Copyright is a form of protection granted by law for original works of authorship. Copyrights come into being when the work is fixed in a tangible medium of expression. There can be copyrights for literary works, musical, dramatic, and choreographed works, pictorial, graphic and sculptural works, motion pictures, and audio visual works, sound recordings, architectural works and software code. Copyrights cover both published and unpublished works. There are actually several exclusive rights under the heading copyright. These include the right of reproduction, making derivative works (such as a film from a book), distribution of copies, performing and displaying publicly. One of the most important acts to enhance the power of copyright is early registration. Often registration occurs only after an infringement is found – that is often too late for the highest damages.
To be liable for direct infringement for offering for sale the subject of a patent, the patented invention need not have been already manufactured or imported into the United States. Any unauthorized promotional activity of a patented invention that does not amount to an actual sale of the patented invention may be found to constitute an infringing offer to sell. However, the promotion or offer must be connected with an act that would itself be infringing. Therefore, promotional activity of a patented invention anticipating the expiration of a patent or an offer to sell a patented product after the patent expires does not infringe the patent.
The United States Patent and Trademark Office, which issues patents under the authority of the patent statute, has no jurisdiction over patents once they are issued; thus, patent infringement lawsuits must be brought in the appropriate federal district court. Remedies for patent infringement include an injunction, which is a court order that infringing activities cease, and monetary damages to compensate any economic losses sustained by the patent owner.
When a patented invention is manufactured and sold, it is not the patent that is sold but rather an embodiment of the patent. When sold, the inventor’s rights in the physical embodiment of the patent are said to have been exhausted, and unless the manufactured product is sold under a contract restricting any resale of the product, the buyer of the manufactured product can freely use the product, offer the product for sale, or sell that product, notwithstanding the existence of the patent. The buyer of that particular embodiment of the patent may not, however, make new embodiments of the invention or import other embodiments of the invention without infringing the patent. The buyer may also repair the product, as long as the repair of the product is not so extensive that it amounts to a completely new manufacturing of the patented invention and so would infringe the patent.
A trademark is a distinctive sign or indicator used to identify that the products or services with which it is used originate from a particular source, and to distinguish its products or services from those of others. Trademarks rights arise when the trademark is used correctly as a trademark. A trademark can be a design, a picture, a word or words, or a group of letters or a combination of any of them. There is a range of “strength” of a trademark. The strongest trademarks are called “arbitrary” or “fanciful”. For example a particular drawing or group of letters which has no relationship to the product would be called fanciful. For example KODAK is fanciful because it is just a group of letters. Also “APPLE” for computers is arbitrary because it has nothing to do with the product. The next level of strength of a trademark is “suggestive”. A suggestive trademark is one which does not immediately bring to mind the product but requires some thinking. The next level is called “descriptive”. A descriptive mark identifies the product or some feature of the product. There are no legal trademark rights in a descriptive mark; except however in rare cases a descriptive mark can acquire legal trademark rights if the consuming public comes to identify the mark with the product. Finally there is the “generic” mark. A generic mark can never acquire trademark rights; for example the word “APPLE” for apples. These rights will cease if a mark is not actively used for a period of time, normally 5 years in most jurisdictions. Trademarks may be “registered”. Registration enhances the enforcement power for the mark. Registration must be carefully done because mistakes can nullify the registration and its extra enforcement power and can even make the trademark unenforceable.
In the latter part of the 20th century, there was a slow realization that the basis for rejecting business-method patent applications was not because the invention to be patented was a business method but because the subject matter of the application did not meet the fundamental requirements for patents such as novelty and non-obviousness. With the widespread use of computers and the development of business methods involving computers, courts were forced to reexamine the question of whether a business method could be patented or, as they had been treated by the U.S. Patent Trademark Office, were inherently unpatentable. In 1998, the U.S. Court of Appeals for the Federal Circuit, which hears all appeals of patent decisions, ruled that business methods could be patented if they produce a “useful, tangible, and concrete result.” The court concluded that a system that used a computer to calculate a mutual fund share price from a complex set of parameters was not an abstract idea but rather a machine–embodied by the computer–that produced a useful result–the share price.
Because it had long been believed that business methods were not patentable, most companies had not bothered to invest the necessary time and money to apply for business-method patents. The 1998 court decision opened a floodgate of patent applications for business methods, many of which involved computer technologies and methodologies, in many cases for conducting business on the Internet. There quickly developed a widespread concern on the part of companies that they might infringe a business-method patent simply by continuing to conduct their business using well-established methods for which someone all of a sudden held patents. In response, Congress passed the First Inventor Defense Act, which adds to the federal patent statute a defense to patent infringement based on the prior commercial use of a business method.
Under the prior-use defense, a person or company that is sued for the infringement of a business method may escape liability for infringement by showing that it had used the patented method commercially for at least one year before the patent holder had applied for the business-method patent. Commercial use does not necessarily mean public use; use in an internal manufacturing or distribution procedure that contributes to the effectiveness of a business operation qualifies as commercial use for the purposes of the prior-use defense, as would a method that produced a product for final sale to another party. A party asserting the prior-use defense has a burden of proving the circumstances that constitute a successful defense by clear and convincing evidence. If a party asserts a prior-use defense without a reasonable basis to do so, the party will be required to pay the patent holder’s attorney’s fees.