Trade Secrets

Gavin Law Offices expands into Charlottesville

Posted on by Gavin Law Offices

A Richmond law firm that boasts clients in the entertainment industry has expanded its practice westward.

Gavin Law Office, which was founded locally in 2002, last month opened an office in Charlottesville.

The expansion was prompted by the addition of Elva Mason Holland, a Charlottesville attorney who had a longtime solo practice before joining Gavin.

Firm founder Pam Gavin said she’s had her eye on Holland for years.

“I’ve been trying to get her to work with me forever,” Gavin said. “She’s been solo. She needs more depth to the bench and I’m always interested in growing.”

Gavin said her firm’s practice and Holland’s book of business fit nicely together. Gavin Law represents musicians and a range of businesses, from startups up to large companies, in intellectual property matters. Holland represents talent in the entertainment business.

The new addition brings Gavin’s attorney headcount to six. Its local office is in Henrico County at 2229 Pump Road.

Holland has her bachelor’s and law degrees from UVA.

Gavin, also a UVA grad, began her career in bank marketing, before going back to law school at William & Mary. She started her own firm in 2004 after stints at McGuireWoods and Reed Smith.

Gavin has expanded the firm previously, including by adding a solo practioner in Bedford years back, before that attorney in that office decided to go back out on his own. She said this latest stop in Charlottesville won’t be the firm’s last.

“I’m always planning and plotting,” she said. “Continued expansion is on the horizon.”

Click here to read the full story in Richmond BizSense

Hot Off the 3D Printer: Infringing Printables Create New Challenges for Copyright Holders

Posted on by Noah Downs

Reproduction and dissemination of written works and 2D visual art like photos, drawings, and videos has become as easy as typing a few words into Google, finding your desire, and clicking “download.” The distribution can be nearly instantaneous. Copyright law has attempted to adapt to protect these works, and constructs such as the Digital Millennium Copyright Act (DMCA) give structure to the legal framework of the Internet.

Now, imagine if reproduction and dissemination of 3D products were that simple. For instance, you find an item you like on Amazon or eBay, click “print,” and have it appear next to you almost immediately. Such capabilities have always appeared to be a technology of the distant future — imagined in The Jetsons and Star Trek. Only in a space fantasy could Captain Jean-Luc Picard turn to a replicator device and say “Tea, Earl Gray, Hot” for a steaming mug of tea to instantly appear.

Surprisingly, this technology is here today. And it’s extremely accessible. 3D printing has rapidly evolved from a technology primarily used in industrial and medical settings to something available for home and personal use. Using digital modeling software, a user can design a product as simple as a cube or as complex as a fully-functional monkey wrench, click “print,” and have the product printed in minutes. 3D printing has evolved not just in the line of personal use, but also into other fields previously unimagined. In fact, architects can now design a home for a prospective homeowner, click “print,” and have that home printed within a few hours.[1]

3D printing capabilities raise endless questions for intellectual property attorneys.  First it may be helpful to understand why intellectual property protection is necessary in the first place. Intellectual property law serves to promote and protect innovation and creativity. Creators often make a substantial investment in the creation of their work and incur a much higher cost for creating the work than a second-comer who merely makes copies would. Without intellectual property protection, others could copy a work for a much lower (or even no) cost. For example, think of the long hours an author spends writing a novel. If anyone could then print a free copy of that novel without paying for it, the author would not have a chance to recoup her investment and may not be willing to invest further time and effort into creating more works. Knowing that your laborious creative endeavor could be freely appropriated by anyone else that comes along would leave little motivation for creators to continue creating. Thus, in order to incentivize creators, the law protects their right to develop their work for commercial gain and prevent copiers from doing so. In this way, creators are rewarded for the high costs of their creativity, and are able to fully harness their creations.

