There are Dangers Lurking in the “Internet of Things!”

There are dangers lurking in the “Internet of Things!”

In the“The Internet of Things,” everything “from meat thermometers monitored with a smartphone to Wi-Fi-equipped dog collars, devices and services in homes and businesses are increasingly being connected to the Internet.” “Devices on the market or the drawing board include smart door locks, toothbrushes, wristwatches, fitness trackers, smoke detectors, surveillance cameras, ovens, toys and robots.” See http://on.wsj.com/1dGJNXC In this world of the “Internet of Things” you’d enter a hotel room where the lights, the stereo, and the window shade adjust to your preferences before you even walk in, your home air conditioning system will start-up when you leave your office at night, your dog’s collar will notify you if your dog leaves your yard, your in-ground sprinkler system will monitor the weather forecast so as not to turn on if it rains and your refrigerator will remind you when you are out of beer.

The data generated by such devices might become a privacy threat, for example, your Nest thermostat has a feature called “Auto-Away” that learns when you’re not home.

More importantly, these devices can be doorways for hackers to hack into your computer network. See http://nyti.ms/1e6rDSe As reported in the New York Times, by infecting with malware the online menu of a Chinese restaurant that was popular with employees, attackers got a foothold into an oil company’s vast computer network. Hackers got access to Target’s customers’ credit card records through its heating and cooling system. Researchers testing computer security got into Google’s Australia headquarters’ network through its building management vendor. Researchers at universities in Canada and Israel were able to hack the Philips Hue smart light bulbs in an office building and by compromising a single light bulb were able to infect a large number of nearby lights within minutes from a car 229 feet away. Philips subsequently fixed the vulnerability with a patch. See https://nyti.ms/2jErU5K

In the most famous example of an Internet of Things hack, web sites, including those of Twitter, Netflix, Spotify, Airbnb, Reddit, Etsy, SoundCloud and The New York Times, were brought down last October via an attack on a company called Dyn, located in New Hampshire, that managed the DNS address servers for those web sites. Those servers match domain names to their associated IP addresses so that when you type a domain name into your web browser’s address bar, your computer contacts that DNS server and asks what IP address is associated with that domain name. In that attack, those web site servers were attacked through a massive distributed denial of service attack utilizing hundreds of thousands of internet-connected devices like cameras, baby monitors and home routers that had been infected without their owners’ knowledge and software that allowed the hacker to command them to flood a target with overwhelming traffic. See https://nyti.ms/2klxPKG

In the Internet of Things, your air conditioner shouldn’t be talking to your point of sale device. Corporations should set up their networks so that access to sensitive data is sealed off from third-party systems and remotely monitored with advanced passwords and technology that can identify anomalous traffic.

At home you should establish and set strong passwords for all of your devices, regularly update your software for your smart home devices and set up separate Wi-Fi networks for your computing devices, i.e., your computer, tablet and smart phone and those other devices like your thermostat, refrigerator and bathroom scale.

Remember, Edward Snowden was a third-party contractor working for Booz Allen Hamilton inside the NSA’s Hawaii regional operations center.

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INTENT-TO-USE YOUR MARK MUST BE “BONA FIDE”

You can file an application to register a trademark in the United States (1) based on a corresponding foreign application or registration to register that same mark for the same goods, (2) your current use of your mark on the goods or services identified in your trademark application which, in the case of goods, must be sold in interstate or foreign commerce and in the case of services must be rendered in commerce that may be regulated by Congress, although offering services via the Internet has been held to constitute use in commerce, or (3) based on your bona fide intent to use your mark on the goods or services identified in your application in the future.

The benefit of filing an application on the latter basis is that it allows you to reserve rights in a trademark before you use that mark in connection with a product or service and, once that mark is in use and you obtain your federal registration, your trademark rights would be deemed to start, not on the date that you first used that mark in connection with that product or service, but rather on the date that you filed your trademark application based on your intent-to-use your mark in the future. However, that application must be based on your “bona fide” intent to use that mark in the future. “Bona Fide” is defined in Merriam-Webster’s dictionary as “made in good faith without fraud or deceit.” See https://www.merriam-webster.com/dictionary/bona%20fide

“Bona fide” intent is important as an Opposer can challenge the registration of your application before the Patent Office’s Trademark Trial and Appeal Board if it can prove that your intent was not “bona fide.” To prove that your intent is “bona fide” you should have documentary evidence of that intent. See M.Z. Berger & Co. v. Swatch AG, 787 F.3d 1368 (Fed. Cir. 2015). So, at the time that you file an intent-to-use trademark application you should have in your possession a business plan, marketing plan, internal correspondence discussing the prospective trademark and the goods and services in connection with which it is intended to be used; if you have simultaneously applied for a domain name, corporate name or LLC name identical to your proposed mark, that is helpful as is the existence of drawings or product prototypes bearing the mark. If you have a proposed brand in mind, you probably have had some prior discussions concerning that name which may be written down or found on an email somewhere. It is important to retain evidence of those disucssions or plans in the event that your bona fides are challenged.

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Maintaining Your Safe Harbor Under the DMCA

The Digital Millennium Copyright Act (“DMCA”) provides safe harbors from copyright infringement liability for online service providers. In order to qualify for safe harbor protection, certain kinds of service providers—for example, those that allow users to post or store material on their systems, and search engines, directories, and other information location tools— must designate an agent to receive notifications of claimed copyright infringement. To designate an agent, a service provider must do two things: (1) make certain contact information for the agent available to the public on its website; and (2) provide the same information to the Copyright Office, which maintains a centralized online directory of designated agent contact information for public use. The service provider must also ensure that this information is up to date.

