Create, Consult, Control
News & commentary on intellectual property issues.
Jun292009 | Steve O'Donnell
Research a brand before investing in it
A business' brand is its most valuable asset, and should be discussed with counsel early in the venture to avoid costly problems later.
I recently spoke with a small business client that got a nasty letter from a competitor in another state. Actually, the letter was fairly pleasant, but the news inside wasn't.
The client started a business a few years ago selling a certain type of goods, for discussion, lets say he was selling skateboard gear. He chose a business name and filed the requisite paperwork using a form he downloaded. He hired an accountant and hired a design firm to come up with a graphic representation of his chosen trademark that he could print on his goods, business cards, etc. He found a small store front, had signs made with his name and graphic and started manufacturing and selling his goods. He registered a domain and started selling online. After two years he was making a profit, a small profit, but enough to expand a little so he also started selling BMX gear. Around this time, his business drew the attention of an out of state competitor.
Unfortunately, this competitor had been using a very similar trademark for his business. The competitor's business exactly the same as the client's, but deals with similar goods in a similar market. The competitor started business sometime before the client and had registered the trademark. Understandably, the competitor wants client to stop using the mark.
The client is now between a rock and a hard place. He could call the competitor's bluff and hope that he doesn't get sued (which will almost certainly go very poorly), he can try to negotiate some deal with the competitor (doubtful because of the similarities between the marks and the markets), he can hope that a court will rule that the small difference between the trademarks is enough to defeat an allegation of infringement or he can rebrand everything and lose the good will and recognition that he's worked to build.
Assuming no deal can be worked out, the client will either have the expense and uncertainty of defending his position in court or the expense and problems associated with rebranding.
These problems could have been avoided for a fraction of the cost and annoyance if the client had spoken with a trademark attorney before investing in branding.
Your business if your livelihood, it's worth setting everything up properly from the beginning.
Jun252009 | Steve O'Donnell
Ring tones as public performance of songs
ASCAP thinks your ringtones are copyright infringement. Not just ringtones you've made yourself, but maybe also those that you've purchased from your carrier.
The Electronic Frontier Foundation has posted a brief from ASCAP (The American Society of Composers, Authors and Publishers) wherein their attorneys argue that a ringtone constitutes a public performance of the song and demands to be paid.
I don't think I would offend anyone if I said that copyright law is a confused and confusing creature that should be mercifully killed in order for something else to take it's place. Copyright law reaches its peak as an arcane body of law when discussing how it pertains to music.
One of the more problematic copyrights is the right of public performance. One may think it reasonable that a recording artist should be able to stop another from playing their music in public (we'll assume that the artist is the copyright holder). For example, one might not want their music to become associated with a group that they don't support (this came up a few times over the last Presidential campaign). It gets a little dicier if you change some of the facts, what if instead of a rally, the music is played at a small group meeting that the artist doesn't like, what if it's blared out of a car that the artist doesn't like, or played in a steakhouse when the artist is a vegetarian? How much control does the copyright holder have over their music once it's released? How much control is enough without being too much?
The amount of control the copyright owner retains in the absence of a license can be hard to discern. In most instances public performance licenses are used to clear music so the entity playing the music is in compliance with the law and can avoid penalties later, but I don't know of anyone that would purchase a license so they would turn their car stereo up and drive with the top down.
Turning to ringtones, ASCAP seems to think that the few second sample that your phone plays should count as a public performance and that someone should pay for it. This doesn't mean that you should worry about being sued next time your “Baby Got Back” ringtone goes off, 17 U.S.C. § 110(4) would protect your use. . . provided you don't charge others at your table to listen to your ringtone. Rather, ASCAP thinks that the ringtone providers should pay a public performance license fee.<
ASCAP's theory of infringement is a long shot and will almost certainly fail. What is troubling is that there is just enough uncertainty about what constitutes a public performance that this will escape Rule 11 sanctions.
Jun252009 | Steve O'Donnell
WKRP in copyright licensing land
If you're old enough to remember when WKRP in Cincinnati was first broadcast you might remember the important role that current music played in the show. At times the soundtrack was almost a character. If you've since caught the show in reruns or have purchased the DVD set (I'm watching it on Hulu) you've probably noticed that the music is changed. Some fault lies in less than ideal licensing work by CBS's attorneys, some of the fault lies in greed.
