ATrademark

is Not a Copyright

or aPatent.

By William M. Borchard

Cowan, Liebowitz & Latman, P.C.New York, New York

2012 Edition

This edition covers the new patent reform legislation

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While originally part of the radiator cap, the Rolls-Royce “Flying Lady” mascot hood ornament has features suitable for simultaneous protection as a registered trademark, a copyrighted sculpturalwork and a patented design.

Although trademarks, copyrights, patents, and tradesecrets all concern intangible property rights and overlapto some extent, they differ from each other significantly. If you know the attributes of each, you can take full ad-vantage of them to weave a fabric of intellectual propertyprotection. And the failure to get appropriate protection isan invitation to pirate. Competent legal advice often isadvisable because all four areas of law are changing,especially as applied to new technology. It may help todistinguish them by remembering that:

• Trademarks protect source identifications (marksof trade);

• Copyrights protect original creative expressions;

• Patents protect new and useful inventions; and

• Trade Secrets protect valuable secret information.

This pamphlet summarizes the principal attributesof these various types of protection.

U.S. patent law is changing in important ways.The America Invents Act was signed September 16,2011. Some provisions took effect immediately;others will start over the following 18 months.See the Patents section for highlights.

The illustrations are used with the permission of their owners: Dole and Sun Design is a registered trademark of Dole Food Company, Inc. Coca-Cola and the contour bottle design areregistered trademarks of The Coca-Cola Company. McDonald’s and the “Golden Arches” logo are registered service marks of McDonald’s Corporation. The “Woolmark” logo is a regis-tered certification mark of The Wool Bureau, Inc. The International Game Fish Association and logo is a registered collective membership mark of International Game Fish Association. The“Flying Lady” mascot is a registered trademark of Rolls-Royce Motor Cars Limited. Gillette is a registered trademark, and SensorExcel is a trademark, of The Gillette Company.

This information is current through January 1, 2012.

© 2012 Cowan, Liebowitz & Latman, P.C.

Design: AC Concept Graphics, Inc. • New York City

What is a Trademark? 3

What is a Copyright? 7

What is a Patent? 11

Summary Table 15

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What is a Trademark?

A trademark is a word, logo or package design, or acombination of them, used by a manufacturer or merchantto identify its goods or services and to distinguish themfrom others. Trademarks include brand names identifyinggoods (Dole for canned pineapple) and trade dress consist-ing of the graphics, color or shape of packaging or, aftersufficient use, of goods (Coca-Cola Bottle for a soft drink);service marks identifying services (McDonald’s for arestaurant service); certification marks identifying goodsor services meeting specified qualifications (Woolmark forapparel made of 100% wool); and collective marks identi-fying goods, services or members of a collective organiza-tion (The International Game Fish Association for a gamefishing organization). The same legal principles generallyapply to all of these terms, often simply called “marks.”

How to obtain trademark rights. You need not register a trademark to have protectibleexclusive rights in it, and reserving a corporate name in one or more states is irrelevant to trademark rights.Simply by using a mark on or in connection with goods,or by displaying the mark in the sale or advertising ofservices, you can automatically acquire trademark rightsin the geographic area of use.

You can stake out nationwide trademark rights byapplying to register the mark in the U.S. Patent and Trade-mark Office. (One reason why people confuse trademarkswith patents seems to be that both are handled by thesame office, but the trademark and patent operations arecompletely separate.)

Federal trademark registration.Registration of a mark is not mandatory, and rights will be protected without registration if you have actually usedthe mark. But it may be advisable to establish your rightsby applying to register the mark in the U.S. Patent andTrademark Office even before use. You can base an appli-cation on one or more of the following:

• actual use of the mark in commerce;

• a bona fide intention to use the mark in federallyregulated commerce (but the mark subsequentlymust be used in the ordinary course of trade, and not merely to reserve a right in the mark, before theregistration will be issued);

• a non-U.S. owner’s country of origin application filedduring the previous 6 months, or its country of origin registration, in either case with a statement of a bonafide intention to use the mark in commerce (althoughuse before registration is not required);

• a non-U.S. owner's extension to the U.S. of its inter-national registration issued by the World IntellectualProperty Organization in Geneva, based on a countryof origin application or registration, with a declara-tion of a bona fide intention to use the mark in com-merce that Congress can regulate (which extension isexamined as a U.S. application, although use beforeregistration is not required).

Trademark applications are subject to an examinationprocess, and registration will be refused if the mark:

• is not capable of distinguishing the applicant’s goodsor services from those of others;

• consists of immoral or scandalous matter;

• consists of a flag or coat of arms of the United Statesor other governmental entity;

• consists of the name, portrait or signature of a livingindividual without that person’s consent;

• so resembles another registered trademark, or a mark or trade name previously used by another andnot abandoned, as to be likely to cause confusion,mistake or deception when applied to the applicant’sgoods or services;

• is merely descriptive or deceptively misdescriptive of applicant’s goods or services and has not becomerecognized as an indication of source;

®

BrandName Trade Dress

ServiceMark

CertificationMark

CollectiveMark

®

®

®

®

• is deceptive or geographically deceptively mis-descriptive of applicant’s goods or services; or

• comprises any matter that, as a whole, is functional.

You also must file a specimen showing the mark asactually used in commerce, such as on labels or packaging,either at the time you file the application, or at least beforeregistration, if the application is not based solely on a for-eign application or registration.

Anyone with a commercial interest can oppose atrademark application in the Trademark Trial AppealBoard (TTAB), or in a court action on the ground thatregistration should not be granted for one of the reasonsstated above, or that the mark is likely to cause confusionwith a previously used mark, or is likely to dilute thedistinctiveness of a famous mark.

