FCC Publishes New Privacy Rules for ISPs

Effective January 3, 2017, the FCC’s new rule, “Protecting the Privacy of Consumers of Broadband and Other Telecommunications Services,” establishes streamlined privacy guidelines applicable to Broadband Internet Access Service (“BIAS”) and all telecommunication carriers.  Prior to this rule, BIAS providers were not subjected to the same privacy standards as telecommunication carriers.  The new rule focuses on creating transparency, choice, and data security to provide “heightened protection for sensitive consumer information, consistent with consumer expectation.”

To promote transparency, the rule requires that carriers “provide privacy notices that clearly and accurately inform customers about what confidential information the carriers collect, how they use it, under what circumstances they share it, and the categories of entities with which they will share it.”  To promote choice, the rule allows customers to opt-in or opt-out of approval for the sharing of sensitive customer personal information.  To promote data security, carriers must “adopt security practices appropriately calibrated to the nature and scope of its activities, the sensitivity of the underlying data, the size of the provider, and technical feasibility.”

Another important aspect of the rule is the adoption of data breach notification requirements, which is particularly relevant considering recent data breaches of large United States companies (i.e. Target and Yahoo!).  Information regarding data breaches must be reported to the FCC, FBI, and Secret Service “within seven business days of when the carrier reasonably determines that a breach has occurred if the breach impacts 5,000 or more customers.”  Carriers are now required to notify affected customers without “unreasonable delay, but within no more than 30 days.”

While these rules are set to take effect January 3, 2017, its fate remains unclear with the Trump Administration taking control and Court challenges accepted until January 31.   However, the implementation of the rule should help protect consumers’ personally identifiable information and allow them to be more informed with what is collected and who it is shared with.

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How long is too long for a Non-Compete Restriction?

No Attorney’s Fees For BitTorrent Download Of “The Cobbler”

In relation to our recent Copyright Radio Show about the risk of copyright infringement liability stemming from illegal downloads, an Oregon Court declined to hold a BitTorrent Defendant responsible for Plaintiff’s attorney fees.  In Cobbler Nev., LLC v. Cerritos, the Plaintiff accused Defendant of violating the Copyright Act by using BitTorrent to illegally download Adam Sandler’s movie “The Cobbler” (based upon the reviews, a movie probably not worth risking a copyright infringement lawsuit for).  While the Defendant was found responsible for the minimum $750 in statutory damages, the Court denied Plaintiff’s motion for attorney’s fees, which would have subjected the Defendant to roughly $17,000 in additional damages.

In rejecting the Plaintiff’s motion, the Court noted that the “financial penalty of that [$750] magnitude is sufficient to deter [Defendant], as well as others, from illegally downloading movies in the future.”  The Court also commented on how awarding “Plaintiff its attorney’s fees in his case would only contribute to the continued overaggressive assertion and negotiation of these Copyright Act claims.”  Overall, allowing upwards of $17,000 in damages would counter the policies of the Copyright Act.

Decisions such as the one in Cobbler Nev., LLC v. Cerritos could mark a change in how illegal downloads are handled under the Copyright Act.  While it is generally agreed that illegal downloads are an issue, as this Court pointed out, “consumers who downloaded a single movie [should not] pay more than their share of the problem.”  Moving forward, it will be interesting to see how the diminished possibility of attorney’s fees under the Copyright Act will impact copyright infringement lawsuits for illegal downloads.

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Damages for Design Patent Infringement

On December 6, 2016, the U.S. Supreme Court reversed a damages award that Apple, Inc. won over Samsung Electronics Co., Ltd. in their longstanding patent fight.  See a copy of the full decision here.  Apple’s design patents were directed to specific elements of Apple’s iPhone.  The Supreme Court remanded the case to the Federal Circuit for further proceedings without actually decided how much money Apple was entitled to from Samsung.  In doing so, the Supreme Court reasoned that “article of manufacture” could be limited to a particular component of a product, regardless of whether that component is sold separate from the product as a whole.

