Infringement and Remedies Learning Objectives After completing this section, you will be able to Discuss the specific requirements for proving copyright infringement. Understand how copyright is affecting a changing music industry. What If Someone Infringes Your Copyright? Before reading this section, please watch the overview video below covering what you can do if your novel, blog post, photograph, or song is used by another without permission, and what the famous “Blurred Lines” copyright trial means to you. Derived from the common law of trespass, infringement of a copyright or any other intellectual property right occurs when a person violates the exclusive rights of its owner. The term gets its meaning from the word “fringe”—implying a boundary that cannot be crossed. As laid out in Sections 106 through 122 of Title 17 of the U.S. Code and subject to certain exclusions, infringement occurs when a person copies, distributes, performs, or displays all or part of a copyrighted work (or in the world of television, conducts a secondary transmission of a cable system without the express consent of the cable system owner). Copyright infringement requires proof of two things. First, it requires proof that the defendant actually copied from the plaintiff’s work. That makes it different than patent infringement, which can take place even if the defendant independently came up with the invention that was patented by the plaintiff. Proof of copying can be obtained either directly, by the defendant admitting the act, or, indirectly, by showing that he had access to the plaintiff’s work, and that there are similarities between the works that make independent creation unlikely. Second, infringement requires proof that the allegedly infringing work is substantially similar to the plaintiff’s work. Derived from Computer Assoc. Int’l v. Altai, Inc. , 982 F.2d 693, 701 (2nd Cir. 1992) Retrieved from homepages.law.asu.edu/~dkarjala/cyberlaw/ComputerAssocsVAltai. The second requirement is there to make clear that not all copying amounts to infringement. For example, copying of a general theme, such as a detective solving a murder mystery, would not be considered infringement. There are two ways to demonstrate the similarity of an allegedly infringing work and the original copyrighted work. “Fragmented literal similarity” may be shown by demonstrating that the infringing work contains specific copied elements of the original work. For example, suppose that one travel writer wrote a guide to Florida that contained a chapter on Key West, and a second writer copied that chapter and included it in their otherwise independently researched and written guide to Florida. In that case, we could point to specific sentences and paragraphs in the two works that were identical, even if other sentences and paragraphs were not. Or, to take another example, in today’s music scene, certain genres of music use pieces or “samples” of previous sound recordings that are then mixed into a new sound recording. Unless the artist doing the sampling licenses the sound recording (and maybe the underlying musical work as well), the sampling could be considered infringing. Copyright Infringement in the Music Industry Take Kanye West, for example. He was recently sued for sampling Sly Johnson’s song “Different Strokes” and using it in a new song called “The Joy” on Kanye’s and Jay-Z’s Watch the Throne Album . The case was settled out of court for an undisclosed amount. The second type of similarity—called comprehensive nonliteral similarity—involves the borrowing of patterns without necessarily borrowing specific elements. In the case of a novel, for example, one author might infringe by copying the plot of another novel, even though he used different words to describe the action taking place. Similarly, a composer of a song might write lyrics and music that closely borrowed patterns from another song, even though he did not use the exact same words and notes. Again, take Kanye West. He was also recently sued by Vincent Peters, a local Chicago artist, not for sampling his music but rather for employing substantially similar concepts and wording in Kanye’s megahit “Stronger.” The judge did not agree, finding that Kanye’s song had actually used concepts and phrasing that were “common ideas” and in the public domain—specifically, Friedrich Nietzsche’s phrase, “That which does not kill us makes us stronger.” Mitchell, D. (2011, November 28). Kanye West Invokes Nietzsche in Copyright Battle . Retrieved from http://tech.fortune.cnn.com/2011/11/28/kanye-west-invokes-nietzsche-in-copyrightbattle/. But by far, the most significant copyright infringement case in recent years concerning music was the March 10, 2015, verdict against Robin Thicke and Pharrell Williams, the performer and primary songwriter-producer of the 2013 pop hit “Blurred Lines.” A federal jury ruled that Thicke and Williams committed copyright infringement by using elements of the 1977 Marvin Gaye classic R&B hit “Got to Give It Up.” The jury awarded Gaye’s family $7.3 million—a very significant penalty—but the Gaye family announced that they will also seek an injunction against further radio and concert performances of the song, which will certainly give them leverage in negotiating future royalties and songwriting credit. The case is significant, even beyond the outsize monetary award, because it challenges the growing practice in contemporary music production of incorporating elements, features, themes, and even the “feel” and “mood” of the work of other artists and genres. Larry Iser, an intellectual property lawyer who has represented artists like Jackson Browne and David Byrne, criticized the verdict. “Although [Marvin] Gaye was the Prince of Soul,” Iser told the New York Times , “he didn’t own a copyright to the genre, and Thicke and Williams’ homage to the feel of Marvin Gaye is not infringing.” Despite the critics, musicians and producers will likely be more cautious in the future. In addition to the “Blurred Lines” case, singers Sam Smith and Tom Petty reached a settlement in 2015 granting songwriting credit and royalties to Petty on Smith’s song “Stay With Me,” which bore some resemblance to Petty’s hit “I Won’t Back Down.” Actual and Statutory Damages As we see in the above case, infringing a copyrighted work can carry very significant penalties. The copyright owner has the right to recoup damages and lost profits from infringement. There are two kinds of damages—actual and statutory. The copyright owner may only receive one or the other form of damages. Derived from 17 U.S.C., § 504 Retrieved from http://www.law.cornell.edu/uscode/text/17/504. The Recording Industry Association of America (RIAA), for example, was awarded major damages from Jammie Thomas in 2009 for her willful statutory infringement of 24 copyrighted songs that she had uploaded to the music sharing site Kazaa. Because the infringement was found to be willful, the court in its discretion raised the damages maximum from its usual $30,000 per act of infringement to $80,000 per infringement. That $80,000, times 24 songs that were infringed, resulted in a damage award of $1,920,000 Kravets, D. (2009, June 18). Jury in RIAA Trial Slaps 2 Million Fine on Jammie Thomas . Retrieved from http://www.wired.com/threatlevel/2009/06/riaajury-slaps-2-million-fine-on-jammie-thomas/ After several trials and appeals, however, the damages assessed against Thomas were reduced to $222,000. Take note, infringers—the risks can be very great, indeed. Only the owners of registered copyrights may file for statutory damages. That’s another reason why it’s a good idea to register your copyright. Sometimes, though, the copyright owner’s most important remedy for infringement will be an injunction that forces the infringer to stop illegal actions that cause continuing damage to their rights. The grounds for getting that injunction, however, have tightened in recent years and now require the plaintiff, or copyright owner, to provide substantial evidence of infringement that cannot be repaired without an injunction. As the court of appeals for the ninth circuit put it in 2011: “Our long-standing precedent finding a plaintiff entitled to a presumption of irreparable harm on a showing of likelihood of success on the merits in a copyright infringement case, as stated in Elvis Presley v. Passport Video and relied on by the district court, has been effectively overruled. In other words, ‘Elvis has left the building.’ Accordingly, we hold that even in a copyright infringement case, the plaintiff must demonstrate a likelihood of irreparable harm as a prerequisite for injunctive relief, whether preliminary or permanent.” http://scholar.google.com/scholar_case?case=7153487234107458840&hl=en&as_sdt=2&as_vis=1&oi=scholarr Individuals who infringe copyrighted material face not only restitution for damages and lost profits and impoundment and destruction of materials, but strict criminal penalties as well. To be subject to criminal penalties, the infringer must have willfully infringed the copyright. For those doing so for commercial advantage or private financial gain, the sentence may be up to five years for a first offense, and ten years for a second offense. Derived from 18 U.S.C., § 2319 Retrieved from http://www.law.cornell.edu/uscode/text/18/2319 We have focused solely on the federal penalties for infringement. That’s because, with the passage of the 1976 Copyright Act, federal copyright law now preempts state laws. State laws governing breach of contract, violations of trust, trespassing, conversion, invasion of privacy, defamation, and deceptive trade practices still exist, however, and these may also be employed by a copyright owner seeking redress for other harms caused by infringing activity.

