World Intellectual Property Organization

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

General Background Information

Form of Government

The United States of America is a federal constitutional republic and representative democracy comprising fifty states, the federal district and capital of Washington, D.C., and several territories, one incorporated [1] and five unincorporated [2]. The states comprising the original U.S. were British colonies that declared independence from the Kingdom of Great Britain on July 4, 1776.  The independence of the U.S. was recognized by Great Britain in the Treaty of Paris, which was signed on September 3, 1783, ending the American Revolutionary War.  Additional states continued to join as a result of westward expansion through acquisition, war, and settlement.

The current Constitution of the United States was adopted on September 17, 1787, and ratified by a sufficient number of states on June 21, 1788.  The U.S. Constitution and federal law serve as the "supreme Law of the Land" (Article VI, Clause 2). Therefore, when federal and state law conflict, federal law prevails.   The Constitution divides the Federal Government into three branches where a system of checks and balances prevents any one branch from obtaining too much power:

  • Article I defines the legislative branch, which consists of a bicameral Congress—the Senate and the House of Representatives—with specific powers, most importantly the authority to enact statutes.  However, legislation may only be passed for certain limited purposes defined by the Constitution.   The most relevant to IP law are Section 8, Clause 8 (the Patent and Copyright Clause, "[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" [3]) and Section 8, Clause 3 (the Commerce Clause, "[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes").  Congress also has implied powers under Section 8, Clause 18 (the 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").
  • Article II vests the power of the executive branch in the President who is head of state, head of government, and commander-in-chief.  The President appoints cabinet members and other high ranking officers, subject to Senate approval, to administer and enforce federal laws and policies.  The director of the U.S. Patent and Trademark Office (USPTO) requires confirmation as does the librarian for the Library of Congress.  The Register of Copyrights does not. The President has the authority to sign treaties, but treaties also require Senate ratification.  In addition to the USPTO, the International Trade Commission (ITC) is also part of the executive branch.  Both the USPTO and the ITC are capable of adjudicating certain IP disputes within their specific competencies notwithstanding that both agencies are part of the executive, not judicial, branch.
  • Article III establishes the judicial branch in the form of one Supreme Court and those inferior federal courts created by Congress.  Federal courts are competent to hear cases that arise under the U.S. Constitution, federal laws and regulations, and treaties.  Other cases may be heard in federal courts depending on the parties to the case.  Today, there are 94 federal district courts, and their decisions may be appealed to one of 12 regional intermediate appellate courts.  In addition, the U.S. Court of Federal Claims and the Court of International Trade are specialized trial courts.  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 ITC, Court of International Trade, and the Court of Federal Claims.

Each state is a separate sovereign with its own constitution, legislature, executive, and judiciary.  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 some governmental powers to local agencies, townships, counties, cities, and special districts.  Thus, under U.S. federalism, citizens are subject to multiple levels of government: federal, state, and local.  A U.S. citizen may be subject to multiple local governments such as both a city and a county. 


Structure of the Legal System

As part of its British heritage, the Federal Government and all states except Louisiana use the common law legal tradition.  In American common law, judicial decisions have the force of law within the relevant jurisdiction.  Therefore, citation to case law is an essential part of American legal practice.  The force of law derives from the concepts of precedent and stare decisis.   These principles require (1) lower courts to follow the decisions of higher courts and (2) that a court will follow its own past decisions absent a compelling reason.  In the states, the common law tradition also grants judges substantial latitude to create law in important areas, such as trademarks and contracts.  Because the Federal Constitution limits the law-making authority of the Federal Government to enumerated areas and delegates the law-making authority solely to Congress, there is no "federal general common law" equivalent to what is present in the states [4].   However, there are a few specific fields, such as anti-trust, where the legal framework has developed largely independent of legislative pronouncements [5].

All law in the U.S. is subordinate to the Federal Constitution.  When there is a conflict, applicable federal law will override state law.  However, only the decisions of the Supreme Court are binding on the states.  The decisions of federal intermediate courts of appeal are binding only on federal district courts within their region, but are not binding on state courts.  Although the formation of law is clearly separated between the federal government and the states, adjudication is not.  State courts are competent to hear claims made under federal law and federal courts are competent to hear state law claims under some common conditions, such as when litigants are from different states.

