Any moderately successful business most likely has valuable intellectual property that it is may not even be aware it has. A business should, however, be aware of, and inventory, its intellectual property. Why? Several reasons: First, knowing what you have is the first step toward properly protecting it. Second, knowing what you have allows you to document the value of the business when you decide to sell. Second, knowing what you have allows to use the value to attract inventors and obtain financing. Third, knowing what you have allows you to document the value of the business when you decide to sell it.

Where is this intellectual property? It is hidden in the reasons customers continue to deal with the business, and how customers find the goods and services of the business. This checklist can help find it:

• PRODUCT
  • Does your product have an overall shape that your customers recognize or associate with your business?
  • Does your product have any appearance features that your customers recognize or associate with your business?
  • Does your product have a color or color scheme that your customers recognize or associate with your business?
  • Does your product have a scent that your customers recognize or associate with your business?
  • Does your product have a texture or “feel” that your customers recognize or associate with your business?
• PACKAGING
  • Does your packaging have an overall shape that your customers recognize or associate with your business?
  • Does your packaging have any appearance features that your customers recognize or associate with your business?
  • Does your packaging have a color or color scheme that your customers recognize or associate with your business?
  • Does your packaging have graphic elements that your customers recognize or associate with your business?
  • Does your packaging have a scent that your customers recognize or associate with your business?
  • Does your product have a texture or “feel” that your customers recognize or associate with your business?
• LABELING
  • Does your labeling have an overall shape that your customers recognize or associate with your business?
  • Does your labeling have any appearance features that your customers recognize or associate with your business?
  • Does your labeling have graphic elements that your customers recognize or associate with your business?
  • Does your labeling have a color or color scheme that your customers recognize or associate with your business?
  • Does your product have a texture or “feel” that your customers recognize or associate with your business?
• SERVICES
  • Does your facility have an overall appearance that your customers recognize or associate with your business?
  • Does your facility have particular architectural features that your customers recognize or associate with your business?
  • Does your facility have unique lighting that your customers recognize or associate with your business?
  • Does your facility have unique signage that your customers recognize or associate with your business?
  • Does your facility have unique fixtures that your customers recognize or associate with your business?
  • Do you employ unique service items (e.g., bags, cups, napkins) that your customers recognize or associate with your business?
  • Do your employees were uniforms or particular clothing elements that your customers recognize or associate with your business?
  • Do the vehicles that your employees use have an overall appearance that your customers recognize or associate with your business?
  • Do the vehicles that your employees use have unique appearance features that your customers recognize or associate with your business?
  • Do the tools or equipment that your employees use have a distinctive appearance that your customers recognize or associate with your business?
• ADVERTISING
  • Does your advertising have a theme that your customers recognize or associate with your business?
  • Does your advertising have a sound or jingle that your customers recognize or associate with your business?
  • Does your advertising have a color or color scheme that your customers recognize or associate with your business?
  • Does your advertising have a graphic element that your customers recognize or associate with your business?
  • Does your advertising feature a character or mascot that your customers recognize or associate with your business?

Overall, consider how do customers identify your products or services from a distance? Do you or your customers have a nickname for your products or your business? What sticks in the minds of your customers about your products or services? These are thing tie your customers to your business, and are things that you should take steps to protect. Your business definitely has intellectual property, are you doing you best to protect and use it?

Taylor Swift won a victory today (March 1, 2022) at the Ninth Circuit Court of Appeals, which affirmed last fall’s district court decision dismissing plaintiff Jesse Graham’s suit alleging that Swift’s song “Shake It Off” infringed his song “Haters Gone Hate.” Graham’s song included the lyrics, “Haters gone hate, Haters gone hate, Playas gone play, Playas gone play, watch out for them fakers, they’ll fake you every day,” while Swift’s song had somewhat similar by different lyrics, “Cause the players gonna play, play, play, play, play, play/And the haters gonna hate, hate, hate, hate, hate, hate/  Baby, I’m just gonna shake, shake, shake, shake, shake, shake.”

