Intellectual Property (IP) is a crucial asset for corporations, and IP strategies should encompass a range of protections that safeguard a company’s creative and innovative outputs. Understanding the distinctions between copyrights, trademarks, service marks, trade secrets, and trade dress is essential for effectively managing, protecting and, if necessary, litigating these assets. This post follows on an earlier VERTEX Insights post on patents to delve into these IP categories and explore their implications in the context of corporate litigation.
Copyrights: Protecting Creative Works
Copyrights protect original works of authorship, such as literature, music, art and software. This protection extends to the specific ways that ideas are expressed, but not to the ideas themselves. For example, if two painters create different paintings based on the same landscape, each can copyright their unique interpretation of the scene, but neither can claim ownership of the landscape itself.
In litigation, copyright infringement cases often arise when one party uses another’s copyrighted material without permission. Key litigation issues include
- establishing ownership,
- proving copying and
- demonstrating substantial similarity.
Consider the case of Shepard Fairey v. The Associated Press (AP), where artist Shepard Fairey created the famous “Hope” poster during Barack Obama’s 2008 presidential campaign, based on a photograph taken by an AP photographer. Fairey argued that his poster was a transformative work, altering the original photo significantly. However, AP claimed copyright infringement, leading to a legal dispute over whether the poster was sufficiently transformative to be considered fair use.
The case was ultimately settled out of court, with both parties agreeing to share the rights to the image. This example illustrates how copyright law navigates the balance between protecting original works and allowing for creative reinterpretation, especially in the context of transformative use.
Trademarks: Distinguishing Products
Trademarks are symbols, names or phrases used to identify and distinguish products from those of other entities. For example, the Nike “Swoosh” logo and its “Just Do It,” tagline and the brand name “Coca-Cola” are all trademarks. These unique identifiers help consumers recognize and differentiate one company’s products from another, ensuring brand integrity and consumer trust.
Trademark litigation often involves claims of trademark infringement, dilution or unfair competition. The plaintiff must prove that the defendant’s use of a similar mark is likely to cause confusion among consumers. Corporations invest heavily in brand identity, making trademark protection vital to their market position. For instance, if a small coffee shop started using a logo similar to Starbucks, it could confuse customers and damage Starbucks’ brand, leading to a lawsuit.
In Qualitex Co. v. Jacobson Products Co., the Supreme Court ruled that a color could function as a trademark if it acquires distinctiveness and serves to identify the source of a product. Qualitex had used a specific green-gold color on its dry-cleaning press pads, which Jacobson Products began using.[1] The court’s decision underscored that even a color, when associated with a product, could warrant trademark protection.
Service Marks: Protecting Service Identification
Service marks are similar to trademarks but specifically apply to services rather than goods. They help consumers distinguish the services of one provider from those of others.
Service mark litigation follows similar principles to trademark litigation. Cases often revolve around
- the likelihood of confusion,
- the distinctiveness of the mark and
- the mark’s use in commerce.
For example, if a new roadside assistance company began using a name or logo similar to AAA (American Automobile Association), it could mislead consumers into thinking they are affiliated, prompting AAA to take legal action.
In a notable case, The American Automobile Association (AAA) v. AAA Insurance Agency, AAA successfully protected its service mark against a company using a similar name to offer insurance services. The court found the similarity in names could confuse consumers about the source of the services, underscoring the importance of distinct service marks.
Trade Secrets: Safeguarding Confidential Business Information
Trade secrets encompass confidential business information that provides a competitive edge, such as formulas, processes, customer lists and marketing strategies. Protection is maintained as long as the information remains secret.
Trade secret litigation typically involves misappropriation claims, where a company alleges its trade secrets have been stolen or disclosed without authorization. The plaintiff must show that
- the information was indeed a trade secret,
- reasonable measures were taken to protect it
- and it was wrongfully acquired or disclosed by the defendant.
For example, a company might sue if a former employee takes confidential client lists to a competitor.
In Waymo LLC v. Uber Technologies, Inc., Waymo, a subsidiary of Alphabet Inc., accused Uber of stealing trade secrets related to self-driving car technology. This high-profile case involved allegations that a former Waymo engineer, Mr. Levandowski, downloaded thousands of confidential files before joining Uber. The lawsuit concluded with Uber agreeing to pay Waymo a substantial settlement and promising not to use Waymo’s proprietary technology.
Trade Dress: Protecting Product Appearance
Trade dress refers to the visual appearance of a product or its packaging that signifies its source. Trade dress includes elements such as design, color, shape and overall presentation.
Trade dress infringement cases focus on whether the defendant’s product creates a likelihood of confusion among consumers regarding the source of the product. The plaintiff must prove that its trade dress is distinctive and non-functional. For example, a company could sue if a competitor’s product packaging is so similar that consumers might think they are buying the plaintiff’s product.
The Two Pesos, Inc. v. Taco Cabana, Inc. case highlighted trade dress protection, where the Supreme Court upheld Taco Cabana’s claim that Two Pesos had copied its restaurant’s distinctive décor, which included a festive eating atmosphere with interior dining and patio areas, painted murals and colorful decorations. The court ruled Taco Cabana’s trade dress was inherently distinctive and protectable under the Lanham Act.
Know the Types of IP to Protect What Matters Most: Competitive and Creative Assets
Understanding intellectual property is paramount to maintaining competitive edge, protecting product differentiation and fostering innovation. In the corporate world, sound IP strategy starts with knowing the unique purpose of each type of IP and the specific strategies for enforcement and defense of each type in litigation. Understanding the nuances of copyrights, trademarks, service marks, trade secrets and trade dress is essential for effective IP management and, when called for, litigation. As companies continue to navigate the complexities of IP law, a solid grasp of these concepts is invaluable in safeguarding creative and competitive assets. In upcoming posts, we’ll discuss the risks raised by infringement of intellectual property, including economic damages.
For answers to questions and more information on the topic of intellectual property contact Adam Rhoten (arhoten@vertexeng.com) or submit a query at info@vertexeng.com or by calling 888.298.5162.
Case Example Citations
Copyrights:
Trademarks:
Service Marks:
Trade Secrets:
Trade Dress:
[1] A dry-cleaning press pad is a tool used to help dry cleaners achieve a higher-quality finish on their work, while reducing the need for time-consuming touch-ups. Press pads are designed to eliminate seam impressions and impression patterns, which can be caused by sensitive materials like rayon and micro-fiber. They can also help with other problems that may arise when pressing these types of fabrics.