In December 2016, the Office introduced an online registration system and electronically generated directory to replace the Office’s old paper-based system and directory. Accordingly, the Office no longer accepts paper designations. To designate an agent, a service provider must register with and use the Office’s online system. All relevant sites should be registered with the Copyright Office, i.e., all sites that allow users to post materials thereon!

Transition period: Any service provider that has designated an agent with the Office prior to December 1, 2016, in order to maintain an active designation with the Office, must submit a new designation electronically using the online registration system by December 31, 2017. Any designation not made through the online registration system will expire and become invalid after December 31, 2017. Until then, the Copyright Office will maintain two directories of designated agents: the directory consisting of paper designations made pursuant to the Office’s prior interim regulations which were in effect between November 3, 1998 and November 30, 2016 (the “old directory”), and the directory consisting of designations made electronically through the online registration system (the “new directory”). During the transition period, a compliant designation in either the old directory or the new directory will satisfy the service provider’s obligation under section 512(c)(2) to designate an agent with the Copyright Office. During the transition period, to search for a service provider’s most up-to-date designation, begin by using the new directory. The old directory should only be consulted if a service provider has not yet designated an agent in the new directory.

See https://www.copyright.gov/dmca-directory/

You Must Designate An Agent with the Copyright Office Electronically As Provided Above & On Your Website As Well.

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YOU SHOULD POLICE YOUR TRADEMARKS!

You should police your trademarks! As I noted in http://www.chicagotrademarkattorney.net/acquiring-and-maintaining-a-trademark/ prior to selecting a trademark for either goods or services or, and you need to consider this, purchasing a domain name for those goods or services as that domain name is likely to incorporate your trademark, you should conduct a trademark search to make sure that that mark is available for your use not only as a domain name but also to identify your goods or services. That search should not only include the specific goods or services that you intend to use your mark on or in connection with but any related goods or services or potential goods or services that you may wish to use that mark on in the future. For example, you would want to know if a name is available for use on comic books, movies and television shows based on those comic books as well as on action figures based on the characters found in those books, movies and television shows.

Assuming that your search discloses that that name is available, you should register it with the U.S. Patent and Trademark Office. The advantages of federal registration are that it is prima facie evidence of the validity of that registered mark, the registrant’s ownership of that mark, and of its exclusive right to use that mark throughout the U.S. as well as gives the registrant the right to sue for infringement in federal court. Also, anyone seeking to register a similar mark in the U.S. will find your trademark application or registration in the records of the U.S. Patent and Trademark Office, which should encourage them not to adopt and use a similar mark for similar goods or services.

As to that latter point, sometimes a party may go ahead and seek to register a similar trademark or service mark for related goods to your own even if your mark appears in the Patent Office’s records. Hopefully, that Office will decide that the earlier filing of your own similar trademark bars the registration of that later filed mark and the subsequent filer of the similar mark gives up on its similar mark and decides to register a different mark that is unlikely to be confused with your mark. But sometimes the U.S. Patent and Trademark Office Trademark Examiner may conclude that that subsequent filer’s mark is not confusingly similar to your mark and allow it to proceed to publication. How would you know about this? One way is to review the Patent Office Trademark Official Gazette published electronically by that Office every Tuesday. This document may be found at https://www.uspto.gov/learning-and-resources/official-gazette/trademark-official-gazette-tmog Note that I review that Gazette weekly for any client marks that are the subject of either pending applications or registrations before that Office and that I do not charge for that service. An alternative means of finding similar marks to your own that may have been published by the Office and may cause confusion among your customers is to hire a firm that watches the records of that Office for filed and published marks. Corsearch, Corporation Service Company and Thomson Compumark are well-known companies that provide this service.

An easy way to potentially determine if another business is using your mark even if they haven’t filed an application to register it is to search the term at issue using the Google search engine, click on “News” and click on “Create Alert” at the bottom of the page. Once this is done, Google will send you an email every day alerting you of any news items involving that term that its search engine generates.

Two final points to remember; (1) there is a significant advantage to filing a trademark application in the U.S. based on your intent-to-use your mark in the U.S. rather than waiting until you are already marketing your goods and services in the U.S. as, assuming that you commence the use of your trademark during the life of your intent-to-use application, your trademark rights will start from the date that you filed your trademark application in the U.S. Patent & Trademark Office rather than the date that you first started using that mark in connection with the marketing of your goods and services and, therefore, even though that new product is merely a glint in your eye, by filing an application to register its name with the Patent Office, you will as of that date obtain trademark rights in it and (2) you need to be consistent in policing your mark. Every time you find the same or confusingly similar mark either filed for used for your goods or services or related goods or services, you need to object to that use.

The reason for this is that the courts have held that in the case of a weak mark, competitors may come closer to a particular owner’s identical mark than would be the case with a strong mark without violating that owner’s rights. See SURE-FIT PRODUCTS CO. V. SALTZSON DRAPERY CO., 117 USPQ 295 (C.C.P.A. 1958). If there are many similar third-party marks out there, then your mark will be deemed weak and the courts will likely allow other similar marks to coexist with your own. However, if you’re the first one to use that mark and object each time another party seeks to or uses a similar mark, then your mark will stand alone both in the records of the Patent Office and in the marketplace, it will be considered a strong mark and the courts will assist you in blocking any infringers of it as long as you have not abandoned your use of it. Policing a mark does not mean that you must sue every potential infringer that pops up. If you have a good case of likely confusion against each potential infringer and you are the senior user of the mark at issue, I have found that a strongly worded demand letter will often make the infringer go away. You may have to be willing to compromise; e.g., give the infringer a reasonable period, usually a few months, to cease its use, allow it to continue that use but in a manner that makes confusion unlikely, e.g. limiting their sales to a different marketplace or to different consumers, or even granting them a license to continue to use your mark if they assign their ownership in the mark to you in exchange for them paying a royalty.

