Trade Secrets

1
Chapter 5

• Trade Secrets

2
Trade Secret Protection

• May be statutory or common law
• Importance of trade secrets (examples designs,
  special business process, customer lists, etc..)
• Some processes or inventions that are not
  patentable are still legally protectable as
  trade secrets.

3
Legal Protection of Trade Secrets

• Uniform Trade Secret Act gives specific
  standards for what constitutes trade secret.
• Misappropriation (ex use of trade secret by
  former employee)
• Economic espionage act federal criminal statute
  (originally intended for theft of trade secrets
  by foreign competitor) that covers trade
  secrets.
• Find 2 examples of a trade secret case

4
Trade Secret Cases

• http//inventors.about.com/od/mstartinventions/a/W
  indows_2.htm
• http//money.cnn.com/2007/05/23/news/newsmakers/co
  ke/

5
Trademarks, service marks, and trade dress

• Trademark word, symbol, or phrase used to
  identify a particular manufacturer or sellers
  products and distinguish them from the
  products of another.
• Nike and the swoosh trademark
• Coca-cola with red and white design
  distinguishing mark (trademark)
• Business Vale of trademark importance in brand
  identification
• Come up with 3 well known Trademarks

6
Samples of Trademarks

• Fedex
• DORITOS
• LIFE SAVERS
• Partial list of trademarks
• http//www.uspto.gov/web/offices/pac/mpep/document
  s/appxi.htm

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Trademarks, service marks, and trade dress

• Protection under the law combination of common
  law and statutory law at both the federal and
  state level.
• Classifications
• Arbitrary or fanciful (no logical relationship to
  product/service Dell and Nike)
• Suggestive (evokes characteristic of product
  /service Cisco
• descriptive (directly relates to characteristics
  of quality of product Pizza Hut)
• Generic (no protection computer is generic)
• Marks can become generic over time (genericity)
  and lose protection ex. Thermos and aspirin

8
Acquiring rights to a trademark

• Use of mark in commerce use of the mark for
  commercial purposes gives user the rights to
  protect the mark in the geographic region
  only.
• Register mark with USPTO gives protection
  nationwide even if sales are limited to one
  geographic region

9
Preserving the Mark

• Protection rights may be lost though abandonment,
  proper licensing, assignment, or genericity (mark
  became generic)
• Nonuse for 3 consecutive years is evidence of
  abandoment
• Bayer lost aspirin
• Owner must police its protection and enforce
  the mark

10
Violation of Trademark Rights

• Infringement
• Using another mark or a substantially similar
  mark
• Courts use a likelihood of confusion by the
  public standard
• In order to infringe, marks muse be close in
  sound, appearance, or making so
  as to cause confusion
• Trademark dilution
• Federal trademark dilution act allows owner of
  mark to bring suit against infringer who either
  blurs or tarnishes mark
• In order to be protected under the FTDA, the mark
  must qualify as famous
• Example Xerox tennis shoes and IBM bicycles

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Infringement Defense

• Fair use (descriptive mark used in good faith for
  primary rather than secondary meanings). Ex
  windows used by a window manufacture in
  advertisement does not violate Microsoft's
  trademark
• Parody (used as an obvious parody situation
  comedy shows etc..)
• First amendment right

12
Remedies

• Injunctive relief, monetary damages for
  tarnishment, profits gained by use of the mark
• Treble damages available for bad faith cases
• WHAT IS TREBLE?
• Damages consisting of single damages determined
  by a jury and tripled in amount in
  certain cases as required by statute.
• In dilution suit usually limited to injunctive
  relief

13
Trademarks in cyberspace

• Domain names and virtual kidnapping
• Cottage industry sprung up for registering famous
  domain names and then holding the mark owner
  hostage for large sums of money.
• practice became known as cybersquatting
• Abuses led Congress to pass the
  Anticybersquatting consumer
  protection act
• Anticypbersquatting consumer protection act
• Gives specific remedies and provides for civil
  penalties for those using domain names in
  bad faith

14
Uniform Domain Name Dispute resolution
policy

• Useful for cyber entrepreneur because it is
  global and inexpensive
• UDRP is an arbitration setting
• Must prove the following
• Domain name is identical or similar to mark
• Party registering has no legal rights
• Domain name was registered in bad faith

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Emerging trends in cyberspace

• Registering domain name with one or tow letters
  off the actual famous name with the intend of
  directing the user to a commercial website.
• Congress passed the Truth in Domain Name Act to
  prevent typosquatting
• Zuccarini case is a notorious typosquatter.
• Lets look him up!

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Cybersquatting list sample

• Dow Jones Company
• Nicole Kidman
• Microsoft
• Encyclopedia Britannica
• Yahoo
• Spiegel Catalog
• Abercrombie Fitch
• United Feature Syndicate
• Budget Rent a Car Corporation
• America Online. 

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Metatags

• Invisible code words programmed into HTML used by
  web designers to generate high rankings on a
  search engine hit list
• Courts have tended to view metatags as fair use
• Framing users may vies a second website within
  the frame of the first one. Can the use of
  links that contain a protected mark and a link to
  the mark owners website constitute blurring or
  tarnishment
• Law is unsettled, but if consumer confusion
  results, mark owner may have a case for
  infringement against the framer

18
Global perspective

• Trademark law treaty
• Adopted in 1994
• Adopts uniform procedure for dealing with
  trademark disputes
• In non-TLT countries, regulations vary greatly.