What Is Intellectual Property Infringement?

What Are the Four Types of Intellectual Property?

Many forms of intellectual property can be broadly split into four categories: trademarks, patents, copyright, and trade secrets. To understand IP infringement, it’s helpful to understand what these property types entail.

• Trademarks
  Trademarks are words, phrases, and designs that are connected to products for sale and help consumers tell brands apart.
• Patents
  Patents give inventors the exclusive right to make and sell their inventions for a set period of time.
• Copyright
  Copyright gives owners and/or makers of original artistic creations the exclusive right to copy, display, perform, and distribute these creations for a certain number of years.
• Trade Secrets
  Trade secrets are pieces of business information whose value comes from being closely held and known by few.

Can Intellectual Property Be Stolen?

Intellectual property infringement is commonly referred to as intellectual property theft. This is a useful illustrator, but it can be a bit misleading.

While IP infringement involves the misuse of creations and/or company secrets, stealing physical property is not a requirement. Theft typically involves illegally taking tangible property.

So IP infringement can involve theft—the stealing of a physical customer list, for example, or someone taking a company hard drive with them at the end of employment—but it doesn’t always. In many cases of IP infringement, the owner still has access to their property even if someone else is using it without permission.

But semantics aside, the improper use of intellectual property can certainly feel like theft. And just like theft, intellectual property infringement involves a violation of rights.

How does intellectual property infringement occur?

One of the trickiest aspects of intellectual property infringement is that it often happens on the sly. Having your business broken into is usually obvious: a rock through a window, missing cash register, stolen merchandise. But intellectual property infringement might not leave obvious traces.

For example, if your song is sampled it could be years before you hear the bootleg version. If a similar brand to yours starts using your trademark, you might not know until a customer points it out to you.

Because a lot of intellectual property exists out in the world, examples of misuse are in high supply. This is why having protections in place and monitoring for infringement is key.

What are the consequences of intellectual property violations?

Intellectual property infringement can be civil or criminal (or both) in nature. But quite often, IP misuse is a civil violation. Instead of jail time, the penalties for proven infringement frequently involve:

• Confiscation of infringed IP
• Fines involving damages and/or attorney fees
• A court order that prevents future infringement

Just as there can be consequences for violators of IP rights, misuse can lead to consequences for owners of IP. If your IP is infringed and you don’t take action, your rights will likely weaken over time.

At Northwest, we can help protect your business’s trademarks. Learn about our Trademark Service.

How to Stop IP Infringement

The best way to stop intellectual property infringement from occurring—or to find a remedy if it does occur—is to ensure you have safeguards in place.

Protecting your IP from the get-go often means:

• Maintaining and securing records
  By maintaining and protecting your records, you put yourself in a stronger position when infringement or misuse happens. Having proof that misused intellectual property is yours can help stop infringement and go a long way in the face of a legal proceeding.
• Using nondisclosure agreements (NDAs) and contracts
  NDAs are particularly useful when dealing with trade secrets. If signed by employees and any non-employees you work with, NDAs both encourage discretion and open up possibilities for legal action if the agreement is breached. Employee contracts can add protection as well. For example, an intellectual property clause within a contract might state that employee ideas or creations provided to the company are solely company property.
• Registering trademarks, copyrights, and patents
  One benefit of registering IP is that it gets added to an easy-to-search database. This is good for two reasons: Knowing that you have ownership rights discourages others from using your IP. Then, if the IP is misused anyway, registration offers a presumption of ownership, giving you a substantial head start if you take legal action.

What do I do if my intellectual property is infringed?

While taking preventative steps is an important part of protecting against IP infringement, misuse may still occur. If it does, lost revenue, broken contracts, and the overall severity of the situation will impact your next steps.

Common responses to intellectual property infringement include:

• Sending a cease and desist letter
• Suing for infringement
• Suing for breach of contract
• Filing a trademark opposition or petition to cancel registration
• Reporting criminal infringement to a government agency

Talking about your situation with an experienced IP attorney will likely prove useful if you want to pursue legal action.

