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Newsletter Issue 62 - April 2014

In this issue:

Artist's rights organizations
Trademark secrecy
Provisional patent applications

Ask Dr. Copyright ...

Dear Doc:

I write the songs that make the whole world sing. Unfortunately, with all that songwriting, I really don't have the time to listen to every radio station that plays my songs, every online store that sells them, and every band, chorus, glee club, and lounge act that covers them so that I can collect royalties. I have heard that there are organizations that will do all of that for me, and even sue people who don't pay up. What gives? I thought that "trolls" were the bad guys, but this sounds like just what us musicians need in order to make a living.

Barry M.

Dear BM:

The organizations you're referring to are called "Artists' Rights Organizations" (AROs) and there are three big ones: Broadcast Music Inc. (BMI), American Society of Composers, Authors and Publishers (ASCAP) and the Harry Fox Agency (HFA). Each one of these companies is a nonprofit that licenses, collects, and distributes royalties on behalf of musical copyright owners. BMI and ASCAP license public performance rights to venues such as concert halls, bars, restaurants, stores, etc.. HFA licenses "mechanical" rights, which include the right to make CDs, records, tapes, and certain digital products. In addition, there are more than 200 similar organizations worldwide, and many have reciprocal agreements with one or more of the US-based AROs. Not to confuse you more, but record labels also license rights, and they have their own organization, the Recording Industry Association of America (RIAA).

It's interesting to note that none of these companies writes any music at all! Nor do they arrange it or perform it. They just collect the royalties, and when someone refuses to pay up, they bring law suits, relying on the Copyright Law (17 U.S.C. §101, et seq.) which provides, among other things, that they can collect attorneys' fees, and ask for statutory damages of up to $150,000 per song played or copied. But, I hear you shout, "Last month, Doc, you told us that this is pretty much exactly what companies that are being called "patent trolls" do with patented inventions! They don't invent widgets, and they don't make the widgets...they just offer to license patent rights, and when someone refuses to pay the royalty, they bring a law suit in which they demand a 'reasonable royalty'".

Yep...exactly! So there you have it. AROs are respected for the work that they do to help musicians make a living by licensing rights, collecting royalties, paying artists, and policing the use of the rights by using the legal system. They are important because, to quote the ASCAP website, "We know that there are many steps between creation and compensation. A music creator is like a small business, and we exist to ensure that ASCAP members are paid promptly and fairly when their compositions are performed publicly." Now, to quote one "patent troll" website, "Patent licensing can be an effective and efficient way to maximize the profit potential of a patent. A patent license agreement grants a third-party user of the invention (an infringer) permission to practice the patented invention in exchange for remuneration."

So there you have it. Patent trolls: BAD. Copyright trolls: GOOD.  Go figure!

If you have a question about how to license your intellectual property, give one of the attorneys at LW&H a call. They're not trolls, but they do understand how to help creative people protect and profit from their creations, whether they are widgets, music, or some other wonderful new thing that will be the next hit.

Keeping the Cat In the Bag When Filing a Trademark Application

One of the potential down sides of filing a trademark application with the United States Patent and Trademark Office is that the application, including the identity of the owner, is of public record, accessible to anybody.

If secrecy is important to your company's marketing strategy then filing a trademark application is not an act to be taken lightly. So, if you are, say, Apple Computer, and you rely upon the anticipation of the product announcement to build up market hype and eventually sales, you will need to keep your trademark filings secret until the product announcement. How do you do that without spilling the beans?

The tried technique for maintaining secrecy is to create a dummy corporation that no one will recognize for filing your trademark applications.  Once the need for secrecy evaporates, the dummy corporation assigns the trademark to its true owner.  Apple, in fact, uses this technique. AppleInsider recently reported that a Delaware corporation called BrightFlash USA LLC recently filed a host of trademark applications for the iWatch trademark.  (Okay, everybody knows or thinks they know that Apple will be releasing a new product called the iWatch so what's the point of keeping it secret? I guess it's because nobody knows for sure.)

It's not completely clear whether BrightFlash is actually an Apple Computer surrogate, however, numerous trademark filings for iWatch in the United States, the United Kingdom, the European Union, Australia, and Denmark, strongly suggest that Apple may be behind the trademark applications. AppleInsider also reported that there were numerous applications filed by BrightFlash for the iWatch trademark in smaller countries. Just an interesting tidbit from those who monitor trademark filings.

Provisional Patent Applications - File Early and Often

A provisional patent application is a temporary application that provides patent-pending status for one year.  The provisional application can be a relatively low-cost way to preserve your patent rights while you develop your invention.  The protection offered by a provisional patent application is only as good as the information contained in the application and only addresses the invention as disclosed in the application.  The provisional application must include enough information in the specification (the narrative part of the application) and the drawings so that a person who is knowledgeable in the technical field of the invention can make and use the invention.

To have any continuing value, your provisional application must be followed within one year by a full U.S. non-provisional (utility) patent application.  If the invention is one for which you will seek international patent protection, your international patent application(s) also must be filed within one year of the provisional filing date.

If you develop improvements to your invention while your provisional application is pending, the improvements are not protected.   What to do? File another provisional application addressed to the improvements.