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You Created It. We Protect It.

 

Intellectual Property Attorney Crystal Broughan shares her latest entry on her blog. Today's topic revolves around everyday copyright issues. Click here to read the story and subscribe to her blog. 

IP Law FAQs

Shareholder and Intellectual Property Attorney Crystal Broughan answers your Frequently Asked Questions in her new Blog Series on 

You Created It. We Protect It.

Shareholder and Intellectual Property Attorney Crystal Broughan answers your FAQ’s regarding all things Intellectual Property in her blog series. Each week she will be posting articles to help you better understand what Intellectual Property law is and how her team can assist your business. If you have an IP question you’d like Crystal to cover, email her at cbroughan@marksgray.com.

Volume 1: Trademarks



Volume 2: Copyrights

Crystal Broughan is an intellectual property law attorney with Marks Gray, P.A.  If you would like to learn more about Marks Gray’s intellectual property law services please contact Ms. Broughan at cbroughan@marksgray.com or 904-807-2180.

How to Prevent an IP Nightmare

Shareholder and Intellectual Property Attorney Crystal T. Broughan shares easy tips for your business to avoid IP confusion 

In the arena of buying and selling businesses, the tangible elements involved are often the first items that come to mind. Most brokers, agents, and business owners always remember the basics such as financial statements, deeds, and contracts. However, there are key elements of businesses and business structures that are often never taken into consideration during the selling process, specifically Intellectual Property.

Intellectual Property is often overlooked by the average buyer or seller because they fail to recognize the value of the intellectual property assets to the business.  Often sellers fail to properly identify intellectual property assets, buyers fail to perform a proper due diligence search and both parties fail to make sure proper assignments are filed with the appropriate government entity immediately after the sale of the business. For this reason, it can present the biggest nightmare after a sale due to the lack of accurate information and proper follow-up. Let me explain this process with a nightmare example from a previous case.

“A few years ago, I was contacted by a client and asked to prepare and file an assignment for some patents and trademarks.  The patents and trademarks had been included in the sale of the company a few years previous but no one had ever drafted the assignments and filed them with the United States Patent and Trademark Office (USPTO). The process took me much longer than normal because the official who had signed on behalf of the seller had suffered a stroke and was no longer competent to sign any documents.  I had to locate the guardian who had been appointed by the court and explain to him what I needed.  In the end, everything was properly signed and filed but I did not understand why no one had made sure all assignments were properly completed and filed at the time the sales agreement was completed.”

Prior to the sale of a business, the owner should identify all intellectual property assets that belong to the company. The owner should have a complete list of Intellectual Property items such as:

• trademarks (registered and not registered)

• copyright registrations

• patent registrations

• trade secrets

• domain names

The owner should be able to provide proof of ownership of all intellectual property assets.  

Trademarks, Copyrights, and Patents

The owners should reveal whether or not there are any licensing agreements for the trademarks and patents, and provide copies of the licensing agreements to the buyer. All royalty agreements for copyrighted material owned by the business should be included.  If there are any confidentiality agreements, non-compete agreements or invention assignment agreements with employees the buyer should be made aware of the agreements and receive copies of the agreements.

The buyer should understand what the trademarks, copyrights and patent registrations cover.  For instance, is the trademark registration just for the words but not include the logo? The buyer should have a clear understanding of what claims the patent registrations cover and if the patents pertain to the current products that are being sold by the company.  

The buyer should review all state and federal trademark and patent registrations the seller claims to own and verify ownership, validity and if the registrations are current or expired.  

Sometimes, small business owners register trademarks and patents in their individual names instead of the company name because they want to maintain individual ownership of the asset.  There should be a frank discussion as to whether or not the individual owner of the trademark or patent is going to include the asset with the sale of the company.

Trade Secrets

If the owner of the business has properly maintained trade secrets there should be confidentiality agreements in place with employees and vendors.  Trade secrets may include recipes, formulas, unique methods, designs, devices, engineering information and prototypes. The buyer should verify that the seller intends to turn over the trade secrets as part of the sale of the company. If the trade secrets are included in the sale of the business the buyer needs to know what steps were taken to maintain the confidentiality of the trade secret (i.e. locked in a safe, limited access by employees, labeled as confidential, training provided to employees).

