Intellectual Property

Intellectual property is a very important topic for creative professionals. We strive to produce work of significant value and we negotiate with clients for its use and ownership. This article provides an overview of the core issues for design and marketing: copyrights, trademarks and trade dress, utility patents and design patents. It also covers the essentials of trade secrets and moral rights. It ends with some thoughts about the challenges of protecting intellectual property rights on the Internet and in global trade. All of these are complex issues and this article can only serve as a brief introduction. For more detailed information, you will of course want to speak with an intellectual property attorney.

Copyright

Copyright is statutory protection granted to “original works of authorship.” In the United States, copyright has been an important legal issue from the very beginning. In 1787, the U.S. Constitution empowered Congress to enact copyright protection. Three years later, the Copyright Act of 1790 laid out the administrative procedures for registration and enforcement. Since that time, U.S. law has gone through several major revisions in order to broaden the scope of copyright, to change the term of copyright protection and to address new technologies. The current version of U.S. copyright law was passed by Congress in 1976 and became effective in 1978. From time to time, minor revisions are made as well. One recent example was the passage of the Digital Millennium Copyright Act in 1998, which addressed some of the ownership challenges posed by easy access to digital works on the Internet. Copyright registration is managed by the U.S. Copyright Office, which is part of the Library of Congress. Lots of useful information is available from their website, www.copyright.gov. For a handy reference, go to the “Publications” section and download the PDF file for Circular 1, “Copyright Basics.”

Copyright does not cover an idea in and of itself—it covers the expression of it in a fixed or tangible form. The author has the exclusive right to reproduce or sell the work, distribute copies, display the work publicly, perform the work publicly or prepare derivative works. Each specific use can be transferred outright (assigned) or transferred in a more targeted way (licensed). A transfer of rights can be either exclusive or non-exclusive. Any transfer may be terminated after 35 years (except “work-for-hire,” which is discussed below). Any rights not transferred explicitly remain the property of the owner. It's important to note that copyright ownership is separate from ownership of the physical work. For example, a collector may purchase a signed original photograph but the photographer will be careful to retain rights to the image itself.

Work-for-Hire

This is also called “work made for hire.” It refers to original work made by an employee, in which copyright ownership automatically belongs to the employer. It can also refer to original work made by an independent contractor or a design firm, in which copyright ownership might automatically belong to the client, but only under certain limited conditions. If your work doesn't meet all of the criteria, copyright will belong to you unless you assign it to your client. The work must be specially ordered or commissioned, a written agreement must be signed saying that it is a work made for hire, and the work must fall within one of the following nine categories:

• A contribution to a collective work (such as a magazine, an anthology or an encyclopedia)
• A work that is part of a motion picture or other audiovisual work (such as a website or a multimedia project)
• A translation
• A supplement prepared as an adjunct to a work created by another author (such as a foreword, an appendix or charts)
• A compilation (a new arrangement of preexisting works, such as a database)
• An instructional text (whether it is literary, pictorial or graphic)
• A test
• Answer material for a test
• An atlas

Original Works of Authorship

As stated above, U.S. copyright law protects “original works of authorship.” So what exactly is included? Here is a list of the various works that are covered:

• Published and unpublished fiction and non-fiction
• Catalogs and advertising copy
• Drawings and other designs
• Fabric designs and sketches for garments
• Photographs
• Sculpture, paintings and other works of fine art
• Architectural plans, drawings and models
• Musical scores and lyrics
• Musical performances captured on records, tapes, discs, etc.
• Choreographic works that have been notated or recorded
• Dramatic works such as stage plays and screen plays
• Motion pictures captured on film, video, DVD, et cetera
• Computer programs, including source code and distinctive screen displays

As you can see, the list is quite long. Copyright protection covers a broad range of creative output. However, it's important to note that the following works are specifically excluded from protection:

• Titles, names, short phrases and facts
• Anything that is written or created by the U.S. government (This includes such things as NASA photographs and government maps.)
• Utilitarian works (Historically, this category has included typeface designs produced by traditional methods because the alphabet itself is utilitarian. It was only possible to copyright original characters outside of the standard alphabet. However, nearly all typefaces are now designed and distributed electronically. Digital fonts are in fact software, which can be copyrighted.)

Collective Works

In addition to individual works, copyright also protects collective works. Examples of this include magazines, anthologies and encyclopedias. Copyright for the collective work is separate from the individual components. This means that individual contributors may retain the underlying rights to their own portion of the project, even though the publisher will own the copyright to the finished compilation. The law presumes that contributors transfer non-exclusive rights only and that all other rights to components remain vested with the authors. Any exclusive or all-rights transfers to a publisher must be in the form of a written agreement signed by both parties.

