Because intellectual property rights (IPRs) are private rights, it is the responsibility of the right holder to protect them. However, governmental authorities also play a role in ensuring that the infringing activity is stopped and that piracy and counterfeiting on a commercial scale are effectively deterred.
In order to stop infringements that could damage your business’s reputation and undermine the value of your IPRs, you must actively monitor the marketplace for unauthorized uses of your trademarks, copyrights, or patents. Examples of monitoring activities include:
- Putting in place your own program or hiring a service that monitors the market for infringement through techniques such as conducting wholesale, retail, and Internet buys; technical and physical surveillance; undercover operations; and market analyses
- Hiring a trademark watch service to monitor official publications showing applications or registrations for trademarks in various countries in the world
If you become aware of any infringements of your IPRs, you should confer with your attorney about whether to communicate your rights to the infringer and, if necessary, defend your rights through legal action. The remainder of this module provides information about legal remedies and procedures available to address infringements of IPRs.
As you learned in Module 4, CBP has established border enforcement procedures to prevent the entry of infringing goods into domestic commerce. Recording federally-registered trademarks and copyrights with CBP is simple and can be done regardless of whether you suspect infringing goods are entering the United States. Recordation can be done online by logging on to the CBP website's IPR Recordation page at https://apps.cbp.gov/e-recordations.
At the time of recordation or anytime after recordation, you can also alert CBP if you suspect that a shipment of infringing goods has entered, or might soon enter, the United States. In this case, you should send an email about the allegation. The email should:
- Provide as much information about the alleged infringer, including as much information as possible about the suspect goods, such as:
- Possible ports of entry
- The name and contact information of the alleged importer, manufacturer, or consignee
- The date of arrival of the goods
- The vessel on which the goods arrived (or may arrive)
- Digital images of both the protected goods and the suspect goods
- Be sent to hqiprbranch@dhs.gov.
The procedures outlined in Module 4 for recording federally-registered trademarks and copyrights with the CBP are similar to the procedures that exist in other countries for enforcing IPRs at the border. You should strongly consider recording your IPRs with customs officials in countries where you do business. Also, unlike the United States, some countries accept recordation of patents. Many countries have information online regarding proper procedures for registering IP with their customs officials. You can get contact information for customs authorities abroad at: http://www.wcoipr.org/wcoipr/Menu_CustomContacts.htm.
ISP-Designated Agent
For a list of ISP designated agents, go to http://www.copyright.gov/onlinesp/list/index.html.
Information and Statements Required
Notice to an ISP must include:
- The name, address, and electronic signature of the complaining party
- An identification of the infringing materials and their Internet location or, if the service provider is an information location tool such as a search engine, the reference or link to the infringing materials
- An identification of the copyrighted works that have been infringed
- A statement by the copyright owner that it has a good faith belief that the copyrighted material is not being used legally
- A statement that the notice is accurate and, under penalty of perjury, that the complaining party is authorized to act on the behalf of the owner
Counter-Notice
A proper counter-notice must contain the following information:
- The subscriber's name, address, phone number, and physical or electronic signature
- Identification of the material removed and its location before removal
- A statement under penalty of perjury that the material was removed by mistake or misidentification
- A statement by the subscriber consenting to local Federal court jurisdiction or, if overseas, to any judicial district where the ISP may be found
Another easy and relatively inexpensive IP enforcement mechanism, known as "notice and takedown," addresses infringement of copyrighted material online. This enforcement mechanism allows a copyright owner to get infringing material taken off a U.S.-owned Web site quickly and easily. The procedure works like this:
- Step One: If you come across material on a third-party Web site that infringes your copyright, you can send a letter to the Internet service provider (ISP) that is hosting the Web site (e.g., AOL, Comcast). You must send the letter to the ISP's designated agent and must include certain information and statements required under the law. Click here to see an example of an ISP notice letter.
- Step Two: If the letter contains all of the required information and statements, the ISP must "take down" (remove or disable access to) the online content in question and must provide notice to the party who posted the content on the Web that it has done so.
