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Corporate Counsel Connect collection

December 2014 edition

Keeping up with outside counsel: The ten IP terms every in-house attorney should know

Uli Holubec, Practical Law

Many in-house attorneys refer their intellectual property (IP) matters to outside counsel. But even though you may not be doing the bulk of the work, you still have to be able to explain it to company management and understand it well enough to critically review outside counsel's bills.

Below are ten-plus IP terms to help make your internal discussions and communications with outside IP counsel both more meaningful and cost-effective.

This is center stage, where patents and trademarks are concerned. The United States Patent & Trademark Office (USPTO or PTO) is the administrative agency that evaluates applications for and issues patents and trademark registrations, and maintains the patent and trademark registers.

While the PTO is powerful, it is not a court, and its jurisdiction is limited to the registrability of trademarks and the patentability of inventions. It cannot rule on the right to use a trademark, for example, or assess damages when a patent is infringed.

Your outside counsel may call the PTO (to speak to an examiner), make submissions to the PTO, or appear before its appellate tribunals, the Trademark Trial and Appeal Board (TTAB) or Patent Trial and Appeal Board (PTAB).

For more information, see Practice Note, Intellectual Property: Overview.

2. Fair use
Fair use is an infringement defense that can apply, in different forms, to both trademark and copyright cases.

Depending on the facts, using another's trademark when referring to that party's own goods or services – as in a product comparison, for example – may be a fair use. Likewise, using another's trademark to legitimately and factually describe your own product – perhaps to say that it was featured in a certain magazine – might also qualify.

For more, see Practice Note, Trademark Infringement and Dilution Claims, Remedies and Defenses.

A copyright fair use is what lets a book reviewer quote a line from the text being discussed and can protect you from suit for copying a page from a treatise to read during your commute. Fair use acts as an exception to the exclusive rights of copyright protection, allowing limited use of copyrighted works for criticism, news reporting, and educational and similar purposes.

For more information on copyright fair use, see Practice Note, Copyright Fair Use.

3. Office action
It can sound intimidating and, at first glance, the news is disappointing – an office action is the USPTO's way of saying that your application for a patent or trademark registration has been refused. All is not lost, however, as the office action will explain the basis of the refusal, citing to supporting law, and provide for at least one opportunity to respond with arguments to support the trademark registration or patent. Then, even if you are not successful and the PTO issues a final office action, you get one more shot before having to file an appeal.

Be sure to stay on top of counsel to know as soon as an office action issues so you can start formulating your response and collecting supporting evidence right away – you can always look up the status of a trademark or patent application on the USPTO's website (

For more on office actions, see Practice Notes, Trademark Office Actions: Likelihood of Confusion Refusals and Patent: Overview .

4. Likelihood of confusion
This is the standard for trademark infringement and unfair competition, decided by an analysis of the DuPont or Polaroid factors, or some other list named for the salient case in your jurisdiction.

You might expect to hear this standard mentioned in the context of a federal trademark infringement action, or in the steps leading up to it, say if you've sent or received a cease-and-desist letter. The USPTO also uses this test, so it may come up in an office action – if the trademark examiner finds that the mark in your trademark application is too similar to one already registered – or in an inter partes proceeding, such as an opposition or cancellation, before the TTAB.

For a chart setting out each federal circuit's likelihood of confusion test and the relevant case law, see Checklist, Trademark Litigation: Likelihood of Confusion Tests by Circuit Chart.

5. Substantial similarity
This is copyright's infringement standard, together with ownership of a valid copyright and copying. Only protectable elements of a work will be analyzed for substantial similarity, so facts, ideas, and methods do not get considered. Ditto "scenes a faire" – elements common to a particular type of work, such as a breakup scene in a romantic comedy – stock characters, and matter in the public domain.

Because substantial similarity is required to prove copyright infringement, it will be a significant consideration in any pre-suit discussions or when analyzing claims in a cease-and-desist letter.

