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On Episode 29 of the Law & Business Podcast, Wil Jacques and Anthony Verna talk about copyright infringement, trademark infringement, patent infringement, and some thoughts to avoid infringement.
What one needs to do is to assess the amount of damages that may be awarded because lawsuits can be expensive.
Copyright infringement occurs when a copyrighted work is reproduced, distributed, performed, publicly displayed, or made into a derivative work without the permission of the copyright owner.
Trademark infringement is the unauthorized use of a trademark or service mark on or in connection with goods and/or services in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.
Patent infringement is the commission of a prohibited act with respect to a patented invention without permission from the patent holder.
Wil Jacques, Patent Agent
Wil discusses the need to understand how a product functions and works and solves problems. That deep dive into the inner workings of a product is the only proper method to draft a patent and understand who may be infringing on that patent.
Counterfeiting is the act of creating a fake. Counterfeit products are fakes or unauthorized replicas of the real product – especially in relation to the trademark and use of the exact, same trademark.
Wil and Anthony also talk about monitoring intellectual property.
Wil Jacques: https://www.linkedin.com/in/wiljacques/
Anthony Verna: https://www.linkedin.com/in/anthonyverna/
Here’s a lightly-edited transcript of the episode:
Anthony Verna:
Welcome to the Law & Business Podcast. We keep continuing with season two. We’re here with my own patent agent. Wil Jacques, please say hello.
Wil Jacques:
Hello. Good to be here again.
Anthony:
Thanks for making some more time to come on.
Wil:
Always nice to talk with you, Anthony. We have such a great topic. I couldn’t afford to miss this one.
Anthony:
So both you and I have had to deal with infringers and counterfeiters; the possibility of copying in some aspect in our past and our current lives. And what I want to do today is talk about either finding, dealing with infringers counterfeiters and some solutions that you and I have seen throughout our careers.
The first thing I do want to talk about though is defining what infringement is and on a soft IP basis in copyright law infringement is basically an authorized copy of a work that’s protected under copyright law.
That unauthorized copy, it could be made, it could be sold, it could be publicly displayed. Any particular amount of rights that’s unauthorized in a copy, that’s a copyright infringement. Trademark infringement is very similar. Now it’s a little different because in trademark law we do see similar trademarks, not the same and trademark could infringe and certainly there has to be some kind of economic relationship between the plaintiffs’ and defendants’ marks and their products.
We kind of have a formula that we look at to determine if there is infringement, but basically infringe on means similar mark on similar goods and services. And we also have some other trademark thoughts such as trademark dilution, which is somehow harming the value of a famous trademark. So that’s what it is on the softer side of IP, on the harder side of IP, how do you look at similarities in product fest patented and a product that might copy or have some similarities to that?
Wil:
Oh, I got to say that a, you’ve made a comment and I had to laugh first when you talked a little bit about the amount of damages or money that would be there. Certainly this is not a game you want to get into unless there is sufficient dollars on the table, too.
Anthony:
Absolutely right. Make it a worthy effort.
Wil:
But, I would say that, in what we would call the hard IP world, or patents, in particular, we kind of parallel what you do: essentially copying is copying. It is just a little more difficult in the patenting world sometimes to prove that copy because if we’re talking about claims in a pattern and just as it’s hard to me be compared to contracts for each other, it might be difficult to compare to pass to each other because the wording of one path versus the wording of another patent may differ even though two products might be in the same industry.
Anthony:
This is true, and we shouldn’t make the distinction that when we talk about infringement, we’re talking about whether or not there is a product that exists in the market place that is similar to your patent. Theoretically, other creators should not bn infringing, but claims of a patent are supposed to be novel and unique. If there is a product out there that copies, as you say, in any clean, each and every element of that independent claim, infringing that claim. Then you may have basis for saying that that person is quote unquote copying or infringing on your patent by selling that product. At which point it’s, again, an unauthorized copy of a product because there’s a specific claim that that product reproduces.
Anthony:
Yeah, absolutely.
Counterfeiting is the act of taking a company’s exact trademark. Putting it on a product meant to confuse consumers into believing that those consumers are buying a product from that company even though they aren’t.
When we talk about counterfeiting, it’s actually a very specific type of infringement. So I just wanted to make sure that our audience is clear on the two different types of legal actions here. It really does kind of depend on how one’s value is derived, right?
Every particular situation is different. There are plenty of products out there that have multiple intellectual property rights. There are plenty of products that fall under copyright law and also have patents attached to them.
If they’re branded correctly then there’s a trademark attached to it as well. So every product is different. Every situation is different. And certainly when you’re looking at food, chances are you’re going to be dealing with the branding of the food because for a natural product like peas, those would be grown. And so maybe the quality difference is not in what’s grown, but maybe in how they’re stored maybe and how they’re shipped, things like that. There is always something behind that brand to make the value worth.
Wil:
Right. And so just to get back to quote unquote IP elements, patents per se, those things, little things that you spoke about of the very nature of the things we attempt to protect by bypass, we want to protect the composition a little particularly, we want to protect how something behaves, how it works.
Anthony:
And so that’s how we distinguish ourselves and derive some value.
