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A decision issued last month by a Pennsylvania federal judge should raise the anxiety level of folks who try to obtain their own copyright registrations.

When you create a copyrightable work (such as a software program or book), you own a common law copyright from the moment you complete the work. Yet, to gain access to meaningful remedies against anyone who may infringe upon your copyright (for example, by making any unauthorized copy of your work), you usually must register your copyright with the U.S. Copyright Office before the infringement takes place.

The Copyright Office posts on its Web site (www.copyright.gov) the forms used for copyright registration. These forms are short (generally just two pages) and appear to be simple to complete.

The Copyright Office posts instructions on its Web site on how to fill them out. By doing so, the Copyright Office implies that a layman can do his own copyright registration.

Indeed, many attorneys have this impression. A fellow intellectual property attorney at another firm once told me that when a client raises the prospect of seeking copyright registration, he just directs that person to the local public library to obtain and fill out the registration application.

Yet, these forms contain pitfalls. I have practiced copyright law for more than a decade, and I still have to research copyright registration issues from time to time. Also, the law evolves on what is proper in copyright registration.

Errors are easily made in several areas of copyright registration forms. It can be difficult to identify when other individuals are joint authors of your copyrighted work and need to be disclosed as such. Also, determining exactly whether and when your work was legally "published" is hazy in the law. In addition, the copyright registration form asks you to reveal if your work was built upon any other copyrighted work, and unraveling a chain of such "derivative works" can be tedious.

If you make errors in your copyright registration application, they likely will not be caught in the registration process. The Copyright Office gives only cursory review to applications before granting registrations.

Any errors made in the copyright registration tend not to be uncovered until litigation occurs over an alleged infringement, when lawyers for both parties scrutinize the registration. Thus, you may not know whether you have a potent legal weapon in your hand until you have spent many legal dollars.

The decision issued last month by the Pennsylvania federal judge concerned an employer satisfaction survey developed by the Gallup polling organization. Gallup began using this survey in 1992, but it did not apply for copyright registration until 1999. When Gallup applied, it could not find a copy of the 1992 survey, so it filed an application stating that it first used the survey in 1992 but attached a copy of a 1999 survey.

Gallup later sued another organization that Gallup claimed had ripped off its survey. Ultimately, the court invalidated Gallup's copyright registration and consequently dismissed its copyright infringement claim. The court did so because the copy of the survey submitted with the registration application (the "deposit" in copyright-speak) was not the version that Gallup had used in 1992.

The court said that mistakes on a copyright registration form may be excused only if they are simple misstatements or clerical errors. Importantly, the court said that you do not have to show that the applicant made an intentional misrepresentation in order to invalidate that registration. Unintentional errors can sink you.

This case wasn't an aberration. Two other federal courts previously had issued decisions with roughly the same facts and result.

The Pennsylvania decision should be an alarm bell in the night to those who have operated under the assumption that all errors in copyright registration short of fraud will be forgiven by courts when copyright infringement suits are brought.

True, in many cases courts have stated broadly that unintentional errors on the copyright registration form should be excused. Yet, these courts gloss over a growing body of cases in which registrations have been invalidated because of unintentional mistakes in the registration process.

In addition, sometimes the error made in the registration application does not invalidate the entire registration but leads to a much narrower registration than the applicant thought he had achieved. If your registration covers only a bit of your whole work, then that registration might not be an effective weapon against copycats.

For example, many folks are surprised to learn that they usually do not own the copyright to what independent contractors contribute to a work unless that person signs a written copyright assignment to the party claiming ownership. This happens in software development and in advertising all the time.

It's wonderful that the Copyright Office makes the copyright registration process so accessible to the public. Just don't be certain that doing it yourself will get it done.

Imagine this: A guy walks into the office of a commercial real estate broker and says he wants to buy and develop a piece of commercial real estate as his new business venture.

“Fine,” says the broker. “What kind of real estate did you have in mind? Office building? Strip shopping center?”

“Office building,” replies the customer. “I’m all set up. I’ve got my office leased and set up, computer system ready, staff hired, letterhead printed, architects retained and coffee brewing. I’m ready to roll.”

“I’ve only got about $500,” says the customer. “I’ve spent nearly all of my budget on setup and salaries, and have a small amount left over for the property acquisition.”

“You’re kidding, right?” the broker spits out. “You’ve got bank financing or something else lined up, right?”

“Nope” says the customer with a straight face. “C’mon, I’m a small business with a small budget. This is all I have to put into this deal. Work with me.”

Well, as obviously wrong and even comical as that customer sounds, I hear that sort of plea all of the time when the conversation is over intellectual property (“IP” in legal jargon) instead of real property.

People usually think logically and with realistic budget expectations when it comes to holding tangible property – land, buildings and machinery. Yet, even many business-savvy people can’t seem to think straight about IP, even in today’s cyber-everything world.

Many people want to build a business that will have IP as a core asset or as its feature product but, nonetheless, are unwilling to invest significantly in the legal work necessary to identify, form and protect that property. Instead, they expect to spend only spare change from their business ventures on IP issues.

For example, on several occasions, I have been approached by businesses that have invested thousands of man-hours and hundreds of thousands of dollars in developing an internal-use software application. In each case, the entrepreneur saw that the software had potential as a product that could be licensed for a fee to other businesses and was contemplating commercializing it.

Well, you own software by owning the IP rights to it – the copyright to the code, perhaps a patent on some inventive aspect of it, perhaps a trademark in its name if the name is distinctive, and perhaps trade-secret rights in parts of the code the customers won’t see.

