Intellectual Capital Glossary

1999 Michael I. Shamos. All rights reserved

This hypertext glossary is a supplement to the author's course 45-886, Intellectual Capital and its Protection, at the Graduate School of Industrial Administration at Carnegie Mellon University. For explanations of abbreviations used in the glossary, see abbreviations. Please note: THIS GLOSSARY IS NOT, AND IS NOT INTENDED TO BE, A COMPLETE INTELLECTUAL PROPERTY REFERENCE. Only those terms are included that relate to the subject course. For information about proper legal use of this glossary, see the legal notice below. Please direct comments, correction and feedback to

abbreviations - The following abbreviations are used liberally in this glossary:
Cf. compare
et seq. and following
F.R.C.P. Federal Rules of Civil Procedure
IC Intellectual capital
US references to United States Supreme Court cases
U.S.C. the United States Code, the codified Federal statutes

absolute novelty -(Patent) The requirement in most industrialized nations other than the U.S. that an invention not have been disclosed publicly prior to the filing of a patent application. In the U.S., applicants have one year after publication of the details of an invention to file a patent application.

actual confusion - (Trademark) An incident in which a consumer or potential consumer has mistaken the source of goods or services. Actual confusion is not necessary for a finding of trademark infringement, but is a strong indicator of likelihood of confusion.

ADR - See alternative dispute resolution.

all rights reserved - (Copyright) Another phrase that does not mean what it says. In the U.S., all rights under copyright are preserved at the creation of work, and no magic words are necessary. The words "all rights reserved" (more properly "todos los derechos reservados") were required to preserve rights under the Buenos Aires Convention of 1910. They may still be required in Bolivia, the Dominican Republic, Honduras and Uruguay, countries that are parties to the Buenos Aires Convention but not the Universal Copyright Convention.

alternative dispute resolution - The generic term for means of resolving disputes outside the courtroom, such as arbitration and mediation.

assignment -

arbitrary - (Trademark) Said of a mark that has no meaning or significance in respect of the goods to which it applied. For example, "Apple" is arbitrary for computers because it has no meaning in the computer trade. "Apple" is not arbitrary for a perfume that smells of apples or a paint that is the color of an apple. An arbitrary mark is entitled to a high degree of trademark protection because no competitor is disadvantaged by being denied the ability to use the mark. Cf. coined word.

arbitration - An alternative to litigation using streamlined procedures in private before a single arbitrator or panel of arbitrators. In "binding" arbitration, the decision of the arbitrator is equivalent to the judgment of a court and may be filed in court for enforcement purposes. Such a decision is not generally appealable except upon an allegation of corruption or similar wrongdoing by the arbitrator. Most commercial arbitration in the U.S. is conducted under the auspices of the American Arbitration Association. Cf. mediation.

author - (Copyright) The creator of a work of authorship. In copyright law, all creators are known as authors, whether they are writers, painters, composers, dramatists or film directors.

barrier to entry - An obstacle, often financial, temporal or legal, that prevents or delays the entry of a competitor to a market. In fast-moving technologies, a barrier that delays entry (even by only a year), such as lack of know-how, may effectively be permanent. In more stable technologies, patents are the most effective barriers.

Berne Convention - An international copyright treaty known as the Berne Convention for the Protection of Literary and Artistic Works, dating from 1886 and now subscribed by more than 75 countries, including the U.S. Text of the Berne Convention. The United States became a party to the Berne Convention in 1988 and thereafter adopted the Berne Convention Implementation Act, effective March 1, 1989, to amend the Copyright Act to conform to certain Berne Convention provisions. The most notable change was the elimination of the requirement of copyright notice as a condition of copyright protection.

bond - An unconditional undertaking to make a payment on behalf of another. A common device to give security to a court, for example, to ensure that damages resulting from a seizure will be paid or to stay execution of a judgment pending appeal. The party who is required to post bond may either give cash or other assets to the clerk of the court or obtain a bond from a surety company. The bond may be "forfeited" upon the happening of certain events, in which case the surety must make good on the bond, for which the company charges a non-refundable fee regardless of whether it actually has to make any payment to the court. A bond is not an insurance policy. If the surety company actually has to pay, it may recover the full amount (in addition to the non-refundable bonding fee) from the bonded party. Security, which may be in the form of a bond, is required to obtain a preliminary injunction (F.R.C.P. Rule 64), a copyright seizure order under the Supreme Court Rules of Practice in Copyright Cases, or a trademark seizure order (15 U.S.C. 1116).

bootlegging -

brand equity -

- The international copyright symbol used to indicate a claim of copyright. Notice of copyright provides certain benefits in litigation but is not a prerequisite to copyright. The use and effect of the symbol are treated at 17 U.S.C. 401.

calculated intangible value - An intellectual capital valuation method developed by NCI Research based on the "excess return" of a business, that is, the amount by which a company's earnings exceed those of the average company in its business sector. Abbreviated CIV. View description of method.

cease and desist letter - A written communication demanding that a party stop engaging in infringing conduct. Generally the opening salvo in an intellectual property dispute. A cease and desist letter must be drafted carefully lest it subject the sending party to a declaratory judgment lawsuit in an inconvenient location.

certification mark - (Trademark) - A particular type of trademark that does not identify a source of goods but is an indicator of their quality or conformance to certain standards. For example, Underwriters Laboratories, owner of the "UL" certification mark, does not produce any goods but allows others to apply "UL" to those goods that have passed certain prescribed safety tests. A certification mark is defined in the Federal Trademark Act as " any word, name, symbol, or device, or any combination thereof … used by a person other than its owner … to certify regional or other origin, material, mode of manufacture, quality, accuracy, or other characteristics of such person's goods or services or that the work or labor on the goods or services was performed by members of a union or other organization." 15 U.S.C. 1127 Thus the "union label" used on clothing is a certification mark.