Unfortunately, copyright law has not yet caught up with the advances in 3D printing, leaving little specific guidance for tackling this new frontier. For the time being, intellectual property attorneys must apply older copyright cases and statutes that imperfectly fit the 3D printing world. For example, the Supreme Court ruled in the 1984 Sony v. Betamax case that although a VCR was capable of copying movies and television shows, the VCR was also capable of “substantial non-infringing purposes,” thus allowing VCR recording capabilities to remain in the hands of the masses. This result differs greatly from the case of Napster, the infamous peer-to-peer file sharing program that was initially shut down because the intended usage was found to be primarily for infringing purposes. The 3D printer likely falls squarely between these cases — when browsing leading 3D printing communities Thingiverse and Shapeways, a user finds as many Stormtroopers[2] and Iron Thrones[3] as original designs for items like cat battlearmor.[4]

The current framework of the DMCA creates difficulties for copyright owners of 3D works trying to have infringing copies taken down. Under the DMCA, Shapeways and Thingiverse may fall under a safe harbor provision that avoids infringement liability so long as they have a takedown policy and do not actively promote the infringement. The burden of enforcing rights falls on the copyright holder, who must search each site for copyrighted works and file takedown requests for each one or go after each individual infringer who uploads infringing content to the sites. The DMCA takedown policy is similarly employed on sites like YouTube, where infringing works are frequently uploaded.

However, unlike in the world of YouTube and digital music, the content on Shapeways and Thingiverse can allow for the creation of goods that affect and reduce a creator’s ability to fully exploit the fruits of their creative work. 3D printing allows users to create content and goods in the realm of the creator’s work that can completely replace a similar work of the creator. In the digital music world, if someone were to attempt to create a song in the style of Green Day, using similar sound and composition, or even identical lyrics, it would likely not be identified as Green Day music but rather as an imitation. By contrast, 3D printers are able to exploit a specific brand for commercial gain and cut into the monetization of the creator. For example, in the vast intellectual property pool behind Disney’s Frozen, a 3D printer could create a unique toy depicting a character from the movie and market it as a Frozen toy, competing with Disney’s other goods.

Recognizing the difficulty of copyright enforcement using the DMCA takedown notice, Hasbro teamed up with Shapeways in 2014 to create a different business model. Instead of going after infringers, Hasbro and Shapeways allow users with 3D printers to use certain Hasbro copyrights for a small fee in making figurines and fan art. This unique model has allowed Hasbro, Shapeways, and Shapeways users to profit from the creation and sale of these works, while reducing or removing the need for Hasbro to pursue copyright infringers. Essentially, Hasbro has made the potential infringer a part of the production team and is able to profit from its copyrights without production costs. Until copyright law catches up with 3D printing technology, partnerships such as that between Hasbro and Shapeways may be the way of choice for copyright holders to police their copyrights in the 3D printing world.

3D printing doesn’t just pose new questions for copyright law, but also for trade secret law. 3D printing is utilized by many manufacturing companies to create prototypes and mock-ups for proofs of concept and pitches. Often, these prototypes and mockups constitute a trade secret. However, researchers at the University of California, Irvine (“UCI”), have discovered a way to recreate a 3D-printed model based on the sounds the 3D printer makes when printing. The sounds of a 3D printer nozzle can be recorded and mapped based on their directional movements to and from the recording source. UCI researchers were able to recreate the 3D model by reverse engineering the sounds made during printing, thus putting carefully guarded trade secrets at risk of being revealed.[5]

Advances in technology (such as the VCR and Napster) have brought forth the most dramatic changes in copyright law and policy. But by the time laws regulating 3D printing come to pass, it is likely that new technology will be available to work around such laws, as was the case when the fall of Napster gave rise to new methods of illegal downloads such as bittorrent.  The question is whether the technology is driving the need for new regulation, or whether new regulation drives innovations in technology in order to work around the new laws. In the meantime, companies need to remain vigilant in their enforcement and innovative in their policies by working with intellectual property experts to protect their rights. — Noah Downs & Rina Van Orden

 

[1] See https://www.washingtonpost.com/news/innovations/wp/2015/02/05/yes-that-3d-printed-mansion-is-safe-to-live-in/.

[2] Stormtroopers are from the Star Wars universe and part of the extensive intellectual property holdings belonging to Disney.

[3] The design of the Iron Throne, made famous by the popular television show Game of Thrones, is owned by HBO.

[4] Cat battlearmor can be found at www.thingiverse.com/thing:1095858, and has over 9,000 downloads as of this article’s publication.

[5] See https://news.uci.edu/research/bad-vibrations-uci-researchers-find-security-breach-in-3-d-printing-process/.

How Does Intellectual Property Add Value to Your Business?

Posted on by Noah Downs

Recently at a networking event, I was asked the simple question: “What do you do?” After responding that I am an “intellectual property attorney,” I received a brief look of confusion, and then the question: “Yes, but what does that mean?” This exchange (which is a frequent occurrence, I might add) illustrates a common issue — many business owners are missing out on the value of their intellectual property, often until it is too late to capture and exploit that value.