Still, despite the huge financial investment these businesses had made in building their systems, each balked at prospectively spending a low five-figure sum to wrap up the IP rights to it. Yet, when each company goes to sell licenses to use its software product, what it will be selling is the right to use its IP.

The problem often arises because the entrepreneur didn’t realize from the start that he was getting into the IP business. Yet, if you intend to make money off of something by excluding others from knocking off your product and selling it in competition with you, you must recognize that IP is a core asset of your new business and plan accordingly.

The IP could be a copyright to something original you have created – a piece of software, a book, or a song. It could be the name of a new business or product – a name that’s distinctive and into which you plan on building goodwill. It could be an invention – a new device or manufacturing process. It could be a secret formula for making a new product – a soft drink.

If you are headed down that path, don’t wait until after you have nearly finished building the product to find out what it’s going to cost to wrap IP protection around it. Such legal work may be one of your larger expenditures, so you need to budget for it and to adequately capitalize your business to support that cost.

To discover the likely magnitude of such cost, you’ll have to spend some time and money mapping the IP aspects of your business. You should sit down with an IP attorney and explain your venture. That person can produce an IP protection plan – a cataloging of what needs to be done to form, protect and maintain your new IP and what it likely will cost to do so. While the planning itself will incur legal fees, it’s a critical step. The estimate of the cost of the work to be done should be a cornerstone element of your pro forma budget.

In order to profit from commercializing real property, you must raise and earmark sufficient capital for acquisition costs, upkeep and security. Perhaps over time, folks will learn that the same rules apply to IP.

Thomas Hobson operated a horse stable in Cambridge, England, in the late 16^th and early 17^th centuries.

He had a stable of fine horses and mainly used them to carry passengers and mail between Cambridge and London.

On the side, he rented horses to Cambridge University students. After a while, students began requesting particular horses, causing some horses to be overworked. Hobson responded with a horse rotation – a horse just back from work would go into the stall furthest from the stable door and the other horses would shift forward so that the freshest horse was in the stall next to the stable door.

Hobson would give a student looking to rent a horse the option of renting the horse nearest the stable door or not renting a horse at all. In the town, this lack of choice came to be known as “Hobson’s Choice.”

Today, consumers frequently are presented with similar “choices” in the form of contracts that can’t be negotiated. For example, when buying boxed software, the software will come with legal terms placed in the box that govern the transaction if you open the plastic wrapper containing the computer disk (these are “shrinkwrap” terms).

Similarly, terms that appear on your computer screen and require that you click “OK” before proceeding are “click-wrap” terms.

Many wonder whether these purported contracts have legal effect. They do. If the company offering the contract has presented the terms in a legally correct way, these contracts will govern your rights as a customer and describe and limit your remedies should you have a beef with the seller.

What if you have a problem with the product after you have purchased and begun using it? What if the downloaded software causes damage to your computer? What if it causes you to make a significant financial mistake, such as incorrect calculation of your taxes? What if your online interaction with the company results in what you consider to be a breach of your privacy or a violation of one of your rights under a consumer protection law?

If the product itself didn’t work properly, you may be able to obtain a refund from the merchant. But what can you do if a refund won’t remedy the damage you suffered?

Of course, merchants want to discourage you from taking any action other than seeking a refund. Increasingly, the fine-print contracts used by merchants provide that, if you want to assert a claim against the merchant, you must do so in arbitration (and not in a lawsuit filed in court), and that arbitration must take place in a specific geographic location (one that’s convenient to the merchant). The contracts prohibit class actions, even in arbitration.

In recent years, courts have wrestled with whether these dispute resolution limitations are enforceable. These clauses tend to decide whether disputes will be raised at all. In small-dollar consumer transactions, litigation or arbitration is hardly ever worth the cost – the product or service often costs less than the court or arbitration filing fee, not to mention the cost of hiring a lawyer to represent you.

Thus, the only way these disputes become economical to fight is if a lawyer can pursue a class action on behalf of a group of purchasers who have suffered a similar problem.

I express no opinion here on the merits of class actions. Proponents argue that they can create justice for large groups of small-claims holders. Opponents contend that class actions are a vehicle for plaintiffs’ lawyers to earn large fees in exchange for agreeing to illusory compensation for class members.

The case law appears to be turning in favor of permitting companies to prohibit class actions if they handle the language in their boilerplate contracts correctly. A 2003 Supreme Court case said that arbitrators, not courts, get to decide whether an arbitration agreement prohibits class actions. Additionally, the court essentially said you can eliminate class actions in arbitration provisions provided that you do so with clear language.

Also in 2003, a California appellate court (California always is on the cutting edge of consumer litigation) ruled that the Federal Arbitration Act will keep a state from applying its substantive law to permit class actions if the arbitration provision in a contract prohibits class actions.

Together, these two decisions boosted the ability of merchants to make asserting claims impractical by requiring that claims be arbitrated without use of class actions.

This issue isn’t settled yet, and won’t be until the U.S. Supreme Court decides a case that presents the whole question – can merchants use an arbitration provision that mandates a particular venue, and that prohibits class actions, to effectively prevent consumers from pursuing damage claims regarding the performance of consumer products and services?

For now, the answer appears to be “yes, merchants can do this,” at least in most cases.

Last February, I wrote about how Google was selling advertisements linked to search engine queries through its “AdWords” program.

I discussed how this program was coming under fire from trademark owners and said the courts would have to sort out the legality of trademark-linked advertising. It appears that a federal court sitting in Northern Virginia will produce an answer shortly.

