Of course there could be other facts involved. However, It appears that the answer is, "Yes." You can't be forced to sign anything. However, patent agreements are usually signed "in consideration of continued employment." It may not be constructive to get upset before knowing the possible consequences. Imprecisely stated for the sake of brevity, amendment to the agreement in view of Stanford v. Roche doesn't make any change to your situation. The case, in my view, just requires employers to be...
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"Can I sue"? is an interesting question. In America, the answer is usually, "Yes." A better question may be, "Is it worth it to sue"? Consider what you would collect if you "won." Consider what it would cost you to "win." Usually the cost is greater than the possible recovery. This is often unjust, but that's how it goes. Counsel's suggestion above regarding the administrative procedure is sound.
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"Upon Publisher's acceptance" means upon publisher's acceptance. Maybe the contract says there is a time limit; maybe it does not. This is one reason why it is a very good idea to read contracts before you sign them. Sometimes what is not in the contract is just as important as something that is in the contract. That is why successful businesses consult attorneys.
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"Will the studio send me a letter . . ." The business aspects warrant consideration as well as the legal aspects. In many cases, this depends on personalities of the owners of the rights and the amount of money involved. Find out who the copyright owner is. Many copyright owners have reputations as either being reasonable or as being unreasonably aggressive. One major entertainment company sends Internet "take-down" notices and threatens copyright litigation at the slightest provocation....
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Your question really does not specify what you want to do. However, we can get some perspective from experience in the market. If a person puts a Starbucks logo on a T-shirt and tries to sell it, they can pretty much count on getting at least a "cease and desist" letter from Starbucks. Quite possibly they will be sued. I'm not sure what you mean by "use a registered trademark and acknowledge it." It would seem as though someone who did that is declaring to the world that they infringed. At...
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"My reading of the Lanham Act"??? We have an entire judicial system in which lawyers on oppositie sides of a case each urge the court to accept a different reading. Each lawyer cites legal precedent. Then the judge and her or his clerks study prior decisions and their readings of the law. Often, a very detailed opinion is written explaining why, in view of the law and prior interpretations, the court is creating its own reading. The fact that your reading may make sense is not particularly...
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Based on the facts presented, this does not appear to be a government contracts question. However, it is good that you included the fact that the employer was a government contractor. You never know which details will make a big difference.
It sounds like you had a pretty good inkling of the answer before you posted your question. It is to your credit that you chose to get clarification here. If you copy from a work and use it in tact in your work, it is difficult to see how that would not be covered by someone's rights. Fair use relates to the nature of the use, e.g., commenting on the work in a reivew. A fair use in not established simply from the number of seconds of sound or number of words that are copied.
You say, "I want this to be the least painful for my partner & the child." That is good. But who is the judge of what is least painful? You are not. The other side is not the judge either. This is why we have courts.
The last debtors' prison in the United States was closed a long time ago. People can still get arrested for fraud.