Articles Posted in Intellectual Property

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Self-driving cars have been a subject of great interest in Silicon Valley recently. The technology that would make autonomous vehicles viable on a wide scale is not here yet, but numerous companies are working to make it a reality. As with any new technology, competition can easily lead to conflict. In this case, a company affiliated with the tech company Google has filed suit against the ridesharing company Uber and others, alleging infringement of trade secrets and patent rights, as well as unfair business practices. Waymo LLC v. Uber Technologies, Inc. et al., No. 3:17-cv-00939, am. complaint (N.D. Cal., Mar. 10, 2017).

Unlike other forms of intellectual property, the value of a company’s trade secrets depends on their confidentiality. State and federal trade secret laws therefore focus on preventing or dissuading the misappropriation of trade secrets. A business must show that information meets several criteria in order to invoke trade secret protection. The information must have economic value based on the fact that it is not known to others and not easily discoverable by others who are in a position to benefit from it, and the business must have made reasonable efforts to safeguard the information’s secrecy. 18 U.S.C. § 1839(3), Cal. Civ. Code § 3426.1(d).

California law allows the owner of trade secrets to obtain injunctive relief preventing “actual or threatened misappropriation.” Cal. Civ. Code § 3426.2. If a court finds that an injunction would be “unreasonable,” it can order a person to pay “a reasonable royalty” for use of the information. Id. A court can award damages for “actual loss” or “unjust enrichment caused by misappropriation,” along with punitive damages in an amount up to twice the total amount of damages in cases of “willful and malicious misappropriation.” Id. at § 3426.3. Federal law contains similar provisions for damages and specifically allows courts to order “seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action.” 18 U.S.C. § 1836(b)(2).

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Operating an online business requires careful attention to numerous potential liabilities, including copyright infringement. Any online service that allows users to post or share information needs to be aware of the federal laws and regulations dealing with potential copyright infringement. The Digital Millennium Copyright Act (DMCA) is a far-reaching law dealing with copyright on the internet and other digital systems, first enacted by Congress in 1998. Title II of the DMCA, also known as the Online Copyright Infringement Liability Limitation Act (OCILLA), creates a “safe harbor” for certain internet service providers (ISPs). The U.S. Copyright Office recently issued new rules regarding safe harbor protection, which took effect toward the end of 2016.

The DMCA covers a wide range of copyright issues, including a prohibition on attempts to circumvent copy-prevention systems in digital media devices. The statute also allows technicians to make temporary copies of software for the limited purpose of computer repair, reversing a court ruling that this constituted copyright infringement. See MAI Systems Corp. v. Peak Computer, Inc., 991 F.2d 511 (9th Cir. 1993). As the internet has gained prominence, and websites that allow users to upload and share content have become features of daily life for millions of people, the “safe harbor” provisions have perhaps become the most important provisions of the DMCA.

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Patent protection can be the key to many business’ success, giving them the exclusive right to use a particular invention or process, or to license its use to others. The federal government has exclusive jurisdiction over patent law in the U.S. In the event of a patent dispute that crosses international borders, a patent owner in the U.S. has several options, including objecting to the importation of allegedly infringing products. The U.S. International Trade Commission (ITC) is authorized to investigate alleged intellectual property infringement under § 337 of the Tariff Act of 1930, 19 U.S.C. § 1337. A recently-closed matter involving rival wearable technology manufacturers demonstrates this process. In re Certain Activity Tracking Devices, Systems, and Components Thereof, Inv. No. 337-TA-963, notice (ITC, Oct. 20, 2016); see also 81 Fed. Reg. 74479 (Oct. 26, 2016).

Congress created the ITC in 1930, giving it responsibility to report on issues involving customs laws to both the White House and Congress. See 19 U.S.C. § 1332. The ITC’s investigative jurisdiction includes alleged import injuries and intellectual property disputes involving imports. This latter category includes patent, trademark, and copyright infringement.

