Business+Intellectual Property +Internet Law

Trademarks Are Everywhere in Dallas!

2013-05-07T15:20:00.000-04:00

As in every city, trademarks are everywhere in Dallas. Because I am here attending the Annual Meeting of the International Trademark Association, it is only fitting that I show a few that I spotted on a brief walk in the sunshine:

"Intellectual Property Protection for Small Businesses" Presentation

2013-04-26T10:30:00.000-04:00

On Tuesday, I had the pleasure of co-presenting a workshop at the "Beacon for Small Business Expo," sponsored by Beacon Mutual for its policyholders and the general public. My presentation was titled "Intellectual Property Protection for Small Businesses." Here is a copy of the slide deck.

My co-presenter was Ted Howell, of Partridge, Snow & Hahn. Ted spoke about strategies for protecting corporate assets in the broader sense, including confidential business information and relationships with customers and vendors.

FTC Updates Rules for Internet and Mobile Advertising

2013-03-18T10:16:00.000-04:00

Does your company advertise online or on mobile devices? Do you promote your company on Twitter and Facebook? If so, you should take note that the Federal Trade Commission last week updated its guidelines for digital advertising. Titled: ".com Disclosures: How to make Effective Disclosures in Digital Advertising," the new guidelines reflect changes in digital advertising practices since the FTC issued the last set of guidelines in 2000.

The new guidelines consist of 28 pages of guidance and an Appendix of 22 mock ads illustrating the points from the guidelines. Four key points emerge:

Consumer protection laws apply to online and mobile advertising just as they do to print, radio and TV advertising. Section 5 of the FTC Act, which prohibits unfair or deceptive acts or practices in advertising, is the touchstone here.
It has always been the law that, if disclosure of information is needed to prevent an ad claim from being deceptive or unfair, the disclosure has to be clear and conspicuous. The new guidance from the FTC affirms that the disclosures must be clear and conspicuous on all devices and platforms on which consumers may view the ads. This means that if an ad would be deceptive without a disclosure, and the disclosure cannot be made conspicuously on a particular device or platform, then the ad should not run on that device or platform.
The FTC now feels that disclosures should be "as close as possible" to the relevant claim. Hyperlinks for disclosures involving key categories of information, such as pricing or health and safety information, are discouraged, and in any event should be labeled as specifically as possible.
The FTC acknowledges that space constraints can be a challenge to advertisers on certain devices and platforms. But companies still have to make the necessary disclosures clearly and conspicuously. The use of pop-ups is not a good idea, because there are so many technologies that block pop-ups.

The new FTC guidelines close with some food for thought: instead of spending time on making disclosures meaningful and conspicuous, perhaps advertisers should rewrite the ads so the disclosures are not needed at all.

Other helpful advertising guidance for small businesses:

--- Advertising FAQ's: A Guide for Small Business

--- Advertising and Marketing Basics

Governor Nominates 5 to Economic Development Corporation

2013-03-11T09:55:00.000-04:00

Last Friday, Governor Chafee nominated five people to fill vacancies on the Rhode Island Economic Development Corporation (RIEDC):

Shannon Brawley, Executive Director of the Rhode Island Nursery and Landscape Association;

Dr. Nancy Carriuolo, President of RI College;

Roland Fiore, President of South County Sand & Gravel Co., Inc.

Jason Kelly, Executive Vice President of Moran Shipping Agencies; and

George Nee, President of the Rhode Island AFL-CIO and an existing Board member.

In supporting the nominations, Governor Chaffee stated that “[t]hese nominees reflect my commitment to changing the focus and priorities of the EDC. We are going to do all we can to help existing Rhode Island businesses – many of them small businesses – succeed and grow. And we are going to continue to improve our economy by building upon Rhode Island’s strengths and assets and investing in the fundamentals, such as education. These nominees bring with them valuable experience in a number of our state’s key industries. This is a new direction for the RIEDC and, I believe, a more promising path to a stronger economy for Rhode Island.”

The nominees remain subject to confirmation by the RI Senate. Chaffee's nominees expired last year because the state Senate never held confirmation hearings before adjourning.

While the position of Executive Director remains vacant, and the nominees remain unconfirmed, it may be difficult for the RIEDC to move forward with its mission to create jobs and help companies expand and relocate to RI. Let's hope that politics will be set aside soon so that the RIEDC can get back to work itself.

Venture Investment Dollars in RI Companies Soar in 2012

2013-02-19T21:01:00.000-05:00

Venture capital investments in New England rose to $790 million invested in 114 companies in the fourth quarter of 2011, according to the MoneyTree Report by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.

Four of those companies are in Rhode Island, netting a total of $35,599,900. Over the entire year, venture investments in Rhode Island companies totaled over $106 million, a huge increase over the $43.3 million invested in RI companies in 2011.

While investment levels in Rhode Island companies are improving, they are just starting to reach levels of a decade ago. The high mark was in 2000, when over $100 million was invested in 11 Rhode Island companies. In 2001, venture capital investments in Rhode Island companies totalled $46.9 million for the entire year.