One problem is that, at the time, no one foresaw the day where studios would sell shows to the public, so when the licenses to use the music were negotiated, the right to include the music in future releases didn't even come to mind. Without those licenses in place, the studio can't reproduce the music on a DVD release.
Going back and obtaining those licenses is an option, but an expensive one. The music copyright holders (who aren't necessarily the performers) are going to want more money, and if the music is integral to the show, they will use that to extract higher licensing revenue, which will drive up the price of the DVDs and likely decrease the number of box sets that will sell. Consequently, the studio will likely make less profit on the box sets since fewer will sell.
This problem is not unique to WKRP, similar licensing issues are keeping a Wonder Years box set off the shelves. Music licensing also was an issue in releasing the Freaks and Geeks box set, but in that case the rights were obtained, resulting in a set priced at $70 for the 18 episode run.
Another option is the one used to bring the first season of WKRP to market, the music was changed or edited out. In the case of a show that so heavily depended on music, the result is horrible to fans. Such backlash may be the reason why the other seasons haven't been released yet.
Still, it's a great show, and if you haven't seen it, or haven't seen it in years, you should check it out.
For the curious, one fan compiled list of the changes made to the episode's music posted at http://zvbxrpl.blogspot.com/2007/03/wkrp-dvd-not-ok.html
Jun172009 | Steve O'Donnell
Patenting illusions II
Do you have an illusion that could be patented? If so, should you patent it?
Magic inventions probably fall into one of two categories, gaffs and methods. Both may be patentable. The first thing to consider is whether your new illusion is really new. A new Topit design might be patentable, but stringing together an old card force with an old billet trick, even though no one has ever thought to do it in that way before, is probably not patentable. That doesn't mean that a patent for a card force is necessarily impossible, but it may be difficult to convince the patent examiner of that. On the other hand, since much of magic is not widely known, it might be difficult for an examiner to find prior art that would kill an application. Keep in mind that hiding information from the patent office may result in a patent that is ultimately unenforceable and expose you to civil liability if you try to enforce it.
If you do get a patent on your trick, what do you do with it? There are a few ways of making money from a patent. One would be if it was such a great trick that people would pay to see you perform that one trick. I have a hard time imagining an act that is one trick long, although shady mentalists have been bilking money out of people with little more for centuries. Another way of making money would be to either license the patent or to sell it outright. Licensing is really similar to what is done already under the Magician's Code model. A person would buy a packet trick and get a license to perform it. Unlike the Magician's Code model though, someone that learns the secret without paying for it may be liable for patent infringement damages and the person that shares the secret could be liable for indirect infringement.
Discovering that someone is infringing a patent is a different issue. A patent covering a intricate gaff is going to be much easier than discovering that someone is infringing a patent covering a method of performing an illusion. The first case likely would involve one of a fairly short list of companies, while the second could be someone performing at a birthday party.
Other than the money that could directly be made from a patent, there might also be a secondary value to a patent on an illusion if it increases the inventor's visibility and reputation in the community. An instructional DVD, seminar, or performance poster will likely get more attention if it rightly declares that the inventor is such a creative innovator that the US has granted a patent to his illusion(s).
Whether or not it makes financial sense to invest in obtaining a patent for an illusion is something that needs to be determined on a case-by-case basis. In addition to getting a patentability opinion from a patent lawyer, the inventor might also want to discuss the plan with a business manager.
I would love to work on magic patents. If you think you have something novel, please let me know and I'll see what I can do for you.
If you are a member of the Magic Cafe [http://www.themagiccafe.com] these is a great list there of magic patents in Secret Sessions, search for “Magic Patents - a list.” You'll need 50 valid posts, I think, to access that forum. . . which if you've read this far probably isn't a problem.
Jun162009 | Steve O'Donnell
Patenting illusions
Remember that “Masked Magician” that showed how a number of illusions were done during a series of specials on Fox a few years ago? He upset a lot of magicians by doing that. Could patenting illusions stop such exposure? Can illusions be patented?
When I was in grade school I had a Marshall Brodine magic kit that I studied tirelessly but eventually lost interest in. Years later, I picked up the magic habit again, and again put it down to chase all the other things that teenage boys chase. Then in graduate school I picked it up again. It was around this time that the Masked Magician made his debut. Fast forward a few years and the time constraints of the practice of law and having two kids has made me put down the hobby again although I do pull out the odd Tenkai palm or card force once in a while.
