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How Can I Avoid Patent Infringement?

by Clifford D. Hyra on March 4, 2010

Small to medium-sized businesses and inventors are usually very focused on securing patent rights in the new aspects of their inventions. This is understandable. They want to be able to market and develop their inventions without having to fear that their ideas will be appropriated by competitors.

However, few think about the flip side of this coin: how to ensure they are not violating the patent rights of others. Any business or entrepreneur coming out with a new product needs to be aware of the fact that you can infringe patent rights without copying a patented device, and in fact without even knowing about the patent you are violating.

The only way to be reasonably confident that you are not infringing on the patent rights of others is to have a state-of-the-art/clearance search performed to find out what relevant patents are out there. If you find anything close, it may be necessary to have a full infringement opinion prepared, advising you as to whether your new product will infringe the patent in question and if necessary advising you on ways to avoid infringement.

The typical strategy for avoiding patent infringement, once it appears infringement is a possibility, is to design around the patent in question. This is done by ensuring that the new product has features that place it outside of the scope of the identified patent. Having a favorable infringement opinion in hand will protect you from any later accusations of willful (deliberate) infringement, which carries elevated damages.

I will be discussing infringement more in subsequent posts. Please leave your questions in the comments.

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Can I Revive or Reinstate My Trademark Registration If I Forget to Renew It?

by Clifford D. Hyra on February 25, 2010

Renewal of Trademark Registrations

A trademark registration expires after ten years. If you wish to keep your trademark registration active, you must file an Application for Renewal of your registration under § 9 (See TMEP § 1606 ) before the expiration of this ten year period.

The window for filing this Renewal opens one year before expiration of the mark and a Renewal may also be filed within six months after the expiration of your mark (the “grace period”) with an additional fee. Thus, you may file a Renewal any time between nine and ten years after registration, or between ten and ten and a half years after registration with payment of the additional fee. A declaration or affidavit of continued use under § 8 must also be filed within the same period as the Application for Renewal of registration (See TMEP § 1604).

Each Renewal extends the life of the registration for ten years, thus a new Renewal must be filed before the end of twenty years after registration, thirty years, etc., if you do not wish for your registration to expire.

Reinstating a Trademark Registration

If you forget about the renewal and miss the ten-and-a-half year deadline, your registration will expire. In that case, there is no way to revive or reinstate it. Your registration is simply gone and if you want another one, you will have to file a new application and undergo examination once again. Examiners are not bound by previous registration decisions of the Trademark Office, so you could encounter some difficulty with your new application.

The only time that a trademark registration can be reinstated once it has expired for failure to file a renewal application or declaration of use is if you did file the required documents and the expiration was due to a Trademark Office error (See TMEP § 1712.02). If, for example, the Trademark Office lost the paperwork, you would be able to reinstate your registration.

In that case, a request for reinstatement  must be filed within two months of receiving notice that your registration was canceled.

So, be careful not to miss any deadlines! The Trademark Office will not warn you when they are approaching. Consider using a trademark attorney or trademark management company to keep track of the deadlines for you.

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Negotiating With Cybersquatters and Domain Name Dispute Resolution

by Clifford D. Hyra on February 22, 2010

I recently filmed this video as a podcast for LegalRiver. It is a sequel to this video and addresses what you can do about cybersquatters once you discover that they have registered domain names similar to one of your trademarks, for example misspellings, typos, or corruptions of your business name.

Dealing with Cyber Squatters from Legal River on Vimeo.

Please leave your questions and comments below.

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A Valuable Copyright Reference

by Clifford D. Hyra on February 19, 2010

Oxford University Press was kind enough to send me a copy of An Associate’s Guide to the Practice of Copyright Law, by Meaghan Hemmings Kent and Joshua J. Kaufman. Upon receiving the book, I looked at the table of contents and flipped through it  and it appeared to be quite a handy general reference guide for copyright issues.

Recently, a client of mine had an unusual copyright issue come up and I found this book to be very helpful. It is perfect as a quick reference, comprehensively covering most common copyright issues from registration and transfer to cease and desist and take-down letters to litigation.

Running a few hundred pages, it does not go in depth into every topic or canvas the relevant case law, however it does an excellent job of laying out the basic principles and of giving clear examples in the Appendix. I found it very handy for quickly checking and verifying certain points that arose.

