Patents, trademarks, copyright and trade secrets are collectively known as intellectual property and each country or region treats these legal matters somewhat different. Below is a brief discussion of what you need to know to protect your intellectual property rights as well as to avoid infringement of others’ rights and the discussion is necessarily “UScentric”. Those with issues involved with intellectual property in other countries should seek advice from a knowledgeable practitioner in that country.

With that said, each of the various types of intellectual property are afforded different manners of legal treatment and protection. Protection for patents and copyrights was specifically provided for by the founding fathers of the United States. Article I, Section 8 of the U.S. Constitution provides that

“…the Congress shall have the power…to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries…”

Thus, based upon this Constitutional provision, patents and copyrights are for a limited duration and are primarily governed by federal law. Trademark rights are unlimited in duration and may be governed by federal or state law. Rights in trade secrets are also not limited by time and are mainly governed by state law.

Patents

A patent is essentially a grant by the government, provided to an inventor (patentee) with rights in a new, useful and non-obvious discovery (invention) which is not otherwise barred by statute. A patent may issue for a design (ornamentation), a plant or a utility (the most common patent issued). Patentable subject matter for a utility patent might be a process, machine, a manufactured good or composition of matter. The life of a typical utility patent is 17 years from the date of issue if the patent was filed before June 1995, or 20 years from the date of filing if the patent was filed thereafter. During the life of the patent, the patentee is granted exclusive rights to prevent all others from making, using, selling, offering for sale or importing the patented invention or design within the United States (or other country of issue).

Patent law, and in particular what may be considered patentable subject matter, has been in flux for the past decade or so. Until fairly recently, methods for transacting business were considered unpatentable and those patents that have issued for computerized business methods (i.e., Amazon’s one-click checkout, CyberGold’s patent for a method that rewards customers who receive on-line advertisements) have come increasingly under fire. At this time, a number of domain related companies, such as Go Daddy and Snap Names, have patents that have issued or are pending for business methods involving acquisition, registration and/or analysis of domain names and domain name auctions. The fate of these types of patents is now in the hands of the U.S. Supreme Court which heard argument on the issue last fall. Hopefully, once and for all, the Court will provide some certainty to inventors and patent practitioner, at least as to this area of the law. In the meantime, if you learn of a patent and are concerned that your business or actions may be infringing it, seek the advice of a patent attorney^(defined) as there are limitations to the exclusive rights held by a patentee and there may be modifications that can be made to your operations to avoid infringement.

Trade Secrets

While patents provide a “monopoly” to an inventor for a limited period of time in exchange for public disclosure of their invention, at the opposite end of intellectual property protection are trade secrets. As stated above, there is no limitation as to the duration of trade secret protection. Trade secrets are protected under and governed by state law. Because the Uniform Trade Secrets Act has not been adopted by all states, it is the individual state law that must be examined in each case.

A trade secret is any information, including aprocess, method, formula, technique, compilation or program device that provides value to its owner from not being generally known to others. Trade secret protection attaches automatically when the information of value is kept secret and continues for as long as the requirements for secrecy continue to be met. One example commonly used to illustrate the value of a trade secret is the formula for the ingredients in the Coca Cola soft drink. The company has maintained for more than a century that the secret ingredients are known only to a couple of key employees.

Misappropriation of trade secrets which may occur through industrial espionage, hacking or by former employees, is an offense that can be punished criminally. In fact, a couple of years ago, two former Coca Cola employees were sent to prison for several years for conspiring to steal and sell the secret formula of a new Coca Cola product to PepsiCo for $1.5 million. It should be noted, however, that discovery of protected information through reverse engineering or independent research is not considered misappropriation. Additionally, protection may be lost if an owner fails to take appropriate steps to keep the information secret. It is vitally important to have a strict policy in place for protecting the information you want to keep as a trade secret.

Trademarks

I have written in more detail, information about trademarks and service marks in a previous Domainer’s Magazine column. Technically speaking, a trademark is any word, design, slogan, sound or symbol that serves to identify a specific product or service. Those not sophisticated in the ways of legitimate domaining may believe that a clever business strategy is to search for and register available trademarks hoping to hit the lottery when the trademark holder looks to use it. However, legitimate domainers know that this is an ill-advised strategy which can result in the loss of valuable time and money. Knowledge of basic trademark law is important, even if at times it can seem a bit gray.

