U.S. Supreme Court to Decide Whether a Software Interface is Protected under Copyright Law

In a case that pertains to technology originally developed in the 1990s, the United States Supreme Court has granted certiorari in Google LLC v. Oracle America, Inc. The dispute between these two technology giants focuses on application programming interfaces (API) that Oracle developed through its predecessor, Sun Microsystems, Inc. At issue for the technology industry is whether an API is copyrightable and, therefore, protected.

The API is critical to most technology companies, especially those with complex and multi-layered tech stacks, because it allows the company to integrate and communicate with other software developers. By way of example and at issue in the case, the Android operating system uses the API originally created by Oracle to allow third-party developers to integrate into the operating system. Although most consumers will not understand how the API works, the use of third-party applications in the Google owned Android operating system is made possible through the API. As a result of its importance in modern commerce, many technology companies protect the structure, sequence, and organization of the API, even if they share how to connect to it.

Regardless of the decision by the Supreme Court on whether the API is protectable under copyright law, the ramifications will be significant. In fact, most of the prominent global technology companies have filed briefs in this case to voice their opinion on the matter. When the Supreme Court decides the case in 2020, every company that interfaces and integrates into the software of another company will need to re-evaluate their intellectual property protection strategies.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
For more information, Contact Us

 

Copyright Ownership when Using Independent Contractors and Service Providers

Businesses often utilize a third-party for services, especially when directly employing someone to perform the task will not add value to the organization. By way of example, it is common practice for a business to hire a freelance photographer, a marketing company to write advertising copy, or an independent contractor to write specific policies and procedures. For many, the business needs require the decision maker move fast and little consideration is given the intellectual property rights. Unfortunately, this can lead to a number of challenges for both the business and the independent contractor.

Generally, when a business hires an independent contractor, the ownership of the creative work belongs to the hiring business. That means the independent contractor is unable to use the work that they actually created without the permission of the business. By way of example, a freelance photographer is infringing on the businesses copyright ownership when posting the photo they took on behalf of the business to their personal portfolio website. Conversely, if the agreement between the business and the independent contractor provides that the independent contractor will have ownership rights, the business may be limited in how they can use the work that they specifically hired the independent contractor to complete. Even more complicated is when no written agreement exists at all or if the business is operating in certain states that have rules that alter the ownership analysis.

To avoid intellectual property disputes that arise from hiring independent contractors, a business should ensure that they have an agreement in place with each independent contractor. The agreement should address ownership and, in many of the more complex business relationships, ensure that the licensing adequately protects the interests of both parties.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
For more information, Contact Us

Domain Names and Trademarks: Enforcing Trademark Rights Against Domain Name Owners.

In the era of modern commerce, the success of a business is often driven by technology and its web presence, and it has become easier than ever to purchase a domain name from an internet domain registrar, making ownership available to the masses. This has increased the number of disputes that arise between an owner of a registered trademark and an owner of a domain name. While many of these disputes are in good faith and resolved through a negotiated settlement, many are arising because individuals are intentionally trying to “ransom” these domain names to the highest bidder. In these situations, it is important to know your rights under the Anti-Cybersquatting Consumer Protection Act (“ACPA”) and the Uniform Domain Name Dispute Resolution Policy (“UDRP”).

The ACPA was enacted in 1999 and designed to protect trademark owners from domain name cybersquatters, but it requires the trademark to be distinctive and/or famous prior to the purchase of the domain name, and the purchase to be in bad faith. Although the distinctiveness and fame element is governed by traditional trademark rules, courts haven’t isolated exactly what constitutes bad faith in this context. By way of example, in ZP No. 314, LLC v. ILM Capital, LLC, No. 1:16-cv-00521-B (S.D. Ala. Sept. 30, 2019), the court decided that bad faith did not include “parking” on the domain name. In this case, the infringing business purchased the domain name with the sole intent of profiting from the other businesses distinctive mark. However, since the mark did not become “distinctive and famous” until after the infringing business stopped actively using the domain name, the court determined that this was not bad faith, despite being critical of its own opinion on the matter.

