the declaration duebetweenthe 5thand6th years
aftertheregistrationdate, and there is a three-month grace period for the declarations due everyten
years.See 15U.S.C. §1141k.Further,owners oftheseregistrationsdonotfilerenewalapplicationsat theUSPTO,
but instead must file a renewal of theunderlyinginternationalregistrationattheInternational
BureauoftheWorldIntellectualPropertyOrganization,underArticle 7ofthe Madrid Protocol, before the
expirationofeachten-yeartermofprotectionfromthedateoftheinternationalregistration.See15
U.S.C. §1141j. For more information and renewal forms for the international registration, see
http://www.wipo.int/madrid/en/.

NOTE:Fees and requirementsfor maintaining registrations are subject tochange.Pleasecheckthe

USPTO website for further information. You can file the registration maintenance documents
referenced above online at http://www.uspto.gov.

*Note:Thesealwillbeagold,embossedsealsimilartowhatappearsonthecurrentcoverbind
 UNIT-3
COPYRIGHTS
Introduction
Every year millions of Americans create original works like books, music, research and
other forms of creative expression.All these creation are Intellectual Property and all of them are
protected by copyright.Writers, editors and publishers, understanding copyrights issues are
essential.Especially now that the production of counterfeit [imitating] and pirated goods,
including written works, has become so prevalent.

In 2005 more than $600 billion in pirated and counterfeited goods were recognized by
WCO [World Customs Organization].Now-a-days the internet has made copying and distributing
protected material easier than ever before for avoiding copying the material.So, in order to
protect yourself from IP theft, it’s important to knowthe basics about rights.

Definition
“The legal protection given to published works forbidding anyone but the author from
publishing or selling them.An author can transfer the copyright to another person or corporation,
such as a publishing company.”

WhatisaCopyright?
❖ Copyright is a form of protection provided by U.S. Law to the authors of “Original Works
of Authorship” fixed in any tangible medium of expression.
❖ Themannerandmediumoffixationarevirtuallyunlimited.
❖ Creative expression may be captured in words, number, notes, sounds, pictures or any other
graphic or symbolic media.
❖ Thesubjectmatterofcopyrightisextremelybroad,includingliterary,dramatic,musical, artistic,
audiovisual and architectural works.
❖ Copyrightprotectionisavailableforbothpublishedandunpublished works.

History
❖ InEnglandpromptedthefirstinsistenceuponprotectionforpublicationofbooks
❖ Bookbindersandprintersdemandedprotectionfromcopyingofbooks.
❖ Authorsalso beganto demandprotectionfromunauthorized copying anddemandedto share in
the financial rewards
❖ Finally, in1710, parliament enactedthe first copyright statute[Act/law], theStatuteofAnne
[Named after Anne, Queen of Great Britain, the Statute become the foundation for British
and American Copyright Law]
❖ The first copyright law is enacted under the new U.S. Constitution, Protecting books maps
and charts for 14 years with privilege of renewal for another 14 years
❖ CopyrightregistrationismadeintheU.S.districtcourtwheretheauthororproprietor resides.
❖ Thefirstcopyrightentry,“ThePhiladelphiaSpellingBook”byJohnBarry,isregisteredin
U.S. District court ofPennsylvania. Protection is for 14yearswitharenewalperiod ofauthor 14
years.

CommonLawRight
❖ The enacted thefirstcopyrightactin 1790 and thefirstfederal copyrightregistration were issued.
❖ UntilJanuary1, 1978[theeffectivedateofthe1976copyright Act]theU.Shadadualsystem of
copyright protection.
❖ Until1978,anauthor hasaperpetualcommonlawrighttotheir unpublished works.
❖ Once the work was published, however, the common law perpetual copyright was
extinguished and protection was afforded by virtue [quality] of the 1909 act, provide
protection up to fifty-six years.
❖ Publication is the distribution of copies of a work to the public for sale or other transfer of
ownership, by rental lease, or lending.
❖ Thedualnatureofcopyrightprotectionwascomplex,often led to controversy
❖ The1976acteliminatedthedistinctionbetweenunpublishedandpublishedworks.

For Example: Ernest Heming way’s a farewell to Arms [Published in 1929], are governed bythe
act in existence on the date of their publication.Heingway’s book would thus be governed by the
1909 act.

❖ JustastrademarkrightsarisefromuseandnotfromregistrationwithPTO
❖ Acopyrightregistrationfromthecopyrightofficeprovidescertainadvantagestoauthor’sof
work,includingthefollowing.
✓ Registrationestablishesapublic recordofthecopyrightclaim
✓ Before an infringement suit may be filed in court, registration is necessary for
works of U.S origin
✓ If made before or within five years of publication, registration will establish
Primafacieevidence incourt ofthevalidityofthe copyright and ofthe factsstated in
the certificate and
✓ If registration is made within three monthsafter publication of the work or priorto
an infringement of the work, statutory damages and attorney’s fee will be
available to the copyright owner in court action
❖ Copyrightprotectiongenerallylastsuntilseventyyearsfromthedeathofthe author.
❖ The 1976 copyright act is found at 17 U.S.C. §§101-1101 and it was amended for several
times.
❖ In1980,specificprotectionwasaffordedtocomputerprogramsasworksentitledto copyright
protection.
❖ CopyrightAct©represents
❖ Another1998amendmenttocopyrightlawistheDigitalMillenniumCopyrightact.
TheUnitedStatesCopyrightOffice:
RegisterofCopyright,
Copyrights office,
Library of Congress,
101IndependenceAvenueSE, Washington,
DC20559-6000

❖ Thecopyrightofficeisnotpermittedtogivelegaladviceandwillnotofferguidanceon mattersuchas
disputes, suits against possible infringers orother mattersrelatedto copyright.
❖ Amongthemoreusefulpublicationsandmaterials arethefollowing:
✓ Formsforcopyrightregistration
✓ Circular1,“Copyright Basics”,
✓ Circular2, “Publicationoncopyrights”,
✓ Circular3,“Copyright Notice”,
✓ Circular4,“Copyright Fees”
✓ Circular15,“RenewalofCopyright”
✓ Circular15a, “DurationofCopyright”; and
✓ Circular38a, “InternationalcopyrightRelationsoftheUnitedStates”;and
✓ Circular61,“Copyright RegistrationforcomputerPrograms”
oordercopyrightpublications,writeto:

LibraryofCongress,
Copyright Office,
Publication section,
LM-455,
101IndependenceAvenueSE,
Washington-DC20559-6000

❖ Circularsandannouncementsareavailableviafacsimile
❖ Ifyoudonotknowthedocumentnumberoftheitemsyouwant,youmayrequestthata menu be faxed
to you
❖ AllthedatapertainingtocopyrightsareavailableinInternet
❖ Thecopyrightofficeprovidesafreeelectronicmailinglist,“NewsNet”,thatissuesperiodic
e-mailmessagesoncopyrightissues
❖ Copyrightofficeprocesstheapplicationviaelectronically
OriginalityofMaterial:

Introduction
❖ Thelimitsofcopyrightabilityaredictated[command]by federalstatute
❖ According to 17 U.S.C § 102, copyright protection exists in original works [tangible
medium]

Thus,therearethreebasicrequirements for copyrightability:

1. Aworkmustbe original
2. Awork mustbefixedinatangibleformofexpression; and
3. Aworkmustbe aworkofauthorship

OriginalityofMaterial
❖ Tobeeligible forcopyrightprotection
 Materialmustbeoriginal
 Meaning
 Independentlycreated
 Possesa modicumofcreativity
 It should not confused with novelty, worthinessor aesthetic [dealing with beauty]
appeal
❖ “Originality”thusdoesnotmean“first”,itmerelymeans“independentlycreated”,
❖ Aslightamountof“creativespark”.

FixationofMaterial:(17U.S.C.§101
❖ The copyright act protects works of authorship that are “fixed in any tangible medium of
expression”.
❖ Awork is“fixed”:
✓ Whenitisembodied[existinginbroadform]
✓ Phonorecordandissufficientlypermanent
✓ Stable to permit it to be perceived, reproduced or communicated for a period of
more than transistory [temporary] duration
❖ Thustherearetwo tangiblecategories
✓ Copies: A copy is a material object from which a work can be perceived,
reproduced or communicated, either directly by human perception or with thehelp
of a machine.