Business


The Fair Use Defense Learning Objectives After completing this section, you will be able to Understand the nature of fair use and how it serves the public interest. Appreciate the continuing debate over just vagaries in what is considered fair use. Is It Fair Use or Infringement? Before reading this section, please watch the overview video below covering Fair Use is an enigma—indeed, no one even knows how many words of a copyrighted work one can legally copy as “fair use.” Here, at last, is everything you need to know about Fair Use. Title 17 of the United States Code allows the copying and use of copyrighted material for specific purposes —including criticism, comment, news reporting, teaching (involving multiple copies for classroom use), scholarship, or research. The statute also describes four factors that draw on the precepts first discussed by Supreme Court Justice Story 150 years earlier to determine if the use of a copyrighted work is infringement or “fair use.” 17 U.S.C., § 107 Retrieved from http://www.law.cornell.edu/uscode/text/17/107. Based on these factors, which are not meant to be all inclusive, a judge must determine if the use of copyrighted material is within the bounds of fair use. What makes that determination sometimes difficult is the challenge of weighing a variety of purposes—was the work used for criticism, comment, news reporting, teaching, scholarship, or research?—in concert with various factors (such as how much was used, and whether it was for commercial gain or not). In the crucial 1973 Supreme Court case of Williams & Wilkins v. United States , for example, the divided justices affirmed a lower U.S. Court of Claims decision that the benefits of freely distributing photocopies of medical journal articles to nonprofit government research libraries outweighed the reduction of potential revenue to the publisher of those journals. Williams & Wilkins v. United States , 487 F.2d 1345 (1973) Retrieved from http://fairuse.stanford.edu/primary_materials/cases/c487F2d1345.html. Parody One of the purposes for which copyrighted work may at times be freely used is parody. As a federal court ruled in one 1993 case: “The heart of any parodist’s claim to quote from existing material is the use of some elements of a prior author’s composition to create a new one that, at least in part, comments on that author’s work.” Campbell v. Acuff-Rose Music , 510 U.S. 569 (1994) Retrieved from http://www.law.cornell.edu/supct/html/92-1292.ZS.html. And the greater the “transformative” nature of the new work, the less likely it infringes the original work. A case involving the Fox TV show Family Guy illustrates the point. In Bourne Co. v. Fox , the court found that a Family Guy episode in which the character Peter Griffin sang a revised version of the song “When You Wish Upon a Star” called “I Need a Jew” was a parody and thereby a fair use of the original material. The outrageous if not offensive visuals and words employed in the Family Guy parody were so substantially different in character and form from the original use of the song in the Walt Disney movie Pinocchio that no one could ever confuse the two or fail to realize that Fox’s use was a parody. Transformative or Theft? A very interesting case involving fair use was decided by the U.S. Court of Appeals for the Second Circuit on April 25, 2013. It overturned a 2011 district court ruling that artist Richard Prince had acted illegally by using another artist’s photographs to create a series of collages and paintings. Such borrowing of another’s work is considered fair use only if it is “transformative” in some substantial way, and the district judge held that it was not because the collages did not comment on the original work explicitly. The federal circuit disagreed, holding that explicit references to the original work are not required so long as the required “transformation” is manifested by “an entirely different aesthetic” in the secondary work. According to the appeals court: “Where [the original artist’s] serene and deliberately composed portrait and landscape photographs depict the natural beauty of the Rastafarians and their surrounding environs, Prince’s crude and jarring works are hectic and provocative.” Fair Use for Public Good The fair use clause also allows libraries and archives that are open to the public, or researchers in a specialized field, to use copyrighted materials for the purpose of preservation and security of the material or as a deposit for research. These libraries and archives can keep up to three copies of a copyrighted work, but a copyright notice must be included on each copy. Libraries and archives will not be held liable for “unsupervised use of reproducing equipment located on its premises” if there is a notice on the equipment that a copy may be subject to copyright law. 17 U.S.C. § 108 Retrieved from http://www.law.cornell.edu/uscode/text/17/108. Any use of photocopied copyrighted materials must be specifically for private study, scholarship, or research, and any other use constitutes infringement. Photocopying copyrighted materials in a business setting is also infringing if used outside of research. Academic institutions also are protected by specific rules regarding fair use, pursuant to an agreement between representatives of the publishing industry and of academic institutions negotiated in the 1970s. The photocopying of a copyrighted work for the classroom is permitted if it is limited to: A chapter from a book An article from a periodical or newspaper A short story, short essay, or short poem, whether or not from a collective work A chart, graph, diagram, drawing, cartoon, or picture from a book, periodical, or newspaper. Library of Congress. (2009, November). Reproduction of Copyrighted Works By Educators And Librarians. Retrieved from http://www.copyright.gov/circs/circ21.pdf. But even in the above academic uses, limitations apply regarding the size of both the audience and the content to be copied. For example, teachers may photocopy works only for students enrolled in the class. The photocopied material must also pass brevity, spontaneity, and other tests. “Brevity” means no more than 250 words of a poem, 2,500 words of a prose work, or 10 percent or 1,000 words of an excerpt of a prose work may be used. In addition, the decision to photocopy the material must be spontaneous; the photocopied material must be used only for one course and one class term; no more than one poem, article, story, or essay—and no more than two excerpts—may be copied from the same author; and such bulk photocopying must be limited to nine instances per class during one term. Derived from The President and Fellows of Harvard College. (2008). Copyright Law Guidelines Retrieved from http://hfs.fas.harvard.edu/copyright.html. Verbatim from source: "The President greets the cast and crew of 'Hamilton' after seeing the play with his daughters at the Richard Rodgers Theatre in New York City." (Official White House Photo by Pete Souza) (credit: Pete Souza via Wikimedia Commons / Public Domain) Finally, copyrighted works may not be photocopied and used in educational settings as a substitute for required texts, photocopies may not be mandatory, and you cannot charge for the photocopied work (although you may recoup the costs of photocopying). Copyright Law Revision (House Report No. 94-1476) Retrieved from http://uscode.house.gov/download/pls/17C1.txt.