CFR - The Code of Federal Regulations.

Circuit Court of Appeals - An intermediate appellate court in the Federal judicial system, which is divided geographically into 11 Circuits. A Circuit Court hears appeals from District Courts within the Circuit. (The Western District of Pennsylvania is in the Third Circuit, which hears cases in Philadelphia.) Every litigant is entitled to an appeal as of right to a Circuit Court of Appeals (subject to rules against frivolous appeals.) Appeals from a Circuit Court of Appeals may be reviewed by the United States Supreme Court. See also Court of Appeals for the Federal Circuit.

claim - (Generally) An assertion of a legal right. For example, one whose copyright is infringement has a claim for copyright infringement, that is, the right to receive damages or sue for damages if the infringer does not grant satisfaction.
(Patent) Words "particularly pointing out and distinctly claiming the subject matter which the applicant regards as is invention." 35 U.S.C. 112. A legal description of the boundaries of an invention, roughly analogous to a verbal description of a parcel of land. Used in determining whether a patent is infringed. The claims are a required portion of a patent application and the issues of which claims to allow is usually hotly contested between the applicant and the PTO.

clean room - (Copyright) A procedure to make use of the unprotected elements of a copyrighted work without engaging in copyright infringement. The idea is to separate out the ideas embodied in the work and then have a team who has no access to the original work (in the "clean room") express the ideas in a second work which will be neither a derivative work nor a copy of the original. Clean room procedures succeed in their purpose if the steps are carefully documented.

Code of Federal Regulations - The set of rules and regulations made by Federal agencies through their rulemaking power conferred by statute. Regulations promulgated pursuant to this authority have the force of law to the extent they are not inconsistent with statute and may not be held invalid by the courts unless unconstitutional. Abbreviated CFR. The regulations concerning patents, trademarks and copyrights are contained in CFR Title 37.

coined word - (Trademark) A word that is invented and did not previously exist in the language of the country in which it is used. For example, "Xerox", "Kodak" and "Exxon" are coined words. Marks consisting of coined words are entitled to the highest degree of trademark protection. However, because they have no meaning and may be difficult to spell, pronounce or remember, significant expense is required to generate market significance for them. Cf. arbitrary.

collective mark - (Trademark) - A particular type of trademark that does not identify a source of goods but indicates membership in a particular organization. A collective mark is defined in the Federal Trademark Act as "a trademark or service mark … used by the members of a cooperative, an association, or other collective group or organization, … and includes marks indicating membership in a union, an association, or other organization." 15 U.S.C. 1127

Commerce Clause - The U.S. Constitution provides that "The Congress shall have Power … To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes." View text of Art. I., Sec. 8, Cl. 3. This is the basis for Federal involvement in trademarks and interstate theft of trade secrets. Cf. Intellectual Property Clause.

Community trademark - (Trademark)

confidentiality agreement - (Trade secret) Also known as a non-disclosure agreement.

conception - (Patent) ***. See also reduction to practice.

Constitution - The U.S. Constitution is intimately involved in intellectual property though the Commerce Clause and the Intellectual Property Clause, both of which are regularly invoked by the courts in interpreting intellectual property statutes. View text of Constitution.

contributory infringement - (Patent) The act of furnishing a component or ingredient (other than a stape article of commerce capable of substantial noninfringing uses) to another with knowledge that the component or ingredient is to be used to infringe a patent. Contributory infringement is patent infringement. 35 U.S.C. 271(c).

copyright - A bundle of five rights incident to the creation of a work of authorship: the right to (1) reproduce the work; (2) prepare derivative works; (3) make and distribute copies of the work; (4) perform the work publicly; and (5) display the work publicly.

Copyright Act - The statute, 17 U.S.C. 101 et seq., setting forth the entitlement of an author to copyright.

Copyright Office - The government agency charged with examining copyright applications and registering copyrights. The Copyright Office is part of the Library of Congress and therefore is within the Legislative Branch of government. Visit the Copyright Office. Cf. United States Patent and Trademark Office.

copyright owner - The party or parties entitled to exclusive exercise of the rights under copyright. The copyright owner may or may not be the original author of a work.

corporate name - The name under which an entity is incorporated. Cf. fictitious name, trade name. To keep corporate records organized, no state permits more than one corporation licensed to do business within its borders to have the same corporate name. A corporate name is not necessarily the name under which a corporation does business, and permission by a state to incorporate under a specific name is not a guarantee that use of the name (even within the state) will not infringe any trademark rights. View the Pennsylvania corporate name statute, 54 P.S. 501, which must be read in conjunction with 15 P.S. 5303, dealing with the form of corporate names.

