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With regards to identification and discussion of any IP
are serious risks involving trade-secret law.
we are operating under UTSA , the company that owns and operates this
web-site could be culpable under civil law and criminal law.
of the memos that I read on-line contain information that is proprietary
to other entities. Some of these
memos could contain trade-secrets (i.e. formula, patterns. programs,
processes, etc). The web-site does
not appear to filter for these.
is highly likely that the people that obtained these memos and
transmitted them to the web-site were employees of the company in which
they originated. Or, they could
be departing employees. Either
way, they are still likely bound to a confidentiality contract.
it would be highly unusual if those employees were not under a
confidentiality agreement contract with their employees. This creates a
duty upon the employee to maintain secrecy.
web-site company has obtained these by improper means by inducing a
breach of a duty to maintain secrecy and, as such, obtained these memos
under “Improper Means”
not all memos on the web-site are trade-secrets, however, I am sure that
there are many memos that do contain some sort of trade-secret data and
meet the definition of a trade-secret, especially under the relaxed rules
coming into play under the UTSA which covers any valuable
information. Also, many of the
memos I saw and certainly have seen at my own place of employment that
could potentially end up on this site contain data that falls under the
definition of secret under Metallurgical Industries.)
company operating the web-site is misappropriating the trade-secrets
since they are acquiring the trade-secrets and they know they are
obtaining them improperly,
course, the threshold requirements for defining a trade-secret under Metallurgical
Industries and attempts to keep secret under Rockwell would
have to be analyzed for each subject memo.
remedies under such a misappropriation of trade-secrets are very serious
and could range from injunction, damages incurred due to the
misappropriation, and exemplary damages in the case of willful
misapprpriation. This web-site is
clearly willfully misappropriating these secrets. The remedies will change depending on
what state one is operating within.
Criminal penalties could exist as well!
company could be culpable under the Economic Espionage Act of 1996. (EEA).
would be culpable under this provision as they have
trade-secrets by appropriated them without authorization;
the stolen trade-secrets; and
the EEA is broader than the UTSA and even legally acquired secrets can be
misappropriated under the EEA.
of the memos on this web-site may be original works of authorship and
protectable under copyright law.
the works distributed were works-for-hire created by the employees for
their employers, the company operating the web-site would be liable for
copyright infringement to the corporations such as E-Bay and MTV since
the corporations were the copyright owners. If not, then the web-site would be liable to the authors of
the memos if others, besides the authors, transmitted the memos to the
web-site without the author’s permission. This, of course, assumes that the memos meet the threshold
requirements of a minimum degree of creativity and independent
creation. This may be
questionable on some of them.
these memos are subject to copyright protection by the authors or their
employers, then there is certainly has been unauthorized reproduction and
distribution of these memos on the part of the web-site operator and they
would be liable for damages under the copyright statutes assuming the
copyright owner did not grant permission to distribute the works.
a copyright exists and there was infringement, fair use may be a defense,
but since this is clearly a commercial activity, it is exploitative,
unpublished, and 100% of the memo content is displayed, I think that
defense would fail. Although
arguments could be made such as this site is for educational use to
educate the world on the workings of corporations and corporate
corruption, which may be highly influential in supporting a fair use
web-site operator may be liable under trademark theory under the theory of
Initial Interest Confusion. The
theory would be that the use of names such as E-Bay and MTV in these memos
may draw people to this site causing initial interest confusion.
web-site operator could be liable under the common law doctrine of
contributory copyright infringement since the web-site owner could be
viewed as an aider-and-abettor as the web-site owner has knowledge of the
infringing activity and induces people (employees) to infringe the
copyrights of various written works.
(i.e., the works owned by employers.) The requirements of
contributory copyright infringement are met assuming the works are subject
to copyright protection and it was not the copyright owners that
transmitted the works to the web-site.
