Comprehensive intellectual capital management phần 10

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272 APPENDIX B Lanham Act provides national protection compared to statewide protection under state law. Trademark law grants the owner the right to perpetually enjoin others in the market from using a similar mark that may confuse consumers as to association between the two similar marks. An application to register a “word, name, symbol, or device” as a trademark should be filed at the PTO for examination. A device has been interpreted to include slogans, colors, product packag-ing or shape, and trade dress. The Lanham Act also provides for intent-to-use applications which entitle the applicant to reserve a certain mark on the register, provided use is established within two years of the application. In this way the U.S. trademark law comes closer to the laws of most countries where registration, not use, establishes priority rights. A trademark whose validity has not been contested for five years achieves an incontestable status and is presumed valid. An application is examined to determine whether the mark is protectable under trademark law or not. Those marks that contain a generic name (one that identifies the type of the product), that are not inherently distinctive or have not acquired distinctiveness through use, that are decep-tively descriptive (e.g., “Leather Comfort” for vinyl products), or that are confusingly similar to a registered mark, are rejected. Even if registered, such marks may be denied protection later or be afforded only limited protection by the courts. The Lanham Act also prohibits various practices under the doctrine of unfair competition, which may result in injury to others’business goodwill or trademarks. These include passing off, false advertising, commercial disparagement, trademark dilution, and cyber squatting. Passing off occurs when a false representation is made to directly or indirectly confuse the consumer as to the source or sponsorship of the good (i.e., an attempt to pass one’s own goods off as those of the trademark owner). The false advertising cause of action goes a step further into enjoining activities that are intended or result in injury to the trademark owner by representations made by a third party about the goods. The representation should result in misleading the consumer, and be sufficiently mate-rial to affect the purchasing decision. The trademark owner only needs to establish that the false advertising of the defendant resulted to injury to the sales position. Commercial disparagement is similar to the false advertising cause of action but differs in that the misrepresentations relate to the quality of the good or service. In addition, actual monetary loss should be established for the award of damages. The dilution cause of action provides added protection to famous marks from the use of others where such use is likely to result in the diminution of the mark’s uniqueness or distinctiveness, its tarnishing or creation of confusion.12 The law against dilution protects famous marks against commercial use only and allow for comparative advertising and all forms of news reporting. The Anticybersquatting Consumer Protection Act was enacted in 1999 to provide protection againsttheregistrationanduseofdomainnames(includingtrafficking)thatareidenticalorconfus-ingly similar to a trademark or dilutive of a famous trademark.The main limitation is that the plain-tiffshouldprovethatthedomainnamewasregisteredinbadfaithwithanintentiontocommercially profit from the registration, divert profits from the trademark owner, or dilute/disparage the mark. FirstAmendment issues may hinder recovery in cases where no commercial gain is proven. International Treaties and Protection in Other Countries • The Paris Convention. Preserves the priority date for a trademark applicant in one coun-try in the other member countries for six months. • The Madrid Agreement and the Madrid Protocol. Both provide for the centralized regis-tration of marks in member countries. The United States is not a member of either. • TRIPs. Includes provisions on minimum protection of trademarks in member countries. APPENDIX B 273 Implications for Legal Management The management of trademarks is closely related to brand management. Both legal and market-ing issues intertwine together to effectively manage trademarks ensuring the preservation of the rights as well as effective marketing. The following table presents legal considerations for vari-ous marketing acts at various stages of the branding plan: BRANDING Create brand Launch a brand Branding strategies Brand extensions Licensing Fortification MARKETING ASPECTS Choice of term, concept, value, market segments, market surveys Advertising, other marketing campaigns Strategic and brand fit, customer and market surveys Strategic partnerships, franchising, merchandising, business and marketing plans Social and community campaigns, management of emotional value, consistency, keep brands current and relevant LEGAL ASPECTS Legal search, assess level of distinctiveness, apply for