IP Thoughts

Indispensable By Monday

2010-03-16T15:08:00Z

Last week we had a training session in firm from an outside consultant. I often do not use outside consultants because few of them understand the legal profession. However, after hearing Larry Mylar speak at the UVEF

luncheon I thought I would give him a try. While Larry's focus is really on much larger corporations and law firms are not an exact match for his model, Larry did a great job of customizing the discussion to the needs of our organization and helped us focus on a couple of points were we could improve our firm. I would also recommend his book, Indispensable by Monday for anyone looking to get their employees vested in profitability of your company.

And The Lock Box Is - - - Mostly Empty

2010-03-16T04:37:00Z

Does anyone remember when Al Gore talked about the social security lock box? The lock box got opened recently. Well, it isn't really a lock box, but a set of filing cabinets. And while it was projected that social security would be bringing in more than it paid out for several years to come, the economy has fast forwarded us to the time when more is going out in social security payments than is coming in.

So what was inside? Loads of cash to help social security? Nope! The lock box held nothing but binders full of IOUs. $2.5 Trillion worth. For decades our Presidents and Congress have been borrowing the surplus money in social security to minimize the amount which the government has to borrow from other countries. Now it is time to start paying it all back. So at a time at which our Federal Government is running record setting deficits, it now needs to borrow even more from abroad to pay back social security. Even with the government paying back the IOUs - which may be iffy if it cannot contain spending - social security is now projected to run out of money in 2037. (27 years may sound like a lot, but that is before anyone 40 or under will be able to require with full social security benefits).

This is a financial train wreck that is happening in slow motion. One only need to look around at our own neighborhoods to see the consequences of reckless spending. While we are in a deep mess, the first thing to do when you find yourself in a hole is to quit digging. If we start making hard decisions today, we have a chance of escaping a complete meltdown that will make Fall of 2008 look like an economic boom. If we keep trying to fix our economy by borrowing from our children and adding mounds of government regulations on businesses - we will be getting a foreclosure notice signed by Japan and China.

Equalization is Not Equal

2010-02-24T04:40:00Z

I have to hand it to the Jordan School District. They have done a great job of playing the victim and spinning the facts. Their PR people should be proud.

For nearly a decade the Jordan School District poured money into building new state of the art schools on the west side while all but ignoring the aging schools on the east side of the district. After years of frustration, the residents on the east side finally decided to leave and start a school district that would take their children's safety and comfort a little more seriously.

Right out the gate residents on the west side complained that they did not get to vote. Of course, there is no doubt how they would vote. Why let the east side leave then all that tax money from the east side was busy building new, state of the art schools on the west side? Who cares if kids on the east side are going to schools built in the 1960s and 1970s that do not meet earthquake codes, if our kids are getting the latest and greatest?

So when the east side voted to leave, did they cash in. No! To the contrary, the new Canyons School District has to pay nearly 59 percent of the debt service on all of those new schools on the west side. ($20 Million per year). This while it is estimated that Canyons School District needs to spend nearly $650 Million on its aging schools.

Having received a $20 Million annual subsidy, the great PR department for the Jordan School District came up with yet another way to extract more money from Canyons. When Canyons left, the tax revenue per pupil went up in the Canyons and down in Jordan School District. There is now nearly a $1,000 per student variance. Ah! Jordan can claim victim status once again by demanding that Canyons District give some of that disparity to Jordan. Of course, when arguing its case to the media, the Jordan School District completely omits the fact that it has a stable full of brand new schools while Canyons District needs $650 million for capital improvements.

If Canyons were to keep that $1000 per student difference, it would take 19 years to make all of the renovations needed for its aging schools. However, legislators from the cities in the Jordan School District are now seeking an addition $15 million annual tribute to "equalize" tax revenues. Why don't they propose anything to "equalize" the great disparity in physical assets? Because, despite the claim to being a conservative state, many of our legislators love a bailout. Any time you can get your hands on other people's money, count them in.

Here is a really radical idea. The residents of the Jordan School District actually raise their taxes to provide adequate funding for their school district. Otherwise, you are doing the same thing you are complaining about OBAMA. Redistribution is redistribution, regardless of who votes for it.