Section 337 prohibits the importation of items that infringe a patent or copyright issued under U.S. law, as well as the sale of such items after importation. The ITC may initiate an investigation of alleged infringement on its own, or in response to a complaint. If it concludes that infringement has occurred, or is occurring, it can order the exclusion of the articles at issue from importation. This typically only applies to individuals or businesses found to have violated the law, but it can also be a general exclusion.
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Trademark registration grants the exclusive right to the registrant to use a name, phrase, or logo in commerce. The Lanham Act, 15 U.S.C. § 1051 et seq., governs this process and provides measures for the enforcement of trademark rights. An important requirement for trademark registration is the use of the mark in interstate commerce, which confers legal jurisdiction on the U.S. Patent and Trademark Office (USPTO). The U.S. Court of Appeals for the Federal Circuit recently ruled on a petition to cancel a trademark registration on the ground that the registrant had not actually used the mark in interstate commerce prior to filing its application. The court’s ruling clarifies what it considers to be the “use” of a mark “in commerce.” Christian Faith Fellowship Church v. Adidas AG, No. 16-1296, slip op. (Fed. Cir., Nov. 14, 2016).

The Lanham Act allows the registration of marks that are already being “used in commerce,” 15 U.S.C. § 1051(a)(1); and marks for which applicants show a “bona fide intention…to use a trademark in commerce,” id. at § 1051(b)(1). Applicants must specify which type of registration they are seeking. The statute defines “use in commerce” as the “bona fide use of a mark in the ordinary course of trade.” Id. at § 1127. With regard to goods produced or sold by the applicant, “use in commerce” includes placing the mark “in any manner on the goods” or on packaging or related materials “when…the goods are sold or transported in commerce.” Id.

Even after the registration of a mark, anyone can petition the USPTO to cancel a registered trademark. A petitioner seeking termination must allege that the registration of that mark is causing them damage or will cause them damage based on a variety of grounds identified in the Lanham Act. Id. at § 1064. The Federal Circuit case mentioned above involved a petition for cancellation filed by a shoe manufacturer (the petitioner), challenging a trademark registered by a church (the respondent).

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Copyright law protects “original works of authorship,” giving a copyright owner the exclusive right to publish, distribute, exhibit, reproduce, and otherwise exploit these works. 17 U.S.C. § 102(a). The Fair Use doctrine allows the use of a copyrighted work by others, without the copyright owner’s permission, under certain circumstances. A long-running dispute involving the “Google Books” project, which involves the digitization of thousands of books for online searches, alleged infringement of the authors’ copyrights. In late 2015, a federal appellate court affirmed a lower court order dismissing the case on Fair Use grounds. Authors Guild v. Google, 804 F.3d 202 (2d Cir. 2015). The U.S. Supreme Court denied the plaintiff’s petition for certiorari in April 2016.

Federal copyright law allows several exceptions to copyright owners’ exclusive rights to copyrighted works. Under one exception, “libraries and archives” may reproduce copyrighted works if they do not do so for commercial benefit, they make the copies available to the public, and they include a notice of copyright with the copy. 17 U.S.C. § 108. At first glance, it might seem like this exception should apply to Google Books, but court decisions in the case focused on Fair Use.

Under the Fair Use doctrine, the use of a copyrighted work is not infringing if its purpose involves “criticism, comment, news reporting, teaching…, scholarship, or research.” 17 U.S.C. § 107. This is not an exhaustive list of permissible uses, and court decisions have identified multiple uses that fall under Fair Use. Even the commercial use of copyrighted works can be covered by Fair Use in certain situations. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).

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Whether federal copyright law, as currently written, is capable of adequately addressing issues presented by 21st-century technology is an open question. A jury in a Northern California court recently rendered a verdict in favor of Google in a copyright lawsuit filed nearly six years ago by the software company Oracle. Oracle America, Inc. v. Google Inc., No. 3:10-cv-03561, complaint (N.D. Cal., Aug. 12, 2010). At the time of filing, Oracle had recently acquired Sun Microsystems, creator of the Java programming language. Google had used Java to build its Android mobile device operating system, and Oracle claimed that Google had infringed its copyright in multiple software protocols known as application programming interfaces (APIs). Two central questions in the case are whether an API is subject to copyright protection, and if so, whether the Fair Use Doctrine applied to Google’s use of the APIs. The May 2016 jury verdict offers an answer for the immediate circumstances, but not necessarily anything to apply to other cases.

