Spot the Issues
This blog post is not going to turn you from one of the the unwashed, into a expert on fair use. At best, it will help you identify the issues and understand when you may be getting into a problem area. What follows is quick primer on how not to get sued for what you thought was fair use.

Ignore Urban Legends
“I am not making money on it; it’s fair use.”
“They should be happy with the free press.”
“I’m making them money, it’s fair use.”
“It didn’t have a copyright notice on it; it’s fair use.”

If you hear any of the foregoing statements bandied about your office, keep my cell phone number on speed dial. There is a strong likelihood you will be speaking with me in the near future.

Don’t Trust Phil From Accounting
A little preventative action now may avoid a courtroom in the future. So what do you need to know about copyright? The first thing is to never believe anything about copyright law unless you hear it from a copyright lawyer. Not a regular lawyer, a copyright lawyer. Even then you might want to check out a second or third opinion until you find a copyright attorney you trust.

What is Fair Use?
Sometimes it is permissible to use limited portions of a
copyrighted work, including quotes, for purposes such as commentary, news reporting, scholarly reports. This is particularly true for current news stories & historical analysis (to promote accuracy). The quoted material, however, must not be unreasonably large and must not destroy the market for the original work (quoting the salacious portions of Monica Lewinsky’s memoirs).

The Criteria
Be aware that courts rarely uphold a claim of “fair use” in a for-profit, commercial context unless the use is directly tied to parody, news or critical commentary. In determining whether your copying constitutes “fair use” the courts will look at:

1) The purpose and character of your work-Are you making money from the copies?
2) Nature of copyrighted work-Is it a form book meant to be copied?
3) Amount of work taken-Are you taking 90% of the work or 2%?
4) Economic impact of taking-Are you taking the 2% that makes people want to buy the original (Lewinsky passages)?

Tipping the Scales
Courts weigh all of the foregoing factors in determining whether a particular use is an allowable fair use. If you are copying 1% of the non-critical portions of a form book for your own personal use, you are okay. If you are selling 98% complete copies of the The Davinci Code, you are in trouble. For anything in between, it is best to either consult your copyright attorney for advice or stick with copying works already in the public domain.

Now, For the Really Important Question
Am I going to get sued? Curiously, the answer to this question often has little to do with the legal analysis. No law or lawyer can tell you whether you are going to get sued. Whether you are going to get sued depends much more on the motivations, as well as the relative strengths of the parties. Is the entity from whom you are taking the copyright work an 800lb gorilla run by the guy with an itchy trigger finger you fired three years ago? If so, a detailed analysis of the esoteric legalities of fair use under United States Copyright Law may be a moot point. You are going to get sued. And since you likely do not have the $30K+ to fight the case, you are likely going to lose or settle for far less than what might otherwise be considered “fair.”

Fair Use and Social Media
The law governing fair use is the same for social media as it is for any other media. While some forms of social media, such as Tweets on Twitter may not be copyrightable, most forms of social media are protectable. The difference between regular media and social media, when it comes to fair use, is the enforcement.

The Authors Decide
Many bloggers enjoy, and even encourage other bloggers and commentators to republish there work. Most social media content creators are more concerned with getting proper credit for their work, while decreasing its distribution. This is not to say acknowledging authorship will do anything at all to prevent a judge from finding you infringed someone’s copyright. It won’t. What is different about social media is that authors are often much more willing to grant you permission to republish their work. Just be sure to ask permission before you use it and to get the permission in writing. An email from the author is usually sufficient.

Think Like a Business
While I am all for fighting the good fight and not paying the bad guy money to use against the next innocent victim, a Pyrrhic victory, or more likely complete immolation at trial, does not help anyone. You may think you are becoming a martyr for the cause, but getting wiped out in court may actually do more harm to future victims than paying money.

Knowledge is the Key
Large corporations often use a track record of putting infringers out of business to extract settlements. The smartest move for you is to review your copyright material beforehand to check for any potential copyright problems. If you own a business, be sure to include “fair use” policies in your employee handbook. With copyright issues, an ounce of prevention can be worth about seven figures of cure.