corroboration - (Patent) It is a principle of patent law that a date of conception cannot proven through the inventor’s own uncorroborated testimony. Contemporary writings witnessed by others, or the testimony of non-inventors is required. This is the chief legal reason for careful maintenance of laboratory notebooks.

counterfeit - (Trademark) A counterfeit is "a spurious mark which is identical with, or substantially indistinguishable from, a registered mark." 15 U.S.C. 1127. Users of counterfeit marks are subject to the special seizure provisions of 15 U.S.C. 1116(d). Not all trademark infringement involves counterfeits. Sometimes marks are similar enough to cause confusion but are not "substantially identical." Trafficking in goods or services using counterfeit marks is also a criminal offense under 18 U.S.C. 2320. The penalties are enormous, but it is frequently difficult to get the U.S. attorney to prosecute under the statute unless the financial losses are also large.

Court of Appeals for the Federal Circuit - A intermediate Federal appellate court that hears (among other issues) appeals from the District Courts in patent cases and certain administrative appeals from the PTO. Also known as the "CAFC" or the "Federal Circuit". The CAFC has no role in copyright or trade secret cases. Decisions of the CAFC. Cf. Circuit Court of Appeals.

customer capital - The intellectual capital asset embodied in the relationships between an organization and the entities with whom it does business, including such ethereal concepts as trust, loyalty, reputation, confidence and quality. It also encompasses more concrete (though still intangible) notions such as contractual relationships, physical proximity to customers and human resources.

declaratory judgment - A form of lawsuit in which a court is asked to settle the outstanding issues between the parties to a controversy. The policy behind allowing such a lawsuit is that no one should have to suffer indefinitely under threat of a lawsuit, it being deemed better to allow the accused to bring the matter to resolution immediately. Declaratory judgments may be filed in Federal courts under the Declaratory Judgments Act, 28 U.S.C. 2201. Many states, including Pennsylvania, have similar declaratory judgment statutes.

derivative work - (Copyright)

design patent - (Patent) A special type of patent protecting a "new ,original and ornamental design for an article of manufacture". 35 U.S.C. 171. A design patent is infringed "if, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other." Gorham v. White, 81 US 511 (1871). Read article "Design Patents: Alternative Protection for Articles of Manufacture", by Julie H. Richardson. The term of a design patent is 14 years from date of grant. 35 U.S.C. 173.

descriptive - (Trademark)

destruction - (Copyright, Trademark)

diligence - (Patent) Cf. due diligence.

dilution - (Trademark) .The eroding of distinctiveness of a trademark through use on non-competing goods or services, that is through use which by itself is not likely to cause confusion but tends to degrade the source-indicating significance of a mark. "The owner of a famous mark shall be entitled, subject to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark …". 15 U.S.C. 1125(c).

distinctive - (Trademark)

disclosure -
(Trade secret)

discovery - The process of exchanging factual information, testimony and documents prior to trial. Discovery is obtained from unwilling persons or parties by subpoena. The test in Federal court for whether material is discoverable is that it be non-privileged and "relevant to the subject matter involved in the pending action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. The information sought need not be admissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence." F.R.C.P. Rule 26(b).

District Court - A trial court of the Federal judicial system, which is divided geographically into 91 Districts. (Pittsburgh is in the Western District of Pennsylvania, one of three Federal districts in the Commonwealth of Pennsylvania.) Appeals from a District Court (except patent appeals) are heard by a Circuit Court of Appeals.

diversity - Diversity of citizenship between parties exists when they are citizens of different states. The Federal courts have jurisdiction to hear non-Federal matters where the "amount in controversy" exceeds $75,000 and there is diversity of citizenship. 28 U.S.C. 1332. If diversity exists when a case is filed in state court, it may removed by either party to the Federal District Court in the district in which the state court sits. 28 U.S.C. 1441.

due diligence - The process of investigating a company or possible investment when one has a fiduciary or other legal duty to do so, as in the case of an acquisition by a public company.

Economic Espionage Act of 1996 - (Trade Secret) A Federal statute, 18 U.S.C. 1831 et. seq., making it a crime to steal trade secrets relating to a product that is in interstate or foreign commerce. The penalties are horrendous.

enabling disclosure - (Patent) The requirement of 35 USC 112 that a patent application contain "a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same …".

European Patent Office - Visit the EPO.

ex parte - A term referring to a hearing or procedure conducted in the absence of an opposing party. For example, the patent application process is ex parte because no party is involved in the review of an application except the applicant and the PTO. Anyone who is aggrieved by the issuance of a patent make take up the issue in inter partes fashion after issuance of the patent. Certain court proceedings may be held ex parte even when the identity of the opposing party is known. For example, seeking a seizure order against a trademark infringer often occurs ex parte because notifying the infringer of a pending court hearing would give him the opportunity to hide the goods to prevent the seizure. In general, ex parte court proceedings are suspect because of the fundamental due process right of a litigant to have notice and an opportunity to be heard. Therefore, whenever ex parte orders are issued they may be challenged in the same court within a short time (usually 3-10 days) by the party adversely affected.

