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Back in 2021, we discussed the difference between trademark infringement and trademark dilution. Business and trademark owners know that both issues can have a considerable impact on their reputations. However, the main concern when it comes to dilution often lies in determining whether or not it is truly a dilution of a trademark or a parody. In that previous blog post, we addressed the particular case involving Jack Daniels’s trademark whiskey bottle design. This case – and the effect parodies have – remains at the center of this complex matter. ONGOING BATTLE OVER DILUTION WENT TO THE SUPREME COURT This legal battle has gone back and forth over the last few years. Some courts determined that the dog toy shaped like the well-known whiskey bottle is indeed a parody, and therefore the company that created it has First Amendment protections. However, in 2023 the Supreme Court ruled that it is not quite a parody. The Supreme Court determined that the toy reflects the trademark enough that it violates trademark protections and rules. The different opinions on this matter illustrate just how complicated it is. So, what must business owners consider? TAKE A CLOSER LOOK AT DILUTION The definition of trademark dilution is quite broad. The federal Trademark Dilution Revision Act of 2006 does not actually consider the risk of confusion or negative economic impacts – as trademark infringement does. The law defines dilution as the use of a mark that might tarnish the mark itself or the reputation tied to it. In short, this law focuses only on protecting the trademark. It is not necessary to prove that consumers may be confused when it comes to a claim of dilution. This allows businesses to protect their image. After all, a business’s public image is an important factor in gaining and maintaining consumer approval. Any mark that would sully or degrade that image the business worked hard to build could be a considerable concern and risk. DILUTION V. PARODY: A SUBJECTIVE ISSUE Of course, the law also explicitly states that parodying is not dilution. These cases are often quite subjective, as the differing opinions also indicate. This subjectivity can just as easily work in favor of businesses trying to safeguard their intellectual property, as it can against them. Protecting a trademark requires vigilance. However, it is also beneficial to obtain skilled legal counsel in order to effectively protect the brand and business in such subjective situations.

It should be simple: you provide a service, and your customer pays you for that service. Unfortunately, it is not always so simple. Not getting paid for your work can be one of the most frustrating issues, especially for small businesses. It also does not take much for money matters to lead to larger disputes. So, what should small business owners do in these cases? 1. START WITH A REMINDER NOTICE Most sources, including the U.S. Chamber of Commerce, agree that business owners should not begin by escalating the situation. Take time to review and fully understand the circumstances of this individual case. Then, begin with resending the invoice or sending reminders to pay. 2. BE OPEN TO NEGOTIATIONS After sending any reminders – and depending on the response you receive – you should then consider scheduling time for negotiations. As much as obtaining that income is important, you do not want to lose a customer or have this issue impact your business’s reputation. Moving forward with a negotiation can show you are serious about obtaining proper payment, but also understanding a customer’s situation. For example, you can arrange a meeting or a call with the customer to discuss the payment. It is not uncommon for customers and other businesses to face financial troubles, especially in today’s market. If this is the case, you could establish a payment plan that will work for both parties. 3. OBTAIN HELP If there is no response to any reminders or offers to negotiate, then you can and should explore the other options to obtain payment. This could involve working with a collections agency to recover the debt owed. However, it is also critical to speak with a knowledgeable California attorney to ensure you understand your rights, as well as the customer’s rights. 4. REVIEW YOUR PROCEDURES Small businesses new and old work hard to gain customers. You may want to protect the relationships you build with them. However, you must also protect your business. It will often help to take another look at your payment policies. Perhaps you make them stricter, to prevent the risk of non-payment issues. A business attorney can also help craft policies to secure finances and the business’s future.