That aside, are patents a good way of protecting illusions? That depends. A few years ago I probably would have said no for most, but I think that has changed and more magicians should seriously consider patenting their original illusions.
The obvious argument against patenting illusions is that patents are public. That's the deal, you teach the public how to do something and in exchange, you get a temporary monopoly on it. Generally, magicians don't want to share their knowledge with the public at large (at least not until someone buys their instructional DVD). Patent applications are published 18 months after they are filed, so by that time, the cat would be out of the bag. In an attempt to avoid large scale exposure, many simply try to live by or enforce the “Magician's Code,” whereby one doesn't get to freely give away secrets and still be part of the fraternity. Of course, that only works if everyone agrees not to share the information they've obtained from someone else.
The Magician's Code worked fairly well for hundreds of years. Even having books at the public library that freely gave away secrets did not erode the public's general ignorance of how illusions are performed. If anything, it encouraged interested people to join the fraternity and support innovators by buying instructional materials and gaffs.
The internet has changed the game for many industries including the business of magic. Instructional books and DVDs can be found on P2P sites or by downloading a torrent file. This itself is one problem, but a bigger problem might be that it's too easy to find a secret these days. If you can describe a trick, you can probably find an explanation online. If not, one of your Facebook friends or twitter followers will probably tell you how it's done.
A patent won't change that, but the disclosure required to get a patent doesn't matter anymore since the information is going to be available online shortly after the trick is first sold if not earlier.
How would patent protection work? That's for tomorrow.
Jun112009 | Steve O'Donnell
Keeping records of your invention
Hopefully you'll never have to prove when you really invented the thing you're trying to patent, but if you do, you better hope you have good records to back you up.
The patent office assumes that the actual date of invention is the date the application was filed. Unless the inventor thought of the widget in the morning, worked through breakfast and lunch to get the invention ready for patenting and then able to get a patent application drafted and submitted by midnight, this isn't going to be the case. Many inventions take years to go from conception to the patent office.
For illustration, we'll say that Inventor A has an idea in January, has it ready for patenting in June and files the application in December. In the mean time, Inventor B has the same idea in February, has the invention ready for patenting in July, but files that application in in November. Who gets the patent?
What should happen is that Inventor A proves that he was the first to have the invention ready to go and so he gets the patent. But, if Inventor A didn't keep notes or kept sloppy notes he might be out of luck if Inventor B kept an organized notebook.
Those notes can also be needed if there is prior art that is published between the time of invention and the time the application is filed or if the invention goes on sale within the year long grace period allowed under 35 U.S.C. § 102(b).
Ideally, counsel will assist in designing and implementing a record keeping system, but that isn't realistic for many first time inventors. However, anyone can keep useful records with a notebook and a pen.
Jun102009 | Steve O'Donnell
Podcasts, music and fair use
I subscribe to a couple dozen podcasts and usually get to listen to at least some of them. One thing I've noticed is that a lot of them play music clips as their intro and outro. One would think that a short clip wouldn't create a legal problem, but that isn't necessarily the case.
That short clip is copyright infringement. Now, I'm sure everyone that is using such a clip thinks that it falls under fair use, but unfortunately, that isn't clear. Also, most people don't realize that fair use is a defense to infringement, but doesn't necessarily keep you out of court.
The defense of fair use is spelled out in 17 U.S.C. § 107. There are four factors that need to be taken into consideration:
(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3)the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
(4)the effect of the use upon the potential market for or value of the copyrighted work.
There are stacks of cases applying these factors and the only really clear rule to emerge is that each case is different and requires a fresh analysis based on the specific facts. There are a number of guidelines that people think will protect them that won't. Among these misconceptions are that all non-commercial use is fair use, that acknowledging the source makes absolves one from liability, or that de minimis (minimal, short samples) copying is fair use. These misconceptions can lead people into a false sense of security, especially the de minimis assumption, when in fact, one court essentially eliminated that defense and ruled that a two-second sample is copyright infringement.