Trademark Overreaching by IOC

2010-02-19T16:24:00Z

Every so often a large entity gets the crazy notation that having a trademark gives them ownership of a word, rather than the exclusive use of the word for their goods or services. The NFL is notorious for trying to own the word SUPERBOWL, even though there are numerous contexts in which use of the word by others would be fair use.

Not be be outdone, the International Olympic Committee apparently believes that it owns everything involved in the Olympics, right down to the names of the athletes. While some companies may legally challenge the IOC's silly position, others have responded with a flair that demonstrates the baselessness of the IOC's position while simultaneously having a little fun. Check out the retort by UVEX, when an athlete who uses their products, Lindsey Vonn, wone the gold medal in the downhill.

UVEX should post the letter from the IOC, just to give everyone a good laugh.

North Face's Case is the South Butt

2010-02-16T16:29:00Z

One of the things that frustrates many people with our courts is the inability to resolve matters quickly. A plaintiff with a lot of money can drive a competitor under regardless of the merits of its claims. In part, it has to do with judges not just stepping up and saying that there is no way a jury could find for the Plaintiff. Even if it would not totally resolve the case, such action by a judge could really streamline the litigation.

One case that seems to beg such action by the court is The North Face Apparel Company v. Williams Pharmacy et al. Williams Pharmacy sells product of The South Butt, LLC another of the defendants.

While North Face has trade dress claims based on its "iconic" coat design, the major issue is whether the mark THE NORTH FACE is infringed by the mark THE SOUTH BUTT. Apparently, North Face believes that consumers cannot determine the difference between North and South or between a face and a butt.

Clearly, the THE SOUTH BUTT mark is a parody on THE NORTH FACE. Not only does South Butt parody the name, it also makes fun of THE NORTH FACE slogan "NEVER STOP EXPLORING" with the retort NEVER STOP RELAXING. On top of SOUTH BUTT's website, it also adds the question "Why climb mountains?"

It is clear that THE NORTH FACE does not like being the "BUTT" of the joke. But does anyone actually believe that consumers are likely to confuse the two marks as originating from a common source. One is clearly mocking the other. (Apparently the Court believes that a jury in Missouri could find a likelihood of confusion.)

"Winkelmann and The South Butt also argue that the marks are so dissimilar that The North Face cannot possibly prevail. I do not find it to be implausible that the marks cannot cause a likelihood of confusion or dilution."

That does not speak well for the jury pool in the Show Me State.

What is even more frightening is that, not only did the Court deny the motion, the Court suggested that the motion bordered on the frivolous. The Court noted:

"I remind counsel of their obligations under Rule 11 and that, with each filing, they certify to the Court that the motion is not being presented to harass, cause unnecessary delay or needlessly increase the cost of litigation and that the legal contentions are warranted by existing case law or nonfrivolous arguments for extending, modifying, or reversing existing law or for establishing new law. Although this filing may not reach the level of frivolity, it approaches the line."

WOW! So much for parody and the First Amendment.

U.S. IP Is Worth More Than The GDP Of Any Other Country

2010-02-12T16:22:00Z

No one doubts that the U.S. is no longer a manufacturing giant. We have lost most of those jobs. So where does our wealth come from. According a presentation by Ocean Tomo (the largest marketer of intellectual property) at the Utah State Bar IP Summit, the value of U.S. intellectual property is worth between $5-5.5 Trillion dollars. That is greater than the gross domestic product of any other country. This makes up roughly 75 percent of the valuation of the S & P 500.

One of the eventual goals to is create a market for trading intellectual property analogous to the commodity exchanges in Chicago. One thing that is clear is that IP has become an asset separate from the operating entity where it is created.

Interesting Inventions

2010-02-12T15:12:00Z

Being a patent attorney is enjoyable because you get to see cutting edge technology and some creative solutions to problems that have plagued people. Some solutions, though, are a little odd. One example is the Easy Inter Burial Container in which a body is a placed in a giant screw and then drilled into the ground. It would definitely be more efficient - but may a little less solemn as grandpa spins into the ground.

