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NDAs and Compelled Disclosure

Non-Disclosure Agreements and contract clauses involving confidential information probably look very familiar to those involved in the business world.  It may seem like no big deal to agree to keep another party’s information confidential – you have standard policies and procedures in place to prevent unauthorized disclosures and all of your employees are required to sign their own NDAs.  However, what happens if you receive a subpoena or court order requiring that you disclose the confidential information of a third party?  Depending on what your contract says, you could be on the hook for an expensive response.

Overlooking the 40th St Trailhead in Phoenix

Most NDAs and confidentiality clauses expressly provide that the recipient of confidential information is permitted to disclose that information if it is required by law, whether due to a subpoena, court order, or other type of compelled disclosure.  Many such clauses also provide that in the event a recipient is legally required to disclose information, the recipient must first provide the party who had originally disclosed the information with notice so that they can determine whether to challenge the compelled disclosure.  It is customary for the agreement to expressly state that if the disclosing party wishes for the recipient to challenge the compelled disclosure, the disclosing party must do so at their own cost and expense or reimburse the recipient for their related expenses.  This prevents the recipient from having to incur its own legal fees to contest the disclosure of information that isn’t its own.

However, what happens if the challenge is unsuccessful?  Alternatively, what if the disclosing party doesn’t object to the compelled disclosure?  This is where things get tricky.  The recipient of the confidential information will then need to determine how to respond to the order requiring disclosure.  To do so properly, the recipient will almost certainly need the advice of counsel to determine what information must be disclosed, whether any information should be redacted, and to properly label, process, and produce the information.  Depending on how much information is responsive, the recipient could be on the hook for tens of thousands of dollars in legal fees simply by virtue of having access to a third-party’s information.

Accordingly, if you are about to sign an NDA or confidentiality clause in anticipation of your receipt of a significant amount of another party’s confidential information, review it carefully to determine what your obligations will be if you are legally compelled to disclose the confidential information.  If the agreement is not clear about who will be responsible for expenses incurred in connection with challenging the court order or otherwise disclosing information as required, consider amending the agreement to clarify that the disclosing party will be responsible for paying all related expenses in connection with the recipient’s response to the compelled disclosure.  And best practice is to seek the advice a competent local corporate attorney who can advise on you on the specific consequences and risks of the NDA.



Electronic Trademark Registration Certificates

The Trademark Office will soon start issuing electronic trademark registration certificates instead of paper ones.

The Trademark Office has for years created an electronic registration certificate and mailed a paper version, which has a decorative stamp and ribbon. After June 7, 2022, if trademark owners want a physical copy of the registration certificate, they will have to specifically order one and pay a $15-25 fee.

The Trademark Office has been trying to modernize its processes. The trademark offices of many other countries around the world have issued only electronic trademark registration certificates. The USPTO now harmonizes with those practices.

The Trademark Office also claims that “many of our customers indicated that they would prefer to receive their electronic trademark registration certificate in a digital format rather than as a paper certificate.” I find this a bit hard to believe because the digital format has been available for over a decade at an easily-accessible, public website. Perhaps customers have complained that they don’t want the paper certificate because it is redundant. I have actually found the opposite, that clients do want the paper copy and sometimes want additional copies for display.

The Trademark Office also claims this will increase the speed with which registration copies are issued. I’m not sure this is true either, as electronic trademark registration certificates are already available online the day they issue – the paper copies just come in the mail a week or two later. Rather than making the process faster, the Trademark Office just eliminated a step at the end. It should, however, have a slight environmental impact. The Trademark Office issues about 400,000 trademark registration certificates a year, which is at least some paper savings.

Applicants who file applications after June 7 will have to order paper registration certificates and pay a fee. If they want a one-page “presentation copy” on heavy paper with a gold foil seal, the government fee will be $25. If they want a certified copy – used in court or in foreign trademark office – the fee will be $15. A presentation copy is not a certified copy. Certified copies are officially stamped and issued, while presentation copies are essentially just ornamental.



