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    Wednesday, June 17, 2009

    Divorce and Intellectual Property

    A recent opinion highlights the ugliness of intellectual property when divorce occurs. The beloved Johnathan Livingstone Seagull was the rope in a tug of war between the author Richard Bach, and his ex, Ms. Parrish, in the Washington Court of Appeals case Bach v. Parrish,
    60406-6-I (2008).
    Ms. Parrish had helped Mr. Bach out by buying the copyright rights to the book when Mr. Bach went through bankruptcy shortly after they were married, using her separate funds. She then granted him 50% of the rights. They then divorced and agreed as part of the divorce to share the rights to the book as tenants in common. They then executed a comprehensive settlement dividing up the rights including rights to accrued causes of action such as copyright infringement. There was an infringer. It resulted in a monetary settlement. Bach and Parrish fought over who got what. Ultimately, Bach won because the divorce agreement was comprehensive and clearly gave him the accrued causes of action. It also required resolution by arbitration before a specific judge. All of which the Court of Appeals agreed to.

    Reading this case displays only some of the bizarre tangles that occur when divorce enters the world of intellectual property. Washington is a community property state. Thus, Ms. Parrish was able to purchase and own because of her separate funds. Would she have been unable to get individual rights in a non-community property state. There are numerous questions of who owns what in a marriage, depending on the State and the type of intellectual property.

    One clear result from the case that entrepreneurs should take away, Bach was definitely benefited by having a well drafted agreement that contained an arbitration clause.

    Wednesday, April 22, 2009

    Rescue Me

    Businesses seeking search engine optimization through use of keywords were dealt a blow by the US Court of Appeals for the Second Circuit on April 3, 2009. In Rescuecom Corp. v Google, Inc., the Second Circuit reversed the lower court’s dismissal of Rescuecom's suit against Google for Google's use of the term “Rescuecom” to trigger sponsored links through Google's Adwords and keyword suggestion programs. The lower court had dismissed the suit ruling that the Google programs use of the terms was not "use in commerce". The Second Circuit reversed, and in doing so, joined the other courts, notably the Ninth Circuit, that have ruled that use of keywords can be “use in commerce” for purposes of liability for infringement under the Federal Lanham Act.

    What are the implications? First, given the wide spectrum of trademark protectabilty, from no-protection generic terms to highly protectable fanciful or arbitrary terms, the business using keywords must navigate a minefield. How do you know if a term is claimed as a trademark by someone else? Certainly a search on the Federal register can yield those marks for which someone has sought Federal registration, but the Lanham Act allows suit for unregistered marks, such as State registered marks or common law marks. Searching for common law marks can be an unwieldy and expensive beast, and if the business owner has to do it for every term it wishes to use as a Google Adword, then marketing costs for internet advertising will quickly add up.

    Second, the decision ruling keyword use to be "use in commerce" seems at odds with the Federal Trademark Office interpretation of "use in commerce". To get a mark registered, the applicant needs to show that the mark has been "used in commerce" for the particular class of goods or service for which registration is sought. The Trademark Office does not accept keyword use as acceptable proof of use. But how can the Trademark Office continue to take this position when the Federal Courts of Appeals rule that keyword advertising is "use in commerce". This conflict is ripe for resolution, which doesn't currently appear anywhere near.
    Due diligence before use of a term in advertising that is even remotely suspected as being a possible trademark of another now seems to be the order of the day. What constitutes due diligence, however, is a topic for another day.

    Saturday, February 14, 2009

    Who you gonna call? Part I-Patents

    People frequently ask what factors should go into evaluating and choosing a patent counsel. Patent work can be broken down into several areas, including licensing, prosecution, and litigation, among others. A deep technical understanding of the underlying art may be less necessary for licensing and litigation, assuming people familiar with the technology are accessible.

    For this post, we will deal with choosing a patent prosecution counsel.