registration or ITU Use of comparative advertising, precautions against genericizing. Caution not to infringe rights of publicity in using likeness or projections of celebrities in promoting the brand Registration in other nonrelated classes, search and possible acquisition of prior trademark rights Protection against naked licensing where lack of actual supervision may result in loss of trademark rights. Policing of trademarks to avoid a ruling that the owner acquiesced to the unauthorized use or abandoned the mark, protect against tarnishing and dilution. Taking prompt enforcement action on detecting infringement. Infringement, Enforcement, and Litigation In general the steps mentioned under Patents should be followed with the following changes to steps 1 through 4: 1. Determine the occurrence of infringement. • Determine the likelihood of consumers’confusion caused by the use of a similar mark by another or by introduction of counterfeit products that use identical marks. • Determine whether the use may dilute a famous mark. • Determine the similarity of the marks by considering similarity of the meaning and sound of the marks, the similarity of the goods, channels of distribution and likelihood of expansion, and the sophistication of consumers. 274 APPENDIX B 2. Collect the required evidence. • Obtain a sample of the counterfeit product, if any. • Obtain evidence of actual consumer confusion. • Collect evidence of all losses incurred as a result of the infringing act. 3. Determine the type of infringement. • Trademark infringement where confusingly similar marks are used • Trademark dilution for famous marks • Unfairly competitive practices that result in passing off the infringer’s goods as those of the trademark owner or result in commercial disparagement, false advertising, or cyber squatting 4. Assess the strength of the trademark. • Assess the validity of the mark. • Proof of first use in trade • Incontestable status—registration on the federal register for five years • Assess the scope of protection. • National protection for federally registered marks—geographical limitations apply for trademark rights created under common law or by registration in State Regis-ters • Strength of the mark—distinctiveness of the mark or the establishment of second-ary meaning, particularly for trade dress • Popularity of the mark—whether it is a famous mark • Check any conduct that amounts to genericizing, or abandonment of the mark as well as lack of policing of infringements that may result in a finding of acquiescence to the unauthorized use. COPYRIGHTS Acquisition and Scope of Protection Copyright covers literary and musical works including dramatic, choreographic, pictorial, graphic and sculptural, audiovisual (including motion pictures), sound recordings, and archi-tectural works.13 Copyright does not protect the idea of the work and thus ideas, facts, func-tional elements of a copyrighted work, and stock characters and plots are excluded from protection. Copyright is created in a work of authorship at the minute it is “fixed in a tangible medium,” through which it can be communicated. Thus, there are no formal requirements that the author should comply with before copyright vests in the work. Registration in the Copy-right Office is a mere formality and no examination to assess originality, or to exclude ideas as opposed to expressions, is made. Nonetheless, lack of registration will preclude the plain-tiff from seeking statutory damages for the infringement under Section 504(c) of the Copy-right Act. Section 405(c) provides that the court may award damages ranging from $750 to $30,000 per infringement and may award up to $150,000 per infringement in cases of willful infringement. APPENDIX B 275 Copyrights are valid for the life of the author plus 70 years, or 95 years from the date of first publication or 120 years after creation of the work for works made for hire. Copyright gives the owner the exclusive right to reproduce, prepare derivative works based upon, distribute, publicly perform and display the copyrighted work. This includes the right of the copyright owner in sound recordings to perform the work publicly by means of digital audio transmission. Copyrights may be narrowed or completely invalidated when scrutinized by the courts. Liti-gation may be instituted either by the owner to sue an infringer or by another seeking a declara-tory judgment that the copyright is invalid. Under judicial scrutiny the work may be found to contain unprotectable elements that are considered to be in the public domain on the basis that they represent ideas or facts, as opposed to expressions. The matter is far from simple and the tests are different depending on the type of work under scrutiny. Works that are highly creative and expressive enjoy a strong versus a weak protection, or a robust versus a thin copyright, as referred to in this area. A work with a robust copyright enjoys great protection against any form of copying and thus can be used to gain a strong market position. In addition, the Digital Mil-lennium Copyright Act, enacted in 1998, provides