In dismissing the case in July 2020 the district court found that Graham didn’t respond to most of Swift’s arguments for dismissal, and noted that Graham failed to allege a registered copyright, finding that Graham has only applied for the registration. In affirming the district court, the Ninth Circuit pointed out that Graham failed to address the grounds for dismissal and has therefore waived his challenge to the district court’s order.

Although there are ample reasons to double Swift’s liability, pro se Graham’s loss was do a simple failure to address Swift’s defenses at the district court, and again on appeal. Thus ended Graham’s fourth lawsuit against Swift since 2015, and Graham’s claim for $42 million is gone, gone, gone, gone, gone.

In Unicolors, Inc. v. H&M Hennes & Mauritz, L.P., 595 U.S. — (2022), the Supreme Court held that under 17 USC 411(b)(1)(A) a certificate of registration is valid even though it contains inaccurate information, as long as the copyright holder lacked “knowledge that is was inaccurate.” 17 USC 411(b)(1)(A).

Unicolors owned copyrights in various fabric designs, and sued H&M for copyright. The jury found in Unicolors’ favor, and the district court denied H&M’s motion for JMOL because the certificate of registration contained inaccurate information. However, the 9th Circuit reversed, finding that Unicolors failed to satisfy the “single unit of publication” requirement, because it offered some of the 31 designs covered by the registration to certain customers. The 9th Circuit took the view that the statute excused only good faith mistakes of fact. Unicolors sought certiorari to review the Ninth Circuit’s interpretation of 17 USC 411(b)(1)(A).

The Supreme Court reversed the 9th Circuit, reasoning first that Section 411(b)(1)(A) says that Unicolors registration is valid “regardless of whether the certificate contains any inaccurate information unless . . . the inaccurate information was included on the application for copyright registration with knowledge that it was inaccurate. Unicolors argued that, when it submitted its registration application, it was not aware (as the Ninth Circuit would later hold) that the 31 designs it was registering together did not satisfy the “single unit of publication” requirement. The Supreme Court said that if Unicolors was not aware of the legal requirement that rendered the information in its application inaccurate, it did not include that information in its application “with knowledge that it was inaccurate.” §411(b)(1)(A) (emphasis added). The Court said that nothing in the statutory language suggests that this straightforward conclusion should be any different simply because there was a mistake of law as opposed to a mistake of fact. In fact, Supreme Court observed, “[i]naccurate information in a registration is therefore equally (or more) likely to arise from a mistake of law as a mistake of fact. That is especially true because applicants include novelists, poets, painters, designers, and others without legal training. Nothing in the statutory language suggests that Congress wanted to forgive those applicants’ factual but not their (often esoteric) legal mistakes.”

The Supreme Court looked to other provisions of the Copyright Statute to confirm that in
this context, the word “knowledge” means actual, subjective awareness of both the facts and the law. The Supreme Court also noted that cases decided before Congress enacted
§411(b) overwhelmingly held that inadvertent mistakes on registration certificates did not invalidate a copyright and thus did not bar infringement actions, and that there is no indication that Congress intended to alter this well-established rule when it enacted §411(b).

The Supreme Court also looked to the legislative history, noting that it indicates that Congress enacted §411(b) to make it easier, not more difficult, for nonlawyers to obtain valid copyright registrations. Given this history, it made no sense to the Supreme Court if §411(b)
left copyright registrations exposed to invalidation based on applicants’ good-faith misunderstandings of the details of copyright law.

H&M argued that such an interpretation of the statute would make it too easy for copyright holders, by claiming lack of knowledge, to avoid the consequences of an inaccurate application. But, the Supreme Court noted, the courts need not automatically accept a copyright holder’s claim that it was unaware of the relevant legal requirements of copyright law. We have recognized in civil cases that willful blindness may support a finding of
actual knowledge.

H&M also argued that “ignorance of the law is no excuse.” The Supreme Court said that this maxim “normally applies where a defendant has the requisite mental state in respect to the elements of a crime but claims to be unaware of the existence of a statute proscribing his conduct.” The Supreme Court said that it does not apply in this civil case concerning the scope of a safe harbor that arises from ignorance of collateral legal requirements.

