Estate planning can be an uncomfortable topic. Not many people like to confront their own mortality, the terminology is confusing, and it’s pointless because everyone lives forever, right? Unfortunately not. Depending on your circumstances, the implications of your intestacy can be significant. A general understanding of this area of law and its terminology will help you feel at ease and prepared the next time you have a conversation about it. The more you know, the more comfortable and better equipped you will be to discuss the implications and issues that are important to you. This knowledge can help avoid future family conflict and ease your worries knowing your assets will be distributed the way you intended them to be.
Testate Transfers & Testacy Proceedings
When a person dies with a complete and legally-executed “Last Will and Testament” (also simply known as a “will”), she is said to die “testate.” This accomplishes the primary goal of estate planning: to identify your assets and assign who those assets will go to after your death. This process eases the burden on those left behind because the deceased’s “Personal Representative” merely has to carry out the deceased’s wishes. Distribution under a will is done under court supervision in the probate court. This court process is called “testacy” or a “testate probate proceeding.”
Intestate & Intestacy
When a person dies without a legally-executed will, he is said to die “intestate.” This means you have no say in how your estate is distributed or who receives it. This will all be determined by state intestate succession laws which determine the priority for distribution of your estate.
Succession laws vary from state to state. However, generally, priority is as follows: (1) surviving spouse, (2) children, (3) parents, (4) brothers, sisters, and their lineal descendants, (5) grandparents, (6) next of kin, and finally (7) the state. Oregon’s intestate succession laws can be found in ORS Chapter 112.
A person can also die “partially intestate” if the final will and testament only covers some of his assets but leaves some out. This can happen if part of the will is invalid or the terms of the will do not cover all of the persons assets. For example, a person may purchase property after the person created the will but failed to later add it to the will. In this case, the assets that are properly covered by the will are distributed according to the terms of the will, while the property purchased after the will was created is generally distributed to based on the will’s residuary clause, if any. If the will lacks a residuary clause, or is out of state, intestacy will generally control distribution of these outstanding assets.
Having prepared your will, you may feel like you no longer have anything to worry about. However, there are often little things that can be overlooked that can have unfavorable consequences. For example, if a disgruntled family member contests the will’s validity, the deceased’s wishes could be thrown out. If the will is thrown out, the estate may be distributed under an older will or intestacy. For this reason, it is helpful to talk to your lawyer about any family members who you know may oppose your will.
What are the requirements to make a valid will?
- Written Documents. In order for a will to be valid the will must be a written document in physical or electronic form.
- The testator must willingly intend to sign his name to the will and must sign the will in the presence of witnesses or acknowledge the signature he already made.
- At least two witnesses must see the testator sign the will AND attest the will by signing their own name to the will.
- Legal age/capacity. While this differs state to state, the legal age is generally 18 years or older. In Oregon a person can also create a will if he is lawfully married or has been emancipated.
- Mental capacity. “Being of sound mind and body” means you understand you are executing a will, and that you are familiar with the assets you are leaving and people you are leaving them to.
- The entire will creation process of a valid will must be absent of fraud or duress.
Wills are not the only way to transfer property after someone has passed. Other options like, designating a beneficiary, creating a revocable or irrevocable trust, payable on death accounts, transfer on death deeds, and lifetime gifting are additional ways to transfer assets postmortem, all of which will be discussed in future posts.
What’s in a name? Well, Juliet, in the world of trademarks, quite a lot. A mark’s distinctiveness places it on a spectrum somewhere between “inherently distinctive” and “generic.” From most to least distinctive, a mark is labeled as either: (1) fanciful, (2) arbitrary, (3) suggestive, (4) descriptive, or (5) generic. Marks falling into camps 1-3 are granted protection. Those in camps 4 or 5 are not; however, there is an important exception that grants protection to certain descriptive marks. I will explain this exception and hopefully arm you with the knowledge to help your business avoid some headache and heartache down the road.