For more on fair use, as well solutions to the most common internet law problems, be sure to check out CyberLaw: A Legal Arsenal For Online Business.

Brett Trout

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What is a Trademark?
A trademark is a word, name, phrase, symbol, color, scent or sound used to identify particular goods or services as coming from a particular source. Unlike domain names, you have no rights to a trademark until you actually use the trademark in commerce. “Naked” trademarks, which are not used in association with the sale of any good or service, are not allowed. Trademarks are also limited to a particular good or service. One company may own “Apple” for computers and another company may own “Apple” for records. As long as there is no likelihood that consumers may be confused that the goods come from the same source, identical trademarks can coexist for different types of goods or services.

Trademark Registration
Simply using a unique, non-descriptive trademark in association with a good or service is all you need to obtain common law rights to that trademark. With common law trademark rights, you can stop an infringer in your market area and obtain damages associated with the infringement. But you cannot get punitive damages or attorney fees. State trademark registrations extend common law rights to the borders of the state, but that is about it. As state registration typically afford little more protection than common law rights, most companies seeking trademark registration opt for federal trademark registration.

Federal Registration
Federal trademark registration is much harder to obtain, and more expensive than state trademark registration. A federal trademark registration may cost $1,200+ and take 18 months or more to obtain. Once you obtain your federal registration, you can use that registration to pursue infringers in any state, regardless of whether you are currently marketing in that state. In addition, if you can show the infringement was “willful,” federal trademark registration allows you to collect triple damages and attorney fees.

® refers to a federally registered trademark. Alternatively, you may use “Registered, U.S. Patent and Trademark Office” or “Reg U.S. Pat. TM Off.” to designate your federal registration. You may not use (R). Failure to properly mark your goods or services, limits your ability to collect profits or damages from an infringer who had no notice of your registration.

TM and SM
TM refers to a state or common law trademark, typically associated with goods and SM refers to a state or common law service mark, typically associated with services. Anyone can use TM or SM. There is no registration required. TM and SM simply mean the user thinks they have a defensible trademark, and may or may not pursue you for infringing it. One thing to consider. If they did not have the $1,200 to pursue a federal trademark registration, how likely is it that they will pay the cost of a lawsuit, especially with no chance of recovering attorney fees. Watch out though. They may just be using TM or SM while their federal trademark registration is pending.

Why Get a Federal Trademark Registration?
Only a federal trademark registration holder can use ®. Use by anyone else, even someone who has merely filed an application, but not yet received the federal registration may be subject to a lawsuit for fraud and false advertising. Additionally, using the ® without a federal registration in hand may prevent you from ever getting a federal registration. Federal trademark registration allows you to recover your attorney fees and up to three times your actual damages if the infringer was “willfully” infringing your trademark. This means the infringer may be liable for ten times or more the actual damage caused. As you might imagine, the ® serves as a pretty aggressive warning to infringers. The best part about the ®, is that it dissuades most would-be infringers without you ever having to lift a finger.

Brett Trout

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When a federal jury heard her case in 2007, it hit Thomas-Rasset with a seemingly astronomical $222,000 judgment. After reviewing the case, the judge determined that the jury instructions were incorrect and ordered a new trial. As in the first trial, the RIAA was still not able to prove Ms. Thomas-Rasset actually shared music files with anyone other than the RIAA, or that she was actually the individual using her computer to upload the songs in question.

Notwithstanding, and much to Ms. Thomas-Rasset’s chagrin, the new jury awarded the RIAA $80,000 per song. Multiply this by 24 songs and you have a jaw-dropping $1.92M verdict. We await the threequel …

Brett Trout

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The Key is to Begin
Lack of marketing knowledge and experience freezes most young attorneys in their tracks. So afraid of failure, they paralyze themselves with inaction. They know the best marketing plan is tailored to their expertise, their personality and, most importantly, to their clients. Unfortunately, there is no magic formula. The only way to discover your unique marketing plan is to try known techniques and discover which ones work best for you and your clients. The best time to start is today.