Receiving a Trademark Final Office Action

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Arizona Snowbowl Ski Resort above Flagstaff

Trademark applications are examined after they are filed.  This is part of the trademark prosecution process, and it sometimes results in an initial refusal, or “office action.”  Office actions are simply official letters from the Trademark Office.  The Trademark Office uses them to communicate about issues that have to be resolved in an application. If you receive multiple office actions, one will be considered a final office action.

When any office action issues, you have an opportunity to respond.  Under current law, you have six months to file a response.  Fail to file in that time, and your application will abandon.  Often the issues in an office action can be resolved fairly straightforwardly.  Sometimes, a quick phone call to the Examiner is enough.

Occasionally, though, the issues raised are more serious obstacles, and in some cases, one response may not be sufficient.  If your initial response does not resolve the issues in the office action, the Trademark Office will typically send a second office action.  A second office action usually is a “final office action.”

The Trademark Office sends a trademark final office action when the issues are ones that were presented at least once before and when you at least had a chance to resolve them.  There are a limited number of options for responding to a final office action:

Request for Reconsideration

One option for responding to a trademark final office action is submitting a request for reconsideration.  This is essentially a second bite at the apple.  When you file a request for reconsideration, you can present new arguments and evidence to try to convince the Examiner that you are right.  If you file a request for reconsideration and the Examiner does not side with you, the application will become abandoned unless you take further action.

If you file the request early in the response period, then the Examiner might return the denial before the six months is up.  If so, then you can potentially file a notice of appeal to prevent your application from abandoning. The Trademark Trial and Appeal Board (“TTAB“) hears and decides appeals.

However, if you file the request late in the response period, the Examiner may very well return a denial after your six months has expired.  You will not have to file anything else in the application at this point, and it will abandon.

Because of these timing concerns, some applicants file a notice of appeal when they file a request for reconsideration.  This assures them an escape route: if the Examiner denies the second argument, then they will at least have one last shot with an appeal.  And, typically, when a notice of appeal is filed together with the request for reconsideration, the TTAB will actually suspend the appeal to give the Examiner a chance to review first.  After all, if the Examiner reviews it and agrees with you, then it saves the TTAB considerable time.

Appeal

An appeal takes the case off the Examiner’s desk and asks that a panel of administrative judges at the TTAB review it.  To file an appeal, you must first file a notice of appeal and then follow-up with an appeal brief.  The Examiner gets a chance to file a brief in response to yours.  You then have the option to file a reply brief – a final brief that address the Examiner’s brief.  Once the case is fully briefed, the TTAB then considers all of the briefs and the evidence of record.  It renders a decision.  The TTAB frequently affirms the Examiner, so you must pursue an appeal with caution and care.  If the TTAB disagrees, your only option to save the application is to further appeal the decision into the federal court system.  If the TTAB agrees with you, however, the case will be returned to the Examiner with instructions to allow the application to continue through prosecution.



Design Patent Application Priority Claims

Snowbasin in Clouds, Utah

Patent applications possess priority claims to couple them to other patent applications.  This often arises when a non-provisional utility patent application claims priority to a provisional application.  The provisional application is a “temporary” filing but can establish a filing date to which the later-filed non-provisional or “real” patent application claims priority.  If the priority claim is good and valid, then the later-filed non-provisional application is considered to have been effectively filed as of the provisional application’s filing date.

Priority also occurs when a later-filed non-provisional utility application is connected to an earlier-filed non-provisional utility application.  The later-filed app may claim the same subject matter or may present new subject matter.  Filing non-provisional applications in this way builds a “family” of patent applications with parent and child applications.  Provisional applications are often the first applications in such families.

While utility patent applications can be strung together to build these families, design applications are more difficult to incorporate.  A design patent application primarily presents a set of drawings as both the disclosure and the claimed coverage, but utility applications rely on both detailed written description and drawings.

