NUTS BOLTS INTELLECTUAL PROPERTY NAPA COUNTY WOMEN LAWYERS
NUTS &BOLTS: INTELLECTUAL PROPERTY NAPA COUNTY WOMEN LAWYERS JULY 12, 2017 CHRISTOPHER J. PASSARELLI SR. INTELLECTUAL PROPERTY ATTORNEY DICKENSON, PEATMAN & FOGARTY T: 707. 252. 7122 | CP@DPF-LAW. COM
Disclaimer This is made available for general informational purposes only and none of the information provided herein should be considered to constitute legal advice.
AGENDA q Forms of Intellectual Property q Patent q Copyright q Trade Secrets q Trademarks and Branding q Geographical Indications, Certification Marks
FORMS OF INTELLECTUAL PROPERTY q Patent q Utility Patent, Design Patent q Plant Patent, PVPA q Copyright q Trade Secrets q Trademarks, Service Marks and Trade Dress
CONSTITUTIONAL BASIS Article I, Section 8, Clause 8 Grants to Congress the power "To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries. "
PATENTS 35 U. S. C. §§ 101, et seq. Processes, machines, articles of manufacture, and compositions of matter which are: q Novel q Useful q Nonobvious Design Patent – protection for ornamental aspects of a product or package.
COPYRIGHT 17 U. S. C. § 101, et seq. q Creative works fixed in a tangible medium of expression q Rights: Reproduction, Distribution, Derivative Works, Public Display, Public Performance q Federal law applies q Term: (Depends) Often lasts for the lifetime of the author plus 70 years
COPYRIGHT - ISSUES q. Protectability q. Creativity Requirement q. Functionality q. Ownership – Who owns the copyright? q. When and How to Register? - Litigation q. Publication/Statutory Damages
COPYRIGHT OWNERSHIP q. Author/Creator owns the copyright q. Web page, label, photographs, etc. q. Exception: Employee in the course of employment q. Commissioned Works Obtain Assignment of Rights!
COPYRIGHT IN THE ALCOHOL BEVERAGE INDUSTRIES q. Label q. Packaging q. Website q. Photographs q. Hot Issues: Unauthorized Dealers, Social Media
TRADE SECRETS DEFINITION q Business formulae, compiled information, and devices or processes which, though neither copyrighted nor patented, or not even novel, are kept as "trade secrets" of the user. Any secret information used in the conduct of the plaintiff's business which is of some competitive advantage to him, and which is not disclosed to the public, might be included. Witkin, 7 Summary of California Law, at p. 5305. q Equity provides a remedy where the information is kept secret and it is improperly obtained by the defendant. Id. at 5306.
TRADE SECRET STATUTES UNIFORM TRADE SECRETS ACT (UTSA) DEFEND TRADE SECRETS ACT OF 2016 18 U. S. C. § 1836, ET SEQ. CALIFORNIA TRADE SECRETS ACT (CTSA) – CAL. CIV. CODE § 3426 – 3426. 11
TRADE SECRETS CALIFORNIA TRADE SECRETS ACT (CTSA) q Trade Secret: “Information, including a formula, pattern, compilation, program, device, method, technique, or process, that: (1) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and (2) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. ” CA Civil Code § 3426. 1(d) KEYS: 1. Economic value 2. Secrecy 3. Competitive advantage
TRADE SECRETS VS. OTHER INTELLECTUAL PROPERTY PROS n Potentially infinite duration n No disclosure requirement – MUST not disclose! n No need to file or register n No novelty requirement n Less expense early in life CONS n Subject to potential reverse engineering n “Reasonable” efforts to maintain secrecy n Inadvertent disclosure n Misappropriation n No presumption - Must identify & prove existence without (disclosing the trade secret) n Enforcement is potentially costly over time
TRADE SECRETS PROTECTION Trade Secret Checklist - Key Areas n Identification n Documentation* n Procedures – Audit, Plan, Repeat o Label, Segregate, Secure o Educate: Orientation, Employment Manual, NDA, Memoranda, Exit Interview n Involuntary or Inadvertent Disclosure
TRADE SECRETS EXAMPLES o. Customer list o. Suppliers o. Production/Manufacturing inputs and processes o. Financial Data o. Consumer Information