 

The Supreme Court argued that an award of “total profit” must be made from the manufacture or sale of the “article of manufacture to which the design or colorable imitation has been applied.”  The Supreme Court defined an “article of manufacture” as a “thing made by hand or machine.”  As such, the infringing component could either the smartphone, itself, or a particular component within the smartphone.  Moving forward, it appears as though the following elements will be important in design patent infringement cases: (1) the scope of the design claimed in the plaintiff’s patent; (2) the relevant prominence of the design within the product as a whole; and (3) whether the design is distinct from the product as a whole.

 

Feel free to contact a Traverse Legal patent attorney today at 866-936-7447 to discuss your patent (utility or design) needs.

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Web Accessibility Lawsuits Increasingly Prevalent

Using and accessing private company websites is undoubtedly a daily occurrence and often a necessity.  But what happens if, because of a disability, a user is unable to access a website fully?  Under the Title III of Americans with Disabilities Act (ADA), “no individual shall be discriminated against on the basis of a disability in the full and equal enjoyment of the goods, services, facilities, privileges, advantages, or accommodations of any place of public accommodation by any person who owns, leases (or lease to), or operates a place of public accommodation.”  Due to disabilities such as blindness and deafness, the number of website accessibility lawsuits have increased dramatically.

In July 2016, southern grocery/pharmacy retailer Winn-Dixie was sued by a blind Plaintiff, Juan Gil, for violation of ADA Title III.  Particularly, Gil was interested in being able to order pharmaceutical refills online, but his website reading software was not compatible with the Winn-Dixie website.  Thus, Gil claimed that the Winn-Dixie website was inaccessible under ADA Title III.  In response, Winn-Dixie has asserted that their website is not a “place of public accommodation” because they are not a physical location. The Department of Justice intervened in the case to support Gil’s position that websites are subjected to ADA Title III.  Courts are split on the issue of whether the internet is included in the statute’s reach, and with a California state court recently finding an online retailer in violation of the ADA Title III under similar facts, it will be telling to see what direction the Winn-Dixie case goes.

To protect your company’s website from exposure to an ADA Title III lawsuit, it is important to be open to making your website as accessible as possible.  In a recent webinar – “The Road to Sustainable Corporate Accessibility” – John Foliot of Deque Systems commented that “[l]awsuits happen because somebody with a disability reached out to an organization to say that they were having problems, and the organization actually created or accelerated their frustration.”  Thus, it is wise to have procedures in place, particularly within your Terms of Use Agreement, explaining how to address the concerns of disabled individuals that reach out regarding the accessibility of your company’s website.  If you need help re-working your company website’s Terms of Use, Traverse Legal can help.

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Could Illegal Downloads Expose You to Copyright Infringement Liability?

Hello listeners! My name is Mallory Donick and I am a Copyright Attorney with Traverse Legal.  Today we are going to talk briefly about illegal downloads and the potential repercussions those downloads can have under copyright law.

It is safe to assume that most people have illegally downloaded something in their lifetime, typically music and movies.  We live in an increasingly connected world where file sharing is the norm, which makes access to free digital media easier than ever.  Because illegal downloading is so prevalent, many are led to believe that they won’t be the ones to get caught.  But, what happens if you do get caught?

As a quick refresher, copyright law protects original works of authorship fixed in a tangible medium, which includes digital copies of music and movies.  Copyright infringement occurs when someone reproduces, distributes, displays, or performs protected works without [the] author’s permission.  Thus, by downloading free, illegal digital media, copyright infringement is occurring.

Even if your free downloads are infringing copyright, you may still ask – how will they find me?  Well, the copyright owner can acquire your IP address as being associated with illegal downloads.  Armed with the IP Address, copyright owners file a “John Doe” lawsuit, which means that the Defendant has not yet been named.  Through the lawsuit process, copyright owners can subpoena your Internet Service Provider (“ISP”) to disclose your name and address.  After that, the copyright owner uses your contact information to send a threat letter asserting legal leverage and requesting payment.  In the event that the issue doesn’t get settled, you are potentially exposing yourself to a full-blown copyright infringement lawsuit.  That could mean getting slapped with some seriously excessive fines.

As use of streaming services like Pandora, Spotify, Netflix, and Amazon increases, logically illegal downloading should be decreasing – but statistics show that it’s not.  In fact, it is estimated that illegal file-sharing has grown approximately 44% from 2008 to 2014.  Software such as BitTorrent and YouTube to MP3 remain extremely popular because people like free.  Well, free is only better until it catches up to you.  While you may never get caught, you have to ask yourself – is illegal downloading really worth the risk?

