what in-house counsel and internal business units … in-house counsel and internal business units...

12016 ACC-SoCal In-House Counsel Conference #IHCC16

What In-House Counsel and Internal Business UnitsNeed to Know About IP Law

January 27, 2016

Anaheim, California

Sponsored by Knobbe Martens

Panelists:

Peter Ching

John Sganga

Michael Guiliana

Jeff Van Hoosear

#IHCC12

http://itunes.apple.com/us/app/twitter/id333903271?mt=8


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#IHCC162016 ACC-SoCal In-House Counsel Conference

Peter Ching - [email protected]

John Sganga - [email protected]

Michael Guiliana - [email protected]

Jeff Van Hoosear - [email protected]

Panelists



mailto:[email protected]




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IP Rights can include

– Rights to a Brand – Trademarks

– Rights to Technology/Inventions – Patents/Trade Secrets

– Rights to art work/graphics/software – Copyrights

Primary IP “RIGHT” – To Exclude Others

Issue: Can you Lose These Rights by Inaction?

YESSOL, Laches, and Failure to Police

Can you Snooze on your IP Rights?



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Patent: 6 year rolling window

Copyright: 3 year rolling window

Trademark: 4 years in California

Trade Secret: 3 years in California

Key IP Statutes of Limitation



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Cause of Action Statute Statute of Limitation

Copyright Infringement 17 U.S.C. § 501 3 years after the claim accrued (17 U.S.C. § 507(b)) Rolling

Criminal Copyright Infringement for Profit17 U.S.C. § 506(a)(1)(A) and

18 U.S.C. § 2319(b)5 years after the cause of action arose (17 U.S.C. § 507(a)) Hard cut off

Criminal Copyright Infringement Without a Profit Motive17 U.S.C. § 506(1)(B) and 18

U.S.C. § 2319(c)5 years after the cause of action arose (17 U.S.C. § 507(a)) Hard cut off

Pre-release Distribution of a Copyrighted Work over a Computer Network17 U.S.C. § 506(a)(1)(c) and

18 U.S.C. § 2319(d)5 years after the cause of action arose (17 U.S.C. § 507(a)) Hard cut off

Circumvention of Copyright Protection 17 U.S.C. §§ 1203, 1204 5 years after the cause of action arose (17 U.S.C. § 1204(c)) Hard cut off

Infringement of a Vessel Hull or Deck Design 17 U.S.C. § 1309 No recovery for infringement > 3 years before date complaint is filed (17 U.S.C. § 1323(c)) Rolling

Trademark Infringement 15 U.S.C. § 1114(1) None; courts look to analogous state law causes of action

Trademark Infringement due to False Designation, Origin, or Sponsorship 15 U.S.C. § 1125(a) None; courts look to analogous state law causes of action

Trademark Dilution 15 U.S.C. § 1125(c) None; courts look to analogous state law causes of action

Cybersquatting and Cyberpiracy 15 U.S.C. §§ 1125(d) and 1129 None; courts look to analogous state law causes of action

Counterfeit Labels, Documentation, or Packaging for Copyrighted Works 18 U.S.C. § 2318 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off

Patent infringement (Utility) 35 U.S.C. § 271 No recovery for infringement > 6 years prior complaint or counterclaim (35 U.S.C. § 286) Rolling

Patent Infringement (Design) 35 U.S.C. § 289 No recovery for infringement > 6 years prior complaint or counterclaim (35 U.S.C. § 286) Rolling

False Marking (Patent) 35 U.S.C. § 292 5 years after the date the claim accrued (28 U.S.C. § 2462) Hard cut off

Patent or Copyright Infringement by the United States 28 U.S.C. § 1498 No recovery for infringement > 6 years prior complaint or counterclaim (35 U.S.C. § 286) Rolling

Trafficking in Counterfeit Trademarks 18 U.S.C. § 2320 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off

Transshipment and Exportation of Counterfeit Goods 18 U.S.C. § 2320(h) 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off

Trade Secret Theft to Benefit a Foreign Entity 18 U.S.C. § 1831 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off

Trade Secret Theft for Commercial Advantage 18 U.S.C. § 1832 5 year general statute of limitations period (18 U.S.C. § 3282(a)) Hard cut off

Trade Secret Misappropriation (state law)Uniform Trade Secrets Act (i.e.

