Copyrights and Trademarks

August 10, 2005
Perry J. Viscounty, J.D.

,
Heather L. Mayer, J.D.

,
Amos E. Hartston, J.D.

BioPharm International, BioPharm International-08-10-2005, Volume 2005 Supplement, Issue 2

Trademark protection in the US is based on a dual system of federal and state laws.

This chapter provides a general overview of two distinct areas of intellectual property law: copyrights and trademarks. Copyrights provide important protection for original works of authorship, and trademarks allow owners to distinguish their products and services from others'.

Copyright

A copyright is a form of federal protection used to safeguard "original works of authorship" that are "fixed" in a tangible form of expression.1 The protection of copyright can extend to literary, dramatic, musical, and artistic works, as well as to software, brochures, labels, and catalogs.2 To qualify for copyright protection, a work must be original and must be fixed in a tangible medium. A copyright cannot protect an idea, only the expression of an idea.

Copyright Protection, Notice, and Registration

Copyright protection exists from the time a work is created and put into a tangible fixed medium. No publication, notice, registration, or other action in the US Copyright Office is required to secure copyright rights. Nevertheless, registration is necessary to file a lawsuit for copyright infringement, and registration prior to infringement is necessary to recover statutory damages and attorneys' fees in any such action. 3

In general, a copyright notice consists of the word or symbol "Copyright," "Copr.," or "©" followed by the date of publication and the name of the copyright holder. Use of a copyright notice is optional for works created after March 1, 1989. Notice is highly recommended, however, because it: (1) informs the public that the work is protected by copyright, (2) identifies the copyright owner, (3) shows the first year of publication, (4) eliminates the defense of innocent infringement in a suit for copyright infringement, and (5) allows the owner to register the work with the US Customs Service for protection against the importation of infringing copies.

To register a copyright, 4 one must send the following items to the US Copyright Office: (1) a properly completed application form, (2) a nonrefundable filing fee, and (3) two nonreturnable copies of the work being registered.5

Protection for a copyrighted work created after 1978 extends for the life of the author plus 70 years. Protection for works made for hire, e.g., a work prepared by an employee in the scope of his or her employment, or a work ordered or commissioned and designated in writing as a work made for hire — in which case the copyright is owned by the employer/commissioner, not the employee, and for anonymous or pseudonymous works lasts for 120 years or 95 years after publication, whichever comes first. For works created prior to 1978, the rules are complex. In general, protection for such works lasts for 95 years, but there are exceptions that could result in the copyright expiring sooner. After expiration of the term of protection, the work enters the public domain and is no longer entitled to protection.

What Does Copyright Protection Entail?

Copyright protection includes the following six exclusive rights: the right to (1) reproduce the work, (2) prepare derivative works based upon the work, (3) distribute copies or phonorecords of the work to the public by sale or other transfer of ownership, or by rental, lease, or lending, (4) perform the work publicly, (5) display the work publicly, and (6) in the case of sound recordings, perform the work publicly by means of digital audio transmissions.

Copyright Infringement

To assert a successful claim for copyright infringement, the copyright owner must demonstrate (1) ownership of the copyright, and (2) copying of protectable elements of the work. Copying is often demonstrated by proof of access to the work and "substantial similarity." If a copyright owner succeeds on a claim for infringement, he or she is entitled to either statutory damages (assuming the copyright was registered prior to the infringement),6 or actual damages plus the infringer's direct and indirect profits.7

Recent Trends and Tips

The most recent and notable developments in copyright law have focused on the impact of peer-to-peer (P2P), file-sharing software on the rights of copyright owners. Most people are familiar with the lawsuit brought by a number of record companies against the creators of Napster, the P2P service utilized by many Internet users to trade and download copyrighted material such as music in the form of MP3 files. This law is still developing, and it may significantly impact music, entertainment, and other businesses.

The most important steps for a copyright owner to take in protecting copyrighted material are obtaining a copyright registration and providing copyright notice. Taking these steps will deter infringers and protect one's financial investment in the copyrighted works.

Trademarks

A trademark is a word, phrase, symbol, device, or other designation that is used to identify a manufacturer or sponsor of goods, and to distinguish such goods from those manufactured or sold by others. Within certain limits, trademarks can consist of almost any type of distinctive matter including a word or phrase, personal name, symbol or logo, design, slogan, product shape, color, or a combination of these. In the pharmaceutical industry, trademarks commonly consist of a company name, logo, and drug names, and in certain limited circumstances may include colors, flavors, and shapes of products or packaging. Trademarks serve primarily as source identifiers, informing others that the trademarked product comes from a certain source, and enabling the trademark owner to build goodwill via its products and services. Trademarks also serve to denote a standard of quality, and to protect the public from confusion. Trademarks often represent a substantial advertising investment and can be among a company's most valuable assets.

