legal test 3

classification of crime - felony

felony —> indictment by a gran jury —> fine: prison and/or probation 1 yr or more

classification of crime - misdemenor

misdemeanor —> information or accusation —> fine: jail and or porbation 12 months or less

DA

prosecutes felonies and misdemenours (assistants are ADA’s)

US Attorney general

federal level (assistants are AUSA)

solicitor

in some states — prosecutes misdemenors, traffic

grand jury

5th amendment

intent element

willfully or knowingly

fraud

is an intentional deception aimed at obtaining financial gain unlawfully

-prosecuters must establush a scheme to defraud

ponzi schemes

a fake investment where new people’s money is used to pay earlier people, instead of the organizers earning real profits

-they don’t actually invest the money

-they just take the money from the next person who joins and use it to pay you

-then they take money from the next person, and so on.

mail and wire fraud

Unlawful to willfully or knowingly ise the U.S. Postal Service or electronic means of interstate communication to defraud a person/a buisness

fraud example case United states v. Bankman-Fried

Embezzlement

the illegal misappropriarion or theft or funds entrusted to someone

-trusted relationship

-access to funds

-used the funds for personal gain

-intentional

money laundering

disguising the origins of the money to make it appear legitimate or from another source

conspiracy

-agreement or a partnership for criminal purposes

-each member becomes the agent or partner of every other member

-they are charged as co-defendants

-overt act

-withdrawing

aiding and abetting

person acting under the direction of someone accused of criminal activities can be held responsible (diff. from conspiracy)

obstruction of justice

commision of an act (or a statement) with the intent to obstruct the legal process

united states v. martha stewart

preventive measures

-compliance team(s)

-internal controls and monitoring

-employee training

regulatory process - administrative agencies

organizations that make up the govermental bureaucracy

-types of authority:

Quasi-legislative

Quasi-judicial

reasons for agencies

to provide

-specificity

-expertise

-protection

-regulation

-services

functions of agencies

-rule making

-adjudicating

-advising

-investigating

advisory opinions

subpoenas

order of authority/hierarchy

1.U.S Constitution

2. Federal statutes

3. Agency rules

indepndent agency

an administrative agency that is governed by a board of commissioners, appointed by the president

executive agency

the agency serves at the pleasure of the president

organizations of agencies

-Agencies, Boards, or Commissions consist of five to seven members.

-One member is appointed as chairperson.

quasi-judicial

-Administrative law judges: Hear cases of alleged admin law violations and apply the law to the facts

-Perform the adjudicative fact-finding functions.

procedure with administrative law judges

Starts with a complaint. —>No jury.

-If the Judge finds violations of the law, the agency may issue cease and desist orders

-often end up with a Consent order

-Courts determine if there is substantial evidence to support the action taken by the agency

influencing agency decisions

Agencies give public notice of proposed rules and hold public hearings —> federal register

Interested parties present evidence in support or opposition to the regulation

role of CCO in a company

Chief Compliance Officer (CCO) ensures that the organization's operations comply with the agency's regulations and standards

-The volume of rules adopted by agencies is a lot for the business community to follow

-Regulation can be a form of taxation

pros and cons to the agencies existing, cost to buisness, cost to the public

pros:

● Specificity

● Expertise

● Protection

● Regulation

● Services

cons:

● High cost of paperwork,

staff, etc. to comply with

regulations

● High cost to taxpayers

● Slows down business

● Inhibits innovation and

competition

what is IP?

IP = creations of the mind

IP Law = Mechanisms to enforxe right to exclude; creates the ability to “control” and profit from an intangible

4 types: Trade Secrets, Trademarks, Copyrights, Patents

What is a violation of IP law?

In short, profiting off someone else’s IP without their permission

-Causes consumer confusion over products

Legal consequences for IP law violation

Civil:

● injunctions (type of specific performance),

● money damages (compensatory, maybe punitive)

Criminal:

● federal crime:

○ Pirating, counterfeiting

prevention stratagies

● NDAs

● digital security measures

● legal audits to ensure compliance

Pros and cons to protecting IP

Pros-

● Encourage research and

development funding

● Encourage invention

● Protects investments

Cons-

● High cost and complexity of law

● _______?

● Could drive up consumer prices

—Failure to follow the IP registration rules may mean that information that could have been captured is instead dedicated to the public domain, meaning that anyone can use it.

Trade Secrets

Confidential business information that provides a competitive edge, such as formulas, practices, or processes. Must have economic value

Term- Lasts forever as long as it remains a secret

Uniform Trade Secrets Act

Steps to protect a trade secret

1. Identify the valuable knowledge

2. Keep it secret

3. Take reasonable measures for it to stay secret (like the prevention strategies covered before

To preserve secrecy

•Lock written material.

•Secure computer-stored knowledge with firewalls and encryption.

