Articles Posted in Intellectual Property

Your business trademark (also sometimes referred to as your “brand”) is at the core of your distinctive corporate identity. It’s the name or symbol that allows consumers to distinguish your goods and services from those of your competitors. bullets

Registering your trademark is what gives you the statutory right to protect it – and also protects from the challenges of those who might accuse you of infringing upon their trademark. Ideally, our Boston business lawyers would advise registering the trademark at the time you begin the business formation process.

The recent case of Hornady Manufacturing Co. v. Doubletap, decided by the U .S. District Court of Appeals for the Tenth Circuit, illustrates the elements of proving trademark infringement.

Involved here were two firms – the first manufactures and sells firearm ammunition and related products, and the second is described as a “niche” ammunition manufacturer.

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A long-running dispute between former business partners has dissolved into a federal lawsuit filed by one of the parties. The former partner claims he was elbowed out of the business and denied the profits after developing the technology that made the company successful.
The case, Morley v. Square Inc., filed in the U.S. District Court for the Eastern District of Missouri, reveals how quickly business partnerships can crumble, and how carefully-drafted contracts can help to spare litigation.

Boston small business attorneys recognize that while the company in question, Square Inc., isn’t small now (it’s most recent valuation was somewhere around $5 billion), it started out with just three men and an idea a few short years ago.
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As technological advances are being made at lightning speed, Boston business owners are doing all they can to not only keep pace, but also to protect the intellectual property they are developing.
Our Boston business litigation attorneys know that, whether they are high-tech or low-tech solutions, having a plan in place to protect your intellectual property is vital to the survival of any enterprise.

On the low-tech side, there are non-compete agreements, signed by new employees before they begin work. These contracts serve to protect an employer’s trade secrets, to protect an employer’s customer relationships and also to prevent other firms from “stealing” an employee who has a special, unique or extraordinary job position, particularly when the firm has invested a great deal of time or special training on the employee.

On the high-tech side, this might increasingly involve the development of computer systems designed to protect your company’s private or sensitive information from outside hackers.

This is becoming a growing concern, as revealed by the just-released IP Commission Report on theft of American intellectual property. This not only applies to large-scale corporations; the nature of the Internet means that international theft of intellectual property can happen to virtually any company at any time.

According to the report, the scale of international theft of American intellectual property is “unprecedented,” costing firms about $300 billion annually. To offer a general comparison, this roughly equals the amount of goods we legally export to Asia.

The effects of this theft, the commission indicates, are that there is tremendous loss of revenue and rewards for those who created the inventions or who purchased licenses to provide services and goods based on them. Additionally, there is a marked amount of job loss and theft of intellectual property reduces the incentive for entrepreneurs to innovate.

The report indicates that China is the No. 1 source of IP theft in the world, accounting for between 50 and 80 percent of the problem. However, there are domestic culprits as well, and it certainly hasn’t been put past some competitors to break the law in order to get ahead.

President Obama has called this kind of cyber threat one of the “most serious economic and national security challenges we face.”

The IP Commission recommended a host of actions that Congress could take to reduce the risk to American firms. Those include:

  • Designating a national security advisor to oversee principal policy coordination regarding the protection of American IP;
  • Appoint the secretary of commerce with statutory authority to serve as the principal official to manage all of those policies;
  • Strengthen the International Trade Commission’s 337 process to sequester goods that contain stolen IP;
  • Increase the resources of the Federal Bureau of Investigation and the Department of Justice to prosecute cases of trade theft, particularly those carried out over the internet;
  • Enforce a strict supply-chain accountability for the U.S. government;
  • Generously offer green cards to foreign students who earn degrees here in technology, science, engineering and mathematics, so that they would not return home to use their knowledge to compete against American companies.

All of those actions, of course, require a macro approach to the problem.

For individual companies, there are steps you can take to protect your intellectual property.

Kevin Hamlen, an associate professor of computer science specializing in software security, says companies can take the following measures to protect themselves:

  • Don’t assume that expensive anti-virus technology will be enough to protect you.
  • Expect that sophisticated attacks will get through, which means you will need a back-up technology.
  • Instruct staffers not to open suspicious e-mail attachments, even if they appear to be sent from trusted people within the company.
  • Require passwords or other techniques for sensitive files to ensure they are only opened by the person for whom those files are intended.
  • If you are attacked, aggressively respond by de-activating compromised accounts.