One common misconception is that a trademark must be registered to be valid. This is untrue. Even without a federal or state registration, a holder may have common law rights within certain limitations. Additionally, care should be taken when registering a domain name that appears to be a generic word. What is important in such a situation is the intended use of the particular domain name, including any advertisements that may appear if the domain is parked. Apple.com is probably the most obvious example. If a registrant displayed advertisements for computers or Iphones, they would most likely be infringing. If the apple.com registrant displayed fruit, they may be okay. Additionally, the use of word that is also a trademark may well be proper if such use is a parody, noncommercial or fair use.

For those domainers with businesses and trademarks of their own, monitoring and vigilance is vital to protecting your own rights. Before using a word or set of words as a trade or service mark, a search should be done to be certain that it is not likely to cause confusion with a mark being used by another party. Keep in mind that the mere registration of a domain name does not, in and of itself, convey trademark rights. The domain name must be used to identify your goods or services to acquire trademark protection.

Also, there are certain categories of words that are not protectable, such those that are geographically descriptive. The most effective trademark protection for a mark being used (or intended to be used) in interstate commerce is obtained by filing a federal trademark registration application with the USPTO. Most marks used in association with goods or services offered over the Internet will meet the requirement of interstate commerce.

A valid trademark holder has the exclusive right to use the trademark on the type of goods and services for which he/she is using the mark. This exclusive right does have limitations, however. Common law rights exist for only as long as the use of the trademark continues. Federal registration of a mark requires an affidavit of continued use in the sixth year and must be renewed every ten years so long as the mark is in use. Lastly, a trademark right is one that must be diligently guarded from infringement and weakening to the point of dilution. A good example of dilution is the word “aspirin” which at one time was a trademark of Bayer AG but over time became a generic term used by the public for any salicylate drug. The words “kleenex” for facial tissues and “escalator” are other examples of such genericized trademarks. Once a trademark is no longer distinctive and consumers fail to recognize an association with the trademark holder, the mark’s value is lost.

Copyrights

Violation of copyright law is not uncommon these days given the global access to just about anything on the Internet. Copyright law protects, among other things, any original literary, musical, dramatic, graphic, audiovisual or architectural work or sound recording from being reproduced without permission of the owner. It conveys to the owner of a copyright the sole right to authorize reproduction, distribution of copies, public performance or display of a work. This right presently endures from the moment it is fixed in a tangible and reproducible form of expression (i.e., written in paper, displayed on a website, taped by a recorder) for the life of the author plus 70 years, or in the case of a work authored by an entity (such as a work-for-hire), for 95 years.

Unlike patent, trademark, and trade secret law, copyright law does not protect ideas, procedures, names, facts, processes, systems, concepts, or discoveries, but it will protect the expression of those ideas, procedures, etc. And like trademarks, copyrighted material need not be registered to be protected. In fact, the copyright symbol (©) may be used as a form of notice without registration. Such a notice is a good idea but federal registration is even better as it increases the likelihood of recovering damages and attorneys’ fees should litigation for infringement become necessary.

The general rule of thumb is this: copyright protects the expression (the particular description or combination of words) of the facts and ideas embodied in the article or website, but the actual facts and ideas are free to be used. Additionally, the law provides exceptions for copying protected material when used for educational purposes or parody. However, interpretation of such use by the courts is by no means black and white.

It is important to note that copyright infringement is a strict liability offense. This means that the law does not allow any defense for an innocent or unintended infringement. There may be less monetary liability than a willful infringement, but there is liability nonetheless. And statutory damages for willful infringement can be very steep-- up to $100,000 for each separate act. Several years ago, a jury awarded, and the court upheld, a $19.2 million verdict against a defendant (who claimed fair use) for willful infringement of copyrighted stock market reports. So if there is any doubt, it is better to err on the side of caution and ask permission of the copyright owner to use, copy or modify a copyrighted work.

If you have a web site that allows users to upload and display text, graphics or other content, it is vital that you take steps to comply with the Digital Millenium Copyright Act of 1998 (DMCA) to avoid liability. These steps and other issues related to copyright law and material on-line will be dealt with in a following column in Domainer’s Magazine since this information deserves to be explained in greater depth. So stay tuned.

In summary, with the growing prominence of a wide range of Internet marketing, sales and services, knowing what intellectual property is, how to use it to your advantage and how to avoid liability for violation of the rights of others is of vital importance to economic survival these days. And while this may seem self-serving, if in doubt, consult an attorney specializing in intellectual property. Proactive issue management can be a wise and, ultimately, costsaving business tool since, as they say, a good offense is better than the best defense…

Deb Logan is a partner with Lipton, Weinberger & Husick, an intellectual property firm located outside of Philadelphia. Ms. Logan has been a litigator for 20 years and focuses her practice on the intersection of intellectual property and Internet law, particularly with regard to domain names and trademark matters.

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