What In-House Counsel and Internal Business Units … In-House Counsel and Internal Business Units...
Transcript of What In-House Counsel and Internal Business Units … In-House Counsel and Internal Business Units...
12016 ACC-SoCal In-House Counsel Conference #IHCC16
What In-House Counsel and Internal Business UnitsNeed to Know About IP Law
January 27, 2016
Anaheim, California
Sponsored by Knobbe Martens
Panelists:
Peter Ching
John Sganga
Michael Guiliana
Jeff Van Hoosear
#IHCC12
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Peter Ching - [email protected]
John Sganga - [email protected]
Michael Guiliana - [email protected]
Jeff Van Hoosear - [email protected]
Panelists
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IP Rights can include
– Rights to a Brand – Trademarks
– Rights to Technology/Inventions – Patents/Trade Secrets
– Rights to art work/graphics/software – Copyrights
Primary IP “RIGHT” – To Exclude Others
Issue: Can you Lose These Rights by Inaction?
YESSOL, Laches, and Failure to Police
Can you Snooze on your IP Rights?
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Patent: 6 year rolling window
Copyright: 3 year rolling window
Trademark: 4 years in California
Trade Secret: 3 years in California
Key IP Statutes of Limitation
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Cause of Action Statute Statute of Limitation
Copyright Infringement 17 U.S.C. § 501 3 years after the claim accrued (17 U.S.C. § 507(b)) Rolling
Criminal Copyright Infringement for Profit17 U.S.C. § 506(a)(1)(A) and
18 U.S.C. § 2319(b)5 years after the cause of action arose (17 U.S.C. § 507(a)) Hard cut off
Criminal Copyright Infringement Without a Profit Motive17 U.S.C. § 506(1)(B) and 18
U.S.C. § 2319(c)5 years after the cause of action arose (17 U.S.C. § 507(a)) Hard cut off
Pre-release Distribution of a Copyrighted Work over a Computer Network17 U.S.C. § 506(a)(1)(c) and
18 U.S.C. § 2319(d)5 years after the cause of action arose (17 U.S.C. § 507(a)) Hard cut off
Circumvention of Copyright Protection 17 U.S.C. §§ 1203, 1204 5 years after the cause of action arose (17 U.S.C. § 1204(c)) Hard cut off
Infringement of a Vessel Hull or Deck Design 17 U.S.C. § 1309 No recovery for infringement > 3 years before date complaint is filed (17 U.S.C. § 1323(c)) Rolling
Trademark Infringement 15 U.S.C. § 1114(1) None; courts look to analogous state law causes of action
Trademark Infringement due to False Designation, Origin, or Sponsorship 15 U.S.C. § 1125(a) None; courts look to analogous state law causes of action
Trademark Dilution 15 U.S.C. § 1125(c) None; courts look to analogous state law causes of action
Cybersquatting and Cyberpiracy 15 U.S.C. §§ 1125(d) and 1129 None; courts look to analogous state law causes of action
Counterfeit Labels, Documentation, or Packaging for Copyrighted Works 18 U.S.C. § 2318 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off
Patent infringement (Utility) 35 U.S.C. § 271 No recovery for infringement > 6 years prior complaint or counterclaim (35 U.S.C. § 286) Rolling
Patent Infringement (Design) 35 U.S.C. § 289 No recovery for infringement > 6 years prior complaint or counterclaim (35 U.S.C. § 286) Rolling
False Marking (Patent) 35 U.S.C. § 292 5 years after the date the claim accrued (28 U.S.C. § 2462) Hard cut off
Patent or Copyright Infringement by the United States 28 U.S.C. § 1498 No recovery for infringement > 6 years prior complaint or counterclaim (35 U.S.C. § 286) Rolling
Trafficking in Counterfeit Trademarks 18 U.S.C. § 2320 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off
Transshipment and Exportation of Counterfeit Goods 18 U.S.C. § 2320(h) 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off
Trade Secret Theft to Benefit a Foreign Entity 18 U.S.C. § 1831 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off
Trade Secret Theft for Commercial Advantage 18 U.S.C. § 1832 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off
Trade Secret Misappropriation (state law)Uniform Trade Secrets Act (i.e.