Before getting to the exception, it is important to understand how distinctiveness is evaluated and what makes a particular mark “descriptive.” Distinctiveness is evaluated through the eyes of the consumer–what do buyers think or do when they see or hear a mark on a product or service? Trademark law presumes that a mark is more distinctive, and therefore entitled to greater protection, if it has little or no relation with the goods or services offered. This is because the less related and more unique a mark is with its goods or services, the easier it is for consumers to identify the source company. The policy principle is that a diverse and distinguishable spectrum of potential marks helps consumers identify specific goods or services with a specific source. Perhaps you see why trademark law is skeptical of rewarding descriptive marks. A descriptive mark is one that merely describes the goods or services for which the mark is used–it describes some character, quality, nature, ingredient, or origin of the goods or services. This does not help the consumer identify the mark with its source because the characteristic or quality describes the actual goods or services and is necessarily shared with any business that offers those same goods or services. For example, the words “red” or “juicy” for a mark on apples could describe all apples, not just those from the company using the mark. From this perspective, choosing a descriptive mark is also a poor business decision because it does little to distinguish your business’ products or services from those of your competitors. However, businesses continue to choose and seek protection for descriptive marks since they directly advertise a business’ goods or services to potential consumers. Through a lot of work, effort, and money, some of these descriptive marks can be granted trademark protection.
A descriptive mark will be granted trademark protection if it has “acquired distinctiveness,” that is to say, the mark has a “secondary meaning” in the minds of the consumer. So, while the mark may be descriptive, the general consuming public has come to identify that descriptive mark with a particular company and product–which is what trademark law tries to protect and reward. Some examples of descriptive marks that have acquired distinctiveness are SHARP for televisions and WINDOWS for computers.
How does a company show that its descriptive mark has acquired distinctiveness? There are several ways: (1) prior registrations, (2) long-term use in the marketplace, or (3) other evidence such as marketing, advertising, and surveys. The key to all of these is showing that the mark has come to identify not only the goods or services but also the source of those goods and services.
- Prior Registrations. Sometimes a company owns a similar mark or marks on the Principal Register. When applying for a later registration, the company may be able to show that the mark identified in the application is similar enough to the company’s existing marks that the new mark already has secondary meaning in the minds of consumers. For example, just this year, Nike attempted to trademark its new “NIKE+ TRAINING CLUB APP,” which is an app that monitors a user’s fitness training. The mark consists of the Nike swoosh with a little “+” next to it and then the letters “NTC” below that. Nike references three of its previously registered “swoosh” marks in its application; however, because “training club” is just a description of the primary function of the app, the examiner issued a preliminary rejection. It will be interesting to see if Nike claims secondary meaning based on a strong “family of marks” in its attempt to overcome the examiner’s objection.
- Long-Term Use. This is the most common route to proving acquired distinctiveness. If a company can show exclusive and continuous use of the mark in interstate commerce for five years in its application for registration, then the USPTO will find that the mark has acquired distinctiveness as a matter of law. One way to document exclusive and continuous use is to register a descriptive mark on the “Supplemental Register.” The Supplemental Register was created to allow registration of trademarks that are ineligible for registration on the Primary Register, such as descriptive marks, and grant those marks some protection. In most cases, the USPTO will assume a mark has acquired secondary meaning after five years on the Supplemental Register. For more on this topic see the post titled “Trademark Registration and Strategy.”
- Other Evidence. When applying for registration, the company can use other evidence, such as the extent of its marketing and advertising, or use consumer surveys to establish that the descriptive mark has acquired a secondary meaning in the minds of the consuming public.
Even after presenting evidence in one or more of these categories there is no guarantee that the USPTO will agree and register the mark. Part of our job is to evaluate your descriptive mark and then have an honest discussion about your registration options. That discussion may involve alternatives, such as state registration, registration on the Supplemental Register, or rebranding. In some situations a mark is so descriptive, or there are too many other problems to overcome at the application stage, that the best option is to choose another mark. That, of course, will depend on how much time, money, and effort your business has already invested in the mark, and how flexible your brand is.
Trademark registration is not required for a mark to receive protection. So long as the mark is distinctive and used in commerce, it will have protectable common law rights. However, registering a trademark has many benefits. I am going to explain these benefits and examine the differences between state and federal registration to help you better understand your options.
State vs. Federal Registration
The two biggest differences between state and federal trademark registration are (i) the geographic scope of protection, and (ii) the cost and complexity of registration. Ultimately, this choice is a strategic one, and will come down to the position your business is currently in and where you intend for it to go.
Geographic Scope of Protection and Priority
Federal registration generally requires that the mark be used in interstate commerce and grants protection throughout the entire United States. State registration requires that the mark be used in intrastate commerce and grants protection only within the territory of the state where it is registered.
