Update on China’s Amended Trademark Laws
Traditionally, China has been a more or less outlier in terms of intellectual property protections, at least in terms in how they approach the enforcement of intellectual property. Now, though, the country is starting to move toward alignment with the rest of the world.
Subtle changes, possibly in response to controversial U.S. political decisions (including recent tariffs) are good news for U.S. businesses, inventors, entrepreneurs, and startups that rely on global enforcement of their technology and brands.
China’s Relationship with IP and the Rest of the World
China — particularly over the last few years — has been an economic force on the world’s stage. But unlike other major players across the globe, China has a questionable track record in its attention to enforcing IP rights, trade secrets, and the like.
This leads to counterfeit products, infringement, potential health and safety issues, and an overall bad deal for companies.
This includes those looking to either sell a product in China or manufacture a product in that country. Once you turn your product over to a Chinese manufacturer, you have very little control over what happens and who sees your sensitive product details, unless you have rigorous protections in place.
Many manufacturers — and the American public — have put up with this fact. It’s all in the name of cheap labor and cheap products. But could this business hurdle become a thing of the past?
China’s Most Recent General Institutional Reform
Possibly because of recent tariffs and other political pressures, China is showing some substantive changes when it comes to honoring trademarks and we’re starting to see it on the patent side of things as well.
A lot of these changes are due to China’s move toward some general institutional reform, including broad-based changes to the law that impact…
- How IP is registered in China
- Examination timelines within the Chinese intellectual property office
- Bad faith filings in China (more on that below)
…and more.
For example, China is beginning to improve a brand owner’s ability to log and report online infringement complaints (similar to how Google, Amazon, and eBay allow you to do so). The country is putting cybersquatting laws in place. Generally, we’re seeing more robust and predictable enforcement mechanisms in court that are more reconciled with the way the rest of the world approaches IP.
While many do not agree with the tariffs and the methodology that American politicians used to encourage these amendments, most brand owners agree that it’s good for business. They are absolutely unique and even historically monumental in some cases.
If the changes are implemented and the tariffs go away, even better. The playing field becomes level.
Bad Faith Filings: The Most Important Change of All?
Historically, it’s been easy to file trademark applications in China, and the China trademark office didn’t do a lot of diligence in terms of validating whether they were legitimate filings or not. That’s changing.
The new IP law amendments state that “applications for trademark registrations in bad faith which are not intended for use shall be refused.” This nearly mimics the sworn declaration that U.S. trademark applicants need to sign when filing an application.
Some might argue that this is the most important recent revision China has made to its brand protection system, so what else does this mean for you and your IP?
- Chinese companies will no longer be able to apply for trademarks or any commercial signs that are similar or identical to existing, well-known trademarks and commercial signs.
- Chinese companies can no longer apply for marks that reflect a notable place name, scenic spot, or building.
- Applying for a large number of trademarks is also in violation of the new amendments, unless a good reason for the applications can be proven.
Because of this amendment, now anyone can file an opposition or invalidation of a mark on the grounds of bad faith. Previously, in order to do so, a person or business would have needed to establish prior rights in China before filing an opposition.
Plus, infringement fines have increased substantially. Overall, this makes it easier for you and your company to defend your brand while operating overseas.
What’s Next?
We can be optimistic that these changes to how China approaches IP and the rest of the world are just the start of building better business relationships with the country.
Are the changes solely the result of tariffs? And if those tariffs are removed, could China revert back to previous behaviors? Only time will tell, but for now, business owners, startups, and entrepreneurs can feel a little more confident when approaching Chinese manufacturers and doing business in China.
If Insulin is Patented, How Did Colorado Cap the Price?
Recently, Colorado took a bold stance against the pharmaceutical and health insurance industries by capping the price of insulin — a life-saving medicine used by more than 7 million Americans — at $100 per month for each patient, regardless of how much insulin is needed.
I followed this story closely not just because I’m a Coloradoan, but also because I’ve been a Type I diabetic for 35 years.