State trademark registration. Although a federal trademark registration providesnationwide protection, a state trademark registration alsocan be useful (for any or all of the following reasons):

• it is available to purely local businesses that cannotqualify for a federal registration;

• it is issued almost automatically, quickly andinexpensively;

• it will be listed in search reports obtained by others;and

• it can be more persuasive to other local businessesand to state court judges than a federal registration.

Federal registration rights generally take precedenceover state registration rights and normally can providesuperior procedural advantages, however.

Advantages of federal trademark registration. When issued, which normally takes over one year, a federalregistration has substantial advantages:

• it confers nationwide priority rights effective fromthe U.S. application’s filing date (or the foreign appli-cation’s filing date for U.S. registrations based on aforeign country of origin application filed during the previous 6 months);

• it will be listed on search reports obtained by others;

• it is evidence, albeit rebuttable, of the registrant’sexclusive ownership rights, shifting the burden ofproof to anyone challenging those rights, and insome circumstances it can be conclusive evidence of those rights;

• it is required for increased remedies against counter-feiters;

• it gives federal courts jurisdiction to hear infringe-ment claims, counterfeiting claims, and related

claims of unfair competition under state law;

• it precludes states from requiring modifications inthe display of registered marks and from applyingtheir own dilution laws;

• it precludes claims under federal and state dilutionlaws;

• you can use it as a basis for registration in someforeign countries; and

• you can record it with U.S. Customs and BorderProtection to prevent importation of foreign goods by third party infringers or even by foreign licenseesnot under common corporate ownership with you.

Notice of trademark registration. It is inappropriate to use a trademark registration noticebefore you actually have registered the mark, and suchinappropriate use also may prevent you from obtainingrelief against an infringer. You can use the informalsymbol TM (for trademark) or SM (for service mark) with an unregistered mark to indicate that you claimcommon law trademark rights.

After federal registration, you can use a statutorytrademark registration notice in one of the followingforms: the symbol ®, the phrase “Registered U.S. Patentand Trademark Office,” or the abbreviation “Reg U.S. Pat.& Tm. Off.” This notice is not mandatory, but you mustuse it to get damages from an infringer under somecircumstances.

How long trademark rights last. Trademark rights continue indefinitely as long as youneither abandon the mark nor permit it to lose its trade-mark significance by becoming a generic term. On theother hand, you must maintain a federal trademark regis-tration by filing a declaration, during the year before thesixth and each tenth anniversary after issuance (plus a six-month grace period for an extra fee), that the mark is inbona fide use in commerce in the ordinary course of tradeand not merely to reserve a right in the mark. You mustalso renew the registration every 10 years. The federal lawprovides that non-use of a mark for 3 consecutive years isordinarily considered proof of an intention to abandon it,opening the way for someone else to claim exclusive rightsin the mark.

Who owns a trademark. In the U.S., unlike many other countries, if you are the first user of a mark, you normally are considered its owner even if someone else has been the first to apply toregister the same mark (unless the application was basedon a bona fide intention to use the mark and was filedbefore your use, or the application has the priority of aforeign country of origin application filed during theprevious 6 months and before your use).

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As the owner of a trademark, you may license anotherto use it but you must control the nature and quality of thelicensee’s goods or services under the mark. Similarly, youmay assign the mark to another party, but the assignmentmust include the good will of the business symbolized bythe mark as well as any existing registrations or pendingapplications, except that you can assign pending intent-to-use applications only to a successor to an ongoing andexisting business.

What infringes a trademark. Federal and state trademark law protects a mark whetheror not it is registered. It is an infringement for someoneelse to use the same or a confusingly similar term ordesign, on the same or closely related goods or services, in the same geographical area, or in some cases, within a natural area of expansion.

Unfair competition. Trademark infringement is one form of unfair competition.The federal trademark law protects against a likelihood ofconfusion, mistake or deception about the source, affilia-tion, sponsorship or approval of goods or services orcommercial activities of another. It also protects against the use of any false or misleading statement of fact incommercial advertising or promotion which contains amisrepresentation about that person’s or another’s goods,services or commercial activities.

Dilution. The federal law, and some states, also protect the owner of a famous and distinctive mark against a likelihood ofdilution by the blurring of its distinctiveness or the tar-nishment of its reputation even if there is no likelihood ofconfusion, actual competition or actual economic injury.

Trademark searches. If you wish to adopt a new trademark, you should firstobtain a knockout search and perhaps a comprehensivesearch report. Someone else may already have acquirednational rights to that mark by having filed an applicationfor a federal registration, obtained an issued federalregistration, or established local rights by having obtaineda state trademark registration or even by using the markwithout registration. Your attorney can order a search froma reputable searching company, and can interpret thereport for you.

Remedies for trademark infringement and dilution. Some states have criminal penalties for certain forms oftrademark infringement. Civil remedies are also availableunder the federal law and most state laws:

• an injunction against future infringement (which is the only remedy against printers, publishers ofperiodicals, and television and radio broadcasterswho print or transmit infringing advertisements

but prove they are innocent infringers);

• the infringer’s profits;

• damages for past infringement suffered by the owner ofthe mark (which may be trebled under the federal law);

• destruction of all materials bearing the infringingmark and sometimes the recall of infringing goodsfrom the market; and

• the costs of the action, and in exceptional cases,reasonable attorney’s fees.

You cannot recover profits or damages under thefederal law unless either the infringer had actual notice ofthe registration or you used a trademark registration notice.

Dilution remedies are an injunction and, for willfulactivities begun after October 6, 2006, the other remediesmentioned above.

Remedies for trademark cybersquatting.The federal law provides civil remedies against a personwho has a bad faith intent to profit by registering, traffick-ing in or using a domain name that is identical or confus-ingly similar to a distinctive mark or living person’s nameor is dilutive of a famous mark. In addition to the usualremedies for infringement, there are special remedies:

• cancellation or transfer of the domain name to theplaintiff; and

• instead of actual damages and profits, at the electionof the plaintiff, statutory damages from $1,000 to$100,000 per domain name.

