Intellectual Property Infringement
When you own intellectual property, you own certain intangible rights in creations, methods, brand names, inventions, and even the look or feel of a product or its packaging. In the United States, there are four different types of intellectual property.
Trademarks protect commercial branding, including names, logos, slogans, and trade dress (the look and feel of a product or packaging).
Copyrights protect original expressions of creative works, such as text, images, photographs, movies, books, and music.
Patents protect inventions, devices, machinery, methods, designs, and plants. There are three different types of patents granted — utility patents, design patents, and plant patents. Approximately 92% of patents granted are utility, 8% are design, and 0.3% are plants.
Trade secrets protect formulas, methods, lists, etc. that are valuable because they are kept secret. The Coca-Cola formula is a classic example of a trade secret. Unlike copyrights, trademarks, and patents, trade secrets are not registered with the government.
Copyrights are by far the most common type of protected intellectual property in the United States. In the most recent year of data available, nearly 450,000 copyrighted works were registered, nearly 330,000 patents were granted, and 282,000 trademarks were registered.
There is some overlap between protections given by these different types of intellectual property, including what types of items can be protected. For example, a logo design can have both copyright and trademark protection.
What is Intellectual Property Infringement?
Different laws govern different types of intellectual property. Due to the number of ways the various types of intellectual property are protected, there are different methods of determining whether intellectual property violations exist.
Trademark infringement exists if there is a likelihood of confusion by the consuming public. Courts look at a number of factors to determine the potential for likelihood of confusion, including the target market, as well as the sophistication of likely buyers.
Copyright infringement occurs when a copyrighted work is used or publicly displayed without the permission of the copyright owner. In order to demonstrate copyright infringement, a plaintiff will need to show access to the work as well as copying.
Patent infringement occurs when someone makes, uses, offers to sell, or sells a product or process that is patented. Patent infringement can occur whether or not the infringer knew of the existence of the patented invention.
Trade secret infringement, also known as misappropriation, happens if someone:
- Improperly acquires a trade secret,
- Improperly discloses or uses a trade secret without permission of the rights holder, or
- Has reason to know that the knowledge was acquired through mistake or accident, and uses it anyway
Unintentional and Intentional Intellectual Property Infringement
There is often a question of the infringing party’s intent when committing the infringement. Trademark, patent, and trade secret infringement can be intentional (willful infringement) or unintentional. Copyright infringement is almost always intentional.
Unintentional patent or trademark infringement occurs when you use someone else’s protected invention, design, or branding and do not realize that there were existing protections on that particular item. Conducting a patent or trademark search as part of your due diligence prior to using particular intellectual property can go a long way in avoiding claims of intellectual property infringement.
Intentional intellectual property infringement can occur in a number of different ways. Copyright infringement nearly always has some degree of intention because the intentional actions – reproducing, distributing, or displaying a work – involve utilizing a preexisting work that the infringer does not have rights to utilize. An action such as copying a photograph online to use on a personal blog is intentional infringement, even if the actor is unaware of the consequences of his or her actions. However, there are different levels of intention, which can correlate to the severity of monetary damages.
Intentional infringement of trademark or patent rights occurs when the infringer knew of the existing brand, invention, or design, and proceeded with the infringing activity anyway. Misappropriation, or trade secret infringement, can be unintentional if a trade secret is disclosed through negligence or an inadvertent happenstance, such as by accidentally sending an email attachment to the wrong address.
Intentional misappropriation occurs when the trade secret is used or disclosed by someone who knows that knowledge of the trade secret was:
- Taken through improper means, such as theft, fraud, espionage, or bribery
- Gained by someone who has a duty of confidentiality to the owner, such as through a nondisclosure agreement
Penalties for Intellectual Property Infringement
Infringement of intellectual property can carry a variety of penalties, depending on the severity of the infringing action, but there are also some similarities in available penalties. For example, equitable injunctions are an available remedy in intellectual property infringement cases. Injunctions prevent the defendant from engaging in infringing activity. Courts can grant preliminary injunctions at the outset of litigation, or permanent injunctions as part of the final judgment. Additionally, while they are not automatic, the prevailing party in intellectual infringement cases can ask the court to grant reasonable attorney’s fees and costs from the litigation.
Copyright cases are unique because, if a work of art is registered with the U.S. Copyright Office, the plaintiff can seek statutory damages from the court, rather than proving the amount of damages sustained. These damages can range from $200 to $100,000, depending on how willful the infringer’s actions were.
For other civil intellectual property matters, the intellectual property rights holder is required to prove damages. This can increase the amount of time involved in federal litigation, due to the additional matters that need to be proved.
Damages in trademark infringement cases include:
- The infringing party’s profits gained through the infringing action
- Damages sustained by the plaintiff due to the infringing activity
- Plaintiff’s costs incurred through “corrective advertising” to restore the value of the trademark damaged by the infringement
- Reasonable royalties the defendant would have paid, had the trademark been properly licensed from the plaintiff
In patent infringement cases, the plaintiff has the option of seeking lost profits or reasonable royalties. Lost profits can yield higher monetary damages, so it is generally the preferred option. However, it requires detailed financial information and can be harder to prove. Reasonable royalties, on the other hand, require only an approximation of damages.
Plaintiffs in both trademark and patent cases can seek treble damages, depending on the severity of the defendant’s infringing actions.
Victims of misappropriation, or trade secret violation, can generally seek financial compensation for actual loss. In many states, including California, punitive damages up to twice the amount of the award can be granted to the plaintiff.