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

  • The U.S. Constitution is the foundational law of the U.S. Laws that conflict with the Constitution may be declared invalid by a court.   Since ratification of the Constitution, there have only been 27 Amendments, of which 10 were completed simultaneously shortly after ratification of the Constitution.
  • Statutes are the general body of federal law.  Proposed legislation must be passed by Congress and signed by the President.  Alternatively, if the President vetoes legislation passed by Congress, it may still become law if 2/3 of each house of Congress votes to override the veto.  Statutes are published in the Statutes at Large and codified in the United States Code (U.S.C.).
  • Treaties ratified by the Senate are considered the hierarchical equivalent of statues.  Courts in the U.S., consistent with the common law role of judges, will make every effort to interpret domestic law to be consistent with international obligations [6].  However, when a treaty provision irreconcilably conflicts with a statute, whichever was passed later is the law applied by U.S. courts [7].
  • Regulations promulgated by federal agencies pursuant to the Administrative Procedure Act carry legal force, but must be consistent with both the Constitution and statutory law.  However, under the Chevron [8] doctrine, there is judicial deference to a government agency's reasonable interpretation of a statute which it administers. Regulations are published in the Federal Register and codified in the Code of Federal Regulations (C.F.R.). 
  • Case law carries legal force that varies according to the court publishing the decision.  Case law is published in national, regional, and state "reporters," which are bound volumes of published court decisions.  For lower courts, not all decisions are published and only those that are published have precedential value.

The independent evolution of law in most states has resulted in a high variance between the laws of different states.  Organizations like the American Law Institute (ALI) and the Uniform Law Commission (ULC) have attempted to create more uniform state laws through model laws and well-supported summaries.  The ALI publishes Restatements of the Law, which summarize the current status of a particular subject of American law according to the consensus of the U.S. legal community, and Principles of the Law, which express the law as it should be on topics in current need of legal direction.

It is important to note that federal and state courts have overlapping jurisdiction.  Therefore, there are many potential lawsuits that could be brought in either federal or state court, under either or both federal and state law.  The forum may not be settled until a plaintiff files suit or after a decision by the judge on the law regulating the proper forum.  It is also possible for a case to proceed simultaneously in federal and state court, although the courts try to avoid this situation.

Because of the central role of judicial decisions in American legal reasoning, it remains important to emphasize that a complete understanding of U.S. federal and state law requires reviewing case law to determine how judges have interpreted a particular provision of law [9].

Supreme Court interpretations of the Commerce Clause since the 1930's have resulted in the expansion of federal law into areas relevant to intellectual property.  The Constitution explicitly grants the Federal Government the authority to create patent and copyright law, but there is no mention of trademarks.  Federal trademark law exists because the Federal Government can regulate certain kinds of commerce.  That is why the Lanham Act, the federal law regulating trademarks, requires use of the mark in commerce that can be regulated by the federal government for the mark to be registered.  Other areas related to IP that are regulated under the Commerce Clause are pharmaceutical regulation and antitrust.  The federal legal scheme may displace state laws, such as the Federal Food, Drug, and Cosmetic Act (FDCA), or the federal law may coexist with strong state laws, such as in antitrust and trademark law.


Intellectual Property System and Laws

U.S. federal IP law is directly permitted by the Constitution for copyrights and patents.  For trademarks and other forms of IP, the federal government only has the authority to make law via its ability to regulate commerce.  Furthermore, when granting Congress the ability to create copyright and patent law, the Constitution does so with an explicit purpose, "to Promote the Progress" of the relevant fields.  This statement is understood as grounding American IP law in the idea of promoting economic benefit and increasing the amount of innovation and creative works available to the people.

Although the federal government has been active in IP law to the greatest extent permitted by the Constitution, state laws are still important for IP law.  It is therefore important to note that a person's rights and obligations can only be completely understood with reference to both federal and state law. 