Like any creative business, architects rely on their intellectual property. Their designs are at the center of their work. For example, as we discussed in a previous post, many architects nowadays focus on creating new ways for their building designs to be environmentally friendly and sustainable. However, nearly every form of intellectual property faces the risk of theft or infringement in the business world. Architects face unique challenges with their copyrights – as well as risks. COPYRIGHT ISSUES IN THE ARCHITECTURE WORLD One of the biggest issues, of course, is that there are many aspects of building designs that architects cannot protect by copyright. This is simply because various details are fundamental in the construction of every building. One person cannot own the rights to such a common design. Even so, there are several elements of a design architects can copyright. These include: Drawings Site plans Certain elements of designs, such as a new sustainable design Additionally, architects own their original designs. However, ownership often comes into question. Owners of the building – or the party who commissioned the building – may believe they have ownership rights. Architects must ensure they proactively address ownership in their initial agreements to avoid disputes as well as the risk of infringement. Yet, another issue remains. Many architectural designs are easily accessible to the public through online public records. What about other parties who may access records and attempt to use copyrighted material? CALIFORNIA LAW AIMS TO IMPROVE COPYRIGHT PROTECTIONS Regarding access to designs, a new law could change the game for California architects. The state lawmakers passed a bill that will restrict the public’s ability to access copyrighted architectural drawings beginning January 2023. This new law will hopefully help to increase protections for the innovative designs that architects work so hard to create – and essentially depend on to establish business. We may not see the impacts of this law until next year. In the meantime, and even when this law takes effect, architectural firms should still ensure they take critical steps now to monitor and secure their intellectual property rights.

Competition plays a significant role in the success of your business. It also promotes innovation, imagination and creativity which you may ultimately transform into protectable intellectual property rights. Your advances, however, may invite competitors to infringe on your intellectual property rights. In today’s digital age, it is especially easy for business owners to launch their designs and get them in front of consumers. It is also easier than ever for competitors to copy those designs. Copycats are an increasing risk businesses face. So, what should California business owners do if a competitor copies their design, for example? BEFORE: PROACTIVE STEPS FOR PROTECTION As a threshold matter, it is critical for business owners to take steps to protect their designs long before they face the risk of a competitor copying their design. When first creating a design, you should: Understand the rules: Learn what designs the law protects, as well as how these protections work in the event of an infringement. Protect your intellectual property: Take the steps to establish and secure the ownership rights and protections of your intellectual property. Properly register your work with the U.S. Copyright Office and obtain a trademark for your logo or brand design. Make a plan: This step is twofold. Create policies and establish security measures that protect your intellectual property. Additionally, consider your strategy for how you will handle the situation if a competitor does copy your design. AFTER: STEPS TO TAKE IF THE DESIGN WAS COPIED If a competitor has copied your design, then immediately: Consult legal counsel: It is important to ensure you understand your rights as well as your options for moving forward to protect your intellectual property. Seeking professional counsel can help you manage this issue while still focusing on your business. Send a cease and desist letter: This is an essential step. It gives your competitor legal notice that they are infringing on your rights. These letters require careful, precise language. That is one of the reasons why it is important to consult counsel before sending a cease and desist letter to the infringing competitor. Take legal action: If you send a cease and desist letter and the competitor continues to use the copied design, then you can file a lawsuit to secure your rights and recover the damages your business may have suffered. Be proactive! You own the design that is unique to your business. It is what possibly gives you the edge in the business world, so take steps to protect it.

Employers know that terminating employment requires a delicate process. Whether an employee resigned, retired or was let go, employers must ensure they continue to uphold the employee’s rights. However, they must also take steps to protect their business as well. One step that employers may not think necessary is the exit interview. But this often-overlooked step can be critical. WHY ARE EXIT INTERVIEWS SO ESSENTIAL? In an exit interview, managers, supervisors or Human Resources representatives meet with the employee leaving the company. These interviews are important for many reasons, including: Maintaining open lines of communication between employers and employees Preserving the company and employer’s brand Helping businesses continue to improve and grow from employee feedback However, another reason that exit interviews are so important is the protection of trade secrets. An unfortunate amount of cases involve current and former employees taking a company’s confidential information. The case involving the alleged theft and sale of Apple’s trade secrets is one of the more recent examples. According to reports, the employee in question announced their resignation, but then continued to attend meetings and saved trade secrets to a personal drive on their last day of work. HOW CAN EMPLOYERS SECURE TRADE SECRETS IN THE EXIT INTERVIEW? Whoever conducts the exit interview should make sure they: Remind employees about their legal obligations and terms of agreements that are still in effect Verify what confidential information the employee had access to throughout their employment Ensure they return all company property, including documents, devices and other company information Of course, employers must establish security measures for trade secrets long before an exit interview occurs. But exit interviews still play an important role in protecting them. CONDUCT THE INTERVIEWS WITH CARE California employers must prepare for the exit interview. These interviews require great care and strategy. Employers should not make employees feel overwhelmed or threatened, and they must ensure the questions they ask do not violate employee rights. Employers should develop best practices for managing these interviews and the termination of employees.

