Outline of the Legal and Regulatory Framework for Intellectual Property in the United States of America

Prepared by WIPO © 2010

Contents

General Background Information

Form of Government
External Relations, Industries, Trade, and Economic Cooperation

Intellectual Property System and Laws

Government Regulatory Agencies
Regulatory Framework and Current Issues
Enforcement and Adjudication
Awareness-Building and Education
Membership in Intellectual Property –Related Multilateral Bodies


General Background Information

Form of Government

The United States of America is a federal constitutional republic and representative democracy comprised of fifty states, the federal district and capital of Washington, D.C., and several territories, one incorporated [1] and five unincorporated.[2] Originally a collection of British colonies, thirteen soon-to-be States declared their independence from the Kingdom of Great Britain July 4, 1776; the independence of the Republic was recognized September 3, 1783, following the American Revolutionary War.  Additional states continued to join the Republic as a result of westward expansion through purchase, war, and settlement.

The current Constitution of the United States was adopted September 17, 1787, and ratified by all the existing states June 21, 1788.  The U.S. Constitution serves as the “supreme Law of the Land” (Article VI, clause 2) and structures the Federal Government according to three branches within an overlapping system of checks and balances:

  • Article I defines the Legislative Branch, which consists of a bicameral Congress—the Senate and the House of Representatives—with enumerated (i.e. express) powers including treaty approval and the authority to enact statutes for certain limited purposes such as“[t]o 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” (Section 8, Clause 8) and “[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes” (Section 8, Clause 3).  Congress also has implied powers under the so-called Necessary and Proper Clause: “To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof” (Section 8, Clause 18).
  • Article II vests the power of the Executive Branch in the President who is both Chief of State and Commander-in-Chief. The President and Vice President are elected through an indirect electoral college system instead of a direct vote.  Subject to Senate approval, the President appoints officers to administer and enforce federal laws and policies, including the regulation and enforcement of federal intellectual property rights.
  • Article III establishes the Judicial Branch in the form of one Supreme Court and inferior federal courts, as decided by Congress, to hear cases that require interpretation and application of the U.S. Constitution and the federal laws and regulations derived therefrom.  Today, 94 federal district courts hear new cases, and their decisions may be appealed to one of 12 regional intermediate appellate courts.  In addition, the U.S. Court of Federal Claims is a special trial court that hears all claims against the federal government, and the Court of International Trade is a trial court specializing in cases involving international trade and customs issues.  Meanwhile, the Court of Appeals for the Federal Circuit is an intermediate appellate court that has nationwide jurisdiction to hear appeals involving patent laws and cases decided by the Court of International Trade and the Court of Federal Claims.

Thus, the U.S. Constitution sets out the boundaries of federal law, including:

  • Constitutional acts passed by Congress (usually published in the Statutes at Large and codified in the consolidated United States Code),
  • Constitutional treaties ratified by Congress,
  • Constitutional regulations promulgated by federal agencies pursuant to the Administrative Procedure Act (usually published in the Federal Register and codified in the Code of Federal Regulations, and generally carrying legal force under the Chevron [3] doctrine, which provides judicial deference to a government agency’s reasonable interpretation of a statute it administers), and
  • Case law decided by the Judicial Branch (often carrying legal force under the common law principle of stare decisis). 

Meanwhile, reserved powers, which the U.S. Constitution neither delegates to the Federal Government nor forbids to the States, are reserved to the people or the States.  States, in turn, have delegated lawmaking powers to local agencies, townships, counties, cities, and special districts.  Thus, under U.S. federalism, citizens are subject to three levels of government: federal, state, and local.  However, all law is subordinate to the U.S. Constitution, and any law that contradicts the Constitution is unenforceable.  In addition, constitutional federal law may preempt state law either expressly or impliedly [4] (the state law presents an actual conflict or an obstacle to the structure and purpose federal statute, or the federal regulatory scheme is so pervasive as to “occupy the field” in that area of law [5]).

Each State is a separate sovereign with its own constitution, legislature, executive, and judiciary.  As part of its British colonial heritage, federal courts and most state courts operate on a common law system and use the principle of stare decisis (i.e., follow precedent); however, much U.S. law has diverged from English law in both substance and procedure since the American Revolution.  Generally, common law judges are allowed to liberally interpret laws unless and until the legislature specifically overrides their interpretations. 

