ELECTRONIC NEWSLETTER

October 21, 2002

Volume 1, Issue 4

Topics: News

Calendar (See Below)

Trademarks and Unfair Competition

• United States: Madrid Protocol Legislation Passed by Congress and Senate Ratifes Treaty
• European Community: Effect of Adoption of 8th Edition of Nice Classification of Goods and Services
• Switzerland Moves to Cancel Trademark Registration for BIN LADIN
• Hong Kong: Proposed New Trademark Law
• El Salvador: New Trademark Law
• Ecuador: Legalization of Documents Filed at Trademark Office No Longer

Domain Names and Other Internet Matters

• Australia Amends Domain Name Filing Rules and Introduces Dispute Policy
• Canada Introduces Domain Name Dispute Policy

Discussions

• United States Foreign Corrupt Practices Act And International Anti-Bribery And Fair Competition Act
• Architectural Copyrights - A Heads Up!

Calendar   top

October 21-24, 2002	Licensing Executives Society (USA & CANADA) Inc. (LES) - Fundamentals of Intellectual Property Asset Management. San Francisco, CA.
October 21-22, 2002	Practicing Law Institute (PLI) - Understanding the Intellectual Property License 2002. Live at 810 Seventh Avenue, New York, NY and by video conference in Boston.
October 21- November 8, 2002	International Trademark Association (INTA) - Trademarks 101: Fundamentals. One day sessions at various cities in the United States.
October 28- November 8, 2002	INTA - Roundtable Program: Electronic Filing. Various cities in the United States and Canada.
November 3-6, 2002	Asian Patent Attorneys Association (APAA) - 47th Council Meeting. Wellington, New Zealand.
November 3-5, 2002	Intellectual Property Owners Association (IPO) - Annual Meeting. The Century Plaza Hotel & Spa, Los Angeles, CA
November 8, 2002	Marques - "Corporate Intellectual Property Enforcement Practices". Hilton Brussels Hotel, Belgium.
November 13-16, 2002	INTA - Leadership Meeting. Scottsdale, Arizona.
November 14-15, 2002	World Intellectual Property Orgainzation (WIPO) - Workshop on Domain Name Dispute Resolution. WIPO headquarters, Geneva.
November 14-15, 2002	Computer Law Association (CLA) - Conducting Digital Business Across the Atlantic. Concorde Lafayette Hotel, Paris.
November 14, 2002	INTA - Roundtable Program: What Brand Owners Expect from Trademark Counsel. Zurich, Switzerland.
November 20-21, 2002	WIPO -Seminar on the Madrid System of International Registration of Marks. Geneva, Switzerland.
November 22, 2002	WIPO - Seminar on the International Classification of Goods and Services for the Purposes of the Registration of Marks under the Nice Agreement and its use within the Madrid System. Geneva, Switzerland.
November 21-22, 2002	PLI - Understanding the Intellectual Property License 2002. University of Chicago Gleacher Center, 450 North City, Front Plaza Drive, Chicago, IL.
December 2-5, 2002	LES - Fundamentals of Intellectual Property Asset Management. Philadelphia, PA.
December 4-5, 2002	INTA and Office for Harmonization in the Internal Market (OHIM) - Community Trademark Forum. Alicante, Spain.
January 22-25, 2003	American Intellectual Property Law Association (AIPLA) - Mid-Winter Meeting. Marco Island Marriot Resort & Golf Club, Marco Island, FL
March 26-28, 2003	The Institute of Trade Mark Attorneys (United Kingdom) (ITMA) - International Meeting 2003: Pushing the Boundaries: Enlargement of Europe, Enlargement of Rights. London, United Kingdom.
May 3-7, 2003	INTA - Annual Meeting. Amsterdam, Netherlands.
May 6-9, 2003	LES - Spring Meeting. Philadelphia, PA
May 14 -16, 2003	AIPLA - Spring Meeting. The Westin Peachtree Plaza, Atlanta, GA.
June 2-6, 2003	Federation Internationale des Conseils en Propriete Industrielle (FICPI) - World Congress. Berlin, Germany.
June 11-14, 2003	European Communities Trade Mark Association (ECTA) - Annual Meeting. Salzburg, Austria.
Sept 14 - 16, 2003- IPO	Annual Meeting. The Fairmont Hotel, Chicago, IL.