Lock Down fatigue is setting in, and budgets are tightening, but there are plenty of things that you can do at little or no cost while hunkered down at home to improve your Company’s IP Portfolio for when the business resumes.

1. Establish an Company wide IP Policy. An IP Policy can help cast the company in a more favorable light should a dispute arise, and they can actually drive employee conduct.
2. Establish a formal trade secret program, including protocols for protecting the Company’s trade secrets and confidential information, and an employee training program to make sure those protocols are followed.
3. Update the Company’s Employee Agreement. Does your agreement include a present assignment of employee inventions? Does it take into account the Defend Trade Secret Act? Does it take into account state employee inventor statutes. Does it give the Company a power of attorney to act for departed or uncooperative employees?
4. Update your invention disclosure form. Does it take into account the changes in the AIA? Does it include a assignment of rights?
5. Establish a virtual IP Committee that can meet using an online documents to evaluate new disclosures and make maintenance decisions.
6. Cull the IP portfolio to reduce on-going maintenance costs. Look for donation opportunities to off-load unused IP at a tax-advantageous manner. Consider making some IP available for compulsory licensing, which can reduce maintenance costs by as much as 50%,
7. Look for licensing opportunities, to generate revenue from the portfolio. A good source of licensees are owners of patents and applications cited in your own patents and applications, and the owners of patents and applications which cite to your patents and applications.
8. Look for enforcement opportunities. A good source are the owners of subsequent patent applications where your patents have been cited.
9. Finally polish up your Confidential Disclosure Agreements. Do they take into account effects of the AIA?
10. Establish procedures for handling the receipt of unsolicited ideas form outside the Company. These continue to be a source of risk from unfounded claims.
11. Audit patent marking, and finally get around to virtual patent marking under 35 USC 287(a).
12. Audit trademark marking, and particularly where U.S. products with brands marked with an ®, are exported to countries where the mark is not registered.
13. Create definitive trademark use guidelines,
14. Revamp the Company’s website’s terms and conditions.
15. Establish a Company social networking policy and email guidelines
16. Finally take the time to see how the Madrid Protocol can reduce maintenance costs, and expand the scope of the Company’s trademark portfolio.
17. Create a permissions for to address requests for permissions to use the Company’s trademarks and copyrighted materials.
18. Register the copyright to the Company’s product literature, packaging advertising and promotional materials. Registration is a prerequisite to bringing suit, and obtaining the registration before infringement begins gives access to an award of statutory damages and attorneys’ fees.
19. Create a new employee IP orientation program.

It may come as a surprise that even patent attorneys don’t believe that every invention should be patented. The time, effort and expense of preparing and filing a patent application should be reserved for those inventions that are likely to provide an advantage. Here is a list of criteria to help judge evaluate whether an invention should patented. These can also help prioritize multiple inventions, and help decide which inventions may be worthy of extra investment.

Nike recently sued Skechers for infringement of twelve of Nike’s design patents. The Complaint convincingly establishes the similarity of the appearance of the shoes:

In addition to appearance, the Complaint also develops a convincing case on appearances, detailing Sketchers strategy of copying:

Nike explains Skecher’s practice of Skecherizing competitor’s designs:

Nike’s Complaint recognizes that while competition is legitimate, people inately believe that copying is wrong. While Skechers appears to embrace its conduct, most business work to preserve its image as a legitimate competitor, and not merely a copier. To this end, a business should pay attention to how it characterizes its own conduct. Internal project names that make the business look like a pirate, or internal communications that talk about “ripping off, “knocking off,” or even “copying,” can cast the company in a bad light to a judge or jury. If what the business is doing is legimate, there is no need to characterize the conduct as improper or inappropriate — when the issue is design patent infringement, appearances can matter just as much as appearance.