fair use - (Copyright) A limitation on the exclusive rights of a copyright owner. "[T]he fair use of a copyrighted work, including such use by reproduction in copies or phonorecords …, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. " 17 U.S.C. 107. Stanford University maintains an entire website devoted to fair use.
(Trademark) It is a defense to trademark infringement to use "a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party, or their geographic origin". 15 U.S.C. 1115. This provision is consonant with the principle that merchants must be free to use the language to describe their goods. Likewise, it is not dilution to fairly use a famous mark "in comparative commercial advertising or promotion to identify the competing goods or services of the owner of the famous mark." 15 U.S.C. 1125(c).

false designation of origin - (Trademark) Any words or symbols used in connection with goods or services that tends to deceive the public as to the source of the goods or services. False designation of origin is actionable under the Trademark Act, 15 U.S.C. 1125(a), whether or not a trademark is involved. For example, it is false designation of origin to state on goods "Made in U.S.A." if the goods were made elsewhere.

famous mark - (Trademark) *** Famous marks are now entitled to Federal trademark protection even without proof of likelihood of confusion. 15 U.S.C. 1125(c)

Federal Circuit - See Court of Appeals for the Federal Circuit.

Federal Rules of Civil Procedure - Rules enacted by Congress governing the procedures used in Federal District Courts. Abbreviated F.R.C.P. Rule 1 states that the rules "shall be construed and administered to secure the just, speedy, and inexpensive determination of every action", an admonition frequently ignored by lawyers and their clients. View text of rules.

fictitious name - A name under which an entity does business other than its corporate or other legal name. In most states it is legal to use a fictitious name provided that the name is registered with the state, is not being used for fraudulent purposes and is not confusingly similar to any corporate name registered in the state. View the Pennsylvania fictitious names statute, 54 P.S. 301.

first to file- (Patent) The principle, not followed in the U.S. but in most other industrialized countries, that, as between two claimants to the same invention, priority is awarded to the first of them to file a patent application, regardless of who was the first inventor. No concept of diligence is necessary in first-to-file countries. Cf. first to invent.

first to invent - (Patent) The principle, followed in the U.S. but not in most other industrialized countries, that, as between two claimants to the same invention, priority is awarded to the first of them to invent, not necessarily the first to file. The first inventor is the first to conceive the invention provided that he exhibits diligence in reducing the invention to practice, even though one who conceived later may actually be the first to reduce the invention to practice . See conception, reduction to practice.

functional - (Trademark)

GATT - The General Agreement on Tariffs and Trade ***.

general intangibles - The category of assets upon which a security interest may be filed that includes intellectual property.

generally inventive - (Patent) An employee is "generally inventive" if he has been employed for his overall inventive skills (e.g. the head of a laboratory or the VP of Research and Development), in which case the employer owns all of the employee’s inventions that relate to the business of the company. Cf. specifically inventive.

generic - The property of an asserted trademark that it names a category of goods or services hence is ineligible for trademark protection because it does not identify a single source for the goods. For example, "screwdriver" is generic for a certain hand tool and an alcoholic drink but is not generic for computers or perfume. Cf. descriptive.

goodwill - An elusive, ill-defined concept that has at least three definitions:
1. The amount by which the purchase price of an entity exceeds its book value, based on the precept that no one pays for nothing, so that if more than book value is paid it must have been for something intangible, all tangible assets already having been reflected on the balance sheet.
2. (Trademark) The reputation of a supplier for producing goods or services of a particular character or quality. Goodwill is associated with a trademark through the tendency of the public to identify the mark with that particular supplier.
3. The public persona of a business, encompassing its image, reputation, expertise and various other intangibles.

gray-market goods - Goods that are genuine (i.e. made by the claimed source) but are being sold or offered for sale outside an authorized sales territory. For example, if Lanvin grants ABC Corp. the exclusive right to market Lanvin products in the U.S. but Lanvin's Mexican distributor ships the same products into the U.S. they are gray-market -- genuine but unauthorized. By contrast, "black market" goods are not even genuine.

Hague Agreement - A treaty known as the Hague Agreement for the International Deposit of Industrial Designs, originally signed in 1925 and now including 29 signatory states (but not the U.S.). See general information or text of treaty. See also industrial design.

human capital - That form of intellectual capital that resides in the knowledge and skills of human resources. Human capital is lost to an organization (and becomes available to a competitor) when the human embodying it leaves the organization. To become structural capital it must be recorded in some tangible form or used to modify the structure or procedures used by the organization.

impoundment - Holding of goods in court until adjudication concering right sto the goods can be determined.

importation -
(Patent) One of the rights of a patent owner is the right to prevent importation into the U.S. of articles that infringe a U.S. patent or were made by a process patented in the U.S. 35 U.S.C. 154.
(Copyright) It is illegal to import into the U.S. unauthorized articles of foreign manufacture that infringe a registered copyright of a U.S. entity. See 19 U.S.C. 1595a.
(Trademark) It is illegal to import into the U.S. any foreign-made article bearing the registered trademark of a U.S. entity without permission. The United States Customs Service, upon invocation of certain procedures, will conduct a seizure of such articles. See 19 U.S. 1526.

inducement of infringement - (Patent) Urging another to engage in patent infringement. Inducing infringement is patent infringement. 35 U.S.C. 271(b).

industrial design -

industrious collection - See sweat of the brow.

inequitable conduct -

infringement -
(Patent) A patent is infringed if any one or more claims of the patent is infringed.
(Trade secret) Trade secrets are not said to be "infringed", but misapproprated.

infringement opinion - (Usually patent) A formal, written legal opinion rendered by a patent attorney stating whether an invention infringes upon any claim of a given patent or all patents known to the attorney after diligent search. A well-reasoned infringement opinion stating that a party is not infringing a patent will, even if incorrect, save the party from enhanced damages for willful infringement. See also patentability opinion.