An alternative remedy for a trademark owner is to seek protection through the UDRP, which is run by the Internet Corporation for Assigned Names and Numbers (“ICANN”). Similar to the ACPA, to obtain relief, the trademark owner must follow a specific process and meet the required elements. The process and the elements are different than the ACPA, but have significant overlap. For a business seeking to enforce its trademark rights against the owner of a domain name, the path to obtaining relief requires careful analysis and planning, especially because the courts continue to adjust to modern commerce.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
For more information, Contact Us

Pre-registration of a Copyrightable Work

An often overlooked method to protect copyrightable works is pre-registration. This method will likely become a little more prominent because, earlier this year, the United States Supreme Court determined in Fourth Estate Public Benefit Corp. v. Wall-Street.com, 585 U.S. ___ (2019) that a copyright owner must wait to bring suit for copyright infringement until their works have been registered. Previously, in the view of certain lower courts, the copyright owner simply had to apply for registration. This decision increased the burden on copyright owners to bring a suit for infringement, but the Supreme Court noted several reasons for its decision, including pre-registration.

Pre-registration is a tool used to protect unpublished works that are in the final stages before commercial distribution, making them particular susceptible to copyright infringement. Instead of following the full registration process that will take over half a year, the copyright owner would submit the work to the United States Copyright Office and, after a limited review, will receive pre-registration. Under Section 408(f) of the Copyright Act, a work that has been pre-registered provides the copyright owner an opportunity to immediately bring a suit for copyright infringement.

Although this particular method of protection might have limited application, it is an important tool to ensure that owners of particularly vulnerable copyrightable works are able to bring suit immediately against those infringing on their works. Otherwise, the copyright owner will have to wait eight or nine months to receive actual registration from the copyright office before they can bring a suit for copyright infringement, which would likely damage the value of the underlying intellectual property. As always, the attorneys at Vandenack Weaver are available to assist with protecting your intellectual property.

VW Contributor: Alex Rainville
© 2019 Vandenack Weaver LLC
For more information, Contact Us

 

Copyright Infringement: Will Congress Make it Easier to Obtain a Remedy?

On October 22, 2019, the United States House of Representatives passed H.R. 2426, The Copyright Alternative in Small-Claims Enforcement Act of 2019. The intent of the legislation is to make it easier for copyright owners to seek enforcement of their rights in situations where the overall damages to the copyright owner are minimal. Essentially, the Copyright Office would create a Copyright Claims Board that would adjudicate infringement claims with damages under $30,000.

The rationale behind the legislation is that cost is a significant impediment to a copyright holder bringing a claim against someone infringing on their work. To bring a claim, as recently determined by the United States Supreme Court, the underlying work must be registered with the United States Copyright Office, which takes time and includes certain expenses. Once registered, the copyright owner can only seek a remedy in federal court, since that is the exclusive jurisdiction for a copyright infringement claim. This process is expensive and, although attorney’s fees can be recovered pursuant to section 505 of the Copyright Act, the United States Supreme Court has also recently limited the scope of recovery. The end result is that many copyright owners are unable to seek a remedy.

This legislation passed with near unanimous support in the United States House of Representatives and moves to the United States Senate for consideration. Should this legislation ultimately become law, it will likely have a significant impact on how copyright owners protect their intellectual property.

VW Contributor: Alex B. Rainville
© 2019 Vandenack Weaver LLC
For more information, Contact Us

 

A Criminal Conviction for Theft of a Trade Secret Does Not Require a Trade Secret

In an unusual case involving trade secrets, a court determined that the mere belief that stolen information is a trade secret, even when no trade secret was stolen, is criminally convictable. As an important tool for protecting intellectual property, businesses will often keep valuable information  secret, and only provide access to individuals necessary to complete some business objective. Most businesses grant access to the trade secret on the belief that misappropriation is actionable under the Defend Trade Secrets Act of 2016, as well as state laws that are substantially similar to the federal law. It is less known, however, that the theft of a trade secret is a federal crime, pursuant to the Economic Espionage Act of 1996 (“EEA”), as codified at 18 U.S.C. § 1832.