Last month, General Chuck Yeager sued Airbus for violation of right of publicity, false endorsement, and trademark infringement. The basis of his complaint? In introducing its new Racer high-speed, cost effective helicopter, Air Bus referenced General Yeager’s breaking of the sound barrier at a press conference, and then repeating the reference on line and in print. Specifically, Air Bus said:

This seems little more than an innocuous reference to a historical fact. It adds some information and interest to an otherwise bland commercial statement, but it seems highly unlikely to cause anyone to believe that General Yeager is in any way connected with the Racer helicopter, let alone endorses it. Shouldn’t anyone, including a commerical entity, have the right to reference a historical event to make a point — at least if they do so in a way that doesn’t make it seem that they have the approval or endorsement of those involved in the event?

Unfortunately, the right of commercial speakers to reference historical events is not so clear. Had Air Bus been a slightly better student of history, it might of known that this is a lesson that General Yeager taught AT&T nearly a decade earlier. AT&T Mobility — then called Cingular — referenced General Yeager in an eerily similar press release:

To paraphrase George Santayana, those who don’t study history are doomed to repeat it. One might add that if you are commercial entity, even if you study history, you best not talk about it!

Le-Vel Brands, LLC recently sued Thrival Nutrition, LLC in the Eastern District of Texas (4:19-cv-00698-SDJ) for trademark infringement and unfair competition arising from Le-Vel’s use of THRIVE and Thrival’s use of THRIVAL

To prevail, Le-Vel will of course have to prove the there is a likelihood of confusion, but Le-Vel has help in meeting this burden from an unlikely source — Thrival’s own social media posts. As set forth in the very first paragraph of the Complain, Thrival has admitted on its Facebook page that there is confusion between the two companies:

While Thrival may ultimately be able to explain away these posts, the bottom line is that they are going to have to. Lured by the ease and informality of posting in social media businesses often post messages without vetting the content. The reality is that such posts are virtually permanent, and relatively easy to find, and thus the content should be vetted the same way it would review formal press releases and advertising

A business should restrict who can post on its behalf, and should have some process for vetting the content of those posts to avoid embarrassment or worse — liability.

It seems everyone has great idea for a t-shirt. Fortunately there are numerous ways to protect these great ideas.

Utility Patents

Although t-shirts have been around for more than 100 years, a novel and non-obvious improved t-shirt can still be protected with a utility patent. A utility patent protects the construction or function of the t-shirt and not its appearance. It typically takes just over 24 months to get a patent, and even on a simple invention like a t-shirt it can cost $7,500 or more. Utility patent protection is not for every invention, but it can provide 20 years of exclusivity for inventions that meet the three tests of utility, novelty, and non-obviousness.

Design Patents

Design patents protect the appearance of a product, not its construction or function. The inventor of a t-shirt with a new and non-obvious appearance can protect that appearance for 15 years with a design patent. It is generally faster, easier, and less expensive to get a design patent than a utility patent, and thus can be a better option, and if the appearance is the only novel feature, it may be the only option.

Trademarks

The words and designs on a t-shirt may function as a trademark. The owner can claim common law (unregistered) rights in these trademarks, but the rights are stronger and easier to enforce if the owner registers the trademark. Trademarks can be registered at the state or federal level. A federal registration provides nationwide protection of the mark, it allows the owner to use the ® symbol, and it makes enforcement easier and less expensive. However, it can be difficult to obtain a registration words and graphics on the exterior of the shirt, because the USPTO may regard the text or graphics as merely ornamental, and not as a trademark. Thus, some additional effort may be required to show that the mark is more than mere ornamentation.

A state registration is relatively fast, easy, and inexpensive to obtain, but it does not provide the same strong benefits of a federal trademark registration and what limited rights it does provide are limited to the borders of the state, Nevertheless, a state registration may provide some benefit where a federal registration is not an option.

Copyright

Copyright provides protection of graphics against copying, but does not protect single words or short phrases or designs that do not exhibit minimal authorship. Copyright arises automatically from the moment a the work is fixed in tangible form, but two steps will ensure the strongest possible copyright rights: First, applying copyright notice to the work. Copyright notice consists of the © symbol, the name of the copyright owner, and the year of first publication. For example for a work first published in 2018, the notice might be: © Copyright Owner 2018, even though it is no longer 2018. Second, registering the copyright with the Copyright Office. Although the copyright exists without registration, prompt registration entitles the copyright owner to statutory damages and attorneys fees.