First, a little refresher: In its AdWords program, Google sells advertisements linked to queries run through its search engine. A prospective advertiser can select the search terms that will trigger the ad, and even can select the region of the country in which the ad usually will appear. The prospective advertiser pays on a per-click basis.

Someone entering a query still gets the usual Google search results, but the paid advertisement appears alongside the results under the heading “Sponsored Links.”

For example, a lawyer could pay to have an advertisement appear when the query “Richmond Virginia intellectual property lawyer” is entered. Indeed, someone else did this.

trademark owners get testy when the searched term is that entity’s trademark and a competitor is doing the advertising. Indeed, GEICO recently sued Google in Alexandria over use of the GEICO trademark in AdWords program. Google discontinued the linked ad but is fighting the lawsuit.

This case poses the big question – does Google infringe on someone’s trademark by selling to a competitor an AdWord ad that keys off of that trademark?

This case should produce an answer. GEICO can afford, and has hired, big-time lawyers. The GEICO trademark is strong – it’s distinctive and well recognized in the marketplace. It’s not like GEICO is asserting a monopoly on a descriptive phrase such as “affordable car insurance.” GEICO has invested millions in advertising.

Google has a lot at stake too. The Interactive Advertising Bureau reported this month that Google has done well in advertising revenue, largely due to the strength of its search-linked ads. The IAB also reported that 40 percent of all online ad revenue was from search-linked ads. If Google had to pull all recognizable trademarks off the advertising sales table, it might forego a lot of revenue.

In an indication of how much Google cares about its AdWords program, before launching its IPO, Google gave 2.7 million shares of its stock to Yahoo! to settle a possible patent infringement claim concerning the program. Yahoo! sold those 2.3 million of those shares, post IPO, for $191 million.

GEICO filed its suit in federal court in Alexandria in May of this year. The court recently denied Google’s motion to dismiss GEICO’s trademark claims on their face.

Google made a preliminary, legally technical argument that its AdWords program didn’t count as a “trademark use” of GEICO’s trademarks. While the court rejected this argument, it left open the central issues of whether Google’s use of the GEICO trademark was a fair use and whether this use of GEICO’s mark likely would confuse consumer

The federal judicial district in which this case is filed is the fastest in the country (lawyers call it the “Rocket Docket”), so this case should be resolved no later than early 2005.

This case ultimately hangs on a trademark concept called “initial interest confusion.” Under this concept, it’s unlawful to draw someone into your store by giving the false impression of being someone else by deceptive use of that other company’s trademark.

For example, a cyber-merchant could not use the iTunes trademark to lure someone into his online music store by giving the false impression that it’s an authorized download site for Apple’s iTunes service when that merchant has no affiliation with Apple, even if, once arriving at the merchant’s Web site, it would be immediately obvious to a Web surfer that the cyber-merchant’s site isn’t affiliated with Apple.

In my view, Google should be able to save its trademark-linked advertising, either in court or after making a few court-inspired changes to its search results layout. Only a Web newbie might believe that the items in Google’s search results under the heading “Sponsored Links” are affiliated with the company whose name is searched. In addition to the indication of sponsorship, the Web address of the site doing the advertising is given, thereby reducing the chance of any false impression.

If the federal court finds that this lack of association between the advertising and the main search results isn’t clear enough, certainly Google can do more with visual presentation and wording to make the distinction sufficiently clear.

Perfectly legitimate reasons exist for keying advertising off of a trademark of someone else, such as product reviews, criticism of corporate conduct, resale of used goods, and the sale of complementary goods or services.

Also, even if the purpose is to sell a competing product, trademark law permits the mentioning of the competition by brand name as long as the use of the trademark isn’t deceptive and is done for accurate comparative advertising. A trademark owner doesn’t have the right to sell its wares without distraction from competitors attempting sell competing products.

Just like a cold spreads around a preschool, new inventors often spread among themselves the myth that a simple and cheap document – a provisional patent application – will fully preserve patent rights until a full patent application can be filed. While such a filing can be simple and cheap, it isn’t a reliable way to preserve patent rights.

David Cox learned this lesson the hard way. He applied for a patent on a drill bit to be used to drill horizontally in underground rock formations. He filed a provisional patent application (a “PPA” in patent lingo) to attempt to preserve his patent rights and later filed a full patent application.

After his patent was issued, his drilling company sued a possible infringer of the patent, no doubt anticipating a fat monetary award. Yet the court held that his PPA didn’t fully describe important details of his drill bit and declared his patent to be invalid. Had Cox filed a full patent application at the time he filed a PPA, this legal failure likely would not have occurred.

New inventors often are interested in filing a PPA because they correctly understand that you have only a limited time to seek patent protection. In the United States, you have only one year to file a patent application once you describe your invention in a printed publication, put it on sale, or use it in public. If you miss that one-year window, you cannot obtain a patent on your invention.

In most foreign countries you don’t have this yearlong window. There, describing an invention in a printed publication or using it in public before filing a patent application usually kills patent rights immediately.

Filing an effective PPA counts for meeting the U.S. patenting deadline, and you have up to a year after you file your PPA to file a full U.S. patent application. It may buy you a year for filing foreign applications too.

Filing a PPA can be much quicker and cheaper than a full patent application. The filing fee for a PPA is under $100, and the inventor might be able to prepare the PPA himself or with minimal assistance from a patent attorney.

On the other hand, the filing fee for a full patent application is several hundred dollars, and the legal fee for a patent attorney to prepare an application usually is several thousand dollars.

Unfortunately, new inventors tend to latch on to the PPA as a solution without questioning its efficacy or, worse yet, with a nearly religious belief that it preserves all patent rights.