Injunction - A court order directing a party, and usually all persons operating in cooperation with that party, to refrain from performing a certain act. Rarely, a court order directing a party to perform an act, in which case it is known as a mandatory injunction. Violations of injunctions are punished by the issuing court by means of a contempt proceeding. See also preliminary injunction.

Intangible value chain - (IC) The series of links in the flow of knowledge within a business sector. The chain is identified by asking the questions: (1) what information drives the business; (2) who possess the knowledge; and (3) to whom is the knowledge valuable (i.e. who will pay for it).

Intellectual Property Clause - The U.S. Constitution provides that "The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." View text of Art. I., Sec. 8, Cl. 8. This is the basis for Federal legislation concerning patents and copyrights. Cf. Commerce Clause.

Invalidity - A defense to patent infringement consisting of the claim that the asserted patent should not have been issued or its existence should not be continued. A patent is presumed valid. However, a court may find that issuance was improper because of a statutory bar, prior art not considered by the PTO, inequitable conduct on the part of the applicant during prosecution or patent misuse.

Intellectual capital - Information or knowledge captured in a useful form that gives an organization a competitive advantage over those that do not possess, or may not legally use, the information. Intellectual capital includes intellectual property but also encompasses other categories of non-protectible information, particularly customer capital, human capital and structural capital.

Intellectual property - Intellectual capital that is legally protectible, falling primarily into the categories of patent, copyright, trademark and trade secret, but sometimes deemed to include non-competition agreements and unfair competition law.

Inter partes - Between parties. The opposite of ex parte. Certain PTO proceedings, such as oppositions, are inter partes, meaning that two or more opposing sides participate in the proceedings.

Inventor - (Patent) One who has contributed to the complete conception of an invention. To be an inventor one need not personally participate in reduction to practice. Likewise, one who reduces to practice but did not conceive is not an inventor. A patent that incorrectly names inventors is invalid and unenforceable.

Irreparable harm - One of the required tests for issuance of a preliminary injunction. The movant must show that he will suffer harm that cannot be compensated in money damages unless the injunction issues.

Know-how - Knowledge of processes used to run a company’s business or manufacture its products. Know-how may or may not be protectible as a trade secret. Cf. show-how.

Knowledge management - (IC) The organized process of marshalling, recording, structuring, disseminating, completing and protecting knowledge within an organization.

License - An agreement not to assert the right to prevent another from engaging in a certain activity. Commonly, but incorrectly, viewed as a permission (incorrectly since the grantor-licensor may not have the power to give all the required permissions.) An intellectual property license generally involves an agreement not to assert infringement. See also exclusive license, non-exclusive license.

Licensee - A person or entity to whom a license is granted.

Licensor - A person or entity granting a license to another.

Likelihood of confusion - The touchstone of trademark infringement. ***. Cf. actual confusion.

Madrid Agreement - (Trademark) A treaty known as the Madrid Agreement Concerning the International Registration of Marks, originally signed in 1890 and now including 60 signatory states (but not the U.S.). See general information or text of treaty.

Manual of Patent Office Examining Procedure - A document issued by the PTO to inform its patent examiners and the public of the policies and procedures used in examining patent applications and granting patents. Abbreviated MPEP. The MPEP, unlike the Code of Federal Regulations, does not have the force of law. View the MPEP text.

Market-to-book ratio - A measure of the relative value of a company's intellectual capital. If the excess of book over market is an indicator of the value of a company's intangibles, the ratio permits comparison of companies having differing market values. Cf. Tobin's q.

Mediation - A procedure used by parties and courts to assist in the settlement of disputes. A court may recommend that the parties present their arguments and evidence to a mediator, who renders a non-binding decision, which the parties are free to accept, reject or modify. The utility of mediation is that it gives the parties the benefit of an opinion by an unbiased observer and may cause the parties to rethink the relative strengths of their positions, possibly leading to settlement and freeing of the court's time.

MFN - See most favored nation.

Most favored nation -

Movant - A party that presents a motion to a court. The movant always bears the burden of persuasion to justify the motion.

MPEP - The Manual of Patent Examining Procedure.

NAFTA - See North American Free Trade Agreement.

National treatment -

National Conference of Commissioners on Uniform State Laws - A body, organized in 1892, to promulgate laws for which uniformity among the states is beneficial. See, e.g., Uniform Commercial Code, Uniform Trade Secrets Act. Visit the conference website.

Non-competition agreement - A contract under which a party agrees not to compete with another party for a certain time, in a certain field of business and/or in a certain geographic territory.

Non-disclosure agreement - See confidentiality agreement.

Non-obviousness - (Patent) The requirement of 35 U.S.C. 103 that an invention, to be patentable, must not "have been obvious at the time the invention was made to a person having ordinary skill in the art" to which the invention pertains." Obviousness is judged based on prior written materials. See also novelty, utility.