Governing Law and Distinctiveness

Trademark protection in the US is based on a dual system of federal and state laws. The basic federal trademark statute is the Lanham Act.8 At the state level, both the common law of unfair competition and a network of state statutes apply. These federal and state trademark laws overlap to a great extent. Trademark registration is possible on both the state and federal levels, with federal registration providing broader protection.9

Only trademarks that are distinctive are eligible for protection. Distinctiveness means the ability to identify the product or service of a particular manufacturer, i.e., the ability to serve as a source identifier. Trademark distinctiveness exists in varying degrees. The scale of a trademark's distinctiveness, from most to least distinctive, is described in terms of marks that are: (1) fanciful — made-up words (e.g., Kodak, Google), (2) arbitrary — marks that are common words used in unexpected ways (e.g., Apple for computers, Amazon for online book sales), (3) suggestive — marks that require some imagination to link the mark to the goods (e.g., Coppertone, Roach Motel), (4) descriptive — marks that describe the goods and convey an immediate idea of the product's characteristics (e.g., Japan Telecom [a telecommunications business that caters to the Japanese community], Tires Plus), and (5) generic — words that refer to a class of objects (e.g., aspirin, shredded wheat). In general, fanciful, arbitrary, and suggestive marks receive automatic protection because of their inherent distinctiveness. Descriptive terms are protected only upon proof of distinctiveness acquired in commerce, commonly referred to as "secondary meaning."10 Generic terms are not entitled to protection because they do not distinguish the source of the goods and because fairness requires that such terms be available to competitors.11

Establishing Trademark Rights

Selection of a new trademark is the most critical step in establishing trademark rights. Once a potential trademark is selected, a trademark search or other investigation should be undertaken to determine if the mark is identical or confusingly similar to a previously registered mark, a mark subject to a pending application, and, to the extent possible, unregistered and foreign marks.

Actual use of a trademark alone establishes trademark rights under common law.12 Registration is not necessary. Registration, however, provides additional substantive rights and presumptions, including constructive notice to others of one's use of the mark, and presumptions of ownership and validity of the trademark.13

To obtain a federal trademark registration, one must apply by filing an application in the US Patent and Trademark Office.14 The application must include, among other things, the date of first use, a sample use, and a verified statement that the mark is being used in commerce and that no other person has the right to use the mark.15 If the application is accepted as meeting the requirements for registration and not confusingly similar to an existing trademark, it will be published for opposition. An opposition may be filed by anyone who believes he or she would be damaged by the granting of the registration. If no successful opposition is filed, a certificate of registration will be issued.16

Trademark Infringement

The two key components of trademark infringement are: (1) the trademark is protectable, and (2) the allegedly infringing mark is likely to confuse consumers as to source or sponsorship of the product.17 The ultimate inquiry in trademark infringement cases is whether, considering all circumstances, a likelihood exists that consumers will be confused by the similar marks. Courts have identified several factors as guidelines for evaluating the likelihood of confusion, including (1) strength of the mark, (2) similarity of the two marks, (3) relatedness of the goods or services, (4) evidence of actual confusion in the marketplace, (5) marketing channels used, (6) likely degree of customer care or sophistication, (7) intent in selecting a similar mark, and (8) likelihood of expansion of product lines. It is the totality of the facts in a given case that is dispositive.18 Various courts and commentators have listed additional considerations, and have given particular weight to certain factors, depending on the specific circumstances.19

Trends and Tips

Developing the best branding campaign involves market research, professional advertising, and legal assistance. One should not underestimate the importance of trademarks and advertising in today's competitive marketplace. Recent trends include direct marketing to consumers through mass media (rather than narrower marketing to medical professionals) and increased use of the Internet. Knowing and understanding one's market, one's target customers, and one's competitors, plus the legal procedures for trademark protection and applicable Food and Drug Administration (FDA) and Federal Trade Commission (FTC) rules, is critical to developing a trademark and advertising strategy.

References and Notes

1. The Copyright Clause of the US Constitution provides Congress with authority "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." US Const Art I, §8 cl 8.

2. The following works are generally not entitled to copyright protection: titles, names, short phrases or slogans, mere variations of typographic ornamentation, lettering or coloring, and mere listings of ingredients or contents.

3. Before 1978, federal copyright rights were generally secured by the act of publication with notice of copyright, assuming compliance with all other relevant statutory conditions.

4. While registration is not required, registration has a number of statutory advantages.

5. Special deposit requirements exist for computer programs and other works, such that proprietary materials can be redacted and trade secrets protected under certain circumstances.

6. Statutory damages can range from $750 to $30,000; however, where the infringement was willful, a court may increase the award up to $150,000.

