Copyright And Patent Fraud

.. became involved in this lawsuit with a motorcycle parts and repair shop called the Hog Farm in San Jose, California, in 1991. The Hog Farm owners argued that a hog referred to any large motorcycle. In this case, Harley-Davidson filed for a trademark of the nickname hog, and was able to win the case. (Fritz 30) An article in the Los Angeles Times reports that on July 5th, 1995, Federal agents raided a stuffy yellow warehouse in downtown Los Angeles, where twelve men were cheating the Chanel Clothing Company of large profits.

These few men make money by copying Chanel’s crossed C logo and selling the fake product with a 500-per cent markup. (Simon A1) Most counterfeiting products tend to be cheaply made, using flimsy plastics, inexpensive polyester, or cheap screen printing machines. However, some products are so real that even the legitimate business owners can not tell the difference. One particular factory counterfeited Gucci watches that looked so real, even the actual Swiss experts had a difficult time determining the authenticity of the watches. (Simon A1) Roth 9 Although investigators have discovered such odd products counterfeited as soy sauce and doggy chews, (Simon A1) for the most part, product knock-offs are expensive items like designer jeans or sunglasses that are easy to make. Counterfeiters take normal denim blue jeans and slap on a cheap, home-made designer label of an expensive clothing line like Calvin Klein jeans. Another favorite item to counterfeit is sunglasses. Consumers pay top dollar for designer sunglasses with special lenses to block the sun. As many know, counterfeiters mold cheap plastic frames together, put a sticker on them, and ship them to pawn shops, street vendors, or anywhere else people will buy them.

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Most counterfeiters realize that what they are doing is illegal, but they always say that they are not really hurting anybody. The truth is that aside from the companies with their sales losses, people really are getting hurt. Some counterfeit products can really endanger the public’s safety. Over the last 20 years, fake airplane bolts have caused damaged engines, fake birth control pills have caused internal bleeding, and counterfeit brake pads have caused fatal car accidents. Although there are many serious cases of product fraud, small counterfeiting operations like the one in downtown Los Roth 10 Angeles are the most familiar.

Los Angeles and New York are considered the nation’s counterfeiting capitals. Factory workers involved with the Chanel counterfeiting barely moved their heads when the Federal agents raided the building. They realize the agents are after the person running the factories, and not the workers. They have seen it all before, and they know the drill. (Simon, A1) Another problem is that when these sweatshops get raided, no one really knows who is in control of them. The boss of the operation stays low key and has someone manage the factory. If one operation gets busted, the boss simply moves on to a new location and product, hires all new workers, and starts all over again. To combat all this counterfeiting, there are several ways in which one can protect, or patent a product, slogan, or logo.

First, the product or mark should be sent to the U.S. Patent and Trademark Office in Washington, D.C. The product will start with state protection, and then will later be registered for federal protection. Many people incorrectly believe that simply by incorporating, that they are protecting their company names. However, Roth 11 incorporating does not mean that they have registered their names within the state or the federal government.(Munro 53R.) To register for protection, an application must be filled out that requires information about the company or the person registering the trademark.

The current application fee ranges from about $245 for a simple database search to about $1,200 for a typical patent office search. (Patents) Persons are entitled to federal registration only if there are plans to use the mark in more than one state. The record search can be done by the business owner or by a specialized trademark lawyer. Next, the application is inspected as to form and substance. It must initially comply with the formal requirements set forth in the Patent Laws and Rules of Practice of the United States Patent Office. (Mandell 24.) If the trademark application is approved, then the Patent Trademark Office will issue a certificate of registration within 15 to 18 months.

The certificate issued by the Patent Office is good for 20 years after the filing date, although it must be renewed every five years thereafter. (Munro 53R)(Patents.) Spending money for trademark protection in a young business may seem expensive to begin with, but will be worth the trouble to avoid litigation in the future. According to Debora H. Shavarese, a trademark attorney in the Dallas office of the Roth 12 Hopkins & Sutter law firm, The key is to protect your business’s mark before you invest time and money in advertising and product development. Protection may seem cost-prohibitive at the beginning, but it’s worth it. The whole value of a catchy name is no good if you can’t use it. (Maynard 12) Because the problem of copyright infringement and counterfeiting have reached such enormous proportions worldwide, there are now organizations that specifically concentrate on fighting these counterfeiters. Serving as copy cops in a way, groups such as the Software Publishers Association (SPA) and the Business Software Alliance (BSA) are winning substantial copyright infringement settlements.

These software industry groups are often successful because of tips from laid-off or disgruntled employees who report massive illegal infringement on the part of their former companies. As an example, in December of 1994, a posse of federal marshals, attorneys, and software piracy auditors appeared at the offices of Southern Benefits Consulting in Dallas, Texas. Representing their plaintiffs Microsoft Corporation and Novell, Inc., they conducted a surprise audit of the insurance company’s Roth 13 computers. The on-the-spot audit was allowed by a court order after Microsoft and Novell filed a sealed complaint of massive copyright infringement. In just a few hours, the audit of one hundred PCs produced sufficient evidence to reap a $110,000 out-of-court settlement.

(Alster E1) Once the SPA has gathered enough evidence to proceed in any case, it can then move in one of three ways. If the case is small and there is only a small amount of infringement, the SPA will issue a cease-and-desist letter. This letter is usually the only step needed for the infringing company to understand they must stop. The second measure is to confront the company and offer them the option of conducting an audit of all the computers in the company as opposed to litigation. The third and most serious cases usually end up in court immediately without previous warning.

As with every new addition to the modern world there comes both advantages and disadvantages. Currently the Internet is causing many different battles over copyrights, fraud, and creator royalties. A new law was just passed that will in the future let performers receive royalties when their pieces of music are played over the Internet.(web) Roth 14 Consumer Fraud in America is a tremendous problem, and it is not going away any time soon. People all across the globe are suffering from fraud of some type, and many are fighting back. It is going to be a long time, however, before the problem is all resolved if it ever can be.

Copy cats now have to watch out because the copy cops are out. Works Cited Baer, Marjorie. Making Sure Web Content is Legal: Industry Legal Issue. Macworld October 1996. 163.

Copyright Pirates Raid 2.5 billion From Record Industry Revenue. USA Today. 27 November. 1995: 6. Estok, David. The Clone Crackdown. Maclean’s 1 July 1996.

30. Fritz, Sandy. What do you Call a Big Pig? Popular Science. March 1994: 30. Ludwig, Eugene, and Koenig, Eric.

Importing a Fraud: Gray market Products. USA Today (magazine). March 1990: 26-28. Mandell, Irving. How to Protect and Patent your invention. New York: Oceana, 1973.Fritz, Sandy.

Maynard, Roberta. Protect your Trademark Before you Start Using it. Nation’s Business September 1993. 12. Melcher, Richard A. Is it Finally Miller Time? Business Week 12 February 1996.

37. Miller, Jerome K. Applying the New Copyright Law: A guide for educators and Librarians. Chicago: ALA, 1979. Munro, Billie. When you want a ‘R’ Rating.

Nation’s Business June 1995. 53R. Patents FAQ: URL: http:// Reske, Henry J. Dye is Cast: Color can be Trademarked. ABA Journal June 1995.

28. Simon, Stephanie. Brash World of Bogus Goods Thrives in L.A. Los Angeles Times. July 1995: A1+.

Web of Confusion: URL: http://infolawalert.com/stories/120195a.html Wells, Melanie. O. J. Agrees to Sell Rights to his Initials. USA Today 22 February 1996: 1.

What do you Call a Big Pig? Popular Science. March 1994: 30.