Remedies for trademark counterfeiting. There are criminal penalties and stiffer civil remediesunder federal law (and some state laws) for intentionallydealing in goods or services knowingly using a counterfeitmark or an Olympic designation.

The federal criminal penalties, which also apply tointentionally trafficking in labels or other packaging ordocumentation knowing that a counterfeit mark has beenapplied without authorization, are:

• a fine for individuals of not more than $2 million (or $5 million for a second or subsequent offense), or imprisonment not exceeding 10 years (or 20 yearsfor a second or subsequent offense), or both; and afine for corporations or partnerships of not morethan $5 million (or $15 million for a second or sub-sequent offense). The maximum prison term is longerfor knowingly or recklessly causing or attempting tocause bodily injury (up to 20 years in prison) ordeath (up to life in prison);

• seizure of the enterprise’s vehicles, equipment andstorage facilities; and

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• destruction of articles bearing the infringing marks.

The federal civil remedies are:

• seizure, without notice, of the goods, counterfeitmarks, means of making the marks, and relevantbusiness records;

• mandatory treble damages, possible prejudgmentinterest and attorney’s fees (including investigator’sfees); and

• instead of actual damages and profits, at the trade-mark owner’s election, statutory damages of $1,000to $200,000 for each type of goods or services forwhich each counterfeit mark is used (subject toincrease to $2,000,000 for willfulness).

International trademark protection. There are three ways that a U.S. business or citizen canregister a trademark outside the U.S., but it takes carefulanalysis to design an international protection programsince each approach has advantages and disadvantages:

• under national laws, apply for a registration in indi-vidual countries (or for a Benelux registration cover-ing Belgium, Netherlands and Luxembourg; or for anOAPI registration covering 16 African countries).

• under the Community Trade Mark central registra-tion system, apply in Alicante, Spain for a single reg-istration covering all 27 current member countries ofthe European Union.

• under the Madrid Protocol central filing system,apply in the U.S. Patent and Trademark Office, basedon a U.S. application or registration, for an interna-tional registration issued by the World IntellectualProperty Organization in Geneva, Switzerland. Theinternational registration can be extended as a localapplication filed in each country you designateamong the 83 Protocol countries.

No matter which of these filing methods you use, younormally can claim the priority of the filing date of thefirst application you filed during the previous six monthsin a country that is a signatory to the Paris Convention,such as the U.S., in which you have a real and effectiveindustrial or commercial establishment or of which youare a national or domiciliary.

Almost all trademark registrations can be attacked forinvalidity if you do not use the registered mark in thecountry or region covered by the registration within threeto five years after issuance.

Trademark licensing is an important aspect of interna-tional trade. Some countries require you to record licensesor to register permitted users, and failure to do so caninvalidate the trademark. Recording registered trademarkswith U.S. Customs and Border Protection can help you tokeep infringing goods from being imported, transshippedor exported.

Industrial design protection.You can protect a two or three-dimensional design, even ifit constitutes the appearance of a useful article, under theindustrial design laws of many non-U.S. countries if thedesign has novelty and distinctiveness. The EuropeanUnion has a dual system which protects an unregistereddesign for 3 years after initial public disclosure, and pro-tects a registered design for 5 years, renewable for up to 25years, after initial public disclosure if the application wasfiled within 12 months after initial public disclosure. Youcan get a design registration much faster than a trademarkregistration covering the same design, although the termof a design registration is limited.

Domain name protection.A domain name is a word followed by a suffix such as.com, .org, .net, .info, .biz, or a number of other similarelements, or a country code. It is a computer address that you can use either as a world wide website locator(www.cll.com) or as an email address (law@cll.com), orboth. You register a domain name in one of the registriesthat is part of the Internet system. And if you use all orpart of a domain name prominently as a source identi-fication on a web page or in advertising, you also canregister and protect that identification as a trademark.

If a cybersquatter, in bad faith, registers a domainname that includes your registered trademark, you may be able to get that domain name transferred to you. Youcan start either a quick and inexpensive internationalarbitration (called an ICANN or UDRP proceeding) or afederal lawsuit under a section of the U.S. trademark law(called an ACPA proceeding) which, although slower andmore expensive, also can result in statutory damages ofbetween $1,000 and $100,000.

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What is a Copyright?A copyright seeks to promote literary and artisticcreativity by protecting, for a limited time, what the U.S. Constitution broadly calls the “writings” of“authors.” Copyrightable works include:

• literary, musical and dramatic works;

• pantomimes and choreographic works;

• pictorial, graphic and sculptural works (including thenonutilitarian design features of useful articles);

• motion pictures and other audiovisual works;

• sound recordings;

• computer programs;

• certain architectural works; and

• compilations of works and derivative works.

Copyright only protects particular expressions of ideas, not the ideas themselves. And a protectible workmust be “original,” i.e., not copied from another source(although two separately protectible works theoreticallycould be identical by coincidence). The work also must not be so elementary that it lacks sufficient creativity to be copyrightable.

Copyright owner’s rights. The creator basically has the exclusive rights to reproducethe work, to distribute the reproductions, to display andperform the work publicly, to make derivative works, andto authorize others to do any of these things. The creatorof certain works of fine art also may have rights to controltheir attribution or modification. The performance right ina sound recording is limited to digital transmissions, suchas webcasting, with lower royalty rates for small webcast-ers. However, you cannot lease or rent a phonographrecord or computer program for commercial advantagewithout the consent of the copyright owner.

How copyright is obtained. The moment you have created and fixed a copyrightablework in a tangible form, such as by writing it down orrecording it on tape, it automatically enjoys copyrightprotection whether or not it has been published or regis-tered. There is no state copyright protection, althoughstates still can redress violations of rights outside the scope of copyright, such as breaches of contracts, acts of unfair competition or defamations. Unfixed works, such as extemporaneous speeches or unrecorded liveperformances, may be protected by state law because they are not covered by the federal statute.