The Techniques
While there are many guides out there to legal marketing, one very short and simple guide is Paula Black’s “The Little Black Book: A Lawyer’s Guide To Creating A Marketing Habit in 21 Days.” It is not comprehensive, it is not detailed, but it is a quick start guide to overcoming paralyzing inertia and getting your legal marketing moving in the right direction. Designed to help lawyers integrate marketing into their daily lives, The Little Black Book is a quick, easy and inspirational read. The main thing is that it motivates you to get started today.

The Bonus
As an additional bonus, if you order in the next 48 hours (I receive absolutely no compensation from any order), you will receive special access to information and resources from more than 30 legal marketing experts. These are some of the most sought-after online and social media experts in the legal arena. “The Smart Lawyer’s Toolkit” provides much more detailed information on ways to leverage your marketing expertise and avoid costly pitfalls.

Comment
If you decide to order The Little Black Book, or just have some insight on lawyer marketing, please leave a comment below, letting me know what has and what has not work for you and your clients.

Brett Trout

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10. Transparency
As Digital Immigrants, we are constantly on the lookout for scams. Wary of thieves, idiots and con artists, we never lay all of our cards on the table at the first meeting. We get to know you, we find out about you, then we trust you and tell you about ourselves. It is a slow process, but one which avoids inadvertent entanglement with disreputable partners. Digital Natives lay everything out for the world to see. They are radically transparent. From blogs, LinkedIn, Facebook, YouTube and myriad other sites invisible to most people over 40, anything you (and the rest of the world) want to know about a savvy Digital Native is out there. Natives want you to know as much as possible about them before they meet you. Throwing everything online allows digital vetting. If the Digital Native is a thief, a scammer, a liar or even just an idiot, the harsh voice of the digital vox populi, so the theory goes, will surely expose these warts. Placing everything online has the risk of alienating potential contacts that may not like your views on politics, religion et cetera. Online exposure also attracts the matches who are attracted to this 21st century curriculum vitae.

9. Play in Their Work and Work in Their Play
Digital natives want jobs that are fun … not necessarily jobs which everyone sees as fun, but jobs which they find personally enriching. They are more amenable to working longer hours for lower wages if they do something they love. Working at something they love, they tend to excel, often expanding their jobs into new areas which they themselves discover. In play, Digital Natives are drawn toward social activities involving large diverse groups. They often see activities as forums for learning and fostering their networks. While open salesmenship is rare, they come with questions and ideas which Digital Immigrants avoid discussing outside of a signed non-disclosure agreement. Natives key in on being a valuable part of an enriching community, at work and at play.

8. An Inch Deep and a Mile Wide
Digital Immigrants spend years searching news outlets for one they can trust. Once they find one with a “spin” similar to their own, they are unwaveringly loyal. Having been weaned on spin, Digital Natives are acutely aware every source comes with its own bias. Instead of sticking with a single news source, Digital Natives look to dozens of sources, including text messages, e-mails, phone calls blogs, social networks and even archaic media such as television. They scan this wealth of information until they find something of interest. At this point they drill down, assessing all of the subtitles the story has to offer. Digital Natives can scan, sift and digest more news in an hour than Digital Immigrants can process in a week. Digital Natives are mercurial in who they trust for news. What was a trusted source yesterday, may not be credible today. Sorting through large amounts of information, as quickly as possible, is what allows Digital Natives separate fact from fiction before an issue even appears on most Digital Immigrants’ radar.

7. Say No to Negativity
As a lawyer, this has been the hardest aspect of Digital Natives for me to understand. From a young age, my siblings, friends and schoolmates assisted my development by sarcastically deriding any perceived error. I quickly discerned the rhyme and meter of this dance and am able to differentiate bullying, constructive criticism and fear of new ideas. This skill I honed to a razor’s edge in law school and the subsequent practice of law. Bringing my adroit verbal rapier to bear on Digital Natives however, yielded  unexpected results. They were raised in a different age. Not better. Not worse. Just different. I never received a participant trophy when I was young. If I had, I would have hid it from anyone whose opinion I valued. Conversely, most Digital Natives were raised on constant positive reinforcement. Negativity was viewed … negatively. Far from making them whiny and lazy, this background has made them open and collaborative. Saying “no” is anathema without providing an alternative solution. Ideas are no criticized, but instead repeatedly stripped down and built up until they either stand on their own or fail. As a result of this process, even ideas which lead to failure are seen as a positive.

