© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of

© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of Barnes & Thornburg LLP, which may not be disseminated or disclosed to anyone other than an employee or partner of

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ATLANTA CHICAGO DELAWARE INDIANA LOS ANGELES MICHIGAN MINNEAPOLIS OHIO WASHINGTON, DC

Ownership of Intellectual Property – A Refresher Brian J. McGinnis

BARNES & THORNBURG [email protected] | @bjmcginnis




Who Owns Intellectual Property?




•November 2010: a mobile phone news and reviews website business hires a writer to assist with marketing and social media

•The employee establishes a Twitter account and uses it for social media marketing of the business

•17,000 Twitter followers•4 years - employee leaves the company on

good terms




•At the encouragement of the employer, the employee continues to use the Twitter account to periodically promote the business of former employer

•Months later, a dispute develops over the amount the employee is owed for role as a vested partner

•Employer asks for the “return” of the Twitter account

•Employee refuses, changes the Twitter account handle




Who owns the content?

Who owns the Twitter account?

Who owns the 17,000 Twitter followers?




Who Owns @PhoneDog_Noah?




Who Owns @PhoneDog_Noah?

•Employer sues for $340,000•= $2.50 x 17,000 x 8 months•@PhoneDog_Noah @NoahKravitz•Litigation pending








TYPES OF INTELLECTUAL PROPETY

1. Patent2. Copyright3. Trademark4. Trade Secret5. Digital Assets?







COPYRIGHT

•Copyright is the right to prevent others from copying a work of authorship

•"Copyright protection subsists . . . in original works of authorship fixed in any tangible medium of expression." 17 U.S.C. §102(a) (emphasis added)

•To be "original" a work must have been independently created by the author (not copied from a previous work) and must exhibit some minimal degree of creativity

•A work is "fixed" if it is in a sufficiently permanent, tangible medium from which the work "can be perceived, reproduced, or otherwise communicated." Id




COPYRIGHT

•Copyright confers a number of exclusive rights •The Copyright Act enumerates:

– The right "to reproduce the copyrighted work."– The right "to prepare derivative works based upon

the copyrighted work."– The right "to distribute copies or phonorecords of

the copyrighted work to the public by sale or other transfer of ownership."

– The right "to perform the copyrighted work publicly."

– The right "to display the copyrighted work publicly."– 17 U.S.C. §106




COPYRIGHT

•Copyright arises at creation and fixation

•Registration confers additional benefits:–Sue for infringement–Statutory damages and attorney’s fees–Prima facie validity

•Infringement = unauthorized copying•Fair Use




Who Owns a Copyright?




COPYRIGHT

•Simple: the “author”• Kurt Vonnegut authors a book• Kurt Vonnegut owns the copyright• T.C. Steele paints a painting• T.C. Steele owns the copyright• John Mellencamp writes a song • The “Cougar” owns the copyright




COPYRIGHT

•Photographer Mannie Garcia takes a photograph while on a freelance assignment for The Associated Press which publishes the photograph that is then copied three years later by contemporary street artist Shepard Fairey for use in an original mixed media stenciled portrait turned poster which becomes one of the most widely recognized and iconic images in American history…




Wait…Who Owns the Copyright?




Who Owns a Copyright?




COPYRIGHT

•Identify the “author”•Copyright protection arises from the time

of creation of a work in a fixed form•The copyright immediately becomes

property owned by the work’s author•Only the author, or those deriving rights

from the author, may claim ownership•Original author’s copyright may be freely transferred

•The exception: Works Made for Hire




COPYRIGHT – WORK FOR HIRE

• 17 U.S.C. §101 - A “work made for hire” is: – (1) a work prepared by an employee within the scope of his

or her employment; or – (2) a work specially ordered or commissioned for use as (i)

a contribution to a collective work, (ii) as a part of a motion picture or other audiovisual work, (iii) as a translation, (iv) as a supplementary work, (v) as a compilation, (vi) as an instructional text, (vii) as a test, (viii) as answer material for a test, or (ix) as an atlas, if the parties expressly agree in a written instrument signed by them that the work shall be considered a work made for hire





•(1) Employee within the scope of employment

•“Employee” ≠ “employee”– Control by employer over the work– Control by employer over the employee– Status and conduct of employer

•Generally, regular, salaried employees qualify





•(2) Specially ordered or commissioned works

•Only qualify if:– 1. The work falls into one of 9 enumerated

categories; AND– 2. There is a written agreement specifying the

work is made for hire

•Includes independent contractors





•Who is the “author” of a work for hire?•NOT the true author (i.e., the employee or

contractor)•Employer / person for whom the work was

prepared automatically becomes the author, and therefore they own the copyright from inception

•No transfer or assignment of rights necessary

•Shepard Fairey vs. The Associated Press – (and not Mannie Garcia)




COPYRIGHT ISSUE SPOTTING

•Common scenario: Company pays thousands of dollars to an outside branding and website design Firm to re-brand the Company and re-design its website

•Company paid for the new logo design trademarks and the website, so it automatically owns the copyrights…right?