Notice of claim to copyright. No copyright notice is required or even prescribed for anunpublished work. However, you may affix a statutory copy-

right notice to all publicly distributed copies of a work in amanner and location giving reasonable notice. The copyrightnotice consists of all three of the following elements:

• the symbol , or the word “Copyright,” or theabbreviation “Copr.” (except that for sound recordingsthe symbol is used);

• the year of first publication (which may be omittedon greeting cards, postcards, stationery, jewelry,dolls, toys, and useful articles); and

• the name of the owner of copyright, or a recognizableabbreviation of the name, or a generally known alter-native designation of the owner.

On copies distributed before 1978, an omission of the notice, or an error in it, could have thrown the workinto the public domain. A change in the law in 1978 madeit possible to cure the defect on copies distributed on orafter that date. And on works created on or after March 1,1989, a copyright notice is no longer mandatory. However,you should use a copyright notice anyway because aninnocent infringer, relying on the absence of notice, is notliable for actual or statutory damages before receivingactual notice of the copyright. Furthermore, a court mayeven grant the infringer the right to continue the infring-ing activity provided it pays a reasonable license fee to the copyright owner.

Any person who uses or removes a copyright noticewith fraudulent intent is subject to a fine.

Library of Congress deposit. Within 3 months after your work is first published in theUnited States, you are required to deposit in the CopyrightOffice two complete copies of the best edition of the workfor the use or disposition of the Library of Congress. Failureto make this deposit does not invalidate the copyright, butif the Register of Copyrights makes a written demand forthe deposit, failure to make the deposit within 3 monthsafter this demand can result in a fine plus other penalties.

Copyright Registration. You can register the copyright in any published or unpub-lished work at any time during the period of copyright bydepositing in the Copyright Office two complete copies ofthe best edition of the work (one is enough in some cases)together with an application and a small fee. The copiesaccompanying your application satisfy the Library ofCongress deposit requirement.

Failure to register the copyright does not invalidate it,but prompt registration is a good idea because:

• It is a prerequisite to suing an infringer (except forworks originating in a Berne Convention state otherthan the U.S.);

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• You cannot recover statutory damages or attorney’sfees for infringement of a published or unpublishedwork commenced before its registration unless youregistered the copyright within 3 months after firstpublication of the work;

• A certificate of a copyright registered before or with-in 5 years after first publication is prima facie evi-dence of the validity of the copyright and the factsstated in the certificate;

• You can record the certificate with U.S. Customs andBorder Protection to protect against the importationof infringing works; and

• Registration is the best way to preserve the necessarycopyright information about the work.

You also can preregister certain types of works, whilethey are being created for commercial release, that have a history of prerelease infringement: motion pictures,sound recordings, musical compositions, literary worksfor book publication, computer programs and advertisingor marketing photographs.

How long a copyright lasts.This is a complex area because the term of copyright largelydepends upon when and where the work was first pub-lished and whether or not the U.S. copyright was federallyregistered or renewed.

• A general rule of thumb is that a work published inthe U.S. before 1923 is public domain in the U.S.

• A work published with a proper copyright noticebetween 1923 and 1964 could still be in copyright if,during the 28th year after publication, a renewal wasfiled for another 67 years.

• A copyright secured from 1964 through 1977 isdeemed automatically renewed for a total of 95years.

• A work not published or registered for copyrightbefore January 1, 1978 is protected for the author’s(or surviving joint author’s) lifetime plus 70 years,unless it was published before the end of 2002 inwhich case the copyright will not expire before 2047,even if the life-plus-70 term would expire before thatdate.

• The general rule for a work created on or afterJanuary 1, 1978 is that the copyright lasts for theauthor’s (or surviving joint author’s) lifetime plus 70years. But the copyright in a “work made for hire,”or in an anonymous or pseudonymous work, lastsfor 95 years from publication or 120 years from cre-ation, whichever is shorter.

Libraries and archives may reproduce, distribute, dis-play or perform in facsimile or digital form copies orphonorecords of works for purposes of preservation,scholarship or research during the last 20 years of thecopyright if reasonable investigation shows that the work

is not the subject of normal commercial exploitation andcannot be obtained at a reasonable price. And some worksfirst published abroad may have their U.S. copyrights,which were forfeited for failure to comply with formali-ties, reinstated in accordance with the GATT Agreement.

Finally, a work may be protected in other countrieseven though its U.S. copyright protection has ended, andvice versa.

Who owns a copyright. The individual or joint authors of a work initially own thecopyright. But the employer or party commissioning awork automatically is deemed to be the “author” of a“work made for hire” if (for a work created on or afterJanuary 1, 1978) either:

• the work was prepared by an employee within thescope of employment; or

• the work was specially ordered or commissioned, andis one of nine specific types of works, and most impor-tantly, is expressly agreed to be a “work made forhire” in a written instrument signed by both parties.

A copyright is divisible, so the recipient of any exclu-sive grant or license of rights becomes the owner of thecopyright for those rights. All transfers must be in writing.Although it is not mandatory to record an instrument oftransfer in the Copyright Office, recording it gives con-structive notice of the transfer to possible subsequenttransferees of the same rights.

Under various circumstances, the author, or specifiedheirs after the author’s death, can terminate exclusive andnon-exclusive transfers or licenses of any right in any workother than a “work made for hire,” and rights in then exist-ing derivative works may be affected by the termination.

What constitutes copyright infringement. Copyright infringement generally is the unauthorized use orcopying of the work. Also, the law provides that those whofacilitate or profit from the infringing conduct of anothermay be liable as vicarious or contributory infringers, as wasthe Napster service (which facilitated infringing conduct byits users). It usually is difficult to prove copying, so thecopyright owner normally tries to prove that the allegedinfringer had “access” to the work and that the two workshave “substantial similarity” from the viewpoint of anordinary observer, after which the burden of provingindependent creation shifts to the alleged infringer.