Business owners know the importance of monitoring the presence of their brand – and their trademarks – online. It is a critical issue we have covered before in previous blog posts. Monitoring trademarks and brands may have become easier with the help of technology and social media, but it also became more essential. Many businesses take advantage of social media and the e-commerce market, but they must also be prepared to manage the risks. One of these risks includes counterfeit products. WHAT IS THE RISK OF COUNTERFEITING? Most counterfeit products target luxury goods, such as clothing brands, but many types of businesses could be a target. Counterfeit products pose serious threats, including: Loss of sales and profits Customer confusion Damage to the brand Additionally, the risk of counterfeiting is increasing. This is due in part to the e-commerce boom. Online markets are useful for businesses and convenient for consumers, but it is also easier for parties to sell forged products. Business owners can take legal action against counterfeiters. As long as they have the evidence necessary to prove infringement, they can pursue a claim to protect their business and mitigate the damages they face. In these situations, it is often beneficial to seek guidance from an experienced business and intellectual property attorney. TRACKING TRADEMARKS IS MORE IMPORTANT THAN EVER To counter this threat, many companies are teaming up. Most recently, fashion giant Gucci and social media giant Facebook filed a lawsuit in California against a counterfeiter. The individual used Facebook and Instagram to sell fake Gucci products. Combining forces could allow the businesses to stop the current counterfeiting, but it could also set a precedent to prevent it in the future. Even so, companies should be mindful of these risks when they do business online. They should also make sure they monitor their trademark carefully. Whether they outsource this service or have a team in-house dedicated to tracking trademark use, this is a critical step to minimize the risks.

Insider threats are often some of the most common sources of trade secret misappropriation – and theft. The risk of employee theft gained national attention with the recent lawsuit involving Coca-Cola. It also brought this danger to the forefront of business owners’ minds. Though the former Coca-Cola employee faced charges and now faces a conviction, the insider theft still put the company at risk. Any form of data theft involves such risks, and business owners must be prepared to handle them. HOW DO EMPLOYEES STEAL TRADE SECRETS? Business owners know they must take reasonable measures to protect their trade secrets, whether it is a secret recipe or a client list. But even with reasonable measures, these secrets could still be at risk. There are a few common methods employees might use to steal trade secrets, including: Saving company files to personal drives Taking hard copies of files or information Using mobile phones to record or take photos Of course, access to the trade secrets is necessary for any of these methods to work. That is why it is essential to limit access to trade secrets. However, business owners should also establish policies to monitor access and use to secure intellectual property belonging to the business. MITIGATE THE THREAT NOW Even if businesses already have safeguards in place, it is critical to regularly review their trade secret policies and procedures. The World Intellectual Property Organization (WIPO) reports that making regular adjustments and improvements to trade secret protection is important but too often overlooked. California business owners must address security proactively to handle threats – both internal and external. Trade secrets are often one of a company’s most valuable assets, and business owners must take the proper steps to avoid and handle threats effectively.