Cal. Civ. Code § 3426)

3 years after misappropriation was or reasonably should have been discovered (Uniform

Trade Secrets Act § 6 (i.e. Cal. Civ. Code. § 3426.6))Hard cut off

IP Statutes of Limitations



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Loss of Distinctiveness (Trademarks)

– Mark used descriptively/generically

– Wide unauthorized use

– User-Generated Content*

Equitable Defense of Laches

– Unreasonable delay by Plaintiff

– Prejudice to Defendant

Vulnerability Ranking:

– Trademarks

– Patents/Trade secrets

– Copyrights

Other Vulnerabilities of IP Rights



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You Snooze You Lose

Failure to address damaging uses:

– reduced distinctiveness/brand value

– reduced/lost ability to enforce

No subjective knowledge required

Trademark Policing Procedures well established

Policing Clearly Necessary

Most Vulnerable IP - Trademarks

MonitorInvestigate

RisksMake

ContactResolve



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Least Vulnerable IP - Copyrights

You Snooze and Still WIN!

Petrella v. Metro-Goldwyn-Mayer, 134 S. Ct. 1962 (2014)

Section 507(b): sue “within three years after the claim accrued”

Treat as a rolling three year window: suit for acts within window is

still timely

S. Ct:

Suit filed 18 years after infringement OK

statute already takes delay into account

OK for copyright owner to wait to see if suit worthwhile

delay may be relevant to equitable relief

Policing Optional



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SCA Hygiene v. First Quality Baby Products, 807 F.3d 1311 (Fed. Cir.,

Sept. 18, 2015) (en banc)

Section 286: Six year damage recovery window

Aukerman (Fed. Cir. 1992): laches bars all pre-suit damages (6

year delay presumed unreasonable)

D. Ct: grants MSJ of laches where 7 year delay, no excuses

Fed. Cir. appeal: is Petrella logic applicable to patent cases? NO

Dissent (6 to 5 split): Petrella applies

– Unfair delay already factored into 6-year statute – court should

not shorten

Patents: Snooze and Lose Laches defense lives (for now)



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Actual knowledge of infringement not required:

– “Discovery Rule” on SOL

– Imputed knowledge based on infringer’s public

activities

Patentee’s overt demands to infringer

Delay after any of these creates risk

Knowledge of Infringement Triggers SOL/Laches



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Plaintiff sues Toshiba for trade secret misappropriation and

breach of NDA

Alleged trade secrets in software from 1980’s and 1990’s

– 4 year statute of limitations

– But: Discovery Rule tolls statute

– Plaintiff claimed recent discovery, and that Toshiba hid

misappropriation

Plaintiff had constructive knowledge of alleged misappropriation

by Toshiba

– Toshiba widely advertised in same publications as Plaintiff

– MSJ granted: claims barred by statute of limitations

Case study: SOL runs on Trade Secrets



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Finding Laches

Crown Packaging Tech., Inc. v.

Rexam Beverage Can Co., 679 F.

Supp. 2d 512, 519 (D. Del. 2010)

Hall v. Aqua Queen Mfg., Inc., 93

F.3d 1548, 1553-54 (Fed. Cir. 1996)

A. C. Aukerman Co. v. R.L. Chaides

Constr. Co., 960 F.2d 1037, 1038

(Fed. Cir. 1992)

Adelberg Labs., Inc. v. Miles, Inc.,

921F.2d1267, 1270 (Fed. Cir. 1990)

Denying Laches McKesson Info. Solutions LLC v. TriZetto Group, Inc.,

426 F. Supp. 2d 203, 209-10 (D. Del. 2006)

Metso Minerals, Inc. v. PowerScreen Int’l Distrib. Ltd.,

833 F. Supp. 2d 321, 328-29 (E.D.N.Y. 2011)

Hearing Components, Inc. v. Shure Inc., 600 F.3d 1357,

1376 (Fed. Cir. 2010)

Mass Engineered Design, Inc. v. Ergotron, Inc., 633 F.