The unauthorized rental of a phonorecord or computerprogram for commercial advantage, and the unauthorizedimportation of a copy or phonorecord, also constituteinfringement even if the imported reproduction waslawfully made abroad.

Some of the many specified activities not consideredcopyright infringements by the federal law include:

• the use of the basic idea expressed in the work;

• the independent creation of an identical workwithout copying;

• the sale or limited public display of a work by theowner of the physical copy or phonorecord;

• ”fair use” of the work for purposes such as criticism,comment, news reporting, teaching, scholarship orresearch;

• use under one of the “compulsory licenses;”

• transitory digital communications by an onlineservice provider;

• certain distance education transmissions;

• making a copy of a computer program solely forpurposes of maintaining or repairing a computercontaining it;

• radio or television performances by certain retailersand restaurants; and

• filters that mute or skip program content in a privatehousehold.

Remedies for copyright infringement. The federal law makes willful copyright infringement for profit a felony, the penalties for which depend on boththe number of copies reproduced or distributed during agiven period of time, and whether it is a first or subse-quent offense.

Criminal penalties range from a fine of not more than $25,000, or imprisonment not exceeding 1 year, orboth, for first offenses infringing any type of work; andup to $250,000 for individuals and $500,000 for organiza-tions, or 10 years, or both, for a second or subsequentoffense of certain types. In addition, a court may orderseizure, forfeiture, destruction, restitution or other dispo-sition of all infringing reproductions and all equipmentused in their manufacture. Additional penalties apply totrafficking in counterfeit record, film, and computer pro-gram labels and documentation. And fines and imprison-ment can be imposed for willful copyright infringementby electronic means, such as by putting someone else’swork on the Internet without permission, even if it is notdone for profit.

The following civil remedies are also available to theholder of any exclusive rights in the copyrighted workunder the federal law:

• an injunction against future infringement;

• seizure, forfeiture, destruction, restitution or otherdisposition of all infringing reproductions and thearticles used to make them;

• seizure of records and information (subject to a pro-tective order as to their discovery and use);

• the actual damages suffered by the copyright owner;

• any additional profits of the infringer;

• instead of actual damages and profits, at the copy-right owner’s election, statutory damages for allinfringements of any one work from $750 to $30,000(subject to reduction to $200 in some instances, or toincrease to $150,000 for willful infringement);

• full costs including a reasonable attorney’s fee; and

• a civil fine imposed by Customs against theimporters of counterfeit goods.

Trafficking in, or the importation of, “bootleg” record-ings or videos of live musical performances is subject tothe same civil and criminal infringement remedies. Thereare also criminal penalties for making an unauthorizedcopy or transmission of a movie in a theatre. In addition,there are criminal penalties for willfully infringing anycopyright for purposes of commercial advantage or pri-vate financial gain, or by reproducing or distributing with-in a 180-day period works whose total value exceed$1,000, or by distributing a work on a public computernetwork if it is or should have been known to be intendedfor commercial distribution.

International copyright protection. First publication anywhere in the world of a literary orartistic work may affect its copyright status elsewhere. So international treaties are particularly important in the copyright field. The U.S. has copyright relations withapproximately 169 jurisdictions, about 157 of which(including the U.S.) are members of the Berne Conventionwhich provides for copyright protection meeting certainminimum standards without formalities.

Many commercially important countries (including theU.S.) have ratified the Universal Copyright Conventionwhich requires foreign works to have the same copyrightprotection as domestic works. Berne Convention protectionhas no formal requirements, but in 4 countries which aremembers of the UCC but are not members of Berne, apublished work must bear a copyright notice consisting of©, the name of the copyright proprietor and the year dateof first publication, in order to be considered to havecomplied automatically with any local formal require-ments in each other UCC member country.

A multilateral treaty against the piracy of soundrecordings (ratified by the U.S.) is similar to the UCC,except that the prescribed copyright notice includes a .The U.S. also is a member of the Buenos Aires Conventionwhich requires use of a notice such as “All RightsReserved.”

WIPO Implementation.The U.S. has implemented international copyright treatiessponsored by the World Intellectual Property Organization(a) prohibiting the direct or indirect circumvention of tech-nological measures to control access to a copyrightedwork, and (b) prohibiting the knowing provision of copy-right management information that is false, the intentionalremoval or alteration of such information, or the distribu-tion, importation or public performance of works knowing

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that copyright management information has beenremoved or altered.

Criminal penalties, for proceedings commenced with-in 5 years from the offense, range from a fine of not morethan $500,000, or imprisonment not exceeding 5 years, orboth, for the first offense; and up to $1,000,000, or 10 years,or both, for any subsequent offense. The civil remedies aresubstantially the same as those for copyright infringement,except that the statutory damages range from $200 to$2,500 for each act of technology circumvention, and from$2,500 to $25,000 for each copyright management informa-tion violation, subject to trebling for repeated acts or viola-tions committed within 3 years after a final judgement.

Semiconductor chip protection. A separate federal law gives the owner of a mask work,that is original when considered as a whole and is notcommonplace, the exclusive rights to reproduce it and toimport and distribute chips embodying it. This protectionstarts when you register the mask work rights in theCopyright Office or you first commercially exploit themask work anywhere, whichever is earlier. It continues for10 years, but only if you make the mandatory registrationwithin 2 years of the first commercial exploitation.

You may use a nonmandatory notice of protectionconsisting of:

• the words “mask work,” or the symbol *M* (Mbetween asterisks), or the symbol ; and

• the name of the owner or a recognized or generallyknown abbreviation.