Studies referenced by the World Intellectual Property Organization say that 80-90% of a business’s potential value lies in its intellectual property.[1] Imagine being a business owner, earning $100 dollars from a sale of goods, and then leaving $80.00 on the table as you leave. If your business is not identifying, protecting, and maintaining its intellectual property rights, then you are one of those owners.

With this is mind, allow me to illustrate some ways to recapture that value. There are numerous types of intellectual property to protect and exploit, and in the following paragraphs we will deal with three of the most prominent types: 1) Trademarks, 2) Copyrights, and 3) Trade Secrets.

Trademarks

Trademarks are the most obvious aspect of intellectual property, and the most widely known. You see and interact with trademarks every day, whether it be through names (Google, Yahoo), logos (Nike’s “Swoosh”), slogans (McDonald’s “I’m lovin’ it”), or even sounds (Windows’ startup tune). Trademarks serve as an indication of source and quality for the consumer.

Trademarks allow consumers to act on strong preferences on where they shop and what they buy. For example, some people prefer to buy groceries at Kroger, others Food Lion, and still others prefer Wal-Mart. Notice — when you read each of those names, you first recognized the name and then immediately had varying impressions of each pop into your mind, ultimately providing a conclusion of whether or not you would choose to shop there. This all happens in a split second. Each trademark leaves an imprint as to the quality and cost of groceries and the experience of shopping.

Not only do trademarks serve as a source and quality indicator, but they serve as a marker for the brand. This marker is extremely important if you want to sell your business for a profit.

For example, the executives at Facebook (another well-known trademark) probably never said “We want to purchase Evan Spiegel’s smartphone app for $3 billion dollars.” More likely, they sat down and said “We want to buy Snapchat for $3 billion dollars.” The reason Facebook values Snapchat at $3 billion dollars is because Snapchat developed its brand under a now widely-known trademark, and that trademark contains the goodwill of millions of consumers. Anyone can make an app that sends temporary pictures (see Mark Cuban’s CyberDust and Facebook’s Poke), but the value lies in the quality, experience, and goodwill already associated with the Snapchat trademark. Although Snapchat is an international brand, it began as a small app and as a small business. Building a brand begins somewhere — and protecting your trademark from the beginning can be key to building up your $3 billion dollar idea.

Copyright

Copyright is another facet of intellectual property that can easily add value to your business. Many people hear the word “copyright” and think of artistic creations such as books, visual art, or music. But consider how copyright translates into your marketing materials. Many businesses have valuable copyrightable interests in photography, product packaging, websites, commercials, or informational videos, to name a few. Establishing control of these assets through copyright protection allows you to harness the value of your business’s creative marketing approaches.

Additionally, some of the most valuable copyrightable materials include software code and data compilations. Copyrights on software code protect your proprietary information from direct copying and allow your company to stake out a claim in the market. Once your company harnesses control of that share of the market, then you are able to control the dissemination of your software through the marketplace. Because copyrights typically have a long duration, having a copyright for a useful piece of software may be extremely valuable when negotiating with potential customers or business partners.

Trade Secrets

One of the least understood areas of intellectual property lies in trade secrets. Most commonly, trade secrets are secret techniques or devices used by a company in manufacturing its products. You establish a trade secret by guarding a proprietary concept that has economic value simply because it’s not generally known and by taking measures to protect it (for example, through contracts). Many businesses have trade secrets but do not realize that the information they have constitutes a trade secret. If you have developed a unique and efficient way of producing results, you may have a trade secret. Alternatively, if the methods of producing a particular product are known only to your company, you may have a trade secret.

Coca-Cola provides one of the greatest trade secret examples. Coca-Cola tightly protects the formula that gives the distinctive and crisp taste associated with their leading beverage. If they did not protect their formula as a trade secret, then the Coca-Cola brand would not have the notoriety it has now. Other soda producers would be able to precisely replicate and recreate the Coca-Cola taste, thereby eliminating Coca-Cola’s uniqueness. By protecting their trade secret, Coca-Cola retains their exclusive market share which is extremely valuable. Although Coca-Cola is a famous example, every company has something that sets them apart in what they do. What you do to set yourself apart may be a valuable trade secret that you can protect.