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Changes in Copyright Law Learning Objectives After completing this section, you will be able to See how copyright law has continually adapted to technological change. Note how digital entertainment industries in particular have been affected by changes in copyright law. Throughout the more than 226-year history of copyright in the United States, technological innovation and changes in consumer behavior have continuously forced Congress and the courts to embrace new forms of copyrighted media and new ways of distributing and consuming it. The Copyright Act of 1976 As noted earlier, the nineteenth century saw copyright expand to include a variety of new technologies, such as mechanical reproductions of musical compositions (player pianos and phonographs), photography, and eventually motion pictures. But those changes were small compared with the enormous advances of the twentieth century. The invention of radio, broadcast television, cable television, the video cassette recorder (VCR), personal computers, computer software and video games, digital audio recorders, compact discs, the digital video recorder (DVR), the Internet, iTunes media players, and now the streaming of music and movies all offered consumers new forms of creative content—and offered creators a new means of reproducing and distributing it. Each of these required an adjustment in U.S. copyright law. Take the advent of cable television in the 1960s and 1970s. Early court cases like Fortnightly Corp. v. United Artists in 1968 and Teleprompter v. CBS in 1974 held that the rebroadcast of broadcast television shows over cable television systems did not constitute a “performance” and therefore did not infringe the copyright in those shows. The Copyright Act of 1976 —the most significant revision of copyright law since 1909—remedied this failure to see cable broadcasts as performances and extended copyright protection to works performed over cable TV. A television studio with a greenscreen setup. (credit: photograph by Jorge Franganillo via flikr / CC BY 2.0) The Copyright Act of 1976 made several other major changes to the law. It also codified “fair use” into the statutes rather than simply the common law, granted statutory copyright protection as soon as a work was reduced to a concrete form rather than only when registered, and began to bring the United States into compliance with international copyright law rather than continue to stand apart from it. Arthur R. Millerand Michael H. Davis, Intellectual Property: Patents, Trademarks, and Copyright In a Nutshell . (5th ed., p. 25). St. Paul MN: West Publishing Co., 2007. The Computer Software Rental Act of 1990 The next major copyright issue arose with the emergence of personal computer software in the 1980s. Software companies and independent developers lobbied Congress to curtail the illegal copying of copyrighted software. As a result, the Computer Software Rental Act of 1990 was passed, prohibiting the unauthorized rental, lease, or lending of a computer program for commercial gain. Individuals, however, could still make personal copies for their own use, and libraries were permitted to lend software. Library of Congress. (2003). The Computer Software Rental Amendments Act of 1990: The Nonprofit Library Lending Exemption to the “Rental Right” . Retrieved from http://www.copyright.gov/reports/software_ren.html The hope was that this would curb the rampant software piracy then costing U.S. firms roughly $1 billion per year in lost sales and rentals. The law probably did slow piracy inside the United States. But by 2010, software piracy worldwide had grown into a $10 billion a year business. The Audio Home Recording Act of 1992 Hoping to prevent similar piracy in the emerging digital audio field, the Audio Home Recording Act of 1992 amended copyright law to require manufacturers and importers of digital audio recording devices to install technology to prevent the illegal copying of copyrighted music. It also mandated that royalties be paid to copyright owners for every device sold. Pirate Bay is one site known for dir ecting users to unauthorized pirated copies of songs, movies, and other works. Despite many attempts to take down and/or block the site, pr oxies still spring up. (credit: The Pirate Bay via Wikimedia Commons / Copyrighted free use) When it came to performance rights—one of the six exclusive rights of copyright owners—the last 150 years have witnessed major changes in the way musical performances are distributed and consumed. The American Society of Composers, Authors and Publishers (ASCAP) was formed in 1914 to develop a system whereby royalties could be obtained for composers whose songs were performed live—and later on, over the newly invented technology of radio. Today, 435,000 U.S. composers, songwriters, lyricists, and music publishers rely upon ASCAP to secure royalties for their work performed over TV, CD, and every new media that has come after radio. The other three performing rights organizations are SESAC, formed in 1930; Broadcast Music, Inc. (BMI), formed in 1939; and SoundExchange, which in 2007 was granted the sole right by the Copyright Royalty Board to represent performers whose music airs on satellite radio (such as SIRIUS XM), Internet radio (like Pandora), cable TV music channels, and similar platforms for streaming sound recordings. The Recording Industry of America Association (RIAA), formed in 1952, represents record labels and music distributors and has played an important role in ensuring that their rights are respected even as new technologies for distributing recorded music have emerged. The RIAA lobbied Congress to enact the No Electronic Theft Act of 1997 , for example, which made it a criminal offense to reproduce or distribute music by electronic means (i.e., over the Internet). Nonetheless, by 2002, some 3.6 billion songs a month were still being downloaded illegally, thanks to music sharing sites like Napster, which had been launched in 1999 and at its peak facilitated the downloading (much of it illegal) of 80 million songs. Indeed, many college dormitory networks became overloaded with MP3 musical file transfers. At the time, many Internet pundits, enthralled with the misquoted notion that “information wants to be free” online, insisted that downloading technology made it impossible for musicians and their labels to enforce their copyrights on the Internet. For its part, Napster claimed that they should not be held responsible for any illegal downloading committed by users. But the RIAA and musicians brought suits for contributory infringement. In court cases like A & M Records. v. Napster and Metallica v. Napster , judges and juries repeatedly found Napster guilty of infringement and it was forced into bankruptcy in 2002. Music piracy still exists, of course. But in place of Napster, music consumers now have legal music download sites such as Apple’s iTunes music store that sell digital music with permission from, and appropriate royalties to, their copyright owners. Surveys show that most consumers don’t really want to steal music. They just want convenient, low-cost online access to it. Most consumers also appear to recognize that if music creators cannot make a living from their work, they won’t be able to keep making music. Meanwhile, digital rights management (DRM) technologies had been developed that have the potential to limit the piracy of copyrighted content. Companies in various content industries lobbied Congress to pass the Digital Millennium Copyright Act of 1998 (DMCA) . This law made it a crime to disseminate technology or services that could circumvent DRM measures used to control access to copyrighted movies, music, and books. It also increased penalties for copyright infringement on the Internet. But in an appropriate concession to online services that merely hosted user content, the DMCA limited the liability of online services for copyright infringement committed by their users, so long as they acted to remove the offending content once informed of it. Viacom vs. YouTube In 2007, however, Viacom filed suit against YouTube and its corporate parent Google for copyright infringement, claiming that the popular video-sharing site was committing “massive intentional copyright infringement” for not taking sufficient steps to prevent or remove some 160,000 unauthorized clips of Viacom’s entertainment programming posted by users. Google argued that the DMCA’s “safe harbor” provisions shielded them from liability for the actions of its users, and a district court judge ruled in favor of Google in 2010. But in April of 2012, a court of appeals vacated that decision and ruled that Viacom had presented enough evidence to warrant a trial. Viacom was seeking more than $1 billion in damages from YouTube, but in March of 2014, the parties quietly settled the seven-year-old case. A key factor in spurring the settlement is that Google has in the interim addressed the concerns of content owners like Viacom by creating a system that allows them to track their content when posted on YouTube and then request it be taken down or run with ads. Extending Copyrights The same year that saw passage of the DMCA also witnessed the passage of the Sonny Bono Copyright Term Extension Act , which added an additional 20 years to the term of copyright—extending it for most works to the life of the author plus 70 years after the author is deceased. Critics called it the “Mickey Mouse Protection Act” because it effectively extended the copyrights of many of the characters and content of the Walt Disney Company, which lobbied strongly for the bill. They argued that copyright law was historically designed to serve a public purpose and ought to defer to the public interest, as it has throughout U.S. history. As the New York Times put it: “When Senator Hatch laments that George Gershwin’s ‘Rhapsody in Blue’ will soon ‘fall into the public domain,’ he makes the public domain sound like a dark abyss where songs go, never to be heard again. In fact, when a work enters the public domain it means the public can afford to use it freely, to give it new currency.” Even a staunch defender of intellectual property rights like Professor Richard Epstein of the NYU School of Law—he was rated one of the top legal thinkers of modern times by the journal Legal Affairs —believes that the copyright term of life- plus-70s years is too long. “My own view is that no commercial property right should ever be tied to life, and the extra 70 years is far too long,” he argues. “It has the potential to create an anti-commons that deprives the public of its rights to freely access cultural works. Copyrighted works should pass into the public domain after 28 years, which was the approach of the Founders.” The debate over the Copyright Term Extension Act, not surprisingly, continues. In the international sphere, meanwhile, the late twentieth century also saw the United States finally agree to the Berne Convention in 1988, joining the following year. The purpose of the convention is to ensure fair and reciprocal copyright protection for member nations. Although it did not create an international copyright per se, it did require the United States to amend its copyright law to comply with certain Berne provisions, such as a ban on registration as a condition of copyright. But overall, the convention facilitated the reciprocal cross-border protection of creative works while leaving most details of each nation’s copyright laws to member states. One proposed bill that didn’t make it into law was the Consumer Broadband and Digital Television Promotion Act of 2002 . It attempted to deal with continuing piracy of copyrighted works by requiring every medium and every device for the consumption of copyrighted works to implement digital rights management (DRM) technology. But the bill was considered too draconian—too 1984 , if you will—and failed to pass. To be sure, many companies have voluntarily implemented elements of DRM technology, to the chagrin of many consumers. Some electronic book readers (e-books) limit the ability of users to read books only on those devices, preventing interoperability between Kindle and iPad e-book readers, for example. Some music labels install software on their CDs to prevent copying of the music. And some Blu-ray and DVD movie players do not allow for the creation of transformative copies. In fact, iTunes, a very popular way to manage music and other media, used to employ a DRM system that limited the transfer of songs to five authorized computers. Groups like the Free Software Foundation argue that “The motive for DRM schemes is to increase profits for those who impose them, but their profit is a side issue when millions of people’s freedom is at stake.” But their argument is undercut by the simple reality that if content creators can’t make a living from it, most will stop creating and take day jobs to pay the rent. This has always been the copyright bargain in America—protection for the rights of creators but only so long as it serves the public interest. And enabling creators to keep creating is clearly in the public interest. E-Books A more legitimate concern regarding DRM is that, whatever its perceived benefits for publishers and distributors, it is holding back innovation and consumer rights in digital content industries. This is especially evident in the burgeoning e-book market, which exploded from barely 10 percent of U.S. book sales in 2011 to 30 percent of all book sales by 2013. But a growing number of e-book publishers have now concluded that unless they meet consumer demands to ease these DRM anti-piracy provisions, further growth could be constrained. According to Microsoft’s Chief Intellectual Property Strategy Counsel Tom Rubin, a leading voice on this issue, that’s because DRM makes the e-book reader experience much less enjoyable and useful than that for printed books. According to Rubin: “When I buy a printed book, I can choose where to buy it—whether from a small neighborhood bookstore, a large chain bookstore, a grocery store, drug store, other retail establishment, or an online retailer. I can even buy books at a steep discount by going to second-hand stores, garage sales, and flea markets. "You can't do that with an ebook. “Then after I buy a print book and bring it home, I can write notes in the margin, share those passages or even the whole book with friends and colleagues, and even photocopy a few pages for my book club. “You can’t do that with an ebook.” Rubin says the fault here lies not in the technology, which already exists to enable these capabilities in e-books and also augment them with rich audio, video, and social media. Rather, it lies in the business arrangements underlying the publication and distribution of e-books. The e-book you buy, for example, is often available from only one source—and usually only readable on one proprietary device. You can’t access it from any device you want, nor can you use the e-reader app of your choice. This balkanization of the market diverts resources from enhancing the user experience into defending the turf of incumbent players. But it’s not just the balkanization of the market that hinders competition and innovation. Some publishers now believe that the digital rights management (DRM) controls they employ to prevent piracy are actually preventing many consumers from fully embracing e-books. After all, as many book buyers have angrily noted, you can’t even download the digital version of a print book that you’ve already purchased unless you pay a second time. Publishing DRM Free "The consumer ebook market is an emerging and changing one, and we want to offer customers as many choices as possible." -Elsevier spokeswoman Suzanne BeDell In response to consumer complaints, some publishers have dispensed with DRM controls. Harry Potter author J. K. Rowling has launched her own website, Pottermore.com , to sell her e-books DRM free, enabling readers to enjoy them on any device they choose. Interestingly, the piracy of Harry Potter books has declined by 25 percent since DRM was dropped in 2012. Also in 2012, Tor Books, a major science fiction publisher owned by MacMillan, went DRM free as well, with no apparent harm to its sales—and to the delight of its customers. Then there’s the big U.S. tech publisher O’Reilly, which has been DRM free since its inception. O’Reilly, which has one of the most loyal customer bases in publishing, signed a deal on April 16 of 2013 with Elsevier, the world’s largest publisher of scientific and health information, to distribute more than 1,200 titles DRM free. (It also distributes all Microsoft e-books DRM free.) “The consumer ebook market is an emerging and changing one, and we want to offer customers as many choices as possible,” explained Elsevier spokeswoman Suzanne BeDell. And finally, although the prestigious Harvard Business Press still sells its books on Amazon with DRM restrictions, it recently started selling books on its own site DRM free. These early publisher moves to dispense with DRM restrictions parallel what happened in the digital music industry a decade ago. For the first few years after the launch of the iTunes music store in 2003, piracy-wary music publishers required Apple to sell its songs with DRM controls that limited the kind and number of devices consumers could play them on. But on February 6, 2007, Apple CEO Steve Jobs wrote an open letter to the industry urging music publishers to let iTunes sell music DRM free: “DRMs haven’t worked, and may never work, to halt music piracy. If such requirements were removed, the music industry might experience an influx of new companies willing to invest in new [music distribution systems].” This, said Jobs, would obviously be “positive for the music companies.” And sure enough, once publishers agreed to license digital music DRM free later that same year, the market exploded. In 2013, iTunes announced the sale of its twenty-fifth billionth song! Ultimately, argues Rubin: “Success [for ebook publishers] can only come with the satisfaction of legitimate consumer needs—most especially the need for an ebook experience that is every bit as good or better than that of their beloved printed books.” Recent Copyright Laws The debate over DRM in e-books is likely to be center stage in the copyright debate in coming years. In the meantime, it’s worth mentioning three other copyright-related laws that were passed during the last decade or so. One, the Technology, Education, and Copyright Harmonization (TEACH) Act of 2002 enabled educators to use certain copyrighted performances and displays for educational purposes. Technology, Education, and Copyright Harmonization (TEACH) Act of 2002, Div. C, Tit. III, Subtitle C of the 21st Century Department of Justice Appropriations Authorization Act, Pub. L. No. 107-273, 116 Stat. 1758, 1910 (Nov. 2, 2002) Retrieved from http://thomas.loc.gov/cgi-bin/query/z?c107:S.487.ES. The bill was focused on the fast-growing arena of distance education, whose students number 12 million and are growing rapidly. Also that year, the Small Webcaster Settlement Act of 2002 eased royalty burdens for small webcasters who don’t have the resources of the major content distributors. Derived from Small Webcaster Settlement Act of 2002 (SWSA), Pub. L. No. 107-321, 116 Stat. 2780 (Dec. 4, 2002) Retrieved from http://thomas.loc.gov/cgi-bin/query/z?c107:H.R.5469.ENR. Finally, the Family Entertainment and Copyright Act of 2005 mandated fines and possible imprisonment for the unauthorized recording of motion pictures in theaters. It also enabled consumers to use new technologies to screen out or skip over some 14 different categories of objectionable content in movies played on DVD players and other devices. Family Entertainment and Copyright Act of 2005, Pub. L. No. 109-9, 119 Stat. 218 (Apr. 27, 2005), codified at various sections of Titles 17 and 18 U.S. Code. Retrieved from http://www.copyright.gov/legislation/pl109-9.html.

