Intellectual Property and Employees 02/23/2012
Defining intellectual property ownership can be tricky in an employment context. Ill defined company policies and contracts regarding intellectual property ownership are often the root of litigation. Updating company policies and implementing contracts which are supported with current case law regarding any intellectual property (trade secret, patent, copyright) ownership will prevent conflicts later down the road.
There are several steps an employer can take to protect its intellectual property assets.
1. Restrictive Clauses: One way to define ownership of intellectual property rights is to use restrictive clauses in contracts such as non-disclosure agreements and confidentiality agreements. An employer can further use non-solicitation or anti-raiding employee clauses in employment contracts.
Employers in California should be careful on how they define non-solicitation and anti-raiding clauses – too broad of a clause may be found unenforceable in California. Consider limiting these clauses to a reasonable period of time.
2. Employment Handbook: The employment handbook comes in handy in regards to protecting a business’s trade secrets. A policy which prevents the employee from disclosing a company’s trade secret outside the company is particularly useful if the business has confidential information such as customer lists or research and development.
Further, a company may require the employee to assign any research or development done during the time of the employment to the company. An assignment clause defines who owns the research if the company wishes to patent the research and further prevents the loss of important intellectual property to competitors.
3. Exit Interviews: When an employee leaves, ensure that the employee has returned all materials (notebooks, electronic devices) that have confidential information. An internal tracking system which tracks notebooks and electronic devices given to employees adds an extra layer of protection and ensures that all material has been returned.
In some jurisdictions, under the “inevitable disclosure” doctrine, employers can prevent departing employees from disclosing intellectual property to their new employer. See PepsiCo, Inc. vs. Redmond, 54 F.3d 1262 (1995).
However, keep in mind that in California, the courts have rejected the inevitable disclosure doctrine and held that the doctrine is contrary to California law and policy because it creates an after-the-fact covenant not to compete restricting employee mobility. See Schlage Lock Co. vs. Whyte, (2002) 101 Cal. App. 4th (1443).
Being aware of potential problems that may arise with intellectual property in the context of employment is the first step in implementing preventative measures and adopting sound policies that may shield the company assets from legal claims down the road.
YouTube.We have all heard about the Digital Millennium Copyright Act (DMCA) and have seen the warning message placed on movie rentals, music CDs and even on
Most business owners, however, do not know that the DMCA extends to content on a website as well. Business owners can be held liable for any infringing content on their website. Infringing content includes texts, images, and videos uploaded by both the owner of the website or by someone posting on the website.
(1) Registering a DMCA Agent
A DMCA Agent is an agent designated by the website owner to receive notifications regarding any copyright infringement on your website. Designating an agent at the US Copyright office is straight forward; simply fill out the form and pay the required fee. It would be prudent to include a notice on a business website that provides instructions on how to contact the designated DMCA Agent.
(2) Terms and Conditions
Terms and Conditions of a website outline the rules that the users of the website have to follow. It is a good idea to mention the legal consequences of copyright infringement in the Terms and Conditions section because it may deter potential infringement. Please remember that the warning by itself is insufficient to avoid liability. The website owner is still under the obligation to monitor its website for any infringing material.
In the eventuality that a website owner does receive notice of infringing material on their website, the DMCA allows the website owner to remove the offending material without incurring any liability.
It is advisable that a business owner contact an attorney who is familiar with the field and can assist the business in registering a DMCA Agent and in drafting Terms and Conditions for a website.
Protecting Your Business Logo 01/03/2012
Creating a business logo is one of the most important things you can do as a business owner to build brand awareness. Logos, such as, Target’s “Bullseye,” McDonalds’ “Golden Arches,” or Apple’s “Apple” are instantly recognized for the specific goods or services the respective companies provide. Strong brand recognition allows you, as a business owner, to market your goods or services effectively and to build a loyal customer following. Therefore, it is critical that small businesses get trademark protection for their logo, in addition to their business name.
Business names usually come under the category of a “standard character mark” which consist of words, numbers, common forms of punctuation, or combinations any of these elements without any stylized elements. Logos come under the category of “stylized mark” which include two or three-dimensional design, color, or words, letters, or numbers in a stylized form. For example, a word mark is the word Apple and a stylized mark is the Apple logo.