I recommend it as a copyright reference for practitioners and as a primer and reference for those in a copyright-intensive industry such as publishing, producing/recording, or art.  The only downside is the $150 price tag.

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Introduction to Cybersquatting

by Clifford D. Hyra on February 12, 2010

I recently filmed the following video with LegalRiver regarding what cybersquatting is and how it affects businesses with an Internet presence. This is the first of a two-part podcast.

Cyber Squatting – Cliff Hyra from Legal River on Vimeo.

Leave your comments and questions below.

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Who Sues For Trademark Infringement?

by Clifford D. Hyra on February 10, 2010

When deciding whether to adopt a new trademark (brand or business name, logo, etc.), a primary consideration is what other businesses are using similar marks. You do not want to adopt a mark that will result in a costly legal confrontation.

However, some businesses are much more likely to cause you problems than others. Evaluating the nature of the other users is key to determining the risk of litigation or other conflicts. Here are some guidelines for evaluating users of similar marks.

1) Big Companies are Litigious

Big companies know the value of brands and of trademarks. They are paying attention to who is using what trademarks and to what trademarks are being registered with the United States Patent and Trademark Office (PTO). If you try to register a trademark similar to theirs, you can bet they will find out.

PTO records are for the most part a matter of public record. They do not have crystal balls, but if your business grows large or your product becomes popular, they will most likely find out if you are using a similar trademark, even if you choose not to register it.

And once they find out, they will come after you. They are perfectly willing to oppose or petition to cancel your trademark application or registration, or to file a lawsuit for trademark infringement. If you are  willing to agree to limitations on your use of the mark, you may be able to continue using it- on the other hand, you may have to change the mark. And if you do not want to comply, they are perfectly willing to spend tens of thousands of dollars fighting you.

So if the conflict is with a Fortune 500 company, you should usually just forget it. There is no point in inflicting the cost of a complete name change and marketing redeux on yourself, not to mention the concomitant legal fees. Find a new name.

2) Small Businesses Are Oblivious

On the flip side, for much smaller businesses with a more local or regional clientele, trademark issues are not as important. Few are willing to pay for the cost of trademark monitoring to make sure no confusingly similar trademarks are being registered. Many very small businesses do not even register their trademarks or have a basic understanding of trademark law.

They are, in general, very unlikely to discover your use of a similar trademark or to understand their options if they do. The only way you are likely to get into trouble is if your business gets huge and suddenly people start thinking about ways to get into your deep pockets. But by that time, your trademark may be incontestable, making it difficult for anyone yo cancel your registration.

When a smaller business gets in a trademark conflict with a really big company, it is often because the smaller business is blindsided by an accusation of trademark similarity that it never saw coming. Large corporations will go after trademarks that are even slightly similar. Small business usually will not.

3) Close Competitors are Unforgiving

The closer a competitor another user is to you, the more likely they will discover your use of the mark and make it an issue. Being in the same industry or the same geographic region and marketing to the same end-users or through the same stores or distribution methods are all factors contributing to closeness between competititors.

Businesses are more familiar with the companies and brands in their industry and geographic region. When business share distributors or end-users, confusion is more likely, and any similarity between marks is more likely to be brought to their attention.

On the flip side, companies that are not direct competitors are less likely to discover or care about your similar mark, and working out an agreement is easier if a conflict does arise.

Look in the Mirror

Finally, consider some characteristics of your own business that could make your trademarks more or less vulnerable to challenge.

Size/Growth -Size works both ways. A bigger company leaves a bigger footprint and its trademarks are more likely to be noticed. Size can deter weak challenges from medium or large firms looking for a quick and inexpensive trademark enforcement action.

However, size can also sometimes encourage conflicts, especially when infringement is clear, because the potential damage to the other party is greater and because there is the potential for a payoff.

If your company is small but growing fast, a conflict may be unlikely now but foreseeable and damaging in the future. Growing companies may also get more publicity and spend more on advertising, increasing awareness of your trademarks.

Web Presence – Web presence can function as a proxy for size. A relatively small business can have a very big impact online. That means that, like a big business, its trademarks are more likely to be found and to confuse consumers.

However, a web presence does not carry the benefit of deterrence. Your strong Internet presence can be a liability when it comes to avoiding trademark conflicts.

Conclusion

These are just some of the factors that affect the likelihood of a conflict between your business and another business that uses a similar trademark. A trademark attorney can help you to evaluate the risks. Is there anything important that I have left out? Any related stories you have to share? Any questions? Leave them in the comments.