California business owners worry about protecting their own intellectual property from threats of theft or misappropriation. That is why they take measures to maintain confidentiality throughout the business. However, they should also consider the reverse situation. What if employees accuse the business of stealing what they believe is their intellectual property? IBM is facing such an issue in New York. So, what steps should business owners take in these situations? 1. REVIEW EMPLOYMENT AGREEMENTS The first step should be to analyze the legal agreements they have with the employees. It is helpful to check that the agreement: Addresses ownership rights of this property Defines the terms and scope of ownership rights Complies with California and federal laws It is also common for employers to use Intellectual Property Contributions and Assignment Agreements. These state that property employees create on the job is usually the property of the employer. Employers should review these agreements carefully as well. 2. EXAMINE THE CIRCUMSTANCES Even if the employment agreement discusses intellectual property ownership, employers should still make sure they understand the details specific to the employee’s dispute. This means that they should investigate the creation process. This is helpful to determine who owns the intellectual property in question. For example, employers generally have legal ownership of intellectual property created by employees if: Employees created it for the business Employees used the business’s resources Employees created it within the scope of their work It is true that in most cases, the employer will have ownership rights. But it is still critical to evaluate the details unique to the circumstances. 3. ENCOURAGE EMPLOYEES TO REACH OUT PROACTIVELY Of course, employers can take proactive measures to avoid such disputes as well. While they should address the terms of ownership rights in the employment agreement, employers should also implement practices that allow open discussion about ownership. That way, companies can manage these concerns before they develop into major legal issues or disputes.

Even if business owners take steps to secure their trade secrets, it is still not uncommon for them to be misappropriated by either an existing competitor or perhaps by a former employee who wants to start his or her own competing business. Because maintaining the integrity of their trade secrets is crucial to a business’s success, misappropriation of those trade secrets could be devastating to the business. This concern came center stage for business owners large and small when tech giant Apple filed a lawsuit against a former employee for stealing and leaking trade secrets. This is the worst-case scenario for many businesses, so it is important that they know how to move forward in this situation. MOST IMPORTANT STEP TO TAKE AFTER A TRADE SECRET LEAK While it is important to act quickly when trade secrets are at risk, business owners must also act strategically – especially when it comes to filing a lawsuit. Therefore, the first thing a business owner should do is to immediately retain a reputable business litigation firm. That firm will have a stable of experts experienced in building the case necessary to prevail in court by establishing two basic facts: Prove Measures Taken to Preserve Trade Secrets Were Adequate: The United States Patent and Trademark Office (USPTO) states that trade secret owners must take reasonable steps to keep the information a secret. Business owners should review their trade secret policies, as well as the implementation of those policies. If the business owner did not take reasonable measures, then businesses may not have grounds to recover damages. Calculate the losses suffered: Assuming measures to preserve their trade secrets were adequate, the business owner must then be able to demonstrate that their business would face significant damage due to the misappropriation of the trade secret. The law firm, in conjunction with the client and forensic expert calculate the losses suffered as a direct result of the misappropriation. An experienced law firm can help a business both put in place appropriate legal safeguards, as well as discharge those intellectual property rights – through litigation if necessary – if those critical elements of your business are misappropriated.

As a business owner, you take great pains to protect your trade secrets. After all, they are essential to your endeavors and competitive success. There are many strategies you can utilize to secure trade secrets and prevent the risk of theft or misappropriation. However, even after making a reasonable effort to keep these secrets, there are still ways that competitors could put your trade secrets at risk without violating the law. In particular, reverse engineering is one concern of which business owners must be aware. THE LAW ALLOWS REVERSE ENGINEERING Essentially, reverse engineering is the process, typically by a competitor, of obtaining knowledge of a trade secret from studying your product, process or technology. Then they recreate it for their own purpose and use. Under California law, reverse engineering is not considered an improper means of obtaining information or a trade secret. If a competitor obtained your trade secret through improper means and reverse engineered the product, then you could take legal action. But reverse engineering in and of itself is not against the law. HOW CAN BUSINESS OWNERS PREVENT REVERSE ENGINEERING? Reverse engineering may not be actionable in and of itself, so the question becomes, “is there a way to prevent it?” Easier asked than answered, but case precedent tells us that business owners cannot expand the definition of improper means in agreements or contracts to include reverse engineering. However, business owners can still improve their strategies of trade secret protection proactively in an effort to prevent this and should: Control who can access trade secrets Establish security measures to protect trade secrets Ensure employees understand confidentiality terms It is often a good idea to consult an experienced attorney as well to determine the effective strategies that will work best for your business. Reverse engineering is an issue that business owners must prepare for, but the proper preparation can reduce the risk it poses.