Generally, the USPTO requires that different elements of your mark be filed separately, i.e., a separate application for a standard character mark and a stylized mark. However, a logo, which also incorporates the business name, can be filed in one trademark application. Although this may reduce filings costs, to obtain the broadest protection for your brand, it is recommended to file separately. Separate filings protect the mark itself and not just the stylized aspect of the mark, giving you more freedom on how you use your mark.
When contemplating whether to trademark the logo or business name, it is best to consider both short-term and long-term goals of your company, including corporate structure, market position, and funding goals. Ask yourself whether changing your business name a year from now would impact the success of your business.
Once the trademark application is filed, the USPTO permits you to use the TM sign next to your logo. Once the application is approved you may then use ® and actively protect your trademark.
Happy Holidays 12/21/2011
Wishing everyone a joyful holiday season and a Happy New Year! May your next year be even more successful and filled with great achievements. Neha Jaiswal.
In a difficult economic environment, the U.S. economy is very dependent on small businesses. Mom and Pop shops are usually the first to resume hiring and stimulate the local economy. Corporate bullying, however, can stifle the small business sector, especially when it comes to IP protection. Recently, a small T-shirt business in Vermont came under fire of Chick-fil-A attorneys for seeking trademark protection for its business slogan. Bo Muller-Moore, the owner of the business, silk-prints his tees with the slogan “eat more kale” as a tribute to local farmers and Vermont’s agriculture. Chick-fil-A was aware of Muller-Moore’s T-shirt slogan in 2006 but turned a blind eye until Muller-Moore filed for trademark protection.
In August, Chick-fil-A sent Muller-Moore a cease and desist letter ordering him to stop using the phrase “eat more kale,” because it could be confused with Chick-fil-A's trademarked term “eat mor chikin”. Chick-fil-A argues that the “kale” slogan causes “confusion of the public and dilutes the distinctiveness of Chick-fil-A’s intellectual property and diminishes its value.”
Chick-fil-A claims that since it has been using its mark for 16 years, it has a legal claim over that mark and similar marks. However, claims of confusion of the public and trademark dilution will be difficult to prove in court.
In Polaroid Corp. v. Polarad Elecs. Corp., the court set out eight factors to find likelihood of confusion: (1) the strength of the infringing mark, (2) the degree of similarity between the two marks, (3) the proximity of the products, (4) the likelihood that the prior owner will bridge the gap, (5) actual confusion, (6) the reciprocal of defendant's good faith in adopting its own mark, (7) the quality of defendant's product, and (8) the sophistication of the buyers.”
Using the eight factors the public argument is weak because Muller-Moore has been using his mark for more than ten years, there is very little similarity between the marks, kale and chicken are not closely related to each other, and the public is not likely to confuse kale t-shirts and chicken sandwiches. It will be challenging for Chick-fil-A to argue that the public may get kale t-shirts instead of chicken sandwiches because of the confusion that “eat more kale” slogan creates.
Further, the trademark dilution argument will most likely fail under “famous” mark analysis of the Federal Trademark Dilution Act (FTDA). Chick-fil-A will have to prove that its mark is not only famous but also that Muller-Moore’s slogan causes a “blurring” of the Chick-fil-A mark. The FTDA protects only “famous” marks against dilution and a court may find a mark famous based on a number of factors including duration and extent of the mark, the duration and extent of the advertising of the mark and the degree of distinctiveness of the mark. For blurring Chick-fil-A will have to show that in consumers’ minds the connection between chicken sandwiches and Chick-fil-A slogan is weakened.
Moreover, Muller-Moore can raise an affirmative fair use defense to the dilution claim and argue that he used the slogan intentionally as a parody.
A recent case which addresses dilution please read Starbucks v Wolfe Borough.
Despite receiving cease and desist letters from Chick-fil-A, Muller-Moore has not backed down and has proceeded with filing for trademark protection. In fact, his business is booming because of the attention this debate has garnered. It will be interesting how this corporate version of David versus Goliath turns out. If Muller-Moore gets his slogan trademarked, Chick-fil-A will likely file a trademark infringement suit against Muller-Moore.
It is refreshing to see a small business take a stand against a corporation and have both local and national support. Getting IP protection is valuable for a small business, be it in the form of trademark, copyright or patent. Moore-Mueller is an excellent example of a small business who is not afraid to exercise the IP rights available to them.
Read more on how to file a trademark for a small business