At the same time, investment levels across the U.S.are on the decline. Nationally, venture capitalists invested $6.4 billion in 968 deals in the fourth quarter, and a total of $26.5 billion in 3698 deals for the entire year. This represents a decrease of 10% in dollars and a 6% decrease in deals over 2011. The Software, Biotechnology and Medical Device sectors received the most investment dollars for the year. Internet companies scored their second highest level of investment since 2001, with $6.7 billion being invested in 976 deals.

Locally, the four companies to receive investments in the fourth quarter of 2012 are:

• Illuminoss Medical, Inc. of East Providence, a company that is developing minimally invasive solutions for the stabilization and treatment of bone fractures, received an expansion investment from Foundation Medical Partners.

• The NanoSteel Company, of Providence, received $10,000,000 in investments from EnerTech Capital and Fairhaven Capital Partners. The NanoSteel Company develops nano-structured steel alloys designed to deliver superior performance.

• PreCision Dermatology Inc., of Cumberland, received $25,599,900 in expansion investments from Essex Woodlands Health Ventures, Frazier Healthcare, Longitude Capital Associates L.P., and NovaQuest Capital Management LLC. PreCision Dermatology is developing innovative therapies to physicians and patients that demonstrably improve the skin.

• TranslateAbroad Inc., of Providence, a company that provides a mobile application that allows users to point their phone camera at any Chinese text (like a food menu) and receive real-time translations, received an early stage investment from 500 Startups L.P.

Let's hope 2013 continues the upward trend of more investment dollars to Rhode Island!

FTC Provides Privacy Guidance for Mobile App Developers

2013-02-11T09:00:00.000-05:00

With about 100 new mobile apps being released every day, how do you keep track of how your personal information is being used? Mobile apps have been notoriously slow in adopting privacy policies and user-friendly privacy settings. After some recent pronouncements by the California Attorney General, the Federal Trade Commission issued a new Report on Mobile Privacy Disclosures and some best practice guidelines for mobile app developers last week..

While a great deal of the report is directed at platform developers (such as Apple, Google, Microsoft and Blackberry), there are some recommendations for app developers as well. These include:

Having a privacy policy and making sure the policy is available through the platform's app store
Providing just-in-time disclosures and obtaining affirmative express consent when collecting sensitive data outside the platform's API (such as financial, health or children's data) or sharing sensitive data with third parties

While app level disclosures do not need to repeat the platform level disclosures on data the app collects, if the app developer decides to share that data then the just-in-time disclosures and consents should kick in

App developers need to understand the third party apps they integrate (particularly those that facilitate advertising and analytics) in order to provide truthful disclosures
App developers should consider participating in self regulatory programs, trade associations, and industry organizations, which can provide industry wide guidance on how to make uniform, short-form privacy disclosures

The FTC also issued some tips to mobile app developers. These are more in the nature of suggestions and best practices, such as understanding the platform and libraries you are using and how they collect data, and considering encryption for sensitive data.

The thrust of the FTC's concerns is that privacy be incorporated by design, not by afterthought. The FTC has demonstrated that it is serious about these issues, and has initiated enforcement actions against companies whose apps do not comply. For example, the FTC recently settled with the social media company Path. Path was collecting birth dates as part of the registration process, but its original app did not prevent children under 13 from registering. Path caught the error on its own and revised the app to kick out children under 13 who tried to register. But the FTC still enforced an $800,000 penalty for Path's violation of COPPA with its initial design, and is requiring Path to obtain independent privacy assessments every other year for the next 20 years.

The FTC publications, following the California Attorney General's pronouncements last month, make it clear the the state and federal regulators are watching the mobile industry closely. All participants --- app developers, app platforms, and app advertisers --- should carefully review their privacy and data collection policies and those of the apps from which they collect information to make sure that the privacy practices are following the current guidelines and that the data collection practices are consistent with the privacy policies.

ICANN to Reveal New Generic Top Level Domains Tomorrow

2012-06-12T18:56:00.000-04:00

Just a brief update of what is going on with ICANN's plan to add new top level domains (in addition to .com, .net. org, .biz, etc).

ICANN has received over 1900 applications, generating in excess of $350 million in filing fees
ICANN will reveal the complete list of applications and applicants tomorrow (June 13, 2012), but in the meantime some of the applicants have disclosed their applications
There will be a process for lodging objections for concerns of trademark infringement or otherwise

After ICANN publishes the complete list of new gTLD applications, there will be a 60 day period in which anyone may file comments with ICANN concerning the applications. There will also be an opportunity for third parties to file formal objections.

Once the list of applications is revealed, companies should review the list and determine if there are any proposed names that would infringe its trademarks or would otherwise be of concern.

More to follow after the complete list is revealed.

Saving Costs in the U.S. Trademark Registration Process

2012-05-14T10:00:00.000-04:00

Because of the complexities of the U.S. trademark registration system, many trademark owners from other countries, and their counsel, are reluctant to file national or international applications in the United States. One of the reasons often given is the higher cost of obtaining trademark protection in the United States due to the statutory requirements and the formalities that must be observed. It is frequently overlooked, however, that a U.S. trademark registration covers a largely monolingual (English), highly sophisticated market of over 310 million people.

