Are LinkedIn Contacts Protectable Trade Secrets?

Many professionals maintain robust social media accounts to raise their public profile and generate business – often at the encouragement of their employers. As just one example, LinkedIn, with its more than 347 million users, proclaims itself as the “World’s Largest Professional Network” and the leader among those social networks aimed at professionals. However, an employee’s LinkedIn contact list can be a valuable asset generated while on the job, from which competitors can gave insider information. Protecting that information is now the subject of a federal court case in Los Angeles, California.

In Cellular Accessories for Less, Inc. v. Trinitas LLC, No. 12-06736 DDP SHX, 2014 WL 4627090, (C.D. Cal., Sept. 16, 2014), Cellular Accessories for Less, Inc. (“Cellular”) sued its former employee and his new employer in California federal court, alleging that they violated various trade secret protections, including by continuing to use the former employee’s LinkedIn contacts and related data developed while he was an employee of Cellular. Cellular argued that the former employee had signed agreements that contained nondisclosure, noncompetition, and confidentiality provisions protecting “proprietary information” and trade secrets of Cellular, including the LinkedIn contacts and related data. The former employee argued that the LinkedIn contacts were not trade secrets, because they could be viewable by the public.

In its opinion, the court stated it could not decide the issue without a trial for two reasons. First, the court needed to know “to what degree the former employee’s LinkedIn contacts were indeed made public”, acknowledging that different LinkedIn users have different privacy settings managing what is “public”. Second, the court needed to know that if the former employee’s contacts were in fact public, “whether it was done with Cellular’s explicit or implicit permission.”

Commentary:

When a business is asked about protecting its proprietary and trade secret information, it often is quick to point to its “blackbook” of existing client/customer and potential leads as information that must be protected. However, businesses should understand that their employees’ LinkedIn profiles often provide the same information to competitors. Just as businesses adapt, the legal system must recognize those changes and allow businesses to protect the electronic age’s version of the blackbook (i.e., social media contact lists). The California federal court’s ruling suggests a business may claim its employees’ LinkedIn contact lists are proprietary information and trade secrets and forbid the use of those lists by a former employee and/or competitor if the employer 1) explicitly forbids its employees from allowing the public to view those LinkedIn contacts and 2) has a strong nondisclosure, noncompetition, and confidentiality agreement with employees.

For information on protecting your business’ proprietary and trade secret information, including client and pricing lists, please contact us.

State Trademark Registration vs. Federal Trademark Registration: And The Winner Is? (Part 2)

The factors businesses should consider when determining whether the trademark registration should be filed at the state or federal level were discussed in Trademark Registration: State vs. Federal … and the Winner Is? (Part 1). Other issues can arise when there are competing registrations at the federal and state level.

U.S. trademark law under the Lanham Act states that a person who obtains a federal registration that predates another person’s use of the same or a confusingly similar mark has superior rights, regardless of whether the other person has been granted a state registration or was the first person to use the mark in the state. When there is a conflict between a federal registration and a state registration, thanks to the Supremacy Clause, the federal registration usually wins. For instance, a prior federal mark takes priority over a subsequently registered, or “junior,” state mark.

Under trademark law, a federal registrant has a nationwide right to a mark if they have a federal registration and show a likelihood of entry into an area where a local junior user exists. The junior user may continue to use the mark in the state for as long as the federal registrant remains outside the market area. But once the federal registrant shows a likelihood of entry, the junior user must cease use of the mark. A federal registration is constructive notice that the registrant has the right to use the mark throughout the entire country (even if the registrant is not using it in a specific geographic area) and can prevent others from using the same or similar mark anywhere in the U.S.

An exception to this exists when the state mark was registered prior to the federal registration. If the state mark was in use before the date of first use of the federally registered mark, the prior state user may have some rights to use the mark, but those rights would be limited to a certain geographical area, usually the state where the mark has been registered and used. A state registration may also be helpful as a means of establishing prior use of a mark. State registrations can serve as evidence for a prior user to help establish rights to the mark in those states where such a registration was obtained.

If you have questions on this, or any other trademark or intellectual property issue, please contact us at (812) 426-1231.