TRADE SECRETS MISAPPROPRIATION CA Civil Code § 3426. 1 n Acquisition of a trade secret by someone who knows or has reason to know it was acquired by improper means, including by: o o o Theft Bribery Misrepresentation Breach of duty; or Inducement of breach of duty to maintain secrecy. n Use or disclosure without consent after acquisition by improper means. n Statute of limitations - Three (3) years. Cal. Civ. Code § 3426. 6
TRADE SECRETS REMEDIES n Injunctive Relief: Court orders defendant to cease violation and to preserve secrecy. Note potential First Amendment limitations. Cal. Civ. Code § 3426. 2. n Damages: Compensation for economic harm. Includes Plaintiff’s losses and the defendant's profits derived from misappropriation. n Punitive damages - Up to twice the actual damages in the event of willfulness. Cal. Civ. Code § 3426. 3. n Attorneys' Fees: Discretionary where defendant acted willfully or maliciously, or where plaintiff brought suit in bad faith. (Also available for a motion to terminate an injunction made or resisted in bad faith. ) Cal Civ. Code § 3426. 4
TRADE SECRETS LITIGATION Classic Alcohol Beverage Industry Paradigm: Secrecy in Practices (Europe) v. Free Information Flow (U. S. ) Trade Secrets are more conducive to commercial industry than to academia, where ideas are more freely shared to spur rapid innovation…
TRADE SECRETS LITIGATION § WINE INDUSTRY CASES Kendall-Jackson v. Steele (Lake County Superior Court, 1992) • Trade secret: Winemaking process - KJ Vintner’s Reserve • “Slightly sweet” chardonnay (“Off dry”) • Technique: Stop fermentation before natural grape sugar converts to CO₂ • Trade secret formula filed in Court - under seal • 30 day trial. Result: Permanent injunction. Cannot be used or divulged by winemaker to subsequent employers or clients. • KEY: Developed at the winery. Ergo, Formula belongs to winery, not winemaker.
TRADE SECRETS LITIGATION § WINE INDUSTRY CASES Domaine Serene v. Rynders (Oregon Federal District Court, 2009) • Trade secret: Winemaking process – Coeur Blanc (white wine from Pinot Noir grapes) • Technique: Pressing clear juice off of colored skins (not new) • Rynders was at-will, contract employee and under Employee Incentive Agreement • DS alleged breach of confidentiality, loyalty, fiduciary duty and misappropriation of trade secrets. • Alleged theft of computer files and documents • Settled out of court
TRADE SECRETS LITIGATION Domaine Serene v. Rynders (Oregon Federal District Court, 2009) Winemaker Tony Rynders’ written statement to the News-Register in Mc. Minnville regarding private settlement with Domain Serene: “While I am not at liberty to discuss the details, I can state: a) That the matter has been resolved to the satisfaction of both parties. . . b) That the parties have agreed to disagree on whether Domaine has (or does not have) any confidential, proprietary or trade secret information with respect to the white Pinot Noir wine it makes, but may make no further disclosure, comment or statement; and c). . . [A]greed not to make or consult on the making of white Pinot Noir wine for three years. ”
TRADE SECRETS DRAFTING CONSIDERATIONS 1. Confidentiality. Neither Winemaker nor Client will disclose or use, either during or after the Term, any proprietary or confidential information of the other party, or of a party for whom Winemaker performs services, without the party's prior written permission except to the extent necessary to the performance of Winemaker's Services. Proprietary or confidential information includes, but is not limited to: (a) the written, printed, graphic or electronically recorded materials; (b) business plans, customer lists, operating procedures, trade secrets, design formulas, know-how and processes, computer programs and inventories, discoveries and improvements of any kind; and (c) information belonging to customers and suppliers of Client about whom Winemaker gained knowledge as a result of Winemaker’s Services to Client. A party will not be restricted in using any material that is publicly available, already in that party's possession or known to the party without restriction, or which is rightfully obtained by the party from other sources.