There are opportunities for international applicants and their counsel to save money and time in the United States registration process. Here is a link to an article I have written, that was recently published by the World Patent and Trademark News, and distributed to over 9500 attendees at the International Trademark Association annual meeting in Washington, D.C. Comments, especially from outside the United States, are especially welcome, as I am thinking into turning this into a longer, more detailed work.

New Trademark Case Filed in D RI --- Can Erwin Pearl Stop JC Penney's Internet Keyword Purchases?

2012-04-26T13:13:00.004-04:00

Erwin Pearl, Inc. v. J.C. Penney Corp., No. 12-207-S (D.R.I. filed March 20, 2012)

From the complaint, this case appears to be one where Erwin Pearl is complaining about J.C. Penney’s purchase from Google of “Erwin Pearl” as a keyword for a “sponsored link,” when J.C. Penney did not sell that brand of jewelry This practice caused J.C. Penney’s advertisements to appear at the beginning of the search results page whenever a computer user entered “Erwin Pearl” as a search term.

Even though the courts continue to struggle with how to characterize “keyword” cases, it may be difficult for Erwin Pearl to prevail unless it shows that JC Penney used its trademarks in the text of the ads, or stated that it sold Erwin Pearl branded jewelry when it did not.

According to the Complaint, in 2011 Google “suspended” J.C. Penney’s ability to appear prominently in search results for a period of 90 days. J.C. Penney allegedly used methods of improving its rankings in search results that Google felt were unfair. As a result, J.C. Penney turned to purchasing keywords to promote “Sponsored Links.” The Complaint alleges that in October, November, and December 2011 (Erwin Pearl’s most important selling season), whenever a computer user entered a search term of “Erwin Pearl” or “Erwin Pearl Jewelry”: into Google’s search engine, J.C. Penney’s advertisement showed up in the number one spot on the search results page as a “Sponsored Link.” The Complaint further alleges that the advertisement referred to prices of “40-60% off” select Erwin Pearl jewelry, and misleadingly suggested that Erwin Pearl’s jewelry was available for purchase at J.C. Penney at prices far less than at the retails stores of Erwin Pearl or its distributors. Unfortunately, a copy of the advertisement was not attached to the Complaint.

Erwin Pearl’s complaint contains claims that J.C. Penney’s actions constitute federal and common law trademark infringement, federal and common law unfair competition, federal and state trademark dilution, and unjust enrichment.. The Complaint seeks an accounting, monetary relief and attorneys’ fees.

The case has been assigned to Judge Smith.

Analysis

The courts have struggled over the years with keyword cases since Google first introduced the practice. Initially, some courts held that the purchase of a competitor’s trademarks as a keyword was not actionable under trademark law because the purchase and use of the keyword was not a “use in commerce.” Since the Second Circuit’s Rescuecom decision, however, [link] most defendants concede that the use is a use in commerce. For example, in Hearts on Fire Co., LLC v. Blue Nile, Inc., 603 F. Supp. 2d 274 (D. Mass. 2009), the Court found that “there is little question that the purchase of a trademarked keyword to trigger sponsored links constitutes a “use” within the meaning of the Lanham Act.”

More recently, courts and defendants have turned to arguments that the purchase of the keyword and its use as a “trigger” for sponsored ads is not an infringement because it creates no likelihood of confusion. In the Hearts on Fire decision, Judge Gertner examined the traditional likelihood of confusion factors, but found that “likelihood of confusion will ultimately turn on what the consumer saw on the screen and reasonably believed, given the context.” She identified the following non-exhaustive list of “relevant elements” to showing a likelihood of confusion in the Internet context: (1) the overall mechanics of web-browsing and Internet navigation, in which a consumer can easily reverse course; (2) the mechanics of the specific consumer search at issue; (3) the content of the search results webpage that was displayed, including the content of the sponsored link itself; (4) downstream content on the defendant’s linked website likely to compound any confusion; (5) the web-savvy and sophistication of the Plaintiff’s potential customers; (6) the specific context of a consumer who has deliberately searched for trademarks [products] only to find a sponsored link to a retailer of that product, and, in light of the foregoing factors, (7) the duration of any resulting confusion.

The Erwin Pearl Complaint does not attach a copy of the advertisements in question, so it is difficult to undertake an analysis of the strength of Erwin Pearl’s claims. Plaintiffs have not had much luck in many recent cases, however, as the courts have continued to find that there has been no likelihood of confusion when a potential customer has been momentarily diverted to a competitor’s website but the competitor has not actually used the plaintiff’s trademark publicly, other than to trigger the sponsored advertisement. Erwin Pearl may have a stronger case if JC Penney used Erwin Pearl's trademarks in the text of the ad, or stated that they sold Erwin Pearl branded jewelry when they did not.

If the case results in a substantive decision, it may be the first in Rhode Island dealing with whether the purchase of keywords by competitor constitutes trademark infringement.

February and March 2012 IP Cases Filed in US District Court of RI

2012-04-06T09:40:00.000-04:00

There was 1 new intellectual property (patent, trademark and copyright) case filing in February and March 2012 at the U.S. District Court for Rhode Island. This is the first IP case filing this year, which is a 75% decrease over the IP case filings for the first three months of 2011.

