Protection of intellectual property rights and other proprietary information and trade secrets is no longer the exclusive concern of Fortune 500® companies. This is especially true given the increasing numbers of service and technology businesses in South Carolina, as well as most other states. A business can much more quickly build value by availing itself of intellectual property and proprietary information rights through the use of patent, trademark, copyright, and trade secret protections
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You may want to consider registering the company trademarks or service marks for company products and services. A trademark is an indicia used to indicate origin of a good or service. Traditionally, an owner of goods, such as a manufacturer or a merchant, adopts the use of a trademark to indicate either origin or ownership of a good and to distinguish it from similar goods of another. Trademark law has primarily developed around the idea of protecting identification of origin.
More specifically, a trademark identifies and distinguishes a manufacturer's or seller's goods from the goods of others. A service mark identifies and distinguishes a seller's services.
Trademarks and service marks are properties, but they also represent a substantial investment in, and embodiment of, the goodwill of a company. Trademarks and service marks, therefore, should be protected when possible. The owner of a trademark or service mark has the right to exclude others from using a mark that would likely confuse customers or clients about the origin of a good or service. Where overseas infringement occurs, under certain circumstances, a trademark or service mark holder can enroll the United States Custom Service in protecting such property rights.
There are three levels of trademark and service mark protection: common law, state law, and federal law. Common law, in some circumstances, protects the use of a trademark or service mark simply by virtue of the mark having been used in commerce in association with a good or service. Protection under common law does not require registration. However, this form of trademark protection is generally strictly limited to the immediate geographical territory and commercial market in which the mark is used. Registration under state or federal law generally gives the owner a larger bundle of rights than under common law, including the right to be reimbursed for attorney’s fees, and the right to be deemed the presumptive owner of the trademark or service mark. Registration of a mark is made in one or more of 45 international classifications. However, not all trademarks and service marks are eligible for protection. In many instances, generic and merely descriptive marks may be ineligible for registration, unless such marks have obtained a secondary meaning, as the recognized mark of goods or services, beyond the generic or merely descriptive meaning. Suggestive and fanciful marks are generally eligible for registration. However, exceptions exist. Therefore, an attorney experienced in trademark law should be consulted.
“TM,” “SM,” and “®” notices should be displayed properly on all company literature or packaging. The indices “TM” and “SM” generally put others on notice that a word, slogan, or graphic design is being used as a trademark (“TM”) or service mark (“SM”) that is not registered with the U.S. Patent and Trademark Office. The indicia “®” indicates that a mark has been registered federally with the U.S. Patent and Trademark Office.
A proper copyright notice should always be placed on all company copyrightable materials. Copyright is a term that is almost deceptively simple. To have a copyright means nothing more than to have the exclusive legal right to copy a fixed act of expression. However, what makes copyright less than simple is in knowing what copyright protection does and does not apply to.
As a legal concept, copyright is applied to “original works of authorship that are fixed in a tangible form of expression.” Literary, musical, dramatic, pictorial, graphic, sculptural, choreographic, photographic, architectural works and sound and audiovisual recordings, for example, rise to the level of original works of authorship. Titles, names, phrases, slogans, ideas, calendars, tape measures and other works do not. A musical or choreographic work that has been reduced to notation is fixed. An improvisational speech is not. For eligible works, copyright occurs automatically, without the need for registration. However, timely registration enhances the rights of a copyright holder.
A work that is created after January 1, 1978, is automatically protected from the moment of its creation and is given a term lasting for the author’s life, plus an additional 70 years after the author’s death. For works made for hire, the duration of copyright will be 95 years from first publication or 120 years from creation, whichever is shorter.
Despite the automatic and immediate copyright protection given copyright owners, providing others with notice of your copyright and registering your copyright with the Copyright Office of the Library of Congress should still be considered.
Providing notice of your copyright informs others that the work is protected, identifies you as the copyright owner (and potential copyright licensor), indicates the year copyright commenced, and prevents others from claiming that their infringement of your copyright was merely innocent, in the hope of limiting any payment for damages to you that a court might impose on them.
Notice of copyright generally is in the following form: the copyright symbol of ©, (c), or the word “Copyright,” followed by the year of publication (generally when made available for sale or distribution to the public) and the name of the copyright owner.
Example: © 2000 John Doe
For sound recordings, such as on phonographs, cassettes, and CDs, notice of copyright is generally the copyright symbol of (p) or the letter P in a circle, followed by the year of publication and the name of the copyright owner.
Example: (p) 2000 John Doe Records, Inc.
Your copyright should be placed in a manner to give others reasonable notice.
Registering your copyright with the Library of Congress: (1) creates a public record of your copyright claim, (2) allows you to record the copyright with the U.S. Customs Service to prevent the importation of infringing copies, and (3) is necessary before an infringement suit may be brought. Moreover, registering your copyright within 3 months after publication or prior to infringement allows you to collect statutory damages and attorney’s fees in any successful infringement lawsuit you bring. Registering your copyright within 5 years of publication shifts the burden of proof of the ownership of the copyright onto those who are making claims against your right.