Copyright law protects “original works” that are “fixed in any tangible medium of expression.” 17 U.S.C. § 102(a). Computer technology was still largely in its infancy at the time of the most recent overhaul of copyright law in October 1976. At that time, Microsoft and Apple were, respectively, only 18 months and six months old. Congress amended federal copyright law again in 1980 to address copyright protection for “computer programs.” Id. at §§ 101, 117. Court decisions have affirmed that various types of software are subject to copyright protection. See, e.g., Apple Computer, Inc. v. Franklin Computer Corp., 714 F.2d 1240 (3rd Cir. 1983).

Copyright protection does not extend to mere ideas, rather than tangible expressions of those ideas, nor does it apply to a “procedure, process, [or] system” that is separate from a work of authorship. 17 U.S.C. § 102(b). Some software does not meet the federal standard for copyright protection, but it might be eligible for patent protection as a “new and useful process.” 35 U.S.C. § 101. Even if software is protected by copyright, a particular use might not constitute infringement under the Fair Use Doctrine. 17 U.S.C. § 107.

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Businesses must take great care to protect their intellectual property from various types of infringement. With intellectual property that is subject to copyright, trademark, or patent protection, businesses want to protect their exclusive rights to use, display, or distribution. The value of this type of intellectual property derives from the fact that it is known to others but controlled by its owner. Another type of intellectual property, trade secrets, has value because it is not widely known to others. Businesses have had to rely on state laws to enforce trade secret rights, which can be difficult when a dispute crosses state lines. Federal law, however, now offers similar trade secret protections, thanks to the Defend Trade Secrets Act (DTSA) of 2016, Pub. L. 114-153 (May 11, 2016).

Many different forms of information, such as formulas, processes, or designs, can be considered a trade secret. The Uniform Trade Secrets Act (UTSA) identifies three key features of a trade secret. It must have economic value based on the fact that it is not generally known to others who could also derive economic benefit from it. It must be something specialized enough that others could not, through reasonable effort, develop or discover it themselves. Finally, the person or business claiming it as a trade secret must have made a reasonable effort to keep it secret. The formula for Coca-Cola is one of the most famous trade secrets in the world. It is not patented or copyrighted but instead kept in a vault in the company’s Atlanta, Georgia headquarters.

Forty-seven U.S. states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands have adopted the UTSA. See Cal. Civ. Code § 3426 et seq. The owner of a trade secret may seek injunctive relief in state court to prevent “actual or threatened misappropriation.” Id. at § 3426.2. A court may also compel a party to take “affirmative acts to protect a trade secret.” Id. The UTSA allows damage awards for actual losses, as well as punitive damages in certain circumstances. It directs courts to use “reasonable means” to “preserve the secrecy of an alleged trade secret,” such as in-camera hearings, orders of nondisclosure, and sealed court records. Id. at § 3426.5.

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Patent litigation is perhaps an inevitable feature of the technology sector of our economy. Smartphones are a frequent subject of patent litigation, and some enormous lawsuits have resulted. A recent decision by a federal judge in California granted one smartphone manufacturer’s request for an injunction against another manufacturer in Apple, Inc. v. Samsung Electronics Co., Ltd. et al., No. 5:12-cv-00630, order (N.D. Cal., Jan. 18, 2016). The decision demonstrates how slowly the court system can move, since the technology at issue stopped being particularly relevant several years ago.

Patent protection is available for “any new and useful process, machine, manufacture, or composition of matter.” 35 U.S.C. § 101. An applicant for a patent must demonstrate that the invention or process is “novel” and that it is not “obvious” to a person with relevant occupational skills. Id. at §§ 102, 103. A patent owner can enforce their rights by filing a patent infringement lawsuit, which entitles them to monetary damages, injunctive relief, and attorney’s fees. See id. at § 281 et seq.

