Navigating Murky Waters

WHEN IT COMES TO ONLINE AND DIGITAL INTELLECTUAL PROPERTY ISSUES, THE DEFINITION OF THEFT ITSELF IS CHANGING. LEARN TO PROTECT YOURSELF

If you walk into your office tomorrow morning and find your computer’s been stolen, you’ll pick up the phone and call the police. Hopefully, the perpetrator will be arrested, tried and sent to jail to reflect upon his crime.

But, if you’re surfing the web and visit your competitor’s web site and find it’s eerily similar to yours with the exact look, feel and content, what do you do?

The answer is: It depends.

“It’s not as if there are internet police,” says attorney Jennifer Wolfe, founder and CEO of The Wolfe Practice in Cincinnati. “It’s a market police. It’s up to you to protect yourself.”

Infringement of online and digital intellectual property is actionable and can result in liability, but like much about the internet, traditional definitions and standards don’t always apply.

“Our laws are adapting as quickly as they can,” says Wolfe, who represents media, publishing, retail and emerging companies in business development with an emphasis on licensing, branding and corporate structure.

I.P. is a fluid area of the law that’s the focus of much of the practice time of Dick Goehler, a Cincinnati attorney with Frost Brown Todd.

“An inherent tension has always existed between First Amendment freedoms and traditional principles of copyright and trademark law,” says Goehler, whose practice is concentrated in the areas of media law, advertising law, and trademark and copyright litigation. “Now the balance between those concepts is evolving as we deal with these issues in the online world.”

According to Jill Meyer, a Cincinnati attorney who oversees Frost Brown Todd’s advertising practice, the very nature of the internet presents complex, though not insurmountable, intellectual property challenges.

“As we move into the whole online and internet-based world of marketing and business, it’s not only the traditional laws that we need to pay attention to, but new laws are in place — and evolving as we speak — to guide us through the unique trademark, copyright, privacy and other content-related issues that the use of the internet creates,” says Meyer, who counsels clients on advertising and interactive media law issues, including intellectual property, viral marketing campaigns and blogging issues.



DEFINING ONLINE AND DIGITAL I.P. THEFT


Even the definition of theft itself is changing when it comes to online and digital intellectual property issues. What once might have been a clear-cut case of plagiarism or copyright infringement is no longer so.

Perhaps the biggest difference between online intellectual property and traditional intellectual property is that online intellectual property is significantly easier to copy and misuse, according to registered patent attorney David Mancino, partner and co-chair of the intellectual property practice at Taft Stettinius & Hollister.

Contributing to the “Wild West” image — that anything goes on the internet — is the relative lack of pursuit of infringement claims by both copyright holders and the government during the late 1990s and early 2000s.

“There is a whole generation of online users who have the misconception that many infringing activities are immune from enforcement if they occur online,” says Mancino, whose scope of practice includes patent and intellectual property litigation and patent preparation and prosecution.

Patent attorney Kevin Kirsch, a partner at Taft Stettinius & Hollister, says everyone agrees that it’s essential to safeguard a company’s trademarks and copyrights to protect the public against illegal activities such as the sale of inferior knockoff products. No one argues that companies should not be allowed to sell products online using another company’s trademark. And copying web pages or infringing trademarks in domain names is also illegal.

But for those who choose to ignore — and break — the law, the internet has just simplified things.

“The internet has rapidly increased the autonomy of the potential infringer and exponentially increased the speed in which infringing activities occur,” says Kirsch, who heads Taft’s nationwide intellectual property litigation practice and litigates patent, trademark, copyright, trade secret and domain name disputes across numerous industries. “To keep up with the developments in technology, sophisticated web-crawling tools are often now employed to search the internet, generate reports and capture evidence for subsequent enforcement activities.”

One important tool for lawyers has been the Digital Millennium Copyright Act (DMCA). The DMCA provides copyright owners a means to have copyrighted content removed from web sites, even if the actual infringer remains unidentified.

According to Karen K. Gaunt, an attorney specializing in intellectual property for the Cincinnati office of Greenebaum Doll & McDonald, “The DMCA provides a safe harbor to ISPs and web site hosts who comply with ‘notice and takedown’ provisions, so most legitimate web sites do take allegations of copyright infringement seriously. Some even have staff dedicated simply to addressing ‘notice and takedown’ demands and infringement claims.”

Thanks to a variety of tools and laws such as the DMCA, it’s easier to bring claims against those who infringe upon online/digital intellectual property. But there exists a real disconnect between companies, with some choosing to accept the internet and its inherent freedoms and new types of dialogues, and others clinging to traditional interpretations of the types of laws that have always governed intellectual property issues.

“Some initially resisted the changes brought by the internet, hoping that if they ignored it, it would go away,” Meyer says. “Now there’s a broad realization that it’s absolutely not going to go away, and the thinking has instead become how can we embrace it and make it work for us?”