6. Failure is a Gift
Digital Immigrants wear failure as a scarlet letter, going to lengths to avoid it or pin it on someone else. Digital Natives view failures as merit badges, things they need to discover before they eventually reach their goals. They know failures teach them things no one else knows, giving them an advantage over any unschooled competition. The most remarkable Digital Natives share stories of their unique failures within trusted groups, not as a form of commiseration, but as a form of advanced learning, giving and receiving gifts not available from any other source at any price.

5. Create or Die
Content is the new commodity. To Digital Natives, it determines who you are and what options you have. Whether it is YouTube videos, ebooks, blog posts, tweets or a string of successful startups, your reputation and your worth are judged by what you have created. While someone with an extensive scholarly background may have the chops to take a company to the next level, to a Digital Native, they are at a competitive disadvantage with a high school dropout who has successfully replicated the implementation at four other companies. Digital Natives are more concerned with their ideas taking root, than in actually receiving compensation for the idea. If they come to an impasse with their idea, they put it out for the world, with the hope that others add and subtract from the idea until it becomes viable. Creating content brings people of a like mind together. The more ideas you have, the more opportunities you have to stand on the shoulders of giants and see your ideas through to fruition.

4. Technological Bulimia
Aware that the amount of valuable information available to them far outstrips their ability to process all of it in a thousand lifetimes, Digital Natives are constantly on the lookout for the latest technology to assist them in processing ideas more quickly. They crave technology not for technology’s sake, but as a tool to assist them in getting from point A to point B better, faster cheaper and easier.

3. Collaboration as a Culture
Collaboration outside of one’s business was anathema to many Digital Immigrants. “I worked hard, and paid my dues to obtain this information. Why should I give it away for free?” Digital Natives see things differently. “If I give one valuable piece of information to five intelligent people, I will probably receive at least three pieces of valuable information in return.” Sure, there are those who try to take advantage of the system, always taking and never giving, but with the speed of information transmission, these individuals are quickly discovered and cut off from future collaboration.

2. Follow Leaders of Trusted Tribes
Digital Natives are more blind to stereotypes than Digital Immigrants. Ignoring borders, language, age and culture, Digital Natives flock to influencers capable of providing the best information at any given time. As a shortcut to determining who is the most trusted influencer, Digital Natives look at who else is looking to a particular individual for advice. In this case, it is quality over quantity of followers. Ashton Kutcher and Sean Combs each have over one million followers on Twitter. Despite their followings, however, they are less influential in that arena than people like Pete Cashmore or Michael Arrington. Despite having fewer followers, the latter two individuals have influential followers and are, therefore exponentially influential. Discovering who a Digital Native trusts provides a wealth of information about who they are and where they are going.

1. Balance
The Holy Grail for a Digital Native contains a balance of friends, family, work and play. If you find a way to help them achieve this balance, or better yet combine these goals, you will see what Digital Natives can truly acheive.

Digital Natives are not “slackers.” Just the opposite. Most work long hours for little pay when pursuing an activity they love. The key is finding out what there is for them to love about you and your company. Understanding their goals, and incorporating them into your business strategy, may translate what you previously dismissed as a liability, into one of your company’s most valuable assets.

Brett Trout

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In addition to causing a 50% jump in TiVo’s stock price, the ruling awarded TiVo $192M in damages. The Eastern District of Texas court ruled Dish Network (formerly Echostar) was in violation of an earlier injunction. The injunction forbid Dish Network from marketing technology which allowed for recording and watching a program at the same time to allow rewinding, fast forwarding and pausing.

