I will be delivering an information-packed presentation on intellectual property at the VBN (Vancouver Business Network) meetup on December 4, 2012.
You will walk away with at least:
– 5 big ideas about intellectual property and the law in general that will answer 80% of your questions about IP;
– 5 reasons to register your trademarks;
– 7 one-word shortcuts that will allow you to instantly identify different types of intellectual property.
You will never be intimidated by IP and IP lawyers again!
Please RSVP for the event at MEETUP.COM.
This is an event you and your business can’t afford to miss.
And so, round one of Apple v. Samsung court saga is over.
A jury of nine Americans have unanimously handed Apple a victory in the form of a verdict for $1,049,343,540.00 in damages. Imagine a cheque for this amount: “One Billion Forty Nine Million Three Hundred Forty Three Thousand Five Hundred Forty Dollars and 00 Cents.”
Kyle Vanhemert has a great day-by-day rendition of the trial.
Wall Street Journal has an equally great chart showing the mutual patent and design patent claims of Apple and Samsung, and the jury’s decision as to each of these claims with respect to each of the allegedly infringing phone models.
Apple spokeswoman Katie Cotton in a statement to the New York Times said:
“We are grateful to the jury for their service and for investing the time to listen to our story and we were thrilled to be able to finally tell it. The mountain of evidence presented during the trail showed that Samsung’s copying went far deeper than even we knew. The lawsuits between Apple and Samsung were about much more than patents or money. They were about values. At Apple, we value originality and innovation and pour our lives into making the best products on earth. We make these products to delight our customers, not for our competitors to flagrantly copy. We applaud the court for finding Samsung’s behavior willful and for sending a loud and clear message that stealing isn’t right.”
Samsung Electronics issued the following statement:
“Today’s verdict should not be viewed as a win for Apple, but as a loss for the American consumer. It will lead to fewer choices, less innovation, and potentially higher prices. It is unfortunate that patent law can be manipulated to give one company a monopoly over rectangles with rounded corners, or technology that is being improved every day by Samsung and other companies. Consumers have the right to choices, and they know what they are buying when they purchase Samsung products. This is not the final word in this case or in battles being waged in courts and tribunals around the world, some of which have already rejected many of Apple’s claims. Samsung will continue to innovate and offer choices for the consumer.”
Google, the force behind Android OS, released the following statement:
“The court of appeals will review both infringement and the validity of the patent claims. Most of these don’t relate to the core Android operating system, and several are being re-examined by the US Patent Office. The mobile industry is moving fast and all players – including newcomers – are building upon ideas that have been around for decades. We work with our partners to give consumers innovative and affordable products, and we don’t want anything to limit that.”
A great comment came from Al Sabawi, a former IBM executive, who wrote:
“To all the lazy copycats out there who think cutting and pasting is an intellectual achievement, that hard work, sweat and tears don’t matter, that ideas, designs, and innovations can be stolen willy-nilly with no consequences: This is to you.”
It comes as no surprise that Samsung will now appeal the decision, and this is the decision of the appelate courts that would be of extreme interest to everybody – IP lawyers, innovators, copy-cats and consumers alike.
For now, I would like to share a couple of observations and comments about this case.
First of all, despite all today’s attacks against intellectual property and the forced “let’s all share” mentality, we have a unanimous decision of 9 non-lawyers who confirmed that patents as tools for protecting innovation are still worth something. In this case, they were worth a Billion bucks. In my opinion, Apple’s statement was very on point. The verdict is about values, it is about sending the message, as clearly as it gets, that taking something that’s not yours is improper.
Second, I’m baffled (although, not really) to read a great number of comments to the effect that Apple’s patents and the jury’s verdict will kill competition and rip off consumers of legitimate options. By definition, patents are about building a monopoly based on something you managed to invent, which had not existed before. Granted, there are tons of nonsense patents out there and a great number of patent trolls, we all know that. The real issue is that legitimate patents always create a monopoly, and there is absolutely nothing wrong with that monopoly.
Just because iPhones had tremendous success does not mean that the monopoly should be destroyed. This goes back to my argument on copyright laws when I reject that public interest should have a role in copyright protection: we don’t have copyright laws to protect works that no one wants to use, while creating loopholes for unauthorized use of works that are popular with the public. If no one wants to use a work, there is no need to have laws to protect it.