✓ Phonorecord: A Phonorecord is a material object in which sounds are fixed and

from which the sounds can be perceived, reproduced or communicated either
directly by human perception or with the help of a machine.
WorksofAuthorship:(17U.S.C§102)
❖ The copyright act provides that copyright protection subsists [support oneself] in original
works of authorship fixed in any tangible medium of expression, now known or hereafter
developed, from which they can be perceived, reproduced or otherwise communicated.
❖ The list is preceded by the phrase that works of authorship “include” those categories,
demonstrating that the listed categories are notonlytypes ofworks that canbe protected, but
are illustrate only
✓ Literaryworks
✓ Musicalworks
✓ Dramaticworks
✓ Pantomimesandchoreographicworks
✓ Pictorial, graphicandsculpturalworks
✓ Motionpicturesandother audiovisualworks
✓ Soundrecordingand
✓ Architecturalworks

Exclusionsfromcopyrightprotection:
❖ Not allworksareprotectedby copyright
✓ Ideas,Methods,or System
✓ Blankforms,Titles,short phrasesandcommonproperty
✓ Publicdomain works
✓ Facts
✓ Computingandmeasuringdevices

TheRightsaffordedbycopyrightlaw:

Introduction
❖ The copyright act provides that, subject to certain exceptions, the owner ofa copyrights has
the exclusive rights to do and to authorize any of the following:
✓ Toreproducethecopyrighted workincopiesorphonorecords
✓ To preparederivativeworksbasedonthecopyrightedwork
✓ Todistributecopiesorphonorecordsofthe copyrighted worktothe public
✓ Toperformthecopyrighted workpublicly
✓ Todisplaythecopyrightedwork publicly
✓ Toperformthecopyrighted workpubliclyby meansofadigitalaudiotransmission
✓ Unless exemption exists, unauthorized exercise of any of these rights by another isan
infringement.
✓ Theseexclusiverights, usuallyreferredtoasa“bundle”
RightsofReproduction:
❖ The most fundamentalofthe rights grantedto copyright owners is the right to reproducethe
work
❖ Aviolationofthe copyrightactoccurswhetherornottheviolatorprofitsbythe reproduction
❖ Onlytheownerhasthe righttoreproducethe work
❖ Secretlytapingaconcert,takingpicturesataperformance,orrecordingallviolatethe
owner’srighttoreproduce
❖ Thesuggestion of congress,in 1978agroup of authors,publishersandusersestablisheda not-for-
profit entity called Copyright Clearance Center [CCC]
❖ CCC grants licenses to academic, government and corporate users to copyand distribute the
works
❖ Itcollectsroyaltyfees,whicharedistributedtotheauthors
❖ Companiesthatphotocopy articlesfrom journalsandmagazinesoften enterintolicensing
arrangements with the CCC so they can make copies.

RightstoprepareDerivativeworks:
❖ Section106ofthecopyrightActprovidesthattheownerofacopyrighthastheexclusive right to
prepare derivative works based upon the copyrighted work
❖ ThisrightIoftenreferred toastherighttoadapttheoriginalwork

Definition:
“A derivative work is broadly defined as a work based upon one or more preexisting
works, such as a translation, dramatization, fictionalized motion pictures version, abridgment
condensation or any other from in which a work may be recast, transformed, or adapted.

❖ a work consisting ofeditorialrevisions, annotations, elaborations, or other modifications is

also a derivative work
❖
Newmaterialrepresentsoriginalworkofauthorship

Rightsofdistributionandthe firstsaledoctrine:
❖ Section106 (3) ofthe copyright act provides that the owner ofa copyright has the exclusive
rightto distributecopiesor phonorecordsoftheworktothepublic bysaleorothertransfer of
ownership
❖ Aviolationofthedistributionrightcanarisesolelyfromtheactofdistributionitself
❖ The distributor did not make an unlawful copy or the copy being distributed wasunauthorized
❖ Thus,blockbustervideostorecanbeliableforviolatinganowner’srighttodistribute
❖ Once the author has parted with ownership of copyrighted material, the new owner of a
lawfully made copy can treat the object as his or her own
❖ Thenewownertherighttolendthebook ormovietoafriend,resell theworkatagarage sale, or even
destroy it.
❖ Thefirstsaledoctrinedoesnotapplytoorlimittheauthor’sexclusiverightstoprepare
derivativeworksorrightsofpublic performance and
❖ Withoutpermissionofauthorship thegoodsarenot permittedtoimportedintotheU.S.

Rightstoperformtheworkpublicly
❖ Section106[5]oftheCopyrightActprovidedthat

✓ in the case of all copyrighted works other than sound recording & works of architecture,
the copyright owner has the exclusive right to display the work publicly.
✓ Adisplayis “public”underthesamecircumstances inwhichaperformanceis “public”.
✓ Namelyifitoccursataplaceopentothepublic(or)ataplacewhereasubstantial number of
persons outside of the normal circle of a family.

CopyrightOwnershipIssues[17U.S.C.§201(a)]:
❖ Copyrightinaworkprotectedunderthecopyrightactvests[providewithpowerand authority] in
the author or authors of the work
❖ Issuesaboutownership arise when morethanone personcreatesa work
❖
Ownershipofaphysicalobject isseparateanddistinct fromownershipofthe
copyright embodied in the material object

❖ Unlesscopyrighthasbeenexplicitlyconveyedwiththosephysicalarticles,theoriginal authors
generally retain all other rights associated with the works.

JointWorks[intenttocreateaunitarywhole]
❖ Ajointworkisaworkpreparedbytwoormoreauthorswiththeintentionthattheir contributions be
merged into inseparable or interdependent parts of a unitary whole.
❖ Onecopyrightexistsinthecreatedworks
❖ Jointauthorsarethosewho“mastermind”or“supermind”thecreativeeffort.

OwnershipRightsinJointWorks
❖ If individual are authors of a joint work, each owns an equal undivided interest in the
copyright as a tenant in common, [each has the right to use the work, prepare derivative
works, display it without seeking the other coauthor’s permission].
❖ Ifprofitsariseoutofsuchuse, anaccounting must be madeso,thateachauthor shares inthe
benefits or proceeds.
❖ The death of a coauthor, his or her rights pass to heirs who then own the rights in common
with the other coauthor.
OwnershipinDerivativeorCollectiveWorks
➢ Theauthoroftheoriginal bookhasrightsonlyto hisor her work and cannot reproduceor
perform the derivative work without permission.
➢ If a work such as a book is created by one person who intends it to be complete at the
time and illustrations are later added to it by another, the work cannot be a joint work
because there was no intention ofthe parties to create a unitary whole at the time oftheir
creation.
➢ The author ofthe derivative work cannot create further works based on the original book
without permission and cannot reproduce the original work without permission.
➢ Multiple ownership rights may also arise if separately copyrightable works are compiled
into a collection.
➢ For Example: If essays written by Jerry Seinfeld, Ellen DeGeneres, and Paul Reiser are
collected into a humor anthology by Bill Jones (with permission of the original authors),
the original authors retain their exclusive rights (such as rights to reproduce, distribute,
and perform) in their respective essays.No join work is created because there was no
intentat the time the separate essays were created to merge them intoa unitary whole.No
derivative work is created because the original works have not been transformed in any
way and nothing new has been added to them.The anthology by the compiler, Bill Jones,
is a collective work and pursuant to section 201(c) of the act, Jones acquires only the
right to reproduce and distribute the contributions as part of the particular collective work
or any revision of the collective work.

WorksMadefor Hire
➢ The general rule is that the person who creates a work is the author of that work and the
owner of the copyright therein, there is an exception to that principle: the copyright law
defines a category of works called works made for hire.
➢ Ifaworkis“madeforhire”,theauthorisconsideredtobetheemployeror
commissioningpartyandnottheemployee ortheactualpersonwhocreatedthework.
➢ Theemployeror commissioning partymaybeacompanyoranindividual.
➢ There are two types of works that are classified as works made for hire; works prepared
by an employer within the scope of employment and certain categories of specially
ordered or commissioned works.
➢

CopyrightRegistration
➢ Aworkis“created”whenitis fixedinacopyorphonorecordforthefirsttime.
➢ Although not required to provide copyright protection for a work, registration of
copyright with the Copyright Office in expensive, easy and provides several advantages,
chiefly, that registration is a condition precedent for bringing an infringement suit for
works of US origin.
 ➢ To register a work, the applicant must sent the following three elements to the Copyright
Office: a properly completed application form, a filing fee, and a deposit of the work
being registered.
➢ Registrationmaybemadeatanytimewithinthelifeofthecopyright.