Let’s talk about some solutions in either finding an infringer or a counterfeiter dealing with infringers or counterfeiters. I want to quickly talk about lawsuits here because we’ll talk about lawsuits elsewhere. And the reason why I say quickly is because of course, since we’re a law firm, that’s going to be the number one way of protecting any type of intellectual property rights. And part of the issue here is always going to be a cost benefit analysis. It’s going to be the value of the intellectual property. It’s going to be a part of the value of the business, of the intellectual property. I think we can all agree that lawsuits themselves can be very expensive. And so if anybody who is thinking of filing a lawsuit to enforce any intellectual property rights needs to think about this and have multiple conversations, not just one consultation, but multiple conversations on whether it’s worth the fight and the expense. Do you agree with, with that particular line of thinking?
Wil:
Yes, I do. I agree with that, Anthony, wholeheartedly.
Anthony:
Okay. I’d like to add that when one, when one starts to even think about, and we’ll take this up in another show, but, you have to be willing first of all to bring an opposition or an infringement lawsuit against a party that copies your intellectual property. And then another aspect of that of course is that there’s no moral incentive for one to come to you and say “I’m infringing your patent.” You have to be your own policeman.
Wil:
Correct. And that’s just your initial cost. The other side of the coin is that you have to have the ability to take your case forward and be the police.
Anthony:
That leads us right into the next topic of what we would call monitoring because monitoring is an IP holder basically being its own police force.
Wil:
Absolutely.
Anthony:
Now in today’s world, a lot of this can be automated. We have a service in which our client’s trademarks are monitored and we are alerted to filings in the patent and trademark office. We are alerted to the time when those applications hit third party review in time for an opposition proceeding. We do counsel our clients whenever we get that particular email that that hits and it’s an important feature for us because it says, “Here’s what somebody else is doing now. Is this somebody else a competitor?”
That’s question number one. Is there a direct economic impact between this potential competitor, this potential defendant and you and are the trademarks similar? So we do the same analysis whenever we get that hit in that particular email notice every single day.
Wil:
There are other types of software out there that are excellent for sales and what that means is that they will see what kind of sales are happening on Amazon, on Ebay, on wish on Alibaba, cause trust me, Alibaba has many, many infringing products. All of these particular companies have what I would call an IP review department where you as an IP owner can basically complain about a listing or two listings or 200 listings, whatever the case might be, and state your case for infringement by those particular listings. These, all of these vendors can easily review and maybe even suspend accounts, suspended sales, whatever the case may be to remove infringement from their own listings. Something interesting also happens with the apple app store. Now the apple app store has started to send email notices to any, to any party that receives a complaint against it. So I had a colleague explained that that their particular product has received or they’ve received an email interesting cause their in house counsel. So they received an email and it says Blah Blah Blah party has lodged a complaint against you.
What would be your response to it? And if you can show that you’ve got a registered trademark for so many years and in so many countries and things like that, obviously it’s not going to be a product that will be taken down from the app store. But apple itself has started to get a little proactive, managed to move away of changes.
Anthony:
To your first point, let me mention that it can be somewhat more difficult to police electronically, but it’s not impossible. We’re looking for essentially what you’re looking for, what I call features or those words that describe the products that are actually being sold. There are colored elements described in your patent claim. And so you go out and you can use automated techniques to search for instance product, for certain types of products.
Wil:
One might even, as laborious as it is to do, go out to your neighborhood grocery store or department store and actually look at the back of products and see what they have in them. If for instance, you believe it’s been covered by some sort of a compensation claim, still some of our best sources are to look at standards that have been established by organizations leading organizations like IEEE or the American Society for Chemists. That’s another way that you can monitor products that might be right.
Anthony:
And since you talked about the difficulty in trying to monitor what products might be infringing the patent, it comes to mind that a company like Amazon is very quick to take down listings. When those listings infringe upon a copyright. And mainly that’s because of the Digital Millennium Copyright Act and the safe harbor that a third party listing service has under the DMC. They don’t want to lose that safe harbor provision. And so these companies will take down an infringing copyright product. But when it comes to something a little more difficult, like say a color trademark or a logo trademark or a pat, because of course this is an extra judicial request rather than an actual court order, these companies might be a little more slow to take it down or a little more inquisitive.
Wil:
Well, it depends on their power as well. So one of my clients is not walking around with as many dollars in their bank accounts, as the U.S. Treasury.
Once they catch wind of that or let’s say more than other products, maybe not paying as much attention to whether the products might be infringing, as we kind of move ahead without understanding of whether or not someone is actually infringing on our patent rights, it’s still up to us to bring that to their attention and not expect that it is something that they themselves will come knocking on your door and say, “I think this might be infringing.”
Anthony:
And I think that’s one thing that’s important is, is regardless of what we’re talking about in this, and you and I have our list of notes here, it’s always incumbent upon the IP holder to be proactive.
Wil:
If you’re not proactive, you can’t expect to get any sort of result that at all. You made mention of sites, products taken down, pages being taken down.