There are no criminal penalties for infringement.The civil remedies are substantially the same as those for

copyright infringement, except that maximum statutorydamages are $250,000.

This law specifically immunizes reverse engineering,disposition or use of authorized chips, and innocentinfringement.

Vessel hull design protection.In the first attempt by the U.S. to protect the industrialdesign of a useful article, a separate federal law gives theowner of a boat hull design, or deck design, or both, thatprovides a distinguishable variation over prior work per-taining to a similar article which is more than merely triv-ial and has not been copied from another source, theexclusive rights to make, have made or import, for sale oruse in trade, and to sell or distribute for sale in or use intrade, any useful article embodying that design. This pro-tection starts upon the date of publication of your applica-tion for registration in the Copyright Office or the date thedesign is first made public, whichever is earlier. It contin-ues for 10 years, but only if you make the mandatory reg-istration within 2 years after the date the design is firstmade public.

You may use the non-mandatory notice of protectionon the boat hull or deck consisting of:

• the words “Protected Design,” or the abbreviation“Prot’d Des.,” or the symbol *D* (D between asterisks)or the symbol ;

• the year in which protection began; and

• the name of the owner, an abbreviation by which thename can be recognized, or a generally acceptedalternative designation of the owner.

There are no criminal penalties for infringement,although the importation restrictions will be enforced byU.S. Customs and Border Protection and the U.S. PostalService. The civil remedies are substantially the same asthose for copyright infringement. The issuance of a designpatent would terminate this new form of protection for the design.

Trafficking in counterfeit or illicit labels.A separate federal law makes it a crime knowingly totraffic in either (a) a counterfeit or illicit label designed to be affixed to, enclose or accompany a phonorecord of a copyrighted sound recording, a copy of a copyrightedcomputer program, a copyrighted motion picture or otheraudiovisual work, a literary work, a pictorial, graphic orsculptural work, a work of visual art, or copyrighteddocumentation or packaging for them; or (b) counterfeitdocumentation or packaging that is copyrighted.

Criminal penalties are a fine of up to $250,000, orimprisonment not exceeding 5 years, or both. In addition,a court may order forfeiture and destruction or other dis-position of the labels, the articles to which they relate, andany devices used to make the labels.

Any copyright owner injured or threatened withinjury may bring a federal civil action within 3 years ofdiscovering the violation for the following civil remedies:

• One or more temporary or permanent injunctions;

• impoundment of any article that the court has reason-able ground to believe was involved in the violation;

• reasonable attorneys fees and costs;

• actual damages calculated by multiplying the retailvalue of the articles to which the labels, documentationor packaging relate by the number of those articles;

• any additional profits of the violator;

• instead of actual damages and profits, at the injuredparty’s election, statutory damages for each violationfrom $2,500 to $25,000; and

• up to three times the damages, in the court’s discre-tion, for a subsequent violation within 3 years of afinal judgment for a prior violation.

HIGHLIGHTS OF THE AMERICA INVENTS ACT

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What is a Patent?

Priority.

On March 16, 2013, the current “first to invent”system will change to a “first inventor to file”system. Instead of having interference proceed-ings to determine the first inventor, a “deriva-tion proceeding” will establish whether an ear-lier filer derived the invention from a later filerwithout authorization. In an infringementaction, a defense will be the commercial use ofthe invention at least 1 year before the earlier of(1) the plaintiff’s effective filing date, or (2) thedate the plaintiff first publicly disclosed theinvention within the year before its filing date.

Signatures.

A patent application normally must be filed in the names of inventors and must include anoath or a declaration signed by all individualinventors. But starting on September 16, 2012,the application may be filed by an assigneeand an assignment may include the statementsrequired to be made in the oath or declaration.If the inventors are unwilling to sign theassignment, or are unavailable, a substitutestatement by one entitled to the assignment,may be filed instead of the oath or declaration.

Prioritized Examination.

Although it normally takes several years ormore for a utility patent to issue, expeditedexamination sometimes can be requested for asubstantial additional fee. “Small entities” canget reductions in this and other fees.

Ineligible Subject Matter.No patents can be issued for (1) tax strategies,or (2) human organisms.

Validity Challenges.A third party may challenge the validity of a patent

• During examination, by submitting relevantprior art as to novelty or non-obviousness.

• Within 9 months from grant in a “post-grantreview” (PGR) challenging validity on a widevariety of bases. This starts as to covered busi-ness methods on September 16, 2012 and as toall other inventions on March 16, 2013.

• After 9 months from grant in an “inter-partesreview” (IPR) challenging validity only on thebasis of published prior art. This starts onSeptember 16, 2012.

PGR and IPR challenges are filed in the PatentTrial and Appeal Board (PTAB) which has 1 yearto decide, extendable to 18 months for good cause.Appeals go only to the Court of Appeals for theFederal Circuit (CAFC). Any pending federal courtactions may be stayed during PTAB and CAFCproceedings. Any ground for invalidity that wasraised, or could reasonably have been raised, in aPTAB proceeding cannot be raised later.

Corrections.At any time after grant, the patent owner itselfmay seek a “supplemental examination” askingthe Patent Office to consider, reconsider or cor-rect information possibly affecting the enforce-ability of the patent.

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What is a patent?A patent is granted only by the federal government. It letsthe patentee exclude others from making, using, offeringfor sale or selling an invention within the U.S. or import-ing it into the U.S. It does not carry the affirmative right to make, use, sell or offer an item covered by the patentbecause one or more other patents may cover aspects ofthe same item.

You can obtain a utility patent (also called a functionalor mechanical patent) for the following statutory classes ofnew and useful inventions:

• processes (a chemical, mechanical or electrical proce-dure, such as a method for refining petroleum; or a business method of processing data or makingcalculations, and any technique used in athletics,instruction or personal skills, if it uses computerassisted implementation or it physically transformsan article or otherwise produces a useful, concreteand tangible result and is not directed to a law ofnature, physical phenomena or an abstract idea);

• machines (mechanisms with moving or interactiveparts, such as a motor or computer system);

• articles of manufacture (man-made products, such asa hand tool); and

• compositions of matter (chemical compounds, combi-nations or mixtures, such as a plastic).