Steal Your Children's Future

2010-02-02T01:51:00Z

It is ironic that it is illegal to open accounts in your children's' names and go into debt. It is identity theft and you can do jail time.

In contrast, you can steal much more from your children by simply electing politicians who will continue to run up the national debt. Currently, our national debt is just shy of $40,000.00 per person. A family of four owes $160,000.

So how are we dealing with our debt? The same way that we got into our current mess. This coming year the federal budget will be $3.83 Trillion. That works our to just shy of $12,500.00 per person, or $50,000.00 for a family of four. (The medium household income in the U.S. for 2007-2008 was $51,233).

So what will we do when the interest we pay on the federal debt exceeds the total revenues collected by the federal government (an event that could happen relatively soon if interest rates spike)? Simple, we will borrow more and pass the debt onto our children. We will have bankrupted the wealthiest nation on earth. We should be so proud.

Apple Is Having Trademark Troubles

2010-01-31T05:02:00Z

It looks like Apple has made yet another mess in its trademark department. A few years ago Apple launched a revolutionary new telephone, only to get mired down in the fact that Cisco already had a registration for IPHONE for computer hardware and software for providing integrated telephone communication with computerized global information networks. Apparently Apple was able to work out a deal and get its own registration.

Having already been through that mess, you think Apple would have thought through the IPAD a little more carefully. The problem is that Fujitsu Transactions Solutions already has a pending trademark for IPAD and has use going back more than 8 years. Of course, Apple has filed for an extension to oppose Fujitsu's mark. Apple's likely position will be that it owns anything with an I in front of it. The odds of winning on that ground seem pretty slim. Thus, Apple will probably pay off another company. One wonders why not put a little more effort on the front end to naming your products so you avoid trademark conflicts.

When Patents are Worth Billions

2009-12-22T14:13:00Z

The record setting patent awards continue. Recently a Federal judge ordered Abbott Laboratories to pay $176 M in interest to Centocor (a division of Johnson & Johnson) for sales of the drug Humira. That was on top of the $1.67 billion awarded for the infringement of Centocor's patent . A billion here, a billion there and pretty soon you are talking serious money.

Google Loses A Round

2009-12-22T14:07:00Z

Google has lost a major round in its attempt to put digitized copies of books on the internet. Somehow Google thought it could overcome the copyrights of the authors whose works it was copying. A French court, however, recently disagreed, ordering Google to stop scanning French books and awarding $430,000 to copyright owners who sue Google for infringement. While the idea of having books on the internet is a great idea that will spread knowledge, Google does not get a free pass regarding infringing others copyrights.

Be Careful of What You Say - And More Careful of What You Don't

2009-10-28T21:54:00Z

There has been a fair amount of press on the intention of the FTC to penalize bloggers for not disclosing renumeration (money, free product, etc.,) that they receive when the write posts endorsing products. When you think about it, disclosure makes sense. Do we really want to have friends tell us things that are in reality just a commercial. The $11,000 potential fine, on the other hand, may be a tad on the excessive.

While the disclosure requirements on blogs has caught the media's attention, the new FTC rules actually go much further. If you advertise, you probably will want to make sure you aren't walking into a hornet's nest.

Everyone has seen the ads for the guy who went from a 250 lb. marshmallow to a ripped Men's Fitness model in a couple of months. (Much as most of us would like - it usually does not happen that way). If you look carefully, the advertisement will almost always have a disclaimer "results not typical." One of the big changes is that the safe harbor disclaimer will no longer be allowed. Now you will have to identify what typical results are. So if the your spokesperson is a freak of nature who lost 50 times your customers' average of 2 lbs, you are going to have to disclose that typical results are two pounds.

The disclosure requirement is also going to extend to peer to peer advertising. If you are are giving award points to a million teenagers who proselyte their friends for you, be aware that those "spontaneous" endorsements have to be disclosed as advertising. Yes, it kind of ruins the effect of peer to peer advertising when people realize that you are paying people to be their friends. However, failure to do so may bring down the ire of the FTC. "Hey Johny, that new video game I bought rocks - This has been a paid commercial for Jimbo's new video game."

