| Patents
General information regarding patents is available directly from the United States Patent and Trademark Office (USPTO) at www.uspto.gov. If you will click on the home page “PATENTS” and on next page “BASIC FACTS ABOUT PATENTS” (upper left hand corner), you will find abundant information regarding many aspects of patents.
Once a patent is issued, there are two ways to exploit this asset. One method is to sell or license the patent. Both of these avenues for realizing some monetary benefit from the patent involve typical marketing and sales techniques. You must find the right customer, negotiate the sale or transfer, and then consummate the transaction. Marketing the patent is done by the patent holder with the assistance of a patent attorney. We are available to develop a strategy for exploiting the patent by sale or transfer, including negotiation and preparation of appropriate documents for completing the transaction.
If you manufacture and sell products, and have obtained the patent in order to provide you with exclusivity in the marketplace, then exploitation takes a different route. You should mark the product as “patent pending” and then monitor the marketplace to determine whether any competitor has infringed upon your patent. We are available to help you make that determination by reviewing the competitive product and the patent and to provide an opinion regarding whether infringement exists.
In the event that there are infringers that resist a license agreement (should you decide to offer one), or should you identify an infringer that is depriving you of exclusivity for your own product, the patent may be used to terminate the infringement. That generally involves a very expensive lawsuit . However, threatening the infringer with a cease and desist letter may bring the infringer to the bargaining table and force it to obtain a license or to discontinue the infringement.
We are highly experienced in all phases of the above-described process commencing with a preliminary patentability search, filing a provisional patent application, preparing and filing a utility application, prosecuting the application in the USPTO, and assisting in the exploitation of the patent including patent infringement lawsuits.
Trademarks
Unlike a patent, a trademark comes into existence when it is applied to a product or service which is sold to the general public. That is referred to as a “common law” trademark. While your usage provides protection, the protection is not as strong as you can obtain by registering your trademark in the United States Patent and Trademark Office. If you wish to register the mark, you can obtain information about the registration process at www.uspto.gov. Click on “TRADEMARKS” on the home page then click on “BASIC FACTS” which provides considerable information regarding trademarks in general and the registration process in particular.
Once a trademark registration is granted, you can then mark your product or service with an ® which informs the public that you have a registered trademark. One benefit of a registered trademark registration is that should an infringement arise, you may sue the infringer in a Federal District Court. We strongly recommend registration for this benefit alone, although there are other benefits that accrue upon successful registration. Federal District Courts are much more familiar with trademark infringement issues than State Courts generally.
Just like a patent, a trademark may be used on your own product or service, or it may be licensed. The most familiar type of trademark licensing is in connection with a franchise. For example, McDonalds Corporation franchises independent owners of its stores; the franchise includes a license of the MCDONALDS trademark. Other marks commonly licensed include characters, such as from STAR WARS, which are licensed to manufacturers of, for example, toys.
A trademark cannot be sold except in conjunction with a business that has been using the trademark. In other words, a trademark is inseparable from the product or service upon which it is used.
The law respecting trademarks and the Internet is in the development stage but by and large the concepts of trademark law are applicable to the use of marks on the web. Courts have been sorting their way through the various issues that arise concerning the relationship between trademarks and domain names.
We are available to conduct a trademark search (highly advised before investing money in a particular trademark), preparation of an application for trademark registration, prosecution of that application, and all aspects relating to use of the trademark after it is registered, by licensing, sale, or a trademark infringement suit.
Copyrights
General information regarding copyrights may be obtained at www.copyrights.gov. On the home page you can click on “COPYRIGHT BASICS’ and/or “FREQUENTLY ASKED QUESTIONS” (FAQ). A copyright comes into existence once the idea has been reduced to a “tangible medium”. However, the concept of a common law copyright, analogous to a common law trademark, has been superceded by Federal Copyright Law. Thus, in order to obtain enforceable rights in a work, an application for registration must be filed. This process, compared to patents and trademarks, is extremely simple. We generally recommend that our clients apply for a copyright on their own, except in unusual situations. Where a business files many copyrights, for example in the jewelry business, we have assisted clients in establishing an in-house system for managing their copyright assets.
Copyrights may be licensed as with other intellectual property rights or they may be sold. The most common copyrighted works are books, sound recordings, periodicals, choreography, and visual arts which include paintings, sculptures and most two and three-dimensional works. A copyright on a book, for example, may be sold or licensed to a publisher generally in an author’s contract which may be relatively simple or may be quite complex.
In the event of infringement of a registered copyright, a suit may be brought in the Federal District Court (but not in a State Court).
We are prepared to assist you in all phases of copyright procurement, commercialization and enforcement.