Federal registration is also superior to state registration. If a mark is registered with the USPTO before a similar state registration, then the federally registered mark has priority. The owner of a federal mark who registers first can stop any later state registered owners from using the same mark or a confusingly similar one. If the state registered mark was first, the owner with priority can continue to use the mark. This effectively stops the federally registered mark from being used within the state. However, the owner of the state mark cannot stop the federally registered mark from being used elsewhere. This scenario is fairly common in the business world and it brings up a few important points:
- It is essential to perform a thorough trademark search before submitting a federal trademark A search not only confirms that there are no other confusingly similar registrations that would cause the application to fail, but it also helps identify any senior users who have limited, but superior, rights. One famous case involves the claim to the Burger King mark. In this case, in 1959, in Mattoon, Illinois,a small ice cream and burger joint, owned by the Hoots,registered the restaurant’s nameBurger King as a state trademark. When the fast-food chain Burger King, which owns the identical federal registration, expanded into Illinois, the Hoots took action and filed suit. The Hoots believed that because their mark was senior to the Burger King chain’s mark in the state of Illinois, their mark gave them exclusive rights to the name Burger King all across the state. However, a federal court did not agree. It held that because a federal trademark registration has priority over state trademark registrations, the Burger King chain had rights to the name almost everywhere in the U.S., including Illinois, with the exception of the Mattoon area where the Hoots were actually doing business. Perhaps the result would have been different if the Hoots had their own chain of stores in other parts of Illinois.This illustrates the limitations of a state registration.
- While state registration does not offer much additional protection for your mark besides the common law trademark rights you already receive just by using your mark, it does create a record of the date you begin using your mark in commerce. This record can help you defend or assert your rights against identical or similar marks where you actually
- Businesses with a large geographic reach or those with multistate expansion goals should plan to submit a federal registration. Often, a new business will delay federal registration and not register its primary mark,or only register at the state level, in order to save time and money during the startup phase. This can be disastrous. Anyone else who is legitimately using the same mark and meets the basic registration requirements can register your mark at the federal level, thereby cutting off your business’ ability to expand or submit your own federal registration. There are procedures that allow a senior user to block or invalidate a junior user’s federal application, but that process is more costly and complicatedthan simply submitting an application before anyone else. Startups would be wise to budget for full and timely trademark registration when national or international protection is needed.
Cost and Renewal
The difference in cost and ease for registering a state versus federal trademark can be quite extreme. It probably will not come as a surprise that state registration is much cheaper and easier than federal registration. State registration usually consists of a $50-$75 filing fee for each “class” of goods or services registered, and is filed with the state office that handles other business filings, often the Secretary of State. State registrations are usually processed within days or weeks.
A federal registration, on the other hand, is filed with the USPTO, then examined by a government attorney, and costs anywhere from $225-$375 per “class” of goods or services. Federal registrations usually take substantially longer to process (months to years). A “class” is a pre-defined category in which the goods or services that you plan to use your mark on or with fits. For example, each trademark application can only list one mark, however, that single mark can be used on multiple items, such as t-shirts, product packaging, etc. Each item could be a different “class” to which additional filing fees apply. Additional legal fees are also common. This is because examining attorney may ask questions of the applicant or issue a preliminary denial that requires a careful response.
Furthermore, even if and after your mark has been registered, you must “maintain” it, show that it is being used, in order for it to remain valid. Maintaining your trademark involves filing an Affidavit of Use, (i) between the fifth and sixth year following registration, and (ii) within the year before the end of every ten-year period after the date of registration. You must also file a Renewal Application before the end of each ten-year period following the date of registration. These filings increase the overall cost associated with owning a federally registered trademark. Failure to maintain or renew a mark will also lead to it being cancelled, so it is important to respond to USPTO notices and schedule your own reminders for deadlines.
Principal v. Supplemental Register for Federal Registrations
Federal registrations are either listed on the “Principal Register” or the “Supplemental Register.” The Principal Register is what this post has been assuming since it offers “full protection.” The Supplemental Register, on the other hand, was created to allow registration of trademarks, such as descriptive marks, that do not meet all the requirements for registration on the Principal Register. Registration on the Supplemental Register entitles the owner to the following benefits:
- Use of the ® symbol;
- The right to file a trademark infringement claim in federal court;
- Allows USPTO examining attorneys to reference your mark as a reason to deny a later application that is confusingly similar to your mark (known as a blocking registration); and most importantly
- After five consecutive years of use, the ability to register a descriptive mark on the Principal Register.