The independent evolution of common law in most states has resulted in a high variance between the laws of different states as well.  Organizations like The American Law Institute (ALI) and the National Conference of Commissioners on Uniform State Laws (NCCUSL) have attempted to create more uniform state laws by circulating model laws based on common law principles, such as the NCCUSL’s Uniform Trade Secrets Act, which has now been adopted by 47 states.  Meanwhile, the ALI publishes Restatements of the Law, which summarize the current status of American common law according to the consensus of the U.S. legal community on subject matter steeped in the common law, and Principles of the Law, which express the law as it should be on topics in current need of legal direction.

Under the Erie [6] doctrine, federal courts no longer have the plenary power to create law unless it is linked to an interpretation of federal law (i.e., there is no general federal common law other than stare decisis), and federal courts must apply state law, including state common law, when there is no federal issue in a case of diversity jurisdiction.  Furthermore, only the U.S. Supreme Court (versus any other federal court) can bind state courts to an interpretation of the U.S. Constitution or any federal law.

It remains important to emphasize that a complete understanding of U.S. federal and/or state law requires reviewing case law to determine how judges have interpreted a particular codified statute or regulation.

Aggressive interpretations of parts of the U.S. Constitution like the Commerce Clause (Section 8, Clause 3) have resulted in the expansion of federal law into intellectual property-relevant areas like pharmaceutical regulation, antitrust, and trademarks.  Sometimes, this has manifested in a scheme that displaces state laws, such as the Federal Food, Drug, and Cosmetic Act (FDCA) enforced by the Food and Drug Administration, but in the case of antitrust and trademark law, strong federal and state laws coexist.
 

External Relations, Industries, Trade, and Economic Cooperation

The United States has a strong global political, military, and economic presence.  The U.S. economy is mixed, tending toward capitalism, with strong infrastructure and healthy productivity.  It continues to be a leader in science and technology innovation as well as the arts and business. 

The United States is a permanent member of the United Nations Security Council and hosts the U.N. headquarters in New York, New York.  As a member of the North Atlantic Treaty Organization, a military/security alliance, the United States agrees to mutual defense against external parties.  Membership in the Organization of American States is also aimed at multilateral collaboration.  Meanwhile, the North American Free Trade Agreement has created a trilateral trade bloc between the United States, Canada, and Mexico.


Intellectual Property System and Laws

Government Regulatory Agencies

Congress has delegated its powers to the following federal agencies:

  • U.S. Copyright Office under the Library of Congress (registers claims of copyright and records copyright transfers under the Copyright Code allowed by Article I, Section, 8, Clause 8, of the U.S. Constitution)
  • U.S. Patent and Trademark Office (USPTO) under the Department of Commerce (grants U.S. patents under the Patent Code allowed by Article I, Section, 8, Clause 8, of the U.S. Constitution and registers trademarks under the Lanham Act allowed by the Commerce Clause, Article I, Section 8, Clause 3, of the U.S. Constitution)
  • U.S. Food and Drug Administration (FDA) under the Department of Health and Human Services (administers the FDCA, including the maintenance of data exclusivity, patent term extensions, and other sui generis forms of intellectual property under the Act)
  • Plant Variety Protection Office under the Department of Agriculture (administers the Plant Variety Protection Act by issuing Certificates of Protection to breeders)
  • Indian Arts and Crafts Board under the Department of the Interior (administers the Indian Arts and Crafts Act)
     

Regulatory Framework and Current Issues

Copyrights

The U.S. copyright protection was established in Article 1, Section 8, Clause 8 (i.e., the Copyright Clause), of the U.S. Constitution: “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.”  Current statutory provisions relating to copyright are codified in Title 17 of the United States Code.  Federal regulations relating to copyright are located within Title 37 of the Code of Federal Regulations.  Federal copyright law has preempted state copyright law (both protection and enforcement) since 1978.

Copyright automatically attaches upon the creation of an original work of authorship; however, registration with the Copyright Office is beneficial in cases of litigation over the copyright and is necessary to obtain statutory damages in cases of infringement. 