North American Free Trade Agreement - Abbreviated NAFTA.

Novelty - (Patent) The requirement of 35 U.S.C. 102 that an invention, to be patentable, must not have been "known or used by others" in the U.S., or described in a printed publication anywhere, prior to its invention. See also absolute novelty, non-obviousness, utility.
(Trade secret) In some states, novelty is a requirement for the existence of trade secret,

Opinion of counsel - A formal written document by an attorney or law firm evaluating a set of facts in light of applicable law and stating a legal opinion as to the consequences of those facts. In intellectual property, opinions of counsel are sought because they may have the effect of mitigating damages or providing the client with certain legal defenses in court even if the opinion should turn out to be incorrect. Opinions of counsel are regularly given in acquisitions and mergers to the effect that the seller is the owner of certain intellectual property free and clear of certain claims. The issuer of the opinion may bear legal liability to the buyer if the opinion is incorrect. See infringement opinion, patentability opinion.

Ordinary observer test - The test, now over 100 years old, for infringement of a design patent.

Organizational capital - Knowledge that has been integrated into the ***. A form of structural capital.

Patent - The right, granted by the government after a formal application process, to exclude others from making, using, selling or importing an invention. 35 U.S.C. 154.

Patent Act - The statute, 35 U.S.C. 1 et seq., under which Congress exercises its power to grant patents.

Patent agent - A non-attorney who has passed a special examination administered by the U.S. Patent and Trademark Office. Patent agents are permitted to prepare and file patent applications, but may not render legal advice on such matters as infringement or license agreements.

Patent attorney - An attorney who has passed a special examination administered by the U.S. Patent and Trademark Office and has been admitted to the Patent Office bar.

Patent Cooperation Treaty - A treaty to harmonize the patent laws among a large number of countries and give national treatment to the citizens of contracting states. See text of treaty, U.S enactment of the treaty and general information about the treaty.

Patent pending - (Patent) A designation on an article that means only that a patent application (even a provisional or design patent application) has been filed claiming the article or the process used to manufacture the article.

Patent misuse - Behavior by a patent owner that exceeds the patent grant. Because a patent confers a limited monopoly, which is antithetical to free trade, exceeding the patent grant has antitrust implications and may be punished by forfeiture of the patent or inability to enforce it against a wronged defendant. See, e.g., tying.

Patent search - (Patent)

Patentability opinion - A formal, written legal opinion rendered by a patent attorney that states whether an invention meets the statutory criteria for patentability in light of the prior art and the facts known to the attorney. See also infringement opinion.

PCT - See Patent Cooperation Treaty.

Plagiarism - An academic and moral offense but not a legal one unless it rises to the level of copyright infringement or false designation of origin.

Piracy - A popular term whose legal meaning (certain crimes on the high seas, 18 U.S.C. 1651) has nothing to do with intellectual property. The term is used colloquially to mean misappropriation of intellectual property, especially by parties in foreign countries beyond the reach of U.S. law.

Preliminary injunction - An injunction usually issued soon after the commencement of legal proceedings to restrain further performance of the acts complained of by the plaintiff, such as infringement. A preliminary injunction is dissolved upon final judgment in the case unless replaced with a permanent injunction. A preliminary injunction will not issue unless the moving party demonstrates that it would suffer irreparable harm if the injunction is not granted. The moving party is required to post security to protect the enjoined party from damage in the event the preliminary injunction turns out to have been erroneously granted.

Prior Art - (Patent) The body of existing technology and knowledge (patents, publications, existing products, etc.) in the field of an invention. Prior art describing a technology for which a patent is being applied may serve to make the invention unpatentable due to lack of Novelty. An invention can also fail to meet the non-obvious requirement if it is merely an obvious extension or progression from the prior art.

PTO - See United States Patent and Trademark Office.

- The registration symbol, used in the U.S. to mean that a registration has been issued by the Patent and Trademark Office for the designated trademark. The registration symbol may not be used for unregistered marks. Cf. TM.

Reduction to practice - (Patent) The elaboration of the conception of an invention into (1) a working prototype or example ("actual" reduction to practice); or (2) an enabling disclosure ("constructive" reduction to practice). Since a proper patent application must contain an enabling disclosure, reduction to practice always occurs on the filing of such an application, although it may occur earlier.

Removal - Moving a case from state court to a Federal District court is possible when the Federal court would have had jurisdiction originally and, in non-Federal matters, when there is diversity of citizenship and no defendant is a resident of the state in which the case was brought. 28 U.S.C. 1441. The possibility of removal is an important factor in choosing a court in which to sue and in deciding what type of action to bring.

Royalty - Consideration paid for a license to intellectual property generally based on some measure or percentage of revenue or profit realized from the intellectual property by the licensee.

Secondary meaning - (Trademark) The tendency of a mark to indicate the source of the goods to which it is applied. (The "primary meaning", a term that is never used, is the meaning of the literal words if the mark, if any.) For example, the primary meaning of "Windows", when applied to computers, is a set of rectangular boxes on a computer screen. The secondary meaning of "Windows" is Microsoft Corporation. .