Registration on the Principal Register gives the trademark owner benefits that other registrations do not. These benefits include:
- Legal presumption of ownership and nationwide constructive notice of use;
- Use the ® symbol;
- Registration with Customs and Boarder Patrol to prevent infringing products from being imported;
- Intent toUse registration option for pre-market clearance; and
- Can be used as a basis for obtaining foreign trademark registration.
While the use of a mark in the market is typically a requirement for registering a federal trademark, there is an exception for those who “intend to use” the mark. An Intent to Use (ITU) application allows a party with a bona fide intention to use a specific mark in commerce in relation to specific goods or services. However, before the mark will actually be registered, the applicant must use the mark in commerce and submit a Statement of Use within six months of the application date, with the possibility of additional extensions for a fee.
An ITU application is typical for a startup that intends to service a national market or a company that is preparing to launch a new national brand. The decision to file an ITU ultimately is going depend on the company’s intended scope of use for that mark. If the company does not intend toservice a very large territory it could avoid the additional fees associated with the application and not file an ITU application. However,if a company’s goal is to provide goods or services nationally or internationally and the initial design of the mark is final, then an ITU application can be filed to give priority to the mark before the initial launch or sale of the goods or services.ITU registrations add value by protecting brand investment through pre-market clearance, however, the most important benefit of filing an ITU application is that it gives the owner of that mark priority, as of the date of the ITU filing, against anyone who files for or uses a similar mark.
Now, having a basic understanding of the differences between state and federal registration, it is time for you to consider your business’ short and long term objectives. Does your business intend to only do operate within the state? Do you plan to provide goods and services nationally or internationally? Is your mark descriptive? These and many other consideration are questions your business should examine with an attorney to help your business and brand reach its potential.
So you’re thinking about getting a trademark? You run a business, or are starting one, and you would like to protect your businesses name or logo. Allow me to introduce you to the world of trademarks. I will lay down the trademark basics and arm you with knowledge that could save you time and money.
Trademark law is a rich and complex field and my hope is that this post will give you a general overlay of that field. It is not meant to delve into the more complex topics that trademark presents. I will address and explain these more convoluted areas in a series of additional posts. Stay tuned.
General Purpose of Trademark
Trademark law’s dual purpose is to avoid consumer confusion and to protect a business’s reputation by guarding it from unfair competition. First, it protects consumers by helping them identify the company that the goods or services originate from—something known as “source-signaling.” Second, it protects a business’s reputation by not allowing another company to take a free ride on the goodwill another company’s brand has established, or from another company tarnishing that goodwill. Your business has spent time, effort, and money establishing a brand, a brand that consumers have come to identify with a certain level of quality and reputation. Trademark law protects that brand and aims to prevent others from profiting off your investment or from shaking your consumer loyalty by tarnishing the quality and reputation of your brand in the eyes of the consumer.
What is a trademark?
A trademark is any word, phrase, slogan, symbol, sound, domain name, design, or a combination of these elements, that helps a consumer identify and distinguish the source of those goods or services. Trademark is not the same as copyright. Copyright protects creative expression in “original works.” It protects works such as books, movies, songs, paintings, photographs, web content, and much more. The purpose behind trademark and copyright, along with what they protect, are very different. The distinction between these two intellectual property fields will be covered in a separate post. For now, let us assume that you are only dealing with trademark law and have settled on your mark.
Not all trademarks are created equal. The level of “distinctiveness” a trademark has determines whether that mark will be protected. The concept of distinctiveness can be understood by examining your mark and how it relates to your goods and services. Your mark will probably fall into one of these five categories—known as the “hierarchy of marks”:
Generic. A mark is generic if it is synonymous or generic for the goods or services that it is used for. Trademark law offers no protection for generic marks, period.
Example: “dirt” for soil or “paper” for paper.
Descriptive. A mark is descriptive if it merely describes the services or goods for which the mark is used. A descriptive mark is given no protection unless it has acquired “secondary meaning.” I will cover this important exception in a separate post.
Example: trying to trademark the term “oat nut cereal” when you sell cereal made from oats and nuts (exactly describes the type of cereal.)
Suggestive. A suggestive mark suggests some quality, nature, or a characteristic of the goods or services for which the mark is used. The mark does not describe this characteristic, otherwise it would be descriptive, and requires some imagination, thought, or perception, on the part of the consumer to identify the nature of the goods. Trademark law protects suggestive marks.