It can fail to do so. With a PPA, essentially all that the inventor must file with the U.S. Patent Office is a description of how to make and use an invention, plus any drawings necessary to understand such making and use, plus a cover sheet and a comparatively small filing fee.

On the other hand, a full patent application requires more work. A PPA and a full patent application both must contain a description of the invention. Yet, most importantly, a full patent application also must contain claims – numbered paragraphs that clearly describe the scope of the invention and how to replicate it.

When an experienced patent attorney drafts a patent application, often he starts by drafting claims. The attorney will take into account any known “prior art” – previous patents and other publications or activities that limit the available scope of protection. Prior art matters because a patent is a claim to some thing or process that hasn’t been invented previously and that wasn’t obvious from previous inventions.

Using the initial claims as a guide, the attorney will then carefully craft the rest of the application to support the claims, keeping in mind the current case law on what is an adequate invention description. The attorney will also consult with the inventor to make certain that the critical details of the invention are captured and that defects in the initial claims are corrected.

In contrast, a poorly written PPA might fail to describe a critical element of an invention – perhaps the wrinkle that makes the invention an improvement upon the prior art. If a critical element isn’t described, the PPA will not preserve patent rights regarding it. Thus, an inventor might rely on the PPA to give him a year to file a regular patent application, but the PPA might not preserve that right because of an inadequate description.

For example, an inventor may have offered the invention for sale to a manufacturer six months ago, and the inventor might file a PPA today to get an application on file within a year of that offer for sale. The inventor then thinks he has a year to file a full patent application, and he eventually files one just before that year is up.

Yet, it turns out that the PPA didn’t specify the critical difference between the invention and the prior art. Eventually, perhaps in the patent application process or later when the inventor sues someone for infringement, he finds out that his PPA didn’t preserve his patent rights. Instead, they were barred one year after the offer for sale and before the full patent application was filed. Either way, the right to patent is lost, and the inventor spent a lot of time and money without getting an effective patent.

The court recently affirmed the dismissal of criminal charges against the vice president of an Internet service provider who had been reading e-mails destined for the ISP’s customers – the folks with individual e-mail accounts.

This ISP wasn’t the traditional sort. The company’s primary business was to provide listings of out-of-print books. The ISP part, giving e-mail accounts to booksellers, was an add-on service.

The vice president of the ISP, Bradford Councilman, allegedly instructed his techies to implement a program that copied all incoming e-mail that contained the word “Amazon” into a special folder for him to read.

Purportedly, Councilman’s plan was to watch for competition from Amazon.com in used-book brokering and to counteract it. The feds charged Councilman with violating the federal Wiretap Act, and he fought back. He persuaded a federal trial court to dismiss the charge on the basis that his conduct did not constitute an illegal wiretap, and an appeals court affirmed that ruling.

The courts’ decisions both turned upon a technical interpretation of the Wiretap Act and on how e-mail technology works. Essentially, the courts noted that, whenever an e-mail is reconstituted while in transit, it is placed in some form of storage. The courts held that Wiretap Act does not cover “stored communications.”

Instead, it covers only communications in transit, such as taping a telephone call while it is occurring. Thus, the courts held that the Wiretap Act did not apply to Councilman’s conduct.

So how does this ruling affect you? It’s easy to see how it could impact the scope of protections for potential criminal defendants, and it might impact the privacy of ordinary e-mail users, too, although that’s less likely.

In the criminal arena, by statute, the government has made it harder on itself to get permission to run a wiretap than the Constitution requires.

The Constitution generally requires “probable cause” before a search warrant can be obtained. When police want a search warrant, magistrates receive the police assertions in private and issue the warrant if they believe probable cause exists.

Although a wiretap order seems like a type ofsearch warrant, it’s harder for the government to get one. Among other limitations, a court (not just a magistrate) must issue the order, the government must make a detailed and strong case for the wiretap, the order usually runs for only a short period of time, and the target must be informed of the wiretap within a reasonable time afterward.

Technology may have passed by the law here. Communications that we would have handled on the phone 10 years ago now often occur by e-mail.

Tapping telephones is covered under the Wiretap Act while e-mail, if this ruling stands, effectively is not. This means it would be a lot easier for the government to “tap” your e-mail than to tap your phone.

Probable cause still must be shown to a magistrate to gain access to e-mail, but the tougher requirements of the Wiretap Act could be disregarded. We don’t yet know whether the government will utilize this power. Sometimes law-enforcement agencies follow internal guidelines that are more restrictive than the law requires.

The Justice Department and other agencies could decide to consider the Wiretap Act applicable to e-mail “tapping” regardless of the Councilman case.

Outside of the criminal realm, it’s harder to tell if this case will reduce your e-mail privacy. On its face, the ruling makes it easier, if not legal, for your ISP to read your e-mail.

Yet at least two things should dissuade your ISP from doing so. First, no ISP wants the customer-relations hit that would come from being found to have read customer e-mail (aside from mechanical spam filtering). Second, ISPs (at least major ones) maintain policies on the privacy of their customers.

Those policies should state clearly whether and when the ISP will read the content of e-mail or divulge it to others. If an ISP says it won’t read or divulge your e-mail (without a court order) and then does so, it likely would be engaging in a deceptive trade practice that could be prosecuted by the Federal Trade Commission.

Also, this ruling shouldn’t change the landscape concerning the privacy of your e-mail versus folks other than your ISP.

Careful employers preserve the legal ability to read any of your work-account e-mail on the grounds that you are using an employer-provided tool.

As for your home e-mail account, if someone hacks into an e-mail server, they likely have criminal and civil issues aside from the Wiretap Act.

