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Tradesecrets
- May 2004 -
CANNING SPAM ON THE
INTERNET:
The Controlling the Assault of Non-Solicited Pornography and Marketing
Act of 2003
The constant influx into everyone’s inboxes of unwanted ads to refinance
your home or to buy over-the-counter remedies has prompted the enactment
of a new federal law regulating the sending of unsolicited commercial
e-mail.
The Controlling the Assault of Non-Solicited Pornography and Marketing
Act of 2003 (the CAN-SPAM Act) went into effect on January 1, 2004. The
law applies to any e-mail message whose primary purpose is the
commercial advertisement or promotion of a product or service. All
commercial e-mails, including “business to business” and “business to
consumer” e-mails are covered by this Act.
While the CAN-SPAM Act does not prohibit a business from sending
unsolicited commercial e-mail, it provides for criminal and civil
penalties ranging from fines of $250 per e-mail (not to exceed $2
million) and/or up to 5 years imprisonment for unsolicited e-mail that
does not conform to three requirements:
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The e-mail must contain certain disclosures and an opt-out
mechanism;
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The e-mail must not be fraudulent or deceptive; and
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The e-mail must not be sent to a recipient who has specifically
“opted out” of receiving such e-mail messages from the sender.
Disclosure and the Ability to Opt-Out
To comply with the new law, the e-mail’s sender must:
This notice, however, is not required when the e-mail recipient has
given prior consent to the receipt of the message.
This can be done by including a valid e-mail address or other
internet mechanism to accept opt-out requests. Once the individual has
opted-out of receiving e-mails, you are indefinitely prohibited from
sending additional commercial e-mails, unless the individual gives
subsequent consent to receive them.
Both the advertisement notification and opt-out mechanism must be clear
and conspicuous in all the e-mails you send.
E-mails Not Covered by the Act
“Transactional or relationship” e-mails are not included under the
CAN-SPAM Act. These include the following:
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An e-mail that confirms a commercial transaction to which the
recipient has already agreed;
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An e-mail that provides information about a product or service the
recipient already purchased;
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An e-mail that provides information about an ongoing commercial
relationship between your business and the recipient;
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An e-mail that provides information about an employment
relationship or benefit plan; or
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An e-mail detailing the delivery of goods or services which the
recipient is entitled to receive under the terms of a previous
commercial transaction.
It is important to make sure your business is following the new
requirements of the CAN-SPAM Act so as to avoid civil and/or criminal
penalties.
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PATENT POINTERS: “Prior
Art” Search
People often have ideas for new products or ways of doing things that are
better than currently exist, but they are unsure whether their idea is
patentable and, if it might be, how best to get that protection.
This article provides a basic overview if you think your product or idea
might be eligible for patent protection. Generally, patent protection may be
sought for new methods of doing things, new articles of manufacture or new
compositions of matter. The patent system was set up to reward inventors for
sharing their innovations with the world by giving the patent owner the
right to stop others from practicing that which is taught in their patent.
While patent protection generally lasts only for twenty years from the date
of first application, the right patent in a hot industry can be quite
lucrative for an inventor if obtained and licensed properly. To be eligible
for patent protection, an inventor needs to come up with an original and
useful product or way of doing something that has not been done before. In
legal terms, this new article of manufacture, composition of matter or
process must be “new, useful and non-obvious” in light of the current state
of the art in the relevant field.
Prior to filing for patent protection, assuming your invention fits within
the statutory description of patentable things, you should perform a
thorough “prior art” search. For example, you will need to know:
Is there anything similar to your idea on the
market already?
A good first step in determining whether your idea complies with the novelty
requirement under U.S. patent law is to scour the marketplace to determine
whether someone else is already selling your product or using your process.
We often counsel clients to look at trade magazines and catalogs, but the
internet is also a good initial mechanism for determining whether your
particular idea is new or original. This so-called prior art market search,
however, serves a dual purpose. While you are looking to see if your
invention is already being sold, make a note of those companies that you
believe manufacture products that are either similar to yours or could be
the predecessor to your invention. These notes will come in handy later when
you are trying to license your invention.
Has your invention been patented already?
Assuming your initial market search shows that your product is not already
being sold, you should consider having a professional search agency perform
a review at the patent office to determine whether or not there are any
“prior art” patents which cover your invention. Essentially, this search
will turn up all patents that the search agency deems relevant and/or
similar to the process or design you disclose to them.