TRADE SECRETS DRAFTING CONSIDERATIONS n n n Require: *Assignment of Rights* Agreement itself and its terms should be Confidential Require notification (advance, if possible) in the event of disclosure If disclosure is required – require reasonable efforts to seek confidential treatment Require recipient to keep records of all trade secrets developed or subject to assignment Prohibit removal of TS info from the premises Prohibit hindering/preventing access to TS info (e. g. , IT access) Require return of TS materials upon termination Require written disclosure of anything developed while with the company Require disclosure/assignment inventions, etc. developed within 6 mos. – 1 year (inc. patent applications) Take heed: Cal. Lab. Code § 2870
TRADE SECRETS CRIMINAL LAW Economic Espionage Act of 1996 - Criminal Penalties 18 o o o U. S. C. § 1831 - Economic Espionage Foreign government beneficiary Maximum individual sentence/fine: 15 years imprisonment/$5 million. Maximum organizational fine: Not more than the greater of $10 million or 3 times the value of the stolen trade secret. 18 U. S. C. § 1832 - Trade Secrets Theft (Industrial Espionage) o Beneficiary must be anyone other than the owner of the misappropriated trade secret(s) o Maximum individual sentence/fine: 10 years imprisonment/$250, 000 or an alternative fine based on gain/loss figures. o Maximum organizational fine: $5 million
TRADE SECRETS CRIMINAL LAW Economic Espionage Act of 1996 o Criminal Forfeiture The court may order the violator to forfeit to the United States any (1) property constituting, or derived from, any proceeds the person obtained directly or indirectly, as the result of the violation, or (2) property used, or intended to be used, in any manner or part, to commit or facilitate the commission of the violation. o Civil Proceedings – Injunctive Relief In a civil action, the Attorney General may obtain appropriate injunctive relief to prevent the offense. The District Courts of the United States have exclusive original jurisdiction of civil actions.
TRADE SECRETS RECENT DEVELOPMENTS Defend Trade Secrets Act of 2016 – 18 U. S. C. 1836, et seq. n n n n Enacted May 11, 2016 Concurrent federal jurisdiction in trade secret cases Previously: Exclusive recourse via state UTSA framework Problem addressed: Lack of “uniformity” – e. g. , Uniform nationwide corporate nondisclosure policies Goal: Bring Trade Secret law in line with federal law applicable to other forms of IP Effect: Increased court powers (e. g. , preservation orders), statute of limitations, damages Purported Benefit: Clear path to federal court. Pitfalls: e. g. , Whistleblower immunity
TRADE SECRETS DTSA 2016 CASES o Henry Schein, Inc. v. Cook, 191 F. Supp. 3 d 1072 (N. D. Cal. 2016) First temporary restraining order under DTSA prohibiting an exemployee from soliciting customers of the plaintiff. o Dalmatia Import Group, Inc. v. Food. Match Inc. et al. , Case no. 16 -cv 02767 (E. D. Pa. Feb. 24, 2017) – Federal jury awarded Dalmatia $2. 5 million for misappropriation of trade secrets, trademark infringement and counterfeiting - $500, 000 of which was allocated to the DTSA claim based on Foodmatch's misappropriation of Dalmatia's fig jam recipe
TRADE SECRETS HOT TOPICS n Data Breach n The Cloud n Public Access via Agency FOIA/Sunshine Act Requests n Trans-Pacific Partnership
TRADEMARK/SERVICE MARK: WHAT IS IT? 15 U. S. C. § 1051, et seq. A trademark can include a: o Word, Phrase, Slogan o Symbol, Logo o Picture, Image, Photograph o Color, Shape, Smell o Product or Packaging (aka Trade Dress) Virtually anything that serves as an Indication of Source
TRADEMARK POLICY CONSIDERATIONS o Easy reference o Business asset development o Indication of Source o Consistent quality o Prevent False Advertising o Prevent Confusion o Prevent Unfair Competition Protect the Consumer
TRADEMARK HOW THEY ARISE o In the U. S. , trademarks arise from use in commerce. o In much of the world, the rightful owner is the first to file a trademark application.
TRADEMARK PITFALLS How to lose your trademark rights: o. Generic usage o. Abandonment o. Crowding of the field o. Naked Licensing o. Illegal Activities
TRADEMARK DISTINCTIVENESS Trademark strength is based on distinctiveness – the ability to indicate source. o Generic – not protected o Descriptive – informational, protected if the mark achieves secondary meaning o Suggestive o Arbitrary o Fanciful A mark can become generic and lose its ability to function as a trademark.
TRADEMARK GENERIC TERMS Trademarks that became generic: o Aspirin o Cellophane o Dry Ice o Heroin o Kerosene o Linoleum o Thermos o Trampoline o Videotape
TRADEMARK NOTICE – 15 U. S. C. § 1111 o Supercript or subscript: n TM, SM or ® n Registered in the U. S. Patent and Trademark Office; or n Reg. U. S. Pat. & Tm. Off. o Notice of claimed rights/deterrent effect o Effect on profits and damages recovery – w/o notice of registration, need to show D’s actual notice of registration o Improper use of ® federal registration notice may be deemed fraudulent.
