Intellectual property (or IP) is often the single most valuable asset of an early-stage business and encompasses everything from business plans to patentable inventions. The sample letters in this chapter are designed to help small businesses recognize and protect all of their intellectual property through a variety of circumstances, such as starting a new business and hiring or firing employees.
Start-up companies will benefit from correspondence explaining the differences between trademarks, trade names, and trade secrets, and providing information about how to protect each and when a fictitious business name filing may be required. Providing clients with a good form of nondisclosure agreement (NDA) and explaining when to use it helps a client protect its trade secrets and offers terms for the resolution of disputes.
Sample letters in this chapter also help explain copyright law, determine when and how to register a copyright, and provide reminders for updating copyright claims on client materials.
Some of the intellectual property issues that arise in connection with changes in employment are addressed in Chapter 7 (Directors, Employees, and Equity Compensation), but this chapter also contains sample letters for employment-related IP issues, such as:
Finally, this chapter includes sample correspondence regarding the process of obtaining U.S. and international registrations for a trademark or service mark designed to help a client understand how an application progresses toward registration and the requirements for maintaining a registration once it is obtained.
Trademarks, Trade Names, and Trade Secrets
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
RE: Trademarks, Trade Names, and Trade Secrets
Dear {Salutation}:
Now that you have formed COMPANY and are embarking on a new venture, it is important that COMPANY’s trademarks and trade names be registered in COMPANY’s name with the U.S. Patent and Trademark Office.
In addition, COMPANY’s trade secrets should be carefully protected by obliging its employees to sign confidentiality agreements, among other things.
Please call me at your earliest convenience to schedule a meeting to consult with us to adopt appropriate forms and procedures to protect COMPANY’s trademarks, trade names, trade secrets, and other intellectual property. In the meantime, please refrain from disclosing COMPANY’s trade secrets to anyone.
Very truly,
FIRM NAME
Lawyer Name
Enclosure
Fictitious Business Names
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
RE: Fictitious Business Names
Dear {Salutation}:
As we discussed in our recent meeting, there are some additional filing and publication requirements if COMPANY intends to transact business using a name other than that specified in its Certificate of Incorporation. First, COMPANY must file a fictitious business name statement with the clerk of the county in which it has its principal place of business and in any other county in which it intends to transact business.
Next, the fictitious business name statement must be published in a newspaper of general circulation in the county of each filing once a week for four consecutive weeks.
Finally, within 30 days after publication, an affidavit of publication must be filed with the county clerk’s office in the county of each filing.
Please let me know if you decide to use a fictitious business name so I can assist you with the appropriate filings.
Very truly,
FIRM NAME
Lawyer Name
Forwarding Form NDA to Help Protect Trade Secrets
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
|
RE: |
Form Nondisclosure Agreement to Protect COMPANY Trade Secrets |
Dear {Salutation}:
It was good to hear from you the other day. Enclosed please find the form Nondisclosure Agreement (or NDA) we discussed.
Please note that use of a nondisclosure or confidential information agreement for your employees is just one step you should be taking to ensure that your customer list and other sensitive information is afforded legal protection as “trade secrets” in the event a former employee tries to use it without your permission.
For information to receive protection under the law as “trade secrets,” the owner needs to take steps to keep the information secret, such as locking the information up (and/or password-protecting it) when it is not being used, keeping employee access (paper and electronic) on a need-to-know basis, and having employees sign confidentiality agreements concerning such information.
Please do not hesitate to call me with any questions or changes.
Very truly,
FIRM NAME
Lawyer Name
Enclosure
Copyright Protection for Software
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}s
RE: Copyright Protection for Software
Dear {Salutation}:
Pursuant to our recent telephone conversation, here is some initial information about obtaining a registered copyright for your computer software product.
Copyright protection extends to all of the copyrightable expression embodied in the computer program. It is best to register the copyright within three months of first publication (and prior to any infringement) so that you will be entitled to statutory damages in the case of infringement.
Copyright protection is not available for ideas, program logic, algorithms, systems, methods, concepts, or layouts. Therefore, you may also wish to consider obtaining one or more patents to fully protect the intellectual property reflected in the program. Please note that a patent application must be filed within one year of publication of the software or it will be statutorily barred.
To complete an application for copyright registration, I will need to know the year of creation and the exact date of first publication of the program. The filing fee is nominal, so most of the cost is in the preparation of the application and materials to be submitted for registration.