In this particular case out of Chicago, an employee resigned and, before leaving, downloaded 1900 files from his employer. He believed that this information constituted trade secrets of his employer, and had the intention to take these trade secrets to his new foreign based employer. However, prior to boarding his plane to China, he was stopped by the United States Customs and Border Patrol, where the hard drive was discovered.

In February 2019, he was convicted by a jury of actual and attempted theft of trade secrets, pursuant to the EEA. The jury also determined that, to a large extent, the stolen documents did not constitute a trade secret. The defendant filed for a post-conviction motion for a new trial, with an argument that you can’t be convicted of theft of trade secrets if the information did not include any trade secrets.

On October 9, 2019, the judge ruled that theft of trade secrets under the EEA exists even if the underlying materials don’t constitute a trade secret. This suggests that stealing what is believed to be a trade secret constitutes a crime. This outcome certainly poses a unique perspective on a lesser known consequence regarding theft of a trade secret. Whether this concept will transfer to non-criminal litigation over the theft of trade secrets has yet to be determined.

For a detailed history, please see United States of America v. Robert O’Rourke, No. 17-cr-00495, (N.D. Ill. 2019).

VW Contributor: Alex B. Rainville
© 2019 Vandenack Weaver LLC
For more information, Contact Us

Foreign-Domiciled Applicants; Why the Change at the Trademark Office?

By Alex Rainville

In a long anticipated decision, starting on August 3, 2019, foreign domiciled trademark applicants, registrants, and parties must be represented by a US licensed attorney in front of the United States Patent and Trademark Office (“USPTO”). This means that any foreign-domiciled person or business wishing to seek trademark registration with the USPTO must appoint a US licensed attorney to file and prosecute the trademark registration application. This may appear like an unnecessary burden, but it is part of fixing overarching administrative problems.

The USPTO is actively trying to modernize and streamline the trademark registration application process, to ensure timely review of applications and increase efficiency to final outcomes. One of the challenges to this process has been a large number of foreign-domiciled applicants submitting inaccurate, and often times fraudulent, materials. By way of example, a common problem with these applications is the specimens are either failing to meet the required standards or are outright fraudulent. This increases the time required for the USPTO to examine and process applications, resulting in an inefficient registration process for all applicants. By using a US licensed attorney, the USPTO expects that the applications will be more accurate and eliminate much of fraud, ultimately increasing efficiency.

For businesses wishing to protect its intellectual property, even those based in the US, it is a good idea to hire a trademark attorney. For example, the attorney will be able to guide you on what can be protected under the Lanham Act and the common law, and the best avenue to obtain registration or, more generally, protection for your intellectual property. They will also ensure you and your business are not defrauded by the multitude of USPTO imposters, and will know how to file complaints regarding these imposters with the Federal Trade Commission, for the Department of Justice to prosecute. Although this change of policy at the USPTO may seem unfair to foreign-domiciled applicants, the change may ultimately benefit all the businesses relying on the USPTO to protect its brand and intellectual property.

© 2019 Vandenack Weaver LLC
For more information, Contact Us

 

Circuit Split on Data Breach Litigation

On March 25th, 2019, the Supreme Court denied review of a case involving individuals whose personal information held in a database was breached by hackers. Specifically, the issue was whether the parties requesting review had Article III “standing” to sue due to the database breach.

