Today, for many products, North America and Europe have become mature markets, where increasing the volume of sales or market share may be difficult, if not impossible. Many a business therefore looks to the markets of Asia, Latin America, and Africa for the opportunity to expand business, revenue, and profits.

The mind then begins to race – sourcing, import/export controls, U.S. Foreign Corrupt Practices Act, taxation and duties, transportation, business franchise requirements, vetting partners, acclimating to cultures, and a myriad of other details. Planning for the expansion seems to take on a life of its own. One such detail is whether the company has the trademark rights necessary for success in the new markets. Unfortunately, if one begins thinking about it at the time the expansion is to take place, it may already be too late.

First, the majority of countries of the globe, and especially those that are associated with developing markets, are civil law countries, not common law countries like the U.S. and U.K. This means one must formally register a trademark to obtain enforceable trademark rights in these developing markets. And this can take time – four or more years in some cases – assuming that the trademark is available at all.

Second, some of these same civil law countries also require that essential terms of trademark licenses be formally set forth in a filing with a government authority, often referred to as a “registered user filing.” For the most part, the licensed trademark must already be registered before a registered user filing may occur. This filing may include lodging a full copy of the license with the authority. Failing to register a licensee as an authorized user of the trademark can have monumental implications for enforcing rights.

Third, as a general proposition, one must use a trademark to continue to enjoy trademark rights. Most countries require use within any two- to five-year period following issuance of a registration to avoid the registration becoming vulnerable to cancellation for non-use – i.e., essentially unenforceable. In countries requiring trademark licenses to be registered, a failure to undertake a registered-user filing means that use of the trademark by the licensee would not support the continued viability of the trademark owner’s registration. Why? Because the trademark owner would not be able to rely on the licensee’s use of the trademark to sustain the registration. Unless the trademark owner itself used the trademark in the jurisdiction within the appropriate period (two to five years), the registration would become vulnerable to cancellation.

To avoid the “deer-in-the-headlights” syndrome, one is best served by first staking out one’s IP position in the markets targeted for expansion as far in advance of pushing forward with anything on the ground as prudently possible. Otherwise, the “other guy” may win the “race to the courthouse” long before the one planning expansion even gets to the starting line. And this can be a costly, if not insurmountable, obstacle to overcome.

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This blog-post is for general informational purposes only and is not intended as legal advice. Please consult your attorney about your particular situation.

The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

In Illinois beginning in 2012, breach notification must include contact information (toll-free numbers and addresses) for consumer reporting agencies and the Federal Trade Commission, as well as a statement concerning the ability to obtain information concerning  fraud alerts and security freezes from these sources.  Additionally, the data collector must cooperate with the owner or licensee of NPI.  This cooperation includes giving notice of the approximate date and nature of the breach and informing the owner or licensee of plans the data collector has taken or plans to take relating to the breach.  The statute touches on information disposal (though not mandating any particular methods) and includes civil penalties for a violation of the disposal provisions of the statute. 

Ultimately,the effect of the upgraded Illinois regime is to add marginally to what a company needs for its national data security compliance program.  But what this law spotlights is the continuing requirement for companies serving a national marketplace to tailor their data security programs to comply with a 50-state patchwork quilt of laws ranging from the general to the specific, the lax to the rigorous.  Perhaps this latest development from Illinois will add to the growing impetus for federal legislation to create a whole cloth from this regulatory quilt.

Until then, we can expect more states legislatively to seek to heighten the protections for NPI as a means of blunting the growing tide of identity theft and its effects and filling the current legislative void at the federal level.

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 This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

 The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

The First Sale Doctrine is a primary defense to a claim of copyright infringement and holds that if the goods are “lawfully made under this title,” the copyright owner has no right to control the further disposition of those goods following the first sale. 

The Wiley case involved books Wiley authorized to be produced abroad for sale solely in certain foreign markets.  The Defendant caused family members to purchase the Wiley books abroad and imported them into the U.S. for resale.  Goods that are authorized for production and sale solely in a foreign market but are nonetheless imported into the U.S. for sale are often called “grey-market goods” and are typically distinguishable from products produced for sale in the U.S. based on quality standards, ingredients, and the like.   The question presented to the Second Circuit was whether goods manufactured abroad are “lawfully made under this title.”  The Court interpreted “under this title” to mean under the U.S. Copyright Act.  Though these goods may have been lawfully made, the Court reasoned they were not manufactured under the U.S. Copyright Act.  Therefore, the Defendant, who was importing the books for resale on eBay, could not rely on the First Sale Doctrine as a defense to Wiley’s claim of infringement.

