Property Law Primer for Multimedia Developers

by J. Dianne Brinson and Mark F. Radcliffe

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Trademark Law

Trademarks and service marks are words, names, symbols, or devices used by manufacturers of goods and providers of services to identify their goods and services, and to distinguish their goods and services from goods manufactured and sold by others. Example: The trademark Wordperfect is used by the Wordperfect Corporation to identify that company's word processing software and distinguish that software from other vendors' word processing software. For trademarks used in commerce, federal trademark protection is available under the federal trademark statute, the Lanham Act. Many states have trademark registration statutes that resemble the Lanham Act, and all states protect unregistered trademarks under the common law (nonstatutory law) of trademarks.

Availability of Protection

Trademark protection is available for words, names, symbols, or devices that are capable of distinguishing the owner's goods or services from the goods or services of others. A trademark that merely describes a class of goods rather than distinguishing the trademark owner's goods from goods provided by others is not protectible.

Example: The word "corn flakes" is not protectible as a trademark for cereal because that term describes a type of cereal that is sold by a number of cereal manufacturers rather than distinguishing one cereal manufacturer's goods. A trademark that so resembles a trademark already in use in the U.S. as to be likely to cause confusion or mistake is not protectible. In addition, trademarks that are "descriptive" of the functions, quality or character of the goods or services have special requirements before they will be protected.

Obtaining Protection

The most effective trademark protection is obtained by filing a trademark registration application in the Patent and Trademark Office. Federal law also protects unregistered trademarks, but such protection is limited to the geographic area in which the mark is actually being used. State trademark protection under common law is obtained simply by adopting a trademark and using it in connection with goods or services. This protection is limited to the geographic area in which the trademark is actually being used. State statutory protection is obtained by filing an application with the state trademark office.

Scope of Protection

Trademark law in general, whether federal or state, protects a trademark owner's commercial identity (goodwill, reputation, and investment in advertising) by giving the trademark owner the exclusive right to use the trademark on the type of goods or services for which the owner is using the trademark. Any person who uses a trademark in connection with goods or services in a way that is likely to cause confusion is an infringer. Trademark owners can obtain injunctions against the confusing use of their trademarks by others, and they can collect damages for infringement.

Example: Small Multimedia Co. is selling a line of interactive training works under the trademark Personal Tutor. If Giant Multimedia Co. starts selling interactive training works under the trademark Personal Tutor, purchasers may think that Giant's works come from the same source as Small Multimedia's works. Giant is infringing Small's trademark. Trade Secret Law A trade secret is information of any sort that is valuable to its owner, not generally known, and that has been kept secret by the owner. Trade secrets are protected only under state law. The Uniform Trade Secrets Act, in effect in a number of states, defines trade secrets as "information, including a formula, pattern, compilation, program, device, method, technique, or process that derives independent economic value from not being generally known and not being readily ascertainable and is subject to reasonable efforts to maintain secrecy."

Works Protected

The following types of technical and business information are examples of material that can be protected by trade secret law: customer lists; instructional methods; manufacturing processes; and methods of developing software. Inventions and processes that are not patentable can be protected under trade secret law. Patent applicants generally rely on trade secret law to protect their inventions while the patent applications are pending.

Six factors are generally used to determine whether information is a trade secret:

  • The extent to which the information is known outside the claimant's business.
  • The extent to which the information is known by the claimant's employees.
  • The extent of measures taken by the claimant to guard the secrecy of the information.
  • The value of the information to the claimant and the claimant's competitors.
  • The amount of effort or money expended by the claimant in developing the information.
  • The ease with which the information could be acquired by others.

Information has value if it gives rise to actual or potential commercial advantage for the owner of the information. Although a trade secret need not be unique in the patent law sense, information that is generally known is not protected under trade secrets law.

Obtaining Protection

Trade secret protection attaches automatically when information of value to the owner is kept secret by the owner. Scope of Protection A trade secret owner has the right to keep others from misappropriating and using the trade secret. Sometimes the misappropriation is a result of industrial espionage. Many trade secret cases involve people who have taken their former employers' trade secrets for use in new businesses or for new employers. Trade secret owners have recourse only against misappropriation. Discovery of protected information through independent research or reverse engineering (taking a product apart to see how it works) is not misappropriation.

Trade secret protection endures so long as the requirements for protection - generally, value to the owner and secrecy - continue to be met. The protection is lost if the owner fails to take reasonable steps to keep the information secret. Example: After Sam discovered a new method for manipulating images in multimedia works, he demonstrated his new method to a number of other developers at a multimedia conference. Sam lost his trade secret protection for the image manipulation method because he failed to keep his method secret.

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