Additionally, the Defend Trade Secrets Act (DTSA), which gave trade secret owners a new federal cause of action, was signed into law in 2016. Under the DTSA, a trade secret owner may also petition a court for civil seizure of property necessary to prevent the dissemination of the secret. Depending on the severity of the infringing activity, bad actors may also be subject to criminal penalties, including jail time, at both the state and federal level. This penalty is typically reserved for large scale counterfeiting operations or intentional theft of trade secrets.
Intellectual Property Rights Infringement
Intellectual property rights are often thought of as a “bundle” of rights held by the owner of the IP. In the United States, IP owners hold different rights depending on what type of intellectual property they own.
Trademark Rights Infringement
Trademark intellectual property rights include the right to prevent others from using your trademark or a trademark that is confusingly similar to yours. Federal registration is not necessary in order to have trademark rights. Common law trademark rights allow a brand owner to prevent others from using a confusingly similar trademark in a certain geographic area. However, a registered trademark owner can prevent usage of the trademark nationwide, which offers significantly more protection to the rights holder.
Violation of trademark rights occurs when an infringer utilizes a trademark that could cause a likelihood of confusion by the consuming public. Trademark infringement could be deliberate, such as deliberate counterfeits meant to look like the original product. This type of infringement could also be unintentional, if there is no awareness of the earlier branding.
Trademark rights differ from other intellectual property rights in that a trademark owner must actively police third party use of the trademarks through sending trademark cease and desist letters or filing trademark litigation to prevent unauthorized use. Failure to do so could result in a loss of rights, whereby brand owners can no longer prevent others from utilizing their previously protected trademarks. Please see our trademark infringement page for more information.
Copyright Rights Infringement
In the United States, copyright holders have the right to:
- Reproduce the work
- Prepare derivative works based on the work, such as a movie based off a novel, or translating a work into another language
- Distribute copies of the work to the public, and
- Perform or display the work publicly
Infringement of these rights occurs when someone does one or more of these actions without permission of the copyright holder. Infringement could be as simple as using a photograph online without permission of the owner, or could involve large scale sales of bootleg DVDs.
Other jurisdictions might grant additional moral rights to copyright holders, which are not found in the U.S. Copyright Act. Common moral rights include:
- The right of attribution, where the work must be attributed to the author,
- The right to have a work published anonymously, or to have the author’s name removed from the work, and
- The right to integrity of the work, which allows an author to object to changes or destruction of the work that is prejudicial to the author’s honor or reputation.
As with the more common set of rights a copyright owner holds, failure to attribute an author’s name, failure to remove an author’s name, or failure to adhere to the integrity of the artistic work could constitute to violation of the author’s moral rights. Please see our copyright infringement page for more information.
Patent Rights Infringement
Patent intellectual property rights include the right to prevent unauthorized people from utilizing an invention or design. For utility patents this monopoly lasts for a period of 20 years. Patent rights infringement commonly occurs when a company produces, sells, or distributes an item that is patented, or has features that are claimed by an existing patent without permission from the patent owner.
As with trademark rights infringement, patent rights can be infringed intentionally or unintentionally. Unlike copyright or trademark protections, there are no common law rights patent owners can claim for non-registered inventions. Please see our patent infringement page for more information.
Trade Secret Rights Infringement
Trade Secret rights, unlike copyright, trademark, or patent rights, are not registered with the government. An organization typically protects trade secrets through the use of nondisclosure or confidentiality agreements, in order to prevent the general public or their competitors from receiving the information. These rights can also be protected through the use of advanced security systems, both inside a company’s offices and through electronic security measures. Please see our trade secret litigation page for more information.
Defenses to Intellectual Property Rights Infringement Claims
There are two common defenses to claims of intellectual property rights infringement.
The first sale doctrine allows for the resale of items that were purchased legally. Under this doctrine, clothing with trademarked logos, used appliances, books, and DVDs can be sold secondhand online, at garage sales, or to thrift stores.
There are also fair use exceptions to claims of copyright and trademark infringement. For copyright matters, the fair use exception can be claimed for:
- Criticism and commentary of the work
- News reporting
- Teaching, scholarship, and research
For trademark cases, fair use is descriptive when an advertiser utilizes a trademarked term to describe their product. Fair use is nominative when an advertiser refers to another trademark when advertising their own goods or services. This situation typically occurs when an advertiser is comparing their product to another belonging to a different brand, or when an advertiser states that their product is compatible with products produced by the referenced brand.
Notice of Intellectual Property Rights Infringement
If someone is infringing your intellectual property online, you may have the option to send a notice of intellectual property rights infringement to the internet service provider, seeking their assistance in resolving the matter.
In the United States, if your copyrighted work is being shared on a website without your permission, you have an option to send a Digital Millennium Copyright Act (DMCA) Takedown Notice to the web host. Failure of an internet service provider to respond to such a notice in a timely manner could result in the provider being liable for copyright infringement.
In a takedown notice, you will need to include:
- Your contact information
- Information about the original work, such as a description or a link to the website on which it originally appeared
- A link identifying the infringing work
Only the copyright holder or the holder’s attorney can send this sort of notice and we suggest that it come from your attorney.
Intellectual Property Cease and Desist Letter
If you believe that someone is infringing your intellectual property rights, a common option is to send that person a cease and desist letter. There are many benefits to sending a cease and desist letter, including:
- Putting the other party “on notice”
- The potential for a quicker resolution than going through the court system
- A more amicable way to resolve the dispute
- Both sides saving money on court costs and litigation fees
For more information, please see our cease and desist letter page.
Mandour & Associates – Intellectual Property Infringement Lawyers
Our law firm is committed to assisting our clients with intellectual property infringement issues. Intellectual property isn’t just one of our practice areas. It is our entire practice. We look forward to working with you.
For a free consultation regarding your intellectual property infringement issue, please contact us today.