STEPPING INTO A BRAVE NEW WORLD


“You want to be part of the great experiment to find out what new opportunities are created by what others think of your product or brand, but at the same time, you don’t want to give up any of your valuable intellectual property rights,” Meyer says.

Many businesses who step out into this brave new world, find that their products can benefit in ways they never could have imagined.

Take Mentos®, for example. The refreshing little mint is now part of a cultural phenomenon.

Science teachers everywhere have known for years about the Mentos geyser phenomenon. But when two men in white lab coats (Fritz Grobe, a professional juggler, and Stephen Voltz, a trial lawyer) recreated the Bellagio Fountain with Mentos and Diet Coke in 2006 and posted it on the internet, they used someone else’s product to attract millions of viewers. And they added to an interesting intellectual property discussion.

Meyer cited the now-famous Mentos and Diet Coke® video experiments as a brilliant example of how the company that owns Mentos (Perfetti van Melle, headquartered in Erlanger) had the vision to capitalize on a third party’s non-traditional use of its trademarked product.

“Some companies are still closely guarding their I.P. in keeping with traditional practice,” Meyer says. “Others are monitoring the creative uses by others and, while still guarding their I.P., are selectively jumping on chances to let the consumers speak for the company.”

While Perfetti Van Melle rigorously defends its trademarks including those for Mentos, in the case of the geyser experiments, the company felt it was best to maintain a light touch, according to Dan Marquardt, Mentos marketing director for Perfetti Van Melle USA.

“The publicity has helped contemporize the brand and reintroduced it to a new generation of young consumers who are now Mentos fans,” he says.

The Mentos geyser videos have been viewed more than 25 million times since 2006, according to Marquardt. There are more than 10,000 user-generated videos on YouTube uploaded by Mentos fans from around the world that show what happens when Mentos are dropped into Diet Coke, he says.

Today, when you visit Mentos’ homepage, you’ll find links to the Diet Coke and Mentos video experiments, and even instructions for creating your own geyser. It’s clear that this is a company that was able to tap into the energy created by a new, creative consumer.

“Mentos has always been positioned as a fun brand that doesn’t take itself too seriously, and this activity was a perfect fit,” Marquardt says. “The craze was driven by consumers actively engaged with our brand rather than by business entities trying to make a profit by using our intellectual property.”



THE CUSTOMER IS ALWAYS RIGHT
 
Whether or not businesses like it, consumers everywhere are changing. No longer content to let others set the tone or define the argument, we are a society that is growing accustomed to the power of the internet and intoxicated by our own need to be heard. This new breed of consumers wants to be a part of the message.

“Ironically, copyright infringement might be a company’s most effective and cheapest advertising tool,” Kirsch says. “Should
Saturday Night Live
sue to stop the free advertising YouTube provides by showing SNL skits to millions of web surfers?”

In the case of Mentos, there was never any question of issuing a take-down request.

“Sometimes by letting go a little brands can build a stronger relationship with consumers,” Marquardt says

The Mentos geyser experiments may have helped explode traditional trademark infringement interpretations, and in many ways it’s more than two silly guys in lab coats. According to Goehler, it is very much a part of an online interactive-driven business philosophy: the consumer is king.

“This example illustrates the strong belief espoused by many that First Amendment protections on the internet should remain very strong to protect, facilitate and encourage creativity and user-generated content in the online space,” he says.

Wolfe says this new kind of dialogue is exciting and worth protecting. “We want to encourage our citizens to create new ideas, to innovate and to build upon shared information,” she says.

According to Wolfe, it’s all about balance. New technology has reduced the entry barriers for the average person to create and capitalize on their intellectual property but at the same time, it has become much easier to steal or infringe upon another’s intellectual property.

“It’s doing something good and doing something bad,” she says. “So the question is, how do you keep the good and protect against the bad?”



IMPLEMENT AN I.P. STRATEGY
 
Some say free-market internet policing favors big business. But Wolfe is philosophical.

“Big business is always going to have the economic advantage,” she says. “There are no laws that are going to change that. That’s all the more reason why small businesses need to be proactive in protecting their intellectual property.”

Wolfe’s advice: Have a very clear intellectual property strategy in place to protect your brand and product. She recommends investing a few hundred dollars for a session with a good intellectual property attorney to establish the priorities and the scope of what might be needed to protect a business’s intellectual property. A budget should be developed that anticipates the types of infringement claims a business may need to pursue or defend against.

Gaunt of Greenebaum Doll & McDonald adds, “A business should employ a mix of technical and legal tools to protect its online content. Technical tools include the use of firewalls, encryption devices, anti-spyware and other technological tools that make it difficult to copy protected content. Legal tools include, but are not limited to, posting clear ‘Terms and Conditions’ provisions on any web sites over which the business has control.”

Mancino says one of the biggest mistakes a company can make today is to neglect to register the copyrights for their important online digital content. The key is to get the copyright registration in place prior to any infringing activities by others. Don’t wait until your competitor’s web site is a virtual copy of your own, which you’ve spent thousands of dollars — and countless hours — perfecting.