The new filing in March is a trademark case. This case will be highlighted in an upcoming blog post.

So far there have been no new patent or copyright cases filed in 2012 in Rhode Island

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims, or where intellectual property counterclaims may have been asserted. But unless the case is designated as such in the court's database, we are not counting it here

Great White Band Fights Over Name

2012-04-02T09:05:00.001-04:00

Russell v. Kendall, No. CV12-02477 (C.D. Cal. complaint filed March 22, 2012).

The Great White band has had its share of notoriety and legal problems over the past decade, largely due to poor decision-making. According to the Courtroom News Service it looks like another bad decision has led to another legal problem. This time, the band is fighting over whether its name is owned by the founder and lead singer Jack Russell, or by the members who continued the band when Russell had to leave for a while due to medical issues.

It seems the trouble started in August 2010, when Russell was hospitalized and underwent surgery for a perforated bowel. While he recuperated, other singers filled in for him during the band's live performances. Russell claims everyone knew his absence was temporary, and that he would resume singing with the band when he had recovered. But when he announced he was ready to return in December 2011, the band imposed a series of "unfair requirements" for his return (including abstaining from taking medications), and gave interviews claiming that Russell was also engaging in substance abuse, and that his addiction troubles were the reason for their not letting him return. The band filed to register the trademark Great White with the Patent and Trademark Office. After Russell formed a new band called "Jack Russell's Great White," Russell's' complaint claims that the band threatened litigation against any location that booked Russell's band. The band is also planning to release a new Great White album later this year.

The Complaint alleges federal law claims for trademark infringement, trademark dilution and unfair competition and state law claims for trademark infringement, unfair competition, injury to business reputation, and interference with prospective economic advantage. Russell seeks injunctive relief and damages in excess of $500,000. The defendants have not filed answers or responsive motions yet.

In similar situations we counsel clients to decide up front who is going to own the name, and what happens in various scenarios when band members leave, the band dissolves, etc. Whether the entity is going to own the name or one of its members, the decision needs to be made and documented. Then there aren't any disputes in the future over ownership of the name. Apparently this advice wasn't given to or followed by Great White. And now it is going to cost a lot in legal fees to sort the matter out.

Courts Struggle With Online Contracting Practices

2012-03-29T08:58:00.002-04:00

Fteja v. Facebook, Inc., No. 11 Civ 918(RJH), 2012 WL 183896 (S.D.N.Y. Jan 24, 2012).

Jerez v. JD Closeouts, LLC, No. CV-024727-11, 2012 WL 934390 (N.Y. Civ. Ct. March 20, 2012)

For over a decade I have been advising clients and teaching seminars about strategies for making sure online contracts are enforceable. It's not rocket science. You just have to take traditional contract principles and apply them online. Yet, businesses (and courts) are still struggling with how to do this properly. Given that the consequences of not being able to enforce a contract can be disastrous for a business, you would think that they would take the time to get things right on their websites.

Two recent cases illustrate the problems that the courts are having in determining whether a contract was made in the first place. In one case, the court decided that it would enforce a contract that was accepted when the user clicked a "Sign Up" box, immediately below which was a hyperlink to the terms and conditions. In the other case, the court refused to enforce an agreement where the terms were accessible only after several clicks through some hard-to-find and less-than-obvious links.

Fjeta v. Facebook

In the Fjeta case, Fteja brought a lawsuit against Facebook, claiming that Facebook discriminated against him and disabled his account improperly because he is a Muslim. Although Facebook's Terms of Use require that lawsuits be brought in a state or federal court located in Santa Clara County, California, Mr. Fteja brought the suit in the New York state courts. Facebook removed the suit to the federal district court in Manhattan, and then moved to transfer the case to California, arguing that the Terms of Use constitute a binding and enforceable contract.

One would expect that Facebook has a good sign-up process in place, although the process described by the court is different from the one currently in place on its website. According to the court, the user is asked to fill out several fields containing personal and contact information, then click a button that reads "Sign Up." After clicking this initial "sign up" button, the user sees another page entitled "Security Check" that requires the user to re-enter a series of letters and numbers displayed on the page. Below the box where the user enters the information, the page displays a second "Sign Up" button similar to the button the user clicked on the initial page. The following sentence appears immediately below that button: "By clicking Sign Up, you are indicating that you have read and agree to the "Terms of Service." The phrase "Terms of Service" is underlined and is linked to another page with the Terms. [John's Note: Facebook may have changed its Sign Up protocol in the interim. Now, the initial "Sign Up" button is immediately below the following sentence: "By clicking Sign Up, you agree to our Terms and that you have read and understand our Data Use Policy." The phrases "Terms" and "Data Use Policy" are linked to the applicable provisions.]