If you have been the subject of a copyright infringement notice due to illegal downloading, Traverse Legal can help navigate your options.  This is Copyright Attorney Mallory Donick signing off until next time.  Take care!

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Patents vs. Trade Secrets

Should I patent my invention or keep it as a trade secret?  What are the differences between patents and trade secrets?  These are the types of questions that we regularly get asked from our clients.

 

According to the USPTO’s Trade Secret Policy, “trade secrets consist of information and can include a formula, pattern, compilation, program, device, method, technique or process.”  The Defend Trade Secrets Act of 2016 specifies that a trade secret involves taking reasonable measures to keep information secret and deriving independent economic value from the information not being generally known to another person who can obtain economic value from the disclosure of the information.

It is important to understand that patents and trade secrets are NOT mutually exclusive forms of intellectual property protection.  Initially, most inventions were probably protected as trade secrets.  At some point, patent protection was pursued on some of these inventions, while others remained trade secrets.  This decision is often based on the commercial potential and marketability of an invention.  A single product may even have both trade secret and patent protection.

While a patent typically has a term of 20 years from its filing date, trade secrets can last forever as long as the information is kept secret and continues to have economic value, such as the formula for Coke®.  Patents are specific to jurisdictions/countries and only provide rights in those jurisdictions/counties, while the geographic scope and enforceability of trade secrets is unlimited.

Further, patents typically involve greater costs (drafting, prosecution, and maintenance fee costs) and time to obtain compared with trade secrets.  Trade secrets can be obtained immediately and typically require of various agreements, such as NDAs, employment agreements, etc., to ensure the security of the information.  However, the risk of someone reverse engineering your invention is much greater if you simply have a trade secret, as opposed to a patent.  Also, trade secrets are lost upon public disclosure, while patents need to be formally invalidated to be lost.

As you can see, there are numerous factors that should be evaluated when deciding whether or not trade secret protection, patent protection, or both is the best form of intellectual property protection for your invention.  This is typically a very fact-dependent decision that involves evaluating both your business and intellectual property goals.  Let a Traverse Legal patent attorney provide you with the tools necessary to help you make these decisions.  Give us a call today at 866-936-7447 for a free consultation.

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Court Orders Yelp to Remove Defamatory Review As a Non-Party To The Case

The California Supreme Court has agreed to hear arguments from a lower court’s decision affirmed by the Court of Appeals to require Yelp to remove  defamatory reviews concerning a California attorney.  The case is significant if it is upheld because Yelp was NOT a party to the underlying lawsuit.

Dawn Hassell and her firm represented Ava Bird during the summer of 2012.  Bird thereafter published an allegedly false and defamatory review about Hassell.  Bird refused to remove the reviews after demand by Hassell and continued to post negative reviews.

Hassell filed suit against Bird and obtained a default judgment against Bird for damages and an injunction requiring Bird and secondly Yelp to remove the defamatory reviews.  Bird refused and then Yelp refused to remove the reviews.  Yelp initiated an appeal to vacate the judgment as to Yelp as it was a non-party to the litigation and which to date has been upheld in the California appellate Courts and is pending in the California Supreme Court.

One of the significant aspects of the ruling was that Section 230 of the Communications Decency Act (CDA) did not bar the trial court from issuing the removal order because the order did not impose any liability on Yelp and therefore the CDA was not at issue.  The court of appeals in its ruling stated that the California Supreme Court “has explicitly confirmed that injunctions can be applied to nonparties in appropriate circumstances,” despite Yelp’s argument to the contrary.

The case is significant, if it stands up on appeal, for those who have had online defamatory online reviews, sued the poster, and the poster has nevertheless refused to remove the postings, as often times websites will nonetheless refuse to remove the content because it was a non-party to the case and is not under order to comply,  and will claim it is otherwise immune from such orders under the CDA.