Security - Something of value, usually but not necessarily money, given to ensure that a payment will be made. For example, a bank may require security in the form of a lien on property in order to give a loan. If the loan is not repaid, the bank may use the security to satisfy the debt. See bond.

Security interest - *** See also general intangibles.

Seizure - A drastic but legal preliminary remedy for certain kinds of infringement. A Federal court may order the United States Marshal to confiscate and impound allegedly infringing articles pending trial. Since it may turn out later that the allegation was incorrect, the party seeking seizure must post a bond to protect the party whose items were seized. The remedy may even be granted ex parte in certain circumstances (meaning that the defendant has no chance to oppose the seizure in advance).
(Copyright) The United States Customs Service is authorized to seize at importation any unauthorized articles of foreign manufacture that infringe a registered copyright of a U.S. entity. 19 U.S.C. 1595a.
(Trademark) The United States Customs Service is authorized to seize at importation any unauthorized articles of foreign manufacture bearing the registered trademark of a U.S. entity. 19 U.S.C. 1526.

Service mark - (Trademark) - A service mark is a trademark applied to services rather than tangible goods. It is defined in the Federal Trademark Act as "any word, name, symbol or device or any combination thereof, … used by a person … to identify and distinguish the services of one person, including a unique service, from the services of others and to indicate the source of the services, even if that source is unknown." 15 U.S.C. 1127.

SM - An informal designation indicating that the used of a particular marks claims service mark rights. See also TM.

Shop right - The narrow right of an employer whose equipment or materials have been used without permission by an employee to make an invention that is not owned by the employer, to a non-exclusive royalty-free license to practice the invention (sometimes limited to the facility in which the invention was made).

Show-how - Knowledge of how to train others in the use of a company’s methods and processes. Differs subtly from know-how, but both are forms of intellectual capital.

Specifically inventive - (Patent) An employee is "specifically inventive" if he has been employed to make a particular invention, or inventions in a particular field, in which case the employer owns the relevant inventions but not others. Cf. generally inventive, shop right.

Status quo - The last uncontested status of the parties before the present dispute arose. (The term is a contraction of "status quo ante", literally the "state before".) The status quo may be preserved by a temporary retraining order or an injunction..

Statutory bar - (Patent) One of a number of actions that by statute preclude an inventor from obtaining a patent. For example, the appearance of an enabling disclosure in a printed publication, or public use or offer of the invention for sale, more than one year prior to applying for a patent is a statutory bar.

Structural capital - Intellectual capital (knowledge) that does not merely reside in the heads of individuals but has been embodied in the structure of an organization, for example, in its formulas, processes, procedures, written standards, policy manuals, organization charts and competitive intelligence.

Subpoena - A document issued under the authority of a court commanding a person to attend a hearing or trial or commanding a person to produce or permit the inspection or copying of documents. An attorney admitted to practice before the Federal court in which a case is pending may issue subpoenas under his own signature. F.R.C.P. Rule 45. Failure to obey a subpoena is punishable as contempt of court.

Supreme Court - The highest appellate court n the Federal judicial system. It hears appeals selectively from the Circuit Courts of Appeals (including the CAFC) by a process known as certiorari, in which the Supreme Court itself decides which appeals it will consider.

Sweat of the brow - (Copyright) The discredited idea that works should be protected simply by virtue of the fact that substantial effort is required to create them, and it is unfair to allow others to benefit from the investment of others. Sometimes known as "industrious collection". The notion was dealt a death blow by the Supreme Court in Feist Publications, Inc. v. Rural Tel. Service Co., 499 U.S. 340 (1991), popularly viewed as holding that white pages telephone directories are not copyrightable. There has been a recent attempt to revive sweat of the brow through special legislation to protect databases.

Technology transfer - A term describing the process of moving intellectual property from the hands of its creator to those capable of working the intellectual property.

Temporary restraining order (TRO) - A extraordinary remedy in the form of a court order preserving the status quo until a full hearing can be held to determine whether a preliminary injunction should issue. A temporary restraining order can be granted without notice to the adverse party, but such an order cannot remain in force for more than 10 days. F.R.C.P. Rule 65(a)(2).

TM - An informal designation indicating that the user of a particular mark claims trademark rights. May be used for unregistered marks, whether or not application for registration has been made. Cf. . See also SM.

Tobin's q - A metric develop by James Tobin (Nobel prize, 1981) now regarded as useful in valuing the intellectual capital of an entity. The q is the ratio of the market value of an asset to its replacement cost. The q is superior to market-to-book ratio in comparing similar companies because it masks the effect of different capitalization and depreciation policies.

Trade dress - (Trademark)

Trade name - (Trademark) The name under which an entity does business. For example, among the trade names of Carnegie Mellon University are "Carnegie Mellon" and "CMU". A trade name may, but does not always, function as a trademark or service mark. Cf. corporate name.

Trade secret -

Trademark - A trademark is defined in the Federal Trademark Act as "any word, name, symbol or device or any combination thereof, … used by a person … to identify and distinguish his or her goods, including a unique product, from those manufactured or sold by others and to indicate the source of the goods, even if that source is unknown." 15 U.S.C. 1127. Trademarks (properly called "marks") also include certification marks, collective marks and service marks.

