The Internet Business: IP 101

Almost every business has an internet presence. A brick-and-mortar store not only sells goods and services at a physical retail location, but also takes orders via its internet website (or on third-party websites). As we have written many times in the past, “branding” goods and services is important. Other IP also comes into play to aid a business owner in getting a leg up on the competition, but is the IP of a brick-and-mortar business different than an internet business? Not really, but in some instances, there may be additional tools for trying to stop an internet IP infringer.

In the virtual world (the internet), the laws and regulations governing IP protection and enforcement are the same as those in the real world. However, the virtual world runs at a much faster pace, so the traditional enforcement methods for IP infringement are often a bit too slow. In response to that situation, so-called selling platforms such as Amazon and eBay have made their own rules for proper behavior and redress.

The Gateway for Protection Equals Federal Registration

Each business generally starts with a product and a name for that product. To find a product on the internet one either searches by product name or the name of the website – the domain. Ideally the domain name and the brand name are the same. For this to occur, an availability search needs to be done concurrently for both the domain name and the trademark. Once availability is confirmed, the domain should be purchased, and an intent- to-use trademark application should be filed with U.S. Patent and Trademark Office immediately, in order to secure rights in both.

The importance of federal trademark registration of the product brand cannot be overemphasized when it comes to the internet. Amazon, eBay, Facebook, Twitter, Pinterest and others have swift procedures to combat infringers – when a trademark is registered. Each rely on the U.S. Patent and Trademark Office to “establish exclusivity” of a party’s trademark rights. These internet platforms do not want to determine who has the trademark rights, but instead rely on existing trademark registrations issued by the federal government to do so.

Who Owns the Copyright?

Next comes the exciting part for your client – the development and launch of its website. It is critical for the client to own the copyright rights to the content on its website. What does this mean? A website is made up of various elements – images, text (including the way text is set up for example, HTML), links, background design, photos, etc. In other words, anything the user sees or hears and the code that makes it all happen. Copyright rights belong to the “author.” Unless the author is an employee of the client, those copyright rights belong to a non-employee under federal law. In the case of a non-employee author, the only way for your client to obtain the copyright rights is by a written assignment of those rights. This federal law is strictly enforced!

Without such a written transfer, your client only owns the copy that was “delivered” by the developer/author. The assignment helps avoid subsequent demands from the developer for additional money based on your client making unauthorized “copies” of that author’s work.

Once your client owns the copyright rights, registration is strongly encouraged. A registered copyright is recognized as proof of ownership of the copyright by most selling platforms. Generally, without a registration, proof needs to be supplied to the selling platform in order to enforce these rights. A registration avoids this extra step. For instance, one very useful provision of the Digital Millennium Copyright Act (DMCA) permits the owner of a copyright registration to shut down a website based on copyright infringement.

Design Patents

U.S. design patents are often overlooked as a mode of protection for websites. Design patents may be obtained for “any new, original and ornamental design for an article of manufacture.” 35 U.S.C. § 171. This statute has been interpreted to also include “surface ornamentation” applied to an article of manufacture such as a computer screen. For example, Microsoft has a design patent on an image of a recycle bin (U.S. Patent D536,002). Microsoft ’s recycle bin image is also protectable by copyright. Again, if such a design is created by a non-employee web designer, an assignment of all IP rights should be made to your client.

We have only scratched the surface of protection/enforcement of IP rights for an internet-based business (which is now essentially every businesses). Everything in the intellectual property toolbox should be considered in protecting your client’s activities and presence on the internet. Truer now than when he first said them are these words from Bill Gates: “If your business is not on the internet, then your business will be out of business.” Z. Peter Sawicki and James L. Young

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