 

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Request for Extension of Time to File a Trademark Opposition

You have filed your trademark application with the United States Patent and Trademark Office (USPTO).  Your trademark application was assigned to, reviewed by and approved for publication by an Examining Attorney at the USPTO.  You got excited, you may have started using the mark or expanded your existing use and you were anxiously awaiting receipt of your Certificate of Registration.  You figured the 30 day Opposition Period was a mere formality.  Then, you suddenly receive notice from the USPTO that an entity has filed a Request for an Extension of Time to File an Opposition.  Now what?  Does this mean your trademark application is dead?  Are you being sued?  What should you do next?

First, recognize what a Request for Extension of Time to Oppose is.  The Trademark Trial and Appeal Board (TTAB) makes a short form available for any “person who believes that he, she or it would be damaged by the registration of a mark on the Principal Register may file a notice of opposition within thirty days of the date the mark is published in the Official Gazette. Such person may request an extension of time in which to oppose. A request for extension of time must be filed prior to the expiration of the opposition period or prior to the expiration of any previously granted extension.”  Since no further extensions of time to file an opposition will be granted under any circumstances, entities oftentimes, as a matter of course, utilize a Request for Extension of Time to Oppose in order to further analyze whether there is any basis for a Trademark Opposition Proceeding.  This means an entity may be considering opposing your trademark application because of, among other reasons, their prior use and your use creating a likelihood of consumer confusion.

Second, recognize what a Request for Extension of Time to Oppose is not.  It is not a Notice of Opposition, which would trigger a Trademark Trial and Appeal Board Opposition Proceeding and necessitate your filing of an Answer or other responsive pleading.  It is not a lawsuit.

Third, recognize that a Request for Extension of Time to Oppose may be an opportunity for you to perform your own analysis, with the help of a trademark attorney if you so desire, in order to determine your risk level.  Once you are apprised of your risk, you may take affirmative steps to communicate with the potential Opposer in hopes of identifying an amicable resolution.  You may also stand by and do nothing, willing to dispute any Opposition or take other action.

Ultimately, a Request for Extension of Time to Oppose is yet another data point you should be mindful of in the trademark prosecution process.  While an Opposer may send a cease and desist letter and inform you of the potential TTAB Opposition, you may receive notice of the request for extension without any direct correspondence from the requesting entity.  As such, pay attention to what you receive and contact a trademark attorney with questions.

 

 

 

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Federal Trademark Registration Important in Mergers & Acquisitions

Clients, existing and prospective alike, regularly ask: Do I really need a trademark registration or can common law rights be enough.  Typically, we then discuss the benefits of a trademark registration on the Principal Register of the United States Patent and Trademark Office (USPTO), including:

1. nationwide priority
2. presumption of ownership in court
3. presumption of validity in court
4. incontestability after 5 years
5. right to sue in federal court
6. right to recover statutory and/or triple your actual damages plus attorney’s fees
7. use of the ® symbol
8. help from the U.S. customs service to avoid counterfeit products
9. deters unauthorized use of the mark
10. helps when going after cybersquatters
11. registration in other countries using the U.S. priority date

However, there is yet another benefit that needs to be discussed by all trademark attorneys.  More so than ever in today’s relatively active merger and acquisition world, we now must also be mindful of what not having a trademark registration means.  It tends to raise questions during due diligence about the exclusivity of ownership of the trademark, albeit in connection with the owner’s goods/services.  It also creates pre-closing, or alternatively, post-closing, obligations that otherwise would not need to be considered.  Finally, as intangible property, trademarks, a form of intellectual property, oftentimes are one of the more valuable components in an M&A deal.  Shouldn’t it be treated as such?

There are too many self-help trademark tools available to entrepreneurs to forego trademark registration for their brand.  Early stage entities can also retain a trademark lawyer who can, hopefully for a flat fee, perform the recommended trademark clearance search and application for registration.  Trademark attorneys experienced in not just trademark prosecution but also in mergers and acquisitions, not to mention trademark litigation, can further advise about the best ways to secure, protect and enforce your trademark rights.

Moral of the story: register your trademark.  In fact, register your brand, product names, and other source identifiers as trademarks early and often.  You will be happy you did when an issue arises or your are fortunate enough to be the target of a merger or acquisition.  Trademark registration should not be one of the choices you have to make as a business owner and, instead, be part of your calculated plan for success.

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