Smartphones, which are mobile phones that include email, web browsers, and other functions, are the subject of numerous patents covering various functions. They have therefore also been the subject of multiple patent infringement claims. Perhaps the best-known patent infringement claim involving a smartphone pitted a patent-holding company against the manufacturer of the Blackberry, formerly one of the top-selling smartphones. The plaintiff claimed that the Blackberry’s email functionality infringed on its patent for a process combining email and wireless communication. Although it initially demanded damages of $1 billion, the case settled in 2007 for $612 million.

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Trade names, brand names, logos, and other names or designs used to identify goods and services are some of the most valuable assets a business has. Federal trademark law gives businesses a powerful tool to protect the integrity of their “marks.” Before the U.S. Patent and Trademark Office (USPTO) will approve an application to register a mark, it allows a period of time for the public to review the application and object to the registration on certain grounds. It also allows petitions to cancel a mark for a distinct period of time after registration. The Trademark Trial and Appeal Board (TTAB) recently considered a claim of fraud in a petition for cancellation. After addressing the substantial evidentiary showing that a petitioner must make in order to establish fraud, it granted the respondent’s motion for summary judgment. Embarcadero Tech., Inc. v. Delphix Corp., Opp. No. 91197762, Canc. No. 92055153, opinion (TTAB, Jan. 21, 2016).

In order to qualify for trademark registration, an applicant must have already used the mark in commerce, or they must intend to do so at a defined point in the future. They must state specific dates—first use of the mark, and first use of the mark in commerce—in their application. They must also provide specimens of the mark, showing how it has been or will be used in commerce. Once the USPTO has approved an application, it posts a proposed registration for public review and objection. If no objections are received within 30 days, it registers the trademark, and the owner of that mark has the right to enforce it according to the terms of the Lanham Act, 15 U.S.C. § 1051 et seq.

Federal trademark law allows objections to registrations by people who claim that registration would cause them “damage.” 15 U.S.C. § 1063(a). The statute only provides two examples of possible “damage”:  “dilution by blurring,” by which the new mark would create confusion that “impairs the distinctiveness of the famous mark”; and “dilution by tarnishment,” which “harms the reputation of the famous mark.” 15 U.S.C. §§ 1063(a); 1125(c)(2)(B), (C). The person opposing registration must file a petition with the USPTO and pay a fee within the 30-day time period. A person can also file a petition to cancel a registration on the same grounds as a petition in opposition, usually within five years of the registration date. 15 U.S.C. § 1064.

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Web-based streaming services, which allow users to view movies and television programs on their computers, televisions, and mobile devices without having to download large video files, have become a major component of the entertainment and digital media industries in recent years. This has led to many high-profile legal disputes between streaming companies, who seek to take advantage of new technologies, and copyright owners like television broadcasters and film studios. A recent ruling found a streaming company liable for copyright infringement. Fox Television Stations, et al. v. FilmOn X LLC, et al., No. 1:13-cv-00758, order (D.D.C., Nov. 12, 2015). Specifically, the court found that, by streaming television at close to the same time as the original broadcaster, the defendant infringed the plaintiffs’ right “to perform the copyrighted work[s] publicly.” 17 U.S.C. § 106(4).

Copyright law embodies a wide range of rights associated with creative works, including the right to perform or exhibit the work to the public. In general, an individual or company must obtain a copyright owner’s permission, usually in the form of a license, to perform the work for the public. With regard to movies and television programs, this includes making the work available to the public by streaming it online.

Major networks like ABC, CBS, NBC, Fox, and the CW typically own the copyrights to the programming they broadcast. Cable companies that rebroadcast programming from these networks to their subscribers are subject to compulsory licensing under federal copyright law. See 17 U.S.C. §§ 111(c), (d). This means that they do not have to obtain a license in advance for every program they rebroadcast, but they must submit semiannual statements of account to the U.S. Copyright Office. In recent years, several web-streaming companies have claimed that they are also covered by this compulsory licensing scheme.

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