Category: Intellectual Property

  • The Truth Is Out There: Does anyone own exclusive rights to the term UFO?

    The Truth Is Out There: Does anyone own exclusive rights to the term UFO?

    Showtime is facing a trademark infringement lawsuit based on its show UFO—a docuseries that explores the possibility of alien life and government coverups of alien encounters.  UFO Magazine—a periodical that reports on UFO sightings—filed a complaint against Showtime in the District of Wyoming, alleging that the title of the show infringes the magazine’s trademark rights.

    UFO Magazine owns three federal trademark registrations for “UFO” in standard characters covering magazines and other entertainment services, including, “Entertainment in the nature of a television series and motion picture film series.”  Generally speaking, the owners of a registered trademark have the exclusive right to use that mark in commerce with the goods and services identified in the registration.  But UFO Magazine is likely to encounter several difficulties in its pending lawsuit.

    First, the magazine might not have any valid trademark rights at all.  To be worthy of trademark rights, a mark owner needs to be using that mark in commerce.  In its complaint, UFO Magazine merely alleges it “has been in discussion for development of a UFO motion picture and/or television series for many years.”  Indeed, the company’s trademark filings include an advertisement that declares “UFO Magazine, Inc. is looking to make a UFO movie” and includes an offer to sell the company’s “UFO” trademarks.  Showtime can argue that this is not a valid use of the mark in connection with the entertainment services identified in UFO Magazine’s registrations.

    Showtime is also likely to argue that the term “UFO” is generic for alien-themed entertainment.  A generic term is one that consumers understand to describe a type of product or service.  Generic terms are ineligible for trademark protection because all competitors in the marketplace need them to accurately describe their goods and services. Here, it seems unlikely that consumers associate the term “UFO” with a single source of entertainment services and giving UFO Magazine exclusive rights to the term for alien-themed entertainment would certainly have anticompetitive effects.

    The First Amendment might also provide Showtime with a strong defense.  There is a long line of precedent that recognizes titles of expressive works—like movies and TV shows, are entitled to protection under the First Amendment and require a stricter test for trademark infringement. Under this standard, the use of another’s trademark in the title of an expressive work is protected when use of the mark is artistically relevant to the underlying work and there is nothing else that explicitly misleads consumers as to the source or content of the work.  In this case, “UFO” is relevant to a show about aliens, and it is doubtful that anything in the show would explicitly mislead consumers to believe it is associated with UFO Magazine.  

    Despite the weakness of its claims, UFO Magazine is seeking to recover Showtime’s profits from the show, as well as punitive damages and attorneys’ fees.  However, it seems unlikely that UFO Magazine will prevail on its trademark infringement claims. 

    Kloss Stenger & Gormley LLP is a firm with experienced attorneys ready and able to help you with any trademark questions or concerns. Contact us today to get started.

    Disclaimer: This blog is made available by Kloss Stenger & Gormley LLP for educational purposes only. It is not intended to provide legal advice nor form any attorney client relationship between the reader and Kloss Stenger & Gormley LLP. You should always seek professional advice from a licensed attorney for any legal questions you may have.

  • Can inventors lose their patent rights via crowdfunding platforms?

    Can inventors lose their patent rights via crowdfunding platforms?

    Every day new startup companies come up with great ideas they hope will be the next big thing. With the advent of internet based crowdfunding, startup companies and inventors can easily use internet crowdfunding platforms such as gofundme.com, kickstarter.com and many others to market and finance new inventions. As of January, over 14 million people have helped fund $3.5 billion to almost 140,000 Kickstarter projects.

    While these platforms have revolutionized the way startups and inventors finance and market their business plans and goals, entrepreneurs using these platforms can jeopardize their ability to protect those new ideas by disclosing an invention before filing for patent protection. But with proper planning, startups seeking funding can avoid losing valuable patent rights.

    A common scenario is a startup company needs to raise funds and signs up with a crowd-source funding program like Kickstarter. The startup discloses its new ideas through an internet platform and raises funds by soliciting money from the public for a small reward in return. These startups do not offer equity or revenue sharing; they offer promotional items like limited editions or copies of the creative work being produced.

    Once the project is funded and starts to gain traction, the startup entrepreneurs first think about patent protection and learn that it is too late to protect the patentable property. This common tale of woe shows how a startup seeking crowdfunding can lose its patent rights: disclosure and offer of sale.

    How exactly are patent rights lost through disclosure?

    Fundraising platforms enable startups and inventors to acquire financing and exposure but, at the same time, may require inventors or startups to disclose their inventions to the public. Under federal law, an inventor must file a patent application within one year after disclosing their invention.