Duration

Copyright protection begins automatically from the moment a work is created in fixed or tangible form. Copyright immediately becomes the property of the author who created the work. Because the law has changed over time, the exact duration of protection will depend upon when the work in question was created.

For older works that were created and published or registered before January 1, 1978, the initial term was 28 years, which could then be renewed for an additional 47 years (bringing the total to 75). However, the Copyright Term Extension Act of 1998 allowed a second renewal that added 20 more years (bringing the total to 95). This second renewal was a bit controversial because it applied to some important works of American popular culture from the 1920s, including the first version of Mickey Mouse and the early songs of Cole Porter. The Copyright Term Extension Act was subjected to a legal challenge but it was upheld by the U.S. Supreme Court in January 2003.

The duration of copyright protection is different for older works that were not published or registered, and for more recent works. Works created before January 1, 1978 but not published or registered by that date, and works created on or after January 1, 1978, have the following term: a sole author's life plus 70 years, a joint author's life plus 70 years or, in the case of work-for-hire, 95 years from publication or 120 years from creation, whichever is shorter.

At the end of the appropriate term, a work enters the public domain. This means that copyright protection has expired and the work becomes available for anyone to use in whatever way they might like. One note of caution: if you are working on a project that involves an older literary work, be careful about translations. If the text that you want to use comes from a recent translation, it will be protected by its own copyright.

Copyright Notice

The use of a copyright notice on the work is beneficial but not absolutely required. The standard format is this: © (the letter “C” in a circle) + the year of first publication + the name of the owner. The letter “P” in a circle is used for “phonorecords” including cassette tapes, CDs and LPs. If the owner licenses the work to someone else, the licensee's name can only be used on the copyright notice if the license is exclusive.

Copyright Registration

Even though formal registration of copyright is not required by law, it is still beneficial because it establishes a public record of the date of creation and the original owner. This information is very important if, at a later date, it becomes necessary to take legal action against infringement. If you feel that you have created something of value that others might be tempted to appropriate, then you should register it. It's recommended that you register a work within three months of its creation. The registration process is very simple. Go to www.copyright.gov and download Form VA (for visual arts). Complete the form and send it to the Copyright Office with documentation of the work that you are registering (one copy if unpublished, two copies if published) plus a filing fee (currently $30). After receiving your packet, it usually takes the Copyright Office 16-24 weeks to complete the processing of your registration.

Group Registration

If you register lots of separate works, the process can become expensive. However, if you have produced a number of items that are related in some way, you may be able to save money by filing a group application.

Any number of unpublished works may be registered as a collection for a single fee if all of the following conditions are met: the elements of the collection are assembled in an orderly form, the combined elements bear a single title identifying the collection as a whole, the copyright claimants for each of the elements are the same, and all of the elements have at least one author in common.

Also, any number of published elements may be registered together if they are published as a single unit (for example a game that consists of playing pieces, instructions and a game board) and the copyright claimants for each of the elements are the same. Group registration can also be made for certain contributions to periodicals.

Copyright Infringement

Infringement is unauthorized use of a substantial portion of a copyright-protected work. It is the opposite of seeking and receiving permission, using correct notice of ownership, and contracting for payment of a royalty or fee. Copyright infringement must be intentional—the infringer must knowingly copy the work without obtaining authorization. If you become aware that an individual or a company is infringing upon your work, you can obtain an injunction or restraining order to stop them from using it. In a lawsuit, you must prove that you own the work and prove that the defendant has copied it. You will recover attorney's fees if you win. You may also recover actual damages, statutory damages, or the profits that were generated by the infringement. The judgment that is made will be affected by the extent of infringement and how much proof there is that it was intentional.

Fair Use

It is important to note, however, that there are certain uses of copyright-protected material that do not constitute infringement. These have to do with criticism, comment, news reporting, teaching, scholarship and research. Fair use also protects parody, satire and caricature. Usually only a small portion of the work is used, and it should not affect the potential market value of the work. Factual works tend to be less protected than creative ones and, in a dispute, the court will consider whether the use was commercial or nonprofit.

