Colorado recently passed a law aimed at reducing the amount of so-called “patent trolling.” Generally, “patent troll” is used as a derogatory term to describe non-practicing entities, which are entities that own a patent on something but do not use it themselves (they may license it to others or do nothing at all with it other than enforce their patent rights against others). Such entities may “troll” other companies that are allegedly using that patent without permission by sending them threatening letters that if they do not pay up a licensing fee for the patent, that they will take them to court over it.
There have been various cases where businesses have shut down or struggled after receiving these letters or paying the licensing fees. This has become an issue of particular concern in the tech industry where very broad patents have been issued, that arguably never should have been or at least been more narrow. You can check out these two This American Life podcasts on the subject if you want to learn more: When Patents Attack! Part 1; Part 2. However, more specifically, this law was motivated by cases where businesses have received threatening letters without much information as to who they were coming from or what the basis was for the alleged infringement.
HB-1063 aims to combat this by allowing Colorado’s Attorney General to go after people who send threatening letters in bad faith to companies asking for money over alleged uses of their patents by the company. The act would apply to instances such as where the sender of the letter falsely claims that litigation has been filed against the recipient or related persons, where there is no reasonable basis in fact or law for the allegations (such as if the sender does not own the patent in question or have any authority to license or sell it). The act can also come into play when the sender does not provide enough information to the recipient. Required information would generally include:
- Identity of the person sending the letter
- The number issued by the USPTO of the patent in question
- Factual allegations regarding the specific areas that the recipient’s activities (products/services/technology) infringed the patent in question
Note that this law should not prevent anyone who legitimately has the rights to the patent and/or its licensing, unless you fail to send adequate information to alleged violators or send such letters without a reasonable basis. This means that so-called patent trolling will not cease to exist, but it should make allegations of patent infringement more substantive, clear, and transparent. This should also reduce abusive and more questionable instances of patent trolling.
It will be interesting to see if this law has the desired effect of both reducing the instances of “patent trolling” in Colorado and encouraging technology and knowledge-based companies to begin and grow in Colorado. From a legal perspective, it will also be interesting to see if this law will have any problems with preemption by federal law, basically meaning that this state law could be held invalid by the federal courts because it is incongruent with federal law (this legal concept is based on the Constitution’s Supremacy Clause).
If you have questions about intellectual property issues, please contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at firstname.lastname@example.org.
As e-commerce businesses have taken off, so have more issues arose relating to use of others’ intellectual property. We’ve already talked about how intellectual property like trademarks can be a delicate situation between businesses trying to protect their rights but trying to avoid upsetting their customers.
So-called patent trolling (generally speaking, this is where a company holds patents but doesn’t use them other than to try to get licensing fees from other companies) has been around for a while, but more recently, we have been seeing what could be called a form of trademark trolling. Basically, these are instances of trademark owners bullying other businesses, not really to prevent consumer confusion, but more so to end some kind of competitive business practice they don’t like (usually against direct competitors or companies selling their competitors’ products).
Take a look at this case between Multi Time Machine, Inc. and Amazon. Here, we have a watchmaker, who does not sell its watches on Amazon.com, suing Amazon for presenting consumers who search for their watches on Amazon.com (usually by entering searches like “mtm special ops”) with results of watches that are similar to MTM. (MTM has registered trademarks for MTM Special Ops and MTM Spec Ops.) Additionally, MTM was unhappy that Amazon failed to indicate to these customers that no results were found when searching for MTM products.
Naturally, Amazon wants to have the appearance of a store that has everything someone could want available for sale, and when it doesn’t have exactly what you were looking for, it wants to offer you the closest product to it. The court in this case referenced the situation where someone at a restaurant asks for a Coke and is instead offered a Pepsi. After all, is the situation in this case that different from walking into a department store and asking for a particular brand watch and the salesperson directing you to similar watches? Whether they tell you they don’t have that specific brand or not, you would probably figure it out pretty quickly by the absence of the brand name you were looking for on the products you were shown and the existence of different brand names in their place. Or perhaps the internet is different from this example, and companies like Amazon are trying to confuse customers into purchasing their alternatives under the guise of being made by MTM. Either way, the primary concern in trademark law is whether or not there is a likelihood of consumers being confused.
Ultimately, the court did not find MTM’s arguments persuasive and determined that there was no likelihood of confusion between MTM’s products and Amazon’s alternative offerings as search results. However, MTM appealed the case to the 9th Circuit, who recently heard oral argument on the matter.
