Newsletter Issue 37 - March 2012
In this issue:
Business resources for entrepreneurs
Copyright troll dealt a blow.
Facebook redefines common words.
Healthcare and innovation.
Business Resources for Entrepreneurs
Do you have an idea for a great new patentable product and
trademark? Of course you do - you're reading this newsletter, after
all. But do you know how to commercialize your product and
trademark; that is, how to turn your ideas into money?
Before you can make money with your ideas, you must learn how. A
great place to start is one of the eighteen Small Business
Development Centers ('SBDC') located in Pennsylvania. These are
publicly-supported resources for entrepreneurs where you can receive
free one-on-one counseling on starting and running your business.
The SBDCs also offer a variety of classes covering topics such as
preparing a business plan, doing business overseas, doing business
with the federal government, marketing on the Internet, managing
your time and providing other practical information for persons
starting and running a business.
If you are located in Southeastern Pennsylvania, our local SBDC's
are the Widener University Small Business Development Center, the
Fox School of Business at Temple University, and the Wharton Small
Business Development Center located at the University of
Pennsylvania. Costs, services and general atmosphere differ among
the SBDCs, but with three SBDCs to choose from, you can find local
resources with whom you are comfortable and that are a good fit with
you and your business.
Other local resources also are available. Delaware County SCORE,
funded by the Small Business Administration and private donations,
provides free online or in-person counseling with volunteer retired
business persons. Other chapters of SCORE as scattered across the
country. The Delaware County Commerce Center, an arm of Delaware
County government, can help with property acquisition and business
location issues in Delaware County, Pennsylvania. The Benjamin
Franklin Technology Partners is a sources of venture capital seed
funding for new companies and new products. Of course, we at Lipton,
Weinberger & Husick are here for all your intellectual property and
business law needs.
Ask Dr. Copyright
Dear Doc:
What ever happened to "RightHaven" that company you called a
"copyright troll" and that was suing bloggers for quoting from the
Las Vegas newspaper?
Signed,
Just Curious, With Nothing Better to Do
Dear JC:
It turns out that RightHaven was beaten back by some of the
defendants that it sued, with the help of the Electronic Frontier
Foundation. In the end, the judge in the case penalized RightHaven
because it did not even fully own some of the copyrights under which
it brought suit. RightHaven was ordered to pay certain defendants
costs and fees amounting to $183,000. To help pay that debt, some of
the copyrights that it did own have been seized and even its domain
name, RightHaven.com, was sold at auction - for $3,300. RightHaven
itself has filed for bankruptcy. Along the way, a federal judge
ruled that even posting a complete newspaper story on a blog may, in
some cases, be considered fair use by the blogger.
If there is a moral to this story, the "Doc" guesses that it may
just be, "Those who live in glass houses should not throw stones."
The "Doc"
A Book By Any Other Name
Rea
ders of this newsletter will recall that trademark rights in the
United States are established by use, not by registration. There are
benefits to registration, of course, but rights arise by the actual
use of a mark in commerce in conjunction with a product or service.
Often, the assertion of a trademark use is indicated by the
placement of the letters TM adjacent the mark. These letters let the
public know that the user is claiming trademark rights.
Another generally established principal of trademark law is that one
can not, by asserting a trademark right in a word, remove that word
from its common language use. In other words, one can not extract
from the language the common use of a word by claiming trademark
rights in it. However, it is possible to assert a trademark right to
a word in the limited context of a particular association or use.
Facebook has been very proactive in trying to establish trademark
rights to words it uses in association with its social networking
site. For instance as of March 26, 2012, the United State Patent and
Trademark Office has granted trademark registrations for FACEBOOK
and WALL. Pending applications include: LIKE and FB among others.
The use of FACE as a trademark has also been approved by the USPTO.
Registration is awaiting proof from Facebook that it actually has
used the mark in commerce.