Although this method of obtaining assent has been upheld in a number of cases, the hyperlink to the Terms of Use gave Judge Holwell reason to pause. Because the terms of use were not displayed on the same page as the "Sign Up" button, but were only available through the link, the judge likened Facebook's Terms of Use to a "browsewrap" agreement, where the terms and conditions are posted on the website as a hyperlink at the bottom of the screen. But then he reasoned that the terms of use were still more like a "click-wrap" agreement, because the user had to "Sign Up" and affirmatively click the button to manifest agreement to the Terms of Use. Eventually, the judge concluded that the link to the terms of use is no different than having terms and conditions printed on the reverse side of a cruise ticket or a paper contract, found that Facebook's terms were enforceable, and ordered the case transferred to California. But he took a long, meandering and unneccesary route to get there . . . he would have been better off sticking to traditional contract principles and following the analysis below.

Jerez v. JD Closeouts

This case involves a dispute over the purchase of 50,000 pairs of white tube socks. Mr. Jerez, a New York resident, apparantly was unhappy with his $7,146 purchase of the tube socks, and sought a refund in the New York courts. JD Closeouts argued that the suit should have been brought in Florida, because of the forum selection clause in its Terms of Sale. According to the decision, the website's "Terms of Sale" containing the forum selection clause were found by clicking a link on its "About Us" page.

Here, the court refused to enforce the forum selection clause. After reviewing a number of cases enforcing and refusing to enforce online terms and conditions (including the Fjeta case above), the court found that this case was more like the situation in Specht v. Netscape Communications Corp. , "where 'submerged' website provisions were found insufficient to bind the company's customers." The court found that in this case the existence of the forum selection clause was not "reasonably communicated" to the buyer through a printed contract, a confirming letter agreement incorporating the terms by reference, or a "click-through" acceptance of hyperlinked terms and conditions. Because the forum selection clause was buried and submerged on a webpage that could only be found by clicking on an inconspicuous link on the seller's "About Us" page, the court refused to enforce the forum selection clause.

Analysis

Both courts seem to have reached the correct result. Facebook could have been a little safer by having the terms and conditions on the same page as the "Sign Up" button rather than a hyperlink. But the practice of disclosing the terms through a hyperlink is not uncommon, and so long as the hyperlink reasonably lets the purchaser know that there are terms and conditions that he or she should read, then courts will generally find an enforceable contract in this situation. The terms in the Jerez case were just too obscure and hard to find. Even a seasoned Internet contract attorney like me would not necessarily think to look on the "About Us' page for terms and conditions if they are not otherwise mentioned on a website.

The judge in the Facebook case seemed to have a hard time classifying the contract as a "click-wrap," a "browse-wrap," or a hybrid. In actuality, he need not have spent so much time, because the same contract formation rules apply no matter the classification.

Several colleagues and I wrote a paper a few years ago entitled “Browse-Wrap Agreements: Validity of Implied Assent in Electronic Form Agreements” (59 Business Lawyer 279 (2003)), in which we set forth a four-part test for courts to use in determining whether a user has validly assented to the terms of a browse-wrap agreement: (1) the user is provided with adequate notice of the existence of the proposed terms; (2) the user has a meaningful opportunity to review the terms; (3) the User is provided with adequate notice that the taking of a specified action manifests assent to the terms; and (4) the user takes the action specified in the notice. Subsequently, we have determined that the test applies not only to browse-wrap agreements, but is applicable to determining valid assent for ALL agreements, whether on-line or in the physical world.

While the two court decisions discussed above did not cite our article or explicitly use our test, maybe they will do so in the future if the decisions are appealed.

These cases and others like it remind us of the importance of certainty in business transactions. It is not difficult to set up Terms and Conditions that are enforceable. Because JD Closeouts did not take the time to make sure the notice of its terms of sale were prominent, the company now is forced to defend a lawsuit in New York instead of in Florida.

Update: Added WL cite for the Jerez decision.

Madonna Accused of Infringing Brazilian Song Writer's Copyright

2012-02-20T15:00:00.001-05:00

News out of Brazil in the last few days reports that Joao Brasil, a Brazilian songwriter, is accusing Madonna of copyright infringment. Brasil claims that the chorus of Madonna's new hit single "Give Me All Your Luvin'" copies from his "Love Banana" song.

To prove copyright infringement, Brasil does not have to show that the two songs are identical. But he will have to show that the infringing portion of Madonna's song is "substantially similar" to his, not just confusing or that her song is reminiscent of his. In some courts, the test is whether the similarity between the two songs is so striking or substantial that the similarity could only have been caused by copying, and not, for example, through coincidence or independent creation

While Madonna has had some similar problems in the past, frankly I do not see this claim being successful. If anything, Brasil's song reminds me more of Gwen Stefani's "Hollaback Girl" than Madonna's song. But you be the judge:

Love Banana
Give Me All Your Luvin'
Hollaback Girl

Good Week for RI Economic Development

2012-02-11T12:31:00.000-05:00

We had two pieces of good news this week from the RI Economic Development Corporation.

On Tuesday, the RIEDC Board announced that it had approved a $500,000 loan to attract PCS UtiliData, of Spokane, Washington, to relocate to Rhode Island. PCS UtiliData is a control system integrator providing automation, consulting, engineering, design, integration, control, automated energy conservation and energy management solutions to the electric utility industry. The company will initially bring 8 to 15 jobs to Rhode Island by the end of 2012, and plans to expand to 47 full time employees in Rhode Island by 2015. The average annual wage for these positions is expected to be about $91,000.