In general, copies of all or a portion of the program source code must be submitted with the application for registration. To determine how much of the program source code must be submitted and the appropriate format, you need to decide whether the program contains any trade secrets.
If the program does not contain trade secrets, we will submit one copy of the identifying portions of the program (i.e., the first 25 and last 25 pages of source code) in human-readable form, together with the page or equivalent unit containing the copyright notice, if any. If a published user’s manual or other printed documentation accompanies the computer program, we will include a copy of the user’s manual along with the identifying portions of the program. In addition, if the program is embodied in a CDROM, ordinarily the entire CD-ROM package must be deposited, including a complete copy of any accompanying operating software and instructional manual.
If the computer program does contain trade secrets, the requirements are similar, but the registrant may block out those portions of the code that contain trade secrets. There are some limitations here, so if this pertains to your product, we should discuss this further.
If you are also seeking to protect screen displays (i.e., the visual component of the program), we will reference them in the application and submit identifying material for the screens.
I hope this answers some of your initial questions. I look forward to further discussion with you.
Very truly,
FIRM NAME
Lawyer Name
Updating Copyright Notices
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
RE: Keeping Copyright Notices Current
Dear {Salutation}:
I was recently on the COMPANY website and noticed that the copyright claim on your site is out of date. As you are aware, an appropriate copyright claim will include a © or the word “Copyright,” the year, and the name of the creator. For example, “Copyright 2010 Legal Venture Counsel, Inc.” While this type of notice is not required for works created after March 1989, it is a good idea to put people on notice that the work belongs to you and demonstrate that your material is current. For works composed of material created over the course of time, the copyright claim can state a period of time, such as “Copyright 2004-2010 Legal Venture Counsel, Inc.”
Rights in copyrighted material exist regardless of whether the copyright is registered. However, you must register your copyright with the U.S. Copyright Office before you can seek a court order to stop someone from infringing your rights.
Please do not hesitate to call me with any questions or for further assistance with regard to the above.
Very truly,
FIRM NAME
Lawyer Name
Obligations of Former Employee Regarding Termination Certificate
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
Dear FORMER EMPLOYEE:
Enclosed for your records is a copy of your signed COMPANY Termination Certification. Please let me know if you need copies of any other documentation in connection with your employment with COMPANY or termination of the same.
I’d like to take this opportunity to remind you of your continuing obligations to COMPANY, as set forth in the attached Termination Certification, to return all property belonging to COMPANY, to maintain in confidence all of COMPANY’s confidential and proprietary information, and to refrain from soliciting or hiring any of COMPANY’s personnel.
If you have any questions with regard to the above, please don’t hesitate to call me.
Very truly,
FIRM NAME
Lawyer Name
Enclosure
Former Employee’s Obligations Regarding Trade Secrets
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
Dear {Salutation}:
As you know, this firm represents COMPANY. It is my understanding that you voluntarily terminated your employment with COMPANY on [DATE]. The purpose of this letter is to remind you of your continuing obligations with regard to the protection of COMPANY trade secrets and other confidential information, to demand that you return all property belonging to COMPANY, and to confirm that you have been paid in full for all compensation due from COMPANY.
Please be advised that COMPANY intends to pursue the new business leads identified and developed on its behalf during your employment with COMPANY and considers such information a valuable trade secret. It would be a violation of the Uniform Trade Secrets Act, as set forth in California Civil Code Section 3426 et seq., for you or your new employer, which is a direct competitor of COMPANY’s, to misappropriate such information. The law provides for the issuance of an injunction to stop or prevent the misappropriation of a trade secret and provides for the award of actual and exemplary damages in the case of willful misappropriation. COMPANY intends to pursue its rights under the law to the full extent required to ensure that you do not use, disclose, or otherwise misappropriate its trade secret information.
You also have an ongoing obligation under Section 13 of your written employment agreement with COMPANY (Agreement) to maintain the confidence of all confidential information obtained by you during your employment with COMPANY and to avoid any unauthorized use of such information.
Any property in your possession that belongs to COMPANY, including but not limited to notes, documents, files, disks, and other materials, must be returned to COMPANY immediately, either electronically or in hard-copy format, and any copies of the same on your own computer or other electronic devices must be permanently deleted.
Pursuant to the terms of the Agreement, your compensation was $_____ per month. You had no accrued unused vacation days as of the date of your termination. As you have been paid your salary through your termination date, and you have not qualified for a bonus under the terms of the Agreement, you have been paid all amounts due to you through the date of your termination.
