Week 7: Trade Secrets / Right of Publicity

Trade Secrets

IRAC Analysis Example (Bean & Barrel)

• A popular New York café chain, \"Bean & Barrel,\" with five locations and ten years in operation, sues a new café called \"Bean Barrel\" in Brooklyn for trademark infringement.

• The new café serves coffee, pastries, and craft beers, and its owners claim they were unaware of the existing chain.

• Factors considered in the lawsuit:

  • Strength of the mark: How distinctive and recognizable the trademark is.

  • Proximity of goods: How similar the products or services are.

  • Similarity of the marks: How alike the two trademarks are in appearance, sound, and meaning.

  • Evidence of actual confusion: Instances where consumers were confused by the similarity of the marks.

  • Marketing channels: The ways in which the products or services are advertised and sold.

  • Type of goods and purchaser care: The nature of the products and the level of care consumers exercise when purchasing them.

  • Intent: Whether the defendant intentionally copied the trademark.

  • Likelihood of expansion: Whether the trademark owner plans to expand their use of the mark.

USPTO Exploration and Extra Credit Opportunity

• Extra credit assignment: Trademark exploration (due Friday, 5/16, 10 PM).

  • Research three favorite brands and write a brief paragraph about their registered trademarks (1 page).

  • Locate one trademark with opposition history (usually associated with larger companies) and summarize one or two trademark oppositions (1 page).

What is a Trade Secret?

• Definition: Any information that has actual or potential commercial value, is maintained in confidence, and is not known to competitors.

• Public disclosure ends the trade secret status, allowing anyone to use the information freely.

Uniform Trade Secrets Act Characteristics and Examples

• Characteristics:

  • Not known outside of the business entity.

  • Known only by employees and others involved in the business (often limited to those who need to know), protected by NDAs.

  • Reasonable measures in place to guard secrecy.

  • Valuable.

  • Difficult for others to properly acquire or independently duplicate.

Business Information as a Trade Secret

• Examples of business information that can be trade secrets:

  • Information concerning the characteristics of customers.

  • Information relevant to the cost and pricing of goods.

  • Supply sources.

  • Books and records of the business.

  • Mailing lists and other sales information.

  • Customer lists.

  • Information regarding new business opportunities.

  • Information regarding the effectiveness and performance of personnel, distributors, and suppliers.

  • Methods of doing business.

Consequences for Stealing or Revealing Trade Secrets

• Legal repercussions for those who have stolen or revealed trade secrets. Penalties can include fines, imprisonment, and injunctions to prevent further misuse of the information.

Federal Economic Espionage Act of 1996 (EEA)

• Applies to anyone who:

  • Physically takes records or articles reflecting the trade secret.

  • Copies or photographs such records or articles.

  • Assists in either of these acts.

  • Discloses the trade secret to another after having received knowledge of the trade secret during employment.

• Case example: United States v. Roarke (2019).

• Note: Duty of confidentiality in the legal profession, ensuring that lawyers protect client's trade secrets.

Insulet Corp. v. Eoflow

• Key issues:

  • Trade Secret Misappropriation: Whether Defendant unlawfully acquired and used confidential information. This includes examining the evidence and testimonies to determine if the defendant had access to the trade secrets and whether they used that information to their advantage.

  • Willful and Malicious Conduct: Whether Defendant’s actions were intentional and egregious, warranting punitive damages. The court assesses the defendant’s state of mind and the severity of their actions to determine if punitive damages are justified.

  • Preliminary Injunction: Whether Plaintiff was entitled to an injunction to prevent further use of its trade secrets. The court balances the potential harm to the plaintiff if the injunction is not granted against the potential harm to the defendant if it is.

Understanding the Basics of Trade Secrets

• Which of the following is NOT typically protected as a trade secret?

  • B. Publicly available marketing materials

• Trade secret protection lasts:

  • C. As long as the information remains secret and provides a competitive advantage

• What is an example of misappropriation of a trade secret?

  • C. Stealing confidential formulas from a former employer

• How is a trade secret protected legally?

  • C. Through nondisclosure agreements and internal safeguards

Non-Disclosure Agreements

• Confidential

Right of Publicity

Right of Publicity Defined

• Individuals have an exclusive right in the use of their name, likeness, photograph, voice, or other personal characteristics in connection with the marketing of products and services.

  • Related to the right to privacy; protects against emotional harm.

  • Involves economic exploitation; focuses on economic harm.

Why Right of Publicity Matters

• This right prevents the unauthorized commercial exploitation of a person’s identity (such as using someone’s photo in an ad without permission or featuring a celebrity’s likeness to endorse merchandise without authorization).

• No federal protection exists; the extent of protection varies state by state. For example, CA and TN recognize this right after the death of a celebrity. Some states provide broader protection, while others offer more limited rights.

Post-Mortem Rights

• Need to consider where the celebrity was legally domiciled at the time of death. The laws of that state will govern the post-mortem right of publicity.

Transformative Use Test

• Courts use this legal standard to balance a person's right of publicity with another party’s First Amendment rights, especially in cases involving art, media, and entertainment.

• Balance two competing rights:

  • The celebrity’s right to control the commercial use of their identity.

  • The creator’s right to free speech and artistic expression.

Determining Transformative Use

• Has the defendant added enough original expression to transform the likeness into something new, or is it just a commercial exploitation of the identity?

• Examples of transformative use:

  • Parody or satire (e.g., a caricature making a point about the celebrity or society).

  • Significant stylistic alteration (e.g., an abstract art depiction).

  • Commentary or biography that adds context or meaning.

• Examples of commercial exploitation:

  • Direct replication of a celebrity's photo or likeness (on a T-shirt, mug, or even a video game character).

  • Use where the fame of the individual is the main draw, and no new meaning or significant artistic contribution is added.

Legal Cases

• Haelen Laboratories, Inc. v. Topps Chewing Gum (1953): Established the right of publicity, allowing celebrities to control the commercial use of their likeness.

• White v. Samsung Electronics America Inc. (1992): Expanded the right of publicity to include situations where the celebrity’s identity is evoked even without using their actual name or likeness.

Upcoming Topics

• Next week: Working with and negotiating intellectual property.