THEAPPLICATIONFORCOPYRIGHTREGISTRATION
Thefollowingpersonsareentitledtosubmitanapplicationforregistrationofcopyright:

➢ theauthor(eitherthepersonwho actuallycreatedtheworkor, iftheworkisone made for hire,

the employer or commissioning party)
➢ the copyright claimant (either the author or a person or organization that has obtained
ownership ofallofthe rights under the copyright originally belonging to the author, such
as a transferee)
➢ the owner of exclusive right, such as the transferee of any of the exclusive rights of
copyright ownership (for example, one who prepares a movie based on an earlier book
may file an application for the newly created derivative work, the movie); and
➢ the dulyauthorized agent ofthe author, claimant, orowner ofexclusive rights(suchasan
attorney, trustee, or anyone authorized to act on behalf of such parties)

ApplicationForms
TheCopyrightOfficeprovidesformsforapplicationforcopyrightregistration.

➢ Eachformisone8½by11”(inchs) sheet, printedfrontand back.

➢ Anapplicantmayusephotocopiesofforms
➢ The Copyright Office receives more than 6,00,000 applications each year, each
application must use a similar format to ease the burden of examination.
➢ Thetype offormusedisdictatedbythe type ofworkthatisthe subjectofcopyright.
➢ For example: One form is used for literary works, while another is used for sound
recording.Following are the forms used for copyright application.
✓ Form TX (Literary works, essays, poetry, textbooks, reference works,
catalogs, advertising copy, compilations of information, and computer
programs)
✓ FormPA(Pantomimes,choreographicworks,operas,motionpicturesand
other audiovisual works, musical compositions and songs.
✓ Form VA (Puzzles, greeting cards, jewelrydesigns, maps, original prints,
photographs, posters, sculptures, drawings, architectural plans and
blueprints.
✓ FormSR(Soundrecording)
✓ Form SE (periodicals, newspapers magazines, newsletter, annuals and
Journals. Etc.
Noticeofcopyright
➢ Since March 1, 1989 (the date of adherence by the United States to the Berne
Convention), use of a notice of copyright (usually the symbol © together with the yearof
first publication and copyright owner’s name) is no longer mandatory, although it is
recommended and offers some advantages.
➢ WorkspublishedbeforeJanuary1,1978,aregovernedbythe1909 copyrightAct.
➢ Under that act, if a work was published under the copyright owner’s authority without a
proper notice ofcopyright, allcopyright protection for that work was permanently lost in
the United States.
➢ With regard to works published between January 1, 1978, and March 1,1989, omission of
a notice was generally excused if the notice was omitted from a smaller number of
copies, registration was made within five years of publication, and a reasonable effortwas
made to add the notice after discovery of its omission.

InternationalCopyrightLaw
➢ Developments intechnologycreatenew industries andopportunities forreproductionand
dissemination of works of authorship.
➢ Anumberofnewissueshavearisenrelatingtothegrowthofelectronicpublishing, distribution,
and viewing of copyrighted works.
➢ Along with new and expanded markets for works comes the ever-increasing challenge of
protecting works form piracy or infringement.
✓ Copyrightprotectionforcomputerprograms
✓ CopyrightprotectionforAutomatedDatabases
✓ CopyrightintheElectronicAge
✓ TheDigitalMillenniumCopyrightAct

LAWOF PATENTS
➢ TheworkPatentisashorthandexpressionfor “letterspatent”
➢ A Patent is a grant from the U.S. government to exclude others from making, using, or
selling another person’s new, nonobvious, and useful invention in the United States for
the term of patent protection.
➢ It is protectedfor20years
➢ Under patent law, inventors can enjoin the making, using or selling of an infringing
invention even if it was independently created.
➢ APatentallowsitsownertoexcludeothersfromusingtheowner’sinvention;itdoesnot
provideanyguarantee thattheownercanselltheinvention.
➢ To obtaina patent, an inventor must file anapplicationwiththe PTO, same agencyofthe
Department of Commerce that issues trademark registration.
➢ Theapplicationmustdescribethe inventionwithspecificity.
 ➢ The application will be reviewed by a PTO examiner, and, if approved, the patent will
issue.
➢ The U.S. Constitution provides that Congress shall have the power “to promote the
progress ofscience and usefularts, bysecuring for limited times to authors and inventors
the exclusive rights to their respective writing and discoveries”.
➢ Patentpromotethepublicgoodinthatpatentprotectionincentivizes inventors.

AdvantagesofPatents
➢ Patentspromotethepublicgoodinthatpatentprotectionincentivizes inventors
➢ The introductionofnewproductsandprocessesbenefits society.
➢ In return for the full disclosure to the public ofspecifies ofthe invention, thus advancing
science and technology, the inventor is given a limited period of time within which to
exploit his or her invention and excluded others from doing so.
➢ Inventors are thus incentivized to create new products, and the public benefits from
inventions that ultimately will fall into the public domain.

RightsUnderFederalLaw
➢ PatentlawderivesfromtheConstitution.
➢ In 1790, pursuant to the direction provided in the Constitution, Congress passed the first
patent, which in large part relied upon English Law.
➢ Threeyearslater,thestatutewasreplaced withanewactauthored byThomas Jefferson.
➢ These early acts provided the structural framework for U.S patent law and specified the
four basic conditions, still existing, that an invention must satisfy to secure patent
protection:
✓ Theinventionmustbeautility,design,orplantpatent
✓ Itmustbeuseful(orornamentalinthecaseofadesignpatentor distinctive in the
case of a plant patent);
✓ Itmustbenovelinrelationtothepriorartinthefield; and
✓ Itmustnot beobvioustoapersonofordinaryskill inthefield.
➢ Revision of federal patent statutes occurred in 1836 when the Patent Office was created
and again in 1870 and 1897.
➢ Thereafter, in 1952, Congress enacted a new patent act, codified in title 35 of the United
States Code (U.S.C), it is last major revision to federal patent statutes
➢ Development of patent law has evolved primarily through federal court decisions rather
that the legislature
➢ In 1982, Congress created a new court, the Court of Appeals for the Federal Circuit
(CAFC), the exercise exclusive jurisdiction over all cases involving patent issues and to
promote uniform interpretation of the U.S. patent statutes, which until then had been
interpreted inoften inconsistent ways bythe various federalcourts ofappeals throughout
the nation.
 ➢ Moreover, some inventions such as computer programs, are protectable under copyright
law as well as patent law.

PatentSearchingProcess
TheNeed fora Search:

➢ Patentabilityrequiresnoveltyandnonobviousness.
➢ Thepatentabilitysearch, sometimescalledanoveltysearch
➢ Asearch isrecommended todeterminethefeasibilityofobtaining apatent.
➢ A novelty search is somewhat limited in scope and is designed to disclosewhether
an application will be rejected on the basis of lack of novelty or obviousness.
➢ Anoveltysearchcanusuallybecompletedforlessthan$1,000.
➢ If an invention is intended for immediate commercial use or sale, an additional
search, call an infringement search or investigation, is often conducted
concurrently with the novelty search.
➢ Thisnoveltysearch isthusmoreexpensive

SearchingMethods:

➢ ThePTOprovidespublicsearchfacilitiesforpatent searching.
➢ Searching is freeand thePTOallowssearcherstoreview issuedpatents, complete
with drawings.
➢ Searching can be done either in the main public search roomor in the examiners’
search areas where examiners will assist in searching. (The patent search room
contains copies of all U.S. issued patents from 1790 to present as well as many
foreign patents).
➢ The PTO employs a classification system that provides for the storage and
retrieval of patent documents
➢ Thepatent examinersinthecourseofexaminingpatent applications,thesystemis also
used by searchers, and classification files are divided into subclasses.
➢ Mostclasseshaveapproximatelythreehundredsubclasses

