August 16, 2019  New Jersey Law Journal

Protecting Internet Inventions: Four Different Paths

By Jonathan D. Bick Jonathan Bick is of counsel at Brach Eichler in Roseland. He is also an adjunct professor at Pace and Rutgers law schools, and the author of 101 Things You Need to Know About Internet Law (Random House 2000).|

The Internet has resulted in a myriad of new ideas and associated inventions. Because the Internet is protocol-driven rather than being subject to a set of regulations, four actions will protect most Internet inventions. Internet inventions come in four major categories. The specific action or combination of actions depends upon the nature of the Internet invention.

Changing the Look and Function of an Internet Site

Internet ideas which change how an Internet site looks and operates are part of the first category of Internet inventions. The look and feel of an Internet site are determined exclusively by the Internet’s protocols related to system operation and interface formats. For example, interface formats are primarily implemented using the Joint Photographic Experts Group construction (JPG or JPEG), Portable Network Graphics formulation (PNG) and Graphics Interchange Format (GIF).

Copyright registration is best used to protect system operation and interface formats and hence the “look and feel” of a website. The “look and feel” of a site comprises a combination of the site’s color schemes, fonts and layouts. To the extent that these are sufficiently original, a copyright registration can be used to prevent others from publishing similar-looking websites.

Copyright rights arise upon use, and thus registration is not absolutely necessary. However, copyright registration fees cost about $35 and allow the copyright holder to assert intellectual property rights much more cost effectively than asserting common law copyright. Registered copyrights have a presumption of validity and, unlike common law copyrights, do not require the copyright holder to prove exclusive ownership or damages.

Thus, a registered copyright holder is the presumed winner of all copyright infringement litigations and the defendant infringer must prove this presumption wrong. Unauthorized copying of any copyright registered element of an Internet site results in statutory damage. Normally, copyright infringers are liable for at least $750 for each act of infringement whether they intended to infringe or the infringement was accidental.

Is the Internet Invention a Source of Goods or Services?

The second category of Internet inventions is those which provide novel sources of goods or services. Trademark law is best used to protect the Internet sources.

More specifically, trademark registration is probably one of the most effective ways of protecting an Internet source’s inventions. A valid trademark registration allows its owner to prevent others from doing similar business or providing a similar service under a “confusingly similar” source.

The confusing similarity standard of trademark law is fairly broad, including preventing misspellings, phonetic equivalents, and any other marketing or display techniques from being used by an entity other than the trademark holder for providing a specific set of goods or services. Additionally, in the Internet context, ownership of a valid trademark allows the owner to utilize the U.S. Anti-cybersquatting Protection Act or the Uniform Domain Name Dispute Resolution system to prevent bad faith competitors from registering similar domain names, as well as to protect the trademark holder from an involuntary transfer of their domain names.

Like copyright registration, trademark registration is not absolutely necessary. However, like copyright registration, the governmental registration fee, which may be as low as $225, is much more cost-effective than attempting to enforce an unregistered or common law trademark right.

Protecting the Idea Behind an Internet Good or Service

The idea behind a particular Internet good or service is the third type of Internet invention. Patent law is the only intellectual property law that is designed to protect ideas, whether they be Internet or traditional.

While Internet ideas that are entirely embodied in software itself cannot easily be patented, the underlying algorithms embodied in software are subject to patent protection. Patenting Internet software ideas is limited by the United States Supreme Court ruling in Alice Corp. v. CLS Bank International, which stated that “merely requiring generic computer implementation fails to transform [an] abstract idea into a patent-eligible invention.”

However, patent law can be used to protect Internet-related ideas that pass the tests of novelty and non-obviousness, if they incorporate a non-software element or provide an improvement to computer functionality, such as improvement to a user interface. In Tinder v. Bumble, 6:18-cv-00080 (2018), the court found that the use of a swipe was part of its Internet idea. As a result, the Internet dating site idea was more than simply a software embodiment of an Internet idea.