Trademark rights are designed to prevent consumer confusion in the marketplace. We don’t want consumers to be confused about who makes the product they are buying, so we don’t let companies use the same or confusingly similar names on their products, especially if they are selling similar products.
If your business is thinking about using another company’s trademark, even for comparative or other purposes, it is a good idea to talk it over with a knowledgeable attorney. If you need help regarding trademarks, do not hesitate to reach out to the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at email@example.com.
Simply put, non-compete agreements are contractual agreements that generally provide for individuals not to compete with their employer while they are employed and for a period of time after leaving the company. Even the sandwich company, Jimmy John’s, has been under fire for its broad non-competes for its low-level employees including sandwich makers and delivery drivers not to compete with any restaurant that sells sandwiches for two years.
Generally speaking, all states require non-competes to be “reasonable” to be valid, but some states go even further. California considers almost all non-competes to be invalid by default, which some claim sparked the economic boom in Silicon Valley by fostering competition.
Here in Colorado under C.R.S. § 8-2-113, non-competes must fit within four particular exceptions to be upheld in court as valid and enforceable.
These specific exceptions include:
- Contracts for the purchase and sale of a business or its assets
- Contracts for the protection of trade secrets
- Contracts providing for the recovery of education and training expenses of an employee who has served an employer for less than two years
- Executive and management personnel and officers and employees who constitute professional staff to executive and management personnel
If the non-compete does not fit within one of these statutory exceptions, then it is not considered to be valid in the State of Colorado. However, even if it may appear to fit within an exception, there are still fact-specific considerations and other reasonableness concerns as to the specific applicability and terms of the agreement that need be considered. So before you have your employees sign a non-compete or think about starting your own business when you have already signed a non-compete, be sure to speak with a knowledgeable attorney first to find out more about its enforceability.
Even if it looks like it would be considered unenforceable by the courts, there is always some level of risk in taking it to court. Additionally, there is a lot of time, money, and stress involved in that process, so it may still be a good idea to wait out the agreement or even try negotiating a settlement between you and the company. With these other considerations in mind, the importance of discussing the options with an experienced attorney is even more vital.
If you would like help in drafting or reviewing a non-compete for you, reach out to the Law Office of E.C. Lewis, P.C., home of your Denver business attorney, Elizabeth Lewis at 720-258-6647 or by email at firstname.lastname@example.org.
Business is business, and the law is the law. Sometimes the combination of these two are unavoidable, even necessary, such as when it comes to business entity formation, contracts, licensing, permits, and the list goes on. In today’s electronic and technology-driven economy, intangible or intellectual property is becoming even more valuable than ever. When it comes to businesses, a lot of this comes down to their brand, their name, their slogans, which often use trademark protection to solidify and help protect these intangibles.
Trademarks as a system, were fundamentally designed to help avoid consumer confusion. That is ultimately the purpose. Trademark rights and protections are designed to prevent other businesses from coming up with products that use other business’ names, phrases, and sometimes even look and feel, sound, or color, which can cause consumers to buy something they thought was made by someone else because they were confused. Imagine a world without trademark protection. You’d probably never know for sure if those shoes with the Swoosh on them were actually made by Nike or not!
In an interesting local trademark story, a while back, Longmont-based craft beermaker, Left Hand Brewing Company, tried to register the trademark for the word “Nitro” as it relates to beer, after it came out with its Milk Stout Nitro beer. This is not the first time we have talked about craft brewery trademark issues, and it likely won’t be the last. Craft brewery trademark disputes are becoming more and more common.
In this case, the company wanted to use the word Nitro to distinguish its nitrogenated beers. It may seem like a harmless thing to do, but boy did it bring the company a lot of trouble. Other companies took action when they saw Left Hand trying to trademark the word, maybe you’ve heard of some of them, they include the makers of Budweiser, Samuel Adams, and Guinness!
Left Hand claimed it was doing it to prevent a bigger beermaker from ultimately registering the trademark, but due to the legal action from other brewers and the upset from the craft beer community over Left Hand’s actions, the company ultimately withdrew its efforts. Craft beerdrinkers were upset that Left Hand was trying to essentially “own” the word Nitro as it relates to beer. Other brewers use nitrogen in their products too, and being such a clear choice for a descriptive word, it only makes sense to use it to differentiate it from traditionally carbonated products.
Let this be a lesson. Whenever your business is thinking about asserting intellectual property rights or trademarks over something, it is important to think of it not only as a legal decision but a business decision as well. Businesses must think about how these actions will impact their competitors and how they might respond. Additionally, the way existing and potential consumers of your business’ products may respond to the news is critical to consider too.