In the end, Congress can clarify the whole issue. It can amend the Wiretap Act to make it apply expressly to e-mail, or it can set other rules for e-mail. Yet, in this post-September 11 era, in contrast to J. Edgar Hoover and Watergate times, it’s debatable whether we wish to impose the high strictures of the Wiretap Act on e-mail monitoring by law-enforcement agencies.

How much would you pay to not have to change the name of your business or key product?

Unfortunately, businesses often are faced with such potentially catastrophic problems because they failed to perform trademark clearance on a business name or product name before putting that name to use.

Sometimes young companies fail for this reason. Sometimes successful companies find they must pay substantial sums to keep their product or business names.

For example, Microsoft paid $5 million in 1998 to a small, bankrupt, Illinois-based Internet service provider, SyNet, Inc., to clear Microsoft’s right to continue using the name “Internet Explorer” for its Web browser. Microsoft launched its browser under that name in 1995, but had failed to detect that obscure SyNet had been using the same name since 1994 for Internet surfing software.

Trademarks signify the origin of goods or services, such as “McDonalds” for fast food or “Jiffy-Lube” for oil-changing services.

The owner of that trademark is entitled to preclude anyone else from using it, or any confusingly similar mark, to promote the sale of identical or even similar goods or services. If consumers would be confused by the use of a similar mark by a newcomer, the newcomer can’t use it.

Most folks know instinctively that you cannot ape the name of an existing trademark when naming your product, service or business. But it may not be obvious that you can be forced to change your name if, even unintentionally, you choose one that is confusingly similar to an existing trademark.

Indeed, you can go so far as to obtain a federal trademark registration and still be forced to change your name afterward.

You don’t need a registration to have some trademark rights. You have limited, common-law rights just by being the first in your market area to use a product or business name for particular goods or services. Yet, you can strengthen these rights and strengthen your ability to expand your market area by obtaining a statewide or, better yet, federal trademark registration for your product or business name.

When you apply for registration, a trademark examiner will examine the roll of existing trademark registrations issued by that body (i.e. the federal trademark office looks only at federal trademark registrations, and a state looks only at its registrations). That examiner will not permit registration if there are existing registrations that are confusingly similar for similar goods or services. If no confusion or other problems exist, you’re on your way to registration.

Many assume that obtaining such registration cements your trademark rights. It doesn’t. The trademark-examining attorney may miss a conflicting registration, or a competitor and court may have a different view of what is confusingly similar.

Also, that trademark-examining attorney doesn’t take into account common-law marks. If someone has been using a confusingly similar mark for similar goods or services in your market, that person’s rights are not wiped out by your obtaining a trademark registration. That person still could later object to your mark and force you to abandon your trademark registration and change your name.

I’ve seen this happen several times. For example, I’ve seen a regional-services firm forced to pay a substantial sum to continue using its name when a much smaller but older company of the same name challenged it. That regional services firm assumed that its federal trademark registration made its name bulletproof. This firm ended up learning an expensive lesson on the necessity of performing trademark clearance research.

This case wasn’t an aberration. Such challenges occur frequently. Indeed, sometimes the company forced to change its name goes out of business because it cannot survive the loss of goodwill.

Finally, many small businesses sometimes assume they have locked up the trademark rights to their business or product names due to some unrelated registration process.

For example, they assume they have done so by securing a corporate name from a state authority (such as Virginia’s State Corporation Commission), or registering a “trading as” name with the state or a county, or registering a Web domain name.

Not so. Such actions do not create trademark rights. Trademark rights arise only from using a trademark in commerce to promote the sale of goods or services, and trademark registration strengthens those rights.

Especially when in startup mode, it’s tempting financially to put this clearance issue off until business is good. But if business becomes good, it’s likely that you have built significant goodwill behind your product, service or company name. Your trademark’s goodwill may be your most valuable asset.

If you build this goodwill on a platform that cannot withstand inspection, because of failing to conduct trademark clearance research, the legs could be kicked out from under your business at the most inopportune time.

A twist in how some open-source software items (including Linux) are licensed soon might turn software companies, who are used to being copyright predators, into copyright prey.

If I am right, it won’t be long before you regularly see the words “GPL” and “copyleft” in the business press.

Open-source software is software in which the source code (code humans can read) is distributed along with the object code (code that be read only by a computer). Usually, open-source software is distributed without charge, and the recipient of the code has the right to copy, modify and further distribute it without owing anything back to its supplier.

Open source is the opposite of proprietary software – software in which the owner earns money by charging license fees for usage. A company that sells licenses to proprietary software almost never will divulge its source code and will strictly limit copying and further distribution of it. Linux is open source, Windows is proprietary.

Yet, while most open-source software is available free of charge, it usually isn’t in the public domain. The people who wrote the open-source software own the copyrights to what they wrote. These authors grant to others the right to use their code by utilizing one of a variety of open-source license agreements.

In one camp are various license agreements that don’t require much other than giving credit to the original authors and passing along warranty disclaimers.

In the other camp is the “general public license” (or “GPL”) maintained by Free Software Foundation.

The GPL differs from other open-source license agreements because of its “copyleft” provision. The Free Software Foundation believes that proprietary software companies have used copyrights to stifle freedom of software development, so it turns the tables by using copyrights to require freedom in software development.

The copyleft provision says that, if you incorporate software governed by a GPL license into your software, you have to license your software under the GPL too.

If your code is governed by the GPL, you cannot limit (or charge for) copying or further distribution of your code, and you must make the source code available to all recipients of your code. Thus, as the code evolves in the hands of successive developers, it must retain the openness mandated by the GPL.

