Event: Copyrights and their importance.

On February 14, 2019, I'll be in downtown Oakland to discuss and answer questions about copyrights. Copyrights are often the most important asset of a business. Software programs, website content, digital media, photographs and many other works are protected by copyright law. Eric will discuss the importance of copyrights, avoiding infringement, registration of copyrights and enforcement of copyrights. Eric has 30 years experience and much of the focus of his practice is in the areas of intellectual property.

The Sky Report.  Our newsletter for June 2016.  The importance of use in trademarks.  Use is everything.

Employee Theft is Rampant

Employee theft has become a rampant problem.  Several our of clients have had employees steal customer lists, designs, website content, and other intellectual property.  Other clients have been embezzled. Thieving employees have become more sophisticated in looking for ways to access confidential information.

Once the theft has happened, it is almost impossible to undo the damage.  I have seen cases of substantial embezzlement of money not investigated by the police.  Intellectual property theft is never prosecuted.  IP theft is also difficult to litigate.  Trade secret theft is difficult to prove since proving something is a trade secret is difficult.  Trademarks and copyrights must be registered before they are infringed to effectively bring suit. Non-disclosure agreements and confidentiality agreements are often not enforceable.

Business owners must be very proactive today.  Some suggestions to business owners regarding their intellectual property:

1.  Assume your workers (employees, consultants, contractors) are going to rip you off.  Sooner or later, one of your workers is going to try to take confidential information or steal from you.

2.  Have all persons who work for you sign carefully drafted, detailed non-disclosure agreements, consulting contracts and employment contracts.  Do not make them over broad but tailor them to your business and IP that you have.

3.  Make an assessment of your IP. What do information, content, formulas, customer lists, etc. do you have? Look at where it is stored and who has access to it. How is it controlled?

4.  Make and implement and IP Protection Plan.  Your plan should include:

     a. Labeling trade secrets as such (e.g. putting a watermark labelled "Trade Secret of XYZ, Inc." on such information).
      b. Revising NDA's and other contracts to specify information that is confidential and not to be disclosed.  And, ensuring that such contracts are enforceable.  If such a contract is too restrictive, a court will find it violates California's anti-noncompete laws.
      c.  IP security.  Make sure that any sensitive information, designs, etc. are kept under lock and key (if tangible).  If in digital form, ensure that it can only be accessed by persons given permission - and they must have a password and username.
      d.  Assign and change usernames and passwords.  Assign usernames and passwords to workers for computer networks and email accounts.  Do not allow them to choose them or the ability to change usernames or passwords.  Change usernames and password frequently.
      e.  Strong computer use policy.  Have a clearly stated computer policy that prohibits the use of computers and email accounts for personal use.  There is no reason, in the age of smart phones, that employees will have any need to use work computers and email accounts for personal use.  There is no reason for a work email account to contain personal contact information. Strictly prohibit workers from giving their usernames and passwords to anyone else, including a fellow worker.

5.  Obtain IP registrations.  If a business has a large amount of content, particularly on a website, it should obtain copyright registrations.  Trademarks should be protected by trademark registrations.  Inventions that can be protected by patents should be unless the cost is prohibitive or not cost effective.

The above steps do not take into account employee theft of tangible property or embezzlement of company money. To prevent theft of tangible property, place controls on the use and possession of such property and follow up.  To prevent embezzlement, regularly review the books of the company and hire outside accountants to audit the financial records.  Do not allow anyone to have unfettered access to financial records or bank accounts.  Be familiar with the vendors of your company and what they charge.

The above steps and others will take time and money to implement.  Consultation with IT professionals, accounts and attorneys is also necessary.  However, it will be well worth it prevent the theft of valuable assets.

Website Legal Checklist

A company’s website is a valuable asset. For Internet based companies, it is often its most valuable asset.

Business owners often are plagued by problems resulting from their websites. These problems primarily result from business owners’ lack of knowledge of the fundamental things they should have and know about their website.

With hardball trademark tactics and copyright trolls, the Internet has become an often perilous place for business owners. The following is a checklist of information that a business website owner must have.

1. The business should own the domain. Not a partner individually, someone’s spouse, etc. But, the corporation, LLC, or partnership must own the domain.

2. Possess all access information for your domain. You, personally, should have the username and password for the account that manages your domain – e.g. the GoDaddy account with which you bought your business’s domain.