 The impact of this ruling, if it stands, will be to render the importation and resale in the U.S. (at least within the Second Circuit) of grey-market goods manufactured abroad solely for sale abroad a risky proposition.  Such an importer could be on the receiving end of a copyright infringement action without the shield of the First Sale Doctrine.

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 This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

 The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

In many copyright cases, the relief that is most important to the claimant is equitable relief, because monetary relief may be too speculative and the magnitude of statutory damage awards too anemic.  Thus, preliminary injunctive relief is a key prize.  The Perfect 10 ruling shifts the burden of proof of irreparable harm to the moving party.  Under prior Ninth Circuit precedent, the showing of a likelihood of success on the merits would trigger the presumption of irreparable harm, placing the primary burden of proof concerning irreparable harm on the defending party.  Now, under the Perfect 10 ruling,  the primary burden falls squarely on the proponent of the request for preliminary injuntive relief, the copyright owner.

This ruling, assuming it is the final word in the Ninth Circuit, will require those seeking preliminary injunctive relief to anticipate this burden of proof in their prefiling preparations.  Token evidence of irreparable harm will need to be replaced with robust showings of such harm.  For some, this may be difficult or even impossible.  For others, it will increase the cost of pursuing such relief.  For the courts of the Ninth Circuit, it will mean greater flexibility in awarding such relief and may mean plaintiffs will attempt to avoid the Ninth Circuit altogether. This adds a wild card to the already rocky interplay between copyright owners and those who distribute content and will necessarily affect the enforcement strategies of copyright owners.   

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 This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

 The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

 I was enthralled by the breadth of issues identified by this panel of amici representives.  Every member of the panel was armed with an arsenal of sound arguments and well-reasoned defenses.  Did the District Court engage in improper statutory construction when it interpreted the safe harbor provision of the DMCA?  Was the Court engaging in making policy and usurping the legislative function.  If the content owners win, does that mean that the effect will be an online environment where non-infringing content is likely to be swept out with infringing content?

And what about the effect of the Court’s ruling?  Does that mean that content owners are relegated to the seemingly impossible task of ferreting out every instance of infringement in our world of massive uploads of all kinds of content.  Has the Court’s ruling placed a dagger at the heart of content-based industries, such as music?

Sadly, a fundamental undercurrent to much of the eloquent discussion was a political truth that quickly became the elephant in the room – claims in this case point directly to a need for a legislative solution.  Though the solution of the Viacom v. YouTube  challenge should reside with Congress as a matter of policy and legislative responsibility, the prospect of Congress taking up this issue in any meaningful way in the foreseeable future is so small as not to be worth a second thought. So we must look to the courts. 

All eyes are on the Second Circuit…at least for now.  Then, who knows?  Back to the District Court?  Or up to the U.S. Supreme Court?  We live in such interesting times!

Thank you, Copyright Society!

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 This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

 The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

1. When one successfully secures a domain name during the Sunrise B period, the domain name will nonetheless resolve to a page that will say something to the effect that “the name is not available for registration.”  Moreover, the WhoIs record will not reflect the registrant’s identity, but “ICM Registry.”
2. The cost of a Sunrise B registration will be between $200 and $300 dollars.  This total reflects both ICN Registry’s cost recovery fees and registrars’ fees.  The ICN portion is approximately $160.  Approximately $100 of this is the fixed cost of administering the Sunrise B program.  The balance (approximately $60) will cover variable costs to look up every domain name registration.
3. There will be two post-launch rights protection mechanisms – a Rapid Evaluation Service (RES) for “clear-cut cases of abuse,” where offending sites will be taken down in 48 hours, and the Charter Eligibility Dispute Resolution Policy (CEDRP) “for when someone registers a domain name they shouldn’t have.”

Interestingly, because of the community the .xxx TLD represents, great thought has been given to creating mechanisms that afford trademark owners effective means for protecting their trademarks.  We shall see if reality achieves the promise.

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This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

How can one think strategically when the pace of the world seems to require surviving on a tactical level?  It is hard to step back from the various brush fires that can overwhelm each day to take a deep breath and think in broader strokes and longer timelines. 

Here are ten steps to help you see the forest and not just the trees:

1.  Take a deep breath and consider your world, your marketplace.  What products or services are offered and through what channels of trade?  Who are the customers?  How sophisticated are they?  Where are the customers?  Who are the competitors?  How many competitors are there? 

2.  How does the business view itself?  What are the company’s core competency(ies) and competitive advantages.  Where does the business fall within the market – e.g., segment leader, start-up challenger, second-tier competitor?   What is the heart and sole of the business?      