In light of the fact that you were not forthright with COMPANY about your association with a competitor of COMPANY and your refusal to meet with COMPANY following your termination, EXECUTIVE has requested that you discontinue use of the recommendation letter he signed for you just prior to your voluntary termination and that you refrain from using him as a professional reference, other than to confirm the dates of your employment.
Finally, please be advised that a copy of the enclosed letter has been sent to your new employer to advise them of your continuing obligations to COMPANY with regard to the protection of confidential information and trade secrets.
Property belonging to COMPANY should be returned to COMPANY directly. Please call the undersigned directly at [PHONE] with any questions with regard to the above.
Very truly,
FIRM NAME
Lawyer Name
Enclosure
Notice to New Employer of Former Employee with Trade Secrets
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
Dear {Salutation}:
This firm represents COMPANY. It is my understanding that FORMER EMPLOYEE has recently associated with your firm. As you know, FORMER EMPLOYEE was previously associated with COMPANY. The purpose of this letter is to advise you of certain continuing obligations FORMER EMPLOYEE has with regard to the protection of COMPANY trade secrets and other confidential information so that NEW EMPLOYER does not inadvertently participate in the misappropriation of such information.
For example, during his employment with COMPANY, FORMER EMPLOYEE was charged with identifying and developing prospective public and private investment banking clientele for COMPANY. The information developed as a result of FORMER EMPLOYEE’s efforts in that regard is a valuable trade secret belonging to COMPANY, and COMPANY intends to pursue those new business leads. It would be a violation of the Uniform Trade Secrets Act, as set forth in California Civil Code Section 3426 et seq., for your firm, which is a direct competitor of COMPANY’s, to misappropriate such information. The law provides for the issuance of an injunction to stop or prevent the misappropriation of a trade secret and provides for the award of actual and exemplary damages in the case of willful misappropriation. COMPANY intends to pursue its rights under the law to the full extent required to ensure that neither FORMER EMPLOYEE nor his new employer use, disclose, or otherwise misappropriate COMPANY’s trade secret information.
FORMER EMPLOYEE also has an ongoing obligation pursuant to his agreement with COMPANY to maintain the confidence of all confidential information he obtained through his employment with COMPANY and to avoid any unauthorized use of such information. FORMER EMPLOYEE has been asked to return all property belonging to COMPANY, including notes, documents, files, disks, and other materials, and to destroy any copies.
Please call me directly with any questions with regard to the above.
Very truly,
FIRM NAME
Lawyer Name
Cease and Desist Letter to Former Contractor
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
|
RE: |
Cease and Desist Demand re: Breach of Confidentiality Obligations |
Dear {Salutation}:
Please be advised that this firm represents COMPANY. It is our understanding that you have posted sensitive and confidential information belonging to COMPANY online in violation of the confidentiality terms of your contractor agreement with COMPANY dated [DATE] (the Agreement).
Specifically, [Section 7] of the Agreement requires that all confidential information and trade secrets of COMPANY be kept strictly confidential both during and after the end of the contractual relationship. The Agreement contains a monetary penalty for your violation of this provision.
We hereby demand on behalf of COMPANY that you immediately cease and desist all violations of the Agreement and remove the offensive online postings. If you refuse, our client will have no choice but to pursue its rights under the Agreement for an injunction, monetary penalties, and/or damages in a court of law.
If you have any questions with regard to the above, please feel free to contact me directly. Thank you in advance for your cooperation in this matter.
Very truly,
FIRM NAME
Lawyer Name
Sharing a Patentable Business Concept with Persons Outside the United States
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
RE: Sending Your Executive Summary to Non-U.S. Persons
Dear {Salutation}:
In response to the question you posed on my voice mail this morning, i.e., whether I think it would be okay for you to send COMPANY’s Executive Summary to a prospective strategic partner outside the United States, please proceed with caution or look elsewhere for partners. The reason is that COMPANY’s U.S. patent does not protect it outside the United States, and you haven’t completed any international patent filings yet. COMPANY would be extremely vulnerable if you disclosed its patented business concept outside the United States without an iron-clad nondisclosure and noncircumvention agreement. Even then, it would be tough, or at least expensive, to enforce a nondisclosure and noncircumvention agreement against a party in another country.
Please give me a call at your convenience to discuss this further. Perhaps it is time to file for patent protection in one or more additional countries.