Example: “Chicken of the Sea” (suggests that it is selling tuna, but without using the word tuna).
Arbitrary. A mark is arbitrary if it utilizes a common word, with a common meaning, that is not related to the goods or services being sold. Trademark law protects arbitrary marks.
Example: Apple for computers.
Fanciful. A mark is fanciful if it is invented for the sole purpose of serving as a trademark and has no other meaning. Trademark law automatically protects fanciful marks.
Example: Adidas, Exxon, Kodak.
If this all seems like a bit much, keep in mind that the purpose for not protecting generic and descriptive marks, except for descriptive marks with secondary meaning, is that no company should be given exclusive rights to use a word that is necessary to describe the actual good or service being sold. The drafters of our trademark laws wanted to prevent unfair competition, not all competition.
You may also look at these categories and think, “I’m not sure where my mark fits.” That is okay. The hierarchy of marks is really best thought of as a “continuum of marks.” Your mark may fit somewhere in between categories. Part of our job is to identify where your mark fits along the continuum, what that means for your ability to protect your mark, and what strategies you may be able to adopt so that you can protect your brand.
How do you get a trademark?
Trademarks are protected by both state and federal law. Deciding if and where to register is more complex than it may seem. I will address registration procedures and issues in more detail in a separate post. For now, you should know that while registration has many benefits, it is not required for you to claim legal rights to a particular mark.
Certain “common law” rights exist the day you start using your mark. This means that, if you started using a mark, but have not registered it, it is a good idea to go back and document your first use. Sales receipts, pictures of your product, packaging showing your mark, or advertising featuring your goods or services are particularly useful for this purpose. Generally speaking, common law protection is limited to the geographical area in which the mark is used. This means, if you are only using your mark in Oregon, another company can use that exact mark in a different state to sell the same goods or services. However, if that company attempts to sell its goods or services in Oregon, your common law rights may prevent them from entering your home market or allow you to ask a court to stop sales that are already occurring.
Additionally, you may use the notice symbols ™ or ℠ alongside an unregistered mark to provide notice to the public that you are claiming legal rights to it as a trade or service mark. Note that the ® symbol is reserved for federally registered marks only. Never use it alongside an unregistered mark—not even if a federal registration is pending. Confused? Don’t worry. I will also address marking and notice in a separate post.
Tax season is upon us. A common question that we get this time of year, especially from people with fixed incomes or unusual financial circumstances, is whether or not they need to file a federal tax return. The IRS has an interactive online tool that you can use to find out if you need to file this year: IRS Interactive Tax Assistant
Let us know what you think of our newly designed website. Thank you Ben Vanderveen and James Arndt for your hard work!
Earlier I wrote a quick post praising the ease of use and overall utility of Filing In Oregon, the Oregon Secretary of State’s online portal. While it is an incredibly useful tool, a word of caution: it is not a one stop shop for setting up your new business. There are other important regulatory, tax, and legal concerns that, if mentioned on the site, are not fully addressed nor resolved. An area of particular concern is partnership disputes. A full-blown legal dispute between partners is costly and detrimental to the business, clients, partners, and pretty much anyone else involved. The single most important thing that you can do to avoid and quickly resolve a dispute is to document the relationship between the partners before any dispute occurs. Since the entity of choice for most new businesses is the LLC, a few quick words on operating agreements.
Operating agreements are like the bylaws of a corporation and govern any number of things related to formation, operations, and closing the business, as well as relations between partners (members) in an LLC. ORS Chapter 63 contains default provisions that control in the absence of an agreement to the contrary, possibly to your detriment. Thankfully, most of these provisions are freely modifiable and superseded by a well-drafted operating agreement. So, what should your operating agreement contain?
At a minimum, your operating agreement should address the following:
- Management – Member or manager managed? Most LLCs are managed by active members, but companies with passive investor members will often prefer a manager-managed company that behaves more like a corporation or limited partnership.
- Contributions – Value and detail each partner’s contribution. Active participation in a limited liability business without any contribution is a classic fact pattern for piercing the veil.
- Distributions and Compensation – How much money does each partner get? When? How? Check with your CPA concerning the tax implications of your decision.
- Valuation – Book value? Fair market value? How many intangible assets does your business have? Agree ahead of time when, and if, experts will be used and how they will be paid.