PatentApplicationProcess
OverviewoftheApplicationProcess

➢ Theprocessofpreparing,filing,andshepherdingapatentapplication throughthe
PTOtowardsissuanceiscalled“prosecution”.
➢ Anapplicationmaybefiledbytheinventorhimselforherselfor,asismore usual, by a
patent attorney.
➢ Only20%ofallapplicationsarefiledbyinventorswithouttheassistanceof attorneys.
 ➢ The application is filled with PTO, it will be assigned to one of more than 3500
patent examiners having experience in the area of technology related to the
invention who will review the application and conduct a search of patent records
to ensure the application complies with the statutory requirements for patents.
➢ Theprocess maycontinueforseveralrounds.
➢ A Notice of Allowance will be sent to the applicant, which specifies an issue fee
that must be paid to the PTO in order for the patent to be granted.
➢ Until2000allpatentapplicationweremaintainedinconfidence,butafter November
2000 they were published
➢ Ittakesonetothreeyearstoprosecuteapatent,andcostsandfeescanrange from$5000to
morethan$30000withfeegenerallyranging for $10000to$12000

Patent Practice

➢ While preparing trademark and copyright applications is relatively

straightforward, preparing a patent applicationrequires skillful drafting as wellas
knowledge in the relevant fields, whether that is biotechnology, chemistry,
mechanical engineering, physics, computers, pharmacology, electrical
engineering, and so forth.
➢ They are divided into different groups, such as a mechanical group, a biotech
group, and an electrical group.
➢ Many patent attorneys possess both a law degree and an advanced degree in
engineering, physics, chemistry, or the like.
➢ To represent patent applicants before the PTO, an attorney must be registered to
practice with the PTO.
➢ An attorney must pass the Patent Bar, which requires the attorney to demonstrate
background in science or engineering.
➢ The examination is very difficult it is a multiple choice questions, and the pass
rate tends to hover around one-third.
➢ A list of attorneys and agents registered to practice before the PTO is available
from the Government Printing Office located in Washington, DC, Alternatively,
the PTO web site (http://www.uspto.gov/web/ofices/dcom/olia/oed/roster/)
provides an index to the more than 18000 attorneys and agents who are licensedto
practice before the PTO.

ConfidentialityofApplication ProcessandPublication ofPatentApplication

➢ More than 200 years, all patent applications filed with the PTO were maintained
in strict confidence throughout the entire application process.
➢ Onlywhenthepatentissued wasthefilewrapperopento publicinspection.
➢ Under the American Inventors Protection Act (AIPA) of 1999, however, which
took effect in November of 2000, the PTO now publishes utility and plant
applications eighteen months after their filing
 ➢ If the applicant later decides to apply for a patent in a foreign country, the
applicant must provide notice of this foreign filing to the PTO within forty-five
days or the application will be regarded as abandoned.
➢ The intent of the new law is to harmonize U.S. patent procedures with those of
other countries, almost all of which publish patent applications after an initial
period of confidentiality.
➢ The new act protects inventors from having their inventions infringed by
providing that patentees can obtain reasonable royalties if others make, used, or
sell the invention during the period between publication and actual grant of the
patent.

Typesof Application

1. ProvisionalApplication
2. UtilityApplication
3. DesignApplication
4. Plant Application
5. ContinuationApplication
6. PCT(PatentCooperationTreaty)Application
7. DivisionalApplication

PreparingtheApplication

➢ Title
➢ Cross-referencestorelatedapplications
➢ Background
➢ Summaryofinvention
➢ Briefdescriptionofdrawing
➢ Detailed descriptionoftheinvention
➢ Claims

PatentProsecution Flowchart

OwnershipRights
➢ Patents are items of personal propertyand thus may be owned, sold, licensed, or devised
by will.
➢ Applications for patent must be filed bytheactualinventor ofthearticle, process, design, or
plant.
➢ Ifthereismorethanoneinventor,theapplicationmustbesigned byallinventors.
➢ In many instance, employees are required to sign agreements with their employers
whereby they agree that any invention or discovery invented by them while on the job
willbelongtotheemployerandthattheywillagreetoassistandcooperateinany
 manner,includingsigningapplicationsforpatents,toensuretheemployer’srightsare
protected
➢ Although the oath in the patent application is signed by the individual inventor, when the
application is filed, a simultaneous assignment is also filed identifying the employer as
the “true” owner of the application and the invention.

Ownershiptransfer
➢ Asobjectsofintellectualpropertyor intangibleassets, patents and patent applications may
be transferred.
➢ A transfer ofpatent or patent application can be the result of a financial transaction, such
asanassignment, a merger, a takeoveror a demerger,orthe result ofanoperationof law, such
as in an inheritance process, or in a bankruptcy.
➢ The rationale behind the transferability of patents and patent applications is thatitenables
inventorsto sell their rights and to let other people manage these intellectual
propertyassets bothon the valuation and enforcement fronts. As The Economist put it,
"Patents are transferable assets, and by the early 20th century they had made it possible
to separate the person who makes an inventionfrom the one who commercialisesit. This
recognised the fact that someone who is good at coming up with ideasis not necessarily
the best person to bring those ideas to market.”.
 UNIT-4

TRADESECRETSLAW
INTRODUCTION:
❖ Thetypeofinformationthatmustbekeptconfidentialinordertoretainitscompetitive
advantageisgenerallycalleda“Trade Secret”

❖ A trade secret is any information that can be used in the operation of a business or other
enterprisethat issufficientlyvaluableand secret toaffordanactualor potentialeconomic
advantage over others.

❖ Restatement(Third)ofUnfair Competition§39(1995).

❖ A recipe, a formula, a method of conducting business, a customer list, a price list,

marketing plans, financial projection, and a list of targets for a potential acquisition can
all constitute trade secrets.

❖ Generally,toqualifyfortradesecretprotection,informationmust

✓ bevaluable;
✓ not be publiclyknown;and
✓ bethesubjectofreasonableeffortstomaintainitssecrecy

❖ The rapid pace of technology advances the ease with which information can now be
rapidly disseminated and the mobility of employees require businesses to devote
significant effort to protecting their trade secrets.

❖ If trade secrets were not legally protectable, companies would have no incentive for
investing time money and effort in research and development that ultimately benefits the
public at large.

❖ Trade secrets law not only provides an incentive for companies to develop new methods
andprocessesofdoing businessbut also,bypunishingwrongdoers,discouragesimproper
conduct in the business environment.

TheLawGoverningTradeSecrets:

❖ Trademarks, copyrights, andpatentsareallsubject to extensive federalstatutoryschemes for

their protection, there is no federal law relating to trade secrets, and no registration is
required to obtain trade secret protection.

❖ Mosttradesecretlawarisesfromcommonlawprinciples,namely,judge-madecaselaw.

❖ The first reportedtradesecret case intheUnitedStateswasdecided in1837 and involved

manufacturing methods for making chocolate.
 ❖ In1939, theRestatement ofTorts(awrongful act or an infringement ofaright) adopted a
definition of a trade secret, and many states relied on thatin developing theirbody of case
law, leading to greater consistency in the development of trade secrets law.

❖ Additionally 1979, the National Conference of Commissioners on Uniform State laws

drafted the uniform Trade Secrets Act (UTSA) to promote uniformity among the states
with regard to trade secrets law.

❖ TheUTSAwasamendedin1985.

❖ Thefollowing definitionoftradesecrethasbeenadoptedbytheUTSA:

Tradesecretmeansinformation,includingaformula,pattern,compilation, program, device,

method, technique or process that:

✓ 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

✓ is the subject ofefforts that are reasonable under the circumstance

to maintain its secrecy.

DETERMINATIONOFTRADESECRETSTATUS:
Restatement ofTorts (awrongfulact or an infringement ofa right) §757 cmt.blists six factorsto be
considered in determining whether information qualifies as a trade secret.Courts routinely
examine these factors to determine whether a company’s information constitutes a trade secret.

Theextenttowhichtheinformationisknownoutsidethecompany:

❖ Although information may be known to other outside the company and still qualify as a
tradesecret,thegreaterthe numberofpeoplewho knowthe information, the less likelyit is to
qualify as a trade secret.