By law, a design patent application cannot claim the benefit of a provisional.  That doesn’t mean, however, that an applicant cannot attempt to claim priority to a provisional application.  An applicant could certainly make a priority claim in the design application.  I have seen instances where the Office technically recognizes it by listing the provisional as a parent in the continuity information section of the Patent Office online portal.  But the priority claim is still wrong and invalid, the Patent Office online system just doesn’t realize it.

37 C.F.R. § 1.78 is clear: (a) An applicant in a nonprovisional application, other than for a design patent, … may claim the benefit of one or more prior-filed provisional applications under the conditions set forth in 35 U.S.C. 119(e) and this section.

MPEP 211 further plainly states: “Design applications may not claim the benefit of a provisional application under 35 U.S.C. 119(e). See 35 U.S.C. 172.  Thus, where a design patent application claims benefit under 35 U.S.C. 120 to an intermediate nonprovisional utility patent application that directly claims the benefit of a provisional application, the design application cannot claim the benefit of the filing date of the provisional application.”



Patent Application Size Fee

December Snow in Durango

The Patent Office charges fees for receiving and processing patent applications.  It levies filing, search, and examination fees for all non-provisional design patent applications and utility patent applications.  These fees vary depending on whether the applicant is large, small, or micro entity.  The fees fluctuate depending on the structure of the claims.  The Patent Office also charges an application size fee.

Most applicants are aware that the Patent Office charges fees for excess claims.  Excess claims are defined in a few ways.  First, there can be a charge for “multiple dependent claims,” but such claims are written so infrequently that those fees can almost be ignored.  Second, the Patent Office charges for each independent claim in excess of three.  Third, the Patent Office charges for any and all claims in excess of twenty claims.

Patent attorneys are accustomed to drafting only 20 claims in 3 sets, and so applications often do not incur excess claim fees.  Most attorneys remember that when they run over the 3 independent / 20 total claim limit, the application incurs excess claim fees.  It is easy to write more than 20 claims.  If I write more than that for a patent application, then I present them to the client and we consider whether to remove or keep them.  But many applications include only 20 claims.

Patent applications can also incur an “application size fee.”  These are charged when an application has a lot of pages.  While it is relatively easy to present more than 20 claims, applications in excess of 100 pages are much less common.

100 pages is a lot of specification pages for a patent application.  However, it isn’t just the detailed description that counts toward the 100 page limit.  Instead, the Office considers the number of drawing pages (and the number of claim pages, if not included together with the specification).  Applications pushing toward 100 pages in length on the detailed description side often have a correspondingly-large number of drawings which can push them over the hundred-page limit.

Because most applications usually have 20-50 pages, the application size fee can be easy to forget.  If forgotten, the Office will issue a Notice of Missing Parts to correct the error, either by eliminating pages (not likely to happen) or by paying the forgotten application size fee together with any surcharges.



Identity Verification at Trademark Office

On January 8, 2022, the United States Patent and Trademark Office will introduce “identity verification” for registered USPTO.gov users.

Thanksgiving in Phoenix – we eat outside!

Before 2019, “anyone” could file a trademark application, so long as they knew how to submit trademark correspondence through mail, fax, or the Trademark Office’s online TEAS filing system. In 2019, the Trademark Office began requiring that users log in to a USPTO.gov account. Now, those users must complete a one-time identity verification step to ensure that their USPTO.gov accounts correspond to biographical information for the actual user.

The intent is to deter so-called “bad actors” who make fraudulent filings at the Trademark Office. This is part of the USPTO’s ongoing process of protecting the validity and integrity of the Trademark Office’s records. The Trademark Office has fallen victim to fraudulent filings in a few ways. For example, some legitimate trademark applications have been co-opted or stolen by people filing without the applicant’s authorization. As another example, in the summer of 2021, the Trademark Office issued an order force-abandoning perhaps 10,000 trademark applications because the filing attorney’s office had fraudulently signed applications in rapid succession, at odd hours, in the names of different applicants spread across the globe, sometime filing hundreds of applications within minutes of each other.