Trademarks

A trademark is a word, name, symbol, design, picture, device or slogan, or a combination of these elements, that is used by a business to distinguish its products or services from those of its competitors. Trademark protection can also include distinctive sounds, shapes or colors that are used in commerce. The purpose of a trademark is to identify the source of a product or service and prevent confusion in the marketplace. Some well-known trademarks are the roar of the MGM lion, the pink of the insulation made by Owens-Corning, the shape of a Coca-Cola bottle and the “Just Do It” slogan that is used by Nike. Trademark is a general term, but it's also possible to be more specific. A “service mark” is a mark used by a business in selling or advertising services. A “certification mark” is used as a seal of compliance or approval (such as union labels or the Underwriters Laboratory mark that appears on many electrical products). A “trade name” is the name by which the public knows a particular business. A domain name on the Internet can be registered as a trademark or a service mark if it identifies the source of goods or services and is not simply a digital address. In the early days of the World Wide Web, there were quite a few lawsuits over newly registered URLs that resembled existing trade names. Congress eventually stepped in to clarify the situation. Domain name pirates can be sued for trademark dilution under the Anticybersquatting Consumer Protection Act adopted in 1999.

There are some restrictions on what can be registered. You cannot register a trademark that:

• Is confusingly similar to another mark that is already registered
• Is merely descriptive, like “soft drink”
• Is immoral, deceptive or scandalous
• Defames an institution, belief, national symbol, living or deceased person
• Contains the flag or other insignia of a country, state or municipality
• Includes the name, portrait or signature of a living person without his or her written permission
• Includes the name, portrait or signature of a deceased U.S. president during his or her surviving spouse's lifetime without written permission

Trademark Registration

Trademark registration is done through the U.S. Patent and Trademark Office. The site www.uspto.gov has detailed information about the process. You can also register trademarks in some individual states, but that protection is only local. Since most businesses today are involved in some form of interstate commerce (this includes all firms that transact business on the Internet) it makes more sense to go directly to the national registration process.

You must first conduct a comprehensive trademark search to check for “prior art,” that is to say, anything already on file that matches or closely resembles what you would like to register. The U.S. government database can be searched for free. The government maintains self-service Patent and Trademark Depository Libraries in many large cities across the country. Usually they are located inside the main public library. Even though the government database can be searched for free, many companies prefer to have the search conducted by a legal professional. The most commonly used private search service is Thompson & Thompson. More information is available from their site at www.thomson-thomson.com. Search services are available from other companies as well, including CORSEARCH, LawMart and 4Trademark. You will need to specify whether you want a word search and/or a design search, and whether you want it to be U.S. and/or international.

You must use a trademark in interstate commerce to order to qualify for U.S. registration. However, while your new business is in its ramp-up stage, you may reserve a trademark in advance by filing an “intent-to-use” application six months prior to the planned start of actual use. It's also possible to file for a series of extensions to bring the advance total to 36 months.

Currently, the federal registration fee is $325. After you have submitted your registration paperwork and fee, it usually takes six months to receive a filing receipt from the Patent and Trademark Office, then at least another six months for them to complete the processing. In the meantime, many companies use a small “TM” or “SM” on their business materials to indicate that trademark or service mark status is being claimed. Those letters are later replaced with the symbol ® (an “R” in a circle) when the entire registration process is complete.

Duration

Trademark registrations completed on or after November 17, 1989 are valid for an initial period of 10 years. After that, they can be renewed every 10 years as long as they are still being used in business. A trademark is presumed to be abandoned if it is not used for a 2-year period. Abandoned trademarks become available to anyone.

Infringement

Trademark infringement includes unauthorized use of an existing registered mark, or use of a new mark that resembles one too closely. Trademark infringement is not about originality, but about creating confusion in the marketplace as to the source of a product or a service. Trademark rights can be infringed unknowingly—that is, even if the new work was created independently. Even though the infringement may be accidental (you may independently create a logo for your client that looks like someone else's trademark), there may be infringement liability, and the infringer may be responsible to pay substantial damages. Each case is of course judged according to its own merits. In general, though, some trademarks are easier to defend. The strength of a trademark can vary based on the nature of the mark itself. A mark that strongly suggests the type of product or service being sold (like “Roto-Rooter”) is often weak from a legal standpoint. An arbitrary mark that uses an ordinary word or phrase in an unexpected way is stronger (like “Yahoo!”). A coined word that did not exist before and has no literal meaning apart from its commercial usage (like “Diageo”) tends to be the strongest.

Most companies actively promote their trademarks to the public, but they must be careful that a mark remains distinctive and does not slip into general usage as a common term for describing an entire category of products or services. If a mark becomes a generic name (like linoleum), federal trademark protection will be difficult to maintain.