Inventors are often surprised to find that an invention has been patented by
someone else, but does not exist in the marketplace. While there are a host
of reasons why this might be so, it does not nullify the other party’s
patent rights. Unlike trademarks and service marks, patent protection is not
dependent upon actual use in the market place. Ownership of patent rights is
sufficient to block others from practicing the invention.
If your prior art search turns up something that is similar to your
invention, you should take careful note of the differences and consider
whether those differences produce a result that someone skilled in that
particular area of technology would consider surprising or unexpected. Then,
you should consider consulting a patent attorney to assist you in evaluating
your invention further. In our next newsletter, we will explore the next
steps in the patent process.
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Pennsylvania’s New Uniform Trade
Secrets Act
By
Steven B. Silverman, Esq.
Pennsylvania recently adopted a new law prohibiting the theft of
trade secrets. The new statute, known as the Uniform Trade Secrets Act
(the "Act"), goes into effect on April 19, 2004. The Act expands the
rights of the aggrieved trade secret owner in terms of the amount of
damages that may be recovered and the length of time after a trade
secret theft during which suit may be filed.
Expansion of the Trade Secret
Owner’s Remedies
Unlike the old common law remedies available to a trade secret owner,
the Act expands the ability of the owner to bring suit and recover more
money damages from defendants. Those expanded rights include:
Increasing the Statute of Limitations.
The trade secret owner now has three years to bring suit, instead of
two, from the date the owner discovered or should have reason- ably
discovered the theft.
Expanding the Type of Recoverable Damages.
Previ- ously, damages were limited to: (1) the owner’s actual losses
resulting from the theft ("consequential damages"); (2) dam- ages
representing the amount by which the misappropriator benefited from
the theft ("unjust enrichment damages"); and (3) in certain limited
circumstances, punitive damages. Under the new law, rather than
punitive damages, a court has the right to award "exemplary damages"
where the theft is willful and malicious. A court may award exemplary
damages of up to twice the total amount of consequential and unjust
enrichment damages suffered by the owner.
Attorney’s Fees and Other Expenses.
If the theft of trade secrets is willful and malicious, a court may
award the trade secret owner attorney’s fees, court costs and
expenses. Just what those "expenses" are is a question to be decided
in the future. None of these were recoverable under the old common
law. Given the high cost of litigating a trade secret case, recovery
of these associated costs could serve as a further deterrent against
trade secret theft.
What The New Law Does Not Change
In some respects, the Act merely codifies the common law approach to
trade secrets. Most importantly, the statute does not generally
change the definition of what is a trade secret. Both the statute and
the common law require that a trade secret:
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Provide economic benefit to its owners from not generally being
known by others;
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Is subject to reasonable efforts to maintain its secrecy; and
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Must not be known or available to others through legitimate means
– such as a trade publication.
There are two other significant ways in which the new statute mirrors
the common law. Both allow the trade secret owner to enter into
contracts with others that alter the owner’s rights from that provided
by the Act. Secondly, both provide the owner with the ability to obtain
an injunction against the misappropriators and those working with them,
preventing them from making use of the purloined secret in any way.
In one respect, the Act appears to expand the definition of a trade
secret regarding customer information. Pennsylvania’s courts have
repeatedly stated that customer lists are at the "very periphery" of
trade secret information. However, by specifically including customer
lists in the definition of a trade secret, the Act places added focus on
the protectibility of customer information. Although such information
must still not be readily available to the public in order to attain
trade secret status, from a practical standpoint, the inclusion of
customer lists in the definition of trade secret may make courts more
willing to afford protection to such information.
What Every Trade Secret Owner
Must Do
To benefit from this new law, a trade secret owner must work with its
legal counsel to:
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Periodically evaluate just what should be considered a trade
secret;
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Take reasonable steps to vigilantly protect the secrecy of its
proprietary information (including considering the use of non-compete
agreements); and
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Use the Act as a deterrent by educating employees and others about
the serious consequences of trade secret theft.
Tucker Arensberg can assist in these efforts by performing a Trade
Secret Audit to ensure that you are properly protecting your most
valuable assets. For more information, please call Steve Silverman at
412.594.5609.
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Collections During Bankruptcy Proceedings
By Brett A. Solomon, Esq.
In
the business community, bankruptcy has become an everyday occurrence.
Companies overestimate their potential and turn to bankruptcy for relief
of their debts and creditors’ claims.
The
following article discusses basic information regarding bankruptcy court
proceedings and steps to take to collect money owed to you during the
bankruptcy proceedings.