The identity verification tool is provided by ID.me. However, the Trademark Office website does not yet detail how the verification process works other than to say it will take less than 15 minutes. Some things that will be needed:

  • Smartphone or computer
  • Government-issued ID
  • Social security number
  • “Selfie” – yes the Trademark Office actually says it wants a “selfie.”
  • Soft credit check permission – unclear if your credit will need be thawed or unlocked if frozen.

Only trademark applicants, US attorneys, and Canadian attorneys will be able to complete the verification process. Support staff, such as paralegals and secretaries, will be sponsored by verified attorneys. Attorneys outside the US and Canada will not be able to complete the identity verification, because they are not allowed to file US trademark applications at all. The Trademark Office a few years ago changed the rules to prohibit foreign attorneys from acting is US trademark applications.

For more information about identity verification, the USPTO is hosting a webinar on December 14, 2021.



Trademarks and Secondary Source

Shearer Creek Trail, Durango, Colorado

A trademark can sometimes be rejected if it is ornamental. This most frequently occurs when the goods are clothing, as I have written before. If your mark is rejected on this basis, there are few escape paths. Secondary source may be one, though.

“Secondary source” is the idea that some trademarks are used to indicate not the source of the goods themselves, but the source of another product or service that has licensed, permitted, or authorized the ornamental use on other goods. In other words, while most trademarks indicate that the goods to which the marks are affixed can be sourced directly to the trademark owner, secondary source indicates that the goods to which the mark is affixed may not come from the trademark owner, but may instead be licensed or affixed with permission. Thus, the trademark owner is not the primary source of the goods but a secondary one.

As an example, a university may authorize its name to be emblazoned across the front of a sweatshirt. If large enough, the name on the sweatshirt is not actually a trademark, because it is merely ornamental. Ornamental “marks” cannot function primarily as trademarks; they are just decoration. However, in this case, the mark is still a secondary source indicator of the university’s educational services. The school would have the opportunity to submit evidence that it provides those educational services under the same mark (the school name) and that evidence would overcome the ornamental refusal.

Frequently, evidence of secondary source is simply a prior registration of the same name for other goods or services. The trademark rules break down a few situations:

  1. ownership of a U.S. registration on the Principal Register of the same mark for other goods or services based on actual use in commerce; or
  2. ownership of a U.S. registration on the Principal Register of the same mark for other goods or services based on a foreign registration;
  3. non-ornamental use of the mark in commerce on other goods or services; or
  4. ownership of a pending use-based application for the same mark, used in a non-ornamental manner, for other goods or services

Notably, intent-to-use applications will not support secondary source arguments. For example, in In re Paramount Pictures Corp., 213 USPQ 1111, 1112 (TTAB 1982), the Trademark Trial and Appeal Board held that MORK & MINDY was registrable for stickers because the applicant had a television series with the same name and had previously registered the name for various goods and services. The Board found that the primary significance of MORK & MINDY to a sticker consumer was to indicate the television series and the principal characters of the television series. The Board followed the rule from in In re Olin Corp., 181 USPQ 182 (TTAB 1973) (stylized “O” design registrable for T-shirts, where applicant had previously registered the “O” design for skis), where the Board stated:

It is a matter of common knowledge that T-shirts are “ornamented” with various insignia . . . or … various sayings such as “Swallow Your Leader.” In that sense what is sought to be registered could be construed to be ornamental. If such ornamentation is without any meaning other than as mere ornamentation it is apparent that the ornamentation could not and would not serve as an indicia of source. Thus, to use our own example, “Swallow Your Leader” probably would not be considered as an indication of source.

Lastly, if ornamental use is the only kind of trademark use, then even widespread ornamental use will not establish that a mark functions as a secondary source indicator. Rather, there must be at least some underlying use of the trademark on other goods or services.

Secondary source is an easily confused topic and is only appropriate in some situations. Contact a local trademark attorney to discuss whether a secondary source argument may help your particular case.



Late US National Stage Entry

US National Stage Entry

Mountain Biking in Park City, Utah

A late US national stage entry, from a PCT international application, is one way a US or international applicant can obtain patent protection in the US.