Protecting your business’ intellectual property requires more than filing for trademarks, copyrights, and protecting trade secrets. Intellectual property protection requires marking your territory in the marketplace, making sure you have the biggest share you can have, and creating a clear impression of what your company offers to the consuming public. In the modern world, the primary value of a business no longer lies solely in the tangible assets it holds. The true value lies in growing and monetizing the intangible assets, which your company can protect as intellectual property. This turns intangibles into value, which then increases the overall value of your business. — Noah Downs

 

(This is not intended as legal advice. Contact a lawyer for assistance in your particular situation.)

 

[1] Building and Enforcing Intellectual Property Value, An International Guide for the Boardroom, 2003 PriceWaterhouseCoopers.

 

The Defend Trade Secrets Act: Congress Considers a Federal Civil Cause of Action for Trade Secret Misappropriation

Posted on by Mary Witzel

Trade secrets are a form of intellectual property that can consist of any piece of information that has commercial value or gives its owner an advantage in the marketplace.  Their value is directly tied to their secrecy, and their security and value is deeply, and often, fatally, impacted if they are stolen or publically revealed.

Currently, trade secret owners can obtain redress for trade secret theft through two avenues: federal remedies under criminal statutes and the Economic Espionage Act of 1996, and civil remedies available under state law.  Trade secret protection is roughly consistent between states, as most states have adopted a form of the Uniform Trade Secret Act.  Nevertheless, variances exist between state trade secret statutes, and the manner in which trade secret law is interpreted by courts also differs from one state to another.  As a result, a company seeking redress for trade secret theft might obtain different results in the courts of states with identical trade secret legislation.  There are currently no remedies under federal civil law for trade secret misappropriation.

Congress is considering an act to provide federal civil remedies for trade secret theft as an alternative to the relief available to trade secret owners under state law.  In late January, the Senate Judiciary Committee approved the Senate version of the Defend Trade Secrets Act, S. 1890 (the “DTSA”), moving the DTSA closer to a Senate Floor vote.  The current iteration of the DTSA contains the following notable provisions:

  • The statute of limitations to bring a claim under the DTSA will be three years.
  • The DTSA would allow trade secret owners to obtain ex parte seizure orders to recover stolen trade secrets while a full court hearing is pending.  Such seizure orders are only to be granted in “extraordinary circumstances,” upon a rigorous showing regarding ownership of the trade secret, theft of the trade secret, and the lack of harm to third parties should the ex parte order be granted.  Seized materials are to remain in the custody of the court pending a full hearing.
  • Under the DTSA, courts may not authorize the disclosure of trade secret information in litigation unless the trade secret owner is allowed the opportunity to submit the information under a seal describing the owner’s interest in preserving the confidentiality of the information.
  • The DTSA attempts to balance employee mobility against trade secret protection: trade secret owners can obtain injunctive relief to prevent actual or threatened disclosure of trade secrets, provided; 1) the injunction is supported by proof of actual or threatened misappropriation; 2) the injunction does not “prevent a person from entering into an employment relationship;” and 3) any conditions placed on employment are “based on evidence of threatened misappropriation, and not merely on the information the person knows.”  In addition, court orders cannot conflict with state laws prohibiting restraints on the practice of a profession, trade, or business.
  • “Safe Harbor” provisions in the DTSA will shelter whistleblowers who disclose trade secrets in confidence to government officials or in lawsuits alleging retaliation by an employer.
  • The DTSA will require an annual report from the Attorney General addressing overseas theft of United States trade secrets and the role of foreign governments in such theft.

The DTSA will not preempt the body of existing state trade secret law, but instead, will provide an alternative form of relief for business owners whose trade secrets have been misappropriated (particularly those whose business operations span multiple states).  If enacted, it will provide trade secret owners an additional tool to add to their enforcement arsenal.

The DTSA has garnered strong support in both the House and the Senate, and a variant of the DTSA is expected to pass into law in 2016.  — Mary Witzel

UPDATE (5/23/16): On May 11, 2016, President Obama signed the DTSA into law.  Litigants are already availing themselves of the federal civil cause of action created by the Act.  See M.C. Dean, Inc. v. City of Miami Beach, No. 16-cv-21731-CMA (S.D. Fla. May 16, 2016); Bonamar, Corp. v. Turkin, No. 16-CV-21746 (S.D. Fla. May 16, 2016); Universal Protection Services v. Thornburg, No. 2:16-cv-00097 (N.D. Tex. May 19, 2016).