Pursuing such a campaign may not be cheap in the short-run but by continually asserting your trademark rights in your brand against the world, that brand will grow as a property and should someone seek to acquire it, assuming that you wish to sell it, the financial rewards can be quite remunerative.

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DUE DILIGENCE BEFORE BRINGING A NEW PRODUCT TO MARKET

Before bringing a new product to market, a certain amount of due diligence is recommended.

For example, before marketing a product or service; whether a financial product, a toy, a new restaurant, mobile phone app or anything else, it is recommended that you conduct a search of the records of the U.S. Patent and Trademark Office to make sure that no one has registered that product or service name or mark or a confusingly similar mark for the same or similar products or services. See http://www.uspto.gov/trademarks-application-process/search-trademark-database

If a logo is a critical part of that mark, the U.S. Patent and Trademark Office database should be searched for similar designs which may be claimed by a potential Plaintiff as a basis for an assertion that in commencing the use of your design you have infringed its design.

Google’s search engine may be utilized as well as registration is not a prerequisite for asserting trademark rights in the U.S.

It is, of course, recommended that you secure the services of experienced trademark counsel and have experienced trademark counsel conduct that search as experienced trademark counsel should be familiar with the relevant case law and, therefore, be able to determine the likelihood that a court would consider your proposed name to be a violation of another party’s rights.

If you have an invention, whether it be a Process, namely a mode of treatment of certain materials to produce a given result, a Machine, namely a concrete thing, consisting of parts, or of certain devices and combination of devices intended to perform some function and produce a certain effect or result, an article of Manufacture, namely an article produced from raw or prepared materials by giving to these materials new forms, qualities, properties, or combinations, whether by hand labor or by machinery or a Composition of matter, namely compositions of two or more substances and all composite articles, whether they be the results of chemical union, or of mechanical mixture, or whether they be gases, fluids, powders or solids, then you could have patentable subject matter (See https://www.uspto.gov/web/offices/pac/mpep/s2106.html) and should, again, conduct a search to ensure that that subject matter of your invention does not involve the making, using, selling, or offering to sell another’s invention which is the subject of prior and currently active patent protection.

Again, as with trademarks, there are databases that are available to begin that search. For example, you can search the U.S. Patent and Trademark Office’s database for patents assigned to your competitors or patents with titles that suggest the subject matter of your invention. You can also search https://scholar.google.com/ for relevant patents to your invention.

However, note here that I do not practice Patent Law and therefore recommend that you secure the services of an experienced patent attorney who can conduct that search and who would be familiar with the relevant case law as to what constitutes patentable subject matter as well as, through his or her knowledge of the relevant technology, could determine whether your invention would be a violation of another party’s rights.

If your invention constitutes patentable subject matter or your brand name is available for protection in the U.S. Patent & Trademark Office, or if, you are offering your product or services to customers outside the United States, available for protection in the relevant trademark and patent offices of those other countries in which you are doing business I strongly recommend that you protect that subject matter or name with that Office and offices.

Copyrights are another story, however. The Stanford University Libraries have put out a handy little guide on searching the records of the Copyright Office. See http://fairuse.stanford.edu/overview/copyright-research/searching-records/ Herein, lies the due diligence problem. The Copyright Office database will provide you with an often vague title of a work, the copyright claimant, the date the Copyright Registration was effective, the date of creation of the copyrighted article, the date of publication of the article, i.e., the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending and the name of the author but it won’t provide you with an image of what was deposited with the application for Copyright Registration. Without that image, there is no way to determine if what you have created is a copy of a protected work. While Copyright Infringement requires not just that your work and the copyrighted work be substantially similar but that you had access to that work in creating your own, i.e., you copied the other party’s work, there may be circumstances where your lack of access to the similar work may not protect you from an infringement claim. See, for example, Selle v. Gibb, 741 F.2d 896, 901 (1984) where the federal Seventh Circuit Court of Appeals wrote, “If, however, the plaintiff does not have direct evidence of access, then an inference of access may still be established circumstantially by proof of similarity which is so striking that the possibilities of independent creation, coincidence and prior common source are, as a practical matter, precluded. If the plaintiff presents evidence of striking similarity sufficient to raise an inference of access, then copying is presumably proved simultaneously, although the fourth element (substantial similarity) still requires proof that the defendant copied a substantial amount of the complaining work.”

Herein lies the due diligence problem. Since everything from advertisements to maps to bumper stickers to dolls to toys to wall-covering designs to games to greeting cards to jewelry designs to posters to photographs to sculptures to architectural plans to computer software and any graphics generated thereby may be the subject of copyright, how can you tell if your product is not a copy of something that’s already out there. See http://www.copyright.gov/circs/circ40.pdf You can search the relevant marketplace, either in its bricks and mortar form or its on-line form but then you can only make an educated guess that any similar product out there is the subject of a copyright registration. Of course, if the brand name of the similar product is identical to its title in the Copyright Office database and the ownership of the product is the same both in that database and on the product’s packaging I would be careful, as that would be a good sign that your product may be the subject of someone’s copyright claim and I would make sure that the products were not substantially similar. Again, here I would recommend that an experienced copyright lawyer compare the two products and assess the validity of the potential copyright claim. But all you would have is an educated guess. To view the actual game, toy, photograph, software or jewelry design that is the subject of that copyright claim, your request for copies of deposits should be submitted to the Records Research and Certification Section. Note that the Copyright Office does not retain all works deposited for copyright registration. Also note that that Office will provide certified or uncertified copies of published or unpublished works deposited in connection with a copyright registration and held in the Office’s custody only when one of the following three conditions has been met:

(1) Written authorization is received from the copyright claimant of record or the owner of any of the exclusive rights in the copyright, as long as this ownership can be demonstrated by written documentation of the transfer of ownership.

