Your business’s intellectual property (IP) can be its most valuable asset. Customers buy your patented gadget because it is one of a kind.
Buyers look for your trademarked logo because they trust your products to be high quality. Or maybe you create books or music or video games, in which case your copyrights are vital to your financial success.
No matter which forms of intellectual property you rely on, you need to be aware of common intellectual property violations. Knowledge is your best defense.
“In the Information Age, intellectual property is the most important asset class for most businesses. For that reason, intellectual property should be protected just as much as money, equipment, or physical property.”
Ashley Brewer, Trademarks and Brands Lawyer
Types of Intellectual Property
The four main types of intellectual property that your business can own include:
- Patents—under 35 U.S.C. § 271(a), a patent issued by the United States Patent and Trademark Office (USPTO) gives the holder the right to exclude others throughout the United States from (1) making, using, offering for sale, or selling the invention and (2) importing the invention into the United States;
- Trademarks—a trademark or service mark is any word, phrase, symbol, design, or combination thereof that identifies your goods or services and distinguishes you from your competitors in the marketplace;
- Copyrights—copyright protects an author’s or artist’s original works once they are fixed in a tangible form of expression and applies to things like books, articles, video games, song lyrics, scripts, photographs, computer programs, and artwork; and
- Trade Secrets—trade secrets are formulas, methods, techniques, processes, or other information compilations that are kept secret by your company because they provide actual or potential economic value.
All of these forms of intellectual property must be proactively protected by the holder.
Intellectual Property Infringement
So, what is an intellectual property violation? Intellectual property infringement means that someone has used your intellectual property without your permission, typically for a commercial purpose. This can have a devastating effect on your business. An intellectual property violation can result in:
- Profit loss to competitors who make knockoffs of your patented products or copyrighted material,
- Customer confusion and income loss when a competitor benefits from your trademark’s brand recognition,
- Brand dilution, and
- Permanent loss of trade secrets.
To minimize your losses, you must actively monitor the competition and act quickly to stop any infringing activity.
TYPES OF INTELLECTUAL PROPERTY INFRINGEMENT
Intellectual property violations cover various unauthorized uses of protected works, from creative content to personal likenesses. Each violation of intellectual property rights carries significant legal consequences and highlights the importance of securing proper permissions and robust legal protection for intellectual property assets.
COPYRIGHT INFRINGEMENT
Copyright infringement involves the unauthorized use of protected works, such as books, music, films, and software. This can include copying, distributing, performing, or displaying copyrighted material without permission.
Legal consequences can range from financial damages to injunctions preventing further use. Copyright holders have exclusive rights to their creative works; any violation can result in serious legal actions.
TRADEMARK INFRINGEMENT
Trademark infringement occurs when a party uses a mark that is identical or confusingly similar to a registered trademark owned by another party, leading to consumer confusion. The use can dilute the brand’s identity and harm its reputation.
Legal remedies include damages, injunctions, and the destruction of infringing goods. Infringement can be particularly damaging to businesses as it can mislead consumers and unfairly capitalize on the established brand equity of the trademark owner.
PATENT INFRINGEMENT
Patent infringement involves the unauthorized making, using, selling, or importing a patented invention. Patent owners have exclusive rights to their inventions, and infringement can lead to significant financial penalties, injunctions, and compensation for lost profits.
Patent infringement affects the patent holder’s market share and discourages innovation by undermining the value of patent protection. Businesses must perform thorough patent searches to avoid unintentionally infringing on existing patents.
RIGHTS OF PUBLICITY VIOLATIONS
Rights of publicity protect individuals from unauthorized commercial use of their name, likeness, or other recognizable aspects of their persona. These rights are particularly important for celebrities and public figures whose identities have significant commercial value.
Violations of these rights can occur in various ways, such as using a person’s image in advertising without permission, creating merchandise featuring their likeness, or falsely implying an endorsement.
When a rights of publicity violation occurs, the individual whose rights have been infringed can seek legal remedies, including financial compensation and injunctions, to stop further misuse.
Examples of IP Violations
Some of the most common intellectual property violation examples happen accidentally. However, whether they are negligent or intentional, it is important to understand how to prevent or respond to these types of infringement.
Inadequate Trademark Search
Trademark infringement often occurs if a new company does not conduct the proper trademark searches before establishing its branding. As a result, it inadvertently uses a trademark that is confusingly similar to yours.
