What Are the Most Important IP Protections for U.S. Businesses?

A recent study reveals that most U.S. businesses view trademarks and trade secrets as the most important forms of intellectual property (IP) protection. The study was conducted by the National Science Foundation (NSF) and the U.S. Census Bureau as part of their Business R&D and Innovation Survey (BRDIS).

According to a NSF press statement, the survey polled a nationally representative sample of about 40,000 companies, including companies in both manufacturing and non-manufacturing industries. Here’s what else they had to say:

Fifteen percent of all businesses reported trademarks as either very important or somewhat important to their business (6 percent said trademarks were very important, while 9 percent said they were somewhat important).
Fourteen percent of surveyed businesses reported trade secrets as very important or somewhat important (6 percent and 8 percent respectively).
Twelve percent of those surveyed identified copyrights as important.
Five percent of respondents indicated that design patents are important, while four percent viewed utility patents as an important form of IP protection.
“Much of today’s business derives its competitive advantage from the ability to protect and exploit exclusive rights over investments in intellectual property,” said John Jankowski, lead author of the report in NSF’s National Center for Science and Engineering Statistics. “Hence, IP protection is a persistent and recurrent concern of businesses.”

USPTO Announces Reforms after Examiner Golfed on the Job

The US Patent and Trademark Office (USPTO) recently announced that it would reform its workplace practices after it was discovered that patent examiners golfed while supposedly on the job.

The revelation about the golfing appeared in a review of the USPTO’s time and attendance policies by the Department of Commerce’s Office of the Inspector General.

The report followed an earlier internal report by the USPTO itself. The draft version of the internal report said that patent examiners “can work inconsistently throughout the year, and even fail to be present at work, with little or no consequences.” However, the final version of the internal report said that investigators were “not able to reach a conclusion” about work-time abuses.

According to the Inspector General’s report, “Inspector A” was authorized to telecommute. The report found that he committed at least 730 hours’ worth of time and attendance abuse and was paid about $25,000 for time he did not actually work in Fiscal Year 2014 – about 43% of the hours he reported.

The investigation was launched when two supervisory patent examiners found copies of an anonymous letter claiming that Examiner A came into the office only at the end of the quarter and that his work was “garbage.”
Examiner A was joined on his worktime golf outings by at least one USPTO co-worker.

The Inspector General referred the matter the US Attorney’s office, which declined to prosecute Examiner A.

When she was still deputy-director of the USPTO, current director Michelle K. Lee told members of Congress that fraudulent time and attendance reporting would be met with appropriate disciplinary action.
Reforms to combat telecommuting abuse at the USPTO include:
• Annual required training on time and attendance rules
• Identifying the causes for attendance misconduct
• Forming employee teams to combat the problem

Many patent applicants are frustrated by the extremely slow pace of the patent examination process. It is not clear whether lax workplace policies may play a role in examination delays, but with these reforms the USPTO is showing acute sensitivity to any indication that its examiners are less than diligent.

Supreme Court Will Review Attorneys’ Fees Award

The U.S. Supreme Court granted certiorari in John Wiley & Sons Inc. v. Kirtsaeng, No. 15-375 (cert. granted January 15, 2016). The issue in this case is the appropriate standard in awarding attorneys’ fees to a prevailing party under Section 505 of the Copyright Act.

There are currently four different standards used by district courts for awarding attorneys’ fees: (1) whether the prevailing party’s successful claim or defense advanced the purposes of the Copyright Act (9th and 11th Circuits); (2) a presumption in favor of attorneys’ fees for a prevailing party (5th and 7th Circuits); (3) the four “non-exclusive factors” listed in Fogerty v. Fantasy, Inc., 510 U.S. 517, 534 n.19 (1994) (3rd, 4th, and 6th Circuits); and (4) the 2nd Circuit’s placement of “substantial weight” on the objective reasonableness of the losing party’s claim.

In this case, a college student sought to win attorneys’ fees after defeating claims he imported and illegally sold foreign edition textbooks on eBay.  The case first reached the Supreme Court in 2013 where it was held that the Copyright Act’s first-sale doctrine applies to goods made anywhere.

As a result of the ruling, Kirtsaeng did not have to pay $600,000 in damages to Wiley for willfully infringing the company’s copyrights. However, Kirtsaeng lost his bid to obtain attorneys’ fees from Wiley, which lead to the present case.

Stay tuned for more information as the case develops.

Copyright FAQ: Who Has the Rights to a Collective Work?