If you can trace the hacking back to a certain IP address, particularly if it is a domestic one, you may have ample grounds to file a lawsuit against the offending parties, as such action is a form of theft.
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An online textbook service is entangled in Boston business litigation, after three of the textbook industry’s top manufacturers alleged copyright infringement. pages.jpg

Our Boston business litigation attorneys understand that there are going to be challenges with any business model, no matter how brilliant the plan. However, one of the ways you can head off costly legal issues is to hire a small business attorney before you open your doors or go live online. A Boston business attorney can help to review your business model, your marketing and even the details of your product to help make sure you’re not going to run into trouble.

In this case, a company called Boundless Learning aimed to market free, online college textbooks. It had raised about $8 million from investors and, just as the fundraising closed, it was hit with this Boston business lawsuit.

Specifically, the older textbook publishers say that Boundless Learning copied material straight from their books on psychology, economics and biology. The suit claims that Boundless Learning is trying to rip them off, by employing people to essentially paraphrase the information in their textbooks, which can be sold at upwards of $200 per book in college bookstores.

The lawsuit, deviating somewhat from the somewhat bland language of many Boston business litigation suits, claims that Boundless Learning “gets an ‘F’ in originality.”

The CEO for the new start-up said he and his Boston business litigation attorneys plan to fight the allegations, saying they don’t copy anything. While the site is not yet live, he said the site has beta tested with several thousand college students over the last several months, and expects to begin marketing efforts before the end of the summer – just in time for the fall semester. The CEO went on to say that the lawsuit is not about copyright infringement, but rather a dying industry that feels threatened by innovation. And, in fact, the textbook manufacturers are embroiled in another suit with a similar digital textbook service.

The traditional publishers say that the start-up is very specific in the textbook titles its service can be used to replace. What’s more, the plaintiffs allege that the online books even put the content in the same order, in some cases on the same pages, and have allegedly ripped off photos, illustrations, captions and other original content. The CEO, when pressed by reporters about where exactly the content originates, was vague, saying freelancers and “open information” are to be credited. A lot of the content, he said, is based on standard information you would find on a college syllabus in any of those courses.

And the web-based product is different in that it offers unique digital study guides and highlighting. And what’s more, it’s free – something that no doubt appeals to cash-strapped college students. The goal, the CEO said, is to lay out most of the information you would find in any college textbook, but to do so in a manner that better engages students.

Our Boston business litigation attorneys will be closely following this case to see what grade the judge hands down.
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A New England intellectual property trial has resulted in a $919 million jury verdict for DuPont, believed to be the largest such verdict ever awarded.

In today’s global economy, moving to protect your product rights is critical. Our General Counsel on Call services can assist startups as well as established businesses that are dealing with a wide variety of legal issues — including employment law and business formation in Boston. For its part, South Korea-based Kolon is claiming that DuPont has violated antitrust law by using its size and market share to force out competition.

Bloomberg Businessweek reports jurors in a federal court in Virginia deliberated for two days before finding Kolon guilty of wrongfully obtaining proprietary information about Kevlar. 860421_police_search.jpg

DuPont began making Kevlar in the 1960s; initially it was used in racing tires. Today, DuPont sells about $1.5 billion of the fiber annually, primarily for use in body armor, bullet-proof vests and other military applications. The company accused Kolon of hiring former DuPont employees and of stealing proprietary information. A former DuPont engineer and marketing director, who went to work for Kolon, was sentenced to 18 months in prison after pleading guilty to theft of trade secrets and obstruction of justice.

Kolon began marketing its own bullet-proof fiber in 2005. The company was sued by DuPont in 2009 after DuPont notified the Federal Bureau of Investigation and the U.S. Department of Justice over what it believed was a theft of trade secrets and other proprietary information by a former employee. A raid of the employee’s home allegedly turned up computer files and other product information belonging to DuPont.

DuPont is also seeking punitive damages for the theft of 149 trade secrets as well as reimbursement of more than $30 million in attorney fees and other secrets. It is also seeking an injunction preventing Kolon from marketing its products using DuPont information.

Kolon’s rival product is called Heracron. The company claims DuPont has violated antitrust laws by forcing customers to purchase at least 80 percent of their Kevlar fibers from them. Kolon also claims it did not solicit trade secrets or use proprietary information. Rather, it claims the allegedly “secret” information is “public knowledge.” While the theft of trade secrets can be devastating, so can being forced out of the marketplace by a larger competitor pushing an unfair advantage.

Court watchers say the large verdict suggests jurors thought the case was particularly egregious. It’s the second such verdict this year; Mattel was ordered to pay $310 million to MGA over the Bratz Doll case.

