• IP BLAWG

    Why You Misappropriate a Trade Secret Doesn't Matter

    Beverly A. Berneman
    10/27/15

    Utah State Supreme Court’s decision in InnoSys v. Mercer gave a boost to plaintiffs in trade secret misappropriation cases by laying out a presumption of harm. But what’s interesting about this case is that Mercer didn’t use InnoSys’ trade secrets to compete with it. Mercer had been employed by InnoSys. She had signed a non-disclosure agreement. At some point, she e-mailed and downloaded confidential trade secrets to a thumb drive. Mercer disclosed the trade secrets in an administrative unemployment hearing after she was dismissed by InnoSys. She eventually deleted the trade secrets from her storage devices. But according to the Utah State Supreme Court, her misappropriation of the trade secrets had already caused harm to her employer. Bottom line is that Mercer was liable for trade secret misappropriation even though she didn’t use the trade secrets for competitive purposes.

    TAKE AWAY: Mercer made a grave mistake by disclosing InnoSys’ trade secrets. What could Mercer have done differently? First, she shouldn’t have e-mailed and then saved the trade secrets on a thumb drive. That alone was actionable. Second, if Mercer felt it was absolutely necessary to her case, she could have told the hearing officer why the trade secrets were relevant without revealing them. Third, if the hearing officer thought knowing the trade secrets were important, either the hearing officer, Mercer, or InnoSys, or any combination of the three, could have worked out an agreement to allow the hearing officer to review the trade secrets under seal. Thanks to my Employment Law gurus, Laura Balson and Ashley Orler for their help with this take away.

  • IP BLAWG

    Happy Birthday to All of Us

    Beverly A. Berneman
    10/20/15

    We can now sing the Happy Birthday song without paying a royalty. For decades, Warner/Chappell Music Inc. claimed to own, and demanded royalties to use, the lyrics to Happy Birthday song. The royalties ran between $1,500 to hundreds of thousands of dollars. The plaintiffs in Good Morning to You Productions Corp. v. Warner/Chappell Music, sued claiming that Warner/Chappell’s copyright in the lyrics was invalid (the melody was already in the public domain). A judge recently ruled in the plaintiff’s favor. The reason for the ruling? It isn’t clear cut. The judge only ruled that Warner/Chappell didn’t have the copyright. Some commentators are saying that the ruling means that the lyrics are in the public domain. Not exactly. There was evidence that the lyrics were written in 1893 which means the copyright had long expired. That means that the 1934 copyright registration could be invalid or forfeited because the lyrics weren’t an original work of authorship. And, there was no evidence that Warner/Chappell’s assignor ever got an assignment from the two sisters who wrote the lyrics. Does that mean that someone else could step up and claim ownership of the copyright? It’s a possibility but they’d have to explain why they’ve been sitting on their rights for decades.

    TAKE AWAY: The saga of the Happy Birthday song shows the importance of due diligence. If you’re going to acquire someone else’s copyright, or any Intellectual Property for that matter, make sure they own what they say they own. Warner/Chappell’s due diligence failed at some point and it’s now facing a class action suit. If Warner/Chappell loses the next phase of the litigation, it might have to return millions of dollars in royalties.

  • IP BLAWG

    How is Barclay's Brokerage Services Like Edward Scissorhands?

    Beverly A. Berneman
    10/13/15

    Barclays Capital Inc. wants to register the trademark “Lehman Brothers” for brokerage services. You may recall that Barclays bought the brokerage services section of the disgraced Lehman Brothers. But Tiger Lily Ventures wants to register Lehman Brokers for wine and spirits. The two companies are now locked in opposition proceedings seeking to cancel each other’s intent to use applications for the same trademark. Most notable are the quotes coming from the Tiger Lily side. Barclay’s bought the name with the brokerage services. But Tiger Lily says that Barclay’s has done everything possible to distance itself from the Lehman Brothers brand; so how can it have an intent to use the trademark? Quoting Tiger Lily’s counsel: “Is Barclays really going to use 'Lehman Brothers' again for banking?” Garson asked. “For us that would make as much sense as using 'Edward Scissorhands' for intimate massage products. The name is just toxic, from a banking perspective.”

    TAKE AWAY. This is a good example of trying to hold onto something that might not benefit your company. I have questions for both parties in this case. Barclays, does the infamous trademark build trust and confidence in your goods and services? Tiger Lily, why would a wine and spirits company want to use a "toxic" name for its products? The value of parody only goes so far.