Cal. Civ. Code § 3426)
3 years after misappropriation was or reasonably should have been discovered (Uniform
Trade Secrets Act § 6 (i.e. Cal. Civ. Code. § 3426.6))Hard cut off
IP Statutes of Limitations
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Loss of Distinctiveness (Trademarks)
– Mark used descriptively/generically
– Wide unauthorized use
– User-Generated Content*
Equitable Defense of Laches
– Unreasonable delay by Plaintiff
– Prejudice to Defendant
Vulnerability Ranking:
– Trademarks
– Patents/Trade secrets
– Copyrights
Other Vulnerabilities of IP Rights
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You Snooze You Lose
Failure to address damaging uses:
– reduced distinctiveness/brand value
– reduced/lost ability to enforce
No subjective knowledge required
Trademark Policing Procedures well established
Policing Clearly Necessary
Most Vulnerable IP - Trademarks
MonitorInvestigate
RisksMake
ContactResolve
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Least Vulnerable IP - Copyrights
You Snooze and Still WIN!
Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014)
Section 507(b): sue “within three years after the claim accrued”
Treat as a rolling three year window: suit for acts within window is
still timely
S. Ct:
Suit filed 18 years after infringement OK
statute already takes delay into account
OK for copyright owner to wait to see if suit worthwhile
delay may be relevant to equitable relief
Policing Optional
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SCA Hygiene v. First Quality Baby Products, 807 F.3d 1311 (Fed. Cir.,
Sept. 18, 2015) (en banc)
Section 286: Six year damage recovery window
Aukerman (Fed. Cir. 1992): laches bars all pre-suit damages (6
year delay presumed unreasonable)
D. Ct: grants MSJ of laches where 7 year delay, no excuses
Fed. Cir. appeal: is Petrella logic applicable to patent cases? NO
Dissent (6 to 5 split): Petrella applies
– Unfair delay already factored into 6-year statute – court should
not shorten
Patents: Snooze and Lose Laches defense lives (for now)
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Actual knowledge of infringement not required:
– “Discovery Rule” on SOL
– Imputed knowledge based on infringer’s public
activities
Patentee’s overt demands to infringer
Delay after any of these creates risk
Knowledge of Infringement Triggers SOL/Laches
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Plaintiff sues Toshiba for trade secret misappropriation and
breach of NDA
Alleged trade secrets in software from 1980’s and 1990’s
– 4 year statute of limitations
– But: Discovery Rule tolls statute
– Plaintiff claimed recent discovery, and that Toshiba hid
misappropriation
Plaintiff had constructive knowledge of alleged misappropriation
by Toshiba
– Toshiba widely advertised in same publications as Plaintiff
– MSJ granted: claims barred by statute of limitations
Case study: SOL runs on Trade Secrets
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Finding Laches
Crown Packaging Tech., Inc. v.
Rexam Beverage Can Co., 679 F.
Supp. 2d 512, 519 (D. Del. 2010)
Hall v. Aqua Queen Mfg., Inc., 93
F.3d 1548, 1553-54 (Fed. Cir. 1996)
A. C. Aukerman Co. v. R.L. Chaides
Constr. Co., 960 F.2d 1037, 1038
(Fed. Cir. 1992)
Adelberg Labs., Inc. v. Miles, Inc.,
921F.2d1267, 1270 (Fed. Cir. 1990)
Denying Laches McKesson Info. Solutions LLC v. TriZetto Group, Inc.,
426 F. Supp. 2d 203, 209-10 (D. Del. 2006)
Metso Minerals, Inc. v. PowerScreen Int’l Distrib. Ltd.,
833 F. Supp. 2d 321, 328-29 (E.D.N.Y. 2011)
Hearing Components, Inc. v. Shure Inc., 600 F.3d 1357,
1376 (Fed. Cir. 2010)
Mass Engineered Design, Inc. v. Ergotron, Inc., 633 F.
