Understanding the law of the 'knowledge economy'

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  • | 12:00 p.m. May 24, 2010
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by JBA Intellectual Property Law Section Chair Howard Caplan

Ed. Note — This two-part column will discuss the main components of intellectual property law. The first column will discuss copyright and trademark, and the second will delve into patents, trade secrets and litigation.

Intellectual property is one of the new terms used in business and news media. Intellectual property is sometimes referred to as the “knowledge economy.” But what really is intellectual property? The most commonly known areas of intellectual property are patent, copyright and trademark. Less commonly recognized areas of intellectual property are trade dress, trade secrets and other proprietary confidential information. Each of these areas involves the right of ownership of the type of property. At its most basic level, intellectual property is information.


Copyright law is exclusively federal. The U.S. Copyright Act defines copyright subject matter as “original works of authorship fixed in any tangible medium of expression.” “Works” can be written material such as books and magazines, articles, and song lyrics; music, including lyrics; dramatic works such as plays and accompanying music; choreographic works; artwork such as painting, drawing, and sculptures; movies; sound recordings; architectural works; and boat hull designs. “Works” does not include ideas alone. Rather, copyright protects the specific expression of the idea. (The idea may be protectable by patent, or nondisclosure agreement or other contract limiting rights to use the idea.)

“Tangible medium” is any medium such as writing on paper, recording on CD or tape, painting or sculpting or residing in a file on a computer. Copyright does not protect the public performance of a reading, play or song. But copyright does protect a recording of the performance.

An important concept in copyright is “authorship.” Who is the author for copyright purposes of a work? A work created by and for a person belongs to that person, the author and the copyright holder. A work created by a person while working for another in the course of employment belongs to the employer, the author. The copyright in a work created by an independent contractor generally belongs to the independent contractor, the author. This is the “work for hire” doctrine. This is so even when the commissioning party pays for and supervises the creation of the work. Copyright law identifies specific, limited situations when the author of a work created by an independent contractor is the commissioning party. In most situations the independent contractor will be considered the author for copyright purposes.

Protection of a copyright requires registration of the work with the Copyright Office of the Library of Congress. The timing of registration is also important in seeking certain damages for infringement. Rights granted to a copyright holder are the exclusive right to make copies of the work, distribute the work, display the work, and make other works derived from the original work. All of these rights can be exclusive or not-exclusive and divisible. Copyrights have a limited term, which is long.


A trademark (or service mark for services) is an identifier that is used to label, distinguish or identify products or services that are unique to a business’s identity or brand. Examples include a distinctive slogan, logo, shape, name, sound, color or scent. The necessary requirements are that the mark be able to identify the source or provider of the goods or services and not be confusingly similar to someone else’s trademark for a similar product or service. The main value of a trademark is its ability to convey the source or provider to the consuming public. Coca-Cola used to be just another soft drink. Now it is one of the most valuable trademarks in the world.

Trademarks do not need to be unique. For example RALLY is the trademark under which du Pont sells car care products and another company sells veterinary products. The difference in the goods or services under which the trademark is used is one of the main criteria used to determine if confusion might exist among the consuming public. In this example the consuming public for one product is car owners and people who work on cars, for the other product the consuming public is pet owners and veterinarians.

Not surprisingly the strength of trademarks is important. The strongest marks are made up, fanciful marks such as Kodak or Google, unique designs, and arbitrary marks. Arbitrary marks use common words but in a context that has no relationship to the goods or services. Examples of arbitrary marks are Sonic for restaurants and Kiss for purses. The strongest marks receive the strongest protections against infringement.

Next are suggestive marks. Suggestive marks suggest something about the goods or service. Once the goods or services are known the link to the trademark is understood. Examples of suggestive marks are Outback restaurants and Craftsman tools. Suggestive trademarks are moderately strong. They receive protection against use for similar goods or services. But they do not prevent others from using the words for different goods or services.

The next class of marks are descriptive marks. These marks describe some attribute or characteristic of the good or service. These also include surnames and geographic origin of a product. If this type of mark is determined to be merely descriptive then it cannot be registered until the mark has acquired sufficient distinctiveness in the mind of the public to know the identity of the maker or service provider. Examples of descriptive marks that were once weak but have become strong due to acquired distinctiveness are McDonald’s and Kentucky Fried Chicken. Protection against infringement for a descriptive mark is weak, if even available, until the mark becomes sufficiently well known by the consuming public as the identifier of the goods or services.

Unlike copyright and patent, an owner of trademark has rights to stop an infringer and recover money damages without registration. These are what are known as common law rights. Undoubtedly registration is better. Registration, which can be or state, provides a number of benefits not otherwise available. These include proof of ownership and date of first use, ability to collect statutory damages (as opposed to proving the amount of loss), and recovery of attorney’s fees. Like patents and copyrights trademarks exist for a finite time. But unlike patents and copyrights trademarks may be renewed indefinitely. Trademarks may be licensed non-exclusively.

Trade Dress is the nonfunctional look of a business’s goods or means of providing services. Examples are the brown of UPS trucks and certain color combinations in product packaging. Trade dress may include color schemes, decor or packaging. Trade dress must be continuously used for a substantial time before it is protectable. Protections for trade dress are similar to protections for trademarks.



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