Intellectual property is divided into four generally accepted categories: copyrights, trademarks, patents, and trade secrets.  Given the ephemeral nature of intellectual property, many people (including some attorneys) often confuse these terms.  Here are thumbnail explanations of these terms, as defined by statutes and our court system:

Copyright:  A copyright is a form of protection granted by law for original works of authorship (including literary, dramatic, musical, and artistic works; such as poetry, novels, movies, songs, computer software, and architecture) fixed in a tangible medium of expression.  A copyright generally gives the copyright holder the exclusive right to reproduce the copyrighted work, to prepare derivative works, to distribute copies or phonorecords of the copyrighted work, to perform the copyrighted work publicly, or to display the copyrighted work publicly.  Copyright does not protect facts, ideas, systems, or methods of operation; although it can protect the way these things are expressed.  A work is under copyright protection the moment it is created and fixed in a tangible form, and lasts for the life of the author plus 70 years (or, in the case of a corporation, 100 years).  Although the registration of a copyright with the U.S. Copyright Office is not required, it can provide the copyright holder with additional rights and protections.

Trademark:  A trademark is a word, name, symbol or device which is used in trade with goods to identify the source of the goods and to distinguish them from the goods of others.  A servicemark is the same as a trademark except that it identifies and distinguishes the source of a “service” instead of a “product”.  The terms “trademark” and “mark” are commonly used to refer to both trademarks and servicemarks. Trademark rights may be used to prevent others from using a confusingly similar mark, but not to prevent others from making the same goods or selling the same goods or services under a clearly different mark. Trademark rights begin to attach as soon as a mark is used in interstate commerce, and last as long as the mark is used in interstate commerce.  However, unlike copyright law, trademarks and service marks must be registered with the Patent and Trademark Office to enjoy wide, federal protection.

Patent:  A patent is the grant made by the Patent and Trademark Office, which provides an inventor with a monopoly on his idea for a set period of time; generally 20 years from the date on which the application for the patent was filed in the United States.  The right conferred by the patent grant is, in the language of the statute and of the grant itself, “the right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States.  What is granted is not the right to make, use, offer for sale, sell or import, but the right to exclude others from making, using, offering for sale, selling or importing the invention.

Trade Secret:  A trade secret is a process, method, plan, formula or other information unique to a business, which gives it an advantage over competitors, and is not generally known or readily ascertainable.  Unlike the other forms of intellectual property described here, trade secret law does not enjoy broad federal protection; it is different from state to state (although the adoption by many states of the Uniform Trade Secret Act is helping to create a more uniform body of law).  Accordingly, there is no registration of trade secrets and what constitutes a trade secret, and the degree of protection afforded to such a trade secret, can be different depending on the jurisdiction and the extent to which the owner protects its confidentiality.  In general, however, trade secret protection extends to information proved to have economic value and in which steps are taken to keep the information secret.  Companies that can support a claim to trade secret protection can be protected by court-ordered injunctions against those who use or reveal the secret (such as current or former employees), or seek damages against such people for improper use or disclosure.

–Matt

Courts have frequently held that e-mail correspondence can qualify as an enforceable agreement, assuming the legal requirements for a valid offer and acceptance are met.  For example, in December 2006, the Michigan Court of Appeals held that parties in a lawsuit may enter into a settlement agreement via exchanges of email messages.  In so holding, the Court reviewed an email exchange as it would any other agreement; as long as there is an offer and an unambiguous acceptance of that offer, a contract is formed.  A valid contract also requires mutual assent or a “meeting of the minds” on all the essential terms.

In Kloian v. Domino’s Pizza LLC, 273 Mich. App. 449; 733 N.W.2d 766 (2006), counsel for the plaintiff Kloian sent an email to counsel for the defendant Domino’s Pizza stating that the plaintiff would “accept the payment of $48,000 in change [sic] for a dismissal with prejudice of all claims and a release as [sic] all possible claims.”  Defendant’s counsel responded, “Domino’s accepts your settlement offer contained in the message below,” and offered to draft a formal settlement agreement and dismissal.  The parties even amended their agreement via email correspondence to include additional terms.  The defendant later refused to sign the settlement agreement.  Domino’s sought to enforce it.

The court found that there was an offer, an unambiguous acceptance, and a “meeting of the minds” on the essential terms.  The defendant argued that settlement agreements, to be enforceable, are required to be in writing and signed by the parties.  The court, nevertheless, found that the agreement was in writing and further that the lawyers’ signature blocks constituted valid “electronic signatures.”  (Lawyers are assumed to have authority to settle lawsuits on behalf of their clients.)  The court enforced the parties’ settlement agreement.