Government Regulatory Agencies

Congress has delegated regulatory authority relevant to IP 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.  Unlike the other agencies, the Library of Congress is organized under the legislative branch.
  • USPTO, under the Department of Commerce, grants U.S. patents under the Patent Code, registers trademarks under the Lanham Act, and hears certain disputes through either the Patent Trial and Appeal Board (PTAB) and Trademark Trial and Appeal Board (TTAB).
  • 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.
  • ITC, an independent agency within the executive branch, settles IP disputes involving the importation of potentially infringing goods.
     

Regulatory Framework and Current Issues

Copyrights

Copyright protection in the U.S. is permitted by the Copyright Clause of the U.S. Constitution.  Current copyright statutes 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 most state copyright law since 1978.

Copyright is automatic from the moment 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.  In many cases, registration is required before suing an infringer, although registration does not alter the existence of protection.

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.

U.S. copyright law is based on the utilitarian concept that copyright should promote the creation of works rather than protect the personal rights of the author.  This purpose of copyright is established in the Constitution; "to promote the Progress of Science and the useful Arts."  Thus, the United States recognizes only minimal moral rights of authors as part of copyright law.  When passing the Berne Convention Implementation Act, the U.S. Congress stated that the moral rights in Article 6bis were adequately protected by laws external to the Copyright Code, such as defamation, unfair competition and publicity [10].   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.  U.S. law does not distinguish between copyrights and related rights.

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


Patents and Utility Models

Patents in the U.S. are permitted by the Patent Clause of the U.S. Constitution.  Until recently, the U.S. used a first-to-invent patent system, where competing patents or patent applications determined their priority based on the date of invention.  The America Invents Act moved the U.S. in 2013 to the more common first-inventor-to-file system, where priority is based on the date of application.  The patent code is contained in Title 35 of the United States Code.  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.  The MPEP describes all of the laws and regulations that must be followed in the examination of U.S. patent applications and includes citations to relevant case law.  The USPTO also handles patent applications as described in the MPEP.  Although patent attorneys may be used to assist with the application process, the USPTO has a separate bar examination for patent practitioners.  Therefore there are "patent agents," who are permitted to practice before the USPTO without being a lawyer.

Three types of patents may be granted:

  • 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 to compensate for delays in the patent office or in obtaining FDA approval under the Drug Price Competition and Patent Term Restoration Act (a.k.a. the Hatch-Waxman Act).  The FDCA also has quasi-patent rights, in the form of market exclusivities, for both generic and brand drug manufacturers under certain circumstances.  For example, market exclusivity is awarded for orphan drugs that have been developed specifically to treat rare medical conditions under the Orphan Drug Act.

Under limited circumstances, U.S. law provides for a 1-year grace period to file an application after a disclosure. In general, the first disclosure must have been by the applicant or by someone who obtained the disclosure from the applicant.

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 the 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

U.S. trademark protection is accomplished under the Commerce Clause of the U.S. Constitution.  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 law.  Both federally registered and common law trademarks may be protected under the Lanham Act; however, federal registration provides some advantages like shifting the burden of proof on the existence of a protectable mark to the registrant's favour in a trademark infringement suit.  Federal regulations relating to trademarks are located within Title 37 of the Code of Federal Regulations.  State laws regarding marks, whether statutory or common law, will vary by state and may be labeled as trademark or unfair competition law.

The USPTO regularly publishes the Trademark Manual of Examining Procedure (TMEP) for use by trademark attorneys and examiners.  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.  The USPTO also handles trademark registration applications as described in the TMEP.  There is no equivalent to a "patent agent" for trademarks, and therefore, a lawyer must be retained for assistance with trademark applications.

U.S. federal law differentiates between trademarks (used to identify a product), service marks (used to identify a service), collective marks (used to identify membership in an group or the goods or services that are produced by a member of the group), and certification marks (used to certify that goods or services meet the characteristics as defined by the owner of the certification mark).  Geographical indications may be protected under the above categories, usually as certification marks.  The Lanham Act protects all of the above marks as well as domain names, some trade names, and some forms of trade dress.