Trademarks and Unfair Competition

United States: Madrid Protocol Legislation Passed by Congress and Senate Ratifes Treaty   top

On October 3, 2002, the Senate approved the conference report to accompany H.R. 2215, the Department of Justice Reauthorization Act, which included a number of separate intellectual property related bills including the Madrid Protocol Implementation Act (S. 407) . The House of Representatives had previously approved the Madrid Protocol Implementation Act in June 4, 2001 as H.R. 741 and adopted the conference report on H.R. 2215 on September 26, 2002. On October 17, the US Senate passed the advice and consent resolution and the concurrent resolution making technical corrections to the implementing legislation to the Department of Justice Authorization Bill, HR 2215. The legislation now proceeds to the President who is expected to sign it this week.

As the Madrid Protocol Implementation Act states that the Act will not take effect until one year after passage, or when the treaty is approved, whichever comes last, it is now expected that the Act will go into effect next October 2003.

Once the Act becomes effective, the United States will become a member of the Madrid System of the International Registration of Trademarks providing an alternative method, through one trademark registration, to obtain trademark protection in the other member states of the Madrid System.

European Community: Effect of Adoption of 8th Edition of Nice Classification of Goods and Services   top

On 1 January 2002, the 8th edition of the Nice Classification entered into force and the Community Trademark Office commenced application of the 8th edition for all trademark applications filed on or after January 1, 2002. Registrations and pending applications having a filing date prior to January 1, 2002 will not will not be reclassified at this time. The Community Office has not decided whether registrations issued under the 7th edition will be reclassified on renewal (the first Community renewals come due in 2006).

One of the amendments introduced by the 8th edition is the deletion from Class 42 of the term "services that cannot be classified in other classes". As a result, the Community Office will now accept filings that claim the class headings as the description of goods or services for all classes.

Switzerland Moves to Cancel Trademark Registration for BIN LADIN   top

On February 17, 2001, Falcon Sporting Goods AG c/o IAW AG, a Swiss company located in Zug, filed the Swiss trademark application for BIN LADIN to protect goods and services in classes 9, 12, 14, 18, 25, 28, 35, and 41. Registration issued on August 16, 2001. The Swiss Trade Mark Office has moved to reopen examination of the mark, with a view to canceling the registration under Article 2d of the Swiss Trademark Law on the basis that the name "Bin Ladin" may now be morally offensive to a considerable section of the public.

Hong Kong - Proposed New Trademark Law   top

A proposed new trademark law currently scheduled to go into effect in January 2003 in Hong Kong will eliminate the distinction between Part A and Part B trademark registrations.

El Salvador - New Trademark Law   top

A new trademark law went into effect in El Salvador on July 17, 2002. The new law includes provisions for:

• Protection of famous marks
• Coexistence of similar trademarks with a written agreement between the owners
• Opposition to registration of a confusingly similar trademark can be filed even if the marks in question are in different classes
• Prevention of unauthorized parallel imports
• Assignment of pending applications
• Partial assignments of trademarks

Ecuador - Legalization of Documents Filed at Trademark Office No Longer Required

Australia Amends Domain Name Filing Rules and Introduces Dispute Policy    top

Under the new domain name filing rules, applicants may register domain names in the .COM.AU and .NET.AU domain space based on a valid Australian trademark registration and may register multiple domain names.

Australia has also introduced an administrative dispute policy. The policy is binding on domain names registered after August 1, 2002 and all domain names registered before that date which are subsequently renewed after August 1, 2002. The policy is an adaptation of ICANN's UDRP procedure.

Canada Introduces Domain Name Dispute Policy    top

Discussions

UNITED STATES FOREIGN CORRUPT PRACTICES ACT AND INTERNATIONAL ANTI-BRIBERY AND FAIR COMPETITION ACT    top

R.E. Lee, Jr., Associate Counsel, Abelman, Frayne & Schwab

The United States Foreign Corrupt Practices Act ("FCPA") is a set of anti-bribery laws with a unique focus. The FCPA was created by the United States in 1977 and amended in 1988. Excepted from the FCPA were grease money payments to facilitate routine actions by ministerial and clerical employees. What distinguished FCPA from previous anti-bribery laws was that its focus was on acts of bribery of foreign government officials. Therefore, excluded from the FCPA is bribery of non-governmental parties or bribery of United States government officials. However, its narrow focus notwithstanding, the FCPA apparently struck a nerve since there were immediate howls of protest both from domestic companies and foreign governments. United States companies objected because they were put at a competitive disadvantage because their foreign competitors allegedly would go about business as usual, presumably offering bribes to governmental officials. Foreign governments objected because the United States was said to be improperly exercising jurisdiction and imposing criminal liability over what was a purely an internal matter reserved for the concerned countries.