I remember the day when the first iPhone was released and all the usual Apple fans vs. Anti-Apple fan battles raging with renewed force. Essentially, after that day the world was divided into three groups: those who owned or dreamed of owning an iPhone; those who had no money or desire to buy an iPhone but wanted their phone to have an interface resembling the one of an iPhone as closely as possible; and those who for one reason or another disliked anything that Apple might put out on the market, didn’t want their phones to be like an iPhone but wanted them to have similar functionality.
The iPhone became and still is the measure of comparison for all cell phones on the market.
Apple knew the value of the innovation that it brought to the market with the release of the iPhone, and so it spent a lot of money in an attempt to protect this innovation. Its efforts have paid off – first with the massive acceptance by the market, and now when the jury confirmed the validity of its patents.
Is this a loss for consumers? Even if so, it is a loss of illegitimate advantage. To avoid an analogy with theft of tangible goods, imagine a situation when somebody came up with a way to trick PayPal into adding $10 a day to everyone’s balance. If at some point PayPal decided to fix the problem, would that be a loss to those who would stop receiving the undeserved benefits? Of course!
Samsung is a serious competitor with a pile of patents of its own. They certainly know how to innovate. Otherwise, it would be difficult for Samsung to win a record almost 20% market share for all LCD TVs sold worldwide. Don’t tell me they can’t come up with technologies that wouldn’t infringe on other company’s patents. At least, don’t tell me they can’t properly license such technologies from those who invented them first.
This is what competition in the XXI century is all about. It’s not about who can manufacture the best and cheapest version of a gadget, it’s about who can come up with a gadget that will redefine the way people live their lives.
Love it or hate it, but this is exactly what Apple did when it released the iPhone and the iPad.
And Apple didn’t precisely intend to prevent Samsung from selling competing phones. Apple actually offered Samsung to license its patents at $30 per smartphone and $40 per tablet.
Finally, and I’ve commented on this issue already, in my opinion, the litigation between the giants (especially, after it will have gone through all available appeals) gives us all a great benefit of having a better understanding of the limits of the modern patent system. Very few patent owners can afford to go out and start a full-blown patent litigation war. So we have been left with a plurality of lawyers’ opinions as to what should be considered obvious, what should be considered novel, and what is the proper subject-matter for a tech patent.
We will soon find out.
PS. Full disclosure: I don’t have an iPhone because it’s too heavy and too big for my taste. However, I’m slowly getting fed up with my current phone and will be investigating my options soon.
Would I, as a consumer, benefit from someone making a 3” version of an iPhone? Absolutely! Do I have a right to expect Apple to allow others to manufacture versions of Apple’s patented products simply because Apple does not see a big enough market for 3” iPhones? Absolutely not!
Tonight I attended an amazing event put up in Vancouver by Roger Killen.
He invited 4 Vancouver entrepreneurs who have recently appeared on Dragons’ Den. Brad Friesen with Last Call, Scott Lim with B.K.H. Jerky, Dougieluv with Dougie The Modern Dog Dog and Dan Plante with Chawel were all in the same room, sharing secrets of their success in and outside of Dragons’ Den.
I had a chance to ask them all a question that was very important to me. Pay attention to their answers. They are instructive for anyone who is starting or is about to start a business.
My question went something like this:
As an IP lawyer, I am trained to tell my clients that it is crucial to have their intellectual property and other legal issues sorted out as early as possible.
Nobody really argues that having good contracts is better than not having good contracts, just as being healthy and wealthy is better than being sick and miserable.
However, aspiring entrepreneurs often tell me that their budgets are tight, and that they’ll deal with their legal stuff later, when their business has grown to be successful.
So in your experience, what’s the last stage at which startups can safely get away without having their legal affairs in order?
Dougie said that it’s imperative to take care of the legal stuff right away, ideally even before you actually start the business. You need to have your whole legal organized before you get out of the gate.
Brad said essentially the same thing and added that he regrets not having dealt with a U.S. trademark issue before he made his pitch before millions of people.
Dan backed the other two, and shared some great ideas about naming his product and difficulties surrounding patenting an invention on a tight budget.
The lesson is simple. Every successful entrepreneur fully understands the value of legal advice and intellectual property in creating a competitive advantage for their business.
Having your legal stuff organized does not guarantee your business success.
But if you do not have your contracts and intellectual property taken care of, you will never be able to enjoy a long-lasting success, simply because even if your business does become successful, there will always be enough leeches ready, willing and able to steal that success away from you.