protection for copyright owners against cir-cumvention of or tampering with digital rights management systems. The Act also defines the liability of online service providers and enables the copyright owner to demand the takedown of the Web material wherever infringement is suspected. The scope of protection is further limited by the fair use doctrine, which allows the use of the copyrighted work in certain circumstances, such as those stipulated under Section 107 of the Copyright Act. Section 107 provides that uses for purposes of “criticism, comment, news report-ing, teaching (including multiple copies for classroom use), scholarship or research” are fair. To determine if a certain use is fair or not, the court should consider four basic factors under Section 107. These are: • The purpose and character of the use • The nature of the copyrighted work • The amount and substantiality of the use • The effect on the plaintiff’s potential market International Treaties and Protection in Other Countries • The Berne Convention. Protects the works of nationals of member countries as well as such works that were first published in a member country. The work must be published within 30 days in a member country from the date of the first publication in a non-member country to be protected. The Berne Convention also provides for minimum requirements of protection including the protection of the moral rights of attribution and integrity. The United States enacted the Visual Artists Right in 1990, limiting moral rights to visual art, on the basis that other provisions of U.S. copyright law afford indirect protection to other works of authorship. The Berne Convention provides in particular that there should be no formalities for the vesting of copyright in a work of authorship. • The Universal Copyright Convention (UCC).The UCC, similar to the Berne Convention, is based on national treatment but has no mention of moral rights. • TRIPs Agreement.Affirms the Berne Convention with the exception of moral rights, and provides that computer programs and compilations are to be treated as literary works. 276 APPENDIX B • The WIPO Copyright Treaty (WCT). The WCT is a protocol for the Berne Convention which provides for digital rights. First, the WCT specifically mentions the Internet and the right of copyright holders to distribute their works online. In addition, the WCT pro-hibits circumvention or tampering with digital management rights, which form the basis of the U.S. Digital Millennium Copyright Act. Implications for Legal Management The most important consideration for management purposes is to ensure that the organization has ownership of the copyright in works that it commissions. This area is complicated by the “work for hire” doctrine. Generally speaking, a copyright is owned by the author except if the copyrighted work was made for hire. The Copyright Act provides that if an “employee” creates a work “within the scope of his or her employment,” then the employer will be considered the author and will hold the rights of ownership in the copyright. However, if the author is an independent contractor then the work will be deemed for hire (i.e., the hiring party retains ownership) only if the work fits into one of the nine categories enumerated under Section 101 of the Act, and the parties agree in writing that the work will be considered as a work made for hire. It is therefore of utmost importance to make sure that agreements are made in writing and signed whenever the organization commissions a consultant or a contractor to develop its Web site, for example, to ensure ownership of the work. Infringement, Enforcement, and Litigation In general, the steps mentioned under Patents should be followed with the following changes to steps 1, 2, and 4: 1. Determine the occurrence of infringement. • Determine the protectable elements of the work, keeping in mind that ideas and facts are not protected by copyright. • If access to and copying of the protected elements are established, then it is clear that infringement has occurred. • If neither access nor copying can be established, then assess the level of similarity between the works. Substantial similarity is required to prove infringement. 2. Collect the required evidence. • Proof of access and copying • Proof of substantial similarity • Proof that the infringing work constitutes a derivative of the protected work through evidence of similarity, and by showing that it limits the ability of the copyright owner to fully exploit the work through reproductions. 4. Assess the strength of the copyright. • Assess validity of the copyright—The work has to be the original creation of the author. Independent creation is allowed. • Assess the strength of the copyright—The more artistic or expressive the features of the work, the stronger the copyright. This excludes functional features that have to be used for the object to perform the function it was created for,and common plot themes or what is referred to as “scene fairez” as well as the idea of the work, provided it has not merged with the expression. ... - 558062