❖ Secrecyneednotbe absolute.

Theextenttowhichtheinformationisknownwithinthecompany:

❖ Althoughanemployerorcompanyispermittedtodiscloseconfidentialinformationto
thosewithademonstrated “need to know”theinformation.

❖ If the information is widely known within the company, especially among those whohave
no business need to knowthe information, it may not qualifyas a trade secret.
Theextentofthemeasurestakenbythecompanytomaintainthesecrecyofthe information:

❖ One claiming trade secret protection must take reasonable precautions to protect the
information.

❖ Courtsareunlikelyto protect informationacompanyhasnot botheredtoprotect.

❖ A company is not obligated to undertake extreme efforts to protect information, but

reasonable precautions are required.

❖ Some expertspredict that courtswill likelyrequire advanced securitymeasures to protect

trade secrets transmitted via e-mail, including encryption and protocols to ensure
confidentiality.

Theextentofthevalue oftheinformationtothecompanyanditscompetitors:

❖ Ifinformationhaslittlevalueeithertoitsownerortotheowner’scompetitors,itisless
likelytoqualifyasatradesecret.

❖ Conversely, information that is valuable to a company, such as the recipe for its keymenu
product, and that would be of great value to the company’s competitors is more likely to
be protectable trade secret.

Theextentoftheexpenditureoftime,effort,andmoneybythecompanyin developing the

information:

❖ The greater the amount of time, effort, and money the company has expended in
developing or acquiring the information, the more likely it is to be held to be aprotectable
trade secret.

The extent of the ease or difficult with which the information could be acquired
orduplicated by other:

❖ Ifinformationiseasytoacquireor duplicate,itislesslikelytoqualifyatradesecret.

❖ Similarly if the information is readily ascertainable from observation or can be easily

reproduced, it is less likely to be a trade secret.

❖ On the other hand, if it can be reverse engineered only with significant expenditures of
time, effort, and money, the product may retain its status as a trade secret.

LIABILITYFORMISAPPROPRIATIONOFTRADESECRETS:
Misappropriation of a trade secret occurs when aperson possesses,discloses,or uses a trade
secret owned by another without express or implied consent and when the person

✓ usedimpropermeansto gainknowledgeofthetradesecret;
 ✓ knewor shouldhaveknownthatthetradesecretwasacquiredbyimproper means;or

✓ Knew or should have known that the trade secret was acquired under circumstances
giving rise to a duty to maintain its secrecy.

The term improper means includes bribery, theft, and misrepresentation, breach of duty to
maintain secrecy, or espionage (the practice of spying or of using spies, typically bygovernments
to obtain political and military information) or other means.

Thus,misappropriationoccurseitherwhenatradesecretislawfully acquiredbutthen improperly used

or when the trade secret is acquired by improper means.

AbsenceofWrittenAgreement:

❖ A written agreement prohibiting misappropriation of trade secrets can be enforced

through an action for breach of contract; a company’s trade secrets can be protected
against misappropriation even in the absence of any written agreement between the
parties.

❖ A party owning trade secrets can bring an action in tort for breach of the duty of
confidentiality, which duty can arise even without an express agreement.

❖ Courts will impose a duty of confidentiality when parties stand in a special relationship
with each other, such as an agent-principal relationship (which includes employer-
employee relationship) or other fiduciary (involving trust, especially with regard to the
relationship between a trustee and a beneficiary) or good faith relationship

❖ Courts have consistently held that employees owe a duty of loyality, fidelity, and
responsibility to their employers.

❖ In fact, more trade secret cases are brought in tort for breach of confidentiality than in
contract for breach of written agreements.

Forexample: IfXYZ company is attempting to make a sale to Jones and informs Jones that the
XYZ product is superior to that of competitors because it involves a new breakthrough in
technology and explains the trade secret, courts would likely find that Jones is subject to a duty
not to disclose the information.Similarly, if XYZ co., explains its trade secrets to its bankers in
an attempt to obtain financing, the bankers would likely be precluded from disclosing or using
the information.Such implied contracts to protect the information generally arise when the
parties’ conduct indicates they intended the information to be kept confidential or impliedly
agreed to keep it confidential.
MisappropriationbyThirdParty:

A number of other parties may also have liability for misappropriation of trade secrets if
they knew or should have known they were the recipients of protected information.
Forexample:
1. Assume Lee is employed by XYZ co., In course of time Mr.Lee learns valuable trade
secret information.If Mr.Lee resigns jobs and begins working for new company and it
prohibited for both inusing the information.He may not misappropriate the information
because he was in an employee-employer relationship with XYZ company.New company
should not use the information if Mr Lee reveals, if it happen so, then XYZ Company
would generally prefer to sue New Company inasmuch as it is far likelier to have deep
pockets, meaning it is more able to pay money damages than is an individual such as Lee.

2. If New Company has no reason to know the information was secret or that Mr. Lee may
not reveal it, New Company would not have liability for such innocent use of the
information. Similarly, if trade secret information were innocently obtained by New
Company by mistake, New Company would have no liability for subsequent use or
disclosure of the information.

WrittenAgreement:

Employers are generally free to require employee, independent contractors, and consultantsto
sign express agreements relating to the confidentiality of information.These agreements are
usually enforced by courts as long as they are reasonable.The agreements usually include four
specific topics:

❖ OwnershipofInventions
❖ Non-disclosureProvisions
❖ Non-solicitationProvisions
❖ Non-competitionProvisions
✓ Purpose
✓ Reasonableness
✓ Consideration

PROTECTIONFORSUBMISSION:

SubmissiontoPrivateParties:

❖ In may instance individuals wish to submit an idea for an invention, process, game, or
entertainment showto acompanyor business inthehopethat thecompanyor business in
 thehopethatthecompanywillmarketanddeveloptheideaandtheindividualwillbe compensated for the
idea?

❖ Idea submission disputes frequently arise in the entertainment industry.In oen case an
individual claimed that the producers of the Cosby Show (American comedian)
misappropriated her idea for a television program portraying a wholesome and loving
AfricanAmerican family.A court heldthere were no people andthe idea wasso general as
to lack the element of concreteness to be protectable.

❖ The solution to such a dilemma is for the “inventor” to submit the idea pursuant to an
evaluation agreement, or submission agreement, whereby the other party agrees to
evaluate the idea only for the purpose of considering a future transaction between the
partiesand further agreesnotto circumventthesubmitterortodisclosethe idea toothers.

SubmissiontoGovernmentAgencies:

❖ Private companies that present bids to government agencies in the hope of obtaining a
government contract are often required to disclose confidential or trade secretinformation
to the agency.

❖ Under freedom of information act (both at the state and federal levels), the proposalmight
later be released to any member of the public requesting the document, thus resulting in
loss of confidential information to possible competitors.

❖ Theprotectedinformationisusuallyblockedout.

❖ Ifagovernment agencydisclosestradesecretinformation, theownermayhaveacauseof action

for an unconstitutional taking of private property and may be awarded compensation if
the owner had a reasonable expectation of confidentiality.

REMEDIESFORMISAPPROPRIATION:
Atradesecretownermayrequestavarietyofremediesfromacourt.Amongthemarethe following:

❖ Injective relief:In many cases, a trade secret owner is more interested in ensuring the
defendant cease use of the trade secret (or is precluded from commencing use) than in
recovering damages. In cases in which money damages are not sufficient to protect a
trade secret owner, acourt mayissue an injection.Acourt mayalso issue an injuctionto
compelthedefendanttosurrenderordestroytradesecret information.Infact,courtsmay issue
injunctions’ to prevent inevitable disclosure, reasoning that even if a former employer
cannot show a particular secret has been taken, it is inevitable that key employees will
eventually disclose what they know to a new employer.

❖ Money damages: A trade secret owner whose information has been misappropriated
may recover money damages from the defendant.The Plaintiff may recover its lost profits
as well as the profits made bythe defendant.Alternatively, the plaintiff mayseek
 and recover a reasonable royalty arising from defendant’s use of the trade secret.Punitive
damages may also be awarded in cases in which the defendant’s conduct is reckless,
willful, and intentional.The USTA provides that punitive damages not exceed more than
twice the compensatory damages awarded.