Trademark Act - The Federal statute, 15 U.S.C. 1051 et seq., dealing with Federal registration and enforcement of trademarks and service marks. Also known as the Lanham Act.

Trademark Manual of Examining Procedure - A document issued by the PTO to inform its trademark examiners and the public of the policies and procedures used in examining trademark applications and issuing registrations. Abbreviated TMEP. The TMEP, unlike the Code of Federal Regulations, does not have the force of law. View the TMEP text. Cf. Manual of Patent Examining Procedure.

Trailer clause - A provision of an employment agreement obliging the employee to assign to the employer inventions made for a certain period after termination of the employment relationship. Informative article by Marc B. Hershovitz.

TRO - Abbreviation for temporary restraining order.

Tying - (Patent).

U.C.C. - An abbreviation for the Uniform Commercial Code. Unforntuantely, also an abbreviation for the Universal Copyright Convention.

Uniform Commercial Code - A uniform law, some version of which has been enacted in every state except Louisiana, governing commercial transactions (such as retail sales), banking transactions and security interests. It contains important warranties against infringement in Section 2-312. These warranties are automatically given (unless disclaimed) by any merchant who regularly deals in goods of the kind being sold Read the entire text of the UCC. The Pennsylvania enactment is at 13 P.S.

Uniform Trade Secrets Act - Not enacted in Pennsylvania. Read the Florida text of the UTSA.

United States Code - The the codified collection of laws enacted by Congress, abbreviated U.S.C. Not all laws are so codified, such as appropriations acts. View the entire Code.

United States Customs Service - An agency of the Treasury Department of Justice whose responsibility is to enforce the customs laws, which deal with collection of import duties and controlling importation of goods. The Customs Service is involved in intellectual property enforcement to the extent that it can conduct seizures of articles that infringe registered trademarks and copyrights. 19 U.S.C. 1595a.

United States Marshals Service - An agency of the Department of Justice whose mission is to "obey, execute and enforce all orders" of the Federal courts. The chief connection of the Service to intellectual property is the execution of seizure orders. The powers of Federal marshals are extraordinary. See 28 U.S.C. 561. The marshals may arrest without warrant and can "command all necessary assistance" to execute their orders.

United States Patent and Trademark Office - An agency of the Department of Commerce charged with examining patent and trademark applications, issuing patents and registering trademarks. The Office is part of the Executive Branch of government. Also known as the PTO. Visit the PTO. Cf. Copyright Office.

United States Supreme Court - Constitutionally the highest judicial authority of the Federal judicial system of the United States. All lower courts, both Federal and state, are bound to obey its rulings and precedent. It hears appeals in intellectual property cases by certiorari from the Court of Appeals for the Federal Circuit and the Circuit Courts of Appeals. Decisions of the Supreme Court.

Universal Copyright Convention - (Copyright) An international copyright treaty dating from 1952. It is not quite universal. See all rights reserved.

U.S. attorney - Employees of the Department of Justice whose primary responsibilities are to "prosecute for all offenses against the United States … [and] prosecute or defend, for the Government, all civil actions, suits or proceedings in which the United States is concerned." 28 U.S.C. 547. There is one U.S. attorney, appointed by the President for a four-year term, for each of the 91 judicial districts of the U.S.

U.S.C. - The United States Code, the codified collection of laws enacted by Congress. Not all laws are so codified, such as appropriations acts.

Utility - The requirement of the Patent Act, 35 USC 101, that an invention be "useful", commonly interpreted to mean "performs the function claimed for it in the patent application." See also non-obviousness, novelty.

UTSA - See Uniform Trade Secrets Act.

Valuation methods - See calculated intangible value, market-to-book ratio, Tobin's q, Value Added Intellectual Coefficient.

Value Added Intellectual Coefficient - A method of computing the value of an organization's intellectual capital useful for entities that use value-added accounting. Abbreviated VAIC. See example.

WIPO - See World Intellectual Property Organization.

Work-around - (Patent) ***.

Work made for hire - (Copyright) In essence a work that has been commissioned and therefore is not owned ab initio by its author but by the commissioning party. However, the term has a technically arcane, formal definition that does not correspond to any natural interpretation of its individual words. A "work made for hire" under the Copyright Act, is either (1) a work prepared by an employee within the scope of his or her employment; or (2) one of nine types of works (not including books or computer software) that may be the subject of express commissioning provided that the author and the commissioning party execute a written document expressly declaring the work to be a work made for hire. The meaning of "employment" in the first part of the definition is very narrow. See Community for Creative Non-Violence v. Reid, 490 U.S. 730 (1989). Sometimes known colloquially as a "work for hire", a term that has no defined legal meaning.

World intellectual Property Organization - An organization of 171 members states under the United Nations that administers various intellectual property treaties, including the PCT, the Madrid Agreement and the Hague Agreement. Abbreviated WIPO. Visit WIPO.


LEGAL NOTICE. This glossary has been posted to the World Wide Web for viewing and browsing only and is subject to change without notice. It may not be copied in any medium, mirrored or made resident on any computer system (except as incident to viewing) without the express advance permission of the author. Application for copyright registration has been made and the author's copyright remedies will be pursued vigorously. See, e.g., 17 U.S.C. 505. It is appropriate to refer to this document though a hyperlink instead of copying it.