There is substantial coexistence between federal and state law in trademarks, unlike the other forms of IP.  In addition to the federal Lanham Act, every state has a complete trademark law within its boundaries.  Most states have statutory law in addition to the common law of "unfair competition" and many states provide for trademark registration.  The most significant aspect of trademark rights in the states is that use without registration is sufficient to create trademark rights.

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


Other Intellectual Property Areas

Plant Variety Protection

The Plant Variety Protection Act (PVPA, Title 7, Chapter 57, of the United States Code) 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 [11].  Federal regulations implementing PVPA are located in Title 7, Part 97 of the Code of Federal Regulations

The Plant Variety Protection Office in the Department of Agriculture handles applications under the PVPA.

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.  The Uniform Trade Secrets Act (UTSA), published by the ULC, has increased uniformity and codified much of the common law understanding of trade secrets.  As of April, 2013, only four states have yet to adopt the UTSA: Massachusetts, New York, North Carolina, and Texas.  Of those, Massachusetts, North Carolina, and Texas have statutory law protecting trade secrets.  New York is the only state relying entirely on the common law for trade secrets.  State contract law also affects the protection of trade secrets: non-disclosure agreements and non-compete clauses are often utilized to prevent disclosure.

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

The FDA maintains limited data exclusivity for products undergoing approval under the FDCA.  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 the FDCA.

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


Emerging Intellectual Property Areas

Genetic Resources

U.S. law does not address the protection of genetic resources by intellectual property. 


Traditional Knowledge & Cultural Expressions

The Indian Arts and Crafts Acts of 1935 and 1990 (IACA) were 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 established by the 1935 Act 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 Tribal Insignia Database permits registration and facilitates protection of 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.  However, registration confers no additional benefits for the insignia and is not considered a trademark.  Therefore, the principle use of registration is preventing third parties from registering a trademark that includes the insignia.


Enforcement and Adjudication

Criminal Enforcement

Copyright holders must actively enforce their rights.  The Federal Bureau of Investigation investigates some cases of criminal infringement, usually after receiving a complaint from the copyright holder.  Criminal prosecution may occur in cases of wilful 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 both state and federal law.  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, reduction of the number of issues destined for trial or settlement between parties,
  • Opt-out class actions, and
  • By default, parties bear their own attorneys' fees, although many statutory schemes provide for attorney fees and costs in certain situations.

The vast majority of enforcement actions for intellectual property issues are by private litigation between the IP owner and the accused infringer.

U.S. federal courts have exclusive subject-matter jurisdiction for civil cases arising under the patent laws.  A patent holder may pursue a cause of action at the ITC instead of, or in addition to, the federal civil court system.  However, the only remedy available from the ITC is the prevention of further importation of infringing products into the United States.  Issues involving patent validity may also be raised with PTAB 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 actively to 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 registered trademark or trademark application may also be raised with the TTAB at the USPTO.

The Federal Circuit Court of Appeals has exclusive jurisdiction over appeals arising under the patent laws as well as appeals from the U.S. Court of Federal Claims, the PTAB, the TTAB, and the ITC.  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 [12]. 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 [13]
  • American Intellectual Property Law Association (AIPLA) [14]


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. In is interesting to note that, at the time of the Constitution, "Science" included literary works and art whereas "useful Arts" referred to technical fields and invention.

4. Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938).

5. See Leegin Creative Leather Prod., Inc., v. PSKS, Inc., 551 U.S. 877, 888 (2007).

6. Murray v. The Schooner Charming Betsy, 6 U.S. (2 Cranch) 64, 118 (1804).

7. Reid v. Covert, 354 U.S. 1, 17 (1957).

8. Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).

9. WIPO Lex is currently a work in progress.  Although WIPO staff are hard at work increasing the scope of the database to include state laws and judicial decisions, this material has not yet been added.  It is anticipated that major judicial decisions and state laws will be added in the next few years.

10. See, e.g., Gilliam v. American Broadcasting Companies, 538 F.2d 14 (1976).

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

12. http://www.uspto.gov/ip/training/index.jsp.

13. http://www.abanet.org/intelprop/.

14. http://www.aipla.org/.

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