3.  How is the business viewed by others?  What does the press say?  Customer feedback?  Feedback from trade channels?

4.  Where is the market headed?  Is there a revolution on the horizon?  Is technology changing the nature of play?  If not, why not?  What will the products and services in this marketplace look like tomorrow?  Next year?  Five years from now?  Who will be offering them?  How will they be offered?

[Notice, not one word about IP.  Not yet.  IP is a toolkit more than an end.  It only adds value if it serves the business.  And serving the business means promoting its growth.  When myopia governs, IP can become an end in itself.  Quantity becomes the byword, rather than quality.  Ask any patent prosecution attorney, and she will tell you that getting a patent can be simple, if one does not care about the scope of protection it provides.]

5.  What IP is necessary to meet the needs of the business in today’s and tomorrow’s marketplace?  Does the business require a trademark-rich IP protfolio?  Where have competitors staked out their claims?  Will competition go to the most inventive, requiring a heavy patent and trade secret focus?  Is creative content necessary to engage customers?  Is copyright protection a necessary element for today’s and tomorrow’s marketplace? 

6.   What IP does the business currently own?  When was it last inventoried?  Is it relevant to current goals and aspirations?  What has the enforcement history been? 

7.  Of the IP that the business needs but does not yet have, does someone else already have it?  If so, can the business acquire it?  Can the business license it?  Which is more cost-effective over time?  Should the business seek to go down a different path?

8.  If no one else already has the needed IP, does the business have the capability to develop the IP?  Even if it does, is it a prudent use of resources to develop the IP independently?  Can the business afford the time?  Or would it be better to have someone else develop it, even though it may increase the cost, at least in the short-term?

9.  Can IP needs be bundled and met through an outsource arrangement?  Is there an efficiency to be found from an outsource vendor, who can provide value from leveraging scale?  How extensive are the risks that attend the relinquishment of control to a third party?

10.  Conversely, does the business have IP that it can license to others?  If so, is there a market for licensing that IP?  What is the cost of licensing, especially if licensing requires substantial enforcement?  Will licensing enhance or detract from the core business and the company’s competitive advantages?

In the end, strategic IP thinking encourages the business to envision the future and marshall the resources necessary to meet it.  Without such thinking, the business can find itself merely reacting to the initiatives of others.  That means playing nothing but ”catch-up.”  In a world of ever faster developments, then, strategic IP thinking can mean the difference between thriving and merely surviving.  Appreciate the forest, not just the trees.

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This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

To make sure your IT contracts take data security into account, consider these five important data security questions:

1.      What and whose data is involved?

2.      Who has access to the data?

3.      Where is the data stored?

4.      How secure is the data in transit?

5.      What are the responsibilities of the respective contracting parties in the case of a data breach?

1.         What and whose data is involved?

 Does the universe of information to be handled by the IT system include sensitive data, such as personally identifiable information, electronic health records, or trade secrets?    Are these customer records?  Employee data?  Patient data?  Confidential business data?  Who is responsible for the security of the data?  Who can disclose it?  Under what conditions?  The type of data and to whom it belongs will implicate both what body of law may apply and how the data should be treated. 

2.         Who has access to the data?

Whoever is collecting the data in the first instance would likely have access to the collected data.  But the party collecting the data is often an entity.  So, who in that entity’s organization would have access to what data?  An internal data security policy would be where one would hope to find such information.  But there is also the IT vendor.  Who at the vendor might need access to the data?  Often an IT contract involves a hosting environment, such as with a system “in the cloud,” and this necessarily implicates that others may have access to the data – individuals at the host or elsewhere.  Who are these individuals?  Where will they be?  Under whose control?  The more decentralized the host environment, the greater the potential uncertainty about who may have access.  This uncertainty may render a particular arrangement unworkable. 

3.         Where is the data stored?

 Where the data may be stored can implicate what jurisdictions’ laws may apply, especially laws concerning export control, import and use, data security, and privacy.  Other factors may also apply.  For example, some jurisdictions require intermediaries to provide information to government agencies for investigative, protective, cyber security, or intelligence activity. Therefore, knowing where the data may “land” is essential to appreciating how secure the data may be.

 4.         How secure is the data in transit?

 The typical solution to the security of data in transit is encryption.  But what level of encryption is involved?  If the level is high enough, the use of encryption could trigger export control considerations.  Also, tools to read encrypted messages may be in the hands of government agencies, again potentially leading to the compromise of sensitive data, even encrypted data, in transit.