There are three different types of federal bankruptcy relief available
to consumer debtors. The first, a Chapter 7, is a liquidation
bankruptcy for a consumer. The second, Chapter 13 bankruptcy, is a
reorganization proceeding for individuals with regular income and whose
unsecured debts are less than $25,000. The debtor is permitted to repay
all or part of his or her debt over five years. Finally, a Chapter 11
bankruptcy is a re-organization proceeding for any debtor, but is
primarily used by businesses seeking
to avoid liquidation where a debtor remains in possession of its assets
and proposes a plan to repay creditors over time.
In
any voluntary bankruptcy case, the case is commenced by the filing of a
petition. The debtor must also file schedules that list, among other
things, all of the creditors and nature and amount of their claims as
well as all of the debtor’s assets. When a trade debtor or other party
who owes you money has filed for protection under the Bankruptcy Code,
all collection efforts directed against the debtor should cease.
In
a Chapter 7 proceeding a trustee is appointed. The trustee will
administer the non-exempt assets of the debtor in the bankruptcy case
and will make a determination as to whether or not the particular case
has sufficient assets to make a distribution to unsecured creditors.
Once the debtor has filed all of the required documents and a trustee
has had a chance to review them, a meeting of creditors will be
scheduled by the Bankruptcy Court to interview the debtors. Any and all
creditors may be present and may question the debtors about any matter
relating to their claim or to the bankruptcy.
If
the trustee determines that the case is a “No Asset Chapter 7” case
(i.e., the debtor has no money to pay creditors), he/she will advise the
court and request that the debtors be discharged. Creditors will have a
chance to object to the discharge within a specified period of time. If
the trustee declares the case a “No Asset Chapter 7” case, there is
need for creditors to file proofs of claim, as there will be no money
or assets being distributed to unsecured creditors. If the trustee
determines that there are assets to distribute to creditors, the
trustee will provide all creditors named in the debtor’s Chapter 7
petition and schedules with a proof of claim form to be completed and
filed with the Court. Depending on the number and amount of claims
filed, debtors will receive a pro rata share of the money distributed
once the trustee has recovered and/or sold the assets and taken out
his/her costs of administration.
In
a Chapter 13 bankruptcy, the debtor provides the Chapter 13 trustee and
all creditors with a proposed Chapter 13 Plan that states how the
debtor’s creditors are to be categorized and treated. Plans must be
filed either with the petition or within 15 days thereafter.
Upon the filing of a Chapter 13 petition and plan, the Court will set a
date for the meeting of creditors and for the Plan confirmation hearing,
which are usually scheduled simultaneously. Immediately upon receiving
notice of a Chapter 13 filing, creditors should provide the Court, the
trustee and the debtor and its counsel with a proof of claim, whether
secured or unsecured. The Court will set a bar date after which proofs
of claim may not be filed.
In
most Chapter 11 cases, meeting of creditors will typically be held 20 to
60 days after the bankruptcy petition is filed. Again, all creditors
may show up and question the debtor. This meeting is conducted by the
United States Trustee’s Office who will oversee the administration of
the estate, even if the debtor is a debtor in possession.
Similar to cases arising under Chapter 13 of the Bankruptcy Code, a
creditor, upon receiving notice of the filing and proof of claim form,
should complete and file this form with the Court and serve it upon the
U.S. Trustee, the debtor and the debtor’s attorney. In both a Chapter
11 and Chapter 13 case, you should review the plan to see how you will
be paid. If you disagree with the plan’s description of your claim or
your treatment, you need to contact your attorney at least ten
days prior to the plan confirmation hearing. If you believe that a
debtor who owes you money has filed for bankruptcy or you have received
notice of the debtor(s) bankruptcy filing, you should do the following:
1.
Immediately cease all collection activities;
2.
Determine under which Chapter of the Bankruptcy Code the case was filed;
3.
Determine if you were listed by the debtor(s) as a creditor and how your
claim will be treated in the bankruptcy;
4.
Determine when proofs of claim are due in the bankruptcy;
5.
In
the case of Chapter 7 Bankruptcy, check whether the Trustee has
deter-mined if there will be distribution to creditors, which would
necessitate the filing of a proof of claim. As a general rule, if you
do not file a proof of claim, you will not be entitled to receive
payment from the debtor (or trustee).
If you have any questions or concerns about a particular bankruptcy
proceeding for which your company is involved, please feel free to
contact Brett Solomon at 412.594.3913 or via e-mail
bsolomon@tuckerlaw.com.
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