I’ve spent my whole life wrestling with diabetes and have seen first-hand how the prices have gone up over time. When I was a child, insulin cost less than $50 a bottle. Today, the over-the-counter price for a single bottle of insulin is approaching $300, if not more — and I use two bottles a month.
Before the Affordable Care Act (aka Obamacare), I couldn’t even get private insurance due to my “life-threatening” pre-existing condition. Thankfully, Cover Colorado, Colorado’s high-risk insurance pool, was available to me at that time.
But even now with the ACA, my plan’s high deductible means I still pay for my insulin out of pocket most years. That’s a chunk of change for anyone, but imagine that burden on someone in a low-wage or underpaid job.
Insulin literally keeps people alive. I will die in a matter of days if I can’t access it. Yet, due to the rising cost of healthcare, people actually ration their insulin because they can’t afford it — sometimes with dire consequences.
It’s great that Colorado passed this law to cap the price of insulin, but it is really a reaction to some broader legal issues: artificial patent extensions and anticompetitive price control.
Insulin’s Patenting Problem
The first form of insulin was patented nearly 100 years ago. The inventors believed it was unethical to profit from a life-saving drug, so they sold it to the University of Toronto for $1. The sale also gave drug companies the right to manufacture and improve it as they pleased.
That’s where part of insulin’s patent problem lies.
Even though the basic formulation of insulin is nearly a century old and the original patents are expired, refinements have been constantly made over the years. The compounds have been changed and improved to the point where the pharmaceutical companies have been able to (what most say, artificially) extend the terms of these patents. This is essentially over-patenting, sometimes known as “evergreening.”
In the case of Sanofi, more than 70 patent applications have been filed in the U.S. on one form of their insulin, which could hold off competition for decades. It makes it almost impossible to have a generic version mimic what they’re doing.
This is commonplace and completely legal. Broadly speaking in the pharmaceutical industry, those companies have been able to file new patent applications on improvements to the drug. Building a robust patent portfolio based on improvements is a strategy that’s employed across most pharmaceuticals and drugs. We counsel clients on these strategies all the time, just not typically in the pharmaceutical industry.
However, in the case of insulin, it’s remained virtually unchecked. The drug companies say that rising prices are simply “the cost of innovation”.
The Question of Insulin Price Control
The second part of Colorado’s price cap is not really a patent law issue, it’s an insurance law issue and a question of competitive pricing.
First, a state can generally tell insurance companies that if they want to do business there, the state has the right to regulate those insurance practices. Insurance companies were in the bargaining room when Colorado was trying to get this regulation passed. To their credit, many feel that they were generally cooperative in getting this legislation passed.
The second part is about pricing, which is where there’s a deeper problem.
In a normal business environment, if there is competition, especially for the exact same product competing for identical customers, prices should go down. A company should be doing everything they can to get that same customer, which usually means they’re going to offer it for a dime less than the competition and people are going to opt for the cheaper of the two.
In the case of insulin, that hasn’t happened.
A century after the first patent for insulin was sold, we have only three companies that manufacture insulin and they all happen to sell it at roughly the same price point. Prices have steadily gone up in lockstep with each other, defying a normal competitive environment. Looking at the prices historically, Drug Company A will increase their prices by $5 a bottle, and then immediately Companies B and C do the same thing.
That’s not healthy competition. It’s too coincidental that their prices have mirrored each other over the years — which many feel reeks of some type of anti-competitive price-fixing behavior. It implies that there’s some sort of behind the scenes discussions saying, “Hey, let’s all set our prices at the same level.” And that’s illegal.
In fact, Colorado Governor Jared Polis publicly called it “price gouging”. Part of the new Colorado price cap includes an investigation by the state attorney general into the rising costs of insulin. That rabbit hole will likely extend to other states and the federal government as well.
Read This Before You Become an Amazon Reseller
Amazon sounds like a great way to get your product out there — billions of shoppers, cross-promotions, and paid spots on the biggest online retailer in the world.