Trade Secrets
Unlike patents, trademarks and copyrights, trade secrets are protected under State law. Most States have enacted a model trade secret law and so the statutes in many States are virtually the same, although the application of the statute in court cases may vary.
Trade secrets comprise information (in many forms) which provides the holder with a competitive advantage when the information is kept in secrecy and is thus unavailable to competitors. There are no applications or forms to fill out but protecting trade secrets requires identification and protection of information created. Trade secrets are sometimes referred to as “confidential information”; the two terms are equivalent for legal purposes. Since the essence of a trade secrete is “secrecy”, it follows that a product rarely is protectible by a trade secret if it is sold to the public. That is because the product can generally be “reverse engineered”. Software may be protected by trade secret but only where the licensee of the software is bound by an agreement and the software has not otherwise been disclosed to the public. It therefore follows that most trade secrets are processes or techniques used in manufacturing or a business method.
Trade secrets may be licensed like other intellectual property rights. Of course, such licenses must bind the licensee to maintain the information in confidence. Trade secrets may also be sold outright. Oftentimes, trade secrets are licensed together with other intellectual property, such as patents, in what is commonly referred to as a technology license. For example, a patent may protect a product but there may be a unique manufacturing method for the product that provides an advantage and thus the patent and trade secret may be licensed together. The term “know how” is related to trade secrets and confidential information but is somewhat ambiguous. Some courts equate know how with a trade secret, but in other cases it involves information that is generally in the public domain, but may have unique advantages in a particular process or method. Know how is often licensed together with trade secrets and patents.
Many trade secrets are protected through a contractual relationship, for example, between an employer and an employee. Often referred to as a “non-disclosure agreement”, it prevents the employee, post-employment, from disclosing or using the confidential information in a competitive business. If two parties enter into a confidential disclosure agreement, and it is breached, a suit on the contract may be brought seeking damages based on the lost profits of the owner of the confidential information. However, an alternative scenario in which trade secrets are lost is through misappropriation, for example, where a company steals the trade secrets or confidential information from the holder. The State statutes referred to above provide a claim for misappropriation of the trade secrets wherein, damages may be collected and an injunction to prevent further use of the trade secrets entered.
The critical aspect of trade secrets is to maintain the information in confidence and taking all of the steps necessary to do so such as marking drawings and reports with the term “Confidential”, keeping certain information in locked file cabinets, obligating persons to whom the trade secret is disclosed during employment to thereafter refrain from disclosure or use, and to constantly remember that secrecy is the essence of the asset.
We are prepared to assist you in all aspects of trade secret acquisition, maintenance and protection, and enforcement.
Covenants-not-to-compete
Covenants-not-to-compete involve State contract law and thus vary considerably from State to State. Covenants-not-to-compete typically arise in two situations: the employer/employee arrangement and the sale of a business. Generally speaking, courts are far more accommodating to enforcing a covenant-not-to-compete signed in conjunction with the sale of a business, than in the employer/employee relationship. Indeed, it could be said that courts are oftentimes hostile to covenants-not-to-compete that bind an employee, from competing after termination.
A well-drafted covenant-not-to-compete can be extremely valuable in certain types of businesses. We believe that there are some indefinite but nevertheless important limitations on the restrictions contained in a covenant specifically, time and geographic scope. A covenant that lasts for only one year is easily enforced by courts. Two years is not uncommon, but more than two years generally requires special circumstances. As for geographic territory, a local business can only enforce a covenant-not-to-compete within a reasonable area around the locale. But businesses that involve sales, for example, over the Internet must typically require a covenant that is nationwide in scope. Older case law demonstrates that courts were hostile to wide geographic restriction but they are reconciling the law to the reality of the nationwide and indeed worldwide business climate.
Covenants-not-to-compete should not be confused with confidential disclosure arrangements discussed above. Unfortunately, many courts confuse the two. Often a confidentiality provision will be contained in an employment contract together with a covenant-not-to-compete. But it is highly desirable that although the covenant should have a limited life, the confidential disclosure obligation should be indefinite depends only upon public disclosure of the information that destroys the confidentiality.
We are prepared to assist you in the drafting of covenants-not-to-compete in various circumstances, and to enforce such covenants against ex-employees or sellers of a business.
Unfair Competition
Unfair competition is a broad and nearly indefinable protection afforded a business in a competitive environment. In one sense, protection of trademarks and trade secrets are forms of unfair competition. But they have congealed into separate bodies of law. Unfair competition includes conduct such as false advertising, disparagement of a product or business, boycotting, and segues into other areas of the law such as antitrust.
In our experience, unfair competition is oftentimes a claim that accompanies a trademark infringement claim, or a trade secret claim. Although not well defined, it can protect the periphery of what is normally encompassed within claims such as trademark infringement.
We are prepared to provide you with counseling as well as enforcement of claims for unfair competition.
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