7. For drug labels, copyright protection may be limited. The Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act require generic drug sellers to use the label approved by the FDA; accordingly, copyright liability does not attach. See SmithKline Beecham Consumer Healthcare, LP v Watson Pharmaceuticals, Inc, 211 F3d 21 (2d Cir 2000).

8. The Lanham Act is the common name for the Trademark Act of 1946, as amended, 15 USC §1051, et seq.

9. Federal trademark registration lasts for 10 years, subject to indefinite 10-year renewals. States vary as to the terms

of trademark registrations and requirements.

10. Through extensive use and advertising, such terms may take on a "secondary" meaning as a source identifier.

11. Similarly, product features that are functional are not subject to protection as a trademark. Functional features

are protectable, if at all, under the patent laws.

12. The ® symbol can be used only with registered trademarks. The TM symbol can be used with unregistered marks. Use of these symbols is not required but recommended.

13. Federal registration is critical to any program to protect the rights of a trademark owner. Without it, a third party may obtain federal registration of the mark, thereby significantly limiting one's rights. Federal registration also gives rise to several important statutory rights, and can be important in terms of establishing nationwide priority to use the mark.

14. The technical requirements of application and renewal are set forth in Section 1(a) of the Lanham Act, 15 USC §1051, et seq, and in: Hannon, ME. Trademark Manual of Examination Procedures (TMEP). 3rd ed. Washington, DC: US Government Printing Office, 2003.

15. Federal applications for registration under certain circumstances may be available based upon intent to use a mark, rather than actual use of the mark in commerce, which can be important for priority and notice purposes.

16. Drug names face additional requirements, including review by the FDA.

17. Other important causes of action include trademark dilution for famous marks, false advertising claims under federal and state law, and unfair competition claims. Additionally, pharmaceutical manufacturers must understand detailed regulations and oversight by the FDA and FTC regarding advertising of drugs, dietary supplements, and cosmetics.

18. There have been suggestions that greater care should be taken to avoid confusion in connection with medication and pharmaceutical names, given the potentially severe consequences of confusion. See Morgenstern Chem Co v GD Searle & Co, 253 F2d 390, 393 (3d Cir 1958) ("In the field of medical products, it is particularly important that great care be taken to prevent any possibility of confusion in the use of trade-marks" [citations omitted]). See also Syntex Labs, Inc v Norwich Pharmacal Co, 437 F2d 566, 569 (2d Cir 1971) (confusion of drugs could result in physical harm to the consuming public, "[h]ence a stricter standard in order to prevent the likelihood of confusion seems desirable"); 5 J Thomas McCarthy, McCarthy on Trademarks and Unfair Competition §23:32 (4th ed 2004) ("proper to require lesser quantum of proof of confusing similarity for drugs and medicinal preparations"); 3A Louis Altman, Callman on Unfair Competition, Trademarks & Monopolies §21:10 & nn 121-132 (4th ed 2004) (collecting authorities).

19. Examples of recent infringement actions related to pharmaceuticals include the following: Trovan Limited v Pfizer Inc, 107 Fed Appx 788 (9th Cir 2004) (producer of electronic tracking devices for veterinarians sued Pfizer for marketing antibiotics under its name "Trovan;" held consumer confusion unlikely given goods unrelated, different marketing channels, and purchaser care); Kos Pharmaceuticals, Inc v Andrx Corp, 369 F3d 700 (3d Cir 2004) (injunction ordered in action by owner of mark "Advicor" used for anticholesterol drug against competitor's use of "Altocor" mark for similar drug); Eli Lilly & Co v Natural Answers, Inc, 233 F3d 456 (7th Cir 2000) (injunction ordered against use of mark "Herbrozac" for a herbal "mood elevator" due to likelihood of confusion and dilution of "Prozac" mark); Pfizer, Inc v Y2K Shipping & Trading, Inc, 70 USPQ2d 1592 (EDNY 2004) (holding mark "Triagra" for "herbs for erectile dysfunction" sold over the Internet infringed Pfizer's "Viagra" mark).

Perry J. Viscounty, J.D., is a partner and global co-chair of the Intellectual Property, Media, and Technology practice of Latham & Watkins LLP, 650 Town Center Drive, 20th Floor, Costa Mesa, California 92626, 714.755.8288, fax 714.755.8290, perry.viscounty@lw.com

Amos E. Hartston, J.D. is a litigation associate at Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, California 90071, 213.891.8315, fax 213.891.8763, amos.hartston@lw.com

Heather Mayer is a litigation associate at Latham & Watkins LLP, 633 West Fifth Street, Suite 4000, Los Angeles, California 90071, 213.891.7869, fax 213.891.8763, heather.mayer@lw.com

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