In addition, you can obtain a design patent for a neworiginal and ornamental design for an article of manufac-ture, and a plant patent for a new variety of seed or plantor any of its parts.

Whether an invention is made by a flash of genius orpainstaking research, to be patentable it also must meet allof the following hard-to-satisfy criteria:

• ”novelty” in that it was neither previously known toothers (except for confidential information known toco-researchers under a joint research agreement), norin public use in the U.S., nor patented or described ina printed publication anywhere, in each case morethan 1 year before the U.S. application’s filing date;

• ”non-obviousness” to a person having ordinary skillin the relevant art; and

• ”utility” in that it has a useful purpose, actuallyworks, and is not frivolous or immoral (althoughworking models generally are no longer required toprovide this attribute, except for inventions claimed to be perpetual motion devices).

Unpatented trade secrets. Federal and state law protects inventions and know-howthat have been kept secret against unauthorized use ordisclosure by anyone who is under an obligation of confi-dentiality to the owner. But this protection requires you totake measures to maintain the information’s secrecy.Moreover, it does not prevent independent developmentor apply to parties learning the information without anyconfidentiality obligation. Of course, trade secret protec-tion ends for the aspects of an invention that are disclosedin a patent.

Patent application procedure. Since a patent application usually is not made public until18 months after the earliest filing date, you do not imme-diately destroy trade secret rights merely by filing a patentapplication. And unless a patentable invention can be keptsecret for many years (like the Coca-Cola soft drink formu-la), it is desirable to file a patent application withoutundue delay because a patent:

• protects against even innocent infringements, not justinfringements by those breaching a confidentialityobligation to the owner;

• is the only way to protect an invention after it is nolonger secret; and

• is barred if, among other things, more than one yearbefore the filing date of the application, (a) the inven-tion was described in a patent application publishedin English, or described in a printed publication,anywhere in the world, (b) the invention was inpublic use or on sale in the U.S., or (c) the inventorfiled a foreign application for a patent which wasgranted before the filing date of the U.S. application.

A preliminary patentability search usually is indispens-able in order to find out if the invention is novel. It alsoaids the registered patent attorney or agent in properlydrafting the patent application, especially since any personat any time on a confidential basis may cause pertinentprior art to be made part of the official file of the patent.

You can get a quick filing date using an abbreviatedprovisional application that describes the invention suffi-ciently to enable someone to practice it and that disclosesthe best mode for the invention’s use. A complete non-provisional application, with the priority of the provisionalapplication, must be filed within the following year settingforth the full patent claims.

As an alternative, you can have a “statutory inventionregistration” published without examination. This giveslimited rights to applicants such as a federal governmentagencies that merely wish to establish defensive rights toan invention.

Notice of patent rights. When you have filed a patent application, you may use theinformal legend “patent applied for” or “patent pending”on articles or processes and in advertisements for them.

After a patent has been issued, you may use thefollowing patent notice: the word “patent” or “pat.” andeither the number of the patent or a direction to a freewebsite showing it. This notice is not mandatory, but itmay be necessary to get damages from an infringer.

On the other hand, use of an improper patent notice ispunishable by a fine which only the U.S. Government mayseek or by compensatory damages which a competitormay seek.

How long patent rights last. A utility patent or plant patent generally lasts 20 yearsfrom the date of filing the patent application. If priority of an earlier application is claimed, the 20-year term ismeasured from the date of the earlier application. Allpatents in force on June 8, 1995, or issued on applicationsfiled before that date, automatically have a term that is the greater of 20 years from filing or 17 years from grant.The term can expire earlier if you do not pay specifiedmaintenance fees 31⁄2 years, 71⁄2 years and 111⁄2 years after the grant (or at least within the 6-month grace period). You can get the term extended for up to five years forcertain patents if issuance is delayed for various reasons,such as delayed action by the Patent and TrademarkOffice, interferences, secrecy orders, successful appeals or pre-market regulatory review.

A design patent lasts 14 years from the date ofissuance. You cannot renew a patent, and since theinvention is publicly disclosed when the patent is issued,anyone can make, use, sell or offer in the U.S. devices orprocesses embodying the formerly patented inventionafter the patent has expired or been declared invalid.

Who owns a patent. Before March 16, 2013, if you are the first to conceive apatentable invention, you normally own it if you work withreasonable diligence to reduce it to practice by making aworking device embodying the invention or by filing a U.S.patent application. After that date, you must be the firstinventor to file a provisional or complete patent application.

Small businesses and nonprofit organizations can elect to own inventions made under government grants,and Federal agencies may grant exclusive licenses topromote investment in federally owned inventions, butthe government retains a non-exclusive royalty-free license and gives U.S. industry a preference in the use of such inventions. All official patent fees are reduced by half for independent individual inventors, smallbusinesses and nonprofit organizations.

What constitutes a patent infringement. If a patent is valid and you have not misused it orengaged in inequitable or unlawful conduct with respectto it, the patent protects against the unauthorized manu-facture, use, sale or offer in the U.S. of all devices orprocesses (except for pure medical or surgical procedures)embodying the invention or of components intended forassembly abroad into such devices, whether they werecopied from authorized devices or resulted from anindependent act of invention. It also protects against theimportation, use or sale in the U.S. of a product madefrom a patented process without authorization, althoughthere are numerous limitations to protect innocentinfringers. But a prior use defense permits you to continueto use a software-driven business method (and afterMarch 16, 2013, any subject matter) if in good faith youactually reduced it to practice at least one year before theeffective filing date of someone else’s patent applicationfor the same method and if you commercially used it before that date.