❖ Attorneys’ feesandcosts: Inmost cases, theparties beartheirownattorneys’fees and

costs.The UTSA, however, provides that reasonable attorneys’ fees and costs may be
awarded to the prevailing party if bad faith or willfulness is shown.

TRADESECRETLITIGATION:
❖ If a trade secret is disclosed in violation of a written confidentially agreement, and the
parties cannot resolve the dispute themselves, an action for breach of contract may be
brought, similar to any other breach of contract action.

❖ Theplaintiff mayaddother causesofactionas well, for example, for misappropriationin

violationofa statetrade secret law. If no writtenagreement exists, the plaintiff must rely
upon case law or state statutes protecting trade secrets, or both.

❖ To protect itself against a lawsuit by another alleging trade secret violation, companies
should require new employees who will have access to confidential information to
acknowledge in writing that accepting employment with the new company does not
violateanyother agreement or violateanyother obligationofconfidentialityto whichthe
employee may be subject.

❖ Ifgrounds for federal jurisdictionexist (the parties have diverse citizenship and the claim
exceeds $75000), the action may be brought in federal court.

❖ The UTSA [Uniform Trade Secrets Act] provides that an action for misappropriation
must be brought within three years after misappropriation is discovered or reasonably
should have been discovered.

❖ In federal court, the action will be governed by the Federal Rules of Civil Procedure
relating to federal civil actions generally.

❖ Most states have rules relating to civil procedure that are modeled substantially after the
Federal Rules of Civil Procedure and likewise govern the litigation.

❖ If the defendant has a cause of action to assert against the plaintiff relating to the trade
secret, it must be asserted by way of a counterclaim in the litigation so that all disputes
between the parties relating to the information can be resolved at the same time.

❖ After the complaint, answer, and counterclaim have been filed, various motions may be
made.Discovery will commence.The plaintiff and defendant will take depositions to
obtain testimony from those who may have information about the case.
 ❖ Ultimately, ifthe matter cannot be resolved byprivate agreement, it willproceed to trial.
The trade secret owner must prove misappropriationbya preponderance ofthe evidence.
Ether party may request a jury trial; otherwise, a judge will render the decision. Appeals
may follow.

❖ One of the difficultissues in trade secret litigation arises from the fact that the trade secret
sought to be protectedoften must be disclosed inthe litigationso the judge or jury can
evaluate whether the information is sufficiently valuable that it affords its owner a
competitive advantage.

❖ Similarly, the owner’s methods of protecting the information often must be disclosed so
the fact-finder candeterminewhether theowner hastakenreasonable measures to protect
the alleged trade secrets.

❖ The dilemma faced bytrade secretsowner is that they must disclose the veryinformation
they seek to protect.

❖ As technology progresses and the value of certain communication and entertainment

inventions increases, trade secret litigation is becoming an increasingly common and
high-stakes occupation.

TRADESECRETPROTECTIONPROGRAMS:
Trade secrets are legally fragile and may be lost by inadvertent disclosure or failure to
reasonably protect them, companies should implement trade secret protection programs to
safeguard valuable information.Because trade secret protection can last indefinitely, businesses
should devote proper attention to the methods used to ensure confidentiality of information.
Developing programs and measure to protect trade secrets is an easy way to demonstrate to a
courtthat anownervalues its informationandtakesappropriatemeasuresto maintainitssecrecy.

Physicalprotection

There are a variety of tangible measures a company can implement to protect trade
secrets, including the following:

❖ Safeguardinginformationunderlockand key;
❖ Protectingtheinformationfromunauthorizedaccess;
❖ Forbiddingremovalofprotectedinformationfromthecompanypremisesorcertain rooms;
❖ Retaining adequate security during evening and weekends either through alarm systems
or security services;
❖ Ensuring toursofthe company premises do not expose outsiders to valuable processes or
information;
❖ Usingcheck-outlistswhenvaluableequipmentorinformationisremovedfromitsnormal
location;
 ❖ Monitoring employees’ use of e-mail and the Internet to ensure confidential information
is not being disseminated;
❖ Usingencryptiontechnologyandantivirusprotectionprogramstoprotectinformation stored
on computers;
❖ Educateemployees ontradesecretsandprotectionoftradesecrets;
❖ Ensuring information retained on computers is available only on company networks
sothat access can be easily tracked.

Most companies will not need to implement all of the measures described above.Courts do
notrequireabsolutesecrecyorthat extreme measurebetakento protect information.Rather,
reasonable measures will be sufficient to protect the status of information as trade secrets.

ContractualProtection

❖ Another method of protecting trade secrets is by contract, namely, requiring those

withaccesstotheinformationtoagreeinwritingnot todisclosetheinformationto other
or use it to the owner’s detriment.

❖ Similarly, in licensingarrangements, trade secret owners should ensure the license

agreements contain sufficient protection for trade secret information.

❖ Employers should use noncompetition agreements to ensure former employees do

not use material gained on the job to later compete against the employer.

❖ With the advent of the Internet and the increased ease of electronic
communications,employershavebecomeconcernedaboutthelossoftradesecrets
through dissemination over the Internet.

❖ Ithasbeenheldthat“onceatradesecretispostedontheInternet,itiseffectively
partofthepublicdomain,impossibletoretrieve”.

ContractualProtection

Companies can also rely on other complementary methods of protection to safeguard

trade secrets. Any material that qualifies for copyright protection should be protected by
registration, or at a minimum, by ensuring a copyright notice is placed on the material or
document to afford notice to other ofthe owner’s right and internet in the material.
 UNFAIRCOMPETITION
INTRODUCTION:
The law of unfair competition is based upon the notion that individuals should be
protected from deceptive (looking down) and improper conduct in the marketplace.The law of
unfair competition is found in case law, in state statutes prohibiting unfair business practices, in
specific federal statutes, and in regulations promulgated by the FTC (Federal Trade
Commission), the federal regulatory agency charged with protecting consumers from unfair or
deceptive acts and practices.

The law of unfair competition continues to evolve as new methods of conductingbusiness

arise, such as electronic offers and sales through telemarketing, television infomercials, and the
Internet.There are anumber of theories and actions that can be used by injured parties to protect
against unfair competition.In many instances, actions for unfair competition will be combined
with other actions (such as those alleging trademark, copyright, or patentinfringement) to
provide a plaintiff a wide array of possible remedies.
ForExample: adesignerofscarves imprintedwithfancifuldesigns maydecideagainst applying for a
design patent due to the expense involved and the short life cycle of fashion products Protection
against copying of the design may thus be available under the umbrella of unfair competition
rather than under design patent law.

Section 43 of the Lanham Act (15 U.S.C § 1125) provides a federal cause of action to protect
consumers against unfair competitive business practices.Moreover, section 43(a) protects
unregistered marks and names, such as those that do not qualify for federal trademarkregistration
because they are descriptive or perhaps used only in intrastate commerce.

The most common types of unfair competition are discussed more fully in this chapterbut
can be briefly summarized as follows:

➢ Passingoff(orpalmingoff),“Passingoff”occurswhenonepartyattemptstopassoffor
sell hisorhergoodsorservicesasthose ofanother.

➢ Misappropriation

➢ RightofPublicity

➢ Falseadvertising

➢ Dilution, Either tarnishing another’s mark or causing it to lose its distinctiveness through
“blurring” is actionable as dilution

➢ Infringement of trade dress, adopting the overall concept of another’s distinctive

packaging or product image, generally called its “trade dress”, so as to deceiveconsumers
is an infringement of trade dress.

Generally,injuredpartiesnotifythewrongdoerpriortoinitiatinglitigation.
MISAPPROPRIATION:

➢ The doctrine of misappropriation first arose in International News Service V. Associated

Press, 248U.S. 215(1918), inwhichtheSupreme Court heldthat anunauthorizedtaking of
another’s property, in that case, news information, that it invested time and money in
creating was actionable as misappropriation of property.

➢ In INS, news information originally gathered by the Associated Press relating to World
War I was pirated by International News Service and sold to its customers.

➢ Because the news itself, as factual matter, could not be copyrighted, the plaintiff couldnot
sue for copyright infringement.
➢ Instead it allegedthat itsvaluablepropertyright hadbeentakenormisappropriatedbythe
defendant.