Mask works or layout designs (topographies) of integrated circuits are protected under U.S. copyright law, although with more limited protections than other copyrightable works.

Unlike many other countries, the United States does not recognize moral rights of authors (traditionally a civil law concept) as part of copyright law—the author’s interest is secondary to that of the public (i.e., the creation and dissemination of more works).  The exception is the Visual Artists Rights Act of 1990 (VARA), which is part of the Copyright Code, but only applies to works of visual art and only considers the rights of attribution and integrity.  Instead, the United States has stipulated that moral rights (as required by the Berne Convention) are addressed sufficiently by other state and federal legal concepts, including:

  • Defamation
  • Passing off
  • Trademark law (e.g. Lanham Act § 43, which governs false and misleading advertising)
  • Right of privacy
  • Contract law

Some individual states have moral rights laws; however, they may be preempted by federal law, particularly VARA.

U.S. law does not differentiate between copyrights and related or neighboring rights.

Key international agreements affecting U.S. copyright law include:


Patents and Utility Models

The U.S. patent right was established in Article 1, Section 8, Clause 8, of the U.S. Constitution: “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.”  Congress implemented the right within a first-to-invent (versus the more common first-to-file) patent system, which is codified in Title 35 of the United States Code, and delegated authority over the patent system to the USPTO.  Federal regulations relating to patents are located within Title 37 of the Code of Federal Regulations.  Patents are exclusively governed by federal law.

The USPTO regularly publishes the Manual of Patent Examining Procedure (MPEP) for use by patent attorneys, agents, and examiners.  Through the use of examples, the MPEP describes all of the laws and regulations that must be followed in the examination of U.S. patent applications.

Three types of patents may be granted, including:

  • Utility patents (for any new, useful, and nonobvious process, machine, article of manufacture, or composition of matter, or any new, useful, and nonobvious improvement thereof),
  • Design patents (for any new, original, and ornamental design for an article of manufacture), and
  • Plant patents (for any distinct and new variety of asexually-reproduced plant, excluding tuber-propagated plants).

The current utility patent term is twenty years from the earliest claimed filing date but can be extended for to compensate for delay in obtaining FDA approval under the Drug Price Competition and Patent Term Restoration Act (a.k.a. the Hatch-Waxman Act), which amended and was consolidated with the FDCA.  The same amendment also allows for a quasi-patent right in the form of exclusive FDA approval, which is the equivalent of market exclusivity, for generic manufacturers.  In addition, market exclusivity is awarded for orphan drugs that have been developed specifically to treat rare medical conditions under the Orphan Drug Act, also administered by the FDA and consolidated in the FDCA.

Key international agreements affecting U.S. patent law include:

U.S. law does not provide for utility model protection.


Industrial Designs

U.S. law does not expressly provide for industrial design protection.  However, depending upon their characteristics, industrial designs may be protectable as U.S. design patents, copyrights, or trade dress.

Key international agreements affecting U.S. industrial design law include:


Marks

The U.S. trademark protection was eventually established under Article 1, Section 8, Clause 3 (i.e., the Commerce Clause), of the U.S. Constitution: “The Congress shall have Power [. . .] To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.”  Today, trademarks are protected both under the federal registration system, codified as the Lanham Act (Title 15, Chapter 22, of the United States Code) and administered by the USPTO, as well as under state common law, specifically the tort of unfair competition.  Both federally registered (must be used in interstate commerce) and common law trademarks may be protected under the Lanham Act; however, federal registration provides some advantages like shifting the burden of proof to the registrant’s favor in a trademark infringement suit.  Federal regulations relating to trademarks are located within Title 37 of the Code of Federal Regulations.  Codifications of common law and local rules and regulations relating to trademarks will vary by state.

The USPTO regularly publishes the Trademark Manual of Examining Procedure (TMEP) for use by trademark attorneys and examiners.  Through the use of examples, the TMEP describes all of the federal laws and regulations that must be followed in order to apply for and maintain a registered trademark in the United States.