Very truly,
FIRM NAME
Lawyer Name
Registering a Trademark or Service Mark
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
RE: The Trademark Registration Process
Dear {Salutation}:
Pursuant to our recent discussions, we have begun work on an application on behalf of COMPANY for registration of the mark MARK. Please note that we have not conducted an independent trademark search to determine the availability of the mark. We are relying on your independent search results with regard to its availability.
Information Needed to Complete Application. Please review the following information needed to complete your trademark application. Where the information is already provided, please make any necessary corrections. If there are any blanks, please fill in the required information.
NAME AND ADDRESS OF THE APPLICANT (COMPANY):
NAME AND ADDRESS FOR CORRESPONDENCE (ATTORNEY):
DATE OF FIRST USE: ______________________
DATE OF FIRST USE IN INTERSTATE COMMERCE:_________________
(For goods, “interstate commerce” involves sending the goods across state lines with the mark displayed on the goods or the packaging for the goods. For services, “interstate commerce” involves offering a service to those in another state or rendering a service that affects interstate commerce, e.g., restaurants, gas stations, hotels, etc.)
NAME AND TITLE OF SIGNATORY FOR APPLICANT:
DEPICTION OF THE MARK (“THE DRAWING”):
GOODS AND/OR SERVICES CLASS (See below):
Type of Mark. This will be a standard character format trademark application, which is used to register word(s), letter(s), number(s), or any combination thereof, without claim to any particular font style, size, or color, and absent any design element. Registration of a mark in the standard character format will provide broad rights—namely, use in any manner of presentation—as distinguished from a stylized or design format trademark application, which would be used to register a mark with a design element or word(s) or letter(s) having a particular stylized appearance that you wish to protect. Please note that the two types of mark formats cannot be mixed in one mark. If you wish to register a design, we will have to do so in a separate application.
Classes of Goods and Services. It is important to register your trademark in the appropriate classes of goods and/or services to prevent competitors from using the same or a similar mark in conjunction with similar goods and services. Based on our review, the primary classes of goods that seem to apply to the MARK are the following: _____________. A couple of service classes also appear to be relevant: ________________.
Costs. Filing fees are $275 to $325 per class and legal fees are $_____ per application. We will need the filing fees in advance. Alternatively, you can provide credit card information for payment of the filing fees.
Benefits of Registration. The following are some of the benefits of registering a trademark with the U.S. Patent and Trademark Office:
1. Constructive notice nationwide of the trademark owner’s claim.
2. Evidence of ownership of the trademark.
3. Jurisdiction of federal courts may be invoked.
4. Can be used as a basis for obtaining registration in foreign countries.
5. Can be filed with U.S. Customs Service to prevent importation of infringing foreign goods.
Timing. Once we have submitted the application, we will get an acknowledgment of receipt and assignment of serial number, and the USPTO will send a request for verification to the applicant. Then it will likely be six months to a year before we get a substantive response to the application.
Other Marks. You may also want to consider registering additional marks you are currently using to promote the company’s products and services.
In any case, you should place a “TM” or “SM” next to each mark you are claiming as a trademark or service mark of COMPANY on at least the first use of each mark in any document, as common-law rights arise from actual use of a mark. Generally, the first to either use a mark in commerce or file an Intent to Use application with the Patent and Trademark Office has the ultimate right to use and registration. So, you would also be well-advised to keep a record of your first use of these additional marks.
International Registrations. Please note that the foregoing information relates to applications to the U.S. Patent and Trademark Office for registration and protection in the United States only. Regarding international trademark applications, most countries outside of the United States award trademark ownership to the first party to register the mark, regardless of actual use. Thus, use of the mark is not a prerequisite to file for a trademark or for ownership of the mark in many countries. There are, as you can appreciate, exceptions to this general rule that should be considered on a case-by-case basis, as required.
Under the Paris Convention, a company is entitled to file applications in countries that belong to the Paris Convention within six months of filing a U.S. application in order to benefit from the U.S. filing date in those jurisdictions. However, not all countries adhere to the Paris Convention. In those countries, no benefit will be given to a filing within six months, and you may need to file an application sooner.
As you can imagine, foreign trademark protection can be quite expensive. However, there are some mechanisms and strategies for keeping costs down. These mechanisms and strategies include filing trademark applications under multi-jurisdictional coverage and staggering the filing expense of applications. For purposes of budgeting, the company should plan to spend an average of $______ per foreign application. Annual taxes (or annuities) will also be due to maintain the mark within each foreign country.