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New Technology Challenges to Copyright (credit: photograph by Ivailo Djilianov via flikr / CC BY 2.0) Learning Objectives After completing this section, you will be able to See how a changing music industry has been affected by copyright. Appreciate the challenges that continued technology advances may pose for copyright in the future. One of the newest technology challenges facing copyright law concerns royalty rates for streaming music online. As it stands, royalty rates are much lower for music played over satellite and cable radio outlets like Sirius XM than they are for music streaming services like Pandora. Music Streaming Rates are set by the federal Copyright Royalty Board (CRB), a three-judge panel, but currently they apply a different rate for streaming music than they do for satellite and cable music. Sirius pays about 8 percent of its revenue to record companies and artists. Pandora, however, claims it must pay a rate per song streamed that amounts to 44 percent of revenue. So it pushed for the introduction in September 2012 of the Internet Radio Fairness Act, which would make the rates for Internet radio companies the same as those for satellite and cable radio. This bill was opposed not only by many musical artists and their organizations, but by many copyright experts as well. In November of 2012, a who’s who of musicians and singers—including stars from Motown, rock and roll, country, rap, and jazz—published an open letter in Billboard magazine opposing Pandora’s plan to cut artists’ pay and make more money, as they put it in the letter, “on the backs of hard working musicians and singers.” In November of 2013, Pandora quietly abandoned efforts to seek legislation that would help reduce the royalties paid to rights holders. Instead of pursuing legislation, Pandora said it will focus its efforts on lobbying the CRB. In early December 2015, the music industry waited breathlessly for the CRB’s decision on royalty rates. Pandora had petitioned the CRB to reduce the current statutory rate of 14 cents per 100 songs to 11 cents per 100 songs starting in 2016. But music labels and artists represented by a royalty collection organization called SoundExchange wanted the statutory royalty rate raised to 25 cents per 100 songs—an 80 percent increase—and then by 1 cent every year after that until 2020. Collectively, music streaming services have a combined listenership of 100 million people and are the fastest-growing revenue source for artists and music labels. On December 16, 2015, in a victory for record labels and artists, the CRB ruled that online radio firms will have to pay 17 cents per 100 plays of songs through 2020. TV Streaming Another new technology challenge to copyright involved television broadcasters and an upstart television service called Aereo that at one point rented dime-sized antennas for $8 per month that act like long-range rabbit ears to people with digital video recorders, enabling them to watch and record over-the-air network channels like NBC or Fox without paying the much-larger fees for cable or satellite service. TV broadcasters argued that Aereo violated their copyrights by rebroadcasting their TV signals. Aereo, however, claimed that it was the subscribers who were doing the transmitting, and that Aereo merely rented a tool that enabled people to watch a private performance—much like they do when they tape a TV show and watch it in their living room. The case, which had the TV and technology industries on edge, was decided in their favor on June 25, 2014, by the U.S. Supreme Court, which ruled that Aereo had infringed the rights of copyright holders. Five months later, Aereo declared bankruptcy.

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Alternative Forms of Copyright (credit: Kristina Alexanderson via flikr / CC BY 2.0) Learning Objectives After completing this section, you will be able to Understand how alternative forms of copyright are emerging in today’s increasingly digital ecosystem. Up to now, we have focused on traditional copyright situations in which an author usually pursues some sort of monetary gain in exchange for the use of their creative work as well as situations in which the author also wants to prevent any alteration of their work. But what if an author simply wants to get their work out before the broadest possible readership and monetary gain is not an issue? What if an author would welcome others adding to the original work? In these cases, there are new kinds of copyright licenses that may be employed by authors. Creative Commons The development of the Creative Commons represents a voluntary private sector alternative to traditional copyright that coordinates the creation and consumption of content among a wide variety of individuals and institutions—all without a hint of government intervention. In doing so, Creative Commons captures a whole section of the market for which broad dissemination of content and not financial gain is key, which is something that could not be done as effectively by either traditional copyright or the public domain. The Creative Commons License is currently available in six flavors: All of these licenses require the work to be copyrighted because the Creative Commons license is based on copyright. Although Creative Commons licenses can provide authors with added opportunities to have their work distributed and used, these licenses do not allow authors to limit any of the rights otherwise available under copyright law, such as fair use. Creative Commons licenses also cannot be revoked, which means that if copies of your work are distributed under a Creative Commons license, they will always be distributed that way. If, for example, you distribute your amazing new video under a Creative Commons license and it generates five million page views on YouTube—and then 20 th Century Fox offers you a seven-figure deal for exclusive rights to distribute your video—you will not be able to prevent everyone on the planet from continuing to distribute your video for free on the Internet. Open Access Another alternative copyright approach is called open access, founded by the Budapest Open Access Initiative in 2002. Open access encourages scholars to provide the fruits of their research online without expectation of payment. Chan, L., Cuplinskas, D., Eisen, M., Friend, F., Genova, Y., Guedon, J., Hagemann, M., Harnad, S., Johnson R., Kupryte, R., Manna, M., Rev I., Segbert, M., Souza, S., Suber, P., & Velterop J. (2002, February 24). Budapest Open Access Initiative . Retrieved from http://www.soros.org/openaccess/read. The aim here is to open up scholarly research far more widely than is currently the case, but open access adherents face a key challenge in the fact that many scholarly articles are published in expensive journals as “works made for hire.” This means that the rights belong to the journals, not the authors. But open access supporters are working with publishers to try to overcome this limitation and create more opportunities for scholarly research to be made more widely accessible at lower cost. (credit: art designer at PLoS, modified by Wikipedia users Nina, Beao, and JakobVoss via Wikimedia Commons / CC0) Finally, open source software licensing also offers an alternative to traditional copyright. An open source license for computer software allows the source code to be used, modified, and/or shared under certain defined terms and conditions set by the Open Source Initiative, an educational, advocacy, and stewardship organization formed in 1998. An open source license allows end users to modify the source code for their own purposes. Open source licensed software is mostly available free of charge, though this does not always have to be the case.

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Copyright in a Changing World Learning Objectives After completing this section, you will be able to Understand how copyright law is showing signs of strain today. Realize that it may very well need to adapt to an increasingly mobile world. Comprehensive copyright reform may soon be on the horizon. On March 20, 2013, Register of Copyrights at the United States Copyright Office Maria A. Pallante testified before the House Judiciary Committee that the time had come for a comprehensive review and updating of the Copyright Act. According to Pallante: "The law is showing the strain of age and requires your attention. [People] increasingly are accessing content on mobile devices and fewer and fewer of them will need or desire the physical copies that were so central to the 19 th and 20 th century copyright laws." The list of issues requiring attention is long, involving everything from copyright term and digital rights management restrictions on digital content to the legality of developing secondary resale markets for digital content as exist with traditional printed content. The debates may be contentious, as they always are when intellectual property rights are involved. But U.S. copyright law has throughout our history demonstrated a remarkable ability to adapt to new economic, social, and technological realities, and there is no reason to doubt that it will continue to do so.

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Introduction (credit: modification of work “Close-up of TESLA trademark sign on a car” by Ivan Radic/flikr.com, CC BY 2.0)

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Core Concepts Learning Objectives After completing this section, you will be able to Understand trademarks and their properties. Identify differences between trademarks and other intellectual property rights. A trademark is an intellectual property right granted by a government to an individual, business, or legal entity that creates and uses a distinctive word, name, symbol, or device to distinguish its products or services from those from any other entity in the marketplace. The original purpose of a trademark was to indicate the origin of goods and services. Trademarks thus protected the public by preventing mistakes, confusion, or deception by those who would “palm off” their goods as those of another. But it also served to protect the market and reputation (or goodwill) of the producers of goods. As modern markets evolved, trademarks also developed into guarantees of quality as well as potent marketing and advertising devices. Trademarks as Branding Consider, for example, the role that Nike’s “Swoosh” logo plays in its $106 billion shoe, equipment, and apparel business. In 1971, Nike founder Phil Knight paid graphic design student Carolyn Davidson a mere $35 to design the “Swoosh” logo for the fledgling new company. According to the Portland Oregonian newspaper, when Knight saw her design, he reportedly told her, “I don’t love it, but maybe it will grow on me.” Nike attorneys nonetheless registered the logo with the U.S. Patent and Trademark Office (USPTO) on June 18, 1971. Allen Brettman, “ Creator of Nike’s Famed Swoosh Remembers Its Conception 40 Years Later ,” the Oregonian, June 15, 2011. Today, this one logo is estimated to be worth as much as $20 billion, and is recognized around the world as a symbol of Nike’s quality workmanship and design. Indeed, its vital role in protecting Nike’s market share and reputation explains why the company so strenuously protects its trademark rights from being infringed by counterfeiters. As for design student Carolyn Davidson, Phil Knight gave her Nike stock in 1983 that is today worth more than $850,000. Trademarks vs. Other Intellectual Property Rights Trademarks share with other intellectual property rights the power to encourage and reward creative enterprise. Trademarks also share with patent rights and copyrights the public policy goal of marshaling the benefits of creative endeavor—in this case, the distinctive branding of one’s products and services from those of others—to the public good. They do this by protecting the consumer from deception and encouraging sellers to provide quality products. But trademarks are different from other intellectual property rights in three key respects. In the first place, the legal foundation for U.S. trademark law comes not from rights expressly enumerated in the Constitution, as is the case with patent rights and copyrights. Rather, it lies in the Commerce Clause of the Constitution, which gives Congress the authority to regulate interstate commerce and enact whatever necessary and proper legislation is required to do that. Trademarks are also different from other intellectual property rights in that they are not limited in duration. Patents and copyright are granted only for limited periods of time because society benefits by putting an invention or literary work into the public domain once the inventor or artistic creator has recouped the costs of innovation and been rewarded for the pioneering endeavor. Trademarks, however, never hinder the sales of other products or services, so they are granted in perpetuity so long as they are not abandoned by the trademark owner. Trademarks Mean Business Finally, trademarks exist only in conjunction with commercial activity. An inventor may receive a patent for a new invention and never employ or “practice” that invention in a business or research endeavor. Similarly, an author can receive a copyright for an original literary or artistic work and yet never publish, display, or sell it. A trademark, however, cannot exist by itself, apart from commercial activity. Thus a trademark cannot be obtained by mere adoption. It can only be acquired through commercial use or in anticipation thereof—i.e., through the sale of goods and services.