If your company invents or discovers new products or applications, you should consider patenting all applicable inventions and discoveries to protect your interests from infringement by third parties.. Three types of patents are available: utility patents, design patents, and plant patents.
A utility patent gives its owner a monopoly in an invention for 20 years, starting from the date the application was filed. Utility patents are available only for those inventions that are non-obvious, novel and useful, and are fully disclosed in the United State’s Patent and Trademark Office application.
A design patent gives its owner a 14-year monopoly in the design (appearance) of an article of manufacture. To qualify for a design patent, a design must be novel, non-obvious and ornamental.
Plant patents run for 20 years and are available to persons who discover or invent a distinct and novel, distinct and non-obvious variety of plant and asexually reproduce it (from a cutting and not from seeds).
If applicable, the company should implement a trade secret program. According to the South Carolina Trade Secrets Act, a company’s trade secret means information, including, but not limited to, a formula, pattern compilation, program, device, method, technique, product, system, or process, design, prototype, procedure, or code that derives independent economic value, actual or potential, from not being generally known to or ascertainable by proper means by the public or any other person and is the subject of efforts that are reasonable under the circumstances to maintain its secrecy. It may consist of a simple fact, item, or procedure, or a series or sequence of items or procedures which may individually be thought of as minor or simple, but collectively can make a substantial difference in the efficiency of a process or the production of a product, or may be the basis of a marketing or commercial strategy. For example, while the name and address of a client or customer might in itself be easily attained in itself and of unknown value, a compiled list of such names and addresses would have substantial independent economic value worthy of protection under the South Carolina Trade Secrets Act.
The Act allows an aggrieved party to recover damages and to prevent further use, disclosure, or dissemination of such trade secrets. Moreover, violation of the act potentially exposes one to fines up to $100,000.00 or imprisonment of up to ten years.
Because of the value of trade secrets to a company and it competitiveness, every company should take steps reasonably necessary to protect its trade secrets, including properly notifying parties which information is considered a trade secret, restricting access to such information to only those who need to know, and marking documents containing trade secrets as “Confidential.” Word processing programs make this last task easy to do, as do a rubber stamp of the word “Confidential” and an ink pad.
Employees, consultants, and independent contractors should sign appropriate confidentiality, work product, invention assignment, and/or work for hire agreements. Inevitably, employees, consultants, and independent contractors receive access to a company’s most important confidential information. Similarly, employees, consultants, and independent contractors are the ones who perform the company’s research, development, manufacturing, and marketing of its goods and the development and marketing of its services. Companies can better protect themselves against competing claims for proprietary and intellectual property rights with respect to the creation of a company’s goods and services by diligently having its employees, consultants, and independent contractors enter into confidentiality, work product, and invention assignment agreements at the start of the employment period or engagement.
Where copyright issues are specifically concerned, the employer and not the employee is considered to be the author when a work is a "work made for hire" because prepared by an employee within the scope of his or her employment. However, when engaging an independent contractor, a work is considered a work for hire, with the company being legally deemed the original copyright holder only if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire and the work prepared by the independent contractor is for use as: (1) a contribution to a collective work; (2) a part of a motion picture or other audiovisual work; (3) a translation; (4) a supplementary work; (5) a compilation; (6) an instructional text; (7) a test; answer material for a test; or (8) an atlas
In all other instances, where the work for hire doctrine does not apply, you will want to consider having the employee or independent contractor enter into an advance written agreement that all copyright in the work shall be assigned to your business.
It is in the company’s best interest to always perform due diligence to determine whether it is infringing on the intellectual property rights of others. For example, state, federal, and other databases should be checked, or third-party services used, to determine whether the company’s name, trademarks, service marks, and domain name are in violation of the intellectual property rights of others.
Every business should perform some due diligence to determine whether it is infringing on the intellectual property rights of others. For example, state, federal, and other databases should be checked, or third-party services used, to determine whether the company’s name, trademarks, service marks, and domain name are in violation of the intellectual property rights of others.
Your business should consider having a program in place to determine if others are violating itss intellectual property rights. State, federal, and other databases should be checked to determine whether its trade name, trademarks, service marks, and domain names are being infringed upon by others.
Your business should ensure that it is complying with all license agreements to which it is a licensee. License agreements should be reviewed to determine whether its use of software, trademarks, service marks, or other licensed property is in compliance with the terms of the agreements.
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IMPORTANT DISCLAIMER: This checklist (in whole or part) is not an exhaustive list of legal issues applicable to any business. Its purpose is strictly educational. It is not intended to be construed as legal advice, or a substitute for legal advice, and should not be relied on without consulting a licensed attorney competent in business matters. The federal, state, and local laws and regulations on which this information was originally created are subject to change without notice. No warranty, whether express or implied, is made as to the frequency or timeliness of any corrections or updates to the information provided herein.
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