For more, see Practice Note, Copyright Litigation: Analyzing Substantial Similarity.

6. ICANN (and UDRP, ACPA and gTLD)
Your IT manager tells you that you have a cybersquatter, and you know that means someone's registered your company's trademark as their domain name. But then what? Here's a mini-primer to guide you through the alphabet soup of abbreviations and acronyms you'll encounter when you consider whether – and how – to fight back:

  • ICANN (Internet Corporation for Assigned Names and Numbers) – The international not-for-profit organization that administers domain names.
  • UDRP (Uniform Domain Name Dispute Resolution Policy) – Anyone who registers a domain name is contractually bound to resolve trademark-based domain name disputes through a streamlined arbitration process called a UDRP proceeding.
  • ACPA (Anticybersquatting Consumer Protection Act of 1999) – A court-based alternative to a UDRP proceeding. Major differences include the availability of damages and attorneys' fees, but also the higher costs and longer time-to-decision associated with traditional litigation.
  • gTLD (Generic top-level domain) – In 2013, ICAAN began activating a large number of new gTLDS – extensions other than the traditional ones like .com and .net. This means greater marketing options for you, but more opportunities for cybersquatters, too.

For more, see Practice Note, Internet Brand Protection.

7. Work made for hire
The work-made-for-hire doctrine challenges the common-sense expectation that the owner of a copyright is the person who actually created the work. If an employee authors something within the scope of employment – drafts web content or writes the code for a new app, for example – the copyright in that work generally vests with the employer. Where the author's employee status is unclear, courts rely on a fact-intensive analysis under agency law.

Similarly, in certain statutorily defined situations, even independent contractors can create works where the copyrights are owned not by them, but by the party commissioning the work.

Patent law has similar principles – the common law shop right and hired-to-invent doctrine – which can grant employers the right to use or patent inventions created under certain circumstances.

Your outside counsel might suggest work-for-hire and explicit assignment language in employment agreements and third-party contracts to avoid uncertainties in these areas.

For more, see Legal Update, Work Made for Hire and Practice Note, Patent: Overview.

8. America invents act
This law was perhaps the most important IP development in the last ten years that many people missed. The AIA changed the US patent process radically, from a first-to-invent to a first-to-file system, to match the rest of the world. So if all you remember about patents from law school was that you had a year to dawdle before filing a patent application, you should switch gears and act now on anything you might want to protect, because the race to the PTO is on.

For more details on the AIA, see Practice Note, Leahy-Smith America Invents Act: Overview.

9. Patent troll
Also called non-practicing entities (NPEs), patent-assertion entities, and the less polite patent pirates or patent sharks, patent trolls are certain companies that acquire and enforce patent rights without practicing the patented invention. (Universities, individual inventors, and other licensors may be NPEs, but are not considered patent trolls.) The patent troll's business model relies on buying up patents, often on the cheap, and instead of manufacturing anything, making money by suing (or threatening to sue) others under those patents.

For more on what to do when facing a patent troll, see Practice Note, Patent Litigation: Litigating Against a Non-practicing Entity.

10. DMCA
Chances are your company has a website. If so, you may have the Digital Millennium Copyright Act to thank for protecting you from copyright infringement claims for material posted by users of that site. Any website with user content must comply with DMCA requirements – which typically include implementing a takedown process and a policy for dealing with repeat infringers – for the website owner to avail itself of the DMCA's "safe harbor" provisions.

Your counsel might suggest implementing a DMCA policy for your company's website, which includes designating an agent to receive notice of alleged infringement. Or you may learn that your company's own copyrighted material – a television commercial or text from its website, for example – is being unlawfully copied elsewhere online, and your counsel may propose sending a takedown notice under the DMCA to the operator of that site.

An overview of the DMCA safe harbor provisions can be found here: Practice Note, Digital Millennium Copyright Act (DMCA): Safe Harbors for Online Service Providers.

Reprinted with permission from the Association of Corporate Counsel 2014 All Rights Reserved