After playing the role of a modern globe-trotting Lone Ranger trying single handedly to eliminate graft and corruption for two decades, the United States' foresightedness and tenacity finally paid off, and in 1998 the International Anti-Bribery and Fair Competition Act ("IAFCA"), which was drafted under the Convention on Combating Bribery of Foreign Public Officials in International Business Transactions ("Anti-bribery Convention"), was passed. The Anti-bribery Convention requires signatory countries to adopt and enforce foreign official anti-bribery legislation with certain minimal standards and to provide for annual status reporting, as well as allowing for peer review. The Anti-bribery Convention became effective for the United States on December 8, 1998, and as of June 7, 2002, thirty-four of the original 35 signatories have ratified it. Under IAFCA, the United States Secretary of Commerce is required to render an annual status report to oversight groups in the House and Senate. The Senate report is made to Vice President Richard Cheney.

FCPA and IAFCA ("the Acts") apply to all United States companies and individuals and apparently foreign companies and individuals as well which use the U.S. Postal service or have some other connection with United States commerce. Prohibited actions include facilitating payments by a United States company or individual to any foreign official. "Foreign official" is defined as a person associated with a foreign government who has discretionary authority over granting or retaining business. To meet its due diligence obligations under the Acts, a company must educate its employees as to the law; issue necessary supportive policy statements and directives through its upper management; and comply fully with the prescribed record keeping and accounting practices. Fines can range up to $2,000,000, as well as imprisonment of up to 5 years. United States companies and their foreign subsidiaries and employees may be subject to foreign laws and sanctions as well. Last year, the U.S. government filed suit against 14 parties based on violations of the Acts.

The biggest problems United States companies encounter under "the Acts" are (1) do's and don'ts for hosting foreign government officials and family members, and (2) proprieties in paying money to or receiving money from their foreign agents (including foreign outside legal counsel), sales representatives, distributors, sub-licensors, joint venture participants, etc. ("Foreign Associates") in situations where funds could have been or may be diverted to foreign government officials.

For example, your company receives a request from a foreign government oil company that you have been courting for a number of months to take a technology license (and, "yes", in anticipation to your question, government controlled oil companies, utility companies, airlines, and other government owned public service or vital resource enterprises are subject to the Acts). What can you do in regard to entertaining the officials and their families and covering their travel expenses? To begin with, all expenses must relate to an immediate business purpose and be thoroughly documented. Unless there are overriding circumstances that are well documented, spouses and other family members usually should not have their expenses reimbursed. Gifts may be given or received if nominal in value as a regard of token or esteem. Usually a monetary limit will be set in the company's corporate guidelines. Giving gifts that have the company logo is preferable to giving non-logo gifts that are more readily marketable. Upper management or the company's legal department should approve any exceptional expenses.

The other tar pit that companies often get so mired in that they cannot make a break and pull away clean is monetary payments to or from Foreign Associates. Payments that your company receives will automatically be tainted if Foreign Associates made payment to a foreign government official relative to the project at hand. Same imputed violation, if in the face of red flags, you make a payment to Foreign Associates who pass on a portion to a foreign government official. If the Foreign Associates are clever at manipulating its books, you may not find out about the bribery until years later, if you ever do. In addition to the obvious acts of bribery that should be avoided, there exist the cases in which it may never occur to the company improper payments may be involved and therefore which may escape scrutiny. In the world of trademarks, investigations are often undertaken whether to ascertain that a mark is available or to locate the source of an infringement. The actions of the investigator may be imputed to the company and it is not beyond the realm of possibility that an investigator, in some countries, will seek to obtain information on a party through official government channels by means of an improper payment.

There is no simple answer for handling these matters, but there are prophylactic measures that may be taken. Make sure that the Foreign Associates are aware of and have copies of the Acts. Require that the Foreign Associates keep accounting records in English at a mutually agreeable location of all payments made and received together with rights to inspect and audit the records on reasonable notice. Acquire the right to terminate the representation immediately if an audit reveals that the Foreign Associates have made an improper payment. Consideration should be given to deferring acceptance of any share of front-end payments until after a due diligence investigation has been completed. Worst possible scenario: your due diligence investigation discloses that Foreign Associates who has been collecting royalties and passing on payments to your company has been paying bribes to a foreign government official listed the United States Prohibited Parties list.

The U.S. Foreign Corrupt Practices Act and the International Anti-bribery and Fair Competition Act, 15 U.S.C. 78 dd et seq.

ARCHITECTURAL COPYRIGHTS - A HEADS UP!    top

R.E. Lee, Jr., Associate Counsel, Abelman, Frayne & Schwab

It's old hat to incorporate distinctive trade dress when designing restaurants and other buildings which are used to service the public in order to establish proprietary rights that can be asserted against third parties. (And if the trade dress can be registered as a service mark, that's an added plus since you avoid having to prove that the trade dress is distinctive and the registration qualifies for various statutory presumptions.) But if in focusing on trade dress and service marks, you have inadvertently ignored the role of copyrights and may not have employed what could be the most potent weapon in your arsenal, namely architectural copyrights.