A design patent is infringed if the two designswould appear to be substantially the same to the ordi-nary observer.

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Remedies for trade secret or patentinfringement. The federal law makes it a crime to steal trade secrets.Criminal penalties for economic espionage to benefit aforeign entity are a fine of not more than $500,000 forindividuals and $10,000,000 for organizations, or impri-sonment not exceeding 15 years, or both; and for privatetrade secret theft, a fine of up to $500,000 for individualsand $5,000,000 for organizations, or 10 years, or both. In addition, a court may order seizure, forfeiture anddisposition of any property constituting, used in orderived from the violation.

There are no criminal penalties for patent infringe-ment. The following civil remedies are available under thefederal law:

• an injunction against future infringement; and

• compensatory damages, in no event less than a reason-able royalty, which may be trebled (and additionallyfor infringing a design patent, the infringer’s profits,but not less than $250).

However, you can recover damages only if either theinfringer was notified of the infringement and continuedto infringe, or the patented article bore a patent notice.

International patent protection. You can patent inventions only on a country-by-countybasis, although a centralized filing procedure is availableunder the Patent Cooperation Treaty or through theEuropean Patent Convention. This can be very expensive,

especially since the granted centralized patent must thenbe filed in each individual country in its official language.Many countries charge patent maintenance taxes thatincrease annually to high levels and require either the localworking of a patent or the compulsory licensing of it.

You have one year from the public disclosure of theinvention in which to file a U.S. patent application. But ifyou intend to seek patent protection in other countries, itis essential to file in the U.S. before public disclosure.Under U.S. law, you cannot file a foreign patent applica-tion until 6 months after the filing date of your U.S. patentapplication unless you have obtained a license for foreignfiling from the Commissioner of Patent and Trademarks,who can refuse the license and order the invention to bekept secret for national security reasons.

A U.S. patent owner may start an International TradeCommission expedited proceeding to exclude infringingproducts from the U.S. if a domestic industry exists or isbeing established.

Utility model protection.In a number of non-U.S. countries, you can protect as autility model (also called a "petty patent" or "innovationpatent") an incremental invention that might not qualifyfor a utility patent. This protection generally is only for 7to 10 years, but you can get it much faster and less expen-sively because there generally is little or no examinationbefore issuance, and the infringement remedies are thesame as for a utility patent although the term of utilitymodel protection is shorter.

Trademark

Patent Copyright

Uncommon packaging which bears notices ofpatent, trademark and copyright protection.

Trademarks Copyrights Patents

Summary Table

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Commercial identifications of sourcesuch as words, designs, slogans,symbols, trade dress.

Original literary and artistic expres-sions such as books, paintings, music,records, plays, movies, software.

New and useful inventions andconfigurations of useful articles.

Nature

Protects against creating a likelihood of confusion; ordiluting a famous mark.

Protects against unauthorized use orcopying.

Excludes others from making, using,offering for sale or selling the inven-tion in the U.S. or by importationinto the U.S.

Scope

Protects owners and public fromunfair competition.

Encourages and rewards creativeexpression.

Encourages and rewards innovation.

Purpose

Use mark in commerce or apply forfederal registration.

Create work and fix it in tangibleform. Registration confirms rights.

Invent first and apply for federalgrant. (After March 16, 2013 be first-inventor-to-file.)

How to ObtainRights

Nationwide priority rights; possiblyconclusive evidence of validity andownership; U.S. Customs and BorderProtection recordation; increased anti-counterfeiting remedies.

Statutory damages and attorney’s fees; prima facie evidence of validity;U.S. Customs and Border Protectionrecordation.

Protection for non-secret inventions. May complement know-how that is a trade secret.

PrincipalAdvantages ofRegistration

(1) Bona fide intention to use incommerce followed by actual use;(2) Non-U.S. owner’s country of origin registration or application filedwithin 6 months prior to U.S. applica-tion, or extension to the U.S. of inter-national registration, plus bona fideintention to use in commerce; or (3) Actual use in commerce.

Originality. Novelty, non-obviousness, utility. Basis forRegistration

Optional. “TM” or “SM” if unregis-tered; “®” or “Reg. U.S. Pat. & Tm.Off.” if registered.

Optional after March 1, 1989. © or“Copyright” with year of first publication and name of owner.

Optional. “Patent applied for” or“Pat. Pending” after application;“Patent” or “Pat.” plus registrationnumber, or website reference, aftergrant.

NoticeRequirements

As long as used; registrations must be maintained by filing use declara-tion before the 6th and each 10thanniversary and by renewing beforeeach 10th anniversary (plus 6 monthgrace period for each filing).

Creations after January 1, 1978:author’s lifetime plus 70 years, or ifanonymous or work made for hire,earlier of 95 years from publication or120 years from creation.

20 years from filing date (or some-times 17 years from grant) for utilityor plant patents, subject to periodicmaintenance fees; 14 years from reg-istration for design patents.

Term of Rights

Registration optional. Registration required for U.S. nation-als; optional for foreign nationals.

Issued patent required.InfringementPrerequisites

Likelihood of confusion, mistake ordeception as to source or sponsorship;or dilution by blurring or tarnishment.

Unauthorized use or copying (accessplus substantial similarity).

Unauthorized manufacture, use,sale, or offer for sale of devices orprocesses embodying the invention.

InfringementStandard

(1) Individual countries or regions; (2) Community Trade Mark registra-tion; or (3) Madrid Protocol central-ized filing.

Usually protected without registrationthrough international treaties.

Usually granted on a country-by-country basis with centralized fil-ing available under the PatentCooperation Treaty or EuropeanPatent Convention.

InternationalProtection

This summary is highly simplified and should only be used for a general comparison. • © 2012 Cowan, Liebowitz & Latman, P.C.

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