U.S. federal law differentiates between trademarks (used to identify a product), service marks (used to identify a service), collective marks (used to identify a level of quality or other characteristic set by an organization), certification marks (used to indicate follow-up agreements between manufacturers and accrediting testing or certification organizations), and geographical indications (used to identify a geographical origin).  The Lanham Act protects all of the above marks as well as domain names, some trade names, and some forms of trade dress.

Key international agreements affecting U.S. trademark law include:


Other Intellectual Property Areas

Plant Variety Protection

The Plant Variety Protection Act (PVPA) gives breeders up to twenty-five years of exclusive control over new, distinct, uniform, and stable sexually-reproduced (by seed) or tuber-propagated plant varieties.  PVPA protection is different from plant patents, which are limited to asexually-reproduced plants and do not include tuber-propagated plants.  Plants that are eligible for PVPA protection may also be eligible for utility patents.[7]  Federal regulations implementing PVPA are located at Title 7 of the Code of Federal Regulations § 97. 

Key international agreements affecting the U.S. law for plant variety protection include:

Undisclosed Information (Trade Secrets)

Undisclosed information or trade secrets have been traditionally protected under state common law, specifically the tort of unfair competition.  ALI’s Restatement (First) of Torts § 757 has provided the common American definition of a “trade secret” since 1939.  Meanwhile, the Uniform Trade Secrets Act, published by the NCCUSL, has increased uniformity: only three states have yet to adopt this model law (Massachusetts, New York, and New Jersey).  State contract law also affects the protection of trade secrets: non-disclosure agreements and non-compete clauses are often utilized to prevent disclosure.

The Economic Espionage Act makes theft or misappropriation of a trade secret a federal crime when for the benefit of foreign powers or commercial or economic purposes.

Also, the FDA maintains limited data exclusivity for products undergoing approval under the FDCA—only limited because generic manufacturers are entitled to rely on data submitted by innovators after a set time period according to the Drug Price Competition and Patent Term Restoration Act (a.k.a. the Hatch-Waxman Act), which amended and was consolidated with the FDCA.

Key international agreements affecting the U.S. law for undisclosed information include:


Emerging Intellectual Property Areas

Genetic Resources

Codified U.S. law does not expressly provide for the protection of genetic resources.  However, both federal and state case law have addressed issues relating to genetic resources.

Traditional Knowledge & Cultural Expressions

The Indian Arts and Crafts Act of 2000 (IACA) was passed to promote the development of Native American arts and crafts, to protect and preserve cultural heritage, and to prevent commercial interests from falsely associating their goods or services with indigenous peoples.  The Indian Arts and Crafts Board may refer violations of the IACA to the Federal Bureau of Investigation as well as recommend the institution of criminal proceedings or a civil enforcement action to the Attorney General of the United States (Department of Justice).  Criminal and civil penalties include large fines and imprisonment.

The USPTO Database of Official Insignia of Native American Tribes was established by the Trademark Law Treaty Implementation Act of 1998 to register and help protect the emblems or devices of any federally or state-recognized Native American tribe—as notified by the tribe to the USPTO—by providing evidence of a relationship between the tribe and their insignia.  For instance, registration could be reason for denying a third party’s trademark application that includes the insignia.
 

Enforcement and Adjudication

Criminal Enforcement

The U.S. law of criminal procedure consists of federal constitutional case law as well as federal and state statutes that govern the creation and operation of law enforcement agencies, prison systems, and proceedings in criminal trials.

Copyright holders must actively enforce their rights.  The U.S. Federal Bureau of Investigation investigates some cases of criminal infringement but only after receiving a complaint from the copyright holder.  Criminal prosecution may occur in cases of willful copyright infringement, fraudulent copyright notice, fraudulent removal of copyright notice, false representations in applications for copyright registration, and certain acts of circumvention and interference with copyright management information.  Criminal penalties include fines and imprisonment.

Criminal penalties may apply to trademark use in the case of criminal counterfeiting of goods and to trade secret dissemination under the Economic Espionage Act.  U.S. Customs and Border Protection, as part of the Department of Homeland Security, plays an active role in enforcing intellectual property rights, including the identification and seizure of counterfeit goods.  Meanwhile, the U.S. Department of Justice Computer Crime and Intellectual Property Section oversees national efforts against intellectual property crime.