But beware of the terms you are signing when you establish that reseller account. There’s a lot in the fine print that can easily undermine your e-commerce efforts!
Selling on Amazon: What Could Go Wrong?
You’ve developed a great product. You’re getting traction in the market. But, if it’s a small-dollar item under $10 — like an energy bar, a beverage, or that new trendy small plastic gadget that you make in China for 5 cents — the key to your business’ success is selling a lot of units. One way to do so, especially for small companies, is to sell your product on Amazon.
After all, if you’re not on Amazon these days, you’re at a big disadvantage. Compared to the efforts needed to get your product to a nationwide audience on your own, Amazon seems like a win-win. If you wanted to get that energy bar or beverage into a place like Whole Foods or Safeway by yourself, you’ll deal with distribution companies, warehouses, resellers, etc., that all make the process much more complicated.
But with Amazon, it seems as simple as creating an account, uploading a few photos and you’re in business . . . right?
It’s true that setting up an Amazon reseller account is easy. Click through a few forms online, upload those photos, send some stuff to Amazon, and then the company fulfills the order. Where do things go wrong?
Are You Your Own Biggest Competitor?
One pitfall you might come across? You could actually end up competing with yourself. Let me explain.
If you’re not 100% in control of your product distribution and others have legitimate access to a supply of your product, then you might not have control over the final consumer cost when that product is sold on Amazon.
Consider these scenarios.
Scenario 1:
- You sell your product to your distributor for $5
- The distributor sells your product to the retailer for $8
- The retailer sells it to the customer for $10
- You also sell it for $10 on Amazon
If your product is priced consistently across selling platforms, this is fine! However, consider this . . .
Scenario 2:
- You sell your product to a distributor for $5
- The distributor sells your product to an online store for $8
- The online store sells it to the consumer for $9
- You list the product at your price point: $10
Suddenly, you’re competing against that other online retailer for your own product — and if they’re selling at a lower price point, they’re going to win.
You could even be competing against someone else directly on Amazon who maybe buys your product at the store and then posts it on Amazon for a low price. The bigger rub? That competitor can actually use your own Amazon advertising collateral to point toward their lower price offering. Wait, what?
As a part of the boilerplate Amazon reseller terms of service, any reseller can promote the sale of their instance of your product by pointing to the images and other advertising that you originally put up on your reseller page. Amazon refers to this broadly as the “buy box” where those “other sellers on Amazon” get to compete solely on price with your marketing collateral in the background. No bueno.
The only way to prevent this from happening is by strictly controlling your distribution network, making it very difficult, if not impossible, for a third party to obtain your product and undercut you on price.
In instances like the ones above, some businesses assume they can sue either Amazon or the other seller. Unfortunately, this just isn’t an option. No one is doing anything wrong in the situation. There’s no counterfeiting or misrepresentation. No one is pretending to be you. They purchased your product through legitimate channels and are now openly reselling it for a lower price.
Even further, the terms and conditions you agreed to when setting up your Amazon account make the entire situation 100% legal.
The Key to Amazon Success
Is becoming an Amazon reseller all bad? Of course not! You just need to be aware of what can happen and the problems that exist when you have no control over your product’s distribution.
The key is controlling the distribution system from the start and really putting effort into your initial agreements with third-party distributors. These are the agreements that you can control and negotiate (versus your reseller agreement with Amazon, which leaves zero room for negotiation).
When creating these agreements, think downstream about pricing pressures and legitimate market competition; and develop terms and conditions of sales, including terms for minimum pricing and quality standards.
Fighting Fires After the Fact
If you haven’t put these conditions in place, there are a few things you can still do.
Third-party Monitoring
Third-party services exist that will monitor on a weekly or monthly basis to see if retailers are competing against you with your own product online. Some of these services will even send quasi cease-and-desist letters on your behalf, but the legalities can be a bit hazy.