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What if My New Trademark or Business Name is Already in Use?

by Clifford D. Hyra on January 27, 2010

So you have come up with a name for your new business or new product, and you love it. It is the perfect brand and trademark to propel your business to widespread success. But wisely, you have a trademark search conducted, and you find that you are not the first person to come up with it. Your new name is not quite as unique or original as you had hoped- some other business is using a similar name. We will call that other business “First User, Inc.”

What should you do? Do you have to drop the name? Change it? Contact First User? Or can you just go ahead with your registration and marketing plans as if nothing had changed? There are a few factors you must weight when making that decision:

  1. What First User can do to you if they find out you are using a similar trademark
  2. How likely First User is to find out or decide to go after you
  3. Just how good the name you came up with is

The first factor is the potential cost to you of using the trademark, the second is the probability of incurring that cost, and the third factor is the benefit from using that trademark. You can then make the classic calculation: is the potential cost multiplied by the probability of incurring that cost greater than the expected benefit to you?

1) Penalties for Trademark Infringement

If you decide to begin using a trademark (business name, logo, brand name, etc.) that is confusingly similar to the trademark of another business in the U.S., that other business can cause you a lot of problems. It can stop you from registering your trademark and it may be able to stop you from using the trademark.

  • Preventing You From Registering Your Trademark

Trademark Examining Attorney Refusal to Register

The Trademark Office will not register a trademark if it is confusingly similar to another registered trademark. Therefore, if First User has registered their trademark, it may be difficult for you to get your application allowed by the PTO. The Trademark Examining Attorney assigned to your application is likely to refuse registration of your mark.

Trademark Opposition / Cancellation

Even if the PTO allows your trademark application, First User can oppose your registration, regardless of whether it has a registration and regardless of where in the U.S. it is located. A trademark opposition is an administrative proceeding before the Trademark Trial and Appeal Board (TTAB) and is essentially a mini-trial.

To go all the way through an opposition you can expect to spend $50,000 to $100,000, depending on what law firm you use. If First User can prove that your mark is confusingly similar to theirs and that it began using the mark in commerce before you, it is likely to succeed in preventing your registration.

Even if your mark is successfully registered without an opposition, First User can come back and petition to cancel your registration up to five years later. A cancellation proceeding is very similar to an opposition in expense, etc.

  • Preventing You From Using Your Trademark

Although registering your trademark is very important, the right to use your trademark is even more important. If First User has registered their trademark, they have exclusive rights to that mark nationwide. Regardless of whether you are operating in the same geographic area, your use of a confusingly similar mark in the United States constitutes trademark infringement.

In that case, First User can sue you and, if it can prove confusing similarity, force you to stop using your trademark. You would then have to redo your marketing materials and marketing campaign and devote a lot of money to rebranding.

As you are probably beginning to understand, it is generally a bad idea to use a trademark that seriously conflicts with an existing registered trademark. More frequently, you will have to make a decision regarding a trademark that is used by another business, but not registered. In that case, you can only be sued for trademark infringement if you do business in the same geographic area as First User, and only in state court. First User will have to prove confusing similarity and first use.

Defending a trademark infringement lawsuit can easily run six figures. Monetary damages could also be awarded against you, although they are uncommon.

2) Likelihood That Trademark Infringement Will Be Discovered or Prosecuted

Whether First User is likely to discover your use of a similar mark or pursue you if they do depends on a number of factors, including:

  • Is First User big or small?
  • Is First User brand-focused?
  • How close are the marks / how strong is First User’s legal position?
  • Does First User do business in your geographic area?
  • Do you have a significant web presence?
  • Is First User a direct competitor?
  • How big will your business become, and how fast?

These factors will be discussed in more depth in a subsequent post. Generally, large corporations are very likely to find out about trademark infringement and take action, whereas very small businesses are very unlikely to.

If you are able to register your trademark and keep that registration for five years, your registration will become incontestable, meaning that First User will no longer be able to cancel it for confusing similarity to their own mark. Your registration will also allow you to prevent First User from expanding beyond their geographic area.

3) How Important Is It To Keep Your Trademark?

Finally, you should consider the importance of the trademark you have selected. Are you wedded to it? Would you be open to tweaking it in order to differentiate it from First User’s trademark? If there are good alternatives and you have nto spent much money on putting together your branding materials, often it is better to avoid potential conflicts by choosing a new trademark.