THE BOTTOM LINE: contracts can be formed and amended via email — even contracts the law requires, or the parties require, to be in writing and signed by the parties.  Businesses should consider how they are using email when transacting business.  More importantly perhaps, businesses should review the provisions in their existing agreements and how they can be amended.  Where those agreements contain standard contract clauses requiring amendments to be in writing and signed, those provisions will need to specify that e-mails with signature blocks do not constitute a writing or written signature.

–Matt

The Electronic Frontier Foundation (the “EFF”), a non-profit advocacy and legal group based in San Francisco, CA, is contemplating filing a lawsuit against Michigan State University.  It seems MSU disciplined a student for being a “spammer” when the student sent an email to about 900 professors without prior school approval.  The student was a member of the MSU student government and, in her personal capacity, was trying to garner professor support to protest a change in the school year that the Provost had put forth.

The EFF wrote a blog post on the matter late last year.  From the EFF blog:

MSU’s email policy prohibits the sending of unsolicited e-mail “for personal purposes, advertising or solicitations, or political statements or purposes” to more than about 20-30 recipients without prior approval of University officials.  EFF and the other organizations noted that, especially by prohibiting “political statements” such as Ms. Spencer’s based on their content, the public university policy is constitutionally suspect.  The policy also improperly grants unfettered discretion to MSU in selecting which messages can be sent to multiple students and faculty by requiring prior administration approval.

The EFF is now looking for local lawyers interested in working on the case pro bono.  If you are interested, contact Vince Polley, a member of the State Bar of Michigan Information Technology Law Section, at vpolley@knowconnect.com.

–Matt

(Hat tip: State Bar of Michigan Information Technology Law Section)

I’ve written previously about the so-called “Battle of the Forms” both here and here.  Yesterday’s post concerned a case, Taurus Mold, Inc. v. TRW Automotive US, LLC, in which the Court of Appeals assumed, without discussion, that purchase orders or invoices that incorporated standard terms and conditions by reference to a website were legal as a matter of law.  Randy Safford in my office noticed another important lesson from the case (one that is often repeated but sadly overlooked): Get. It. In. Writing.

In Taurus, the plaintiff alleged that it entered into oral agreements with the defendant under which the plaintiff agreed to sell goods and perform services specified in written purchase orders, but at a higher price than specified in the purchase orders.  Each of the purchase orders, however, referenced the online terms and conditions which contained a so-called “integration clause”.  The “integration clause” specifically states that the “parties are contracting solely on the basis of this order, which contains the entire understanding of the parties and is intended as a final expression of their agreement and a complete statement of the terms thereof” (the emphasis is mine).  In other words, the separate oral agreements are inadmissible and, therefore, the court looked only to the purchase orders to determine the parties’ agreement.

The plaintiff’s problem then is not so much that the terms and conditions were incorporated by reference but that the plaintiff relied on what the defendant told him (the “oral” agreement) and ignored the written purchase order and the “fine print” entirely.  As Randy put it, “Get the oral deal in writing or get burned….”

–Matt

Some time ago I wrote about the “battle of the forms” — the legal dispute that arises between buyers and sellers when each parties’ “standard terms and conditions,” contained in their respective purchase orders and invoices, are in conflict.  The full post can be read here.  Typically, those standard terms and conditions are found on the back of the purchase orders and invoices in small print.  Recently, however, some buyers and sellers are foregoing the small type on the back of their forms and merely referencing a website where their terms and conditions can be found.  Such a provision may look something like this:

The Terms and Conditions, which are incorporated into this Purchase Order by reference, are located at http://xxx.xxxx.com (the “Website”), and Supplier acknowledges receipt, review and acceptance of the Terms and Conditions.

Since first seeing this type of provision, I’ve wondered about its legality and prudence.  After all, the provision is essentially asking the other party to visit a website, which can be changed at anytime without notice, in order to understand the terms of the parties’ agreement.

However, in a recent Michigan Court of Appeals case, Taurus Mold, Inc. v. TRW Automotive US, LLC (unpublished), such a provision was assumed to be enforceable, as a matter of law, without much discussion.  The lower court was “not convinced by plaintiff’s argument that the Terms and Conditions were ’secret’ and ‘hidden’ since they were on defendant’s website, as plainly stated under each Purchase Order,” and the Court of Appeals apparently agreed.

The full opinion from the Court of Appeals can be read here.

–Matt