Supp. 2d 361, 383 (E.D. Tex. 2009)
Union Carbide Chems. v. Shell Oil Co., 2004 WL
1305849 at *19 (D. Del. June 9, 2004)
State Contracting & Engineering Corp. v. Condotte
America, Inc., 346 F.3d 1057, 1066 (Fed. Cir. 2003)
Eastman Kodak Co. v. Goodyear Tire & Rubber Co., 114
F.3d 1547, 1559 (Fed. Cir. 1997)
Gasser Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d
770, 774 (Fed. Cir. 1995)
Vaupel Textilmaschinen KG v. Meccanica Euro Italia
S.P.A., 944 F.2d 870, 878 (Fed. Cir. 1991)
Meyers v. Brooks Shoe, Inc., 912 F.2d 1459, 1462 (Fed.
Cir. 1990)
Laches Decisions
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“Should Have Known
About Infringement”
Crown Packaging Tech., Inc. v.
Rexam Beverage Can Co.,
679 F. Supp. 2d 512, 519 (D.
Del. 2010)
Hall v. Aqua Queen Mfg., Inc.,
93 F.3d 1548, (Fed. Cir. 1996)
Odetics, Inc. v. Storage Tech.
Corp., 919 F.Supp 911, 918
(E.D. Va. 1996)
Overt Act/C&D Letter
Adelberg Labs., Inc. v. Miles,
Inc., 921F.2d1267 (Fed. Cir.
1990)
Wanlass v. General Elec. Co.,
148 F.3d 1334, 1338 (Fed. Cir.
1998)
A. C. Aukerman Co. v. R.L.
Chaides Constr. Co., 960 F.2d
1037, 1038 (Fed. Cir. 1992)
Decisions Granting Laches
No Decisions Granting Laches based on A/C privileged investigation.
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Patent Acquisition
“Notorious” Infringement
6 years
EnforcementContinued
Infringement
Example 1: Notorious Infringement
Laches Possibly Successful, Triggered by Infringers’ activities
Patent Owner loses right to Injunction, cannot stop infringement
Patent Owner loses right to 6 years of Patent Infringement Damages
Patent Owner still has right to royalties for future infringement
No Subjective Knowledge Necessary/Policing not determinative
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Patent Acquisition
Infringement
Detected
C&D Letter
Unexcused Delay
EnforcementContinued
Infringement
Example 2: C&D Letter + Delay
Laches Possibly Successful, Triggered by C&D Letter
Patent Owner loses right to Injunction, cannot stop infringement
Patent Owner loses right to 6 years of Patent Infringement Damages
Patent Owner still has right to royalties for future infringement
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Patent Acquisition
Infringement
Detected
A/C Priv
Add Targeted Patents
6 Year Delay
C&D Letter/
Enforcement
Continued Infringement
ENJOINED
Example 3: Added Value
Laches Less Likely, No Delay after Overt Act
Patent Owner Preserves right to Injunction
Rights to 6 years of Patent Infringement Damages more likely preserved
C&D Letter is More Threatening; more patents and exposure
Laches Does Not Apply to Later-issued patents
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Not Policing Patents can result in Loss of Rights
Infringement before 6 year window not actionable
Laches triggered by Open/Notorious Infringement
or C&D Letter
Policing/Monitoring under A/C Privilege:
– opportunity to strengthen IP case against infringers –
“continuation practice”
– infringer might find targeted patents and stop
infringement
– preserves right to past damages and injunctions
Policing Patents Summary
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Early bird gets the injunction
Snooze and you lose respect from accused
infringers
Trademark Rights MUST be policed or lost
Copyright Rights CAN be policed
Patent Rights SHOULD be Policed
– Laches could arise regardless of actual knowledge
– Use A/C privilege/sequestration to protect investigation
– More information leads to stronger patents
TAKE AWAYS - IP Policing
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User-Generated Content: Friend or Foe?
What is User-Generated Content (UGC)?
– Content made publicly available over the Internet
– Content which has some level of creative effort
– Content created outside of professional practices
Social Media Platforms and UGC
What You Need to Know About IP Law and User-Generated Content
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Social Media Statistics:
User-Generated Content:Friend or Foe?
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Intellectual Property Risks
– Trademark
– Copyright
– Right of Publicity
Tort Risks
– Defamation
– Privacy
Statutory Risks
– Data collection
– Children
UGC Legal Issues
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Copyright Infringement
Trademark Infringement
Trademark Dilution
False Advertising
Unfair Competition
Rights of Publicity
What is actionable for UGC?
