Tag: Protecting

Unexpected Liability for Service Providers

With “hacking” and identify thefts becoming all too common place, each service provider must place more and more emphasis on protecting itself from legal liability caused by not only its own actions, but the actions of the company(ies) to whom it outsources. This article provides an introduction to contracting for service providers with an eye toward gaining legal platform upon which to adequately defend itself, if necessary.

In addition to government compliance, which will vary depending upon the industry, any company that collects personal information during the course of providing its services must take steps to safeguard itself from legal liability arising due to unwanted disclosures.  One way to provide a legal safety net is to consider the applicable issues in the service provider’s agreement.  The following is an abbreviated checklist.

  1. Whether personally identifiable information will be provided to service provider’s employees, and if so, what measures are taken to narrowly tailor the need to expose such information to only those employees or third parties who need to know in order to provide the service.  In considering this, a service provider may want to consider identifying types of employees or third parties that may be exposed to such information, or even listing such persons and having them sign a confidentiality agreement with respect to such information.
  2. When does a service provider have to notify a customer of a security breach?   Is there an obligation to notify customers of a potential privacy-related compliance issue?  Or, only when a security breach has occurred?  If a security breach is defined, service providers will be required to undertake all tasks from notification to remediation and payment for such remediation upon receipt of a complaint.
  3. While necessary, service providers will want to limit their contractual obligations to comply with compliance with IT management standards such as the International Organization for Standardization certification.
  4. If the service provider receives credit card information of customers, then at the very least, the following issues must be considered:
    1. Limitation of access of personal information to authorized employees or parties
    2. Securing business facilities, data centers, paper files, servicers, backup systems and computing equipment (mobile and other equip with info storage capability;
    3. Implementing network/ device application, database and platform security
    4. Securing info transmission storage and disposal
    5. Implementing authorization and access controls with media, apps, operating systems and equipment
    6. Encrypting highly sensitive personal information stored on any mobile media
    7. Encrypting highly sensitive transmitted over public or wireless networks
    8. Strictly segregating personal information from and info of service provider or its other customers so that personal information is not commingled;
    9. Implementing appropriate personnel security and integrity procedures and practices (conducting background checks, and providing appropriate privacy and info security training to service providers’ employees.

If you have any questions regarding your liability for disclosure of personal information, please contact:

Natalie Remien at:

nremien@lgattorneys.com or (312) 368-0100.

That Looks Just Like Our Product!

The phone rings and it is one of our clients telling us that someone has taken the design of their product and is selling a competing product.  The competitor is not solidly a typical trademark infringer, as they named the infringing product something completely different.

Trade dress to the rescue?  Not so fast.  Patent design or trade dress infringement theories can sometimes be a successful remedy, but not always.   Patent design requires a prior patent registration, which oftentimes, the victim of the infringement either did not realize it, should have filed a design patent, or did not take the time or money and put it toward that task.  Therefore, patent design is only as good as the forethought and planning that may have (or may not have) gone into the product design.

So, we are left with trade dress protection.  Trade dress is typically defined as the “look and feel” of a product and is a bit elusive considering it is not usually filed in an application before the USPTO.  Therefore, this client would be left to try to factually establish infringement in court, an often time consuming and expensive venture.

Converse was certainly up for the challenge several years ago.  The shoe company sued multiple companies concerning the alleged “copying” of its iconic Chuck Taylor shoe designs.  An argument typically argued by defendants in these cases is functionality – that is – if the design is functional, a necessary component for the product to work or function, then that element is not eligible for trademark protection.   However, a most interesting other argument is that Converse waited so long to file these lawsuits, that the design was already copied by so many companies that it became “generic.”   While trademark infringement defendants often argue laches, or delay in filing suit, that has somehow prejudiced defendant, we do not often see an argument that delay caused the design to become generic.  That is, that there already were so many infringers and Converse did not act quickly enough so as to determine that the design is actually not protected.

What is interesting is the lesson to business owners and designers.  This example is yet another reason to periodically review the product lines and advertising to determine whether the brands are adequately protected.  Additionally, companies should also be vigilant when it comes to protecting its product designs, and even website designs, before it is too late.

If you have any questions in this area, please contact:

Natalie A. Remien at:

nremien@lgattorneys.com or 312-368-0100

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