Buy It Back
In some cases, you might try to buy some of the products from these third parties and look at the condition in which they arrive. If your product comes in bland or defective packaging or the product has been handled in a way that dilutes its quality, you may be able to address the issue of brand damage and misrepresentation directly with Amazon since situations like this actually do violate the Amazon reseller terms and conditions.
Of course, if that third party product comes with any evidence of actual counterfeiting or trademark infringement, you have a separate cause of action, both on your own and directly through Amazon.
Often, a simple letter to the reseller is enough to cause them to either drop the product or work with you on agreeable terms, as they likely don’t want to deal with any potential legal issues.
Making Amazon Profitable for Your Brand
Selling your product on Amazon isn’t something you should shy away from. It can be quite profitable — as long as you have the right precautions in place.
Look at your distribution agreements right from the beginning, from all angles. Taking the future of your business into consideration is essential to protecting your brand and your profits, on Amazon and anywhere else.
5 Common Issues With DIY Trademarking
On its surface, the trademark application filing process is relatively uncomplicated. The trademark office offers an online form for preparing and filing your trademark application and it’s simple and easy to use. All you need are basic computer skills and — voila! — you have a trademark application on file.
If it’s all so simple, why does our firm see so many issues?
1. The Application is Too Good (and Easy) to Be True
The first and most common problem people get into with DIY trademarking comes with the supposed simplicity of the form itself.
As you’re putting together your trademark application, there are a lot of selections to make, certifications to attest to, documents to upload, and correct language to use. All of these nuanced details impact how the trademark office judges your application. Without a clear understanding of all of these things, you might receive an unfavorable response from the trademark office months after your initial application, possibly even after already using your mark in a public-facing way.
While it might be easy to get started on the forms, push the ‘submit’ button, and pay your fee, there are a lot of hidden traps you can fall into if you’re not clear on what you’re doing.
Unfortunately, if you do fall into one of these traps and submit your application, you won’t know until you receive a response from the trademark office after the typical wait time of three or four months. At that point, not only did your mark get rejected, you may have already invested time and money into building your brand.
2. You’re Not Automatically Protected
Many trademark DIY-ers don’t quite understand their rights. Some assume that as soon as they submit their trademark application, they have rights to use the trademark.
However, this is a false sense of security. Without knowing the precise status of your brand rights, you might begin using improper terminology, make incorrect representations to the world about the status of your brand, and/or incur some financial risks or other legal liabilities.
Additionally, the trademark office may come back to you and let you know someone else already has prior rights to your same brand. Now, if you’ve gone ahead and used the mark just because you thought you had the right to by merely submitting your application, you’re suddenly in the wrong.
3. Your Brand Might Infringe Someone Else’s Trademark
One trap that many people fall into when taking the DIY trademarking route is that they don’t truly understand how to search for other trademarks that might precede their own.
The trademark office offers a search engine where you can type in a phrase, like your business name, and see marks that meet your search criteria.
Many people use the search engine and, if no direct hits show up, assume they’re in the clear.
However, the trademark office search engine is not fail-proof and not sophisticated enough to show you all the trademarks that might be similar to the one you want. It is a simple interface that gives simple results. Most don’t understand that common trademark “workarounds” such as phonetic equivalents, misspellings, and the like are not going to be enough to avoid trademark infringement. And these subtleties often don’t show up in a simple search at the USPTO.
4. You Must Understand and Prove “Use in Commerce”
In order to get a trademark registered in the United States, you eventually have to show that you are actually using the mark in commerce, which means that you are essentially offering for sale, or selling, the products identified in your application in connection with your brand.
That concept can be hard to grasp for some people. They think just by putting the words in an article or using it in a PowerPoint slide, that’s enough. . . but it’s not. Trademark applications filed by foreign entities frequently stumble on this issue as many countries do not require proof of use as the U.S. does.
You actually have to sell the goods across state lines, in a federal “use in commerce”-type environment. Not fulfilling this requirement will lead to a rejected application or a registration that is subject to cancellation if this use was alleged inappropriately.