Civil Enforcement

Federal judicial proceedings involving lawsuits between private parties are governed by the Federal Rules of Civil Procedure (FRCP).  Many states have adopted rules of civil procedure that are modeled after the FRCP; however, significant exceptions include New York and California.  State civil procedure laws may be in the form of codified statutes enacted by the state legislature or court rules promulgated by the state supreme court.

Notable features of American civil procedure include:

  • Extensive pretrial discovery,
  • Heavy reliance on live testimony obtained at deposition or elicited before a jury,
  • Aggressive pretrial “law and motion” practice designed to result in summary judgment or settlement between parties,
  • Opt-out class actions, and
  • Parties bear their own attorneys’ fees (the “American Rule” versus the “English Rule” where the loser pays).

U.S. federal courts have exclusive subject-matter jurisdiction over patent law.  A patent holder may pursue a cause of action at the International Trade Commission (ITC) instead of, or in addition to, the federal civil court system.  However, the only remedy available from the ITC is injunctive relief—the prevention of further importation of infringing products into the United States—versus monetary damages.  Issues involving patent validity may also be raised with U.S. Board of Appeals and Interferences at the USPTO.

U.S. federal district courts also have exclusive subject-matter jurisdiction over copyright law.  Equitable relief, monetary damages, and attorneys’ fees may be available to the complainant.  Claims for copyright infringement against the United States that did not arise in a foreign country must be filed with the U.S. Court of Federal Claims within three years of the infringing acts.  Only monetary damages are available against the U.S. government.

Trademark law is almost entirely enforced through private lawsuits, and the failure to actively stop infringing uses by others may result in the loss of protection.  Depending on the claim and remedy sought, a case may be brought in either state or federal court.  Issues with the status of a trademark or trademark application may also be raised with the U.S. Trademark Trial and Appeal Board at the USPTO.

The Federal Circuit Court of Appeals is the only intermediate appellate court for which jurisdiction is based on subject matter versus geographic location.[8]  Of importance to intellectual property, the Federal Circuit has exclusive jurisdiction over appeals regarding patent cases as well as appeals from the U.S. Court of Federal Claims, the U.S. Board of Appeals and Interferences, the U.S. Trademark Trial and Appeal Board, and the U.S. International Trade Commission.  Decisions by the Federal Circuit are only superseded by federal legislation or decisions by the U.S. Supreme Court.
 

Awareness-Building and Education

The USPTO provides educational programs about enforcement, patent, trademark, and copyright issues through the Global Intellectual Property Academy.[9]  Most U.S. law schools and often other types of graduate programs offer programs or classes focused on issues of intellectual property.

Active non-governmental groups that promote intellectual property awareness in the United States include:

  • American Bar Association Section of Intellectual Property Law [10]
  • American Intellectual Property Law Association (AIPLA) [11]
     

Membership in Intellectual Property-Related Multilateral Bodies

Key intellectual property-related multilateral bodies, of which the United States is a member, include:

Footnotes:

1. Palmyra Atoll, where the U.S. Constitution applies just as it would to the local governments and residents of U.S. states.

2. Guam, Northern Mariana Islands, Puerto Rico, and the U.S. Virgin Islands, where the U.S. Constitution applies only partially.

3. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984) (articulating the Supreme Court’s doctrine of administrative deference given the delegation of authority by a Congressional statute and the absence of express limitations in the U.S. Constitution).

4. Gibbons v. Ogden, 22 U.S. 1 (1824).

5. See Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142-43 (1963); Crosby v. Nat’l Foreign Trade Council, 530 U.S. 363, 372-73 (2000); Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S. 88, 98 (1992).

6. Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938) (holding quite radically that U.S. federal courts must not develop their own common law but instead must apply the common law of the state when hearing state law claims under diversity jurisdiction—parties are diverse in citizenship or state residence).

7. J.E.M. Ag Supply, Inc. v. Pioneer Hi-Bred International, Inc., 534 U.S. 124 (2001).

8. 28 U.S.C. § 1295 (2009) (providing the jurisdiction of the Federal Circuit).

9. See http://www.uspto.gov/ip/training/index.jsp.

10. See http://www.abanet.org/intelprop/.

11. See http://www.aipla.org/.

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