Unfortunately, having to change all of its logos, websites, and branding will be a costly mistake. That is why it is so important to obtain the assistance of counsel when forming your company. Understandably, it is an additional startup expense, but it is an important one.
Importation of Infringing Products
Another common intellectual property violation is the international importation of products that infringe your copyright, patent, or trademark rights.
One way to fight this is by patenting your invention and federally registering your trademark with the USPTO or registering your copyright with the Copyright Office.
Once you register your trademark, you can record your registration with U.S. Customs and Border Protection. They will then stop competitors from importing goods with infringing trademarks. Likewise, Section 1337 of the Tariff Act of 1930 prohibits the importation of products that infringe valid patents, federally registered trademarks, and federally registered copyrights. When you have federally protected your rights, you can seek swift relief from the International Trade Commission.
Infringement on Websites and Social Media Sites
Small businesses in particular also will find other websites or social media sites using their copyrighted or trademarked material. In the most glaring situations, a fraudulent website will mirror your site using a very similar domain name.
When customers accidentally order from a fraudulent website, the money goes to the competitor, the product never ships, and your reputation is damaged.
In less egregious situations, another company may repost your company’s logo or copyrighted material without permission. Many people think that simply crediting the copyright holder absolves them of liability for copyright infringement. Not so. They must obtain the holder’s permission, which usually is issued in the form of a license.
To stop the infringement, the trademark or copyright holder must act quickly. First, contact the platform hosting their website or social media site—examples include Shopify or Twitter—and request that they immediately remove the infringing content.
By citing your federal registration, you can easily prove your ownership of this IP, making the process easier. Next, send a cease and desist letter to the infringer. If necessary, file a federal lawsuit.
Disclosure of Trade Secret
Business reality is that sometimes former employees take your trade secrets to their new employer. Thus, every business needs to have counsel prepare airtight nondisclosure and non-compete agreements for their employees.
CONSEQUENCES OF IP VIOLATIONS AND LEGAL REMEDIES
Intellectual property infringement carries severe legal implications. Depending on the type and extent of infringement, consequences can include:
- Financial damages. Financial damages are calculated based on the economic loss experienced by the intellectual property owner, including lost profits and the costs of legal action. This compensation aims to restore the owner to the financial position they would have been in if the infringement had not occurred.
- Injunctions. Injunctions are legal orders that can immediately halt the production, distribution, and sale of infringing goods. This can be crucial in stopping ongoing harm and preventing further intellectual property violation examples from proliferating in the market.
- Criminal penalties. Criminal penalties apply to cases involving counterfeit goods or large-scale commercial infringement. These penalties serve as a strong deterrent against the illegal use of intellectual property and highlight the seriousness of such violations.
- Destruction of infringing goods. Courts may order the destruction of counterfeit or infringing goods. This measure ensures that infringing items are removed from circulation, thereby protecting the integrity of the intellectual property and preventing further damage to the owner’s market.
These legal implications underscore the importance of respecting intellectual property laws and obtaining proper permissions. Companies and individuals must be vigilant in avoiding activities that could lead to intellectual property infringement to safeguard against these significant legal consequences.
BrewerLong Helps Businesses Protect Their Intellectual Property
BrewerLong takes a proactive approach to helping its clients. We take steps to protect trademarks, copyrights, trade secrets, and patents at the business formation stage. Then we advise you on how to monitor for an intellectual property violation and how to respond if one occurs.
Because we are a relationship-focused law firm, BrewerLong wants to make long-term plans with you and help your business grow. Our attorneys can provide the services you need, whether you are just starting or looking to expand. Contact us today.
This blog post is provided on an “as is” and “as available” basis as of the date of publication. We disclaim any duty to update or correct any information contained in this blog post, including errors, even if we are notified about them. To the fullest extent permitted by law, we disclaim all representations or warranties of any kind, express or implied with respect to the information contained in this blog post, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title, non-infringement, accuracy, completeness, and timeliness. We will not be liable for damages of any kind arising from or in connection with your use of or reliance on this blog post, including, but not limited to, direct, indirect, incidental, consequential, and punitive damages. You agree to use this blog post at your own risk. Regarding your particular circumstances, we recommend that you consult your own legal counsel–hopefully, BrewerLong.
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