On the other hand, if you have a really good and meaningful trademark that you have spent money to develop and build a marketing campaign around, it may be worth taking the risk of going ahead with it. This is particularly true when the risk is low, for example if First User is a small business that is not a direct competitor and is unlikely to discover the similarity.

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Steps for Getting a Patent (Part 2)

by Clifford D. Hyra on January 13, 2010

This is part two of a two-part podcast I recently filmed for LegalRiver on the steps for getting a patent. In this part I address the last two steps, preparing and filing your application and getting your application through the examination process at the United States Patent and Trademark Office. In the first part, I addressed patent searches and opinions and selecting the right type of patent application to file.

Steps for Getting A Patent – Part 2 from Legal River on Vimeo.

Please leave your comments and questions below!

<a href=”http://vimeo.com/8033071″>Steps For Getting A Patent – Part I</a> from <a href=”http://vimeo.com/user1324941″>Legal River</a> on <a href=”http://vimeo.com”>Vimeo</a>.

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Steps for Getting a Patent (Part I)

by Clifford D. Hyra on January 8, 2010

I recently filmed this short (<5 min.) video for LegalRiver on the steps for getting a patent. In this part I address the first two steps, having a patentability search report and opinion prepared and deciding what type of application to file. In the next video, I discuss the last two steps, preparing and filing your application and getting your application through the examination process at the United States Patent and Trademark Office.

Steps For Getting A Patent – Part I from Legal River on Vimeo.

Please leave your comments and questions below!

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Does Intellectual Property Protection Still Matter?

by Clifford D. Hyra on December 16, 2009

In a recent blog post, Seth Godin seems to question whether trademarks, copyrights, and patents have value. He begins with the question “If we’re in the idea business, how to protect those ideas?” and ends with “Don’t.” Instead, he recommends, “spread them. Build a reputation as someone who creates great ideas.” Along the way, he attacks the trifecta of trademarks, copyrights, and patents.

This is Terrible Advice

No Fortune 500 companies are going to read Seth Godin’s blog, see the light, and decide that those cease & desist letters really were not worth it after all, and maybe they should stop sending them out. To the extent that Godin’s readership consists of people who actually might seek intellectual property (IP) protection, I imagine they are primarily entrepreneurs and small business owners. Godin’s article will encourage them not to seek out such protection.

These people do not need anyone to convince them NOT to protect their IP. Not protecting your IP is easy-just don’t do anything! Lots of people do that because they are not aware of the importance IP can have to the success of their business. Not protecting your IP because Coca-Cola or MGM is sending out 10 cease and desist letters today is a mistake of monumental proportions and it is irresponsible to encourage entrepreneurs to make that mistake.

What Entrepreneurs Need to Know About IP Protection

Entrepreneurs need to know up front what IP protections are available and what their costs and benefits are. And there are benefits- potentially enormous benefits. Recent estimates place the total value of patents in the U.S. at $200 Billion. Brand value (integrally tied to trademarks) makes up a third of the total value of fortune 500 companies (that’s well over $1 trillion folks).

Registering a trademark is not about suing everyone who says the words “thank you”, it is about protecting your brand from competitors and avoiding costly legal conflicts. Patenting an invention allows you to lock your competitors out of the marketplace for a period of 20 years, and if you can get a patent for a valuable invention you came up with in the shower, more power to you.

An initial patent search and provisional application are essential to any entrepreneur planning to start a business around an innovative new product. They cost a lot less than “tens of thousands of dollars” (try ~$2,000) and without them potential investors and partners will not even talk to you. Without a search, you do not even know if your invention has any value. These protections are just part of the cost of entering that kind of business, and they are far from the largest cost involved (try prototyping or manufacturing an initial run).

So don’t dismiss IP protection out of hand. Figure out the costs involved and the likely benefits and do a cost/benefit analysis.

Should I Spread My “Ideas” Around as Godin Suggests?

Not if they have value to you. If, considering the risks involved, the cost of trying to protect your idea is greater than its benefit to you, then sure you should find something else to do with it. Maybe, as Godin suggests, telling everyone about it will build your reputation and be beneficial to you.

But for a company to spread its brand around freely or spread its new, heavily researched product around to its competitors in order to “Build a reputation as someone who creates great ideas” would be destroying enormous value- and insane. In this digital age, IP protection matters more than ever.

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