(2) The Copyright Office Litigation Statement Form is completed and received from an attorney or authorized representative in connection with litigation, actual or prospective, involving the copyrighted work. The following information must be included in such a request: (a) the names of all parties involved and the nature of the controversy, and (b) the name of the court in which the actual case is pending. In the case of a prospective proceeding, the requestor must give a full statement of the facts of controversy in which the copyrighted work is involved, attach any letter or other document that supports the claim that litigation may be instituted, and make satisfactory assurance that the requested reproduction will be used only in connection with the specified litigation.

(3) A court order is issued for a reproduction of a deposited article, facsimile, or identifying portion of a work that is the subject of litigation in its jurisdiction. The order must be issued by a court having jurisdiction over a case in which the copy is to be submitted as evidence. A request for copies of works deposited in connection
with a copyright claim should be accompanied by whatever material is necessary to show that one of the three conditions given above has been met.

So while due diligence is always recommended, conducting the necessary due diligence may not be easy or cheap.

 

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TOMORROWLAND

Tomorrowland is the name of a money-losing 2015 science-fiction adventure film starring George Clooney, the final episode of the fourth season of Mad Men in which Don Draper takes his children and his Secretary, Megan, on a vacation to Southern California and, most famously, is one of the themed lands at Disney’s theme parks. The original Disneyland Tomorrowland built in 1955 gave visitors a view of the National Interstate System that was to be built in the future and in 1957 the Monsanto House of the Future was opened, a plastic house with four wings cantilevered from a central plinth featuring conveniences such as picture phones and television remote controls, and it introduced many people to their first microwave oven. https://en.wikipedia.org/w/index.php?title=Tomorrowland&oldid=735338724

And today’s Tomorrowland…I opened the Wall Street Journal a couple of weeks ago to see two articles facing each other on the front page of the Technology Section. On the left side was an article describing how China was replacing workers with robots with small motor skills and on the right side was an article describing Ford Motor Company’s push into building autonomous cars.

As an example of robots with small motor skills, Butchery, was long considered the sort of skill that machines would struggle to develop, because of the need for careful hand-eye co-ordination and the manipulation of non-uniform slabs of meat. But robots cut the fat off meat much more efficiently than humans, thanks to the use of cheaper and more responsive sensors. “It’s becoming economically feasible to use machines to do this because you save another 3 or 4 per cent of the meat — and that’s worth a lot on a production line, where you can move quickly.” See http://on.ft.com/1Uj5NOp Or see this article from last May 25th in the BBC, “Apple and Samsung supplier Foxconn has reportedly replaced 60,000 factory workers with robots.” See http://www.bbc.com/news/technology-36376966

As for lawyers, a 2005 study compared a human review team against an automated document assessment system to search for relevant documents to respond to discovery in litigation. While the humans identified only 51% of relevant documents, the automated system identified more than 95%. Back then, a senior attorney had to be involved in training the system. The senior attorney would have to review and code hundreds or thousands of random documents until the system stabilized. Today, however, through a process known as “continuous active learning,” the review team can simply begin reviewing documents and the system will continuously learn from coding calls and improve its results. See http://www.lawtechnologytoday.org/2015/11/history-technology-assisted-review/ A big part of the training of first-year lawyers in large law firms was once pouring through boxes of corporate documents, learning their client’s or the Defendant’s business, as well as evidentiary concepts such as relevancy as they learned what documents to pull and what not to pull. Now those first-year associates largely watch as automation has taken over that part of their job.

And call centers;  the call-centre explosion has been a colossal boon for Filipinos who speak good English. With so many employers to choose from, they can demand gyms, cafés and computer-games rooms, as well as higher pay. Experienced workers can often find managerial jobs. And though the night shift is hard, it is far better than being a maid in Saudi Arabia. Much of the call-handling and data-processing work sent overseas is basic and repetitive, says Pat Geary of Blue Prism, a British technology firm. When somebody challenges a gas-meter reading or asks to move an old phone number to a new SIM card, many databases must be updated, often by tediously cutting and pasting from one to another. Such routine tasks can often be done better by a machine. Blue Prism makes software “robots” that carry out such repetitive tasks just as a person would do them, without requiring a change to underlying IT systems—but much faster and more cheaply. The firm has contracts with more than 100 outfits. Increasingly, Western companies prod customers to get in touch via e-mail or online chat. Software robots can often handle these inquiries. The cleverest systems, such as the one Celaton, another British firm, has built for Virgin Trains, refer the most complex questions to human operators and learn from the responses. The longer they run, the better they get. Software is also making call-centre workers more efficient. It can quickly retrieve and display customer data on their screens, reducing the need to transfer callers to other departments. Software robots are only going to become faster, cleverer and cheaper. Sarah Burnett of Everest, a research firm, predicts that the most basic jobs will vanish as a result. Call-centre workers will still be needed, not for repetitive tasks, but to coax customers into buying other products and services. That is a harder job, demanding better language skills. So automation might mean fewer jobs, or at least less growth, in India and the Philippines, but more jobs in America and Europe. See http://econ.st/1mga7Q6