TRADEMARK REGISTRATION Benefits of federal registration: o o o Nationwide constructive use Presumption of ownership, validity Use of ® acts as a deterrent Federal Court jurisdiction +5 Minutes of sleep every night!
FEDERAL REGISTRATION PROCESS o Filing – Current Use v. Intent to Use o Examination n Office Actions & Information Requests o Publication for Opposition o Allowance for Registration o Issuance of Registration Certificate o Continued Use/Incontestability o Renewal No Attorney Required? (57% v. 83% success)
REGISTRATION STATE TRADEMARK Alternative to federal registration o PROS: n Easier to obtain n No interstate commerce requirement n No Publication for Opposition o CONS: n No Presumption of ownership, validity n Cannot use “®” n Will not necessarily prevent third parties from achieving federal registration
TRADEMARK USE o Must be used on or in connection with the goods or services o Affixed to the goods (e. g. , label) or their packaging o Website use in proximity to a means for ordering the goods or services o Means to Request a Quote
TRADEMARK CLEARANCE o #1 Misconception: The Secretary of State cleared my mark o Preliminary Search v. Full Search o Common Law Use by third parties o Willful infringement issue o Tip: Bring alternatives o Tip: Do your own search first o No Search Is Perfect
CONFLICTING MARKS o Pseudo Marks – may be assigned to marks that have alternative spellings or meanings. Used as an additional search tool. n E. g. , YOU ARE GREAT v. URGR 8 o Phonetic Equivalents – alternative spellings n E. g. , KWIXTART v. QUICK START o Foreign Equivalents – foreign translations n E. g. , EL JEFE v. THE BOSS
TRADE DRESS DEFINITION o Total image or overall design or appearance of a product or its packaging. o Includes size, shape, color combinations, texture and graphics o All features be considered together, not separately o Function elements NOT protectable o OK if certain components are functional if the overall combination of features is not. Two Pesos, Inc. v. Taco Cabana, Inc. , 505 U. S. 763 (1992)
TRADE DRESS o Packaging Trade Dress n For single product or product line/family of products o Product Trade Dress n Product Configuration can serve as trade dress if it is inherently distinctive. Computer Care v. Service Systems Enterprises, Inc. , 982 F. 2 d 1063, 1067 (7 th Cir. 1992) o Examples: n Coca Cola, Maker’s Mark
RECENT DEVELOPMENTS: ALCOHOL - RELATED GOODS o Virtually all alcohol beverage products are considered related goods n Beer/Wine/Distilled Spirits/Energy Drinks o White Oak Vineyards & Winery v. White Oak Spirits LLC, Case No. 2: 14 -cv-09830 (CACD 2015) n Vodka and wine found to be related goods.
RECENT DEVELOPMENTS: SCANDALOUS MARKS Matal v. Tam, 582 U. S. ___ (2017) -“The Slants” o Decided June 19, 2017 o Affirmed In Re Tam, 808 F. 3 d 1321 (Fed. Cir. 2015). o Held 8– 0, that the Lanham Act's prohibition against registering "disparaging" trademarks with the USPTO violates the First Amendment freedom of speech. o Paves the way for an end to WA Redskins disputes.
GEOGRAPHICAL INDICATIONS o Appellations of Origin o American Viticultural Areas (AVA) o Conjunctive Labeling Requirements n E. g. , Oakville - Napa Valley n Misconception: TTB approved my label!
CERTIFICATIONS o Certification Marks - Certifies nature or origin. E. g. , n Location or origin, n Materials of construction n Method or mode of manufacture of goods or provision of services n Quality assurance n Accuracy of the goods or services; and n Union or other organization standards.
CERTIFICATIONS o Examples: n Organics: CCOF, USDA Organic, Oregon Tilth n Sustainability: SIP Certified, Certified California Sustainable Winegrowing (CCSWP) o Cannot certify yourself! n The certifier cannot engage in production or marketing of the certified goods or services but must be competent to certify that any user has met the requirements.
THANK YOU! CHRISTOPHER J. PASSARELLI SR. INTELLECTUAL PROPERTY ATTORNEY DICKENSON, PEATMAN & FOGARTY 1455 FIRST STREET, STE. 301 | NAPA, CA 94559 TELEPHONE: 707. 252. 7122 CP@DPF-LAW. COM | WWW. DPF-LAW. COM
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