    Technical understanding. For patent prosecution counsel, the technical understanding becomes more important, but again dependent on the area. For mechanical inventions, being an expert in that field of mechanical endeavor is probably unnecessary so long as the patent attorney is qualified for mechanical patents. Specialized understanding gets to be more important depending on the sophistication of the art. Cryptological software inventions, for example, probably require a skilled CS person who also has qualification in upper level (i.e., beyond engineer level) mathematics. Pharmaceuticals require not only the biochemical understanding, but access to attorneys skilled in FDA approvals. Numerous examples of the different arts, some requiring only basic qualification, and others requiring specialized qualification, exist.

    In regards to efficiency/billing, and also in regard to ability, other qualities than specialized knowledge can be equally or more important such as learning speed, wheel-spinning, and legal conceptual understanding. The speed of learning—there are electrical engineers who can learn quickly, and those who cannot. Since all inventions are by their essence new, novel, and nonobvious, there will be learning regardless of specialized knowledge. Wheel-spinning--there are highly technically qualified attorneys who can take forever to sit down and hammer out the applications. Some people need to take a break every twenty minutes for a water cooler chat. Some like to do an application a day. Legal conceptual understanding—if the highly qualified technician just does not get the fact that patents are ultimately read by non-patent attorneys, and non-lawyers, the product will suffer and may require redrafting requests.

    Anyone looking to choose patent prosecution counsel should also determine whether the counsel they consider is stuck in the past or married to inflexible platforms for performance and billing. Is the counsel open to alternative billing structures. Is the counsel open to re-constituted staffing of projects. The old firm tradition of billing hourly, and then maximizing profit by staffing a case with junior level attorneys all answering up the chain to a senior attorney, may not always be the most optimum. Is the counsel open to billing structures that provide motivation for efficiency.

    Thus, in terms of selecting counsel for patent prosecution, while some breakdown should be made for specialized arts, to maximize value and minimize unnecessary fees, the evaluator should design a selection process that includes: (a) identifying a pool of base qualified counsel; (b) winnow the most efficient by focusing selection not on degrees or industry experience, but instead on factors which identify and quantify learning curve speed, work energy and motivation, and availability of senior attorneys who are experienced not only in prosecution, but also who have done licensing and who have actually conducted jury trials; and (c) determining whether in this winnowed group the counsel understands, is open to, and able to provide different billing structures so that in-house counsel can price and budget prosecution work in perspective to its worth to the company.

    Monday, January 26, 2009

    Patently Ridiculous

    A series of more or less recent articles points to a troubling trend at the U.S. Patent Office. On January 5, 2009, PatentlyO reported a plummeting reversal rate at the Board of Patent Appeals and Interferences (BPAI). On January 8, 2009, PatentlyO reported a soaring appeal rate at the BPAI. The BPAI is the review board that reviews examiner rejections of patent application claims. Add to this state of affairs the troubling statistics, again reported at PatentlyO, showing a long wait time before the Examiner even gets to an office action. Similarly, the significant lag at the BPAI to even reach a decision on the merits, averaging 542 days (1 2/3 years), causes concern.

    What does this mean? One conclusion is that there is a general belief that there are too many questionable Examiner rejections and that the only way to get a fair review is to appeal to the BPAI--hence, the soaring appeals. But because appeals are now sought more frequently, instead of after serious consideration, more questionable appeals are being filed--hence the plummeting reversal rate. And in both scenarios, it will be a long time before a decision because of the double lag times imposed upon Applicants by the Patent Office. The dedicated IP entrepreneur should increasingly expect to be "patent pending" for quite some time.

    Monday, January 19, 2009

    Naming your business

    Picking a business and/or product name can be tricky. The more a name describes the product/business the more the name is not protectable. Pick a generic name and get instant recognition--but anybody else can use the name also. Building a reputation into an unusual nondescriptive name takes time and effort, but usually yields a more protectable name. But don't choose a name chosen by somebody else because then you risk trademark infringement/dilution liability. These precepts making choosing a name difficult. Nolo recently published an article on "Picking a Winning Name for your Business" which discusses some of these issues, and others.