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Sacramento Intellectual Property Law Blog

Understanding royalties in intellectual property litigation

After working hard to create or invent something, a California entrepreneur will want to protect it. This will most likely require obtaining a patent, trademark or copyright depending on the type of intellectual property. One of the protections a creator or inventor can seek is royalties, which are often the subject of intellectual property litigation.

Royalties are usually payments made to the holder of a patent, copyright or trademark in exchange for the use of the property protected by it. The owner of the intellectual property and the party wanting to use it enter into an agreement whereby the owner grants its use for a specified amount of time. For its part, the other party agrees to make certain payments, and receives indemnity from any claims of improper use from the owner.

New year starts with lawsuits over using photos on the internet

An increasing number of individuals and companies find themselves facing lawsuits for copyright infringement for using photographs owned by someone else. Even broadcasting companies such as Lieberman Broadcasting and Bonneville International are not immune to these types of accusations. Both companies started off 2020 facing allegations they infringed on the copyrights of photographers for using certain photos in articles posted on the internet.

The complaints focus on two radio stations here in California using material owned by two separate photographers. In one complaint, the radio station used a photo of the Jonas Brothers. The other complaint focuses on the other station's use of a photograph of El Chapo, a notorious drug lord currently serving a life sentence in a federal penitentiary. 

Patent law dispute arises over inflatable heart

California inventors often find inspiration from other people's products. Perhaps they find a way to improve upon a design or make one of their own that may be similar, but still unique enough to make it unique. These inventors need to use caution, however, because they could end up violating patent law if their designs come close enough to be considered infringement on someone else's patent.

For example, a company called Medical Inflatable Exhibits Inc. recently filed a lawsuit against Sanford Health claiming that the company infringed on its patents regarding a large inflatable heart. MIE patented its design back in 2014 and 2015. It had trademarked the design back in 2010 when it debuted the exhibit.

Would trade secrets or patents provide the better protection?

Often, a California company's intellectual property gives it the market edge needed in order to become a success. Protecting that property becomes a crucial task in order for a business to continue to thrive. The question is whether trade secrets or patents provide the better protection. In some cases, the combination of both could be the right way to go.

Each option comes with pros and cons. For instance, patents expire after a certain number of years and make inventions part of the public record. In addition, it may be easier to pursue restitution from those who misuse or misappropriate those patented materials, and patent owners could enter into agreements to allow others to use this intellectual property in exchange for the payment of royalties.

Copyright law claims filed against Spotify once again

This is the digital age, and many people here in California and elsewhere prefer to purchase, view and store their entertainment electronically. For this reason, music-streaming services such as Spotify are widely popular these days. The problem is that entertainment companies claim that this service routinely violates copyright law.

One of the most recent companies to make accusations against Spotify is Sosa Entertainment. The company claims the music streaming service has failed to pay agreed upon royalties on more than half a billion of its music streams. The trouble began in 2017 when Spotify removed the company's music catalog for alleged "illegitimate" activity. Sosa claims those allegations were false, and Spotify's actions damaged the company's relationship with a global digital rights agency called Merlin.

Creating a mediation statement in a patent law dispute

For many reasons, it would more than likely be advantageous for parties to a dispute to stay out of a California courtroom. If that is the preferred course of action for parties involved in a patent law dispute, then mediation could provide the desired results. In order to maximize the experience, it would be beneficial to create an effective mediation statement.

When most people hear about mediation, the discussion centers on informal meetings, cost savings and other benefits of the process. While those advantages are available, what may not be discussed is the fact that the mediator could request a statement outlining the details of the dispute, along with each party's position and options for resolution. An effective mediation statement often starts with a concise summary of the details and facts of the situation.

Not paying royalties may lead to intellectual property litigation

Just because a California individual or business owns a patent, copyright or trademark, it does not mean that no one else can use the item associated with it. Owners can negotiate licenses to others so they can use the item, and in return, they receive royalties. If the licensee fails to make the agreed upon payments, intellectual property litigation could ensue.

Every contract for royalties has its own unique provisions, but nearly all of them share some commonalities. The property associated with a patent, copyright or trademark needs to be described in as much detail as possible, along with its owner. The contract also needs to specify the limits and scope associated with the other party's use, which can be anywhere from perpetual use to one-time use and anything in between.

Maintaining control of a trademark when growing a business

While some Sacramento small business owners are content with one shop, many others are not. They intend to grow their business and perhaps even begin allowing other potential small business owners to work under the same company trademark. This requires careful planning in order to avoid losing control over it, however.

A trademark must be used consistently in order for its owner to retain it. A trademark identifies a certain business to consumers, and they expect certain goods and a certain quality from those goods. If a business using the trademark does not meet those minimum requirements, then the owner of it could lose it.

Did BMW violate patent law with regard to its hybrid engine?

When a Sacramento inventor wants to market an invention, it may become necessary to share certain details with prospective customers or clients. During these meetings, those individuals may decide to circumvent patent law by not obtaining the proper licensing to use the invention. This issue is at the heart of a recent lawsuit filed by Paice LLC and its investor, The Abell Foundation Inc., against BMW.

According to Paice, it shared details about its hyrbrid engine technology with BMW starting in the early 2000s. Those discussions ended, and BMW made an attempt to team up with General Motors and DaimlerChrysler to develop a hybrid engine, but those discussions stopped when it was determined the technology was simply too expensive. The following year, BMW released its first attempt at a hybrid vehicle, but later took it off the market.

Protecting trade secrets may require going to court

Keeping proprietary information within the company can present a challenge to Sacramento business owners. Every time an employee leaves, whether voluntarily or otherwise, steps need to be taken in order to make sure that no trade secrets leave with him or her. If an employer discovers that someone did leave the company with one or more trade secrets, it may be necessary to take steps to retrieve the information and protect it. Phillips 66 had to do just that when it turned in to the FBI a former employee who ultimately admitted to taking at least one trade secret upon his resignation.

The 35-year-old man worked with a team to develop a next generation battery. In Dec. 2018, he left the company with a thumb drive upon which he had copied several proprietary research and development files. He later returned it, claiming he "forgot" to leave it when he left the company. Upon its inspection, some files were deleted from it. Those files turned up on a hard drive in the possession of the man, who was a permanent resident of the country at the time.

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