5. DIY Legal Platforms Do Not Necessarily Provide More Safeguards
If you think you can register your trademark using a DIY legal platform and benefit from more legal protection, think again.
For a trademark application, popular self-service legal platforms give you a form to fill out, but it basically just asks the same questions that are on the trademark application. Then, the service’s clerks take that information and fill out the trademark application on your behalf with the information you’ve provided.
You won’t eliminate any of the pitfalls discussed above, as you rarely actually have a conversation and interaction with a legal representative that can help you avoid these.
Doing It Correctly Now Saves Time and Money Later
DIY trademarking can cost you both time and money, as well as potentially get you involved in some legal issues if you end up on the wrong side of a trademark infringement claim.
As is in most IP law cases, the best route is to make sure you properly protect and register your brand right from the beginning. If not, fixing your mistakes at a later date can be much more costly.
Questions about protecting your intellectual property? Schedule a consult.
The Politics of Intellectual Property
President Trump recently announced a 25% tariff on $200 billion worth of Chinese goods. Originally set at 10%, these recent increases will hit a much larger portion of the U.S. economy. According to CNBC, the United States imports nearly $540 billion in Chinese goods, and the trade deficit was $419.2 billion in 2018.
While politicians are looking to strike a deal with China, other trade changes are occurring on the Mexican and Canadian borders. NAFTA’s replacement, the U.S.-Mexico-Canada Agreement (USMCA), is intended to expand agriculture, manufacturing jobs, and enhance protections on U.S.-based intellectual property.
What does this mean for your company’s IP?
IP Protection: A Problem That Crosses Party Lines
No matter your political party, just about everyone can agree that international IP protection is a problem that needs solving. The current administration is putting pressure on China that the country has never faced before.
While most might not agree with the means (or merely the messenger), many, if not all, do agree with the end goal.
That goal is a positive worldwide shift in IP protection across a variety of industries stemming largely from China’s historically poor treatment of intellectual property rights, private property, and various humanitarian issues that continue to linger.
At the Root of the Matter: Chinese IP Laws
China is still a Communist country, but the country’s business policies have shifted over the years to encourage private enterprise, making them a dominant player in the world economy.
While the Chinese government has moved away from complete state control of all business, the state still has control (or at least strong oversight) of most business activities in the background. Those controls often impose threats or other disadvantages on foreign companies doing business there.
However, these same policies have made it easy for China to offer cheap labor and the resulting inexpensive products — something the United States has fallen in love with and grown accustomed to over the decades.
Whether you’re in electronics, clothing, or consumer/consumable goods, you often can’t do business in the U.S. without taking advantage of the low-cost labor in China and other developing countries.
The problem is, in order to do business in China, American businesses must comply with Chinese laws. We have no control or say in this fact. In our practice, this effectively requires a forced transfer of the intellectual property to a Chinese state-controlled organization of some form with little control on its distribution or enforcement.
Unfortunately, there is still an inherent lack of respect for IP and trade secrets in China. A lot of things are stolen; it’s why American consumers deal with counterfeit products all the time!
When a company starts doing business in China, there’s not a lot of control over who might see your product, who has access to your plans, or who knows your manufacturing methods. This is even more pronounced when the U.S. company does not maintain a constant presence in China or provide consistent oversight into the day-to-day manufacturing of their products. And often this lack of oversight and control leads to other Chinese manufacturers making cheap knockoffs of your product.
Americans have put up with this for quite a while, primarily in the name of making our products for a more competitive cost.
Looking Ahead: Are Tariffs Good for IP?
This is one of the underlying problems being addressed by the trade wars you’ve likely seen in the news. If China wants to continue selling to the United States, they must meet our standards of intellectual property protection. Otherwise, they face a high tax on every product they send to the United States.
Unfortunately, retaliation takes the form of similar tariffs on U.S.-made products that are sold into China. So, everything gets more expensive . . .