➢ The Supreme Court agreed, noting that the defendant was “endeavoring to reap where it
has not sown, and is appropriating to itself the harvest of those who have sown. “Id. At
239-40.Because the defendant was not attempting to convince its subscribers that its
news reports were from the plaintiff, an action for passing off would not lie.The
defendant was misappropriating rather that misrepresenting.

RIGHTOFPUBLICITY:

➢ The right of publicity gives individuals, not merely celebrities, the right to control
commercial used of their identities or personas.

➢ The right of publicity protects a commercial interest, the vast majority of cases involve
celebrities inasmuch as they can readily show economic harm when their names,
photographs, or identities are used to sell products or suggest a sponsorship of
merchandise.

➢ Publicityrights are governedby statelaw.

➢ The right of publicity has evolved from the right of privacy, which protected against
unreasonable invasions upon another person’s solitude and provided remedies for the
disclosure of private information.

➢ The right of publicity allows individuals to protect the marketability of their identitiesand
punishes those who would unjustly enrich themselves by appropriating another’s fame
for profit-making purposes.

➢ Unpermittedcommercialexploitationofanindividual’s personawoulddilutethevalueof the

persona, making it more difficult for the individual to commercialize his or her
identity.Thus, remedies for infringement include injunctions to prevent further
exploitation and monetary relief to compensate the individual whose right of publicityhas
been appropriated (including damages for injury to reputation recovery of the defendant’s
profits, and punitive damages in extreme cases)
 ➢ Courts have articulated a number of reasons for uploading an individual’s right to
publicity, including the need to protect against confusion that would arise if consumers
were ledtobelieve individuals sponsororapproveproductswhentheydo not,theneedto
incentivize performers who provide entertainment and benefit t society and should thusbe
provided with a protectable proper right in their identities.

➢ Therightofpublicitydoesnotapplytononcommercialuses;usinganother’sname,
likeness,oridentityfornewsreporting,scholarship,orresearchispermissible.

NEWDEVELOPMENTSINTHERIGHTOFPUBLICITY
➢ Asiscommonwithintellectualpropertyrightsintoday’ssociety,someofthenew
issuesrelatingto therightsofpublicitystemfromincreasingtechnologicaladvances.

➢ Withoutpriorpermissiononeshouldnotappearinthedigitaltechnologyusedmovie.

➢ The international Trademark Association has proposed amending the U.S.Tradeamrk

Act to create a federal right ofpublicity with postmortemrights (although such rights
would be limited to some specific period of duration after death).

➢ Similarly, names, gestures, and likenesses are unprotectable under copyright law
because they are titles or ideas rather than expressions.

➢ Thus,insomeinstances,federalcopyrightlawmaycontrolaplaintiff’srights,while
inotherinstances;onlytherightto publicitywillprovide protection.

➢ California recently passed the Astaire Celebrity Image Protection Act(Cal.Civ.Code

§ § 3344-3346) to allow heirs of celebrities to block commercial uses of deceased
celebrities’ likenesses while allowing a “safe harbor exemption” to
artisticuses,suchasthedigitalinsertionofPresident Kennedy’simage intothe movie
Forrest Gump, or uses for news, public affairs, and so forth.

FALSEADVERTISING:

➢ In1943,thefederaltrademarklaw,the LanhamAct,waspassed.
➢ Section 43(a) of the act (15 U.S.C. § 1125) prohibited false designations of origin,
namely, descriptions or representations tending falselyto describe or represent goods
or services.
➢ It was not an effective vehicle to use when a party made misrepresentations relatingto
the nature or quality of goods or services.
➢ Moreover, until the passage of the Lanham Act, Plaintiffs, an element that was often
difficult to demonstrate.
 ➢ Although the individual states enacted statutes prohibiting false advertising, these
statutes varied from state to state and were often ineffective to prohibit false
advertising that was national in scope.
➢ The expansive language of section 43 ofthe Lanham Act, however, soon began to be
used to protect not only against unregistered trademarks but also against nearly all
forms of false advertising.
➢ In 1989 Congress amended the Lanham Act and broadened the scope of section 43for
infringement of trademarks (both registered and unregistered marks) and trade dress,
while the other portion of the statute allows the assertion of claims for false
advertising and trade libel.
➢
Under section 43(a), whoever uses a false or misleading description or
representation oftact or false designation oforigin in commercial advertising or
promotion or misrepresents the nature, qualities, or geographic origin of his or
her or another person’s goods, services, or commercial activities is liable to any
person likely to be injured by such act (if the act is committed in interstate
commerce)

ForExample:

➢ afailuretodisclosethatadvertisedpricesdidnotincludeadditionalcharges;
➢ a statement that a pregnancy test kit would disclose results in “as fast as ten minutes”
whenapositiveresult wouldappear intenminutesbut anegativeresultsmighttakethirty
minutes;
➢ aclaimthatacertainmotoroilprovidedlongerlifeandbetterengineprotectionthana
competitor’sproductwhenthatclaimcouldnotbe substantiated;
➢ afalseclaimthatautomobileantifreezemetanautomobile manufacturer’sstandards;
➢ coveringupalabelstating “MadeinTaiwan”thatappeared ongoods

INTERNATIONALPROTECTIONAGAINSTUNFAIRCOMPETITION:
➢ The United States has assumed certain obligations under international agreements in the
arena of unfair completion, chiefly under the Paris Convention.
➢ The Paris Convention seeks to afford citizens of each of the more than 160 member
nation’s protection against unfair competition and trademark infringement and requires
that member nations provide the same level of protection against unfair competition to
citizens of other member nations as they do for their own citizens.
➢ The Paris Convention expressly prohibits acts that create confusion b yany means with a
competitor, false allegations that discredit a competitor, and indications that mislead the
public in regard to the nature or characteristics of goods.
➢ Section 44 of the Lanham Act (15 U.S.C§ 1126) implements the Paris Convention and
expressly provides that any person whose country of origin is a party to any conventionor
treaty relating to the repression of unfair competition, towhich the United States is also a
party, is entitled to effective protection against unfair completion.
x
 UNIT-5

NEWDEVELOPMENTSOFINTELLECTUALPROPERTY
NEWDEVELOPMENTINTRADEMARKSLAW:

TheInternet:

❖ Trademark owners throughout the world are struggling with new issues presented by
increased electronic communication, primarily that occurring through the Internet.

❖ The Internet derives froma network set up inthe 1970s bythe Department ofDefense to
connect militaryand research sites that could continue to communicate even in the event
of nuclear attract.

❖ In the 1980s, the National Science Foundation expanded on the system, and its first
significant users were government agencies and universities.

❖ In the early1990s, however, it became apparent that the system could provide a global
communication network, allowing people fromall over the world to talk with each other;
send written messages, pictures, and text to each other; and establish web pages to
advertise their ware and provide information to their customers.

AssignmentofDomainNames:

➢ A company’s presence on the internet begins with its address or domain name not only
serves as a locator for a company but also functions as a designation of origin and a
symbol of goodwill---a trademark.

➢ There are two portions to a domain name: the generic top-level domain, which is the
portionofthe nametotheright ofaperiod (suchas.govor .com) and the secondary level
domain, which is the portion of the name to the left of a period (such as “kraft” in
Kraft.com”).

➢ Disputes frequently arise between owners of registered mark and owners of domain
names whose domain names similar or identical to the registered marks.

InternetCorporationforAssignedNamesandNumbers[ICANN]:

➢ Tohelpresolvetheproblems inthedomainnamesregistrationanduse process

➢ ThegovernmentcreatedtheICANN

➢ Itisa nonprofitcorporation
 ➢ It is governed by a board of directors elected in part by various members of the Internet
community.
➢ ICANNareauthorizedtoregisterdomainnamesendingwith.com, .organd.net

➢ Registrationsusuallylastoneyear, atwhichtimetheycan beremovedorwillexpire.

➢ Registration requires a representation that the person seeing to register the name is not
doing so far an unlawful purpose and does not know of any infringement

➢ ICANNrecentlyaddedsevennewtop-leveldomains,including.bizand .info

PROTECTINGADOMAINNAME:
➢ People register well-known marks as domain names to prey on consumer confusion by
misusing the domain name to divert customers from the legitimate mark owner’s site.
This practice is commonly called cybersquatting.