And truck drivers; there are 3.5 million truck drivers in America. Autonomous trucks will obviously replace drivers, an estimated 3.5 million of them, but they will make the business that cater to drivers obsolete, too. Those 3.5 million truck drivers driving all over the country stop regularly to eat, drink, rest, and sleep. Entire businesses have been built around serving their wants and needs. Think restaurants and motels as just two examples. So now we’re talking about millions more whose employment depends on the employment of truck drivers. But we still can’t even stop there. Those working in these restaurants and motels along truck-driving routes are also consumers within their own local economies. Think about what a server spends her paycheck and tips on in her own community, and what a motel maid spends from her earnings into the same community. That spending creates other paychecks in turn. So now we’re not only talking about millions more who depend on those who depend on truck drivers, but we’re also talking about entire small town communities full of people who depend on all of the above in more rural areas. With any amount of reduced consumer spending, these local economies will shrink. See http://gizmodo.com/self-driving-trucks-are-going-to-kill-jobs-and-not-jus-1705921308 Otto, a San Francisco start-up is developing autonomous big rigs and is looking for 1,000 truckers to volunteer to have self-driving kits installed on their cabs, at no cost, to help fine-tune the technology. See http://www.cbc.ca/1.3585523 and there is even a proposal for an autonomous vehicle corridor from Mexico to Canada. See http://www.cbc.ca/1.3086215 Last April 7th six convoys of self-driving trucks traveled from as far away as Sweden and Southern Germany to the Dutch port of Rotterdam utilizing “Truck platooning.” “Truck platooning” involves two or three trucks that autonomously drive in convoy and are connected via wireless, with the leading truck determining route and speed. The advantage of truck platooning was that you had trucks driving at a consistent speed, which would help traffic flow on heavily congested roads in Europe. See https://www.theguardian.com/technology/2016/apr/07/convoy-self-driving-trucks-completes-first-european-cross-border-trip

And, as for the self-driving car, “In the future, you’ll simply reach for your smartphone or another connected device and call for a self-driving car whenever you need it. Rather than spending 90 percent or more of their time parked, cars will see much higher utilization rates. That change alone would unleash a real-estate revolution in cities. Vast stretches of space now earmarked for parking would become available for other uses. To be sure, self-driving cars would still need to be stored somewhere when not in use, but there would be no need for random egress; the cars could be packed end-to-end. If you call for a car, and there isn’t already one on the road close to your location, you’ll simply get the next vehicle in line…. If the sharing model does prevail, higher utilization for each car would, of course, mean fewer vehicles relative to the population. Environmentalists and urban planners would likely be overjoyed; automobile manufacturers not so much. Beyond the prospect of fewer cars per capita, there could also be a significant threat to luxury automotive brands. If you don’t own the car and will use it for only a single trip, you have little reason to care what make or model it is. Cars could cease to be status items, and the automobile market might well become commoditized.” See http://gizmodo.com/the-rise-of-automated-cars-will-thousands-of-jobs-and-n-1702689348 On August 18th Bloomberg reported, “Starting later this month, Uber will allow customers in downtown Pittsburgh to summon self-driving cars from their phones, crossing an important milestone that no automotive or technology company has yet achieved.” See http://bloom.bg/2bzThsU

What does this have to do with intellectual property? Intellectual property may include inventions, innovations, improvements, developments, methods, designs, trademarks, service marks, trade dress, logos, slogans, trade names, Internet domain names, patents, copyrightable works, mask works, trade secrets and confidential business information (including ideas, research and development, know-how, formulas, compositions, products, manufacturing and production processes and techniques, technical data, designs, drawings, specifications, customer, provider, vendor and supplier lists, pricing, cost and benefit information, and business and marketing plans and proposals), as well as computer software (including source code, executable code, data, databases, and related documentation). Included in these listed ingredients are those which make robots, discovery software and autonomous vehicles run. And as we as a country have shown, from IBM’s glory days to the present day of Facebook, Snapchat, Google, Instagram and What’sApp, we are very good at creating those ingredients and mixing those ingredients into a brew.

But what does that brew mean to society? Neither of our candidates for President are addressing how we are going to live in Tomorrowland, a land that, as the above examples note, is visible just above the horizon. They talk about climate change, medical care, war and peace but what happens to our automobile industry when the personal car disappears, to our rural economy when truck drivers disappear and their vehicles just roll on past the small towns of America, when even skilled factory jobs are replaced by robots and skilled professional jobs, like lawyers, are reduced by the introduction of labor-saving software? How much new infrastructure will be required when cars and trucks utilizing such features as adaptive cruise control and “truck platooning” as described above allow vehicles to use less roadway? And if less infrastructure is required, what will happen to those construction jobs?

Sure, we may still need humans as caregivers for the aged, to shovel asphalt onto roads and to pick fruits and vegetables, for a while at least, but how many people desire those jobs? And McDonald’s. See http://www.restaurant.org/News-Research/News/The-future-is-now-3-robots-at-the-NRA-Show

So, in my mind, this is the big unanswered question for both our politicians and our policy makers, “How do we manage a future where, on the planet, in Tomorrowland, there will be more people than there will be work for those people to do?” and “What will those people’s lives be like?”