A negotiated result that unifies the treatment of individual IP rights would be good for every company’s intellectual property, as brands would be able to establish a set of rules that must be followed regarding assets such as their customer lists, pricing guides, IP, and other technology.
I recently spoke on an Outdoor Industry Association panel discussing this very topic. When costs go up, people look for cheaper ways of doing business. In my world of intellectual property law, that means issues with counterfeiting, trademark and patent infringement, and other surreptitious ways to get cheap products to market.
The end goal is to force China to reconcile their intellectual property laws so that they’re more aligned with the United States, Europe, and other regions that respect personal property rights.
What Does This Mean for IP Protection?
It’s now more important than ever to protect your intellectual property.
If a U.S. company chooses to file their U.S. patent application in other countries around the world, they must comply with strict and unforgiving timelines.
For many, it’s a no-brainer to file that patent in places like Europe, Canada, Australia, or Japan. They have very similar IP protection laws that respect personal property rights and are generally reconciled with U.S. laws.
While China does have straightforward processes for procuring your patents and trademarks, the enforcement of those rights is still a moving target and is largely unpredictable. Despite this, we often recommend our clients file their patent there now as the uncertain environment hopefully continues to decrease over the next few years.
A properly enforced patent in China should give you similar rights as it would in the U.S. — a roughly 20=year exclusive right to make, use, sell, and offer for sale your patent-covered product. If a client waits until the hostile environment lessens to file the patent, they may never have the opportunity to do so. Filing your patent in China is important now so that you’re ready for the future.
New policies will hopefully convince countries like China, that might not have really respected intellectual property to U.S. standards in the past, to do so in the coming years. While global IP has trended toward this change for a while, albeit very slowly, this change is now occurring rapidly.
Almost Infamous: Separating Your Product From Defective Brands
In late 2015, Segway, maker of the famous two-wheeled, self-balancing scooter, sued a company called Swagway, then-producer of a motorized transporter called Hovertrax — aka, a hoverboard. Swagway’s hoverboards were reported to cause fires and injuries (which they were already being sued for). Compounding the negative coverage were the many problematic hoverboard knockoffs.
In this case, Segway argued that the brand names were close enough that consumers would confuse their brand with a competitor linked to consumer injuries and lawsuits.
(Things got even more confusing when the scooter company Razor acquired patent rights to Hovertrax, prompting Segway to sue both Razor and Swagway for patent infringement as well.)
This type of brand protection scenario is pretty common in the intellectual property space. Maybe if you’re selling, say, a cellphone case, you’re not really worried about someone hurting themselves with a knockoff product. But if you’re selling an electronic device or a pharmaceutical — something where a fraudulent brand could actually hurt someone — the stakes of protecting your intellectual property are much higher.
If you find your company in a Segway/Swagway-type scenario, how can you distance yourself from a brand with a rocky reputation?
Proactive Brand Protection
When other brands are copying what you’re doing, it’s a bit of a backhanded compliment. It usually means that your product has been really successful. However, as flattering as imitation might be, it’s still not preferable for the brand looking to set itself apart, especially when the imitator is linked to bad news.
In terms of enforcing your own intellectual property, there are generally two main approaches: patents and trademarks. Both aspects need protection in different ways, and both have gray areas where a knockoff might be able to exist without actually infringing on your rights. This is why I recommend always coming at intellectual property protection from multiple directions.
The Pitfalls of Patent Protection
On the patent side, someone could knock off your product so it looks and feels exactly the same, but it might not infringe the patent that you have in place because of subtleties in how the claims of the patent were drafted.
For example, you may produce a mechanical widget and also have a patent on some aspect of that widget. The inventive aspect might be something small, or a minor improvement buried in the mechanics or software.
So what happens when someone comes up with a competitive product that looks, feels and even operates the same, and is even marketed to the same consumer?