Two multi-jurisdictional applications that are available are the European Union (EU) (Community Trademark—CTM) and the Madrid Protocol (administered by the World Intellectual Property Organization). The CTM enables an applicant to file a single application that is effective in over 20 countries throughout the European Community. There are advantages and disadvantages to filing for protection in the EU. In some instances, applicants will file for a CTM mark and also file for national registration of a mark in a smaller subset of countries that are considered particularly critical to the business.
Through the Madrid Protocol, trademark owners may then apply for an international registration that can be extended into any of approximately 60 countries. As with CTM, there are advantages and disadvantages to both filing in direct national trademark offices and filing under the multi-jurisdictional processes. As a practical matter, it may be too expensive to file in all countries where the company plans to be commercially active. Thus, it may be practical to divide the potential countries into three categories—critical, imminently important, and countries where the company plans to be active within the next five years—to come up with a strategy for timing of applications.
There are benefits to filing international applications within six months of the U.S. filing in those countries that belong to the Paris Convention. So it may be prudent to file for marks in foreign countries that are considered critical within this deadline. We can obtain more accurate estimates for your foreign filings after we have your country list and timing strategy.
Monitoring Possible Infringement. Finally, the protection and enforcement of your marks will depend in part on your diligence in policing the use of the same or similar marks by others. We will provide information about monitoring services in a subsequent correspondence.
I look forward to hearing from you.
Very truly,
FIRM NAME
Lawyer Name
Forwarding a Notice of Publication on a Trademark Application
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
RE: Notice of Publication of Trademark
Dear {Salutation}:
Enclosed please find a Notice of Publication under Section 12(a) in connection with your trademark application for registration of the mark TRADEMARK. Your mark will be published on DATE.
Your application has gone through very smoothly to this point, and publication symbolizes an important step toward registration. If there is no opposition as a result of publication, you will likely receive Notice of Registration.
Please do not hesitate to call me with any questions with regard to the above or any other matter.
Very truly,
FIRM NAME
Lawyer Name
Enclosure
Forwarding a Certificate of Registration for a Trademark
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
Dear {Salutation}:
UNITED STATES:
Enclosed please find a Certificate of Registration for the COMPANY trademark. Congratulations on the registration of this mark! You should now place the symbol ® next to the mark on all company publications and correspondence to put potential infringers on notice and to enable you to collect money damages for infringing acts prior to the infringer’s actual notice of registration.
Also, please have someone in your office calendar the filing deadlines for the required Affidavits of Continued Use for the mark at the intervals set forth in the enclosed certificate. It will be the company’s responsibility to ensure that these filings are made on a timely basis to avoid cancellation of the registration.
EUROPEAN COMMUNITY:
Enclosed please find a Statement of Grant of Protection for the COMPANY trademark by the European Community pursuant to the Madrid Agreement and Protocol. Congratulations on the successful international registration of the COMPANY mark!
WORLD INTELLECTUAL PROPERTY ORGANIZATION:
Enclosed please find the original World Intellectual Property Organization correspondence and Certificate of Registration for the registration of the COMPANY trademark in the European Community, Japan, and Spain through the Madrid Agreement and Protocol. Please make a note that an additional payment will be due in 2019 to maintain the registration.
Congratulations again!
Very truly,
FIRM NAME
Lawyer Name
Enclosure
Forwarding a Certificate of Registration for a Service Mark to Client
{Date}
{Name}
{Company Name}
{Address}
{City, State, Zip Code}
RE: Service Mark Registration
Dear {Salutation}:
I am pleased to advise you that your service mark registration for SERVICE MARK is complete. Enclosed please find a Certificate of Registration from the U.S. Patent and Trademark Office. We will keep the original in your file unless you direct us otherwise.
When using the mark, you may now include the ® symbol to indicate that it is a registered mark (e.g., Mark®). I would be happy to review your marketing materials to help ensure that you are protecting your intellectual property to the greatest extent possible.
As set forth in the enclosed certificate, an Affidavit of Continued Use and an Application for Renewal are required at years 6 and 10, respectively, to keep the registration in force. Please calendar the due dates for these filings, as they will be the responsibility of COMPANY to ensure that they are filed on a timely basis.
Please do not hesitate to call me with any questions with regard to the above or any other matter.
Very truly,
FIRM NAME
Lawyer Name
Enclosure