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Early Trademark Systems (credit: Wikimedia Commons / Public Domain) Learning Objectives After completing this section, you will be able to Discuss the origins of trademarks. Analyze examples of early forms of trademarks. Bronze Age Origins Scholars of antiquity give Early Bronze Age potters the credit for creating the world’s first trademarks by imprinting their works with distinctive markings. We assume that these marks were meant to indicate the origin of a particular work or the identity of its craftsman, but the historical record is not conclusive on this point. But an examination of the potters’ seals found on Corinthian artifacts dating to 2000 BC suggests this is a reasonable supposition. Trade and commerce between the tribes and early civilizations of that era were expanding rapidly, and in order to be mutually beneficial, trade requires a certain amount of trust in the provenance and quality of goods. These early potters’ trademarks seemed to have served that purpose by distinguishing the goods of quality craftsmen from those of unknown or uncertain sources. Triangular dagger with solid handle from the Early Bronze Age, a period with some of the earliest examples of trademarks. (credit: Wikimedia Commons / Public Domain) Trademarks have always been inextricably bound up with commerce. And as commerce grew and developed over the centuries, so did the use of trademarks. Marks have been found, for example, on works ranging from Egyptian pots to the swords of Roman blacksmiths. But it was in the medieval period, with the emergence of powerful craft guilds, that trademark usage really expanded. Their marks identified a work as being made by a particular guild or member of that guild, and therefore continued the long tradition of identifying the origin of goods. But medieval trademarks also served other functions. They became a means by which guilds could control the quality of work of fellow guild members and, because of a trademark’s association with quality, ultimately, a source of competitive advantage in the market. Arthur R. Miller and Michael H. Davis, Intellectual Property: Patents, Trademarks, and Copyright in a Nutshell . (5th ed., p. 25). St. Paul MN: West Publishing Co., 2007. Trademarks thus began to acquire something akin to the existential “moral rights” found in later copyright statutes—i.e., the right of a creator to defend the quality, originality, and “personality” of their work. Trademark use in medieval times also acquired a public interest function. As Arthur R. Miller and Michael H. Davis note in Intellectual Property: Patents, Trademarks, and Copyright in a Nutshell , “Statutes dating back as early as the thirteenth century show that [trademark] was eventually recognized as having social consequence. These statutes were meant to protect the public by preventing the sale of unidentified goods whose quality could not be ascertained.” One notable trademark from the time was that of Löwenbräu Brewery, which claims to have used its lion mark since its founding in 1383. Gary Richardson, Brand Names Before the Industrial Revolution , National Bureau of Economic Research, NBER Working Paper No. 13930, April,2008. Early Trademark Cases Scholars had until only recently attributed the first reported trademark case in Anglo-American law to be Southern v. How , which was decided in 1618. This despite the fact that the case involved not a trademark but the sale of counterfeit jewels. McKenna, M. The Normative Foundations of Trademark Law (December 30, 2010). Notre Dame Law Review, Vol. 82, No. 5, p. 1839, 2007. Retrieved from SSRN: http://ssrn.com/abstract=889162. Its connection to trademark came from a reference by the presiding judge to an earlier, unnamed, and unreported case in 1584 involving a suit brought by a cloth maker against another cloth maker who had used his mark. That earlier clothier case, only recently discovered and now known as Sanforth’s Case , is now held to be the earliest reported trademark case in Anglo- American law. It establishes beyond a doubt that even 250 years before the Industrial Revolution, trademark infringement was viewed as a tort of deceit and a violation of the laws against unfair competition. Keith M. Stolte, How Early Did Anglo-American Trademark Law Begin? An Answer to Schechter’s Conundrum , Fordham Intellectual Property, Media and Entertainment Law Journal, Volume 8, Issue 2, 1997. To quote from a contemporary 1656 legal report: “The action upon the case was brought in the [Court of] Common Pleas by a clothier, that whereupon he had gained great reputation for his making of his cloth … to his benefit and profit, and that he used to set his mark on his cloth whereby it should be known to be his cloth; and another clothier, observing it, used the same mark to his ill-made cloth [in order] to deceive him.” In the more than four centuries since then, as commerce and industry have evolved into an $80 trillion a year global marketplace unimaginable to the people of Sanforth’s Case time, its verdict that trademark infringement is competition most unfair and demands redress still serves as the foundation and wellspring of worldwide trademark policies and statutes today.

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U.S. Trademark Law Learning Objectives After completing this section, you will be able to Grasp the basics of trademark law. Analyze notable trademark cases. As the young United States rapidly developed its commerce and industry in the late eighteenth and early nineteenth centuries, propelled in no small part by the nation’s unusually democratic and effective patent laws (see Chapter 1, “Section 1.5: What the U.S. Patent System Wrought”), the states developed increasingly sophisticated and complex trademark laws. Eventually, however, the transformation of America’s many local and regional markets into a single, unified, national economy propelled Congress to try to federalize trademark law despite the lack of any express constitutional authority to do so. So Congress passed the first national trademark laws in 1870 and 1876. But in a set of three court challenges consolidated into a single appeal before the U.S. Supreme Court in 1879, Justice Samuel Freeman Miller ruled for the majority that the Patent and Copyright Clause of the Constitution gave Congress no explicit authority to regulate trademarks, and declared the 1870 and 1876 trademark laws unconstitutional. See United States v. Steffens 100 U.S. 82 (1879); United States v. Wittemann 100 U.S. 82 (1879); United States v. Johnson 100 U.S. 82 (1879) Retrieved From http://caselaw.lp.findlaw.com/cgibin/getcase.pl?court=us&vol=100&invol=82. The Commerce Clause and the Lanham Act of 1946 Two years later, Congress instead acted under the Commerce Clause of the Constitution to pass the Trade Mark Act of 1881. This first national trademark law, however, only regulated trademarks used in commerce with other nations and with Indian tribes. It wasn’t until 1905 that Congress passed another trademark statute regulating the use of marks within the United States. Those two trademark laws were subsequently overhauled by the Lanham Act of 1946 , which remains the principal law of the land on trademarks in the United States to this day. Harvard University. (2012). Overview of Trademark Law . Retrieved from http://cyber.law.harvard.edu/metaschool/fisher/domain/tm.htm. It broadened national registration of trademarks, and also gave owners of unregistered marks access for the first time to the federal courts. The act also established remedies such as bars on the sale or importation of infringing products, and required the renewal of trademarks every ten years to weed out the registry trademarks that are no longer in commercial use (known as the “deadwood” prevision). Op. cit., Miller and Davis. After 119 years in business, for example, the world-famous retailer Woolworth’s went bankrupt in 1997 and its trademark was no longer protected. The 83-year-old Hostess Twinkies brand, however, was acquired by two private equity firms for $410 million because they see future profit in the iconic brand—and the customers who love it. Requirements for a U.S. Trademark The requirement that a trademark must be actively used or intended to be used in commercial activity in order to be protected by law has been a fundamental feature of U.S. trademark law since its inception. The Lanham Act specifically requires applicants to submit “a verified statement that the mark is in use in commerce, specifying the date of the applicant’s first use of the mark in commerce and those goods or services specified in the notice of allowance on or in connection with which the mark is used in commerce.” 15 U.S.C. §1051 Retrieved from http://www.law.cornell.edu/uscode/text/15/1051. A trademark is presumed to have been abandoned when its owner ceases to use it for three or more years, after which anyone else can register and use the mark. ?