➢ Therearethreeapproaches foragainstcybersquatter:
✓ Anactioncanbebroughtunderthe FederalTrademarkdilutionAct
✓ AcivilsuitcanbeinstitutedundertherecentAnticybersquattingconsumerprotection
Act, or
✓ AnarbitrationproceedingcanbeinstitutedthroughICANN’sdisputsresolutions
process

➢ Cybersqutter and the dilution doctrine: Federal trademark dilution Act (15 U.S.C § 1125
(C)

➢ CybersquattersandAnticybersquattingconsumerprotectionAct(15U.S.C§1125(d) [ACPA:
Anticybersquatting consumer Protection Act]
✓ Toprevailinacivilactionunder ACPA, aplaintiffmustprovethree thing:
1. Theplaintiff’smarkisadistinctiveorfamousmarkdeservingof
protection
2. Theallegedcybersquatter’sinfringingdomainnameis identicaltoor
confusinglysimilartotheplaintiffmark
3. Thecybersquatterregisteredthedomainnameisbad faith

➢ ResolvingDisputesthroughtheUniformDomainNameDisputeResolutionPolicy: [UDRP]
1999
✓ Theallegedlywrongfuldomainnameisidenticalorconfusinglysimilartothe
complainants’trademark;
✓ Thedomain nameregistranthasno legitimate interestinthedomainnameand
✓ Thedomain nameisbeingusedinbadfaith

NEWDEVELOPMENTINCOPYRIGHTLAW:
➢ While acknowledging that clothing is a useful article and thus not subject to copyright
protection, a New York Federal court ruled that lace design, copyrighted as writing and
incorporated into wedding dresses, were protectable and enjoined another maker of
weddingdressesfrommakingormarketingcopies.Similarly,detailedembroidersor
 some other two dimensional drawing or graphic work affixed to a portion of a
garmentmay be copyrightable.

➢ A federal court in California recently held that while type fonts themselves are not
protectable under copyright law, a software program that generated and created the
typefaces was protectable.

➢ AssoonasStephenKingsoldhis bookridingtheBullet exclusivelyinanInternet format, an

individual cracked the copyright protection software and posted free copies of thebook on
the Internet.The publishers responded by adopting stronger encryption
technology.Similarly, in 2000, Mr. King suspended online publication of a serial novel
because too many individuals were downloading the work without paying it.

➢ It late 1997 President Clinton signed into law the No Electronic Theft [NET] Act
[amending 18 U.S.C §2319] to enhance criminal penalties for copyright infringement,
evenifthe infringerdoesnot profit fromthe transaction.Theact also extendsthestatutes
oflimitationsforcriminalcopyright infringement fromthreeto five years,andallowslaw
enforcement officers to use federal copyright law against online copyright violation,
thereby extending the same copyright protection to the Internet that is provided to other
media.

➢ In September 1999, the Clinton administration relaxed government restrictions on the

export of encryption products and simultaneously introduced new legislation to give law
enforcement agencies greater authority to combat the use of computers by terrorists and
criminals and to create a new code cracking unit within the FBI [Foreign Bureau of
Investigation] .

➢ In mid-2000, president Clinton signed the Electronic signatures in Global and National
Commerce Act, making digital execution, called e-signatures, as legally binding as their
paper counterparts.

➢ In2000, federalprosecutors in Chicago indicted seventeenpeople who called themselves

“Pirates with Attitude” for pirating thousands of software program.The case wasbrought
under theNET Act.Someofthe individualswere former employeesofInteland Microsoft.

➢ The copyright office has recommended that congress amend section110 ofthe copyright
Act to grant educators the right to transmit copyrighted works for distance learning if
certain conditions are met.

NEWDEVELOPMENTINPATENT LAW:

The patent Act has proven remarkably flexible in accommodating changes and
development in technology.Thus advisement in technology generally has not necessitated
changes in the stately governing patent protection.

Businessmethodandsoftwarepatent:
 Many of the cutting-edge issues in patent law related to patents for computer software.
For several years, the conventional wisdom has been that unless a computer program had
significant commercial value and application patent protection was often counterproductive or
ineffective in that the PTO often took two years to issue a patent, roughly the same time it took
for the software program to become absolute.

Biotechnologypatent:

Medicines, Science, agricultural and pharmacology present the other cutting-edge issues
in patent law.Research into genes may hold the key to curing disease throughout the world.
Agricultural research may hold the key to providing sufficient food for the world’s ever-
increasing population.

The development of strains of plants and crops that are resistant to brought and disease
has also led to an increasing number of patents issued, and attendant litigation.In the field of
“agbiotech”.

AmericanInvestorsProtectionActof1999[AIPA]:

The AIPA was signed into law in 1999 and represents the most significant changes to
patent law in twenty years.Although some of the provisions of AIPA have been discussed earlier,
its key subtitles are as follows:

➢ Inventors’RightActof1999
➢ TheFirstInventorDefenseActof1999
➢ The patenttermguaranteeactof1999
➢ ThedomesticpublicationofForeignfiledpatentapplicationactof1999
➢ TheoptionalInterpartsreexaminationprocedureActof1999

IntroductionofInternationalPatentprotection:

The rights granted by a U.S Patent extend only throughout the U.S and have no effect in a
foreign country.Therefore, an inventor who desires patent protection in other countries must
apply for a patent in each of the other countries or in regional patent office.

➢ TheParisconvention(alreadyitisinpreviousunits)
➢ TheEuropeanpatent organization
➢ Agreement onTrade-RelatedAspectsofIPR(alreadyitis inpreviousunits)
➢ ThepatentLaw Treaty
➢ ForeignFillingLicenses
➢ Applicationsfor UnitedStatesPatentsbyForeignapplicants

TheEuropeanpatentorganization:

The European Patent Organization (EPO) was founded in 1973 to provide a uniform
patent system in Europe.A European patent can be obtained by filing a single application with
the EPO headquartered in Munich (or its subbranches in The Hague or Berlin or with thenational
offices in the contractingnations).Oncegranted, the patentin validin any of the EPO
countries designated in theapplication and hasthe same forceaspatent granted in anyoneofthe contracting
nations.

INTELLECTUALPROPERTYAUDITS:

Many companies believe that copyright extends only to important literary works and
therefore fail to secure protection for their marketing brochures or other written materials.
Similarly, companies often fail to implement measures to ensure valuable trade secrets maintain
their protectability.Because clients are often unaware of the great potential and value of this
property, law firms oftenoffer their clientsanintellectualpropertyaudit to uncover acompany’s
protectable intellectual property.The IP audit is analogous to the accounting audit most
companies conduct on an annual basis to review their financial status.

Another type of IP investigation is usually conducts when a company acquires another

entity.At that time, a thorough investigation should be conducted ofthe intellectualproperty of the
target company to ensure the acquiring company will obtain the benefits ofwhat it is paying for
and will not inherit infringement suits and other problems stemming fromthe targets’ failure to
protect its IP.This type of IP investigation is generally called a due diligencereview inasmuch as
the acquiring company and its counsel have an obligation to duly and diligently investigate the
target’s assets.

ConductingtheAudit:

➢ The first stepintheaudit should be a face-to-face meetingofthe legalteamandcompany

managers.

➢ The legalteamshould makeabriefpresentationonwhat IntellectualPropertyis, whyit is

important to the company, and why and how the audit will be conducted.
➢ Managers will be more likely to cooperate if they fully understand the importance of the
audit.

➢ Obtaining this kind of “buyin” from the clints managers and employees will speed the
audit and reduce costs.

➢ Moreover, education about the importance of intellectual property helps ensure that
managers consider ways to further protect a company’s valuable assets and remain alertto
possible infringements of the company’s Intellectual capital or infringements by the
computer of other’s right.

➢ Finally, having, outside counsel involved in the process will ensure that communications
related to the audit are protected by the attorney-client privilege.

➢ Once thecompany’s managers have beenadvised ofthe need for theaudit, the legalteam
should provide a work-sheet or questionnaire to the company specifying the type of
information that the firm is looking for so that company files can be reviewed and
materials assembled for inspection by the firm and its representatives.