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
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What Is Trademark Infringement?

An Intellectual Property FAQ with Mark A. Williams.

Put simply, trademark infringement is when you use somebody else’s trademark; however, it is really a lot more complex than that. If you use any mark or symbol to identify your goods and that confuses customers as to whether or not you might be associated with someone else’s goods. There are a lot of examples of this in industry, but basically, you cannot take a word and change how it is spelled or use a phonetically similar word to trade on the value of the other mark for your benefit. If you do that, you are infringing that other person’s rights and they have the right to not only stop you, but to potentially take the profits of your business that you gained from using that mark, for their own benefit.

© 2014 Parsonage Vandenack Williams LLC

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Is Federal Trademark Registration Valid Outside the United States?

An Intellectual Property FAQ with Mark A. Williams.

If you obtain a federal trademark within the United States with the United States Patent and Trademark Office, it will apply to anybody that wants to do business within the United States. So a foreign company that wants to come to your state or to the U.S. and do business, yes, it applies to them.

What it doesn’t do is it doesn’t stop people in another country from using your trademark. If you do business outside of the United States or if you do business on the internet with people in foreign countries, you really have to consider whether you need to obtain a trademark in those countries, or whether you have to seek what is called Madrid Protocol protection, which is something akin to a treaty between several different countries that will extend your U.S. trademark protection to those countries.

© 2014 Parsonage Vandenack Williams LLC

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Should I Spend the Money to Get a Trademark For My Business?

An Intellectual Property FAQ with Mark A. Williams.

Whether you should buy a trademark for your business really depends on where you do business at. There are federal trademarks and a federal trademark is registered with the United States Patent and Trademark Office and that gives you rights in all 50 states. You can only get a federal trademark if you actually use your mark in more than one state. So, if you are only doing business in one state, one city, on locality, then you should look at whether you can obtain a state trademark.

The benefits of obtaining trademark protection, either federal or state, is that it makes it easier to stop other people from using your brand, your business name or whatever your mark might be. If you don’t register it, you still do have some level of protection; however, I can honestly say that obtaining a trademark is usually a fairly inexpensive process and the benefits you get from those statutory rights usually far outweigh the cost of obtaining the mark.

© 2014 Parsonage Vandenack Williams LLC

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What Is a Trademark?

An Intellectual Property FAQ with Joshua A. Diveley.

A trademark is any kind of name, symbol or sign that is used to identify the source of a good. A common example would be Nike or the Nike swoosh. As soon as somebody sees the Nike symbol or a Nike swoosh in the store or on a pair of shoes, they are going to identify it with the Nike Corporation and that is going to be the way to identify that that is the source of the product.

© 2014 Parsonage Vandenack Williams LLC

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Trademarks

WHY USE A TRADEMARK?

Trademarks (including service marks) are words, phrases, symbols, or designs that identify and distinguish goods and services.  An effective trademark can be a powerful tool for a business owner.  It enables the business owner to protect her business’s valuable intellectual property from competitors.  It can also be a source of added value for the business in the event of expansion or sale.  Furthermore, it can prevent unauthorized use of company products, slogans, and other company intellectual property on the Internet.  In short, trademarks both create and protect value for businesses.

SELECTING A TRADEMARK

To help ensure that the desired trademark can be obtained, business owners have to choose carefully.  Business owners must select a trademark that has not already been registered or is not confusingly similar to other existing marks.  Prior to submitting a trademark application, it is generally advisable to have a professional engage in a search for similar marks.  In addition, choosing the type of mark to be registered is important.  Three different kinds of marks are common:

  • Generic marks, such as RESTAURANT or SHOP, may not be registered.
  • Descriptive marks, such as JOE’S COFFEE SHOP, require the registrant to show a specialized “secondary meaning” that the mark has obtained, separating it from other similar marks in the minds of consumers. These marks are also hard to protect in an infringement action.
  • Suggestive, arbitrary, or fanciful marks, such as JOCOSHO, require no showing of secondary meaning, and are generally easiest to obtain and protect.

HOW IS A TRADEMARK OBTAINED?

Trademarks may be obtained in two ways.  First, a trademark may arise solely from being used in commerce.  These are called “common law” trademarks.  Here, no state or federal registration is required.   Common law trademarks are typically limited to the geographic area in which the mark is used.  Common law trademarks do not provide as many rights as a registered trade mark.

More typically, a registered trademark is obtained.  Trademarks may be registered on a state or federal level.  When obtaining a trademark, the first step is to search for potentially similar marks.  Afterward, an application for registration is filed either on the grounds that the applicant is using the mark in commerce or intends to do so.  This process can be challenging, and typically can take anywhere from nine to eighteen months.  The application will be reviewed and will either be approved or an Office Action will be issued indicating an issue with the mark.  Once approved, the mark is published for 30 days, during which any party can object to the application.  After publication, the registrant receives a certificate of registration or a notice of allowance, which must be responded to.

PROTECTING THE TRADEMARK

Once a trademark has been obtained, it must be protected aggressively.  Trademarks may lapse after a certain time period if certain notices are not filed with the USPTO.  More importantly, unauthorized use of the mark must be prevented, since the mark may be considered abandoned if such use is permitted.  Business owners especially need to consider protecting against unauthorized use on the Internet and in social media, since these are frequent sources of unauthorized trademark use.

TRADEMARK VS. TRADE NAME

Finally, trademarks are often confused with trade names.  As explained above, a trademark identifies goods and services.  Trade names, on the other hand, identify the name of a business other than its legal name.  For example, “Joe’s Coffee Shop, Inc.” may obtain a trade name to identify itself as “Joe’s Coffee Shop” and not have to use the “Inc.” reference.  This will also protect others from operating under a similar trade name.  Trade names, otherwise known as a “doing business as”, are obtained through the state where your company operates.  In Nebraska, operating under an improperly registered trade name is punishable as a Class V misdemeanor.

© 2012 Parsonage Vandenack Williams LLC

For more information, contact info@pvwlaw.com