Makers of proprietary software once regarded the GPL with its copyleft feature as an amusing but irrelevant left-wing experiment. Now, proprietary software makers see GPL software as a threat to their product lines.

Some items of GPL software have become so accepted that programmers at proprietary software companies might be tempted to grab portions of GPL code for incorporation into proprietary software. Even a small portion of open-source code implanted into what is intended to be a proprietary software product could be a big problem for the product’s maker.

The GPL says that software must be licensed under the GPL if it “in whole or in part contains or is derived from” GPL open-source software.

This line in the GPL causes worry at proprietary software companies. How related does proprietary code have to be to open-source code for the proprietary code to be sucked into the GPL’s coverage? No court has analyzed this issue.

Proprietary software makers fret because, if GPL open-source code is integrated into their software products, either or both of two bad things could happen:

They could be forced to license their products under the GPL (thereby destroying their licensing-for-profit business model).

No U.S. court has yet ruled on what the effect would be of violating the GPL by incorporating GPL software into a proprietary product.

Various unresolved legal questions exist regarding the enforceability of the GPL.

Yet, in April, a German court ordered a Dutch company, Sitecom, to cease distribution of its software product until it complies with the GPL because the Sitecom product contained some GPL software.

The German case likely is a harbinger of things to come in the United States. Because of the cut-and-paste nature of software development, I suspect (but do not know) that a substantial number of proprietary software products have been infected with the GPL “virus.”

But, if such violations exist, does anyone have the incentive and muscle to assert them against proprietary software makers?

The Free Software Foundation, the caretaker of the GPL, contends it regularly enforces the GPL through private persuasion, but it hasn’t proven its power and stamina in a U.S. court yet.

Still, some for-profit (if not profitable) technology companies now have a financial stake in the success of open source or at least would benefit from the demise of rivals who make proprietary software. These companies likely will find a way to uncover and assert violations of the GPL copyleft provision by adversaries.

If only we could find a way to scare businesses straight on intellectual property rights the same way my high-school driver’s ed teacher used to scare kids straight on the dangers of driving irresponsibly.

I have vivid memories of the Ohio State Police films shown in my ninth-grade driver’s ed class. We saw films such as “Mechanized Death” and “Wheels of Tragedy” – 1960s and ’70s films that showed dead teenagers being scraped off pavement and peeled out of demolished cars. This was the original reality TV.

In the legal world, I often feel like the ambulance driver in those police films. I arrive on the scene of a business tragedy that could have been prevented by some advance intellectual property planning.

All too often, young businesses create products or services, find some commercial success, and only then seek intellectual property protection for the new products or services.

These businesses have a loose awareness that something called “intellectual property” exists and that, perhaps, intellectual property protection can be erected to prevent competitors from becoming copycats.

Intellectual property rights, such as patents and copyrights, can perform that function. A patent on an invention can prevent competitors from making, using or selling something that includes the patented item or manufacturing process. A copyright can protect against unauthorized copying of an original work, such as a software program.

Yet, what these businesses don’t know is that a business does not own the patent rights or copyrights to something just because it paid to have the thing created. Instead, often the employees or contractors of the company own these intellectual property rights.

First, consider patent rights. Generally, unless there is a written agreement to the contrary, employees own the patent rights to inventions they create, even if the employee created the invention on company time, using company resources, and even if the invention was within the subject matter of the employee’s work.

At best, the employer usually has only a “shop right” to continue to use that invention in its business. The employee owns the patent rights and, after obtaining a patent, the employee might be able to sell or license the patent to others or to go into business himself.

Sometimes, the employer will own the patent rights if the inventing employee was hired to invent a particular type of thing or process, or if the inventing employee was a senior company official with responsibility for the part of the business that produced the invention. Yet, employers rarely gain patent rights using these arguments.

As for contractors who create inventions, the contractor almost always will own the patent rights unless there was a written agreement assigning ownership of patentable inventions to the hiring company. This is so even if the hiring company pays for all the work done.

As for copyrights, employers fare a little better. Generally, an employer owns the copyrights to what an employee creates on company time and using company resources. Some situations are legally hazy, so it’s best to address copyright ownership in writing, such as in an employment agreement.

On the other hand, a contractor will own the copyright to what that contractor creates, even if the hiring company paid the full cost of creating the work. There are some situations where the hiring company will own the copyright if the parties agree in writing that the item created was a “work made for hire,” but those situations are rare. Thus, for the hiring party to gain copyright ownership, it should obtain a written copyright assignment from the contractor.

The contractor problem frequently sinks young technology companies, especially software firms. Because of the freelance nature of the software programming community, such companies often use contractors to develop software. Yet these companies commonly fail to obtain, in advance, copyright assignments from the programmers.

Without such assignments, each contractor-programmer usually owns the copyright to what he created. Yet the software company wants to sell licenses to its software, and a software license essentially is a copyright license. It’s difficult to license and to protect legally what you don’t own.

By the time legal counsel is called, usually the software is nearly finished or already being licensed. At that stage, usually the contractor-programmers have been paid and have almost no incentive to cooperate on the copyright issue.

Either they will give up their newly discovered copyrights only for extortionate prices, or they claim they can’t give up copyright ownership because they want to use the same code over in other projects. Companies confronted with this problem often crumble.

All of this can be avoided with planning. You can put in place, before the work begins, written agreements that assign copyrights and patent rights to the hiring company. You can require future cooperation in obtaining patent and copyright registrations.

Like the bloody accidents in the films, these tragedies are preventable. No one can stand seeing young folks die needlessly. I’m tired of seeing promising businesses die needlessly.