Even if your use is fair use and you win, that comes after a potentially very long and expensive lawsuit. There are a couple ways of avoiding the issue entirely: obtaining licenses to the music, which for small niche podcasts probably doesn't make any economic sense; or using royalty free, public domain or Creative Commons licensed music. Just make sure that if you use Creative Commons licensed music that you're complying with the license.
And before anyone asks, I don't have a great explanation for why Girl Talk has not been sued yet.
Jun092009 | Steve O'Donnell
Protecting your invention on the way to the patent office
I recommend to everyone that they contact a patent attorney as early as possible after they have an idea for a “new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C. § 101. Of course, not everyone is going to do this. In the meantime, there are a couple things you should be doing or not doing to keep you from accidently losing your rights to your invention.
The most important, but maybe most difficult one to do is the SHUT UP! I don't mean to shout, but seriously, SHUT UP! The easiest way to lose your rights is to go around talking about or showing your invention.
35 U.S.C. § 102(b) bars the patenting of something that has been in public use or on sale for longer than a year before the application is submitted. The U.S. is the most liberal country as far as public disclosure of an invention goes, in other countries a public disclosure is most likely going to block a patent from being issued.
The real question is whether talking about your invention a “public use?” It can be. Certainly telling someone that you've invented a time machine is not giving anything away and won't bar your patent. Sitting down and describing enough about how your time machine works that someone else could build it might be enough to bar.
Section 2133.03 of the Manual of Patent Examination Procedures has a short overview of the requirements for “public use” under the statute. Some of these problems that can come up can be solved, or at least minimized, with the use of non-disclosure agreements and other precautionary measures. The downside with protecting yourself that way is that you might have to convince the patent office or a court that you did take the proper measures to protect yourself. A cheaper and easier way of ensuring that you don't have a 102(b) problem is to. . . SHUT UP!
Another problem that can occur if an inventor shares too much is that the person receiving the information might try to poach the invention and file their own patent. Unfortunately, there is no shortage of dishonest people and although the real inventor might be able to defeat such a fraud, that is an unnecessary expense that could have been easily avoided by keeping quiet.
Sometimes, it just isn't possible to keep the invention completely secret before an application is filed. It may be that public testing is needed, that some design help is needed or maybe that investment capital needs to be raised to pay for the patent application. In that case, tread carefully, and enlist a patent attorney to make sure that you are protected.
Jun042009 | Steve O'Donnell
The value of a patent application itself
In an earlier post I noted that there is a competitive advantage in the application itself, even if a patent never issues or if the final patent is so narrow that it can be easily designed around. What is this advantage and how can it be used to benefit your business?
The first advantage is somewhat tangential to the application. An application or narrow patent will count towards your business' intangible assets (assets that aren't. . . ahem. . . tangible, things that can't be touched). Increasing a business' assets will make it more attractive to lenders or investors, which in turn can mean increased capital available to take on the competition.
The other advantage is that is puts the competition on notice that copying the invention may be foolish. After an application is filed, the patentee has the right, under 35 U.S.C. § 292 to mark a product as “patent pending” or similar. This by itself alerts potential infringers that the product might be later patented, and they could face an infringement lawsuit if they copy the product. Also, because applications are held in confidence for the first 18 months after they are filed, the competitor has no way of finding out what the subject matter of the application is.
Consider you invent a gadget and, after consulting with your patent attorney, decide to pursue a patent on one small aspect of it, after filing, you can use mark it as “patent pending.” A competitor wants to copy it, but has no way of finding out what the application covers or its likelihood of issuing. Now, the decision to copy becomes more complicated because of the uncertainty and the possibility of being hit with an infringement lawsuit.
This same type of “persuasive protection” comes up again when the application is published 18 months after filing. Here, as was the case with the “square appliances” application, possible infringers have a better idea what the patentee is trying to protect, but still no idea if the patent will eventually issue or exactly what it might cover. Additionally, the possible infringer should also realize that there might be other related patent applications haven't been published yet (as can happen with a continuation application).
In the case where a patent has to be very narrow in order to get past the examiner, this still has value beyond the legal monopoly it grants the patentee. Possible infringers probably don't have the patent background to analyze the patent and discern what it covers, so they'll need to have their lawyers work on it and draft an infringement opinion. Depending on the complexity of the patent, even if it is rather narrow, these opinions can quickly turn into tens of thousands of dollars. That might be enough to either dissuade the possible infringer or bring them to the table for a possible license.
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