If they’ve done their work and designed their product around your patent, there’s little you can do. The competitor isn’t actually infringing on your patent because your patent covers something specific that the competitor deliberately avoided.
The Gray Area of Trademark Protection
On the trademark side, things are a little more fuzzy — which could actually work in your favor.
Say you don’t have a patent on your product or the patent only covers something very narrow, but your product has a good brand and a good name associated with it. You find a competitor selling a similar product and is doing something to pawn off of the goodwill you’ve established with your brand — maybe the competitor has a similar name, uses some of the look and feel of your branding, or is doing something surreptitious online to drive traffic to their site. That’s a different story in terms of enforcement.
Because there is more subjectivity in determining an instance of trademark infringement as opposed to patent infringement, your options for enforcement may be more numerous. In a broad sense, the specific product being sold by your competitor may not matter so much. What matters is that a consumer might be confused as to the source of those competing goods.
In these instances, if a consumer is likely to be confused into thinking that a knock-off brand is your brand or that they are associated with your brand’s reputation, that may be enough to move forward with a trademark suit.
And this is when you should have formal trademark protection in place.
Reactive Brand Protection
These preventative measures aren’t always enough, though. Crooks don’t often care about legal protections. If they want to copy a product, most of the time they’re not going to do any kind of diligence to avoid litigation unless they’re a large or otherwise sophisticated company. For them, it might just be easier to ask for forgiveness rather than permission, and that may be their only true legal strategy from the start.
Often, one might find themselves in a reactive, rather than proactive, situation as they try to enforce their intellectual property. What are your options without getting involved in a messy court battle?
Step 1: Make Your Intentions Known
In some cases, a one-page cease-and-desist letter can be enough to scare away the problem.
Our firm works with clients that sell consumer products to a wide range of customers. The products are generally low-dollar, high-volume items sold through large third-party distributor networks — the type of product that is at a high risk of encountering knockoffs or unauthorized sales.
For these clients, we employ a counterfeit avoidance program to constantly monitor where these products are being sold (online or elsewhere). We get reports showing us all the vendors out there selling the same product. Some of these services can send an automated short-form, cease-and-desist letter on the first round. With just that, you can successfully get rid of up to 80% of the bad apples without a ton of legal work.
Then, if needed, a second letter could come from a lawyer. It doesn’t necessarily say anything different, but when they see our legal letterhead with “intellectual property litigation” in the tagline, that gets people’s attention.
Most of the time, this is when we get that “please forgive us” response from the offender and they cease the bad behavior. Many of these genuinely didn’t know what they were doing was wrong. But not all . . .
Step 2: Determine If Litigation Is Right for the Situation
For the 10 or 20% that ignore the warnings and their actions are true instances of trademark infringement or counterfeiting, the next step is typically some form of litigation.
If it’s a U.S. company and you have a U.S. trademark registration in place, then you file a trademark infringement lawsuit. If it’s a counterfeit product pawning off on your goodwill, the claims will generally focus on some form of unfair competition.
Once you’re in litigation, things can become very expensive, time-consuming, drawn out, and uncertain. You have to pick your legal targets carefully. Some just aren’t worth litigating.
Step 3: Drum Up Some Good Press
In instances where a lawsuit is not preferable, it’s advised that your brand have a good public relations campaign in place to make sure consumers are informed (and maybe even give them tips for identifying problematic knock-off products). This campaign could include everything from basic press releases to emails to social media.
Having a strong patent or trademark doesn’t mean getting bogged down in endless IP litigation. However, having a routine and repeatable process in place to address any form of brand damage is important, especially when you’re trying to protect the positive associations that consumers have with your brand or product.
Questions about protecting your intellectual property? Schedule a consult.
What Lawyers and Clients Need to Know About the Use of Artificial Intelligence
Last summer, I was at an Intellectual Property conference here in Colorado. As a lawyer, it’s one of my favorite continuing-ed events of the year as all of my local colleagues and friends also attend. One seminar listed on the agenda was about attorney ethics and the use of artificial intelligence (AI) and other technology in the practice of law. Techfan that I am, I was eager to attend.