3. Own all domains around your main domain. If your primary domain is xyzwidget.com, then buy xyzwidget.biz, xyzwidget.net, xyzwidget.org, xyzwidget.xxx, xyz-widget.com, xyz-widget.net, xyz-widget.org, etc. Spend some money and buy them all up

4. Use a reputable website designer. Not a friend or a relative or employee. They’ll make mistakes and break the law.

5. Have a contract with the designer. You must have a written contract with your web designer. The contract should spell out the services and the price and contain two terms:

a. The designer’s work is “work for hire”. You will own the content, not the designer.

b. All stock art, photos, content will be licensed. There should be a line item in the contract for the cost of getting licenses for stock photos. Do not allow your designer to put someone else’s pictures, art or photos on your website without a license or permission.

6. Protect your trademarks. If you do not register your trademarks, unscrupulous persons might try to take them away from you – particularly now that you are broadcasting them to the Internet.

7. Post terms and conditions of use and a privacy policy on your website. If you will be doing business on the website, you must have terms and conditions of use and a privacy policy.

8. Know your host. You need to know who is the company that is hosting your website (and probably providing you email service) and you should be in direct contract with that company.

9. Have your FTP information. You must also have the FTP (File Transfer Protocol) information and any other information that will allow you full access to the site and transfer the site to another server.

10. File your copyrights. Once your site is complete, file a copyright registration for its content.

This post is not so much informational as a checklist to be referred to by a business owner when starting a company’s website. If you need any help with any of the above items, please contact me. We have extensive experience with each of these areas.

Create an Intellectual Property Portfolio

All business have intagible assets that need to be protected. In particular, business have intellectual property assets that need protection. Things such a trademarks, copyrights, trade secrets, etc. A method of doing systematically is called an intellectual property portfolio.

An IP portfolio is a systematic method of protecting the IP of a business by inventorying, cataloging and periodically reviewing the business' IP. The reason for doing is to prevent the loss of IP through the lapse of registrations from lapsing or licenses and to prevent the misuse a company's IP assets.

For instance, Federal trademark registrations lapse after 10 years. Furthermore, a new trademark registration has certain filing requirements six years after registration or the registration will be cancelled. Unless a company has a systematic method of reviewing its IP assets, it may let the registration lapse. I have personally seen this happen several times.

Another advantage of creating an IP portfolio is that it reminds business owners of their IP assets and gets them thinking about their use and what else needs to be protected.

The final and biggest reason for creating an IP portfolio is that it increases the marketability and value of a business. A company that does not have registrations for its trademarks or does not protect its copyrights is almost unmarketable. A company that not only protects its IP assets but has a standard system for reviewing and protecting all of its IP is much more valuable and attractive.

Large corporations have in-house attorneys, or hire big law firms, to manage their IP portfolios. Companies that own large amounts of copyright protected material, or own many patents, or have several brands, may have several attorneys dedicated to managing their IP portfolios. Those companies are very serious about protecting their IP. The small and medium sized business owner should be also.

How does one create a IP portfolio?

1. Take an inventory. Review all of the IP of the company including its copyrighted materials, trade secrets, trademarks, licenses, etc.

2. Take steps to ensure that the company's IP is protected. Often the inventory will reveal IP that a company wasn't aware of and that needs protection. Register copyrights, trademarks, create non-disclosure agreements, etc. Also educate employees of the use of trademarks, copyright protected materials and trade secrets.

3. Create an easy to use and understandable series of files or notebooks that have summaries of all of the company's IP. For instance, a file regarding a trademark might have a copy of the registration and a page with the dates that the registration must be renewed and what goods or services it can be used with.

The idea is to have in one place a summary of all of the IP of the company that can be easily reviewed and understood.

4. Periodically review. Assign someone the job of reviewing the portfolio. I recommend not less than every six months. In this way, nothing lapses.

As a part of that review, the business owner should also think about what other IP assets that the company has that need to be protected. For instance, a company might start using a trademark for goods that were not listed in its original registration. A new registration should be filed to list those goods.

A well managed IP portfolio can be invaluable to a business. It increases the value of a company and prevent the loss of important IP.

For a modest fee, I help small and medium sized business develop their own IP portfolios. We review a company's IP assets and help organize an easy to use portfolio that the business can manage. I then send periodic reminders to my clients for them to review their portfolios. In this way, small and medium size businesses can have the same level of professional IP management as large corporations, even if they don't have their own in-house legal departments.