Special copyright rules apply to collective works under the Copyright Act.  A collective work is defined as a work “in which a number of contributions, constituting separate and independent works in themselves, are assembled into a collective whole.” Common examples include magazines, academic journals, anthologies, and encyclopedias.  The articles, columns, or short stories that make up the collective work are referred to as “contributions to a collective work.”

The copyright in a collective work covers only the collective work as a whole (i.e., the order and organization of the entire magazine or encyclopedia). Thus, the copyright in each individual contribution is distinct from the larger work.

In the absence of an express transfer from the author of the individual article, the copyright owner in the collective work is presumed to have acquired only the right to use the contribution in the collective work and in subsequent revisions and later editions of the collective work. However, in many cases, authors submitting articles to magazines and journals must agree that they will not retain a copyright to the work once it is published as part of a collective work.

For individual advice on the copyrights to a contribution to a collective work, please contact me.

Supreme Court Will Review Claim Construction Standard

The U.S. Supreme Court granted certiorari in Cuozzo Speed Technologies, LLC v. Lee, U.S. No. 15-446 (cert. granted January 15, 2016).  There are two issues in this case.

The first issue is in regards to the claim construction standard used during Inter Partes Review (IPR) proceedings before the Patent Trial and Appeal Board (PTAB).  Currently, the PTAB construes the claims of an issued patent in an IPR proceeding according to their broadest reasonable interpretation.  This standard is different than the “plain and ordinary meaning” standard used in federal district court. The question is whether or not the PTAB is using the correct claim construction standard, or if it the claims should be interpreted according to their plain and ordinary meaning.

The second issue is whether or not the PTAB’s decision to institute an IPR proceeding is judicially unreviewable. In Cuozzo, the Federal Circuit held that 35 U.S.C. 314(d) bars it from reviewing a PTAB decision to institute an IPR, even if the issue is raised in an appeal of a PTAB final decision.

Stay tuned for more information as the case develops.

New Trade Secret Law Pending in the European Union

New trade secret legislation  is pending in the European Parliament .

As stated by the European Commission: “A trade secret is a valuable piece of information for an enterprise that is treated as confidential and that gives that enterprise a competitive advantage. European companies are increasingly exposed to the misappropriation of trade secrets. The European Commission is working to harmonise the existing diverging national laws on the protection against the misappropriation of trade secrets so that companies can exploit and share their trade secrets with privileged business partners across the Internal Market, turning their innovative ideas into growth and jobs.”

The new law was seen as needed because the laws of some EU member states do not define what a trade secret is. Only 2/3 of EU states even have specific trade secret laws. Also, remedies available for the owners of trade secrets, when those secrets were misappropriated, are seen as inconsistent and ineffective.

In the US, trade secrets are protected on a state-by-state basis, but many states follow the model Uniform Trade Secrets Act.

The proposed new EU law does not provide for criminal sanctions, as are available in the US in some cases of trade secret theft. However, some EU member states, including France and Germany, do provide for criminal sanctions for trade secret theft.

The proposed law would:
• Stop the unlawful use and further disclosure of misappropriated trade secrets
• Remove from the market goods manufactured using trade secrets that were illegally acquired
• Give victims of trade secret theft the right to seek compensation for damages caused by the unlawful use or disclosure of their trade secrets
More information and copies of the relevant documents are available here.

The law, if passed, will be good news for US companies with operations in the EU, or which are considering doing business there. US companies already doing business in Europe will want to review their information protection policies to assure that they are taking “reasonable steps,” as defined by the new law, to protect their trade secrets.

Don’t Get Scammed: Warning For IP Applicants and Registrants

There are ongoing scams targeting patent, trademark, and copyright applicants and registrants. Although each scam varies slightly, they all generally involve notices intended to look like they are coming from an official government office such as the U.S. Patent and Trademark Office.

The notices, sent by unscrupulous entities and organizations, are designed to solicit fees from applicants. In fact, they may often be called “invoices.”

To give the appearance of legitimacy, they usually contain publically available information about the application or registration and use names and logos that resemble official entities like the USPTO or, the case of an international application, the World Intellectual Property Organization.

In one recent case, a client received a notice from an entity calling itself the “United States Trademark Registration Office.” The “invoice” requested payment in the amount of $375 for registration with U.S. Customs and Border Protection and trademark monitoring services.

Despite what this mailing may lead one to believe, trademark monitoring and customs registration are not part of the official trademark application process. Although they are legitimate services, this notice clearly employed deceptive advertising to sell its services.
The bottom line—the United States Patent and Trademark Office is the only government agency that will contact you about your U.S. patent or trademark registration or application. If you receive an official looking document in the mail from someone else, it could be a scam.