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HOW TO CHOOSE LOGO COLORS

Check out http://www.websitemagazine.com/content/blogs/posts/archive/2016/06/23/how-to-choose-logo-colors.aspx?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter

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THE DEFEND TRADE SECRETS ACT

The misappropriation of a trade secret may now be enforced in the federal courts. On May 11th President Obama signed the Defend Trade Secrets Act of 2016.

Previously, entities seeking relief for the misappropriation of their trade secrets had to resort to their state courts and state law. Although 48 states have adopted the Uniform Trade Secrets Act in some form, as with any state statute, each of those state’s courts could interpret that state’s version of that Act differently. The exception to this was if you could show diversity jurisdiction, i.e., that the parties involved in the theft of trade secrets were from different states but in many cases trade secrets are stolen by an employee or a local competitor and in those cases federal court relief is unavailable.

This has now changed under the Defend Trade Secrets Act which provides a federal civil remedy for the misappropriation of trade secrets. Note that it does not preempt any preexisting state law remedies. For this reason, a party seeking judicial relief for the misappropriation of trade secrets needs to consider differences in statutes of limitation, attorney’s fees and other available damage relief and make a decision as to whether to file suit in state or federal court.

The Federal Defend Trade Secrets Act provides that, “An owner of a trade secret that is misappropriated may bring a civil action if the trade secret is related to a product or service used in, or intended for use in, interstate or foreign commerce.” There is a three-year statute of limitations from the date on which the misappropriation with respect to which the action would relate is discovered or by the exercise of reasonable diligence should have been discovered.

The term, “Trade Secret” is defined as ” all forms and types of financial, business, scientific, technical, economic, or engineering information, including patterns, plans, compilations, program devices, formulas, designs, prototypes, methods, techniques, processes, procedures, programs, or codes, whether tangible or intangible, and whether or how stored, compiled, or memorialized physically, electronically, graphically, photographically, or in writing if (A) the owner thereof has taken reasonable measures to keep such information secret; and (B) the information derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable through proper means by, the public.”

“Misappropriation” is defined as “(A) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means; or “(B) disclosure or use of a trade secret of another without express or implied consent by a person who (i) used improper means to acquire knowledge of the trade secret; (ii) at the time of disclosure or use, knew or had reason to know that the knowledge of the trade secret was (I) derived from or through a person who had used improper means to acquire the trade secret; (II) acquired under circumstances giving rise to a duty to maintain the secrecy of the trade secret or limit the use of the trade secret; or “(III) derived from or through a person who owed a duty to the person seeking relief to maintain the secrecy of the trade secret or limit the use of the trade secret; or “(iii) before a material change of the position of the person, knew or had reason to know that “(I) the trade secret was a trade secret; and (II) knowledge of the trade secret had been acquired by accident or mistake.”

“Improper means” (A) includes theft, bribery, misrepresentation, breach or inducement of a breach of a duty to maintain secrecy, or espionage through electronic or other means; and (B) does not include reverse engineering, independent derivation, or any other lawful means of acquisition.

Remedies for misappropriation of a trade secret under the federal Act include injunctive relief, damages for actual loss caused by the misappropriation, damages for any unjust enrichment caused by the misappropriation of the trade secret that is not addressed in computing damages for actual loss; or in lieu of damages measured by any other methods, the damages caused by the misappropriation measured by imposition of liability for a reasonable royalty for the misappropriator’s unauthorized disclosure or use of the trade secret. If the trade secret is willfully and maliciously misappropriated, exemplary damages may be awarded in an amount not more than 2 times the amount of the damages awarded under the previous provisions.

In addition, in extraordinary circumstances only, a court may, upon ex parte application, issue an order providing for the seizure of property necessary to prevent the propagation or dissemination of the trade secret that is the subject of the action if equitable relief would be inadequate to achieve the purpose of this paragraph because the party to which the order would be issued would evade, avoid, or otherwise not comply with such an order. In order to obtain such relief the requestor must also demonstrate that immediate and irreparable injury will occur if such seizure is not ordered; the harm to the applicant of denying the application outweighs the harm to the legitimate interests of the person against whom seizure would be ordered and substantially outweighs the harm to any third parties who may be harmed by such seizure; and that the applicant is likely to succeed in showing that the information is a trade secret, that misappropriation occurred, that the person against whom the seizure order is sought has actual possession of the trade secret and any property to be seized and equitable relief would be inadequate to achieve the purpose of this paragraph because the party to which the order would be issued would evade, avoid, or otherwise not comply with such an order.

Trade secrets may be disclosed under the Act if made in confidence to a Federal, State, or local government official, either directly or indirectly, or to an attorney; and solely for the purpose of reporting or investigating a suspected violation of law; or “is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.” Also, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order. Note here that “employee” is defined broadly to include “any individual performing work as a contractor or consultant for an employer.”

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SIX RULES FOR START-UPS

(Note that these aren’t all-inclusive!)

1. Do a search to confirm that no one has beaten you to your technology.

Do a thorough search of the Internet to see if anyone else out there is providing the services or goods that you intend to provide using the method or channel of trade that you intend to use. In some fields there can be multiple successful players and through your research you may determine if yours is a field where that can happen. Your search may also disclose the amounts of capital that have been invested in your potential competitors. While that is no guarantee of success for them, if significant monies were invested in your competition, that would suggest the amount of resources that you may need to successfully compete. Often, there can be more than one business in a particular field but generally one will turn out to be the market leader. For example, there can be an Uber and a Lyft but if the market leader builds widespread brand recognition, no matter how good #2 is, it may never be more than second best. See http://skift.com/2015/11/20/lyft-leak-of-financials-show-struggles-of-being-number-2-behind-uber/Also, if patentable subject matter is involved, you should check with a patent lawyer to determine if you can bring your product to market without fearing the possibility of an infringement claim. See http://www.uspto.gov/patents-getting-started/general-information-concerning-patents for a basic summary of patent law. See also https://scholar.google.com/ for a place where you can begin your patent search. Again, I recommend that you retain a professional, i.e., a patent lawyer, if you are developing patentable subject matter to make sure that you are clear of potential infringements.