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The Four Types of Trademarks (credit: photograph by Mike Mozart via flikr / CC BY 2.0) Learning Objectives After completing this section, you will be able to Identify the four types of trademarks. Compare differences between types of trademarks. Can I Trademark That? Before reading this section, please watch the overview video below covering the four types of trademarks and what they are used for, the subject matter of trademarks, and why trademarks are important—not just to their owners, but even more so, to the general public. The term “trademark” is usually used to describe any of the four types of marks that can be registered with the U.S. Patent and Trademark Office. The two primary types of marks are trademarks and service marks . The two other marks— certification marks and collective marks —occur much less frequently and must meet different requirements for registration. United States Patent and Trademark Office. (2012, May 24). Trademarks. Retrieved from http://www.uspto.gov/inventors/trademarks.jsp Trademarks Trademarks identify products —i.e., physical goods and commodities—that are either manufactured, produced, grown, or that exist naturally. A trademark is a word, name, symbol, or device—or combination of these—used to identify and distinguish the source of that product. Examples of trademarks include the Nike “Swoosh” symbol, the arched “M” for McDonalds, and the apple symbol with a small curved bite taken out of it for Apple Computer. Service Marks Service marks are exactly the same in principle as trademarks except that these words, names, symbols, or devices identify and distinguish the source of a service . Examples of service marks include the sleek silver greyhound dog on Greyhound buses, and United Parcel Service’s brown shield emblazoned with the bold yellow letters “UPS.” Certification Marks A certification mark is any word, phrase, symbol, or design—or a combination of any of these—owned by one party that certifies the goods and services of others when they meet certain standards or requirements. United States Patent and Trademark Office. (2012, March 09). What Is a Collective Membership Mark ?. Retrieved from http://www.uspto.gov/faq/trademarks.jsp#_Toc275426676 A certification mark identifies either the nature of a product or service—for example, that it meets the quality standards needed to receive the “Good Housekeeping Seal of Approval”—or the origin of products or services, as in the certification mark “Washington State” given to apples grown in that state. Collective Marks Collective marks come in one of two varieties: collective trademarks and service marks, and collective membership marks. A collective trade or service mark is any word, phrase, symbol, or design that is owned by a cooperative, association, collective group, or organization and is used by its members to indicate the source of goods or services. United States Patent and Trademark Office. (2012, March 09). Frequently Asked Questions About Trademarks. Retrieved from http://www.uspto.gov/faq/trademarks.jsp An example of a collective trademark is the “Girl Scouts” mark seen on cookies every February, or the designation “CPA” to identify the services provided by a Certified Public Accountant. (credit: Wikimedia Commons / Public Domain) A collective membership mark, by contrast, is used to indicate that a person is a member of some organization, such as a trade union or an association like the Rotary Club, but is not used to identify the source of goods and services.

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The Subject Matter of Trademarks Learning Objectives After completing this section, you will be able to Learn the subject matter of trademarks. Analyze characteristics of various forms of trademarks. As discussed, there are four types of trademarks: trademarks, service marks, certification marks, and collective marks. But what does it mean to say that a trademark may be a “word [or phrase], name, symbol [or design], or device.” The answers may in some cases surprise you. Words, Phrases, and Names There is little confusion about what is meant by a trademarkable word , phrase , or name . The only point to remember here is that words, names, and phrases that are simply descriptive of the goods or services with which they are associated do not necessarily qualify for registration as a trademark. United States Patent and Trademark Office. (2012, August 09). Trademark Manual of Examining Procedure § 1202. Retrieved from http://tess2.uspto.gov/bin80/gate.exe?f=doc&state=nk9n3c.2.14 They must be distinctive and indicate the origin of a product or service. What is meant by distinctive—and how distinctive they must be—will be discussed in the next section. Symbols and Devices Symbols and devices are where things start to get interesting in trademark law. The language of the Lanham Act does not specify what is meant by a “symbol” or a “device” that can be trademarked. The U.S. Supreme Court took careful note of that fact, ruling in 1995 that, “Since human beings might use as a ‘symbol’ or ‘device’ almost anything at all that is capable of carrying meaning, this language, read literally, is not restrictive.” Qualitex Co. v. Jacobson Products Co. , 514 U.S. 159, 7 (1995) Retrieved from: http://www.todaysengineer.org/2003/Feb/files/514U.S.159.pdf In the United States, therefore, trademarks can include almost anything that carries distinctive meaning and identifies the origin of products and services. This includes slogans, letters, numbers, logos, three-dimensional designs—even colors, scents, and sounds that indicate the source of a good or service to consumers. Henderson, C. International Standards for The Protection of Intellectual Property Rights: Trademarks and Geographical Indications . Retrieved from USPTO website: www.uspto.gov/web/offices/dcom/olia/conf_gipa2007nov2/lebanont (credit: TIGER500 via flikr / CC BY 2.0) A trademarkable symbol can be a number . The number 5, for example, is a trademarked symbol of Chanel No. 5 perfume (No. 73788555). So is the number 31, which is the trademarked symbol of Baskin-Robbins 31 Flavors (No. 72172718). No trademark can block the use of the numbers 5 or 31 in math. Nor have the courts allowed the trademarking of mere part numbers, See Southco, Inc. v. Kanebridge Corp. , 258 F.3d 148, 149 n.2 (3d Cir. 2001). model numbers, See See In re Dana Corp. , 12 USPQ2d 1748 (TTAB 1989). or grades, See See In re Union Oil Co. , 33 USPQ 43 (C.C.P.A.1937). because these are not distinctive enough and do not indicate the origin of the goods in question. Regular gas, also known as “87 octane,” also cannot be trademarked because it doesn’t tell you whether that gas comes from Exxon, Shell, or BP. Yet despite the above, one of the most iconic trademarked numbers is 501. Originally, the number 501 was simply the lot number Levi’s assigned to the famous copper-riveted waist overalls. But over time, 501 acquired meaning in the minds of consumers and came to be very strongly associated with Levi’s brand jeans. How otherwise un-trademarkable symbols (or words and designs) can acquire secondary (trademark) meaning will be discussed in the next section. A label for Levi’s “501” jeans, another example of a number that gained trademark protection. (credit: The original uploader was Ludovic Glucksman at French Wikipedia via Wikimedia Commons / CC BY 1.0) As for scents , the fundamental case for trademarking these came about when the USPTO denied Celia Clarke’s request in 1990 for a trademark for scented yarns and threads with a “fresh, floral fragrance reminiscent of Plumeria blossoms.” She appealed, and the Trademark Trial and Appeal Board overruled the examiner, granting her a trademark for the scent. “[F]ragrance is not an inherent attribute or natural characteristic of applicant’s goods but is rather a feature supplied by applicant,” the board noted. “Moreover, applicant has emphasized this characteristic of her goods in advertising, promoting the scented feature of her goods. Applicant has demonstrated that customers, dealers and distributors of her scented yarns and threads have come to recognize applicant as the source of these goods. . . . In her advertisements and at craft fairs, applicant has promoted her products as having a scented nature. We believe that applicant has presented a prima facie case of distinctiveness of her fragrance mark.” In re Clarke, 17 U.S.P.Q.2d 1238 (T.T.A.B. 1990) Retrieved from http://ipmall.info/hosted_resources/TTAB_Decisions/TTAB_Appeal_758429.asp On the other hand, a trademark cannot be granted for any scent that serves a function other than identifying the product’s source. The scent of perfumes and air fresheners, therefore, cannot be registered, nor can the sulfurous smell that serves as a warning for natural gas leaks. Still, there remains a good deal of uncertainty about when a scent is trademarkable and when it is not. Consider the world-famous Cinnabon smell—that sweet, sugary, cinnamon-infused scent that is absolutely unmistakable (if not also irresistible). But it is not trademarked because even though it is certainly distinctive, it cannot be easily distinguished from the smell of cinnamon buns made by any number of other bakeries. Sounds can also be trademarked provided they indicate the source of the product or service with which they are associated, and indeed, there are approximately 700 trademarked sounds registered at the USPTO. See Constine, J. (2011, December 20). Don’t Let Your Company’s Sound Be Stolen, Trademark it With Trademarkia . Retrieved from http://techcrunch.com/2011/12/20/tradmark-sound-trademarkia/ These include Tarzan’s Yell, the THX theme heard at the beginning of a movie, MGM’s roaring lion, America Online’s “You’ve got mail” announcement, the sequence of chimes heard with the display of the NBC logo on TV, and, naturally, the sound of a duck quacking “Aflac!” for the American Family Life Assurance Company. Designs and Trade Dress A design , like a logo, can also be trademarked, provided it distinguishes the origin of the product or service from any other source or producer. In these trademarks, the logo must be unique and consist of more than simple stylization. The Pepsi logo has been tweaked a few times since 1969 but the overall design has remained recognizable and distinct. (credit: Mike Mozart via flikr / CC BY 2.0) Bacardi for using a similar stylized “O” on its label for orange-flavored vodka. The court ruled against Geogri, however, because its design consisted merely of a stylized symbol that had not acquired a distinguishing (or secondary) meaning in the minds of consumers that enabled them to identify the producer. Star Industries, Inc. v. Bacardi & Co., LTD. , 412 F.3d 373 (2d Circuit, 2005) Retrieved from http://bulk.resource.org/courts.gov/c/F3/412/412.F3d.373.04-1753-.04-0831-.html Examples of pure trademarked designs, without any associated words, include Nike’s “Swoosh” and Apple’s famous logo of an apple with a bite taken out of it. This is why design trademarks often take a “design plus words” approach, as in the trademarked Lacoste logo featuring the word “Lacoste” above the famous green alligator. Trade dress , on the other hand, refers to the overall appearance of a product or service that indicates its source. Trade dress can include features such as size, shape, color or color combinations, texture, graphics, or even particular sales techniques. The key to claiming trade dress protection is that the attributes must be distinctive. For example, Taco Cabana has trademarked its distinctive and “festive eating atmosphere having interior dining and patio areas decorated with artifacts, bright colors, paintings and murals,” and won an infringement case against a competitor restaurant called Two Pesos. By creating a theme that was similar to Taco Cabana, Two Pesos created confusion in the minds of consumers. 932 F.2d 1113, 1117 (CA5 1991), derived from: http://caselaw.lp.findlaw.com/scripts/getcase.pl?court=us&vol=505&invol=763 A design trademark may be one part of a product’s trade dress, but it is distinct from trade dress because it only covers the stylization of words, letters, numbers, or of a specific design like the Lacoste green alligator. Imagine that an Apple competitor opened a retail store with the same colors, lighting, atmosphere, and overall look and feel as the Apple store but sold their own products. The goal would not be to stop the sale of the goods, which are not necessarily infringing any of Apple’s design trademarks or patents, but to stop the competitor from infringing the look and feel of the Apple store. In this case, Apple would file a trade dress suit. Both design trademarks and trade dress are different from design patents. Although all three cover only nonfunctional designs and appearances, design patents strictly protect only the new and original ornamental design of an article of manufacture, and the actual drawing of a design patent limits what is protected. A design trademark, on the other hand, protects a particular word, name, symbol, or design used in commerce to distinguish a product’s source. And trade dress protects the overall appearance of the product and can include anything that gives a product or service meaning and distinguishes it from those of any other producer. A design patent might protect the new and original ornamental design of a lamp, for example, so long as that appearance does not affect the lamp’s function. A design trademark would protect the words or symbols used on the lamp that identify it as coming from a particular producer. And trade dress protects the overall “look and feel” of the lamp. Sometimes both forms of protection can be obtained, providing an extra advantage to the owner of these rights. Examples of products with both design trademarks and design patents include the Dustbuster vacuum cleaner, the Pepsi bottle, and the Honeywell round thermostat.