Perhaps you’ve noticed in the news litigation concerning ownership of the intellectual property rights to Linux, the open-source software operating system. This litigation highlights a legal risk that users of open-source software should understand.

Speaking broadly, open-source software is software in which the source code (code humans can read) is distributed, free of charge, along with the object code (code that be read only by a computer). Generally, open-source software is shared freely for others to copy and improve, with the stipulation that whoever makes further improvements will make their source code available to all.

Linux is the household-name example. It has achieved significant usage on corporate servers, and IBM is conducting an expensive advertising campaign to promote it (to run on hardware it sells, implemented using its consulting services).

IBM is involved in messy litigation concerning Linux. A Utah-based company, SCO Group, has sued IBM claiming that IBM programmers inserted into Linux some copyrighted Unix computer code owned by SCO. Unlike Linux, Unix is proprietary code – code that is licensed for a fee with the source code kept confidential by its owner.

Doubt exists as to whether SCO owns the copyrights to Unix. Another software company, Novell, claims to own these copyrights. SCO asserts that, through a predecessor company, it acquired the copyrights to Unix from Novell.

Regardless, SCO has threatened copyright-infringement litigation against corporate users of Linux. SCO recently sued AutoZone, a Linux user, to demonstrate its seriousness.

The IBM-SCO litigation raises a question every Linux user must ponder. Is using Linux worth the legal risk of possibly being sued for copyright infringement by SCO?

There is some safety in numbers. SCO purportedly has sent letters to about 1500 corporate Linux users threatening copyright infringement suits and asking them to purchase Unix licenses from SCO to make the threat go away. Especially if you did not receive one of SCO’s letters, the odds are against you getting singled out next because SCO can’t afford to sue everyone.

But this issue goes further than just SCO and Linux. Almost without exception, a supplier of any open-source software will not give to you any warranty that using the software will not infringe upon the copyrights of others.

On the other hand, a maker of proprietary software usually will agree to defend any suits filed against you asserting copyright infringement and to pay any court judgment entered against you for such infringement.

You generally don’t get such an indemnity and defense from distributors of open-source software. Thus, if you get sued for infringement based upon your use of the open-source code, you’re likely on your own. Worse yet, intellectual property infringement litigation is quite expensive.

To see why the infringement risk is real with all software (open source and proprietary), consider how software is written. Most software applications contain millions of lines of code. Software programmers sometimes grab lines of code to use in software development projects. Sometimes legal corners are cut, in that the “borrowed” software is someone else’s copyright property. Software development has much in common with the making of sausage and legislation.

Of course, in order to “borrow” code owned by others, a developer must have access to it. Companies that sell proprietary software guard the source code to such software like crown jewels. Thus, it may not be easy to just casually grab proprietary code for open-source development. Yet, some developers will have had access to proprietary code through present and past employment and contractor relationships.

As for corporate users of Linux, the SCO litigation has prompted some companies with a stake in Linux’s success to offer modest protection.

Red Hat, which distributes Linux code with its sales of Linux support, now offers to replace Linux software if an intellectual property issue arises regarding it. Red Hat also has created a fund to assist in paying the legal expenses of those sued for infringement over Linux use. Another fund has been started by a coalition of Linux supporters. Hewlett-Packard offers indemnification from any claims by SCO to some customers who purchase systems containing Linux.

On the other hand, IBM has not offered any indemnity or defense to customers who might be sued by SCO.

The general sense in the IT community is that IBM probably will defeat SCO in court (because the community believes that Linux will be found to not infringe upon any copyrights to Unix) and, consequently, the SCO storm will pass.

Yet, because of the cut-and-paste way in which some software developers work, it’s likely that we’ll see other intellectual property infringement claims made about open-source software by other makers of proprietary software. One must keep this risk of expensive litigation in mind when evaluating the total cost and benefit of using open-source software.

Google's AdWords program presents an exciting marketing opportunity and potential legal threat to small businesses. Are the potential sales worth the risk?

Perhaps you've noticed in Google search results that sometimes pink text boxes appear on the right side of the screen under the heading "sponsored links." These boxes contain brief advertisements triggered by your search terms. Any business with a credit card and a Web site can purchase such advertisements at Google's Web site through its AdWords program.

AdWords might grasp the Holy Grail of advertising - reaching only consumers interested in your kind of product exactly when they enter the market. It does so by combining the dominance of Google's search engine with two online targeting mechanisms.

First, you select the search words or exact search phrase that will trigger the appearance of your online ad, so your ad reaches only targeted shoppers. You even can roughly determine the region of the country where the ad will run, because Google can make educated guesses about the location of Web surfers based upon their Internet Protocol addresses.

Second, you pay for your ad on a per-click basis (anywhere from five cents to fifty dollars a click), so hopefully you are paying only to reach shoppers who might be interested in buying from you. Google allows you to set a cap on what you pay per click and on how much you spend per day on advertising.

Google's automated process determines the placement of your ad and the price per click based upon the size of your ad budget, the nature of your product and the popularity of your advertisement.

Beware that the most valuable AdWords advertising might create trademark infringement problems for both the advertiser and Google.

With rare exceptions, no trademark problem should arise from buying an ad keyed to a descriptive phrase (such as "Richmond used car dealer") because, absent a ton of spending on advertising, usually no one can claim such a phrase to be their trademark property.

But can you trigger your paid ad to appear when the searched term or phrase is someone else's trademark?