    Disclosure can be a publication or a public use of the invention. If a patent application is not filed within a year of the disclosure, it is considered a novelty defeating event and the invention is no longer patentable.

    However, not all disclosures are significant enough to trigger the filing requirement. To be a sufficient disclosure, there must be enough information disclosed to enable a person having ordinary skill in the art to make and use the invention.

    It should be noted that losing patent rights is not exclusive to fundraising platforms. The same legal repercussions, such as novelty defeating events, can result by simply publishing an invention anywhere on the internet or actual use in a public place.

    Another problem with disclosure is the risk of another entity filing a patent application based on the disclosure. The United States and most other industrialized countries have a first to file patent system. If another entity wins the race to the patent office, all rights to the invention are lost.

    What is a novelty defeating event?

    Novelty defeating events render the invention no longer new or novel. An invention is no longer considered novel or new when it is considered known to the public. What does this mean exactly? An invention is considered known to the public when there are pre-existing inventions or references that already describe the components of the disclosed invention. Even if it was the inventor who disclosed the invention, it is considered a novelty defeating event.

    Offer of sale as novelty defeating event

    Disclosing your invention on a fundraising platform is not the only potential way to lose your patent rights. Even if you do not disclose enough information to enable a person having ordinary skill in the art, you can still lose your patent rights through an on-sale bar. On-sale bars occur when the invention is sold or offered for sale one year before the filing of the patent. The on-sale bar requires that the invention is ready for patenting, which means either some tangible model of the invention is produced or the inventor has enough information to create the invention.

    So even without a sufficient public disclosure to enable someone with skill in the art to make the invention, patent rights can still be lost when the invention is ready for patenting and offered for sale.

    But is there really a sale?

    The question of whether an invention is the subject of a commercial offer of sale is analyzed under the generally understood law of contracts. The Federal Circuit Courts have held that a sale occurs when there is a contract between parties to pass rights of property for consideration which the buyer pays the seller for the thing bought or sold. Whether a sale occurs will vary with each case.

    The Federal Circuit has also established a framework for determining whether or not there is an offer for sale, and identified several factors for consideration in the analysis. In doing so, it stated that such a sale must bear the hallmarks of a sale pursuant to the Uniform Commercial Code.

    The commercial code defines a sale as the transfer of title. A transfer of title suggests that the inventor has given up some or all of its interest and control over the product.

    Postings on crowdfunding platforms in and of themselves do not appear to constitute a sale. Rather, it is the language of the post, and the description of the project, that can make or break an inventor. Here is where the tension arises. In order to obtain funding, an inventor must generate attention and excitement for their project. The inventor must provide sufficient detail as an enticement for prospective funders to feel comfortable sending money.

    A general search of crowdfunding sites reveals that while you cannot immediately buy the products, if you donate a certain amount, you receive a product or prototype when production begins. It could be argued that such an exchange of money for a prototype or finished product (regardless of the timing) would constitute a sale sufficient to start the clock running.That is not to say that you cannot raise money on these platforms without harming your rights. On the contrary, it all depends on the phrasing of the post and what you are offering the contributors. And of course the timing of the patent filing.

    Measures and safeguards to protect patent rights

    Generally, once patent rights are lost, there is no way to reclaim them. Thus, it is imperative that inventors and startups take the proper steps and precautions to ensure that novelty defeating events do not occur. However, it may be impossible to keep information pertinent to the invention strictly confidential while asking for funds through crowdsourcing. Therefore, the pivotal step in retaining any potential patent rights would be to file a patent application before any disclosure or offer of sale.

    Registered patent attorneyVincent LoTempiois a partner at Kloss Stenger & LoTempio: vglotempio@klosslaw.com.Justin Klossis an associate attorney at the firm who focuses on litigation: jdkloss@kloss.com. Law clerk Anthony Vu contributed to this article.

    This Column also appears in Buffalo Business First.

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    Proud Sponsors of Clarence Academy of Business and Finance

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  • Kloss Stenger And LoTempio Rated 4.5 / 5 at Martindale-Hubbell

    Kloss Stenger And LoTempio Rated 4.5 / 5 at Martindale-Hubbell

    We are excited to announce that Kloss Stenger & LoTempio received a 4.5/ 5 star rating at Martindale-Hubbell (the premier source for finding and researching attorneys since 1868)!

    Six of our attorneys are rated preeminent or distinguished by Martindale-Hubbell for 2017 including Joseph Marusak, Philip Abramowitz, David Kloss, Vince, Mitch Stenger, and Michael Burwick.