2. Do a trademark search before selecting a domain name as domain rights are often determined based on ownership of a registered trademark.

I assume that you will want to use the same name for your product or services that you are choosing as your domain name and, therefore, you will need to ascertain if that name is available for your use. Also, note that in a domain name dispute, if the complainant owns a trademark registration, then it generally satisfies the threshold requirement of having trademark rights. If a complainant registers a domain name before it acquires trademark rights in that name it may be difficult to prove that that same domain name was registered in bad faith by the respondent under the Uniform Domain Name Dispute Resolution Policy. See http://www.wipo.int/amc/en/domains/search/overview2.0/ Under that Policy, a complainant challenging a domain name must describe the manner in which the domain name(s) is/are identical or confusingly similar to a trademark or service mark in which the complainant has rights. Again, I recommend that you seek out a professional, i.e., a trademark attorney, to conduct that search as that individual should be able to advise you as to what potential marks are stronger than others and, therefore, will be easier to enforce as well as are available for your use.

3. Register your trademark (ITU) and domain name simultaneously.

While you can get a domain name almost instantaneously, obtaining a trademark registration in the U.S. usually takes over a year and you will need to be offering your services over the Internet or shipping product in interstate commerce to do so. So, as soon as you have selected a name, get your trademark application on file with the United States Patent and Trademark Office. Note that you can file based on your intent-to-use that mark on products or services in the future.

4. Identify protectable IP (the kernel) of what you got, what gives your product protectable value and protect it using trade secret, copyright or patent law.

Sometimes, what is most valuable about your product may not be what you’re selling to your purchaser. For example, it may be the underlying computer code used to deliver your goods or services or to manage the applicable transaction.

5. Move fast or die!

Make sure that you have a market for your product and get it out there, in people’s faces quickly. The world is a fast-moving competitive place. If you determine that there is a market out there for your product or service, and that there is demand for it….this is important!…..no demand, no customers, be sure that someone else will figure this out too and if they get their product or service to market six months before you do, all your investment and efforts may go down the toilet as you may find that that other business has already acquired your customer base. Therefore, you better move quickly, make sure that your intellectual property is protectable and protected, and race your product to the finish line.

6. Don’t be sloppy.
As you race to the finish line, unless you are doing everything yourself, make sure the people that are working for you are aware that what they are working on is a trade secret, make sure that they sign non-disclosure and non-compete agreements, make them feel wanted, make them feel part of a team, and compensate them well. An unhappy employee, consultant or contractor will take your idea to someone else who will make them feel wanted, part of a team or better compensated and that someone else will then be where you are presently without having made the investment that you have and, therefore, be in a position to reach the finish line before you.

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Z-Burger Case Shows Value of Trademark Protection

It also demonstrates the value of having a written, executed partnership agreement.

Also, note here that Mr. Tabibian federally registered the Z-BURGER trademarks in his own name. While this may have won him the first round in his battle to own those trademarks, placing the goodwill of a hamburger chain in one’s own personal name may not be such a great idea. See http://nyti.ms/1QcrISB

For the Z-Burger case, see the October 28th piece from the New York Times at http://nyti.ms/1kRykwa

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Theft of Intellectual Property

Yesterday President Barack Obama and President Xi Jinping of China announced that they had reached a common understanding to combat “cyber-enabled theft of intellectual property” As stated in the New York Times report of that “understanding,” the two leaders had agreed that “neither country’s government will conduct or knowingly support cyber-enabled theft of intellectual property, including trade secrets or other confidential business information, with the intent of providing competitive advantages to companies or commercial sectors.”

Meanwhile on that same day Apple introduced the iPhone 6S and iPhone 6S Plus and, despite Steve Jobs promise to “spend every penny of Apple’s $40 billion in the bank..to destroy Android, because it’s a stolen product,” (See http://gizmodo.com/5941817/what-really-made-steve-jobs-so-angry-about-google) on the day before in the 24 or so fake Apple stores in the Shenzhen shopping corridor unauthorized “fakes” of the new Apple phones were already available for sale, some of which are running on the Android OS.

These phones appear authentic although they are not openly displayed and some run slow and their images are fuzzy. But they’re a steal at a tenth of a price of a real iPhone. In these fake Apple stores, the logos, uniforms, display shelves and shopping bags resemble those found at a genuine Apple store and some of these stores do, in fact, offer the real thing, smuggled across the border from the U.S. and Hong Kong but those real phones are being offered at as much as double the official price as legitimate purchases must have been pre-ordered.

Is this a bad thing for Apple? Yes, the sale of inferior knock-offs tarnishes their brand and may divert purchasers from paying more for the real thing. However, maybe not as some analysts have said that these rotten Apple stores may promote brand awareness in the world’s most populous country which has a meager 22 legitimate Apple stores.

We will also have to see if President Xi Jinping keeps his promise to combat China’s theft of the West’s intellectual property. Though, making that theft easier will be Boeing’s opening of its first aircraft production facility abroad, in China, a joint venture between Boeing and the state-owned Commercial Aviation Company of China which is building a Chinese competitor to the 737. See http://www.vox.com/2015/9/24/9389767/boeing-china-deal quoting Lenin as saying, ” “the capitalists will sell us the rope we use to hang them.”