You might do so for any one of a variety of legitimate purposes, such as to sell that product ("we sell Acme cars for less"), to suggest an alternative product ("test drive an Ajax; you'll like it better than an Acme"), to sell a complimentary product or service ("we specialize in repairing Acme cars"), or to sell a used item ("best prices on used Acme cars").

Each of these types of ads should not cause you legal problems in traditional advertising media, provided your advertising claims are true and you don't falsely suggest an affiliation with the trademark owner.

Yet, the unique nature of online advertising and the aggressiveness of some trademark owners make the fate of such AdWords advertising uncertain. Potentially, litigation risks could persuade Google to no longer allow ads keyed to the trademarks of others. Also, some trademark owners might sue anyone keying Google ads off of their trademarks.

This issue hangs on a trademark concept called "initial interest confusion." It's trademark infringement to entice someone into your store based upon a false impression that you sell a certain brand of goods when, in fact, you sell something else.

For example, Joe's Burgers can't rent a billboard on the highway saying "McDonald's - Next Exit" when the only burger joint there is Joe's. Some folks might pull off the highway enticed by the prospect of McDonald's, find only Joe's and decide to go with it.

Google's AdWords program should pass trademark muster. No one should be confused - anyone with Web common sense will recognize that the pink boxes under the heading "sponsored links" are paid ads linked to the search terms. As long as the text you choose for your ad doesn't suggest a nonexistent affiliation with the trademark holder, there shouldn't be an initial interest confusion problem.

Still, Google takes a cautious stance here. Its automated process has accepted many ads keyed off of the trademarks of others. Yet, it accepts complaints from trademark owners and reserves the discretion to remove the offending paid ads. For example, at eBay's request, Google agreed to not sell any ads based upon a search for "eBay."

Yet, interestingly, eBay has purchased AdWords ads based upon the trademarked search terms "Nike" and "Barbie." Perhaps Google agreed to block ads keyed to "eBay" for customer-relations reasons, not legal ones.

Regardless, the issue of what Google legally can do in selling ads linked to trademarks hasn't been resolved. Google is litigating a pair of AdWords cases concerning the initial interest confusion issue. Eventually, the courts will determine whether trademark holders should be allowed to effectively eliminate any advertisements posted next to search results that key off their trademarks.

The World Wide Web has existed since 1991 and it's been legal to use it for commercial purposes since 1996. Yet, the Copyright Office still has not developed a reasonable way to register copyright ownership in a Web site. Nothing prevents the Copyright Office from doing so other than its bureaucratic intransigence.

Copyright is the intellectual property right that protects creative works, such as music, books and plays, from unauthorized copying by others. It also is the primary vehicle for protecting the content of Web sites.

Authors own copyrights to works just by creating them. If I doodle on a piece of paper, I own a "common law" copyright to that doodle the second I complete the drawing.

Yet, a "common law" copyright doesn't give you much protection. To be able to sue copyright infringers, you have to register your copyright with the Copyright Office.

Indeed, to have access to special monetary damages (called "statutory damages") against an infringer, you have to register your copyright before that infringer steals your stuff. In the court's discretion, statutory damages can be as high as $30,000 per work infringed, or $150,000 per work if the infringement was willful.

Oftentimes, if you cannot obtain statutory damages against an infringer because you didn't seek registration until after the infringement began, you may not be able to recover any money for the infringement.

If you register your copyright only after the infringer strikes, you can still sue to recover your actual damages plus the profits gained by the infringer by virtue of the infringement, but that number might be incalculable and could be zero.

The problem with obtaining copyright registration for Web sites is that they evolve over time after first being published, and Copyright Office procedures don't accommodate that fact.

This failure to accommodate evolution grows from an outdated view, implicit in the structure of our copyright laws, that creative works (such as novels) are produced to completion in private and only then published to the world.

The copyright laws consider additions to copyrighted works after initial publication (such as chapters added to an old book) to be independent copyrightable creations ("derivative works" in copyright-speak).

Such thinking is fine for books and plays, but Web sites evolve constantly after being put online.

Trapped in its offline mindset, the Copyright Office insists that a separate copyright registration application must be filed for each material change in the Web site, because the Copyright Office considers each evolution of the Web site to be a new derivative work. Thus, you would have to file one application for the Web site as originally posted, and an additional application for each subsequent, material modification to the site.

For some Web sites, this means a new copyright registration application would have to be filed every day, starting with the date the site was first online.

Because of the time and financial burden of such a task, this effectively means that owners of frequently changing Web sites cannot create and maintain copyright registration protection for their Web sites.

Congress wrote the copyright law, and that law does not require the Copyright Office to be unhelpful here. The federal law governing registration empowers the Copyright Office to permit filing a single registration for a group of related works. The Copyright Office has failed to exercise this power to create a user-friendly way to register copyright ownership in Web sites despite pleas from the Web community.

The Copyright Office offers some consolidated registration procedures, but none of them fit the Web well. For example, it permits consolidated filings for newspapers and other periodicals published on a schedule.

It also permits consolidated registration for "automated databases." Some data-retrieval oriented Web sites might be able to gain some protection from this option. Yet, the Copyright Office created this special procedure in the 1970s, and it doesn't fit the copyright needs of Web sites well.

Indeed, this "automated database" registration procedure predates the launch of the Web (in 1991) and the posting for download of the first reasonably usable Web browser ("Mosaic," in 1993).

It's time for the Copyright Office to serve the needs of the Web community. As the Web slowly supplants hard copy as the dominant means of distributing written and graphic products and services, it becomes increasingly important that copyright registration protection be available for Web content.

Our free-enterprise economy depends on strong, clear property rights, and the Copyright Office is undercutting the availability of enforceable property rights in Web content.

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