- Step Three: If the party posting the content feels that it was taken down unfairly, he or she may submit a counter-notice to the ISP ("the put back").
-
Step Four: If the ISP receives a proper counter-notice, it must:
- Notify you that the material will be restored in 10 business days
- Restore the content between 10 and 14 business days from the date of receipt of the counter- notice, unless the ISP first receives notice from you that you have filed a lawsuit against the party who posted the content on the Web.
Note that any party who misrepresents a claim regarding infringing material could become liable to the ISP for any damages that resulted from the improper removal of the material. Also note that these procedures apply to U.S. disputes; procedures for addressing online infringement by foreign persons or entities may differ, and many countries do not have comparable notice-and-takedown procedures.
Legitimate Trademark Owners' Domain Name Disputes
Businesses and individuals with the legal right to use the same trademark for different products and services often want to use the same domain name. For example, the respective owners of the trademark ROYAL for windows, dill pickles, and financial services all may have wanted to register the domain www.royal.com.
Cybersquatters
Cybersquatters are those who exploit the first-come, first-served nature of the domain name registration system by registering domains incorporating trademarks with which they have no legitimate connection.
UDRP
The UDRP is applicable only to disputes over domain names registered in the generic top-level domains (gTLDs) (e.g., .com, .org, .info, .biz). The UDRP was designed to be efficient and cost-effective and has been used to resolve thousands of domain name disputes.
Domain name disputes also arise in country-code top-level domains (ccTLDs). These disputes are handled according to the policies and practices of the specific ccTLD. Some ccTLDs have adopted the UDRP or a modified UDRP, while others have instituted other approaches to resolving disputes. Still others have no system in place for administrative dispute resolution; in those ccTLDs, disputes would be handled through the courts.
The explosion of the Internet in the mid-1990s and the race to acquire domain names created some thorny problems for trademark owners around the world. Disputes quickly arose among legitimate trademark owners and between legitimate trademark owners and cybersquatters.
In order to facilitate the resolution of domain name disputes around the world, a dispute resolution procedure called the Uniform Domain Name Dispute Resolution Policy (UDRP) was adopted by the Internet Corporation for Assigned Names and Numbers (ICANN). A number of organizations have been approved by ICANN to hear and resolve disputes under the UDRP. Information about the UDRP and the approved dispute resolution service providers may be found through the ICANN Web site at www.icann.org/udrp.
If border enforcement and online enforcement mechanisms are not sufficient or appropriate to address an IP infringement situation you are facing, you will need to engage the services of an attorney to help you take other steps to confront the problem. Often, the first step to take will be the preparation and delivery of a cease and desist letter. A cease and desist letter is simply a letter that puts the alleged infringer on notice of your rights and asks the alleged infringer to stop the activity that is believed to be infringing.
There are numerous benefits to sending a cease and desist letter as a preliminary step in confronting infringement. Cease and desist letters:
- Frequently facilitate an out-of-court settlement.
- Many IP violators are unaware of their violations and are willing to stop their conduct once they receive notice of the problem from the IP owner.
- Dialogue with the alleged infringer can help establish facts about the infringement that resolve the matter with only minor changes from the alleged infringer.
- Sometimes enable IP owners to identify the ultimate source of offending merchandise and avoid litigation with parties whose role is merely tangential.
- May put you in a position to recover increased damages in any litigation that may ensue because, by putting the alleged infringer on notice of your rights, continued infringement may be characterized as "willful."
Alternative Dispute Resolution
There are many reasons why litigation may not be the best method to deal with infringers. IP litigation is complex, and cases often take years to reach a decision. In that time, the IP at issue may become obsolete. In cases involving foreign infringers, jurisdictional issues can be extremely difficult to navigate. Finally, IP litigation is very expensive. For example, in the United States, the total median cost of patent litigation through trial is $1 million.An alternative to litigation is "alternative dispute resolution (ADR)," a term which refers to dispute resolution methods that do not rely on the traditional court system. One form of ADR that is much less expensive than litigation is mediation. Mediation is a voluntary, non-binding private dispute resolution process in which a neutral person (the mediator) helps the parties try to reach a negotiated settlement. Mediation could be described as a form of assisted settlement conference at which all parties are present and represented by counsel.