Standing is the authority of a court to hear a case. For the court to exercise such authority, the court will only hear cases based on events that cause actual injuries or create real threats of imminent harm to individuals who brought the case. The D.C. Circuit Court in its ruling of June 21st, 2019 deepened the split among contradicting circuit rulings. The D.C. Circuit Court ruled the petitioning party had standing to bring the case due to the breach of 21.5 million social security numbers, birth dates, and residency details of former, current, and prospective employees. The court held that, the plaintiff’s fear of facing a substantial risk of future identity theft met the burden to establish standing.

While the Sixth, Seventh, and Ninth circuits have similarly concluded that a heightened risk of identity theft is sufficient for individuals to possess standing to sue; the Second, Third, Fourth, and Eighth Circuits have ruled in the opposite direction. Distinct facts from this  latest data breach case include the nature of the defendant being a federal government agency and the alleged identity of the hacker being a foreign government entity where the breach was executed for purposes other than identity theft. Nonetheless, the D.C. Circuit Court found the federal government agency liable as well as Office of Personnel Management’s (OPMs) third-party vendor, despite the contract between the two parties. The Supreme Court may need to review and rule on this crucial issue in the near future given the current split of authority.

© 2019 Vandenack Weaver LLC

For more information, Contact Us

 

 

The Defend Trade Secrets Act

Last summer, Congress enacted the Defend Trade Secrets Act (“DTSA”), which created a federal civil cause of action for misappropriation of trade secrets. Recently, various courts have started to interpret the DTSA, and determined that it does not preempt existing state law, but gives trade secret owners the option to enforce their claims and receive more consistent outcomes than they would in state court. Prior to the DTSA’s enactment, manufacturers and sellers had to bring trade secret misappropriation claims in state court, unless the parties could establish diversity jurisdiction or an independent federal cause of action.  Because state interpretations of the Uniform Trade Secrets Act vary in every state, consistent relief was not always possible.  For example, the definition of “trade secret” and the types of remedies differ across states. However, the DTSA applies nationwide and provides a uniform statute for trade secret owners to rely on in federal court.

The DTSA has important features that will impact trade secret owners.  Notably, it defines “misappropriation” and “trade secret”, which aids in consistent enforcement across state lines.  Additionally, it creates a civil seizure mechanism, which allows courts to order the seizure of property to prevent the propagation or dissemination of the trade secret, even before a formal finding of misappropriation is established and without notice to the alleged wrongdoer.  Last, a whistleblower provision provides immunity to employees from criminal or civil liability under federal or state laws for disclosing a trade secret to an attorney or government official for purposes of reporting or investigating a suspected violation of the law or filing a lawsuit made under seal.

Most controversial is the civil seizure provision, and courts are reluctant to permit seizures unless the plaintiff establishes necessity. Also controversial, federal courts are turning to state courts for guidance in interpreting the DTSA, thus, defeating its underlying purpose of providing uniformity. However, these issues are likely to be resolved over time. Since its enactment, it is estimated that less than seventy cases have been brought under the DTSA, but the law provides an important option for those pursuing trade secret claims.

© 2017 Vandenack Weaver LLC
For more information, Contact Us

Federal Civil Remedy for Misappropriation of Trade Secrets Now Available

by M. Tom Langan, II

President Obama recently signed into law legislation that creates a federal civil remedy for the misappropriation of trade secrets. Trade secrets are a form of intellectual property that consist of a business’s methods, designs, formulas, and other confidential or proprietary information that helps a business obtain economic advantages over its competitors. While there were federal remedies for misappropriation of other forms of intellectual property (i.e. trademarks, patents, copyrights etc.), trade secrets were not protected at the federal level until now. The Defend Trade Secrets Act of 2015 offers a variety of remedies, from monetary penalties to injunctive relief to even seizure orders – all designed to stop the unlawful dissemination of trade secrets. There is a 3 year statute of limitations to bring a claim based off when the misappropriation is discovered or should have been discovered based off a reasonable investigation.

© 2016 Vandenack Williams LLC
For more information, Contact Us