But certainly after making a contact to counsel or spending a fair amount of time on a web page. Again, looking for what we do in service to our clients , showing evidence of use. We’re looking for those words, those elements that describe a product that may be infringing our patent. But I have gone back say a week later or so, and that page is no longer there.
Anthony:
That reminds me of an anti-counterfeiting suit that we handled a couple of years ago. And while we did sue, all of the people in New York City who were selling the counterfeit product, we knew that it was coming from China. It was on the website of the factory that was selling it. The second we sued everybody here that that sold it, they had to have picked up the phone and called China because then that factory removed from their website within a month of US filing the lawsuit here in the United States against those who are selling the infringing products. So it does make its way back sometimes when you file those, those lawsuits. And so monitoring is important for monitoring. It’s very important.
There are also some, some technical things and hopefully we’ll get a chance to talk about this in the, in the future.
Wil:
Absolutely. Anthony, the simple, task of making sure that your rights are clear in the patents, only a patent owner in bringing a patent suit by statute. And so sometimes we have groups that will come together and not understand that individually they may be able to act as an example.
Three partners from college: they’re about to run down the road with a new startup idea and each one of them is a contributing inventor in the absence of any other agreement. Also, each is an owner and can go out on their own and do things with the patent that may not necessarily serve the purpose of the intended company that they’re putting together, including being able to go after people who may be copying their invention. So even those little nuances are things that we encourage people to take a look at while they’re monitoring the market. And while they’re trying to make a decision about whether or not to bring the patent lawsuits against a copier.
Anthony:
Let’s think of a couple other non-illegal strategies, maybe more of a business side strategy, but something that that still works.
A couple episodes ago on this podcast, I spoke with John Eastwood of Eiger Law in Taipei and one of his thoughts was that if anybody’s manufacturing in China, you need to make sure that you, as an American company, have boots on the ground and that you have a good relationship with the factory owner.
Basically, you’re teaching somebody how to infringe on your product, that it doesn’t matter whether it’s a copyright, doesn’t matter whether it’s trademark, doesn’t matter if it’s a patent, you’re basically teaching somebody how to infringe if you’re not protecting yourself with some good boots on the ground and having a good relationship with the factory owner.
Your first question is: Do you have a good relationship with the factory owner? And if not, you need to fly to China. If you’re manufacturing there, you need to make sure that that it’s somebody who understands and appreciates the business.
Wil:
I would have to agree with you about other parties.
Let’s say our client, ABC manufacturing partners, we don’t spend a fair amount of time in just building the relationship and just understanding how far that takes your company, in terms of whether or not your manufacturing facility may in fact turn out to be your, competitor. You want to preclude this.
So we have to be very clear, at least in our agreements as it pertains to our own us law and law in the countries which you’re trying to do, business that you’re giving someone is a right to either make, use, sell, export, import, all of the above or some combination of the above. And you have to be very clear about what those things are going to be as you go into the agreement and not try to stipulate those things after the fact.
Anthony:
Excellent points. Well, another interesting way of finding infringers are probably what we would call a copyright trap. But in today’s world, when you can do a trademark traps, you can do a patent trap. It’s effectively having something fake and a product in order to see if somebody is copying the fake portion of it. Traditionally, I’d say a trap in the copyright world would be a map with either fake cities or fake streets on it.
I spoke to a colleague not that long ago who was in house counsel of a company and they recently did fake products and they asked some of their factories is this particular company has multiple factories in China to spec out and build a prototype for a product that this particular company had no intention of building. And uh, because of the, the slight differences in the products that were given to the factories, they were able to figure out obviously, which factory started to make the product and then go put it on Ebay and put it on Amazon. So this way now they knew which factory was actually making the counterfeit products that were not authorized and they were able to pick up the phone and scold that factory. Because, now, here was a product that they had no intention of selling actually being sold.
Wil:
That’s very ingenious by that company. That was totally ingenious.
The net is just somewhat narrow.
When I look at copyright, at trademark, design patents probably come much closer to that.
And you can get claims issued into design patents. Let’s see. They’re not ever intended to be functional shiny patents, but they may mimic certain things that can be shown in a design, wouldn’t be parched from what you said is that these things are not necessarily of a size or form that is very well defined. And so sometimes they may not be picked up very easily in my world in terms of what is infringing or what may not be infringing. And so we still have to rely on in our world those elements, those features in the clean that speak to how things were had they been enabled to execute functionally either by, again by composition, either by the method or processes that are being used. So on and so forth in the patent that you’ve been issued.
Anthony:
Yes. You and I certainly had a, had a few phone calls recently with inventors whose ideas may have been popped me, even though even they may have gotten as far as having their applications published but certainly didn’t, doesn’t look like they’re getting shot in the light.
Wil:
Really, when you look at great ideas, great, great ideas that are derailed because of a couple of missteps, very early in the game, we did this at once. With the proper and right search for prior art, let’s broaden the claims. It saves our inventors a lot.
Anthony:
Agreed. Agreed. Completely. All right, so we will cap this episode right here, but just remember there are lots of different ways of handling infringers or counterfeiters trying to find them, trying to handle them, and don’t be afraid, be creative. That’s certainly something that we love helping businesses with. Trying to find creative solutions to these problems.