The critical laws that protect the ever-important trademark have been in place since 1946. These laws are essential to ensure businesses avoid the risks of counterfeit marks and secure their brand. Business owners must be aware of the recent additions to sustain and improve these protections. AMENDMENTS REINFORCE TRADEMARK PROTECTIONS At the end of 2020, federal lawmakers added a new set of regulations with the Trademark Modernization Act. The new law makes important amendments to the Lanham Act (1946). In particular, three things of note that the Act does is to: Reaffirm the presumption that businesses suffer irreparable harm when trademark infringement occurs, making it easier for them to obtain injunctions; Adjust the process of trademark prosecution allowing parties to submit evidence of potential conflicts with existing trademarks; and Create new ways to challenge and examine trademarks for non-use, and now includes non-use as a reason for canceling a trademark registration. The goal of these amendments is to target issues with fraudulent trademarks, as well as coordinate the legal process of resolving disputes after the divergence that occurred after the well-known case of eBay v. MercExchange, L.L.C., in 2006. WHAT DOES THIS MEAN FOR BUSINESS OWNERS? Trademark infringement damages businesses, and the changes to the Act should help businesses increase their trademark protection. For example, injunctions are a critical tool when it comes to stopping trademark infringement. They can prevent further damaging effects of trademark infringement and force the other party to stop any infringing actions. Yet, proving irreparable harm occurred can often pose a challenge. Reaffirming the presumption is critical to help businesses effectively defend their trademarks. As we have discussed in past blog posts, the risk of infringement seems only to increase with time and advances in technology. Hopefully, these changes will help to improve trademark protection processes in the modern world.

There is no way to overstate the importance of a company’s trademark, which is why it is so important that California business owners closely monitor the use of their trademark. By being on top of a possible infringement, they can protect their brand and business proactively against threats to their trademark. When a company’s trademark becomes famous and well-known, such as Nike, Coca-Cola, Apple or Google, they might face a high risk of infringement, and possibly a higher risk of trademark dilution. WHAT IS THE DIFFERENCE? Trademark infringement and dilution are different, even though they frequently occur in the same situations and legal claims. It is helpful if business owners understand the differences between the two claims. For example: Trademark infringement: As we have discussed in past blog posts, this is the unauthorized use of a company’s trademark by a third party. This misuse creates confusion for consumers. Trademark dilution: This is the use of a famous trademark that causes the original mark to lose elements of its unique identity or damages the trademark’s worth and brand. Courts will consider several factors to determine if the trademark is famous enough to suffer dilution, such as the overall brand recognition as well as the registration information. THE BIGGEST ISSUE WITH DILUTION? PARODIES A diluted trademark is often a parody of the original trademark. Since it is one of the most common reasons for trademark dilution, it is also one of the most common defenses. For example, one of the most recent cases involved the famous whiskey brand, Jack Daniels. The parent company of the other party, VIP Products, created a dog toy called “Bad Spaniels,” which held the same shape and design as the Jack Daniels bottle. Despite humorous intentions, Jack Daniels filed a trademark dilution suit. Even though there is no likelihood of confusion, Jack Daniels’ claim insinuates that their business and products could suffer damage through the mockery of their trademark. Yet, the culture and focus on free speech that surrounds parodies makes these claims particularly challenging. Regardless of whether businesses face a trademark infringement or dilution threat, they must ensure they understand the details of federal and California trademark laws before they move forward. It is also helpful in these cases to consult with an experienced business attorney, so business owners can protect their rights to their trademarks.