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What are companies doing with UGC?
Advertising their brands
Connecting with consumers
Interacting with consumers
Conducting contests/events
Product/name development
User-Generated Content:Friend or Foe?
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How do you want to use the content?
Do you need to own it? Will a license suffice?
Do you want others to use it?
How are you collecting the content?
Where will content appear?
Will it be used online? Will you use it offline?
Will it include people? Will it include children?
User-Generated Content
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Like that product name that user submitted?
– Obtain ownership
– Conduct a trademark search
Want to add music?
– Obtain a copyright license
Want to use that great photo of a customer?
– Obtain permission/release
Third party IP visible?
– Determine if permission is needed or blur/obscure
You still need to clear it!
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Digital Millennium Copyright Act (1998)
– Safe harbor for “service providers” in regard to
storage of information at the direction of users
Complete bar of monetary damages for online infringement
Must adopt and apply policy to remove infringing content and
terminate repeat offenders
Legal Protections - DMCA
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Must have DMCA policy
Must register with U.S. Copyright Office
Must designate an agent to review take downs
Must monitor email address(es) that receive take
down notices
Act expeditiously on take down notices
Allow for users to appeal any removal
Address repeat offenders in policy
DMCA
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Communications Decency Act (1996)
– Providers of computer services are given broad
immunity for publication
– Does not apply to speaker of the content
– Does not apply to Federal IP claims
Legal Protections - CDA
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You are protected if you passively host third-party content
If you exercise traditional editorial functions over UGC
(whether to publish, remove, or edit material), you are
protected unless you materially alter the meaning of the
UGC
You are protected even if you pre-screen content or correct
content
You are protected even if you encourage or pay third-
parties to create or submit UGC
Use caution with forms or questionnaires
CDA
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Terms & Conditions (T&Cs)
– Policies will control the relationship with UGC
– Contractual obligations and responsibilities
Contractual Protections
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However you use it – T&Cs for IP must match the use
Add at least a license to use, repost, or repurpose
submissions made via company website, social
media platforms and contests
Add the right to use commercially
Add the right to use in-store
Add the right to use in promotions
Meet legal/statutory requirements
User-Generated Content
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Consumer Interaction - Contests
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Contest Rules
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Contest Rules
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Banana Republic – Friend
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Banana Republic – Foe
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Ben & Jerry’s - Friend
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“Do Us A Flavor” - Friend
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“Southern Biscuits And Gravy”
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Know your demographics/users
Be prepared to disengage
T&Cs which acknowledge and cover
What if something goes wrong?
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“Dub the Dew” – UGC Definitely Foe
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Quiznos v. Subway – TV Ad Challenge
Quiznos’ contest asked customers to upload
commercials
Subway claimed some ads made false claims
False Advertising – Unfair Competition
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Quiznos argued the CDA applied
The court denied Quizno’s motion to dismiss
holding that Section 230 provides an affirmative
defense which can be raised on summary
judgment but not a motion to dismiss
The case settled after Quizno’s summary judgment
motion was denied
UGC – FOE
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To Tweet or not to Tweet?
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FTC Guidelines on Sponsored Tweet
– Endorsements to use #ad hashtag
– Use words like "typically" or "about" to avoid
misleading
– Disclosure in every post - not just end/final post
– https://www.ftc.gov/tips-advice/business-
center/guidance/ftcs-endorsement-guides-what-
people-are-asking#intro
And if you do Tweet…
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Review IP issues in UGC as you would traditional
advertising
Have a dedicated social media/website person
Have policies and T&Cs set guidelines and give
examples
Streamline clearance/approval processes to avoid
delays and risks
Remember FTC guidelines and disclose paid
ads/promotions
UGC TAKE AWAYS
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Take advantage of legal protections
– Post DMCA notice
– Post T&Cs
– Adhere to what you say!
– Periodic review and update of notice/policies
Separate creation from distribution
– Don’t lose CDA protection
Know how to deal with privacy
– Especially children
UGC TAKE AWAYS
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