U.S. Department of Commerce Reports on Trademark Litigation Tactics
Refresher on U.S. Copyright Law, Including "Work Made for Hire" 

U.S. Department of Commerce Reports on Trademark Litigation Tactics

Timothy J. Lockhart 

On April 27, the U.S. Department of Commerce sent to Congress a report entitled "Trademark Litigation Tactics and Federal Government Services to Protect Trademarks and Prevent Counterfeiting." The Trademark Technical and Conforming Amendment Act of 2010 tasked Commerce, in consultation with the executive branch’s Office of the U.S. Intellectual Property Enforcement Coordinator, to study the extent to which small businesses may be harmed by abusive trademark-enforcement tactics.

The U.S. Patent and Trademark Office (PTO) conducted much of the study. In his role as a member of the PTO’s Trademark Public Advisory Committee (TPAC) and the TPAC’s "champion" for the issue, this author prepared the first draft of the questions the PTO used to solicit comments from trademark stakeholders about their perceptions of and recommendations concerning trademark-litigation tactics.

In introducing the study, Senator Patrick Leahy (D-VT) said,

I am concerned that large corporations are at times abusing the substantial rights Congress has granted them in their intellectual property to the detriment of small businesses. We saw a high-profile case like this in Vermont last year involving a spurious claim against Rock Art Brewery. When a corporation exaggerates the scope of its rights far beyond a reasonable interpretation in an attempt to bully a small business out of the market that is wrong.

The claim to which Senator Leahy referred was the controversial one made by Hansen Beverages, producer of MONSTER-brand energy drinks, in 2009. Hansen claimed that Rock Art Brewery use of the trademark "VERMONSTER in connection with beer will undoubtedly create a likelihood of confusion and/or dilute the distinctive quality of Hansen’s MONSTER marks."

Commerce’s report has three main sections: (1) Trademark Enforcement and Marketplace Impact (which includes a summary of the responses the PTO received from various interested parties as a result of the PTO’s request for comments), (2) Federal Government Resources To Protect Intellectual Property and Prevent Counterfeiting, and (3) Recommendations. The report’s ultimate conclusion is that "because trademark enforcement is a private property rights litigation issue, if abusive tactics are a problem, such tactics may best be addressed by the existing safeguards in the litigation system in the U.S. and by private sector outreach, support, and education relating to these issues."

More specifically, the report recommends that, to the extent small businesses suffer a disproportionate adverse effect from abusive litigation tactics because they lack funds to hire lawyers to defend against such tactics, the federal government undertake the following actions:

  1. Engage the private sector about providing free or low-cost legal advice to small businesses via pro bono programs and intellectual property rights clinics;

  2. Engage the private sector about offering continuing legal education programs focused on trademark policing measures and tactics; and

  3. Enhance federal agency educational outreach programs by identifying resources that enable small businesses to further their understanding of trademark rights, enforcement measures, and available resources for protecting and enforcing trademarks.

Section IV of the report discusses each of those recommendations in detail.

The next step in the process will be for Congress to review the report and decide what, if any, additional actions may be necessary. Given the PTO’s key role in keeping trademark stakeholders informed about developments in U.S. trademark law and practice, the PTO will likely announce and possibly participate in any such actions.

Refresher on U.S. Copyright Law, Including "Work Made for Hire"

Timothy J. Lockhart 

U.S. copyright law covers "original works of authorship fixed in any tangible medium of expression." There are eight categories of such works: literary works (including forms, documents, and software); musical works, including any accompanying words; dramatic works, including any accompanying music; pantomimes and other choreographic works; pictorial, graphic, and sculptural works; motion pictures and other audiovisual works; sound recordings; and architectural works. Common examples of works subject to copyright include marketing brochures, manuals, reports, and web pages. Thus, virtually every business owns at least some copyrights and needs to know how to protect them.

A copyright owner has the following exclusive rights in a work:

  • To make copies of the work;

  • To prepare derivative works based on the copyrighted work;

  • To distribute the work to the public;

  • In the case of literary, musical, dramatic, choreographic, and audiovisual works, to perform the work publicly;

  • In the case of literary, musical, dramatic, choreographic, and pictorial, graphic, or sculptural works, to display the work publicly;

  • In the case of sound recordings, to perform the work publicly by means of a digital audio transmission; and

  • In the case of architectural works, to copy or construct the work.

The copyright in a work exists from the moment of a work’s creation. Contrary to what many people believe, registering the copyright is not necessary for the copyright to exist or for someone to claim ownership of it. Thus, a business can use a copyright notice with an unregistered copyright and probably should use such a notice with any materials it makes available to the public, whether in printed or electronic form. A copyright notice has three elements: the copyright symbol © (or "Copyright" or "Copr."), the year of first publication of the work, and the name of the copyright owner.

Although registering a copyright is not required, registration does offer significant advantages. First, registration is necessary to bring a lawsuit for copyright infringement. Second, registering a copyright before its infringement entitles the owner to seek statutory damages—that is, damages set by law—and attorneys’ fees, which are often greater than the relevant damages. Registering a copyright is quick, easy, and inexpensive as compared to obtaining a patent or a trademark registration. Thus, a business should consider registering its copyrights in any materials it makes available to the public.

Under the "work-made-for-hire" doctrine, an employer automatically owns the copyright in any work its employees create within the scope of their employment. Many people incorrectly assume a business also automatically owns the copyright in a work the business commissions an independent contractor to create, especially if the parties agree that the work is a work made for hire. However, because U.S. copyright law restricts to nine narrow categories what works created by an independent contractor can be works made for hire, a business should generally try to include in a contract with an independent contractor a clause that says the contractor assigns to the business any copyrights the contractor creates on behalf of the business.

U.S. copyrights last a long time. Generally, for works created after January 1, 1978, a U.S. copyright lasts for the life of author plus 70 years. For anonymous works, pseudonymous works, or works made for hire, a copyright endures for 95 years from the year of first publication or 120 years from the year of creation, whichever is shorter. For works first published prior to 1978, the copyright term varies, depending on several factors.

Copyrights can be and often are valuable business assets. Any business that does not know what copyrights it owns or how to protect and enforce them should consult an experienced copyright lawyer for advice.

As appeared in the April 2011 issue of Retail Angles, a publication of the Retail Alliance.

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