Supp. 2d 361, 383 (E.D. Tex. 2009)

Union Carbide Chems. v. Shell Oil Co., 2004 WL

1305849 at *19 (D. Del. June 9, 2004)

State Contracting & Engineering Corp. v. Condotte

America, Inc., 346 F.3d 1057, 1066 (Fed. Cir. 2003)

Eastman Kodak Co. v. Goodyear Tire & Rubber Co., 114

F.3d 1547, 1559 (Fed. Cir. 1997)

Gasser Chair Co. v. Infanti Chair Mfg. Corp., 60 F.3d

770, 774 (Fed. Cir. 1995)

Vaupel Textilmaschinen KG v. Meccanica Euro Italia

S.P.A., 944 F.2d 870, 878 (Fed. Cir. 1991)

Meyers v. Brooks Shoe, Inc., 912 F.2d 1459, 1462 (Fed.

Cir. 1990)

Laches Decisions

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“Should Have Known

About Infringement”

Crown Packaging Tech., Inc. v.

Rexam Beverage Can Co.,

679 F. Supp. 2d 512, 519 (D.

Del. 2010)

Hall v. Aqua Queen Mfg., Inc.,

93 F.3d 1548, (Fed. Cir. 1996)

Odetics, Inc. v. Storage Tech.

Corp., 919 F.Supp 911, 918

(E.D. Va. 1996)

Overt Act/C&D Letter

Adelberg Labs., Inc. v. Miles,

Inc., 921F.2d1267 (Fed. Cir.

1990)

Wanlass v. General Elec. Co.,

148 F.3d 1334, 1338 (Fed. Cir.

1998)

A. C. Aukerman Co. v. R.L.

Chaides Constr. Co., 960 F.2d

1037, 1038 (Fed. Cir. 1992)

Decisions Granting Laches

No Decisions Granting Laches based on A/C privileged investigation.

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Patent Acquisition

“Notorious” Infringement

6 years

EnforcementContinued

Infringement

Example 1: Notorious Infringement

Laches Possibly Successful, Triggered by Infringers’ activities

Patent Owner loses right to Injunction, cannot stop infringement

Patent Owner loses right to 6 years of Patent Infringement Damages

Patent Owner still has right to royalties for future infringement

No Subjective Knowledge Necessary/Policing not determinative



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Patent Acquisition

Infringement

Detected

C&D Letter

Unexcused Delay

EnforcementContinued

Infringement

Example 2: C&D Letter + Delay

Laches Possibly Successful, Triggered by C&D Letter

Patent Owner loses right to Injunction, cannot stop infringement

Patent Owner loses right to 6 years of Patent Infringement Damages

Patent Owner still has right to royalties for future infringement



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Patent Acquisition

Infringement

Detected

A/C Priv

Add Targeted Patents

6 Year Delay

C&D Letter/

Enforcement

Continued Infringement

ENJOINED

Example 3: Added Value

Laches Less Likely, No Delay after Overt Act

Patent Owner Preserves right to Injunction

Rights to 6 years of Patent Infringement Damages more likely preserved

C&D Letter is More Threatening; more patents and exposure

Laches Does Not Apply to Later-issued patents



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Not Policing Patents can result in Loss of Rights

Infringement before 6 year window not actionable

Laches triggered by Open/Notorious Infringement

or C&D Letter

Policing/Monitoring under A/C Privilege:

– opportunity to strengthen IP case against infringers –

“continuation practice”

– infringer might find targeted patents and stop

infringement

– preserves right to past damages and injunctions

Policing Patents Summary



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Early bird gets the injunction

Snooze and you lose respect from accused

infringers

Trademark Rights MUST be policed or lost

Copyright Rights CAN be policed

Patent Rights SHOULD be Policed

– Laches could arise regardless of actual knowledge

– Use A/C privilege/sequestration to protect investigation

– More information leads to stronger patents

TAKE AWAYS - IP Policing



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User-Generated Content: Friend or Foe?

What is User-Generated Content (UGC)?

– Content made publicly available over the Internet

– Content which has some level of creative effort

– Content created outside of professional practices

Social Media Platforms and UGC

What You Need to Know About IP Law and User-Generated Content



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Social Media Statistics:

User-Generated Content:Friend or Foe?

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Intellectual Property Risks

– Trademark

– Copyright

– Right of Publicity

Tort Risks

– Defamation

– Privacy

Statutory Risks

– Data collection

– Children

UGC Legal Issues



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Copyright Infringement

Trademark Infringement

Trademark Dilution

False Advertising

Unfair Competition

Rights of Publicity

What is actionable for UGC?