Echostar already paid TiVo $106M from a 2006 patent infringement lawsuit and was required to disable three million infringing digital recorders. In January of 2008, the Court of Appeals for the Federal Circuit upheld the lower court’s 2006 ruling, finding willful patent infringement and awarding full damages and a permanent injunction. Dish Network appealed and The United Supreme Court denied certiorari in October of 2008. Dish Network plans to appeal this most recent ruling.

Brett Trout

UPDATE: Dish Network wins last minute stay against TiVo.

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The CAFC cut $77.2M from the judgment relating to lost profits from the sale of related, but non-infringing products. The CAFC also
cut $10M in sanctions and $400K in attorney fees associated with litigation misconduct.

For more information, read Depuy v. Medtronic.

Brett Trout

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State Street
Prior to 1998, methods of doing business were not patentable. On July 23, 1998, the CAFC in State Street Bank & Trust Co., v. Signature Financial Group, Inc., ruled that a computer programmed with software is indeed patentable even if the result is expressed in numbers. This decision opened the floodgates, resulting in the filing of thousands of “business method” patent applications, many relating to Internet commerce. It was a veritable “land rush,” with patentees staking out monopolies over new areas of internet growth.

Flood of Business Method Patents
The United States Patent and Trademark Office (USPTO) has gained considerable knowledge about the allowance of business method patents over the past decade. Early on, however, the USPTO did not have access to the wealth of prior art patents they had for more pedestrian inventions like mousetraps and termite flatulence detectors. Given the lack of resources to thoroughly vet this new type of patent, the USPTO, left with no other option, allowed hundreds of patents which claimed combination of elements which had been in the public domain for years.

The Following Drought
The growing number of patents on public domain material led to an outcry from the online community. With the assistance of the public, the USPTO adopted stricter protocols, utilizing a more thorough database of current technical knowledge. These procedures led to a drastic decrease in the allowance of business method patents, but did little to address the large number of business method patents already issued. Another problem with the new protocols was that for many information technology related businesses, the new protocols were far too expensive and time consuming. Either the business ran out of money before the process was completed, or the patent failed to issue before the technology was outdated.

Enter Bilski
In October of 2008, the CAFC handed down its most momentous decision since State Street Bank. In In re Bilski, the CAFC ruled that business methods, like the Amazon “One-Click” purchase, cannot be patented. To be patentable, the CAFC ruled, an invention must fall into one of two categories: (1) it must be tied to a particular machine or apparatus, or (2) it must transform a particular article into a different state or thing. The court ruled business method inventions are subject to the “same legal requirements for patentability as applied to any other process or method.”

The Aftermath
The CAFC ruling in Bilski obviously came as a shock to the owners of the 50,000 business method patents the USPTO had already granted. This overnight deregulation of online business led to much hew and cry, culminating in a request (for certiorari) that the United Supreme Court review the CAFC’s ruling. The questions presented for United States Supreme Court review were:

1. Whether the Federal Circuit erred by holding that a “process” must be tied to a particular machine or apparatus, or transform a particular article into a different state or thing (“machine-or-transformation” test), to be eligible for patenting under 35 U.S.C. § 101, despite this Court’s precedent declining to limit the broad statutory grant of patent eligibility for “any” new and useful process beyond excluding patents for “laws of nature, physical phenomena, and abstract ideas.”

2. Whether the Federal Circuit’s “machine-or-transformation” test for patent eligibility, which effectively forecloses meaningful patent protection to many business methods, contradicts the clear Congressional intent that patents protect “method[s] of doing or conducting business.” 35 U.S.C. § 273.

The United States Supreme Court Grants Certiorari
The United States Supreme Court has taken the unusual step of granting certiorari (agreeing to review the lower court’s ruling) in In re Bilski, the most important patent case involving the internet since the State Street Bank case. The Supreme Court might expand or eliminate the business method patent, resulting in a multi-trillion dollar swing in the value of existing, and future, business method patents. It may mean the death knell, or a new base of operations for patent trolls. It could shut down, or start up, tens of thousands of new online business. It may increase or decrease the cost of doing business online for everyone.

Stay tuned, for what are sure to be fireworks in this epic battle over business method patents.

Brett Trout

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