 5.          What are the responsibilities of the respective contracting parties in the case of a data breach?

 This is often a focal point in the give and take of IT contract negotiations, because it is about risk sharing and shifting.  The answer typically relies in large measure upon bargaining power.  And regardless of bargaining position, a material flashpoint for conflict is certainly the remedial cost in the case of a data breach and who bears it. 

The cost of a data breach in the U.S. is now estimated at over US $200 per compromised customer record.  How substantial an impact such a cost could have on a business in a worst-case scenario depends on the business and the number of customer, employee, and patient records available to be compromised.  A quick calculation can offer an order-of-magnitude assessment of what a catastrophic U.S. data breach might entail.  Insurance coverage may be one way to reduce the risk of loss to the parties, but it is not a panacea.

At the end of the day, these five key questions, and the resulting follow-up inquiries, open up IT contracting discussions to fundamental issues of data security, especially when dealing with the decentralized environment of the cloud.  Resolving these issues to the mutual satisfaction of the parties can then be part of larger plans to reduce the prospect of a data breach and the harm it can cause the vendor, the licensee, and ultimately the person whose records may be compromised.

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This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

Marketing is about efficient and effective communication.  Condensed to its essence, this means conveying a message simply with as few words as possible.  What better way to do that than to develop trademarks that are descriptive, packed with messaging about the qualities or characteristics of the product or service.  To come up with the new product or service trademark, marketers craft monikers based around desired qualities or characteristics, test those monikers with target audiences, and measure the extent to which these qualities or characteristics are indeed captured in the trademark.  Thus, the goal is for the trademark to be the epitome of efficient communication.

Unfortunately, the legal perspective is quite different.  First and foremost, lawyers look to afford the company the greatest scope of legal protection possible with the least amount of risk.  This means distinctiveness, not cleverness and certainly not descriptiveness, when it comes to trademarks.  The legal function of a trademark is source identification.  Thus, lawyers look to how arbitrary or fanciful the trademark is in relation to the product or service, not how effectively descriptive it may be.  In other words, the efficiency of communication from the lawyer’s perspective has to do with source identification, not product or service description.  And therein lies the divide.

A strong trademark from a marketing standpoint lets the customer know what the product or service is or what its distinguishing characteristics are, while a strong trademark from a legal point of view is one that is a distinctive symbol of the source of the product or service.  The less descriptive the trademark is, the stronger the trademark may be from a legal perspective, but the less efficient the communication will be when it comes to the initial encounters customers may have with the product or service.  Thus, if the roles of marketers and lawyers were reversed, the lawyers would likely fail miserably, because they would create very strong (legally speaking) trademarks that would require large sums of initial promotional dollars to link the trademark to the product or service in the customers’ minds.  Likewise, if the marketers had the duty to protect the company from infringers armed only with descriptive trademarks, the legal budget would be overwhelmed to meet countless third parties with the same or similar trademarks for similar products and services.

Marketing needs to involve Legal as early in the process of developing a trademark as possible.   This should prevent unwise forays and investment in proposed trademarks that either violate the rights of others or possess such a limited scope of legal protection that the company simply joins a sea of undifferentiated, potentially unenforceable, trademarks.  And Legal needs to avoid the simplistic, knee-jerk “NO!” response in all but the most compelling circumstances.  The challenge, then, is a conundrum so long as Marketing and Legal are encouraged to avoid one another.  Lawyers cannot, and should not, simply say no to proposed marketing concepts.  Instead, the strengths and weaknesses of a proposed mark should be coupled with suggestions on what might render Marketing’s proposed trademark legally enforceable and strong.  And in turn, Marketing needs to be open to suggestions that may render the proposed trademark legally, as well as promotionally, strong.   That’s right, the big “C’s” – Communication and Collaboration.  It is possible to develop strong trademarks that also convey imagery that suggests, rather than describes, the product or service qualities or characteristics that are to be highlighted.  But it takes creativity and resolve from both camps.  The goals of each can and should be met.  But this requires each to learn from and about the other, which requires the demolition of the silos!

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This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.

The real issue is rethinking how one commercializes (i.e., makes money) in our Internet world of “free.”   We are at an inflection point, and many of the commentators on the state of the music business eagerly try to discern what the “new paradigm” is or will be.  And with the focus on money – if you can’t make it on recordings, how do you make it?  As one might expect, there is no “silver bullet,” but a glib answer would be :  Don’t give it away!  In this regard, there are attributes of copyright protection that tend to go unheralded, yet can constitute a fundamental commercial building-block - that is, if a musical composition (or any other work, for that matter) is properly licensed, the owner of the copyright need not cede all control over the work to the masses in the literal online free-for-all.