Trade Dress

Trade dress is part of U.S. trademark law. It protects an established “look” for a particular product or a service in the marketplace, including overall composition and design, size, shape, color, texture and graphics. Trade dress is intended to protect a brand from unfair competition by imitators and copycats. For example, trade dress for a product will include the design and appearance of the product itself as well as that of its container and all other distinguishing nonfunctional elements that make up the total visual image with which the product is presented to consumers. However, a general visual “style” cannot be protected, such as art nouveau or art deco. Keep in mind that trade dress protection applies to the manufacturer or source of products, not usually to the designer—unless you are very well-known and have negotiated an agreement to co-brand a product with your client (like Philippe Starck and Target).

Trade Dress Infringement

Just as we discussed with trademarks, trade dress rights can be infringed unknowingly—that is, even if the new work was created independently.

Unfair Competition

So far, we have been discussing disputes between trademark owners. Another part of U.S. trademark law, Section 43(a) of the Lanham Act, opens up the possibility of lawsuits by consumers. The law includes the following language: “Any person who shall affix, apply, or annex, or use in connection with any goods or services, or any container… for goods, a false designation of origin, or any false description or representation, including words or other symbols tending falsely to describe or represent the same… shall be liable to a civil action… by any person who believes that he is or is likely to be damaged by the use of any such false description or representation.” This means that both competitors and consumers can file suit against:

• Active misrepresentation of one product or service in relation to another
• False statements made in connection with a promotion
• False designations of origin
• Misuse of names and trademarks
• Commercial imitation of voice, image or likeness without consent

Patents

A patent functions rather like a deed to a particular invention. It cannot be obtained for a mere idea or suggestion—it must be for something that is complete and specific. A patent gives the inventor the right to exclude other people from making, using, importing, offering and selling the invention. By inference, this gives the inventor the opportunity to produce and market the invention, or license others to do so, and to make a profit from it. A patent can be obtained for any new, useful, nonobvious invention, including food and clothing. Nonobvious means not obvious to a person having ordinary skill in the field. Patents cannot be obtained on any of the following: the laws of nature, physical phenomena, abstract ideas, machines that are not useful, inventions that are useful solely in relation to nuclear weapons, new minerals or new plants that have been found in the wild, printed matter or human beings. The patent itself is a type of personal property. It may be sold, assigned or licensed to others, mortgaged, bequeathed or inherited. In a design relationship, typically it is the client who will own the patent. However, the designer must first assign rights to them.

There are several different categories of patents, but two categories are of particular interest to designers: utility patents and design patents.

Utility Patents

Utility patents protect useful processes, machines, articles of manufacture and compositions of matter. Examples include fiber optics, computer hardware, medications and user interfaces. A utility patent is valid for 20 years from its filing date (if three maintenance fees are paid). This category includes so-called “business process” patents. Patents for business methods have generated many lawsuits over the past few years, particularly among Internet companies. For example: MercExchange sued eBay, alleging unauthorized use of a patented procedure for locking in an offer during an online auction. The court ordered eBay to pay $35M in damages. Another example: the lawsuit filed by Amazon.com against BarnesandNoble.com for using a “1-click” purchasing system. The settlement required Barnes and Noble to change their online ordering process.

Critics of these process-oriented patents claim that basic business practices are being usurped and that innovation is being jeopardized. They contend that new patent applications are not screened closely enough and that too many vague patents have been granted. In response to these concerns, a number of possible changes to the system are being explored by the Patent Office, as well as by the Federal Trade Commission, the National Academy of Sciences and Congress.

Design Patents

A design patent is intended to protect a new, original and nonobvious ornamental design for an article of manufacture. It protects only the appearance of an article, not its structural or functional features. For example, the outward appearance of an athletic shoe or of a bicycle helmet can be protected. A design patent is valid for 14 years from the date it was granted, with no interim maintenance fees.

Patent Registration

When applying for a patent, it's best to use the services of an experienced intellectual property attorney. The process begins with a patent search to check for “prior art.” Once the application is filed with the Patent Office, it can take up to 22 months for processing to be completed. Application, issue, maintenance and related fees can cost at least $4,000 over the life of a patent. The words “Patent Pending” on a product mean that a patent has been applied for. The words “U.S. Patent Number XXXXXXX” on a manufactured item mean that the processing is complete and a patent has been issued. It's illegal to use either of these phrases if you have not actually applied.