•Wrong. Absent specific agreement, the Firm, or the actual designer(s), own the copyrights to all “original works of authorship”





•Critical to ensure assignment of all necessary copyrights

•Balance: ownership | cost | license– Necessary to own all code?– Can Firm retain background technology, license its

use, and allow Company to own/control new code/technology?

•Beware of wide scope of copyright protection: all “original works of authorship”.– Can include: software, apps, code manuals, drawings,

pictures, marketing material, website designs, photographs, logos, images, infographics





•Audit status of copyright ownership•Watch for Works Made for Hire

– e.g., Website designed by summer intern. – Employee? Work for Hire?

•Address copyright ownership in employment, independent contractor, etc. agreements– Functions both to protect + educate

•Review contracts, assignments, website TOS, M&A, security interest documents, etc. mindful of trademark/IP ownership and issues







TRADEMARK

•Trademarks protect an owner's right to use words and designs that distinguish goods or services from others; and

•to prevent others from using marks that are likely to confuse consumers as to the source or affiliation of a good or service

•Symbolize the goodwill of products, services and businesses

•Protect consumers




TRADEMARK

•Trademark rights established by use in commerce

•The first user of a distinctive mark generally has superior rights to later users

•Trademark rights are established in connection with specific goods and services and the scope of rights extends only to markets and geographic areas in which the mark is used

•Thus similar marks may coexist if the marks are used in remote territories or in connection with unrelated products




TRADEMARK

• Registration provides significant additional advantages:

• Nationwide constructive notice of registrant's claim of ownership. 15 U.S.C. §1072

• Establishment of jurisdiction in federal court to sue trademark infringers, regardless of the amount in controversy or the diversity of citizenship. 15 U.S.C. §1121

• Prima facie evidence of the validity of the mark, of the registrant's ownership of the mark, and of the registrant's exclusive right to use the mark in commerce. 15 U.S.C. §1057(b), §1115(a)




TRADEMARK

•Treble damages and attorneys' fees in successful infringement actions. 15 U.S.C. §1117

•Registration may be recorded with the U.S. Customs Service to prevent importation of counterfeit goods. 15 U.S.C. §1124

•Remedies for infringement include injunctions, monetary relief (including profits, damages and costs), attorneys' fees and destruction of infringing materials




TRADEMARK

•Infringement = likelihood of confusion•“Polaroid Factors”:

– the strength of plaintiff's mark; – the proximity of the products in the marketplace; – similarity of the marks in sound, appearance and

meaning; – evidence of actual confusion; – marketing channels used; – types of products and degree of care likely to be

exercised by the purchaser; – defendant's intent in selecting the mark; and – likelihood of expansion of the product lines

Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961)




Who Owns a Trademark?




WHO OWNS A TRADEMARK?

•Use vs. Registration•Trademark rights may arise solely through

use in commerce First user = owner•But rights limited:

– Territory– Goods/services

•Registered rights owned by Registrant/Applicant– National rights– Limited by goods/services




What happens when there is a dispute over ownership?




Apple Corps vs. Apple Computer: 1978-2010




Who Owns Your Trademarks Around the World?




Too often, it’s not who you think…




Proview’s IPAD Registration - China




iPhone 5 Ice Cream - China




TRADEMARK ISSUE SPOTTING

• Critical to ensure protection of trademarks in relevant, and potentially relevant, jurisdictions

• Audit trademark protection coverage and ownership• Watch international registrations - many

international laws make it extremely difficult, if not impossible, to overcome name squatting

• Third parties own marks? (e.g. Distributors, partners)

• Improper business entity or individuals own?• Review contracts, assignments, website TOS, M&A,

security interest documents, etc. mindful of trademark/IP ownership and issues

• Regularly search and enforce




Who Owns a Domain Name?







TRADEMARKS & DOMAIN NAMES

•Trademarks and Domain Names often related; however– Trademarks do NOT create a right to a domain name

&– Domain Names do NOT create a right to a trademark

•A registration for the trademark APPLE does not mean Apple Inc. is entitled to own apple.com, appleTV.biz, applecomputer.net, etc.

•Is there a Likelihood of Confusion?•Exceptions for true cybersquatting where:

– Confusingly similar Domain Name– No rights or legitimate interests– Bad faith registration and use




TRADEMARK ISSUE SPOTTING

•Audit Domain Name registrations and registrants

•Regularly search and enforce•Watch for foreign ccTLD registrations

(apple.com.br)•Monitor new gTLD registrations

(apple.computers)•Monitor developments in keyword advertising•Ensure proper entity owns AND controls

Domain Names•Please - do NOT just leave it all to “the web guy”




Who Owns Digital Assets?




DIGITAL ASSETS

•Digital Assets: Social media and Internet service handles and accounts, blogs, domain names, etc.