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The Spectrum of Distinctiveness Learning Objectives After completing this section, you will be able to Discover the elements of distinctiveness within trademarks. Identify the various kinds of marks used. The fundamental and overriding requirement for a trademark is distinctiveness . The requirement for distinctiveness is analogous to the requirement for novelty in patent rights and originality in copyright. Without distinctiveness, there can be no trademark. As Miller and Davis note, “Naturally, a trademark must be distinctive if it is to serve the function of identifying the origin of goods and thereby avoid confusion, deception, or mistake. If a trademark is to protect purchasers from confusion over what they are purchasing, then the trademark somehow must be recognizable, identifiable, and different from other marks.” Op. cit., Miller and Davis. Some trade and service marks achieve distinction via their inherent nature—Nike’s curved “Swoosh” check mark suggesting speed and agility, for example. But other marks gain distinctiveness as a result of marketing, eventually forming a powerful association over time in the minds of consumers. As an example, the term “Raisin Bran” is merely descriptive of the foods used in the cereal and would not be eligible for trademark registration had Kellogg Company not demonstrated through evidence of use (including sales, advertising expenditures, and consumer surveys) that the buying public had come to distinctively associate Raisin Bran with this particular Kellogg’s cereal. The public’s distinct association of a trademark to a company is known as secondary meaning, and that is something that can only be established over time. An understanding of secondary meaning is crucial when discussing the spectrum of distinctiveness. In Abercrombie & Fitch Co. v. Hunting World, Inc. in 1976, Judge Henry Jacob Friendly established five basic categories of marks along a spectrum of distinctiveness, ranging from “fanciful” marks that are inherently distinctive on one end and on the other end “generic” marks that are never distinctive and thus not eligible for trademark registration. Abercrombie & Fitch Co. v. Hunting World, Inc. , 537 F.2d 4, Court of Appeals. Retrieved from http://scholar.google.com/scholar_case?case=9011105700430131407&q=abercrombie+%26+fitch+v.+hunting+world&hl=en&as_sdt=2,38&as_vis=1 Fanciful Marks Fanciful marks are invented words, symbols, or devices that have no relation to the good or service being sold and have no meaning other than to distinctly identify the product or service and distinguish it in the minds of consumers from those of any other vendor. “Xerox” is a good example of a fanciful mark, as are “Google” and “Kodak.” Fanciful marks are considered the strongest type of mark and are prima facie registrable with the USPTO. Arbitrary Marks Arbitrary marks are real words in common usage that have no descriptive relationship to the product or service being sold. Examples of arbitrary marks include “Apple” (for the computer company), “Oracle” (for the software company), and “Galaxy” (for the mobile phone). Arbitrary marks are also unreservedly eligible for trademark registration. Suggestive Marks Suggestive marks are marks that suggest or imply a quality or characteristic of the goods and services being sold. They require imagination, insight, or perception on the part of the consumer as to the nature of the article. Derived from: http://www.bitlaw.com/trademark/degrees.html Examples include “iPad” for the tablet computer and “Coppertone” for the sunscreen lotion. A suggestive mark is the minimum required for a mark to be unconditionally registrable absent a secondary meaning. Or in the words of Judge Friendly, “The validity of the mark ends where suggestion ends and description begins.” Op. cit., Abercrombie & Fitch Co. v. Hunting World, Inc. From this point on along the spectrum of distinctiveness, things get a bit tricky. Descriptive Marks A descriptive mark explicitly describes the purpose, nature, or an attribute of a product or service and is, therefore, not eligible for trademark registration unless a secondary meaning or association has been developed in the public’s mind through usage. United States Patent and Trademark Office. (2011, January). Trademark Manual of Examining Procedure (TMEP) - 8th Edition . Retrieved from http://tess2.uspto.gov/tmdb/tmep/1200.htm Ineligible descriptive marks include “Lightweight” and “Faster.” However, if a descriptive mark takes on a secondary meaning in the public mind—“Sharp” televisions, for example, or “Windows” for windowing software—then it can be eligible for trademark registration. The bar against descriptive marks is designed to protect for public use common concepts and language that everyone needs to use. Imagine having to pay the coiner of the term “reverse mortgage” every time you wanted to describe such a financial arrangement. It would create a nightmare of social costs, which can be prevented simply by allowing the descriptive term to remain in the public domain. The bar against descriptive marks spotlights the overall social purpose of trademarks, which is to prevent fraud and confusion in the market while not conferring a monopoly on anyone. Generic Marks The last and least distinctive category of marks are generic marks that are simply the common name for the goods and services being sold. Examples of generic marks might be “Aspirin” for the analgesic, or the use of the word “Baskets” for a basket store without any accompanying logo or other design element to distinguish from a merely generic description of the items sold. A generic mark is never eligible for registration no matter how much evidence a mark owner offers that it has acquired a secondary meaning through advertising and marketing. Ironically, a product or service can become so successful in the marketplace that the public begins to associate its trademark with an entire category of similar products and services. When this happens, a valid trademark can become a generic name and the trademark will be lost, as happened with both “Cellophane” and “Aspirin.” To prevent this from happening, companies like “Kleenex,” “Xerox,” and more recently “Google” have gone to great legal and advertising expense to prevent the generic misuse of their trademarks so these remain valid. (credit: Microsoft via Wikimedia Commons / Public Domain) There are many companies that sell aspirin, but aspirin itself can no longer be trademarked. Adobe, for example, sent emails to many web authors advising them to discontinue using the term “photoshopped” and instead say that their photos were “modified by Adobe Photoshop software.” Similarly, Xerox spent heavily on advertisements warning that “you cannot Xerox a document, but you can copy it on a Xerox brand copying machine.”

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Bars to Trademark (credit: Amazon via Wikimedia Commons / Public Domain) Learning Objectives After completing this section, you will be able to Identify the bars to trademark. Dissect criteria for trademark registration. The Prior Use Bar No one can register a trademark if it has been used by other parties prior to its use by the applicant. Indeed, if the applicant uses such a mark, he or she may be liable for trademark infringement. 15 U.S.C. §1115. The only exception to the prior use bar is when the mark has been used in an entirely different market or field of business, as in the trademark “Progressive” granted to two companies, one a backpack manufacturer and the other an auto insurance company. The Functionality Bar To be trademarked, no word, symbol, design, device, scent, or sound may purely or primarily serve a functional purpose. Nor can it be trademarked if its absence in or on the product inflates its cost or reduces its quality. Inwood Laboratories Inc. v. Ives Laboratories, Inc. , 456 U.S. 844 (1982) Retrieved from http://supreme.justia.com/cases/federal/us/456/844/case.html Thus as noted earlier, the scent of a perfume cannot be trademarked because the core requirement of a perfume is that it have a pleasant and distinctive smell. The design of a chair presents an interesting dilemma, however. Does the design enable a person to sit—i.e., does it have a functional purpose? Or does the design distinctively mark an otherwise perfectly functional chair as coming from an identifiable producer? This “chicken and egg” question has confronted many applicants, trademark examiners, judges, and juries over the years. The issue is usually decided by asking whether the appearance of a product or its components is inspired more by design or by function? The issue is most easily decided when the functionality of an item resides in a specific part of the product, and the design elements are found in other parts of the product. A great example of this is the “A Christmas Story Leg Lamp” based on the classic 1983 film comedy. The functional part of the lamp is its electronics and light fixture sitting atop the base. The base, however, is in the shape of a woman’s stocking-clad leg, and is thus clearly a design feature that distinguishes the lamp from any other on the market, and it is trademarked (No. 77105065). Subject Matter Bars In addition to prior use and functionality, certain kinds of subject matter are generally not eligible for trademark registration. These are surnames, geographic marks, and ornamental, immoral, or offensive marks. United States Patent and Trademark Office.(2012, March 09). Frequently Asked Questions About Trademarks . Retrieved from http://www.uspto.gov/faq/trademarks.jsp Surnames or family names such as “Smith” and “Johnson” cannot be trademarked except under certain conditions. The USPTO assesses five factors in determining whether a surname is eligible for a trademark: Whether the surname is rare. Whether the term is the surname of anyone connected with the applicant. Whether the term has any recognized meaning other than as a surname. Whether it has the “look and feel” of a surname. Whether the stylization of lettering is distinctive enough to create a separate commercial impression United States Patent and Trademark Office. (2011, January). TMEP 1211.01 “Primarily Merely A Surname” . Retrieved from http://tess2.uspto.gov/tmdb/tmep/1200.htm “If the mark’s character as a surname predominates in terms of its ‘primary significance to the purchasing public,’ then it is prohibited,” write Miller and Davis. Op. cit., Miller and Davis. But over time, if the surname becomes associated in the public mind with the distinctive origin of products or services, then it may be eligible for a trademark, as is the case with “Sears” and “Macy’s.” Macy’s the brand name of the department store chain—is an example of a surname that has become eligible for trademark protection. (credit: photograph by Mike Mozart via flikr / CC BY 2.0) Geographic marks must also be evaluated for eligibility on the basis of several factors. If a geographic mark is simply descriptive , the following tests apply: The primary significance of the mark is a generally known geographic location. The goods or services originate in the place identified in the mark. Purchasers would be likely to believe that the goods or services originate in the geographic place identified in the mark. United States Patent and Trademark Office. (2011, January). TMEP 1211.01(a) “Primarily Merely A Surname.” Retrieved from http://tess2.uspto.gov/tmdb/tmep/1200.htm The test above determines whether there is a literal association to the name or not. For example, if an entrepreneur launches a company called “Los Angeles Shoes” to produce shoes in Los Angeles, the name would not pass the test for trademark eligibility because the primary significance of the mark is that it is a generally known location, the product is produced in the location stated in the mark, and consumers would believe the shoes were made in Los Angeles. The goal of the bar against geographically descriptive marks, then, is to protect one party from seizing ownership of a geographic term that ought to remain in the public domain. If a geographic mark is deceptively misdescriptive , however, the test is as follows: The primary significance of the mark is a generally known geographic location. The goods or services do not originate in the place identified in the mark. Purchasers would be likely to believe that the goods or services originate in the geographic place identified in the mark. The misrepresentation is a material factor in a significant portion of the relevant consumer’s decision to buy the goods or use the services. United States Patent and Trademark Office. (2011, January). TMEP 1211.01(b) “Primarily Merely A Surname.” Retrieved from http://tess2.uspto.gov/tmdb/tmep/1200.htm The goal of this test for geographically misdescriptive marks is to prevent the confusion and deception of the consumer. For example, if an entrepreneur launches a fashionable shoe business called “New York Shoes” but actually manufactures the shoes in China, he will not receive a trademark for the name because it will likely confuse or deceive consumers. Sometimes, however, a geographic name may be trademarked, as was the case with the online retailing giant’s trademark “Amazon.” In this case, the geographic name “Amazon” is not indicative of the source of goods, nor are consumers under the impression that the goods sold by the retailer come from the Amazonian region of South America. In addition, the geographic nature of the name “Amazon” is not a significant factor in whether or not consumers decide to purchase books, clothing, electronics, or anything else from the company. Nor can ornamental , immoral , or offensive marks be trademarked. Ornamental marks such as a “smiley face” logo are merely decorative and are too vague to distinguish the origin of a product or service. Immoral or offensive marks—e.g., an online dating service with a logo depicting two naked people having sex—also cannot be registered.