Patent Infringement

Patent rights can be infringed unknowingly—that is, even if the work was created independently. Litigation to protect patents can be very time-consuming and expensive. Because of this, many product firms carry patent enforcement insurance.

Trade Secrets

A trade secret is any type of information that cannot be trademarked or patented, but that you want to keep secret because it gives you an advantage over your competitors. The information must not be generally known to others, and it must have actual or potential economic value. Examples include the formula for Coca-Cola, a customer list or an advertising plan. You must make reasonable efforts to maintain the secrecy of the information. This means controlling access to it and having signed agreements in place for confidentiality, nondisclosure and noncompetition. If the information is in a digital format, you must protect your computer network and maintain reasonable security against hackers. Trade secrets do not have a specific duration. They can be protected indefinitely. Every state in the U.S. has enacted a law prohibiting theft or disclosure of trade secrets. Intentional theft can also be a federal crime under the Economic Espionage Act of 1996.

Moral Rights

Moral rights are sometimes referred to in design contracts, but they are really more relevant to the fine arts. The Visual Artists Rights Act (VARA) is an amendment to U.S. copyright law that took effect in 1991. It extends to artists in the U.S. rights that are similar to those contained in the Berne Convention, an international copyright treaty. U.S. protection lasts, in general, for the life of the artist. Protection cannot be transferred but it can be waived. It does not apply to work-for-hire (discussed above). The VARA defines a work of art as:

• A painting or a drawing
• A print, sculpture or photograph, if it is in a limited edition of 200 or fewer copies, consecutively numbered and signed by the artist.

In the U.S., VARA gives an artist these specific rights:

• The right of attribution
  To claim authorship of his or her work, and to prevent the use of his or her name on the works of others 
• The right of integrity
  To prevent use of his or her name on mutilated or distorted versions of the work (if the changes would injure his or her honor or reputation), and to prevent the mutilation or distortion itself if it will damage the artist's reputation 
• Plus the additional right
  To prevent the destruction of a work if it is of “recognized stature” 

Even though these rights have been in place since 1991, only a few U.S. artists have actually filed VARA lawsuits. Most of these cases have involved public works of art or pieces affixed to buildings. This lack of claims may be due to the fact that costs can be high if an artist files a federal lawsuit and then loses, especially if the case goes to appeal. The legal costs could easily exceed the value of the artwork in question.

Issues on the Internet and in Global Trade

The rapid expansion of the Internet has created new enforcement challenges for owners of copyrights, trademarks and patents. It's very easy to take work that is digital and use it without authorization. Sometimes its difficult to tell who is doing the infringing and where they are located, so there are also legal risks for Web site owners and Internet service providers who may transmit or store material that infringes. If you are a web designer, you can avoid problems by using only content that is either completely original, verifiably in the public domain, or for which you have the signed consent of the owner. On each site, you must include patent marking, copyright notices and trademark notices as appropriate.

Compounding the challenge is the fact that intellectual property laws are national, but the Internet is global. Global businesses often seek to register intellectual property separately in each country where they plan to do business. After registering in the U.S., many American companies also seek protection in Canada, Japan, Australia and the European Union. However, when you are registering in different countries, the specifics of eligibility and duration can vary quite a bit. Here's one example that relates to patents: most countries in the world offer patent protection on a “first to file” basis, but the U.S. and the Philippines have a “first to invent” system.

Intellectual property laws are national, but many countries sign international treaties and trade agreements that include intellectual property protection, such as the Paris Convention for the Protection of Industrial Property (which is focused primarily on industrial design and patents) and the Berne Convention for the Protection of Literary and Artistic Works (which is focused primarily on copyright). As trade becomes increasingly global, U.S. trade negotiators seek to defend American companies from foreign copycats and pirates in many product categories such as music, films and videos, software and pharmaceuticals. In 1995 a major international trade agreement known as TRIPS (Trade-Related Aspects of Intellectual Property Rights) went into effect. It put in place a rule-based trade system. Upon signing, countries are given a specific amount of time (usually 1, 5 or 11 years) to bring their national laws and practices into compliance. Countries that permit intellectual property violations can be threatened with trade sanctions. Global trade involves a very wide range of social and economic issues, but for questions specifically related to intellectual property law, you'll want to take a look at these two websites:

• www.wto.org
  The World Trade Organization currently has 147 member states and 30 observer governments.

• www.wipo.org
  The World Intellectual Property Organization is part of the United Nations. It includes 180 member states and administers 23 international treaties.