•No right to ownership of digital assets•Trademarks, trade names, business names, etc.

do not necessarily create right of ownership of digital assets

•May protect against false and misleading use•Monitor important Internet services and

account names for illegitimate uses•Reserve names whenever possible







LINKEDIN

•Eagle v. Morgan: Owner of a financial services company, Linda Eagle, created a LinkedIn account for business and personal use – Eagle v. Morgan, et al., Civil Action No. 11-4303 (E.D.Pa. December 22, 2011)

•Third party purchases the company, replaces Eagle with new management

•New management takes control of Eagle’s LinkedIn profile, changes the password, and replaces Eagle’s name, photo and information with that of new CEO

•New CEO (Morgan) profile retains certain personal info, including contacts and recommendations




LINKEDIN

•Who owns the account? •Eagle sues Morgan and company in federal

court •Company counterclaims that company policy

requiring all employees to actively use LinkedIn for business purposes made account a company asset and the company the owner of the account

•Eagle survived Motion to Dismiss – publicly accessible contacts held not to be trade secret customer lists

•Summary Judgment motions pending




Who Owns Digital Assets?




DIGITAL ASSETS

•The line between professional | personal blurring

•Employees spend time on the Internet, including social media, promoting both themselves and their employer both at home and at work

•Difficult to find the line between professional and personal conduct

•Who owns the contacts? The relationships? Accounts? Information? Content?

•Avoid the @PhoneDog_Noah and Eagle situations•Draw the line




DIGITAL ASSETS ISSUE SPOTTING

• Ensure company agreements clearly establish company ownership of all accounts and account access information

• Address use of accounts after termination of employment; non-compete agreements

• Separate company accounts from employee accounts

• Build brand around “official” accounts– Not: @PhoneDog_Noah, @BestBuyCMO,

@ricksanchezcnn





•Establish strong social media policies that both educate and govern employee use

•Establish:– The business, not the individual owns the account– The employee has no right to use the account

after termination– The employee must turn over account upon

termination– Only the employer is permitted to change

account settings– Watch labor law issues





•Be familiar with Terms of Service of Internet services

•Many are broad and overreaching•Be aware – establish boundaries of use and

services to avoid unintended consequences•Use of service and upload of content can transfer ownership of IP to services under certain TOS

•Typically at minimum grant extremely broad licenses







FACEBOOK

• “You own all of the content and information you post on Facebook, and you can control how it is shared through your privacy and application settings.”

• But…• “In addition:

– For content that is covered by intellectual property rights, like photos and videos (IP content), you specifically give us the following permission, subject to your privacy and application settings: you grant us a non-exclusive, transferable, sub-licensable, royalty-free, worldwide license to use any IP content that you post on or in connection with Facebook (IP License). This IP License ends when you delete your IP content or your account unless your content has been shared with others, and they have not deleted it.

– When you delete IP content, it is deleted in a manner similar to emptying the recycle bin on a computer. However, you understand that removed content may persist in backup copies for a reasonable period of time (but will not be available to others).

– When you use an application, the application may ask for your permission to access your content and information as well as content and information that others have shared with you. We require applications to respect your privacy, and your agreement with that application will control how the application can use, store, and transfer that content and information.”

http://www.facebook.com/legal/terms (Sept. 13, 2012)







GOOGLE

• “Some of our Services allow you to submit content. You retain ownership of any intellectual property rights that you hold in that content. In short, what belongs to you stays yours.”

• But…• “When you upload or otherwise submit content to our Services, you

give Google (and those we work with) a worldwide license to use, host, store, reproduce, modify, create derivative works (such as those resulting from translations, adaptations or other changes we make so that your content works better with our Services), communicate, publish, publicly perform, publicly display and distribute such content. The rights you grant in this license are for the limited purpose of operating, promoting, and improving our Services, and to develop new ones. This license continues even if you stop using our Services (for example, for a business listing you have added to Google Maps). Some Services may offer you ways to access and remove content that has been provided to that Service. Also, in some of our Services, there are terms or settings that narrow the scope of our use of the content submitted in those Services. Make sure you have the necessary rights to grant us this license for any content that you submit to our Services.”

http://www.google.com/intl/en/policies/terms/ (September 13, 2012)




DIGITAL ASSETS

•The Internet moves faster than most businesses

•And much faster than the law•Important to stay on top of developments,

and•Try to keep up…











CONCLUSION: WHO OWNS IP?

•In general: creator = owner•Ownership may be freely assigned and

transferred•Copyright automatically transferred in work

made for hire•Ensure employee, contractor, non-compete,

licenses – any business agreement unambiguously defines ownership of intellectual property

•Watch for unintentional licensing•Monitor and enforce




Thank you.

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© 2012 CONFIDENTIAL Barnes & Thornburg LLP. All Rights Reserved. This page, and all information on it, is confidential, proprietary and the property of