Another interesting change in the rules is that the endorser may now also be liable for violations of the rules. Thus, if you make your living endorsing people's products, what you do not say may be just as important as what you do.

What to do - read the rules and make sure that your latest ad campaign won't get you a visit from the FTC.

Here is the FTC Announcement

Here is the Revised Endorsement Guide

How to lose sales and disinterest people

2009-10-14T22:25:00Z

It is a tough economy and it is understandable that people might stretch a little. However, if you are being completely dishonest, it will not help your prospects in the long term. In the last week I have several calls from people trying to get my business. Some were selling things and others were trying to get my firm to sponsor events. In each case the caller made a misrepresentation in an attempt to speak with me. A couple claimed that they were returning my call or that I had expressed interest in their product. No one at my firm was familiar with the company and I certainly had no interest in their product. The moment I realized that the person calling had lied to get through to me, the chance that I would ever do business with the company - for any product or service - went to zero.

Likewise, someone left me a voice mail indicating that we had called about sponsoring their event. I was unaware of the event and probably would not have been interested even if I had been. However, the mere fact that the caller lied to try and get a return telephone call told me not to do business with them again.

I always wonder why someone thinks I would do business with them if our first encounter is based on a lie. It may work in the short term by getting some confused individual to listen. However, in the long term it creates a lot of people who are no longer potential customers.

Take Down Letters and Misusing Intellectual Property

2009-10-08T22:30:00Z

Most people dislike being criticized. Sure, we should stop people from engaging in slander or libel, but how about when they are criticizing poor work? Do you have the right to avoid criticism.

Apparently RALPH LAUREN believes that it does. Recently RALPH LAUREN ran an add for its clothing. Apparently, the model it hired did not look quite anorexic enough, so they used a little PHOTOSHOP magic to show a woman you can wrap your hand around.

One could go on about the fashion industry and whether it is responsible for the problems of anorexia and bulemia in today's young women. After all, your typical teenager cannot use PHOTOSHOP to get down to 75 or 80 lbs. Boing Boing, however, simply made fun of the poor use of PHOTOSHOP.

Apparently RALPH LAUREN did not appreciate the criticism. They had their New York attorneys send a take down letter claiming copyright infringement. Fortunately Boing Boing did not cave.

Using the copyright laws to try and shut down criticism has two major draw backs. First, the copyright laws have a fair use exception that allows copying - and use for criticism is about as clear of a fair use as it gets. Second, it risks the "Streisand effect" - named for the singing Diva who tried to stop publication of a photograph that included her beachfront home. Not only didn't she succeed, the photo got far more attention than it would have.

When someone has done something you do not like on line, you need to ask yourself a few questions before you send cease and desist letters or take down letters. First - is what they are doing really violating your rights? If not, threatening legal action based on intellectual property only makes you look stupid. Second - even if they are violating your rights, is the cure worse than the disease? In other words, will threatening them merely result in more publicity of the improper post, etc., A prime example of the Streisand effect is DirectBuy's attempt to shut down dissent which only backfired, as I discussed a couple of years ago. Their cease and desist letter made DirectBuy and their attorneys look stupid.

Protecting your rights is important. Thinking before you act is more important.

Chasing the Money

2009-09-29T23:26:00Z

Last night I was reading the paper and came across an article that indicated a majority of people in the U.S. are in favor of taxing millionaires at 50%. Wow, have we really become such a jealous country that we want to take half of what people earn. While many have the attitude - so what they are rich, it makes you wonder who is going want to take the risk to start new ventures. If you fail - sucks to be you. If you succeed, we will take half. (I am unsure whether than included state taxes, so maybe the total is more like 55-60%).

The great irony is that on the same page there was also an article about how New York is not receiving the money it expected from its new tax on millionaires. It seems that at least some of the big earners have decided to move out of state and resettle where taxes are lower. Many high income people already own second homes in other states so the switch will not be hard. Look for the number of millionaires in Florida, Wyoming and Nevada to increase.

While gouging the other guy always sounds better, it comes at a cost. One of the people they interviewed who had moved out of New York relocated her company to Florida. Not only does New York not get her tax money anymore, it also lost a number of jobs that the people in Florida were more than happy to fill.