To establish trademark rights to a word, it is useful to demonstrate
that the public associates the use of the word with a product or
service. Which brings us to the present interesting attempt by
Facebook to begin to establish rights to the word "BOOK." The
recently proposed Facebook user agreement open for public comment
states: "You will not use our copyrights or trademarks (including
Facebook, the Faceboo, and F Logos, FB, Face, Poke, Book and Wall)
or any confusingly similar marks, except as expressly permitted by
our Brand Usage Guidelines or with our prior written permission."
So, following these guidelines, use of your Facebook account
mandates that you recognize BOOK as a trademark belonging to
Facebook. This may be an end run by Facebook to bolster future
argument against other users of the word BOOK that Facebook has
already established in the public's mind an association between the
word BOOK with Facebook. What do you think of this strategy?
Healthcare Reform Affects Intellectual Property
This week the United States Supreme Court heard arguments over the
constitutionality of the Patient Protection and Affordable Care Act
(PPACA). The ten titles of PPACA, along with amendments to the
"Health Care and Education Reconciliation Act of 2010" regulate
multiple industries making up approximately one-sixth of the
national economy, all of which affect science, technology, and
innovation. In 2010, David Applegate and Arthur Gollwitzer III
published a short synopsis of how the PPACA affects the intellectual
law community. While it is probably not the last word on the
subject, in view of the historic Supreme Court arguments of this
week, its worth a quick review.
Several parts of the PPACA affect intellectual property issues,
either directly or indirectly: Titles II,III, VI, VII, and X. The
part of the Act, which directly affects intellectual property rights
is Title VII, known as the "Biologics Price Competition and
Innovation Act of 2009," which provides an abbreviated approval
process for biologic drugs. Although according to Applegate and
Gollwitzer, the new law provides an accelerated application process,
the authors not that there are those critics that argue that it
creates "a regulatory scheme with artificial dates, undefined terms,
and paperwork hurdles that will cause inefficiency and litigation,
thus imposing additional costs upon, and therefore reducing the
productive output of, the companies being regulated." Of course, if
this is correct, the law will affect the rate of innovation in this
area.
Title VII also expands the number of entities that may purchase
drugs at a discount from a federal list (known as the "340B
Program"), which will either expand the number of drugs available at
discount or decrease the discount price for available drugs, thereby
reducing payments to pharmaceutical companies. Those who favor the
bill cite to the economic benefits of expanded drug discounts as
well as the support of the pharmaceutical industry; distractors
argues that that the reduction of revenues will reduce research and
development. Yet, according to Applegate and Gollwitzer, "some
analysts see the reform bill as a boon for the pharmaceutical
industry, asserting that although costs per unit can be expected to
go down, overall sales will rise considerably as government-funded
programs that underwrite prescription drugs expand. Under this
scenario, drug companies would be expected to have more funds
available for research and development."
In a similar vein, Title II of the PPACA expands Medicaid rebates
for prescription drugs. The arguments are similar, increased
discounts mean decreased revenue, which means less research and
innovation. Others argue that the pharmaceutical industry has
everything to gain from increased sales stimulated by the new law.
Title IX imposes taxes on certain pharmaceutical and medical device
manufacturers and importers. Critics contend that the Act will
affect the overall profitability and incentives by diverting
otherwise productive resources to the "tax avoidance industry".
Title II of the Act establishes a national strategy to "improve the
delivery of heath care services patient health care outcomes, and
population health." To the extent that the government will become
the single largest consumer of health care services, it will have a
huge influence over the available supply of treatments and
innovations, a power that the critics are suspicious of. According
to Applegate and Gollwitzer, "supporters, however, contend that the
government-as-consumer scenario will permit economies of scale
previously unknown in the industry" thereby driving research and
innovation.
One thing is clear that given the clamor on both sides of the aisle
on these and other issues, no one has a clear picture of what the
affect of the PPACA will have either upon innovation and research or
upon the larger economy. The future of the law hangs in the balance
and will be dependent upon the the decision of the Supreme Court.