The Patent and Trademark Appeals Board (PTAB) has affirmed the patent-ineligibility of claims directed to a graphic interface but while doing so has suggested a path for patent eligibility for graphical interface patents. For example patent application  No. 13/189,844 discloses how an inexpensive widely used set of  complex software systems can be used to improve users’ performance by employing using a graphical interface to present data obtained from sensors and sensor systems. The PTAB found the invention would have been patent eligible if it had conveyed an improvement to the display. This may be interpreted as stating that patent eligibility would be granted for patent applications for a graphic interface invention that had a display improvement feature.

Similarly, the PTAB also affirmed the patent-ineligibility of claims directed to a picture (graphical) interface that allows medical personnel to document medical procedures and automatically generate billing information for the procedures. The PTAB, when considering Patent App. No. 13/103,129, found that the invention disclosure reduced time spent summarizing data details by changing the user interface but failed to identify and provide supporting explanation for additional elements that amount to significantly more than an abstract idea. This may be interpreted as stating that patent eligibility would be granted for patent applications for graphic interface inventions that identify and provide supporting explanation for the additional elements that reduced time spent summarizing data details.

Also it should be noted that Match v. Bumble Trading, Civil Action No. 6:18-cv-00080, found that U.S. Patent No. 9,733,811, a graphical user interface of a mobile device was not invalid. For these reasons, applicants should reconsider the patent applications that relate to graphic interfaces which had previously been rejected based on 35 U.S.C. §101 eligibility objections.

Some Internet ideas may be both sufficiently novel or nonobvious to warrant patent protection, but still cannot be patented due to the fact that the Internet idea merely requires generic computer implementation. For example, Facebook does not own the monopoly on social networking Internet sites. While their idea as implemented may have been novel and nonobvious, the general idea of social networking using a generic computer software implementation is too abstract to be eligible for patent protection. Instead, those seeking patent protection for Internet-based inventions should focus on inventions that include a non-software element or specific algorithms that improve computer functionality or other technological processes.

The cost to initiate a patent application may be as little as $140 in government fees. However, for budgeting purposes it is appropriate to expect to spend at least 10 times that amount in government fees for an issued patent.

Patent applications do not require attorney input. In fact, the United States Patent Office is required to help applicants file if they are not represented by an attorney. However, patent applications that are filed with help from patent attorneys are statistically significantly more likely to be issued. Such help can be expected to cost $4,000 to $14,000.

Inventions That Result in Innovative Ways to Use the Internet

The fourth category of Internet inventions are ideas which are associated with using the Internet in novel ways. Trade secrets law is one of the most effective tools to protect new ideas for using the Internet.

While copyright law can be used to protect ideas associated with the look and feel of the Internet, trademark law to protect ideas related to Internet as a source of goods or services, and patent law to protect ideas behind Internet goods or services, only trade secret law can be used to protect new ideas for using the Internet. More particularly, trade secrets law can be used to protect a new way of using the Internet from misuse by employees, consultants, investors, and a host of other third parties who contribute to using the Internet in a new way.

This protection is best afforded by the implementation of a well-drafted confidentiality or non-disclosure agreement in combination with technology that shields the trade secret owner from replication by another. Such technology includes encrypting communication, distributing operational function, and compartmentalizing implementation instructions.

A trade secret is, in the most general sense, information developed and used by a person or business to effectively run the business. Examples of trade secrets include client lists, marketing methodology, inventions, prototypes, implementation ideas, etc. The key for information to be legally classified as a trade secret is that it is not obvious or easily available from public sources (e.g., the Internet, yellow pages, etc.).

A confidentiality agreement, or non-disclosure agreement, is a contract where one of the third parties listed above promises not to disclose any trade secrets provided to him by the business creator about the business.

From a practical standpoint, a confidentiality or non-disclosure agreement acts as a deterrent. On the most basic level, the agreement is evidence that the parties to the agreement had some sort of relationship where potential “trade secrets” about a business were exchanged. A properly drafted and executed confidentiality agreement serves to deter third parties from “stealing” your business idea by effectively pointing out that, if they try to steal your idea, they can and will get sued, and that you will have good evidence to show that the trade secrets behind the business came from you.

Aside from the IP-heavy protection mechanisms outlined above, there is also no substitute for following basic business formalities. These include proper entity incorporation, partnership or shareholder agreements to outline rights and responsibilities between partners and investors, employment agreements, web development agreements, and a host of other contractual protections which can and should be used in any third-party business relationship.