Trademark Registration: State vs. Federal … and the Winner Is? (Part 1)

In our ever changing and expanding global market place, a business must stand out from the rest of its competitors in new and unique ways, and businesses stand out through their names, logos and brands.  The business’ name, logo and brand are one of its most important assets, and protection is critical. 

In the United States, trademark rights are conferred by use of the mark.   Trademark registration is, therefore, little more than a formal acknowledgement of already existing rights.  Trademarks may be registered at the federal level and also at the state level.  The law of each state concerning trademark registration and rights may differ, and as a result, the protection afforded by one state’s trademark registration may differ from that provided by another state’s registration.

Businesses often question whether the trademark registration should be filed at the state or federal level, and the answer depends on a number of factors.  State registrations are simpler, quicker and more cost-effective.  Therefore, some companies may find that a state mark is sufficient as the company operates solely within the one state, has no plans for expansion and has little to no internet presence.   State trademark laws, however, provide less protection for a mark than federal law.  As a result, for other companies, the benefits of registering a mark federally far outweigh those of state registrations despite the federal mark registration process being more extensive, rigorous, time-consuming and costly than state registrations.  Because of the numerous factors to consider in making a decision whether to file a federal or state trademark registration, one should consult with an attorney to evaluate the benefits as well as any drawbacks to each registration before deciding which registration to pursue. 

If you have questions on this, or any other trademark or intellectual property issue, please contact us at (812) 426-1231.

There Is No Substitute For Copyright Registration: The Mythological “Poor Man’s Copyright”

Authors often tell others, including attorneys, that the author does not need to register his or her work and obtain a copyright with the U.S. Copyright Office because the author has a “poor man’s copyright.”  The “poor man’s copyright” is a method of using a registered date by the post office, a notary public, or another highly trusted source to establish a particular date that the work existed on.  The “poor man’s copyright” is, however, a mythological creature similar to those found in great works of literature. (Think Cerberus, Medusa, Charon and Charybdis.)

U.S. Copyright law is clear that there is no provision regarding any such type of protection as a “poor man’s copyright,” and therefore, there is no substitute for registration.  An author’s work receives copyright protection the moment that work is created and fixed in a tangible form.  However, registration with the U.S. Copyright Office is a voluntary process, at least for unpublished works, and is recommended for a number of reasons, including, but not limited to:

  • Provides public notice of an author’s ownership interest;
  • If registration occurs within 5 years of publication, the registration is considered prima facie evidence in court of law should litigation commence; and
  • Registered works may be eligible for statutory damages and attorney’s fees in successful litigation.  Otherwise, a copyright owner’s only available remedy is an award of actual damages and profits.

If you have questions on this, or any other trademark or intellectual property issue, please contact us at (812) 426-1231.

 

What’s in a Name? Trademark Protection and Your Business

In Shakespeare’s Romeo and Juliet, Juliet says to Romeo: 

“What's in a name? that which we call a rose 

By any other name would smell as sweet.” 

While scholars agree that this line, which is in reference to Romeo’s house, Montague, implies that his name means nothing and that the star-crossed lovers should be together, a name in today’s business world is one of a business’ most important assets.

Trademark law allows businesses to protect their name.  A trademark is a distinctive sign that identifies certain goods or services produced or provided by an individual or a company.  It is a symbol of quality and a certain standard the company has established for a product or service, and it is this goodwill that allows consumers to know what to expect from the product or service when looking at comparable products or services in the marketplace.

A business or trademark owner acquires trademark rights from actual use of the name, logo, symbol, sound or some combination of these.  However, in order to protect and enforce the trademark, the business or trademark owner must register the mark.  One should consult with an attorney when filing the trademark application to ensure that the trademark application is properly filed, protects the mark actually being used and provides protection in the classes of products or services that are associated with the trademark.

Contrary to Juliet’s argument that the names of things do not matter, a business’ name, logo, symbol, sound or combination of these does matter and steps should be taken to obtain protection.  

If you have questions on this, or any other trademark or intellectual property issue, please contact us at (812) 426-1231.