The other piece of good news was the release on Tuesday by Providence-based 38 Studios , owned by former Red Sox pitcher Curt Schilling, of its first video game, Kingdoms of Amalur: Reckoning. Reckoning is a single-player role playing action game that introduces players to the fantasy Kingdom of Amalur. 38 Studios was the subject of a controversial $75 million loan guarantee in 2010 by the State of Rhode Island. In exchange for an arrangement where the State does not loan any money directly to 38 Studios, but guarantees the repayment of a $75 million loan by banks and other investors, 38 Studios agreed to relocate its headquarters to Providence and create up to 450 jobs here by 2013. (In a loan guarantee, the State is only obligated to pay the lenders if 38 Studios defaults on the loan). The State's guarantee is secured by 38 Studio's second project, currently called "Copernicus," which is being developed in Rhode Island. The successful release of the first game makes it more likely that the second game will also be successfully released, in which case the State's loan guarantee will be cancelled, and the deal will be considered a "home run" in economic development circles.

Jobs are jobs. Economic development is a slow but steady way to increase jobs. Let's hope the EDC can continue its progress.

January 2012 IP Cases Filed in US District Court of RI

2012-02-06T09:00:00.001-05:00

There were no new intellectual property (patent, trademark and copyright) case filings in January 2012 at the U.S. District Court for Rhode Island. This matched January 2011, when no intellectual property cases were filed.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims. But unless the case is designated as such, we are not counting it here.

More Venture Dollars Find RI in 4th Quarter

2012-02-03T08:30:00.003-05:00

Venture capital investments in New England rose to $774 million invested in 116 companies in the fourth quarter of 2011, according to the MoneyTree Report by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters..

Five of those companies are in Rhode Island, netting a total of $3,032,000. Over the entire year, venture investments in Rhode Island companies totalled $40,383,000.

While investment levels in Rhode Island companies are improving, they still have not reached levels of a decade ago. The high mark was in 2000, when over $100 million was invested in 11 Rhode Island companies. In 2001, venture capital investments in Rhode Island companies totalled $46.9 million for the entire year.

Nationally, venture capitalists invested $6.566 billionin 844 deals in the fourth quarter, and a total of $28.4 billion in 3673 deals for the entire year. This represents an increase of 22% in dollars and a 4% rise in deals over 2010. The Software, Biotechnology and Medical Device sectors received the most investment dollars for the year. Internet companies scored their highest level of investment over the past decade, with $6.9 billion being invested in 997 deals.

Locally, the five companies to receive investments are

VCharge, Inc., of Cranston, a company that offers scalable, rapid-response energy storage for the electric grid, received $1,782,000 in early stage funding from the State's Slater Technology Fund and the Clean Energy Venture Group.
GreenBytes, Inc., of Ashaway, a more established company, received $1,150,000 from an undisclosed investor. GreenBytes makes hardware and software that IT operations teams use to store and protect huge amounts of data, and develops deduplication data storage solutions.
Alektrona Corporation, of Providence, received $100,000 from the Slater Technology Fund. Alektrona specializes in networking smart energy devices and applications.
Mnemosyne Pharmaceuticals, Inc., of Providence, a biotechnology company that is developing therapeutic products to treat schizophrenia and other cognitive and neuropsychiatric disorders, also received an investment from the Slater Technology Fund.
Tracelytics, of Providence, a company that provides performance analysis and diagnostic services for web applications, received seed investments from Battery Ventures, Flybridge Capital Partners, and Google Ventures.

Let's hope 2012 brings many more investment dollars to Rhode Island!

New Trademark Infringement Case Filed in DRI --- Selling Good Stuff Cheap Can Get You in Trouble

2012-01-27T12:51:00.000-05:00

Swarovski Aktiengesellschaft v. Building #19, Inc., No. 11-627 ML (D.R.I. filed Dec.14. 2011)

A new trademark infringement case was filed in the District of Rhode Island in December. The case involves the sale of genuine Swarovski crystal products by Building #19, Inc., which obtained the products from a salvage company after the warehouse in which the products had been stored was damaged in a tornado. For those of our readers outside New England, Building #19 is an iconic chain of discount stores known for selling items it obtains at fire sales, liquidations, bankruptcies and other unfortunate events. The chain’s motto is “GOOD STUFF CHEAP,” which is all you really need to know.

According to Swarovski’s Complaint, Building #19 acquired over $1.5 million of Swarovski crystal products from an insurance salvage company. At least some of the crystal products came from a warehouse that had been damaged in a tornado, but Swarovski claims it was not a Swarovski warehouse. As can be expected in a disaster like this, the packaging for some of the products was damaged.

In December, Building #19 advertised a “One Day Event” for “SWAROVSKI CRYSTAL” in the Providence Journal and on its website, and allegedly used the Swarovski name liberally in website ads and in in-store materials promoting the sale. The next weekend, Building #19 advertised a similar sale at its Weymouth, Massachusetts store. Swarovski took offense to the use of its name and trademark on the web ads, on Building #19’s Facebook page and on the in-store promotional materials. Apparently, Swarovski feels that the ads made it look like Swarovski sponsored or otherwise approved of the sales.