The direct infringer would be the individuals that transmitted
copyrighted memos to the web-site without the copyright owners permission
and the web-site owner is then liable under contributory infringement for
the reasons cited.
web-site operator could be liable under the doctrine of vicarious
copyright infringement. Similar to
the facts in Fonovisa v. Cherry Auction, the web-site owner in the
instant case is both in control of the premises (web-site), it promotes
the premises (web-site), and control of access to the premises by
requiring certain fees to be paid.
The infringing works draw potential customers to this venue
(web-site). The web-site owner
also financially benefits from the reproduction and dissemination of these
copyrighted works owned, presumably by the employers of employees who
transmitted these works to the web-site.
The requirements of vicarious copyright infringement are then met
assuming the works are subject to copyright protection and it was not the
copyright owners that transmitted the works to the web-site. The direct
infringer would be the individuals that transmitted copyrighted memos to
the web-site without the copyright owners permission and the web-site owner
is liable under vicarious infringement.
With regards to identification and discussion of the
protectability of any IP:
expression embodied in the web-site pages could be protected by
is so because it meets the requirements of 102(a) as the site and its
web-page designs may be viewed as an original work of authorship which
has been fixed in a tangible medium of expression.
tangible medium of expression could be the diskette, hard-drive, or RAM
of the target computers in which the web-pages are stored and
web-site also meets the requirements of 102(b) as the site is an
expression and probably not the idea.
Although one could argue that the merger doctrine would apply here
as there are probably only a few ways of displaying corporate memos on a
computer screen. However, the
other elements of the web-page like the layout choices may be protectable
original work of authorship.
web-site could be copyright protectable as a compilation.
is differentiated from Feist in that the facts compiled in this
web-site and they way they are organized possesses the requisate
requirements for originality.
trade-secret with regards to how the web-site filters and disseminates
these memos may be protectable.
would need more information to determine this.
ornamental design of the web-site could be protected by a design
would assume that the software would be viewed as an article of
manufacture and that the design of the web-site met the threshold
requirements of novelty, originality, and nonobviousness. This may be a very difficult hurdle to
underlying source code (software) for operating the web-site may be
protected by copyright.
software is protectable under 102(a) as, we would presume, that it
incorporates authorship in the programmer’s expression of original
underlying source code could be protected by a utility patent.
would assume the source code had ideas that were new, useful, and
non-obvious. However, this is a
very difficult threshold to meet.
We would need more information here.
trade-name (brand) of the web-site could be protected by a trademark. (i.e. INTERNALMEMOS).
trademark in this case is acting as a source-identifier and represents a
level of quality in terms of service, content, etc., and certainly would
qualify for trademark protection.
domain name could be protected under trademark protection.
would be enforced through the Anticybersquatting Consumer Protection Act
and Uniform Dispute Resolution Procedure through ICANN.
valid trademark would be required, but that is attainable as long as no
other organizations preempted them under state or federal law.
considered if the content of the web-site (i.e. the memos) could be
protected under copyright law. I
conclude it could not as these are not original work of authorship.
trade-dress of the web-site could be protected.
evaluation of this would fall under either the Taco Cabana or Wal-Mart
- Most likely, it would fall under Taco Cabana and trade-dress, as defined in that case, covering the total
image of the business (i.e. product-packaging). In essence, the web-site could be viewed as being analogous
to the store-front in Two
Pesos. As such, proof of secondary meaning
would not be required (which this web-site probably did not attain) to
prevail under a claim under § 43(a) of the Lanham act, as long as the
web-site design would be viewed as inherently distinctive.
- This is differentiated from Walmart, which covers product-design vs product-packaging
trade-dress. Per the Walmart court, product-design can never be inherently distinctive and
can only be protectable when it gains secondary meaning which this
web-site, in all likelihood, never did.
