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May 2012 | July 2012  |  October 2012 |  December 2012 |  April 2013      

The Morton Memo - AUGUST 2013

Our two articles concern two timely topics.  One is maintaining and safeguarding private data.  The other concerns trademark registrations and the little known (at least in the business world) Intent to Use Federal trademark application. 

The Morton Memo is for you, so kindly email me those topics of interst to you. 


>> Privacy and Data: What do you have, where is it stored and how are you guarding it?  

>> Trademark Intent to Use application: A powerful tool

 

privacy data: what do you have, where is it stored, and how are you guarding it?

By Eric D. Morton

Data Lock

A healthcare company was recently fined $1.2 million for selling a photocopier.  At least, the company thought it was only selling a photocopier.  It turns out the photocopier had a hard drive that contained the files of more than 344,000 patients on the date the photocopier was sold.  The Department of Health and Human Services was informed of this breach and brought legal action against the health care company. 

Companies of all sizes are receiving and storing more and more information about their customers and employees.  They are storing them in an increasing number of places.  I am sure that the healthcare company had no idea that all that information was stored on the hard drive of its photocopier.  Expensive oversight.

The potential liability for disclosure of confidential information about customers or employees is enormous, even for businesses not in the healthcare field.  In California, if a company loses confidential information or has confidential information that is accessed by third parties (whether through a security breach or not), then the company must inform all persons whose confidential information was potentially compromised or accessed.  Confidential information can mean names, addresses, email addresses, dates of birth, as well as highly sensitive information such as social security numbers, banking information and credit card numbers.

Earlier this year, we addressed privacy concerns in mobile apps in an earlier Morton Memo  

In addition to online issues, companies can hold a surprising amount of confidential information and hold it in surprising places.  We suggest that companies inventory what information that they have concerning customers (patients, clients, etc.) and employees. 

 1.         What confidential information does the company have? 

 2.         Where is this information stored? 

 3.         Is the information identified as confidential?

 4.         Who has access to that information? 

 5.         Is it secure within the company - i.e. can it only be accessed by authorized persons? 

  6.         Is it secure from outside intrusions? 

 After inventorying all confidential information held by the business, the business should develop a written policy regarding the confidential information.  The policy should cover:

  1.         The manner in which confidential information is taken.

  2.         What information is necessary and what is not.

  3.         How confidential information is identified.

  4.         How confidential is information stored.  Where it should not be stored.

  5.         When confidential information should be deleted and how.

  6.         How long confidential information should be stored.

  7.         Who is authorized to access confidential information.

  8.         How confidential information is secured within the company.  In other words, what steps does a company take to restrict access to only those who need access.

  9.         How confidential information is secured from outside/third party access.  This includes IT, security and access to company systems by third parties.

 The penalties for breaches of confidential information can be severe.  In addition to the embarrassment from disclosing a breach to customers, if a customer is damaged by the disclosure of confidential information, then the company that lost the information can be liable for those damages plus attorneys’ fees and costs. 

 We urge all businesses to review what confidential information they have in their custody and develop and implement policies to prevent its loss or inadvertent disclosure.

 For more information about privacy laws and issues, contact us at (760) 722-6582 or info@ericmortonlaw.com. 

 

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IP circle

TRADEMARK INTENT TO USE APPLICATION: A POWERFUL TOOL

By Eric D. Morton

Typically, my clients ask me to file a trademark application for them after they have begun to use a new mark in some line of business, to protect their brand.  However, businesses often invest considerable resources in creative work to develop logos and brands for a new marketing campaign, product, or company launch, before a new brand or trademark is actually in use.  Luckily, the U.S. Patent and Trademark Office allows you to file an “Intent to Use” application,   as opposed to an application in which the trademark is already in “actual” use in commerce. 

An Intent to Use application can be a powerful tool because it allows a trademark owner to get approval of a trademark before actually using it.  This type of application gives the trademark owner unusual rights under trademark law.