Both cases involved former employees who went to work for the competition. A properly fashioned employment agreement in Boston is another critical tool in protecting trade secrets and other competitive advantages from falling into the hands of the competition.
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Companies that display art or sculptures on their property must be careful about making repairs or alterations; such alterations could affect the artist’s reputation and could put the company on the wrong side of the Visual Arts Law.

Belmont business litigation attorneys understand corporations often purchase works of art or sculpture, or permit art to be displayed on company property. In other cases, the sculpture out front may have come with the property. The last thing you want is to end up in litigation over it. Yet Massachusetts winters can be brutal, damaging outdoor art or otherwise leaving it in disrepair. Companies rarely give any thought to the prospect of being sued over repairs or removal but it is happening in an increasing number of cases. 673264_hammer_to_fall.jpg

Chapter 231 Section 85S of the General Laws of Massachusetts governs the physical alteration or destruction of fine art. It states in part that “the physical alteration or destruction of fine art, which is an expression of the artist’s personality, is detrimental to the artist’s reputation.”

The law defines fine art as painting, drawing, print, sculpture, audio or video tape, film, hologram, photograph, craft object or other work of “recognized quality.” The law prohibits defacement, destruction, mutilation or alteration that is taken either through gross negligence or deliberately.

An artist or his or her representative may take legal action in superior court for damages incurred, special damages and general damages, including injunctive or declaratory relief, actual damages, and all other costs, including attorney and witness fees.

Possible legal issues include whether or not the creator is an “artist;” whether the piece in question is “fine art;” whether it’s in “public view;” and whether gross negligence applies to the condition of the piece in question. The court may rely upon the opinions of art dealers and collects, museums and restorers or conservators.

The law protects the art on behalf of the artist until 50 years after the artist’s death and permits heirs or other legal representatives to take action on the artist’s behalf. The Attorney General may also take legal action on the artist’s behalf if the artist is deceased and the art is in public view.

A building owner may win some relief under the law if the art cannot be removed from the building without destroying the art. However, the owner may also be forbidden from removing a piece of art if to do so would destroy. In such cases, the building owner must notify the artist, or his heirs or representatives, of the intention to remove the art. Such notice provides the artist 90 days to remove the art or pay for its removal.

As we can see, the law is complex. Problems most frequently arise when a business owner or landowner has a piece of art on the property that is in disrepair and decides to take action, either by removing the work or by attempting to make repairs. Many never give any thought to the artist’s rights and the artist may even have long since passed away. However, seeking legal advice is the best course of action.
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USA Today reports a patent infringement lawsuit has been filed against Ford Motor Company, claiming its in-car communication system, Sync, is in violation of copyright law.

Our Massachusetts technology attorneys have posted here frequently about the need to protect intellectual property and the need for young companies to defend against allegations involving the theft of intellectual property.
Eagle Harbor Holdings and MediusTech claim Ford used their patent technology in the Sync system and in other in-car technologies, include Active Park Assist, Blind-Spot Identification System with Cross Traffic Alert, Integrated Control System for Stability Control and MyKey.

The Sync system allows people to integrate smartphones and other devices with their vehicle. Users can choose to have e-mails read to them and pick songs on the stereo via voice command. Eagle Harbor’s attorney estimates damages could be in the millions. Ford has thus far declined to comment.

Ever-changing technology makes protecting intellectual property via the patent process more important than ever before. So important, in fact, that tech companies are paying billions to snap up the patent rights to technology owned by failing enterprises. Bloomberg News recently reported that Google lost in its $4.5 billion bid for the patent portfolio of Nortel Networks Corp. Google is said to be using its $36.7 billion war chest to snap up available patents in part to protect itself against a slew of patent lawsuits.

In April, Google offered $900 million to buy more than 6,000 patents owned by a Canadian phone maker in bankruptcy protection.

The winner of the Nortel auction? Apple Inc.

Presently, Google owns little more than 700 patents. Last year it acquired approximately 300 patents. Apple, meanwhile, acquired more than 550 and Microsoft took control of more than 3,000. In recent months, Google has been sued by Oracle Corp. over technology in Android, its smartphone operating system. Apple, meanwhile, has sued several makers of phones using the Android platform, including HTC Corp. and Samsung Electronics.

Oracle claims in a federal patent- and copyright infringement lawsuit that Google copied Java programming language technology; the lawsuit seeks $6.1 billion in damages.

Google and Microsoft have been compared as both companies shunned patents in their infancy, only to race to protect themselves as they grew into economic and technological powerhouses. Ten years ago, Microsoft ranked 44th among companies receiving U.S. patents. Today it is third behind International Business Machines Corp and Samsung.
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