If architectural copyrights are such a big deal, why are there so few architectural copyright cases and so many trade dress cases? The answer appears to be one of circumstance - much like when section 43(a) lay on the shelf unasserted for nearly two decades before it came to be recognized as the multi-faceted force that it is. A combination of circumstances has caused architectural copyrights to endure similar disregard. Under the 1976 copyright act, which became effective January 1, 1978, architectural drawings were recognized as subject matter entitled to protection, but buildings and other physical embodiments constructed from the drawings were not protected or considered to be infringements. Another matter holding back copyrights in general and graphic building designs in particular was the requirement that a copyright notice be included on published works as a condition of copyright protection. Finally, under the Berne convention implementation act that became effective march 1, 1989, the requirement of copyright notice as a condition of copyright was eliminated from the law. This set the stage for the architectural works protection act that was enacted on December 1, 1990. This act expanded architectural copyrights to include buildings constructed on or after December 1, 1990 and buildings constructed post 1990 that were represented in existing architectural plans at the time of enactment. Then, in 1992, just when it appeared that architectural copyrights were ready to roll, the Supreme Court in Two Pesos v. Taco Cabana, 505 U.S.763 (1992), validated trade dress actions in federal court under section 43(a) without proof of secondary meaning where the trade dress was inherently distinctive. This shifted the focus of the intellectual property community away from copyrights to trade dress situations, resulting in the flurry of trade dress suits that have been brought the last decade.

What gives architectural copyrights a leg up over trade dress and service marks? For starters there are multiple rights that might be infringed which gives more flexibility to establish a cause of action, as well as potentially a larger choice of defendants. Besides the right of reproduction, the Owner has exclusive rights to prepare derivative works, to distribute and to perform or display publicly. Being able to bring an action for derivative work violations adds a lot since infringing work is by definition a modification of the original so that your starting place is on a down slope rather than an up slope. Another area where actions for trade dress violations and trademark protection don't match up to copyrights is that suits for copyright infringement, whether conventional or architectural, allow for recovery of statutory damages in lieu of the recovery of profits and damages. And we are not talking mundane statutory damages; we are talking big time statutory damages, e.g., in the case of willful infringements, the statutory damages may be as high as $150,000, as determined by the court, for each work that is infringed. This means that even if only a single copyright is involved, you are guaranteed a minimum level of recovery to go along with your false designation of origin and trademark infringement claims and perhaps make your suit viable. Moreover, with copyrights you have global protection in the Berne Convention Member countries automatically, while with trademarks you have to file country-by-country, class-by-class. And copyrights last a very long time (longer than most of us will be around) without renewal, payment of fees or proof of use. Finally, the registration fee for obtaining a copyright registration is about one tenth what a trademark application would cost.

What should be done for your clients? For new designs the answer is easy. Make architectural copyrights a part of the interior design along with trade dress and service marks. Each of these has its strong points and weaknesses. Only by using a combination of all three rights can you optimize your defenses. Trade dress tends to take an overall look and feel approach, while with service marks and architectural copyrights the infringements are more focused and localized. Each approach has strong points and weaknesses.

If your building pre-dates this article and was created or formed on or after December 1, 2000, review the exterior and interior designs to see if there are any decorative non-functional features designs that would qualify as architectural copyrights. Caveat: Architectural copyrights and the corresponding technical drawings cannot be registered on the same VA application form.

For works created after March 1, 1989 and before December 1, 2000 notice of copyright was optional, but notice of copyright was compulsory for works published before March 1, 1989. Also, there is a critical deadline for works that were on the drawing board on December 1, 2000 and remain unconstructed. They have to be built by the end of this year or the copyright rights will be forfeited.

WORKS EXCLUDED FROM COPYRIGHT: Buildings that are not intended for human inhabitation; e.g., a doghouse is not a building entitled to registration. The designs of buildings where the plans or drawings were first published or the buildings were constructed before December 1, 1990 cannot be copyrighted. Also, excluded from copyright are configurations of spaces and standard features such as windows, doors, and other stable building components and functional elements whose design is utilitarian.

An "architectural work" is a design of a building as embodied in a medium of expression, including a building, architectural plans or drawings. The work includes the original form as well as the arrangement and composition of spaces and elements in the design, but does not include individual standard features.

The Term "building" means structures that are habitable by humans and intended to be both permanent and stationary, such as houses and office buildings, and other permanent and stationary structures designed for human occupancy, including but not limited to churches, museums, gazebos, and garden pavilions. The Congressional Committee Report states that "interior" design is included in the definition of "building".