In August 2008, Jackson Browne filed a complaint alleging copyright infringement and vicarious copyright infringement, among other claims, against Senator John McCain and the Republican National Committee for unauthorized use of Browne’s signature song “Runnin’ on Empty.”  In April 2010, David Byrne of the Talking Heads similarly sued Governor Charlie Crist and his campaign for the same offenses for use of Byrne’s famous “Road to Nowhere” song.  And Steve Miller and the Steve Miller Band made known their disappointment with Marco Rubio’s use of Miller’s hit “Take the Money and Run.”  All three famous performers and songwriters used copyright law as a vehicle to curb unacceptable uses of their copyrighted works.  These weren’t suits against consumers downloading the music.  These actions, whether formal or informal, were used to curb the unauthorized use of copyrighted works in a way that was unacceptable to the copyright holders.

This is precisely the approach taken by proponents of open source licensing.  Songwriters, as copyright holders, like those who create open source software, seek to have their work proliferate or “go viral” under acceptable conditions.  The philosophy behind open source is to allow free, but not totally unrestrained, distribution and use of software.  Under an open-source license, no one who obtains and uses the open source software may do so in a manner that violates the conditions set by the copyright holder for granting free access to the software.  Typically, these conditions include a prohibition against erecting impediments to free access to the software along the distribution chain and a requirement that all proprietary notices remain intact.  The distribution is therefore free from the standpoint of financial cost, but is not free of obligations imposed through a licensing regime.  The same opportunity is available to songwriters and performers who recognize that popularity online leads to financial rewards from sources other than the distribution of recorded music per se - the sale of merchandise, live performances, corporate sponsorships, synch licenses, and a host of other revenue streams.  The fear, of course, is that once one lets the “genie out of the bottle” by allowing free downloads, the songs and their value to the songwriter and performer are gone forever, donated to the public domain.  This need not be the case.  Copyright law gives the copyright holder the right to chose how and to what extent the copyright owner’s works - songs for songwriters – may be distributed, copied, altered, and used.  And the rights the copyright holder owns under U.S. copyright law are not so bound together that to “give away” one right requires the giving away of all rights.  

Open source provides a model from which those holding copyrights in music may take heart.  For example, Creative Commons (http://creativecommons.org)  presents a simple licensing regime that allows anyone to license any copyrighted work for proliferation, where access to the work is free of cost, but not free of conditions.  The cases of the performers described above reflect copyright holders issuing challenges to unauthorized uses of songs by political campaigns.  Copyright law empowers copyright holders to stop such unauthorized uses in their tracks, provided the copyright holders have not given away the rights necessary to challenge such uses.  And there is no reason for songwriters or performers to cede this authority away, just because they may choose to make music available for free.  License the downloading and sharing, but retain the right to commercialize and otherwise exploit the recordings, making sure all the while that appropriate attribution is retained.

Under Creative Commons, there are four attributes among which one can choose for licensing works in a royalty-free manner – “Attribution,” “ShareAlike,” “NonCommercial,” and “NoDerivatives.”   For more information, go to http://creativecommons.org/about/licenses/.  The idea is that you can tailor your license to mix and match attributes.  For example, if a songwriter wants to make an original song available for free download, but also wants (a) to require that the song be attributed to the songwriter, (b) to prevent commercial use of the song, and (c) to prevent others from using it to create derivative works - the songwriter could use a Creative Commons format to help frame a license.  Such a license could be included as part of  access to the songwriter’s web site - say, in the form of some affirmative acceptance of the Terms of Use for the web site.

Granted, there are challenges from downstream proliferation of a work when it comes to policing and enforcing such licenses in this “Web 2.0″ world.  Just look at the “buzz” surrounding Spotify and the potential that fluid streaming and sharing of music may hold for the future.  If the copyright holder has retained her rights through a license, she may be able to take advantage of this streaming future, while retaining the right to challenge the more egregious violators of the license terms – primarily focusing on improper uses that undermine the copyright holder’s revenue streams or that simply offend.  To retain this capacity, copyright holders should avoid doing anything that would dedicate works (original songs) to the public domain.  One way to do this is to follow the model of open source – license distribution, even if it is free.  That way, the songwriter or performer can challenge unauthorized, impermissible uses of music more effectively, while using free downloading to develop the kind of name-recognition and cache enjoyed by the likes of Jackson Browne, David Byrne, and Steve Miller.

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This blog-post is for general informational purposes only and is not intended as legal advice.  Please consult your attorney about your particular situation. 

The views expressed in this blog-post are the personal views of David Gryce and do not represent the views of Arent Fox LLP, its partners, employees, or clients.