Even if you may have a valid legal claim to something, it may not always be the best business decision to pursue it to the fullest. Cost-benefit analysis is key to situations like this, and it is clearly a good idea to consider both the business and legal ramifications of the different courses of action available to you. Branding is about more than logos, names, trademarks, etc. It is about the image your portray as a company, and a growing component of that is how litigious the company is, especially if it can be perceived as an “unfair” or “unnecessary” use of the legal system.
If your business needs help regarding a trademark, other intellectual property, or other business legal needs, do not hesitate to reach out to the Law Office of E.C. Lewis, P.C., home of your Denver Business Attorney, Elizabeth Lewis, at 720-258-6647 or email her at email@example.com.
Recent developments coming to light regarding the use of music in torture by the CIA in Guantanamo indicated that Canadian industrial band Skinny Puppy’s music was one of the artists whose music was being used. As a semi-serious response, Skinny Puppy has since invoiced the Federal Government for $666,000 for the use of their music without permission or licensing from the group and is considering a lawsuit.
Skinny Puppy’s self-described “unsettling” music being used in torture was not surprising to them, but they were not very happy about it. It is interesting given the group’s history as well. Skinny Puppy has been a long-time proponent for animal rights and against animal dissection and other practices that Skinny Puppy considers akin to torture of animals.
While there have been numerous reports over the years of different music from Metallica to Sesame Street being used in such ways, nobody has appeared to try and take legal action for it yet. Nevertheless, it would likely end up being a long and unsuccessful road trying to fight the Federal Government against these practices.
Owners of copyrights have the exclusive rights to all of the following under 17 U.S.C. § 106, and if you do one of the following without being an owner then it would classify as copyright infringement:
(1) to reproduce the copyrighted work in copies or phonorecords;
(2) to prepare derivative works based upon the copyrighted work;
(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;
(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;
(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and
(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.
Since there is no evidence the government copied or distributed Skinny Puppy’s music, it looks like the big question is whether or not using the music in a prison in Cuba would constitute a “public performance” under the law or if the government is otherwise protected in its use. It will be interesting to see how much further this action goes.
If you have questions about copyright or other intellectual property rights for your music or business, contact the Law Office of E.C. Lewis, P.C., home of your Denver Business Lawyer, Elizabeth Lewis, 720-258-6647 or email her at Elizabeth.Lewis@eclewis.com.
After you have researched whether or not your business name or idea is being used by anyone else, see How to Research Your Business Name and How to Research Your Business Idea, it is important to take measures to protect it appropriately.
If the idea is an invention, or improvement to an existing one, that is useful, novel, non-obvious, adequately described or enabled, and claimed by the inventor in clear and definite terms, then it may be patentable, and you should speak with an attorney right a way to discuss the patent application process. You may also consider applying for a provisional patent, which can protect your idea for the first twelve months and allow you to use the phrase “Patent Pending.”
If the idea is of the artistic or creative variety such as a painting, novel, or movie, then you should sit down with an attorney to discuss whether or not it is protected by copyright and whether or not it is a good idea to have the copyright registered with the U.S. Copyright Office. This is usually a straightforward process that can be done electronically.
If your idea is a name, slogan, symbol, sound, or other identifier for your business or its goods and services, then it may be protectable as a trademark. Trademark protections can exist under common law, state law, or federal law, so you should be sure to discuss what is most appropriate and cost-effective for your business with an attorney. Federal trademarks can be especially difficult and expensive to obtain and keep, so this will require some careful deliberation. You may also need to consider whether or not your business needs to be formed a particular way or if a trade name should be filed in order to help protect the name or aspects of the business idea.
If you are thinking about discussing or pitching your idea to others, you should seriously evaluate whether a Non-Disclosure Agreement or other form of confidentiality protection is suitable. These can help protect you from having your idea copied by those you discuss it with, but it can be a delicate issue to raise in front of friends, family, or potential business partners.
Remember that if you do not protect yourself, you could wind up finding yourself in a lengthy and costly court battle to stop someone from profiting off of your idea, and you still might lose. This business idea could be the livelihood of you and your family, so why risk losing it? Do not let this happen to you.
If you have questions about or need help with protecting your business name or idea, contact the Law Office of E.C. Lewis PC, home of your Denver Business Lawyer, Elizabeth Lewis, 720-258-6647 or email her at Elizabeth.Lewis@eclewis.com.