Domain Names

All domain names and websites owned by the company or used by the company should be listed as part of the assets of the company. The buyer should verify that all domains names owned by the company are included in the sale. If this item is not included or covered you could be walking into a hairy situation…

“I was contacted by a person who purchased a hair salon. The sales agreement did not include the company website and domain name as an asset of the business. Getty Images accused the new owner of the business of copyright infringement because the website contained Getty Images that had not been properly obtained prior to the sale of the hair salon.  The buyer and seller of the business fought for months over who was responsible.”

If the sale or purchase of a business is done correctly, all of the intellectual property assets of the company are identified, verified as valid, inventoried, and included in the sales agreement. Assignments should be signed at the same time the sales agreement is signed and filed with the government entity that issued certificates of registration (i.e. USPTO, State of Florida Division of Corporations) and copies provided to all parties. 

A good intellectual property lawyer can help buyers and sellers’ save time and money by conducting a due diligence search and review of all intellectual property assets prior to the sale to ensure the process does not become an “IP Nightmare” for both parties.

Crystal Broughan is an intellectual property law attorney with Marks Gray, P.A.  If you would like to learn more about Marks Gray’s intellectual property law services please contact Ms. Broughan at cbroughan@marksgray.com or 904-807-2180.

"Stairway to Heaven" - A Case Study on Copyright Infringement

Intellectual Property Law Updates 

by Crystal T, Broughan, Intellectual Property Law Attorney 

Led Zeppelin fans were pleased to hear that a California jury in a copyright infringement case issued a verdict that the Defendants, members of the Led Zeppelin band and others, did not commit copyright infringement when they wrote and performed the musical composition “Stairway to Heaven”.  The exact question answered by the jury on the verdict form was, “Do you find by a preponderance of the evidence that original elements of the musical composition Taurus are extrinsically substantially similar to Stairway to Heaven?”  The jury marked “No” on the verdict form.

Robert Plant, former frontman for Led Zeppelin
Photo Courtesy of Big Stock 2016

                The Plaintiff in the case was the Trustee for the Randy Craig Wolfe Trust.  Randy Craig (a/k/a Randy California) was the founding member of the rock band, Spirit.  Randy California wrote a song entitled “Taurus” which was included on Spirit’s self-titled album in 1968 and performed throughout the country.  Randy California drowned off the coast of Hawaii in 1997.  The Trust was established after his death by his mother.  The Trustee of the Randy Craig Wolfe Trust is Michael Skidmore, the Plaintiff. 

                The Plaintiff alleged that the elements of copyright infringement were established because the Led Zeppelin band had access to the musical composition by having close interaction with the band Spirit and performing as an opening act for Spirit. Plaintiff claimed that to a reasonable observer, the iconic notes, melodies and chord progressions of “Stairway to Heaven” were almost identical to “Taurus” therefore there was a substantially similar element between the two compositions. 

                James Page and Robert Plant, members of Led Zeppelin, are listed as the writers of the song “Stairway to Heaven” which was released in 1971 and a copyright registration was issued by the US Copyright Office in 1972.  The Led Zeppelin band toured the country in 1968 and opened for the band Spirit.   The Defendants claimed many affirmative defenses in response to the Amended Complaint filed with the court including, “Stairway to Heaven” was an independent creation, de minimis infringement, fair use, unreasonable delay in the assertion of the claim and prejudice as a result of the delay, and statute of limitations. 

                According to the court record, the jury listened to recordings of both musical compositions and reviewed the original sheet music that was filed with the US Copyright Office.  Defendants James Page and Robert Plant both testified as to events that took place more than 40 years ago based on what they could remember.  Experts in musicology testified for the Plaintiff and the Defendants.  There were arguments over protected and unprotected elements of the composition.   Two years of attorney arguments, three days of witness testimony and presentation of evidence led to a Jury Verdict for the Defendants.  Now Plaintiff will have to battle in court when Defendants demand that the Plaintiff pay all of their attorneys’ fees.

                The case was filed in May 2014, forty-six years after the creation of “Taurus”, forty-three years after “Stairway to Heaven” was released and seventeen years after the death of Randy California.  The case went to a jury trial in June 2016 and lasted three days.  If Randy California considered “Stairway to Heaven” to be an infringement of his musical composition, “Taurus” why was a copyright infringement case filed sixteen years after he passed on?  

Special Assistance and Research from Marks Gray Summer Associate Austin K. Sherman

Crystal Broughan is an intellectual property law attorney with Marks Gray, P.A.  If you would like to learn more about Marks Gray’s intellectual property law services please contact Ms. Broughan at cbroughan@marksgray.com or 904-807-2180.