Key Takeaways: Lanham Act Overview
- Main takeaway: In today’s digital world, businesses need to stay alert to protect their intellectual property, since infringement can be harder to spot.
- Impact on your business: This guide introduces common IP claims and provides examples on how damages may be calculated.
Intellectual Property Violations Explained
When most people think of property violations, they imagine clear-cut cases: trespassing in a yard, damaging a personal item, or breaking into a home. Those are straightforward.
Intellectual property (IP) violations, however, are more complex. According to the World Intellectual Property Organization, IP refers to “creations of the mind,” including inventions, artistic works, literary works, and designs. It also covers images, names, and symbols used in media or commerce.
This article breaks down the most common types of IP claims and explains how damages may be calculated when your intellectual property is infringed. Understanding which IP category applies to your business is essential. Partnering with qualified legal counsel and firms like iDS, experts in IP analysis and support, does more than help you navigate complex IP law. It gives you a strategic edge in protecting your creations and recovering what’s rightfully yours.
The Lanham Act and Trademark Protection
Before exploring the most common types of IP, it’s important to understand the Lanham Act, also known as the Trademark Act of 1946. This federal law governs trademark and service mark infringements, as well as illegal business practices and unfair business competition related to IP.
The Lanham Act regulates the registration and use of trademarks throughout the United States. Its national registration system safeguards trademark owners and prevents other businesses from using similar marks that could confuse customers or damage a brand’s credibility.
For business owners, understanding the Lanham Act is critical, but navigating its complexities requires guidance. Always consult with your legal team to ensure your IP rights are fully protected.
Copyrights: Safeguarding Creative Works
Copyright infringement is one of the most prevalent issues in the world of intellectual property. Under Section 102 of the Copyright Act of 1976, eight categories of creative works receive legal protection:
- Literary works
- Musical works, including any accompanying words
- Dramatic works, including any accompanying music
- Pantomimes and choreographic works
- Pictorial, graphic and sculptural works
- Motion pictures and other audiovisual works
- Sound recordings
- Architectural works
Copyrights provide exclusive rights for a limited period. For works created after December 31, 1977, protection lasts 70 years after the death of the work’s sole or last surviving author. For anonymous works, pseudonymous works, or works made for hire, copyright lasts 95 years from first publication or 120 years from creation, whichever comes first. Once a copyright expires, the work enters the public domain, allowing anyone to use it freely.
Understanding both the types of works covered and how long protection lasts is essential for creators and businesses alike to safeguard their intellectual property and avoid infringement.
Trademarks: Protect Your Brand
A trademark is any word, name, symbol, device, or combination thereof that a business uses to distinguish its goods or services from those of others. Unlike patents and copyrights, which encourage innovation, trademark law aims to prevent deception and customers’ confusion; it also aims to protect an organization’s investment in reputation and goodwill.
Trademarks must be distinctive to qualify for protection. The law uses a distinctiveness scale with four categories, from least to most distinctive: Generic, Descriptive, Suggestive, and Arbitrary or Fanciful. The more distinctive the mark, the stronger its protection.
A trademark lasts as long as the company continues to use it. If usage stops, the trademark can lapse. Registered trademarks must be renewed every 10 years, with no limit on renewals. While registration with the U.S. Patent and Trademark Office (and state authorities) is optional, it provides the advantage of “nationwide priority rights, even in areas where the mark hasn’t yet been used.”
If a registered trademark is infringed, the owner can seek damages under the Lanham Act. While various state statutes and common law provisions also address trademarks, the Lanham Act serves as the primary source of law for trademark infringement, with Section 43(a) prohibiting unfair competition, and trademark violations are considered a key form of that unfair competition.
Trade Dress: Protect Your Product Design
A trademark can refer to a symbol, name, word, or device, while trade dress refers to the overall look and feel of a product in the marketplace. Trade dress includes the elements a company uses to package a product or service, which is why it is often considered part of product design. A classic example is Coca-Cola’s curved bottle.
Trade dress can be safeguarded through common law, but it is also covered by the Lanham Act and can be registered with the U.S. Patent and Trademark Office. To claim trade dress infringement, a company must show that its product design is “inherently distinctive or has acquired secondary meaning, and that junior use is likely to cause consumer confusion.” [Source: Justia.com] For instance, Coca-Cola could protect the trade dress of its bottle design by demonstrating that consumers might be misled about the origin of another product if it were packaged in a design identical to its famous bottle.
Calculating IP Damages
An owner of infringed intellectual property can claim the infringer’s profits (only to the extent such amounts do not duplicate other damages). Including the infringer’s profits in the damages calculation ensures that the infringement does not enrich the infringer.[1] Under applicable law, “a plaintiff seeking profit damages has an affirmative duty to prove the defendant’s gross revenue reasonably related to the infringement.
This requires the plaintiff to prove (1) the amount of the claimed revenue streams, and (2) that there is some reasonable relationship between the infringement and those particular profit streams. Proving that the claimed profit streams are reasonably related to the infringement requires the plaintiff to (1) allege a ‘conceivable connection’ between the infringement and the claimed revenues, and (2) offer nonspeculative evidence that a causal link exists.”[2]
Per the AICPA Forensic and Valuation Services Practice Aid: Attaining Reasonable Certainty in Economic Damages Calculations, it is the Plaintiff’s burden to establish a causal link, and the Plaintiff’s damages expert can appropriately rely on the fact that Plaintiff will be able to establish the existence of said causal link.[3]
The calculation of damages for Copyright infringements versus Trademark or Trade Dress infringement are similar in nature with some small differentiators.
Conclusion: Preventing IP Infringement
In today’s digitally driven world, where technology and AI are rapidly shrinking the barriers to creation, IP infringement is becoming harder to detect and more costly. Consulting with legal counsel and working with a professional firm like iDS ensures you have experts who can identify, analyze, and trace even the most complex infringements. They can also help you develop strategies to protect your intellectual property and recover damages. Taking action early safeguards your IP and gives your business the confidence to innovate without risk.
[1] Weil, Lentz, Evans; Litigations Services Handbook: The Role of the Financial Expert; Sixth edition; Wiley; 2017; pg. 19.14.
[2] Dash v. Mayweather, 731 F.3d 303, 329-30 (4th Cir. 2013)
[3] AICPA Forensic and Valuation Services Practice Aid: Attaining Reasonable Certainty in Economic Damages Calculations; 2015; pg. 35
iDS provides consultative data solutions to corporations and law firms around the world, giving them a decisive advantage – both in and out of the courtroom. iDS’s subject matter experts and data strategists specialize in finding solutions to complex evidence challenges, ensuring data can be leveraged as an asset, not a liability. To learn more, visit idsinc.com.