“A copyright registration provides the web site owner with such a big stick,” Mancino says. “It’s easy to do and it’s very inexpensive.”

Such a copyright registration — which would cost about $50 per work — would protect not only a web site’s source code, but its look, feel and content. Copyright registrations are also important to protect proprietary digital content: things like music, photographs and artwork. It’s your best bet when seeking statutory damages or reimbursement for attorney fees in an infringement case.

According to Kirsch, it may be the best $50 a business can spend.

Successfully navigating the world of online, digital and interactive intellectual property can be a challenge for businesses of all shapes and sizes.

“There’s no doubt the internet has opened a bigger box of intellectual property issues — some challenges, some real opportunities — all requiring that everyone have a greater awareness of where the lines are drawn, and in many instances, are still being drawn,” Meyer says.

For those willing to spend the time and money to understand the complexities inherent in the concept of an online world, there is much to gain.

“In a global and digital economy, if you have the idea, the drive and the passion, you can start up a business in your basement and turn it into a billion-dollar opportunity,” Wolfe says. ”The key is not only knowing what to do with the great idea, but how to protect it and capitalize on it with enough savvy to stay out of costly lawsuits until you can sell it."

“An inherent tension has always existed between First Amendment freedoms and traditional principles of copyright and trademark law. Now the balance between those concepts is evolving as we deal with these issues in the online world.”
—Dick Goehler, Attorney, Trademark and Copyright Litigation at Frost Brown Todd
 
“There is a whole generation of online users who have the misconception that many infringing activities are immune from enforcement if they occur online.”
—David Mancino, Partner and Co-chair, Intellectual Property Practice, Taft Stettinus & Hollister
“Some companies are still closely guarding their I.P. in keeping with traditional practice. Others are monitoring the creative uses by others and, while still guarding their I.P., are selectively jumping on chances to let the consumers speak for the company.”

The Patent Reform Act: What You Need to Know

Patent reform may not grab your attention, but it should. It’s not just another debate between policymakers in Washington. It’s an issue that has the potential to affect the very heart of businesses across the country.

According to Rep. Steve Chabot (R-Cincinnati), the Patent Reform Act narrowly passed by the House last year and the version now being considered in the Senate could stifle innovation and deter businesses from researching, developing and investing in new ideas.

“The United States is the No. 1 patent system in the world,” says Chabot, a ranking member of the Committee on Small Business. “What has made it No. 1 is its ability to adapt to different business models and inventions — protecting those who invent while at the same time encouraging public dissemination. Although the system is not perfect, Congress should be every careful before making significant changes to a system that has its origins in the Constitution and has worked for more than 200 years.”

According to Kevin Kirsch and David Mancino, attorneys with Taft Stettinius & Hollister in Cincinnati, the strength and enforceability of U.S. patents are being tested and questioned. They say the current and proposed changes to the patent laws are the most significant in our country’s history.

“The patent rules and law reforms are generally viewed as narrowing the strength of many patents, and as an attack on the rising tide of lawsuits brought by patent holding companies against big business,” Kirsch says.

According to Kirsch, some people believe reform is necessary because too many “bad” patents have been issued in the past decade. Others claim the reform measures constitute an overreaction to some limited abuses.

Chabot says though the bills make some positive changes, it’s not enough. “I’m very concerned that the Patent Reform Act as passed by the House, and the version now contemplated by the Senate, do not do enough to give legitimate patent holders the certainty they need to use their inventions to the fullest potential,” he says.
—Jill Meyer, Attorney, Advertising Practice, Frost Brown Todd
 
“Ironically, copyright infringement might be a company’s most effective and cheapest advertising tool. Should Saturday Night Live sue to stop the free advertising YouTube provides by showing SNL skits to millions of web surfers?”
—Kevin Kirsch, Partner, Intellectual Property Litigation, Taft Stettinus & Hollister
Here is what is being proposed:
■ The U.S. patent system would convert from “First to Invent” to “First to File.”

■ The amount of patent damages for infringing activities would be limited.

■ Patent holders would be unable to pursue increased damages based on willful infringement of a patent.

■ The ability for parties to challenge the validity of existing patents in the United States Patent and Trademark Office would be broadened.

■ Patent applicants would be required to submit even more detailed search reports and analysis in addition to their patent applications, further increasing the patent application cost.

The Patent Office has already implemented some changes to the rules for filing patent applications. These changes drastically limit the ability to file multiple patent applications on a single technology, a common aggressive patenting strategy, and limit the number of claims that may be obtained, according to Mancino.

“The new rules will require patent attorneys to put in significantly more time and effort in preparing and filing any initial patent application,” Mancino says.

The proposed patent reform measures have been fiercely debated within the legislature, patent community and business community. Many labor unions have weighed in, urging opposition to the Senate bill, raising concerns about its impact upon workers, according to Kirsch.

As in any debate, there are differing opinions. But all agree on one thing: patent reform will have a significant impact on United States business for years to come.