- Partnership Accounting – What standard will you use for capital accounts: GAAP, tax basis, IRC § 704(b)? How will you comply with Treas. Reg. § 1.704-1(b)(2) (substantial economic effects test for allocation of income, losses, and other items): deficit restoration obligation (DRO) or qualified income offset (QIO)?
- Duties and Conflicts – The duties of loyalty and care are required by default and they may be modified, but not entirely eliminated.
- Buy Outs – Do you want a push/pull agreement? If not, how will you handle deadlock? If so, should this provision have a limited duration? Should it be re-negotiated or eliminated at a later date once the business matures?
- Entering and Exiting – Can new partners join? How? Is a partner’s interest transferable in whole or in part? Can a partner be expelled? How?
- Disputes – What is the general dispute resolution process, when is it triggered, and what happens if it fails to achieve resolution?
By having an open and honest discussion of these issues with your partners and documenting your plans in an operating agreement, you will greatly reduce the likelihood of a dispute and, if a dispute occurs, it is more likely to settle before costly litigation.
IRS Circular 230 Disclosure: Any tax advice contained in this communication is not intended to be used, and cannot be used, for purposes of avoiding penalties imposed under the United States Internal Revenue Code or promoting, marketing or recommending to another person any tax-related matter.
In Oregon and most other places, a trade secret is anything that:
(a) Derives independent economic value, actual or potential, from not being generally known to the public or to other persons who can obtain economic value from its disclosure or use; and
(b) Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Before getting to the two criteria, I should mention that stealing trade secrets is, of course, a bad thing and thieves are subject to money damages, attorneys fees, injunctions preventing further misappropriation, and/or criminal liability.
Valuable business information typically includes drawings, cost data, customer lists, formulas, patterns, compilations, programs, devices, methods, techniques or processes. Unlike a kid that knows what his sister is getting for her birthday, businesses can rely on trade secrets to protect valuable information for a very long time. Coca-Cola, Co. owns one of the oldest and most famous trade secrets–the formula for Coke.
The trick about trade secrets though, is that they have to remain secret or their power is gone. Thankfully, courts look to a specific set of factors when deciding whether or not a business acted reasonably under the circumstances to keep something secret:
- The extent to which the information is known outside the owner’s organization;
- The extent to which it is known by employees and others involved in the organization;
- The extent of measures taken by the owner to guard the secrecy of the information (e.g., labeling the information “Trade Secret” or “Confidential,” advising employees of the existence of a trade secret, limiting access to the information within the company on a “need-to-know basis,” and controlling company access);
- The economic value of the information to the owner and the owner’s competitors;
- The amount of effort or money expended by the owner in developing the information; and
- The ease or difficulty with which the information could be properly acquired or duplicated by others.
Businesses should use these factors as guidelines when developing policies and procedures to protect their trade secrets. Businesses can also guard against theft or unintentional disclosure of trade secrets by having reasonable confidentiality, non-disclosure, and termination from employment/severance agreements in place.
The Digital Millennium Copyright Act contains many powerful copyright enforcement tools and is a beloved whipping boy among many on the internet. But, as someone famous once said, “with great power comes great responsibility.” Enter 17 U.S.C. § 512(f):
Any person who knowingly materially misrepresents under this section—
(1) that material or activity is infringing, or
(2) that material or activity was removed or disabled by mistake or misidentification,
shall be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer…who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it.
Basically, a copyright owner may be sued for using the DMCA as an incendiary bomb rather than the laser-guided missile that it was meant to be. You’ll notice that this works both ways too; an alleged infringer may be sued for damages related to abuse of the so-called put-back system. Since it’s not that hard to identify the copyrighted work or learn the true identity of the alleged infringer, thanks to § 512(h), the real trap for the unwary lies in copyright owners’ overuse of takedown notices.
While the specifics of 512(f)’s knowledge requirement are still being worked out in courts around the country, the law clearly prohibits sending DMCA takedown notices in bad faith–i.e. to harass your competitor. The 9th Circuit has also said that copyright owners must, in their heart of hearts, believe that an alleged infringer isn’t making fair use of the copyrighted material. So, while you’re allowed to be wrong in your assessment of the situation, you must sincerely believe that your work is being infringed when you send a takedown notice.
Bottom line: do your due diligence and be able to document and thoroughly explain why somebody is infringing your copyright before sending a DMCA takedown notice.