 

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Why you should Google your proposed new name

Or at least Google your proposed new name…..See http://nyti.ms/1IHFFDz

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SCENES A FAIRE

“Scenes a faire” is neither the title of a French ” New Wave” film nor is it a description of French President Francois Hollande’s personal life, in which he had four children with a fellow Socialist politician, then dated a reporter for the magazine, Paris Match, who moved into the Presidential Palace with him, during which time had an affair with a French Actress. No, it is a doctrine of copyright law which holds that there are “incidents, characters or settings which are as a practical matter indispensable, or at least standard, in the treatment of a given topic.” Alexander v. Haley, 460 F.Supp. 40, 45 (S.D.N.Y.1978). Similarity of expression, whether literal or nonliteral, which necessarily results from the fact that the common idea is only capable of expression in more or less stereotyped form will preclude a finding of actionable similarity. Such stock literary devices are not protectable by copyright.

So, while a plaintiff may prove copying by showing that a defendant had access to plaintiff’s work and that the two works are substantially similar, under the above doctrine, that plaintiff may not be eligible for relief for copyright infringement if the alleged similar aspects of both works are Scenes a Faire.

The courts have been very specific in various cases in identifying what qualifies as these. In Alexander v. Haley, 460 F.Supp. 40, 45 (S.D.N.Y.1978), the court listed a number of types of incidents that are not copyrightable in a slave story; attempted escapes, flights through the woods pursued by baying dogs, the sorrowful or happy singing of slaves …. scenes portraying sex between male slave owners and female slaves and the resentment of female slave owners … slave owners complaining about the high price of slaves ….

In a case involving the classic video game, “Asteroids,” the court wrote, “There are certain forms of expression that one must necessarily use in designing a video game in which a player fights his way through space rocks and enemy spaceships. The player must be able to rotate and move his craft. All the spaceships must be able to fire weapons which can destroy targets. The game must be easy at first and gradually get harder, so that bad players are not frustrated and good ones are challenged. Therefore, the rocks must move faster as the game progresses. In order for the game to look at all realistic, there must be more than one size of rock. Rocks cannot split into very many pieces, or else the screen would quickly become filled with rocks and the player would lose too quickly. All video games have characteristic sounds and symbols designed to increase the sensation of action. The player must be awarded points for destroying objects, based on the degree of difficulty involved. All these requirements of a video game in which the player combats space rocks and spaceships combine to dictate certain forms of expression that must appear in any version of such a game. In fact, these requirements account for most of the similarities between “Meteors” and “Asteroids.” Similarities so accounted for do not constitute copyright infringement, because they are part of plaintiff’s idea and are not protected by plaintiff’s copyright. See Atari, Inc. v. Amusement World, Inc., et al., 547 F.Supp. 222 (D. Maryland 1981).

In a case involving a film script, Muller v. Twentieth Century Fox Film Corporation, 794 F.Supp.2d 429 (S.D.N.Y. 2011), that court wrote that “certain literary or cinematographic elements are not protected even if they take the form of concrete expression, such as ‘stock’ themes or ‘scenes a faire.” Id. “Stock themes, or themes that are “commonly linked to a particular genre,” are only protected under copyright law “to the extent they are given unique…expression in an original creation.” Examples in a film or film script depicting a poor crime-ridden neighborhood would include images of drunks, prostitutes, rodents and abandoned cars, and such features, the court held were unprotectable “scenes a faire.” Muller, at 441.

As to Barbie, in a Second Circuit case, Mattel, Inc. v. Goldberger Doll Mfg. Co., 365 F.3d 133 (2004) involving the copyright infringement of the “Barbie doll,” the court wrote in dictum that “Mattel’s copyright in a doll visage with an upturned nose, bow lips, and widely spaced eyes will not prevent a competitor from making dolls with upturned noses, bow lips, and widely spaced eyes, even if the competitor has taken the idea from Mattel’s example, so long as the competitor has not copied Mattel’s particularized expression. An upturned nose, bow lips, and wide eyes are the “idea” of a certain type of doll face. That idea belongs not to Mattel but to the public domain.”

And in a 2013 case, Rucker v. Harlequin Enterprises, decided by the United States District Court in Houston, that court identified numerous instances of scenes a faire, for example, “[C]onspiracies, characters with superhuman qualities, and advanced technology . . . are unoriginal and uncopyrightable stock elements of the action-adventure and science fiction film genres,” “shared characteristics of both parties’ Santa toys of a “traditional red suit and floppy cap, trimmed in white, black boots and white beard” and “nose like a cherry” are common to all Santas and not probative of copying,” and “a beautiful woman and a handsome, wealthy man fall in love, become estranged, find themselves alone together in close quarters, have a passionate reunion, rediscover their love and commitment, and begin a new life together…are familiar plot elements in the romance genre and would be scenes à faire.

In addition, “cliched language, phrases, and expressions conveying an idea that is typically expressed in a limited number of stereotypical fashions are not protectable in and of themselves.” See Green v. Lindsey, 885 F. Supp. 469 (S.D. N.Y. 1992.)

The Scenes a Faire doctrine can therefore be a defense to a claim of copyright infringement if the alleged copied elements are not sufficiently creative as to be protectable. And another example where federal judges act as critics.

 

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LOGO DESIGN PSYCHOLOGY

See the following infograph:

http://webmag.co/logo-design-psychology/?utm_source=websitemagazine&utm_medium=email&utm_campaign=newsletter

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