Posted by Lance Koonce While theft of trade secrets tends to garner more prominent headlines, there are also a number of ways in which a company can lose control of its secrets that are unintentional, and often preventable. A case in point is intellectual property filings. We reported recently about potential disclosure of confidential information where patent holders fail to pay their maintainence fees. But a more prevalent problem arises from the simple act of filing an application for registration of patents, trademarks and domain names. The Problem: Mandatory Public Disclosure When a new product or service is about to be launched, often the brand name and any related slogan will be registered as trademarks. One part of the trademark application process involves publication of the proposed trademark in the official Trademark Official Gazette, issued by the Patent & Trademark Office. The Gazette lists all pending trademarks and their owners, along with other relevant information. This publication is intended to put other trademark owners on notice of the new mark, so that they may oppose the registration if the new mark is too similar to an existing trademark. Most major companies regularly review the Gazette to make sure no one is encroaching on their trademarks. Further, the Patent and Trademark Office now makes the entirety of applications available online. An unavoidable side effect of this process is that it may also provide competitors with a heads-up as to some aspects of the new products before they reach the market. For instance, trademark filings earlier this year by Intel for “Intel Inside VIIV” and “Intel VIIV”, along with a square graphic that resembled an inkblot or a starfield, led to reports speculating about potential new products. The same issue arises for patent filings. Recently, several websites disclosed that Apple has applied for a patent for a camera that resides in the latch that closes a laptop, and speculation has ensued as to what product Apple may release incorporating this technology. Finally, product launches today are often accompanied by the creation of dedicated websites, and the purchase of a domain name may also provide tantalizing clues as to an upcoming launch. Potential Solutions Is there a way to avoid this unintentional disclosure? For patents, if the inventor will remain the owner of record with the Patent and Trademark Office, the answer is likely no. However, if the inventor assigns the patent to another party (a very typical situation where the inventor is an employee of a corporation), the assignee may be able to avoid disclosure of its identity in the patent application documents. In the United States, patent applications require an oath executed by the inventor(s), but the owner of a patent application need not identify itself. Thus, if a large tech company files a patent application based on technology developed by several of its researchers (each of whom must sign the oath), but the researchers assign their rights in that application and the invention it describes to the company but the assignment is not recorded in the Patent and Trademark Office, there will be no public record of ownership by the tech company, even if an assignment has in fact been executed. Companies also can consider foregoing patent protection entirely and rely on trade secret protection in certain cases. [Thanks to Seth Levy for this explanation.] For domain names, the story is different. A number of companies offer “proxy” registration services that result in an anonymous filing administered by the proxy company, but which is owned by the ultimate registrant. This service can be quite valuable for businesses whose product launches are closely-held secrets. A partial list of domain name registration companies that offer anonymous registration is available here. The use of a proxy for domain name registration has been noted with approval in at least one domain name arbitration, where the panel stated:
Respondent registered the at-issue domain name via a proxy service through [an authorized registrar]. By using the service, the proxy’s contact information, rather than the registrant-in-fact’s contact information appears on the registration record. Complainant argues that the use of a proxy registrant is a per se indicator of bad faith. This Panel disagrees. There are numerous benign reasons why one would want to buffer one’s identity or have another control a domain name by using an agent or proxy. Third parties wanting to direct soliciting mail and email, wanting to defraud domain name owners into changing registrars or to otherwise defraud registrants into transferring their domain name, have used publicly available WHOIS contact information to reach their victims. Often ISPs, web presence providers, web designers or other agents of the principal registrant register a domain name in their own name so that they may maintain control over the domain name or manage the domain name and its related Internet objects for the real registrant-in-interest. Categorically ascribing foul intent to all those using a proxy registrant or proxy service, is simply speculation. Similarly, failing to list contact information on a website may be for innoxious reasons.
Potential registrants should be aware that in ost cases registration information must still be disclosed where a court orders such disclosure, where disclosure is needed to comply with ICANN’s dispute resolution policy, or if the registrant is using the domain to break the law. It is worth noting that proxy registrations for domain names also potentially makes it more difficult to track cybersquatters and others who abuse the registration process. Recently, the National Telecommunications and Information Administration, a division of the U.S. Commerce Department, issued a ban on proxy reservations for domain names with the “.us” extensions, reportedly to increase the accuracy and reliability of WHOIS domain registration information for the public and for law enforcement officials. Finally, for trademarks, it appears that one possibility that some companies have exploited is for a trademark applicant to set up a holding company to file the initial application, and then later assign it to the company that will ultimately hold it, either after the product launch or after the application is published for opposition in the Official Gazette. Applicants must carefully consider their actions here, of course, to make sure that they are not taking any steps that would constitute fraudulent behavior or render their application void (for instance, an intent-to-use application requires the applicant to have a bona fide intent to use the mark, which might not be true in the case of a holding company). [Thanks to Dave Deits for the intent-to-use point.]