- Therefore, if the web-site never
obtained secondary meaning, trade-dress protection would only be
obtainable for the web-site if the site would be viewed as product
packaging and not product-design which I think one could successfully
I would not take any chance on investing in this
company. First, although the company
may be capable of protecting some of its IP, the amount of protection that it
is entitled is limited and certainly does not give it any substantial
competitive advantage over its potential competitors. The only exception is possibly its brand name (trademark) and
correlating domain name. Second, due to
the nature of the business there is both civil and criminal liability created
with the services offered by this web-site.
I would want nothing to do with it.
Third, I think it is immoral and counter to good ethics to endorse this
type of web-site. As such, I could
never support it financially or otherwise.
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two choices in this matter. They can
either try to protect their proprietary system through the use of trade-secret
law or they could try to protect their system through the use of the patent
system. I would recommend that Epitime
uses trade-secret law to protect their system.
I do not recommend that they file a patent. My reasoning is as follows:
The pros of Trade Secret protection (not filing a patent)
secret law can last indefinitely as opposed to patents which last
generally 20 years from the date of filing.
secrets are very easy to obtain, although they require some diligence to
maintain. Note the Rockwell case.
are ideal to protect by trade secrets.
Formulas may be more difficult to obtain patent protection. Formula’s or mathematical algorithms
are not patentable subject matter to the extent that they are merely
abstract ideas. Diehr. The formula or mathematical
algorithm must be reduced to a practical application. That could occur in this case, but
there would probably be a long prosecution in the patent office to succeed
in obtaining claims to that formula.
It could be done, however.
The risk is that if the patent attorney is not successful, then
this magic formula would be disclosed to the public after the 18 month
a patent will extinguish any trade-secret rights in the system.
a patent is a very powerful legal tool that limits others from using,
manufacturing, and selling the claimed invention, they are expensive to
obtain and one runs the risk of disclosing the heart of the invention and
not being able to obtain adequate and broad claim coverage for the
of the invention to the public in consideration for patent protection
makes it likely that one of Epitime’s competitors will make an improvement
to that invention. Although one of
the primary objectives of patent law is to promote the progress of science
and invention, if one of Epitime’s competitors obtain patent protection
for improvements on their invention, that new patent may serve as a
blocking patent to Epitime’s patent which would substantially diminish its
such as software patents, can be very difficult to enforce. First of all, it may be difficult to
tell if one of their competitors is actually infringing the patent. If a competitor has embedded the
formula in its software or business method, it would be difficult to
infringement is expensive and very time consuming, although, trade-secret
infringement litigation is also expensive as well. Litigation is seldom a preferred
The pros of Patent Protection (and not using Trade-Secret
protection is a powerful monopoly that could exclude their competitors
from using this formula. This
assumes claims could be granted covering the use of the formula which is
may be less expensive to enforce.
They are certainly more predictable to enforce than
litigation usually dissolves into a finger pointing exercise. Patents on the other hand have a formal
process to determine infringement using Markan hearings to construe the
claims and concluding in a jury trial in most cases.
due encourage continued innovation and building on other’s
inventions. This is certainly good
for society but may be bad for Epitime as stated above. Although, if blocking patents were
created, perhaps both Epitime and its competitor would both benefit from
are much easier to sustain than trade-secrets. No maintenance of secrecy is required for patents after they
are filed. Maintenance fees must
be paid which can get quite expensive, especially during the final years
of the life of the patent.
However, if the patent still has economic worth, then the fee is
well worth it.
can easily be licensed to other entities.
protect against independent invention as opposed to trade-secrets. So if a competitor independently
invented the same formula, they would be prohibited from using that
formula. (With the exceptions in the American Inventor Protection Act
w/r/t business method patents in use before the filing of the patent
application) This would not be the
case for trade-secrets.
Even though patents certainly have many advantages, I would
feel much more comfortable recommending to my client that they put in place
trade-secret protection “secrecy” procedures in their company and treat the
formula like Coke’s secret formula. Although
patent protection is theoretically possible, the risk in disclosure may not be
worth it since there is a chance the patent would not be granted and the
formula would be disclosed with no protection.
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