Swarovski’s complaint alleges that Building #19’s advertising constitutes federal and common law trademark infringement, trademark dilution, federal and state unfair competition, deceptive trade practices under R.I.G.L. Section 6.13.1-2, and injury to business reputation under R.I.G.L. section 6-2-12. The complaint seeks injunctive relief, damages, treble damages for willful infringement, punitive damages, and an order requiring Building #19 to produce corrective advertising.

The case has been assigned to Judge Lisi.

Supreme Court Upholds Congress’s Authority To Determine Scope Of Copyright Protection

2012-01-23T15:29:00.000-05:00

Golan v. Holder, No. 10-545 (U.S. Jan 18, 2012)

Last week, the United States Supreme Court confirmed once again that Congress has broad power to determine what works are protected by copyright and the length of that protection. In Golan, the Court upheld a ruling by the federal appeals court that Congress did not exceed its Constitutional authority when it enacted the Uruguay Round Agreements Act (URAA) in 1994 and granted copyright protection to certain foreign works that previously had not been protected in the United States.

Background

The Berne Convention for the Protection of Literary and Artistic Works (Berne Convention) is the principal treaty for determining how works protected by copyright in the author’s home country will be treated in other countries. Each of the 164 countries that has become a member the Berne Convention agrees to provide a minimum level of copyright protection for works of its authors, and to treat authors from other member countries at least as well as it treats its own authors. In particular, Article 18 of the Berne Convention requires member countries to protect the works of the authors of other member countries unless the work’s copyright term has expired in either the country where protection is sought or the country of origin.

When Congress enacted legislation in 1988 so that the U.S. could become a member of the Berne Convention, the law said nothing about how the United States would treat foreign works protected in their countries of origin, but not in the United States. (For example, Tchaikovsky’s Peter and the Wolf had never been protected by copyright in the United States because the United States did not have a copyright treaty with

Russia

to protect works of Russian authors and composers). The completion of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) mandated implementation of certain provisions of the Berne Convention, including Article 18, under the threat of economic sanctions.

In 1994, Congress responded. Section 514 of the URAA (codified at 17 U.S.C. section 104A) grants copyright protection to works still protected n their country of origin, but not protected in the United States because: (a) the United States did not provide copyright protection to works of that country at the time the work was published; (b) the United States did not protect sound recordings fixed before 1972; or (c) the author had not complied with certain statutory requirements in the US law. The effect of Section 514 was to take works that previously were in the “public domain” and not protected under

U.S.

Orchestra conductors, musicians, publishers and others who formerly enjoyed free access to works Section 514 removed from the public domain brought suit to challenge Congress’s authority under the Copyright Clause to enact Section 514 Although the District Court agreed, the Tenth Circuit Court of Appeals reversed, and upheld Congress’s authority to enact Section 514.

Supreme Court Ruling

The Supreme Court ruled 6-2 that Section 514 does not exceed Congress’s authority under the Copyright Clause. The Court rejected the argument that the language that Congress can provide copyright protection “for a limited time” means Congress cannot extend copyright protection to works in the public domain. The Court found that its 2003 decision in Eldred v. Ashcroft was largely dispositive. In that case, the Court ruled that Congress has the authority under the Copyright Clause to extend the copyright term of certain works by 20 years, and that the term “limited” does not mean that the term is “fixed” or “inalterable.” The Court reviewed the history of amendments to the Copyright Act and found a number of situations where Congress has protected works that had been unprotected. Finally, the Court saw no reason to reject Congress’s determination that adherence to the Berne Convention would serve the objectives of the Copyright Clause.

Takeaways

Two definitive rulings in a decade on the authority of Congress under the Commerce Clause will hopefully put the challenges to rest. The Supreme Court clearly has told us that Congress has the authority to extend copyright protection to works that previously have not been protected, and to extend the term of copyright protection. In Eldred, the Court told us that Congress’s authority is not unlimited, but to date Congress has not pushed the limits of its authority so much as to cause the Court concern.

These cases also serve to warn those who use uncopyrighted works in their businesses, and those who advise them, that “nothing is forever.” Congress could change the status of the copyrighted works in the future. Such users should keep this in mind when developing business plans and models based on uncopyrighted works.

November and December 2011 IP Cases Filed in US District Court of RI

2012-01-13T09:37:00.000-05:00

There were 3 new intellectual property (patent, trademark and copyright) case filings in November and December 2011 at the U.S. District Court for Rhode Island. This brings the final total to 13 new IP case filings (3 patent and 9 trademark and 1 copyright) for the year, which is a 32% decrease over the 19 new IP case filings in 2010.