Is IP theft a federal crime?

Federal law defines numerous types of intellectual property infringement as a federal crime. Here are a few examples of IP misuse that are federal violations:

• Counterfeit trademarks, labels, and packaging
• Copyright infringement where at least 10 copies of material (worth a minimum of $2,500) are reproduced or distributed within six months
• Theft of trade secrets with the intention of aiding a foreign government

Who do I report intellectual property crime to?

If the violation of your IP rights is criminal in nature—for example, if counterfeits of your goods are being sold—you can report misuse to numerous U.S. government agencies. Here are a couple:

• National Intellectual Property Rights Coordination Center
  The purpose of the IPR Center is to organize the actions of the United States when responding to IP violations. To achieve this goal, they partner with various businesses and government agencies. You can report IP infringement to them directly, then they’ll coordinate a response.
• Local FBI Field Offices
  IP crime can be reported to any of the 56 FBI field offices stationed throughout the country.

Examples of Intellectual Property Infringement

Infringement and misuse of your intellectual property can occur even if you’ve taken ample precautions. Below are a couple examples of intellectual property infringement—one involving copyright and another focused on patents.

Looking for trademark examples? Check out our page on trademark infringement.

Example of Copyright Infringement

In this 1992 case, ideas about fair use were front and center, alongside the question of when permission from an artist is needed before using their work.

Art Rogers vs. Jeff Koons
After photographer Art Rogers learned that artist Jeff Koons used one of his photos as the basis for a series of sculptures, Rogers sued for copyright infringement. He won.

The original black and white photo features a man and woman sitting on a bench, holding armfuls of puppies. The sculptures were slightly different—rendered in color, for example—but are clearly based off the image. Koons’ case was hampered by ample documentation of him telling his sculptors to refine the art until it more closely resembled the original image, of which he’d torn off the copyright notice.

Koons argued fair use and parody, which are both protected by copyright law. He claimed that his sculptures weren’t copies of the photograph, but rendered something new and culturally valuable. Both the District Court and Appellate Court disagreed. Koons had to turn over the infringing material and later reached an out-of-court settlement with Rogers.

Why does this matter?
The outcome of this case was good news for copyright owners. Ultimately, it boils down to a simple truth: had Koons gotten permission to base his work off the copyrighted photograph, we wouldn’t be talking about this case at all.

Example of Patent Infringement

This plant patent case, which was affirmed by the U.S. Supreme Court in 2013, is a great example of how far-reaching patent rights can be.

Bowman vs. Monsanto
In this case, soybean farmer Vernon Bowman was sued by agriculture super-giant Monsanto. The corporation claimed Bowman had infringed their patents by saving seeds harvested in one crop and replanting them for future crops.

Monsanto prohibits the act of saving-and-replanting in its licensing agreement. However, the seeds in question were purchased from a third party sans agreement. Bowman did not initially know which of these seeds were Monsanto’s and which weren’t (though he did employ farming techniques to ultimately figure it out).

Bowman argued he was protected by “patent exhaustion,” a doctrine that says once a patented product is sold, the owner of the product can legally use or sell it. The District, Federal, and U.S. Supreme Court all disagreed with Bowman’s argument in relation to his particular case.

Monsanto was awarded $84,456 in damages.

Why does this matter?
Large companies pay attention to how their IP is being used, even by relatively small players. Corporations like Monsanto are often willing to spend a lot of money to protect and enforce their intellectual property rights, and the reality of relatively small possible damages may not be a deterrent.

The point isn’t the money awarded, it’s the long term protection of their IP. For any IP owner, this is a distinction to keep in mind.

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*This is informational commentary, not advice. This information is intended strictly for informational purposes and does not constitute legal advice or a substitute for legal counsel. This information is not intended to create, nor does your receipt, viewing, or use of it constitute, an attorney-client relationship. More information is available in our Terms of Service.