The only difference in filing an Intent to Use application is that the applicant files  without an example (specimen) of the trademark in use.  The USPTO gives the application the same scrutiny as other applications and, if  approved, the USPTO gives the applicant a Notice of Allowance (“NOA”).  After the NOA, the applicant has six months to file a Statement of Use (“SOU”), showing that the trademark is actually being used for the goods and services listed in the application.  The applicant can obtain up to five extensions of time to file the SOU.  Once the SOU has been accepted, the USPTO registers the trademark. 

 Intent to Use applications have several benefits for a trademark owner:

1.       To  determine whether the USPTO will allow a registration before actually using the trademark;

2.      To learn whether someone will oppose the trademark. This can be very useful to companies that want to roll out a new brand but don’t want to go through the expense of creating the brand before knowing if the trademark can be protected;

3.       To put the public on notice that the applicant has a good faith intent to use that trademark.  If an Intent to Use application goes to registration, then the date the application was filed will be considered the constructive date of use for determining infringement.   This is a powerful right under trademark law, and may be the most important reason to file an intent to use application.  Let me explain a little further.

Trademark law is all about use.  If you are using a trademark, you have what are called common law trademark rights within the market and for the goods or services for which you are using the trademark.  A Federal registration from the USPTO gives a presumption that you are the only person who can use that trademark for those goods or services in the United States.  A state registration does the same for the particular state.  However, even if you have a registration, you may not be able to stop someone from using the same trademark if that person was using it first.

For instance, let’s say that Carmen Brown sells dog kennels under the name “House of Jupiter” and obtains a Federal registration for “House of Jupiter” for use with the sale of dog kennels.  Carmen’s application is filed shortly after she starts using the trademark in 2012 and she obtains a registration in 2013.  Then Carmen discovers that Winnie Black, who is in San Diego County, is also selling dog kennels under the name “House of Jupiter.”  Carmen then sues Winnie for infringement.  But, it turns out that Winnie has been using the name in San Diego County continuously since 2011 even though she doesn’t have any registrations.  She hasn’t used the trademark outside of San Diego County.   The result would be that Carmen would not be able to prevent Winnie from using the name “House of Jupiter” in San Diego County.  Winnie would have what is called "priority" to use that name for those goods (dog kennels) in a particular market (San Diego County).  Winnie would not be able to use the name for dog kennels outside San Diego County because Carmen has a Federal registration.  However, Winnie could prevent Carmen from using that trademark in San Diego County.  If others started using the name in the United States after Carmen filed her application, then Carmen could sue for infringement because they would be on notice through her registration. 

The above example is the traditional analysis of trademark infringement. 

An Intent to Use application does a strange thing to traditional trademark law.  By law, an Intent to Use application gives the trademark owner what is called "constructive use" as of the date that the owner files the Intent to Use application as long as the application goes to registration.   So, if the applicant's Intent to Use application is approved, the applicant begins to use the trademark, and obtains a registration, the applicant will be considered to have used the mark since the date the application was filed - which is why it is called "constructive use."  The applicant has no rights until the registration is issued, but upon registration, its rights go back to the application date.  This is a huge advantage. 

In the above example, Carmen files an Intent to Use application in 2010 but doesn’t use the trademark immediately.  She finally obtains a registration in 2013 (after several extensions of time to file a SOU). Carmen could successfully stop Winnie from using “House of Jupiter.”  This would be true even though Winnie began using the trademark two years before Carmen.  Carmen would have “constructive use” as of 201o and would have priority over Winnie who didn’t start using the trademark until 2011.

Given the potentially decisive advantage that constructive use gives a trademark owner, we suggest that a business file an Intent to Use application as soon as it determines to go forward with a new trademark even if the business isn’t ready to roll out the new brand yet.

For more information about trademarks and trademark applications, contact us at (760) 722-6582 or info@ericmortonlaw.com.

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