Another form of ADR is arbitration, which is binding and final, just like litigation. Although arbitratration is more formal than mediation, it is still, in many cases, cheaper and faster than litigation.
The World Intellectual Property Organization (WIPO) Arbitration and Mediation Centre offers ADR services for the resolution of international commercial disputes between private parties. For more information on the WIPO Arbitration and Mediation Centre, go to http://www.wipo.int/amc/en/index.html.
In addition, the International Trademark Association offers ADR in trademark infringement cases. For more information, go to http://www.inta.org/index.php?option=com_content&task=view&id=71&Itemid=219&getcontent=4.
Local bar associations, artist organizations, and industry-specific associations may also offer such services.
Business Associations
Industry associations representing the IPR sectors (copyright, trademark, and patent) are very active in the United States and many overseas markets. Representatives from these associations can be excellent resources for "on the ground" perspectives and intelligence. These associations, as well as other industry-specific associations, can also help to assert pressure on foreign governments to take enforcement action against infringers in their countries.
You will find a list of some of the industry associations in the Resource Center.
Licensing Agreements
In some circumstances, demanding a complete halt to infringing activity and compensation for all prior infringing acts may not be the best way to deal with an infringer. A mutually agreeable business resolution, such as offering to license the infringer on commercially reasonable terms, may present a faster, less costly solution to the problem.
Depending upon the circumstances, licensing can enable a company to exploit other markets by allowing the licensee to apply the existing technology to a different market. Licensing to firms for production and distribution to different populations can enable a company to further profit from its technology while protecting itself from the overhead required to participate in foreign markets.
While a license may not make sense in every situation, it is one option that should be considered when determining how to confront an IP infringer.
If a cease and desist letter does not achieve the desired result, litigation may be necessary to address the infringing activity. There are, however, other steps that an IP owner should consider before resorting to costly and time-consuming litigation. They include:
Civil Court Cases
A civil court is a proceeding between two private parties in which one person (the plaintiff) sues another (the defendant) who has caused him or her injury or loss. A judgment in a civil matter does not include the imposition of a criminal sentence. If the plaintiff wins, he or she can receive compensation in the form of damages and/or an order to stop the defendant's infringing activities.
A preliminary injunction is an order that requires a defendant to do or not to do something during the time that a civil case is pending. In the United States, a plaintiff seeking a preliminary injunction has to show he or she will suffer an irreparable injury and that he or she is likely to win the lawsuit. In an IPR infringement case, a preliminary injunction will generally prohibit the alleged infringer from manufacturing or selling the product or service in question while the case is pending. Many trademark cases are settled with an injunction, i.e., an order to stop selling the infringing goods and to destroy them. Most court cases in the United States are settled or otherwise resolved short of trial.
Administrative Tribunals
Administrative tribunals are decision-making bodies that operate within, or in direct relationship with, particular government agencies. Administrative tribunals are not part of a country's judicial court system, although their function is quasi-judicial because it directly affects the legal rights of a person or corporation. Both civil court cases and administrative tribunal cases are considered to be civil proceedings because they do not involve the imposition of criminal penalties.
Countries around the world utilize a myriad of administrative tribunals to address issues relating to IPR. An example of an IPR administrative tribunal in the United States is the Trademark Trial and Appeal Board (TTAB). The TTAB is part of the U.S. Patent and Trademark Office (USPTO), and it hears cases relating to trademark registration, including disputes between conflicting trademark owners relating to trademark applications and registrations.