Patent applicants can seek patent rights outside their home country through a few mechanisms.  For utility applications, applicants file either direct foreign applications in individual foreign patent offices or initiate a centralized international process.  With direct filing, applicants use local counsel to file and examine the applications according to the local law.  With the international process, a centralized PCT application is filed, searched and examined under internationally-accepted rules, and is then sent to foreign offices where it can be processed according to the foreign country’s laws.

Deadlines govern the decisions and timing to file either directly or internationally.  A PCT application must usually be filed within 12 months of a priority date, usually the date a first application was filed on the subject matter.  There are methods for restoring a right of priority within a limited amount of time if that deadline is missed.  However, those methods are limited and not always available.

PCT Applications

Once filed, the PCT application processes through an “international phase” in which it searched by an international searching authority, and a written opinion is developed.  The written opinion determines whether the claims presented in the PCT application have met internationally-accepted standards for patentability.  A report on patentability is eventually developed which is based either on that written opinion or on subsequent examination following the presentation of amendments or arguments in response to the written opinion.

The “international phase” of the PCT application ends 30 months from the priority date, and the “national phase” (also called the “national stage”) begins with the filing of national applications.  This deadline is no less than 30 months, but in many countries it is 31 months, and some countries provide even more time under certain circumstances.  An applicant looking for patent protection in foreign countries must file a foreign application in those countries before the expiration of each country’s respective deadline.

Missed National Stage Entry Deadline

In many countries, missing the national stage entry deadline is the end of the road, and you can no longer pursue a patent application in that particular country.  In some countries, there may be exceptions.  Canada, for instance, is unique in that provides an additional 12-month extension period when the delay is unintentional.

Late US National Stage Entry

The United States is perhaps one of the most gracious countries when it comes to missed deadlines.

In the US, if the deadline on a regular patent application is missed (say, the applicant failed to respond to a rejection), then the application will become abandoned.  It can, however, potentially be revived.  If the abandonment was unintentional, and the delay in filing a petition to revive accompanied the missed response was also unintentional, then the application can generally be revived (with payment of a hefty governmental fee).  In some cases, there are additional requirements, and in other cases, the Patent Office may request more information about long delays, such as those over two years.  However, there are means for reviving abandoned applications.

A wrinkle of PCT law enables a PCT application to enter the national stage late.  Filing a PCT application will automatically constitute the designation of all PCT contracting states on that filing date.  In other words, the effect of the international application is as if a national patent application were filed in each contracting state.

So, when a PCT application is filed, the application is also considered to have been effectively in each PCT member country.  For the US, that means that a US application is considered to have been filed on the same day the PCT application was filed, even though a US application was not actually filed.

This means that the “US application” can go abandoned, which means it can be revived.  If an applicant who has filed a PCT application misses its 30-month deadline for entering the national stage in the US, that deadline closes, and the application is considered abandoned as to the US.  However, the US will allow it to be revived (again – revival is not always possible, it is subject to certain restrictions).

The US even has a form – PCT/SB/64PCT as of the time of this writing – that can be used in a petition to revive an international application.  It is named the Petition For Revival Of An International (PCT) Application For Patent Designating The U.S. Abandoned Unintentionally Under 37 CFR 1.137(a) and includes a checklist of some of the minimum documents that need to be filed along with a such a request.

Any applicant reviving a PCT application for national stage entry into the US would be well advised to contact and hire an experienced patent attorney.  A national stage entry on its own is a complicated process that requires a great deal of accompanying paperwork.  Certain translations, priority copies, international records, and other documents must be submitted for a national stage entry.  In addition, the Petition For Revival has another set of documents that must be furnished to support the request.  And the government fees, which vary depending on the size of the applicant, the type of filing, and the results of the international application, are high and non-refundable.



Student Athlete Trademarks, Names, Images, and Likeness

Student athletes will now be allowed to profit from their performance and influence.