Among other topics, the speaker mentioned in detail an AI platform that auto-generates certain types of patent applications. At one point he detailed the functional extent of this system.
The room was full of patent attorneys — people who make their living drafting patent applications.
I looked around and saw that everybody had a look of horror on their face. It was the look that said, “The robots are coming to take my job away.”
I went back and talked to my partners and said, “We have to get ahead of this.”
Why AI and Why Now?
Like any industry, the legal sector has had pressure on it for a number of years to bring costs down. Clients don’t like seeing billable hours creep up or otherwise pay for inexperienced lawyers to do straightforward work. Private practice lawyers, like myself, are constantly under pressure to do things cheaper, faster, better.
In the grand scheme, we, too, are always looking for ways to streamline our processes and make our output better for our clients. So when I learned more about this AI vendor, I saw an opportunity to leverage the power of intelligent automation to not only do more work for less cost to our clients, but also to increase the reliability and accuracy of those pieces of the drafting process that are somewhat mechanical in nature to begin with.
Practical Applications of AI
First, it’s important to understand that there’s a bit of term-washing going on with AI. There’s a difference between true artificial intelligence systems and systems that are just good at performing automated processes.
At our firm, we employ some platforms and highly skilled personnel (paralegals and support staff) that make repetitive tasks or routine legal projects much quicker and more efficient. While we have expertise at using these systems, that doesn’t mean they are utilizing true artificial intelligence.
In one form, true AI in the legal realm can be more narrowly described as a natural-language processing system. For instance, in the context of a patent application, drafting claims is an integral and time-consuming part of the process. It requires real legal language nuance and creative legal thought — the lawyer needs to specifically describe the invention and there are specific formats and legalese for many portions of this part of the application.
However, drafting other parts of a patent application can be very mechanical in nature. With the proper AI systems, a lawyer can draft the important legal language up front and the system can develop the rest of the patent application, or a large part of it, almost automatically. Final revisions and editing then takes much less time.
In more transactional practices, contracts tend to go through a number of changes. There are similar systems available that can analyze the other side’s suggested changes and automatically accept them based on what the lawyer has indicated to the AI platform that their side is willing to concede or modify.
The end result: Documents that are created in a fraction of the time for a fraction of the cost to the client, and with much more accuracy in the first draft.
Should You Be Concerned About the Use of AI for Your Cases?
Artificial intelligence as it is starting to be employed is certainly new technology. You have to be aware that it is essentially the proverbial “robot” doing stuff, not a person. There are going to be glitches. But, in one sense, we have always had automated systems doing “stuff” for us. Whether that be document review, legal research, docketing, report generation, etc.
At our firm, we always provide that personal touch and careful review to make sure things are correct. Just as when I assign a task to a younger associate or paralegal, I’m still the one who’s held accountable. I still need to put my eyes on it and make sure it complies with laws, regulations, attorney ethical obligations and quality standards, plus the client’s own preferences — the same inquiries that every lawyer needs to make for all aspects of his or her practice, whether outsourcing to a younger associate or a third-party service.
Why Our Firm Embraced AI
We are still at the forefront of AI being a readily adopted technology for lawyers. The practice of law is not a fast-changing industry. Its professionals are typically not very good at adopting technology. Across the board, law firms and lawyers typically have conservative work philosophies.
This is where it’s great to be in intellectual property law. A lot of our clients are technology focused and software-savvy companies, so they are well suited to be receptive to these types of technologies. It’s part of our firm’s core ethics to be at the forefront of adopting cutting-edge technology like this.
Some firms that use AI will hide it in the background and just use it as an internal tool, solely to drive their own costs down. It might not be overtly client facing. But our firm uses it as a selling point, basically to say, “We’ve thought of ways to make this cheaper, better, faster for you.”
And who doesn’t want that?
Questions about protecting your intellectual property? Schedule a consult.