SEED SAVING CAN BE HAZARDOUS TO YOUR POCKETBOOK: A Review of Bowman vs. Monsanto

In a 9-0 decision, the United States Supreme Court sided with agribusiness Monsanto on Monday holding  that an Indiana farmer violated Monsanto’s patents on Roundup Ready soybeans when he replanted his own crop year after year using Monsanto’s patented seeds that he picked out of a grain elevator years before, without compensating Monsanto.  The Court held that patent exhaustion does not permit a farmer to reproduce patent seeds through planning and harvesting without the patent holder’s permission.

The patent exhaustion doctrine states that the initial authorized sale of a patented item terminates all patent rights to that item.  Thus, a purchaser or a subsequent owner has the right to use or sell the item as he or she sees fit.  The doctrine, however, reserves the right of the patentee to prevent a buyer from making new copies of the patented item, which is how Bowman, the Indiana farmer,  violated the patent exhaustion doctrine.  Bowman made additional copies of Monsanto’s Roundup Ready genetically modified soybeans and, by planting and harvesting, year after year, these seeds, which were copies of the initial seeds purchased from Monsanto, Bowman violated the patent exhaustion doctrine and infringed on Monsanto’s patent. 

In writing the majority opinion, Justice Elena Kagan wrote,

[I]f simply copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention.  The undiluted patent monopoly, it might be said, would extend not for 20 years (as the Patent Act promises), but for only one transaction. And that would result in less incentive for innovation than Congress wanted.”   In the present case, for example, after Monsanto sold its first seed, other seed companies could produce the patented seeds competing with Monsanto and farmers would only have to buy the seeds once.

Kagan’s opinion is limited to the facts of the Monsanto case, but with the still pending case on whether human genes can be patented (Oral Arguments were held on that case in April), the ruling will surely affect inventors seeking biotech patents in the future and particularly help inventors seeking patents on self-replicated products. The opinion also hints that consumers will continue to pay high prices for food as the cost to plant crops such as soybeans continues to rise.

Our intellectual property department will continue to monitor this case and its effects.  If you have questions on this issue or any other intellectual property issue, please contact us at (812) 426-1231.  

YARD SALES CAN CONTINUE: THE FEDERAL COPYRIGHT ACT AND THE NATURE OF OWNERSHIP

E-bay sellers and yard sellers rejoice! In a 6 to 3 decision, the United States Supreme Court issued its ruling in Kirtsaeng v. John Wiley & Sons Inc. and held that the “first-sale” doctrine applies to copyrighted works that are lawfully published outside of the United States. The “first-sale” doctrine allows copyright owners of copyrighted works to sell, rent, give away, or lend the copyrighted work as the owner desires, while also providing a secondary market for the copyrighted work in thrift stores, libraries and even garage sales.

This case involved a U.S. college student, Supap Kirtsaeng, whose relatives, in his native Thailand, sent him lower-priced, foreign-published version of major college textbooks. Kirtsaeng then sold these textbooks on eBay for a profit of approximately $100,000.00.

In writing the majority opinion, Justice Breyer stated that a careful reading of the law did not show that geography mattered. Therefore, books and other goods manufactured and lawfully purchased oversees can be sold, rented, given away, or lent in the United States by the new owner as the new owner sees fit and without the permission of the copyright owners. Ginsburg, in writing the minority opinion, said that the majority’s interpretation of the Federal Copyright Act is “at odds with Congress’ aim to protect copyright owners against the unauthorized importation of low-priced, foreign-made copies of their copyrighted works.”

A copyright owner’s exclusive right to distribute the copyrighted work has historically ended after the first book was sold (hence the “first sale” doctrine), and a consumer, therefore, has the right to re-sell, rent, lend, or give away the copyrighted work. The ruling in this case clarifies that the “first sale” doctrine applies to copyrighted works lawfully purchased, not only in the U.S., but oversees as well. Further, the ruling is consistent with the consumer’s right to use a copyright work. The ruling in this case, undoubtedly, will have an effect on a copyright owner’s right to set a price for the copyrighted materials, but the full effect of which will not be known for some time.

Our intellectual property department will continue to monitor this case and its effects. If you have questions on this issue or any other intellectual property issue, please contact us at (812) 426-1231.