Who Makes the Rules Anyway?

February 2019

Intellectual property law encompasses patents, trademarks, and copyrights, and each of these areas of law has specific rules that are not necessarily consistent with the rules applicable to other forms of intellectual property. For example, it is perfectly legal to use the copyright symbol (©) upon creation of an original work, even if it is not registered with the U.S. Copyright Office. By contrast, it is not legal to use the registered trademark symbol (®) until and unless your trademark or service mark has been registered with the U.S. Patent and Trademark Office (USPTO). Use of the registered trademark symbol in connection with an unregistered mark is considered fraud and may subject the actor to false advertising claims brought by competitors.

Similarly, the rules pertaining to employee ownership of inventions and creative works are different under patent and copyright law, respectively. Under patent law, an employer does not own the patent rights to inventions created by its employees in the absence of a written agreement that includes a patent assignment clause. If the invention is developed with employer resources, then the employer may have a "shop right," which is a nonexclusive license to practice the invention. Under copyright law, on the other hand, employers automatically own the copyright in and to all copyrightable works created by their employees within the scope of their employment. Software is protectable under both patent and copyright law, which means that without a written agreement, an employer may own the copyright—but not the patent rights—to software developed by its employees.

The rules are also different with respect to remedies for infringement of unregistered intellectual property. Trademark law allows for both monetary damages and injunctive relief based on infringement of unregistered marks, but copyright infringement is not actionable unless the work is registered with the U.S. Copyright Office. As for inventions, there is no cause of action for patent infringement without an issued patent.

Joint ownership of trademarks is rare, but joint ownership of inventions and copyrightable works is more common. The implications of joint ownership are different under patent and copyright law, however. Joint owners of a patent have the right to practice the invention without any obligation to share profits with the other joint owners; thus, joint ownership of a patent creates automatic competition among the joint owners. Joint authors of a copyrightable work are free to exploit the work without the consent of the other owners, but they must account to the other owners for profits earned from use or licensing of the work.

The implications for use of intellectual property prior to registration are also different. Under patent law, if the invention was publicly disclosed more than a year ago, then the invention may not be patented; in other words, the inventor must move quickly to protect his invention or risk losing all proprietary rights. There are no such restrictions under trademark law; a mark may be in use for years or even decades before it is registered with the USPTO. Copyright law lies somewhere in the middle of these two extremes: a work may be registered any time before or after the date of first publication, but remedies are maximized if registration is obtained within three months of that date.

The tests for infringement of patents, trademarks and copyrights vary. A patent is infringed if the accused product falls within the literal scope of one or more patent claims or is a functional equivalent (if the doctrine of equivalents applies). Trademark infringement takes into consideration the similarity of the marks and the relatedness of the goods and services, as well as the strength of the trademark (whether it is distinctive or descriptive). A copyright is infringed is the works are substantially similar and it can be proven (through direct or circumstantial evidence) that the original work was copied.

Monetary damages are calculated differently based on the type of infringement. Damages for patent infringement may be based on the patent owner's lost profits but must be at least equal to a reasonable royalty. The federal trademark statute provides for monetary damages based on either the infringer's profits or actual damages. Under copyright law, monetary damages are based on actual damages and may be increased by an amount equal to the infringer's profits, if and to the extent that such profits have not already been taken into account in calculating actual damages. Treble damages are available for willful infringement under both patent and trademark law. Statutory damages are available under trademark (for registered marks only) and copyright law but not under patent law.

Finally, attorneys' fees may be awarded to the prevailing party in an exceptional patent or trademark infringement case. In copyright cases, the court may award attorneys' fees to the prevailing party in its discretion (there is no requirement that the case be "exceptional"). In making this determination, the court must take into consideration the "objective reasonableness" of the losing party's position, which test has been characterized by some as an attempt to harmonize the attorneys' fees provisions of the patent and copyright statutes.


Amicable photo of Toni

Antoinette M. Tease, P.L.L.C.