Provisional Measures
Provisional measures are legal remedies that are available to put an immediate halt to infringing activity while an infringement case is pending. Examples of provisional measures include:
-
Preliminary injunctions, which are court orders requiring a defendant to do or not do something during the time that a case is pending. In an IPR case, a preliminary injunction will generally prohibit the alleged infringer from manufacturing or selling the product or service in question while the case is pending
-
Seizure orders, which are court orders mandating seizure and impoundment of infringing goods at issue at the beginning of a case. Seizure orders can also relate to the infringer's business records.
In some cases, where other methods of enforcement have failed to stop infringing activity, it may be necessary to resort to litigation to address the problem. In such cases, you will need to retain an experienced IP attorney to assist you. The laws and procedures associated with IP litigation are complex, and it is extremely difficult to effectively enforce your legal rights without the assistance of an attorney who specializes in this area of law.
Litigation to address IP infringement takes place before either civil courts or administrative tribunals. The decision as to which route is better for you should be made in consultation with your attorney. Both types of proceedings often take a substantial amount of time to reach a conclusion, and while these cases are pending, infringing goods may continue to enter the marketplace or be destroyed. To address this, IP owners can seek provisional measures to immediately stop infringing products from entering the stream of commerce. Again, the availability of such measures in your case should be discussed with your lawyer.
If you know the identity of a foreign person or entity shipping infringing products into the United States, and if you meet the necessary legal and jurisdictional requirements, you can file a complaint against the foreign infringer and/or its U.S. importer or distributor in U.S. Federal court. If successful in the litigation, you can recover monetary damages and obtain an injunction against further infringing activity.
Be aware, however, that civil cases against foreign defendants in U.S. court can be difficult, expensive, and time-consuming. Consult with your attorney about whether this option is appropriate.
Easier and Faster Proceedings
There are three primary reasons why a Section 337 investigation typically is faster than an infringement lawsuit filed in Federal court:
- Section 337 investigations are accelerated proceedings, which means that they are intended to be quicker and more streamlined than court proceedings.
- Service of process is faster and less expensive in the ITC.
- Jurisdictional disputes are less common in the ITC because the ITC can take action against the infringing goods and does not need to obtain jurisdiction over the foreign infringer.
In recent years, a growing number of IP owners have sought relief from infringing imports by initiating investigations before the United States International Trade Commission (ITC) under Section 337 of the Tariff Act of 1930. A Section 337 investigation is comparable to the infringement lawsuit an IP owner could file in Federal court, but many IP owners favor proceeding in the ITC because:
- It is easier and faster.
- If successful, the IP owner may obtain (1) an exclusion order that prevents infringing products from being imported into the United States, and (2) a "cease and desist order" that bans the sale and distribution of the infringing product within the United States.
- An exclusion order from the ITC relating to a patent right may allow the patent owner to obtain customs enforcement of patent rights that are not available simply by recording a patent with the CBP. (While the CBP does not have legal authority to determine patent infringement on its own, it can enforce exclusion orders obtained from the ITC.)
Although a Section 337 proceeding is generally faster than a civil court case, it is nevertheless very expensive, as it requires significant time and effort by an attorney to navigate to final resolution. Also note that an IP owner must have a registered patent, trademark or copyright to initiate a Section 337 proceeding. Further information pertaining to Section 337 investigations can be found at http://www.usitc.gov/trade_remedy/int_prop/index.htm.
Because profits from the sale of counterfeit and pirated goods are so enormous, monetary damages, administrative fines, and seizures and destruction of infringing goods are not always effective in deterring this activity. Accordingly, criminal proceedings are sometimes necessary, particularly in cases of trademark counterfeiting and copyright piracy that are willful and on a commercial scale.
Criminal penalties include:
- Imprisonment and/or monetary fines
- Seizure and destruction of infringing goods and equipment used in their manufacture
If you have knowledge of IP theft, contact the National IPR Center through http://www.ice.gov/pi/cornerstone/ipr/index.htm.
You have now completed the Understanding Intellectual Property Rights course. For a list of resources available to provide information and assistance with regard to protection and enforcement of IP, click the Resource Center button at the bottom of this screen.