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What are companies doing with UGC?

Advertising their brands

Connecting with consumers

Interacting with consumers

Conducting contests/events

Product/name development

User-Generated Content:Friend or Foe?



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How do you want to use the content?

Do you need to own it? Will a license suffice?

Do you want others to use it?

How are you collecting the content?

Where will content appear?

Will it be used online? Will you use it offline?

Will it include people? Will it include children?

User-Generated Content



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Like that product name that user submitted?

– Obtain ownership

– Conduct a trademark search

Want to add music?

– Obtain a copyright license

Want to use that great photo of a customer?

– Obtain permission/release

Third party IP visible?

– Determine if permission is needed or blur/obscure

You still need to clear it!



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Digital Millennium Copyright Act (1998)

– Safe harbor for “service providers” in regard to

storage of information at the direction of users

Complete bar of monetary damages for online infringement

Must adopt and apply policy to remove infringing content and

terminate repeat offenders

Legal Protections - DMCA



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Must have DMCA policy

Must register with U.S. Copyright Office

Must designate an agent to review take downs

Must monitor email address(es) that receive take

down notices

Act expeditiously on take down notices

Allow for users to appeal any removal

Address repeat offenders in policy

DMCA



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Communications Decency Act (1996)

– Providers of computer services are given broad

immunity for publication

– Does not apply to speaker of the content

– Does not apply to Federal IP claims

Legal Protections - CDA



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You are protected if you passively host third-party content

If you exercise traditional editorial functions over UGC

(whether to publish, remove, or edit material), you are

protected unless you materially alter the meaning of the

UGC

You are protected even if you pre-screen content or correct

content

You are protected even if you encourage or pay third-

parties to create or submit UGC

Use caution with forms or questionnaires

CDA



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Terms & Conditions (T&Cs)

– Policies will control the relationship with UGC

– Contractual obligations and responsibilities

Contractual Protections



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However you use it – T&Cs for IP must match the use

Add at least a license to use, repost, or repurpose

submissions made via company website, social

media platforms and contests

Add the right to use commercially

Add the right to use in-store

Add the right to use in promotions

Meet legal/statutory requirements

User-Generated Content



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Consumer Interaction - Contests



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Contest Rules



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Contest Rules



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Banana Republic – Friend



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Banana Republic – Foe



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Ben & Jerry’s - Friend



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“Do Us A Flavor” - Friend



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“Southern Biscuits And Gravy”



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Know your demographics/users

Be prepared to disengage

T&Cs which acknowledge and cover

What if something goes wrong?



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“Dub the Dew” – UGC Definitely Foe



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Quiznos v. Subway – TV Ad Challenge

Quiznos’ contest asked customers to upload

commercials

Subway claimed some ads made false claims

False Advertising – Unfair Competition



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Quiznos argued the CDA applied

The court denied Quizno’s motion to dismiss

holding that Section 230 provides an affirmative

defense which can be raised on summary

judgment but not a motion to dismiss

The case settled after Quizno’s summary judgment

motion was denied

UGC – FOE



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To Tweet or not to Tweet?



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FTC Guidelines on Sponsored Tweet

– Endorsements to use #ad hashtag

– Use words like "typically" or "about" to avoid

misleading

– Disclosure in every post - not just end/final post

– https://www.ftc.gov/tips-advice/business-

center/guidance/ftcs-endorsement-guides-what-

people-are-asking#intro

And if you do Tweet…



http://www.copypress.com/blog/ftc-lays-down-the-law-on-endorsed-tweets/

https://www.ftc.gov/tips-advice/business-center/guidance/ftcs-endorsement-guides-what-people-are-asking#intro

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Review IP issues in UGC as you would traditional

advertising

Have a dedicated social media/website person

Have policies and T&Cs set guidelines and give

examples

Streamline clearance/approval processes to avoid

delays and risks

Remember FTC guidelines and disclose paid

ads/promotions

UGC TAKE AWAYS



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Take advantage of legal protections

– Post DMCA notice

– Post T&Cs

– Adhere to what you say!

– Periodic review and update of notice/policies

Separate creation from distribution

– Don’t lose CDA protection

Know how to deal with privacy

– Especially children

UGC TAKE AWAYS



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12th Annual In-House Counsel Conference

January 27, 2016 (Anaheim, CA)

#IHCC1648

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