The same thing can happen on a global scale. There is a reason that countries/states like the Bahamas, Monaco and others have a large number of very wealthy from other countries. If you raise taxes to high, the golden goose will fly away.

Cyber Symposium

2009-09-25T20:47:00Z

Today I have been attending the Utah Cyber Symposium. Many thanks to Perry Clegg, David Langeland, and Ben Holt , the officers of the Cyberlaw Section of the Utah State Bar, for putting together a top notch program.

Unlike the typical continuing legal education, the Cyber Symposium was designed for both lawyers and business people alike.

The morning speaker was Paul Alan Levy. Mr. Levy is well known nationally as a public interest attorney for his work with Public Citizen. He has argued four cases before the U.S. Supreme Court and submitted briefs in 7 others. He has the odd distinction of having each case decided on 9-0 decisions. Mr. Levy addressed issues involving Immunity of those who allow the posting of content under 47 U.S.C. 230 - i.e. can you be sued for defamatory (or other improper) statements by others on your website. His outline can be a great guide on how to keep your company out of trouble.

Chris Johnson of SCI received the Cyber Pioneer Award

Other speakers included:
Brock Blake of Funding Universe, speaking about negotiating high tech funding transactions;
Pete Ashdown of Xmission, discussed the technical contrainsts of legal regulation;
Lee Livingston of Fibernet Corp. discussed PCI Compliance;
Douglas R. Bush of Arent Fox in Washington, D.C. discussed the expansion of top level domain names.;
Steve Spencer of One to One Interactive (Twelve Horses) discussed social media ettiquette;
David Bradford of Fusion-io discussed networking;
Paulo Patente of Di Blasi Parente Vaz e Dias & Associados discussed ten tips for doing business in Brazil.

A number of other speakers also presented. The handouts for the speakers are available at the Cyber Law Website

Fraud In Trademarks

2009-09-18T22:35:00Z

The Court of Appeals for the Federal Circuit has recently given a little bit of relief to trademark owners. For a number of years the Trademark Trial and Appeal Board at the U.S. Patent and Trademark Office was canceling trademark registrations for "fraud" if any of the information was inaccurate. The most dangerous was the date of first use of the mark. This led many to claim a later date than for which they had actual use just to protect against potentially invalidating their registration. In In re Bose Corporation the Federal Circuit found that the TTAB had been misapplying the standard. Not only do you have to show that the information is inaccurate, you have to show that there was an intent to deceive. The Federal Circuit's analysis makes more sense and will give a little breathing room in case of inadvertent errors.

How Far In Debt Are You Personally?

2009-08-28T23:34:00Z

I hate it when you cannot tell how much something actually costs or how far in debt you are. I was trying to figure out my debt load today, but kept getting differing information.

Fox News claim I owe almost $38,000 for my share of the National Debt. USWA claims that it is more than $38,000. It would be nice to know the real numbers. (The two are off by almost $200 Billion on the national debt). Oh well, it is not like I will be paying it off my share - or the ~$38,000 my wife owes - or the ~$190,000 my kids owe - any time soon. No, I'll just leave the mess for my yet unborn grandchildren to clean up.

Exploding Coke Cans

2009-08-27T22:47:00Z

Your mother probably told you that soda wasn't good for you. Well, I finally have proof. The attached pictures are of my associates office. He had a Diet Coke Lime sitting on his credenza. As he was sitting in his chair facing his desk, the can exploded, went over his head and landed in his lap. Lucky for him, it missed his neck.

I have talked to others who have had similar experiences with Coke cans. Maybe I should change my practice from IP to products liability. COKE's new motto is "OPEN HAPPINESS" - Thanks but I would rather wait until I open the can.

Another Perspective

2009-08-27T22:20:00Z

For the past week we have had some friends from France staying with us. They are retired and have a very different political view than we do. When we discussed Obama's health care plan they did not see our concerns with rationing. My wife explained that we were concerned with a system that gives lower priority to some than others because of their age, etc. After thinking about it for a minute they acknowledged that they had just come to accept it because that is how it works in France.

Health Care will always be rationed. The question is how. The least acceptable way to me is a bureaucrat in Washington.