The new cases in November consist of 1 trademark and 1 copyright case. The new filing in December is a trademark case. These cases will be highlighted in an upcoming blog post.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims, or where intellectual property counterclaims may have been asserted. But unless the case is designated as such in the court's database, we are not counting it here

Congressman Langevin Voices Oppostion to SOPA

2012-01-11T23:41:00.001-05:00

Kudos to Congressman Jim Langevin for being the first of Rhode Island's Congressional delegation to voice opposition to the proposed Stop Online Piracy Act (SOPA). Last Friday Langevin voiced his concerns about the effect the bill would have on the "security and openness of the Internet." Langevin told politico.com's "Politico Morning Tech" that the bill “would interfere with efforts to increase transparency and security online by allowing U.S. companies to actively seek to shut down other companies’ websites, without court order or government involvement, while undermining initiatives like DNSSEC that help increase trust online.”

SOPA is pitting the entertainment communities against the technology communities. The proposed bill attempts to stop rogue offshore websites that steal and copy American content (movies, music, etc.) by permitting the Attorney General to obtain a court order requiring Internet Service Providers (such as Comcast or Cox) to prevent access to a website within five days. Proponents say the bill is necessary to protect U.S. intellectual property against infringement by foreign websites. Opponents argue that the bill violates the First Amendment, and will "cripple the Internet."

Hearings on SOPA are expected to resume this month.

September and October 2011 IP Cases Filed in US District Court of RI

2011-11-10T15:00:00.004-05:00

There were no new intellectual property (patent, trademark and copyright) case filings in September or October 2011 at the U.S. District Court for Rhode Island. This leaves the total at 10 new IP case filings (3 patent and 7 trademark) for the year to date, which is a 33% decrease over the same period in 2010.

So far there have been no new copyright cases filed in 2011 in Rhode Island.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims, or where intellectual property counterclaims may have been asserted. But unless the case is designated as such in the court's database, we are not counting it here

Hiatus

2011-11-10T12:56:00.000-05:00

Sorry for the break in the action. Sometimes life just gets in the way. Regular posts will return within a few days.

August 2011 IP Cases Filed in US District Court of RI

2011-09-02T11:43:00.000-04:00

There were no new intellectual property (patent, trademark and copyright) case filings in August 2011 at the U.S. District Court for Rhode Island. This leaves the total at 10 new IP case filings (3 patent and 7 trademark) for the year to date, which is a 29% decrease over the same period in 2010.

So far there have been no new copyright cases filed in 2011 in Rhode Island.

These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims. But unless the case is designated as such, we are not counting it here.

Venture Dollars Find RI in Second Quarter 2011

2011-08-17T09:00:00.001-04:00

The good news: venture capital investments in New England hit a 10 year high in the second quarter this year, with $1.1 billion invested in 119 companies, according to the MoneyTree Report from PriceWaterhouseCoopers.

The bad news: only two of those companies are in Rhode Island, netting a total of $1,151,000.

So while investments in New England companies are back to where they were a decade ago before the "Internet crash," the money still is not flowing to Rhode Island. Ten years ago, venture capital investments in Rhode Island companies totalled $19.6 million in the first quarter of 2001, and $26 million in the second quarter of 2001.

Nationally, venture capitalists invested $7.5 billion in 966 deals in the second quarter, representing a 19% increase over the first quarter, when $6.3 billion was invested in 814 deals. The Life Sciences sector (including biotechnology and medical device companies) accounted for much of the growth, improving 37% in dollars and 12% in deals over the first quarter. Investments in Internet companies also rose to the highest quarterly level since 2001.

Locally, the two companies to receive investments are VCharge, Inc., of Cranston, and GreenBytes, Inc., of Ashaway. VCharge, a company that offers scalable, rapid-response energy storage for the electric grid, received $150,000 in seed funding from the State's Slater Technology Fund. GreenBytes, a more established company, received $1,001,000 from Battery Ventures, an existing investor. GreenBytes makes hardware and software that IT operations teams use to store and protect huge amounts of data, and to control how much energy they must use to do so.

Let's hope these investment dollars start finding their way to Rhode Island.

New Trademark Infringement Case Filed in DRI --- FM Global Seeks to Protect its FM and Diamond Certification Mark

2011-08-16T09:00:00.011-04:00

FM Approvals, LLC v. Fullco Industries, Inc., No. 11-cv-00327-L (D.R.I. filed July 28, 2011).

A new trademark complaint was filed in the District of Rhode Island on July 28th. In its Complaint, FM Approvals LLC, a subsidiary of FM Global, claims federal and state trademark rights in a four-sided diamond containing the letters "FM." for its third party testing and product certification services. FM's mark is a certification mark, like the Good Housekeeping Seal of Approval, and is registered with the U.S. Patent and Trademark Office. FM Approvals tests and certifies numerous products, including roofing and building material products, classroom materials, and electrical and fire protection equipment. According to the Complaint, FM Approvals's certification process assures customers that a product has been tested by an objective third party and conforms to rigorous standards.

FM Approvals claims that Fullco is selling industrial products such as bushings and bearings, fasteners and screws that are of the type used in building assemblies certified by FM Approvals, and has been casting a design consisting of an "F" inside a four sided diamond onto its products. Fullco's mark also has been registered with the U.S. Patent and Trademark Office.

FM Approvals seeks damages on counts of federal trademark infringement and federal and state law unfair competition, and seeks cancellation of Fullco's federal trademark registration for its "F" and four sided diamond mark.. The case has been assigned to Judge Lisi.