Until this year, the NCAA prohibited college students from making money for playing sports. However, this month, Florida began allowing students to benefit financially from their performance and the money and attention that brings. California signed the Fair Pay to Play Act (“FPPA”), going into effect in 2023 and affecting schools that make $10 million or more in media rights each yeah. Colorado will allow students to profit from their name, image, and likeness in 2023 as well. Discussion and legislation are working through most of the other states and Congress as well. Rather than being directly paid to play, most rules allow student athletes to accept brand relationships, sponsorships, and other promotional arrangements.

Social Media Influence

Companies seeking sponsorships opportunities are looking for not just outstanding athletes but also influencers who reach a large audience.

A large audience means widespread brand promotion. It also means targeted promotion; the right sponsors may be able access specific demographics through the student’s socials. Those demos may be ones that they cannot otherwise target. This represents a tremendous opportunity for the sponsor and thus can create great value for the student. Knowing this positioning will be incredibly important for any student athlete negotiating a deal.

The Student’s Opportunity

Most athletes become famous long before they turn professional. While professional athletes have an insanely high level of fame, many of them were famous or at least well-known in college, and some in high school. A student who captures the value of their athletic performance while they are still in college builds their brand early and realizes a longer income life.

Some student athletes don’t turn professional, either because they aren’t quite good enough or because there is no professional league for their sport. For them, college may be the only time that they would be able to profit from their performance. Doing so may be an opportunity to make money from their sport before graduating and entering the more normal workforce.

Potential Challenges

Student athletes and the colleges they attend may become competitors. For example, a school that has a contract with Nike to outfit its players in Nike gear only will not be too happy with a student who individually takes a deal to rep Adidas. How does this conflict resolve? In California, the FPPA prohibits the student from closing a deal with a competing sponsor. The NCAA may adopt a similar policy. This potential conflict could be in any number of fields: nutrition, beverages, shoes, athletic and protective equipment, mobile services, etc. This will restrict the student’s opportunities and will require competent representation to negotiate those limitations.

Protecting Name, Image, and Likeness

Being popular on social media is just one aspect of building value. Look at any highly successful professional athlete and you will find a portfolio of trademarks protecting them.

It may seem strange, but a person doesn’t necessarily own their name. Simply having a name does not alone give someone the right to prevent other people from using it. If a student athlete doesn’t actively pursue protection, then there are only a few ways in which they can prevent others from using their name, image, and likeness (“NIL”).

Filing a trademark application is perhaps the easiest, most straightforward, and most definite way to protect a student athlete’s brand. Trademarks can cover the student’s name, nickname, any logo they adopt, or a catchphrase or slogan used on or off the field. Some marks that come easily to mind:

Johnny Manziel’s Trademark

Lance Armstrong’s Former Foundation’s Trademark

Tim Tebow’s Logo

Michael Phelp’s Logo

Jeremy Lin’s Trademark

Serena Williams’ Logo

While filing a trademark application is an easy step, it is one that still requires careful planning. The student and their attorney must consider how the student’s fame is likely to be used, how it will leverage the most value, and consequently how a trademark application should be filed to capture that. Further, once filed, the application needs to be properly processed through the Trademark Office. Once the mark is registered, the student will want to monitor for unauthorized use of their properties.

Some athletes will also want to consider seeking international protection, either because they will play internationally or because they expect their fame to extend beyond the boundaries of the US.

Lastly, owning trademarks protecting one’s name, image, or likeness is just the start – the student athlete will likely want and need guidance in negotiating deals with companies. Representation – either with a registered agent or attorney – will serve the athlete well in ensuring that they take the fullest advantage of their performance.

If you are a college student with questions about how to protect your influence, please feel free to contact trademark attorney Tom Galvani.



Juneteenth at the Patent and Trademark Office

The United States Patent and Trademark Office is closed today, June 18, 2021, for the first federal holiday of Juneteenth National Independence Day.  Federal employees have the day off.  The electronic filing systems remain open for business for all those who still wish to file applications, responses, and other communications with the Patent and Trademark Office.