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Establishing Trademark Protection Learning Objectives After completing this section, you will be able to Identify the reasons for establishing trademark registration. Understand the process of trademark protection. Establishing Your Trademark Protection Before reading this section, please watch the overview video below covering the “spectrum of distinctiveness” and other fancy-sounding legal terms and what they really mean in the real world of commerce and consumerism. As in the case with copyrights, trademarks do not necessarily have to be registered with the federal government, but doing so has benefits. The owners of unregistered trademarks have the exclusive right to use the mark concerning similar goods and services in the geographic area of actual use of the mark, the right to bring civil action against infringers, and protection against false advertising. Unregistered trademarks are usually identified by the “TM” symbol displayed on the product, package, or advertising used to promote them. Trademarks formally registered with the USPTO, however, receive additional benefits: A legal presumption of ownership of the mark and exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration. Public notice of claim of ownership of the mark. The ability to bring an action concerning the mark in federal court. The use of the U.S. registration as a basis to obtain registration in foreign countries. The ability to record the U.S. registration with the U.S. Customs and Border Protection (CBP) Service to prevent importation of infringing foreign goods. The right to use the federal registration symbol ® Listing in the United States Patent and Trademark Office’s online databases. Derived from: http://www.uspto.gov/faq/trademarks.jsp#_Toc275426681 Because registration costs money, many small businesses choose to rely upon the common law protections afforded trademarks, especially when just starting up. A case in point was Google, which used an unregistered trademark for its first six years in operation. Only in 2006 did the company formally apply for a registered trademark for “Google.” It was registered in 2012. But trademark protection can be vital to a small business, as one recent case amply demonstrates. Payam “Peter” Tabibian first registered the 1950s-style red, white, and yellow logo for his start-up Z-Burger chain in 2007, a few months before he opened his first restaurant the next year in a hip Washington neighborhood. As the New York Times reported, “his first restaurant was an immediate hit, attracting students from nearby American University. The place [later] drew public praise when it gave free food to federal workers who were furloughed from their jobs during government budget cutbacks.” But Mr. Tabibian eventually fell out with his partners, who then tried to stop him from continuing to use his Z-Burger brand with his expanding chain of restaurants; they also demanded he transfer the trademarks to them. But because Mr. Tabibian had done his homework and taken the time to properly register his trademarks, a federal judge ruled in August of 2015 that he was the legitimate owner of the trademarks and could continue to use them. As James Gibson, law professor at the University of Richmond School of Law, told the New York Times , the Z-Burger case shows why “it is very important early on to pick a trademark that’s going to work, and make sure ownership is sewn on. That’s particularly true if nobody knows who you are and you’re operating in a limited area. The federal trademark gives you a lot of nationwide rights.” In order for your trademark to be eligible for registration with the USPTO, however, you must actually use it in conjunction with commercial activity—i.e., with the marketing and sale of products and services—or be about to use it within six months. Absent the selling of athletic shoes and other sports attire, Nike’s $20 billion “Swoosh” logo would be nothing more than a worthless doodle. When applying for trademark registration, the applicant must file an affidavit attesting to the date the mark was first used in commerce as well as a specimen showing how the mark was first used, whether in advertising or on the product in a store setting. It is imperative that the applicant identify the earliest provable date of first use in commerce, to lessen the likelihood that another party can claim prior use of that mark and invalidate the trademark. The USPTO also offers an “intent-to-use” application, which allows an entity to apply for a trademark that is not yet used in commerce. “If you have not yet used the mark but plan to do so in the future, you may file based on a good faith or bona fide intent to use the mark in commerce,” notes a USPTO publication. “A bona fide intent to use the mark is more than an idea, [but] less than market ready. For example, having a business plan, creating sample products, or performing other initial business activities may reflect a bona fide intent to use the mark.” Protecting Your Trademark: Basic Facts About Trademarks , U.S. Patent and Trademark Office, derived from: http://www.uspto.gov/trademarks/basics/BasicFacts.pdf The mark must then be put into use within six months of receiving a “notice of allowance” from the USPTO or the applicant risks having to pay extension fees or losing the mark entirely. If the trademark is still in commercial use five years after registration, the owner is eligible to receive an additional protection known as “incontestability,” which immunizes the mark from many challenges, including challenges to validity, ownership, registration, and descriptiveness. (Incontestable marks can still be challenged on some grounds, such as genericism, functionality, and abandonment.) To receive incontestability status, a § 15 Declaration must be submitted to the USPTO. Once incontestability is achieved, no one can contest the validity, ownership, or registration of the mark, nor can anyone contest the owner’s exclusive right to use the mark. An individual or a corporate entity can register a mark. A trademark can be assigned to others in the event of purchase or acquisition by another entity. The §15 Declaration must include: The registration number and the date of registration. The fee for each class of goods/services in the registration to which the Declaration pertains. A statement that declares: -The mark has been in continuous use in commerce for a period of five years and is still in use in commerce -No final decision exists adverse to the owner’s claim of ownership of the mark for the goods/services, or to the owner’s right to register the mark or to keep the same on the register -No pending proceeding exists involving the claimed rights in the USPTO or in the courts A signed and dated affidavit or declaration under 37 C.F.R. §2.20 United States Patent and Trademark Office. (21 August, 2012). Maintain/Renew a Registration: How to Keep a Registration Alive . Retrieved from http://www.uspto.gov/trademarks/process/maintain/prfaq.jsp There are other reasons why an owner might assign trademarks to another party, including a business name change, a security agreement, a license, a lien, as collateral for a loan, or as a result of a bankruptcy procedure. Ford used its trademarks as collateral for a $23.5 billion loan. Ford was still able to use its trademarks, but if the company had defaulted on the loan, the trademarks would have been assigned to the lender. CBS News. (23 May, 2012). Ford Regains Assets, Including Blue Logo, After Credit Upgrade . Retrieved from http://www.cbsnews.com/8301-505164_162-57440003-10391734/ford-regainsassets-including-blue-logo-after-credit-upgrade/ Just like tangible assets, trademarks and other intellectual property such as patents and copyrights often have enormous value. In fact, some sources estimate that in contrast to 40 years ago, when plant, equipment, and other tangible assets comprised 80 percent of the market value of most public companies, today it is intangible assets like intellectual property, business methods, and know-how that make up roughly 80 percent of the value of public companies. “Intangible Asset Market Value,” Ocean Tomo, Retrieved from: http://bit.ly/1gldnWL The official logo of the Ford Motor Company. Ford was still able to keep its trademarks, as long as it didn’t default on the loan. (credit: JD Hancock via flikr / CC BY 2.0) Trademarks can also be licensed to others. In 2012, licensed trademarks generated $5.45 billion for North American owners, reported the Licensing Industry Merchandisers’ Association. That same year, the top 150 global brand licensors earned $230 billion in sales of trademarked products, with the Walt Disney Company alone accounting for nearly $40 billion in sales. Abandonment of a mark results in loss of ownership and the associated rights of the mark. For a mark to be considered abandoned, it must be discontinued from active use in commerce with no intent to resume the commercial use of the mark. Evidence of nonuse for three consecutive years is usually considered to be sufficient proof of abandonment. Upon abandonment, the trademark owner loses the right to prevent others from infringing the mark.

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