Granted, as a copyright and trademarks lawyer, I have an direct interest in turning entrepreneurs into my clients.
So don’t take my word for it. Take it from those who have every right to be admired. Take it from people who grew their businesses from nothing.
Protect Your Ideas as early as you can and make sure to Cover Your Assets!
Most people think of intellectual property only as something that should be protected from others.
It is clear that when you invent something great, or write a thrilling new book, or shoot an awesome new movie, that you would want to protect your work from being used against your wish.
Most people and companies, however, are not this fortunate, and do not really create enough to want to hire a lawyer to protect what they’ve created.
This is one of the reasons why many businesses don’t think that they need to consult an IP lawyer. Their thinking goes like this: “Well, we don’t really create anything, and even if we do, it’s not enough to justify spending thousands and thousands of dollars to try to protect it.”
They may be right, but this approach misses a very serious point. IP is not only what you have to protect against others, it’s also something that others can use against you.
If you are a dentist, you may be interested in registering a trademark for your business, but really there is unlikely to be much more beyond that in terms of using IP as a tool of competitive advantage. But if you have a popular website that promotes your practice, you want to make sure that you own every little bit of content on that website.
What you don’t want to happen one day when your business finally makes it, is to find out that someone wants a piece of your pie, simply because you’ve been using their IP for several years to promote your business.
This is the difference between using IP as a sword (to obtain a tool of competitive advantage) and using IP as a shield (to make sure that nobody can lay a claim on your business).
Few businesses will need to use IP as a sword, but most of them are using IP created by somebody else.
If you don’t take care of IP as a shield, you will be sorry if your business becomes successful.
One of the most common misconceptions surrounding the law of trademarks in Canada is how trademarks relate to trade names. This misconception can have very costly consequences.
Trade names are used to identify a business or a company. Trade names are the “who” of the business. Customers do business with a business bearing the trade name.
Trademarks are used to identify products or services. Trademarks are the “what” of the business. Customers buy products and services bearing the trademark.
In very simplistic terms, customers buy trademarks from trade names.
Every business registered with the Registrar of Companies or incorporated (provincially or federally) has a trade name. But neither the reservation of a corporate name nor the formation of a corporation create a right to use the business name of the corporation in that jurisdiction.
How can that be? The government registers my business name and I can’t use it? Yes. Unfortunately, corporate registries don’t really check if the name submitted for the registration violates any prior rights. In other words, just because a provincial corporate registry approved your name for registration does not mean that you don’t violate someone else’s prior right (in a trade name or a trademark) and that you will not be compelled to change it in the future.
Rights in corporate names are treated like rights in unregistered trademarks, which means that they are nonexistent outside the geographical areas where the business is actually making use of and it known for its name.
Even if you register a corporate name that no one else had thought of before, it does not give you the right to stop others from using it, unless you can prove that other person’s use of the name creates confusion.
Just because you came up with a fancy company name that helps you attract customers for whatever products or services you are offering does not mean that your name, or brand, is a trademark. If you are not using your trade name as a trademark, your don’t have trademark protection for your trade name.
Trade name can be registered as a trademark, but only if you use it as such, that is, to identify products or services. This is often referred to as using the trade name as an adjective, as opposed to a noun.
Let’s say, your company is called Awesome Software Inc. and you make software. If you phrase your marketing materials to say that “Awesome Software Inc. offers such great titles as Text, Calculator and Presentations”, you are using “Awesome Software” as a trade name. If you phrase them to say “We offer Awesome Software™ Text, Awesome Software™ Calculator and Awesome Software™ Presentations”, then you are using “Awesome Software” as a trademark.
The classic example is, of course, Microsoft® Windows®. We don’t buy Microsoft, we buy from Microsoft. But because “Microsoft” is a part of the name of the product we buy (and part of the reason why we buy it), it is also protected as a trademark in its own standing.
If you believe that a substantial number of your customers are attracted to your business because of your trade name, you should consider using the trade name as a trademark and getting it registered as a trademark.
In other words, if you consider your trade name a factor that gives you a competitive advantage, you should not rely merely on registration of the company name with the Registrar of companies. You should accord the asset that you care about the protection that it deserves, and the only way to do it is through registering it as a trademark.
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Tags:CollectivismPhilosophySmall BusinessNew Copyright ActFair Dealing