•Impose confidentiality restrictions.

•Regulate visitors.

•Ask employees, customers, and business partners to sign nondisclosure agreements.

steps to bringing a lawsuit for violating a trade secret

1. Information must actually be secret

2. Business had to have taken reasonable steps to keep it secret

3. Misappropriation of the trade secret - more on next slide

Misappropriation

-Happens via a crime (theft, hacking, etc)

-Or violating duty to keep secret (example: employee violating NDA)

-Independent creation is not misappropriation; reverse engineering is not misappropriation

Employee creation of trade secrets

• If Employee independently creates a TS unrelated to work and using own resources, Employee owns it

• If created at work, connected to job, or using Employer resources:

1. Belongs to Employer if:

(a)Express employment contract or

(b)Employee was “hired to invent

Remedies for trade secret violation

Trade secret owners can acquire injunction or receive money damages

Criminal - Economic Espionage Act (federal)

Patents

-Exclusive rights granted for inventions, allowing the inventor to control how the invention is used.

-Term- Last for 20 years from the date the application is filed in the Patent and Trademark Office

-Do NOT require the owner to make and/or sell the product; patent is a right to exclude/control

Utility patent

A property right awarded for a new and nonobvious process, machine, or invention with a useful function.

Ex: Safety Glide Needle Shield

Covers: Utility patent for a needle with a built-in safety shield.

Design Patent

Protects ornamental appearance, not function.

These only last for __15_years, all others for 20 years

ex: coca cola bottle —> the iconic contour shape of the glass bottle

patent process

1. Pay a filing fee and submit an application with Federal Patent and Trademark Office

a. Application must show:

i. How to make and use the invention

ii. Why it is different from prior ones

iii. Precisely detail the invention

2. An examiner looks over the application and communicates with the inventor

3. Can take several years

(Contrast with trade secrets which are never filed anywhere

Novelty, nonobviousness, and utility

-An invention is not patentable if it would have been obvious to an ordinary person in the industry at the time of filing

-An infringer can argue that the invention is previously known, obvious, or lacks utility

-For utility patents only, the new design/invention must be useful (so it has to actually work)

20 year time limit for utility and plant patents, 15 for design patent

When that time expires, it is in the public domain and others may use it without permission of the creator

steps to protect a patent

Register it

Defend it through legal means when it is infringed upon

Patent Owner – stop others from making, using, importing, offering to sell, selling, etc. your patented invention or obvious variants thereof. • Litigation is very expensive

Trade Marks

Signs, logos, phrases, or expressions that distinguish goods or services of one entity from another.

Term – 10 years

Goal – Allow consumer to identify the manufacturer

-Distinctiveness - the capability of a trademark to identify the goods of a particular merchant and to distinguish those goods from others

-generic terms cannot be trademarked

genericide - mark becomes the generic name for the goods or service

ex: escalator, dry ice, trampoline, zipper

brand vs trademark

Trademark can also be called the brand or brand logo:

slogans - a type of trademark

-A registrable slogan is one that is used in a trademark sense and functions as a trademark

-If slogan is generic, merely informational, or is otherwise not being used as a mark, registration is refused

sound marks - type of trademark

Sound marks function as trademarks when they create in the hearer’s mind an association with a good or service

trade dress

-Ownership right over a distinctive appearance

-Total image and overall appearance of a business

how to register and protect a trademark

● Make sure yours is unique enough

● Trademarks exist under state and federal law

● Must actually use the mark to obtain and protect rights

● If registered, must be renewed every 10 years

● Prosecute infringement

how to defend against a trademark infringment case

Defenses:

1. Mark is not distinctive enough to be a trademark

or

2. No chance of confusion —>

or

3. Fair use

a. Parody

b. Education

c. News reporting

copy rights

Rights that protect original works of authorship, including books, music, films, software, and artwork.

Expression rather than invention

Goal: promote creativity

95 years from publication by a company, or 120 years from creation by a company

Automatic protection under the Copyright Act (federal) from the moment of creation by the author or company

term: life of the author plus 70 years

trademark symbol (TM)

Use when: You want to claim trademark rights but haven’t registered the mark with the U.S. Patent and Trademark Office (USPTO).

Applies to: Logos, names, phrases, or symbols used to identify good

registered trademark symbol (R)

● Use when: Your trademark has been officially registered with the USPTO.

● Applies to: Logos, names, phrases, or symbols that have completed the federal registration process

public domain

requirement for copyright protection

1.original

2. in a tangible medium (digital is ok)

3. show creativity

copyright enforcement

There is no way to accidentally infringe like with patents or trademarks

You cannot begin legal action for copyright infringement unless you have registered your work with the Copyright Office

Must show the infringer took your work, not just had a similar idea

Example: Vampire novels

What the court can do:

injunction

Compensatory

Statutory damages

Criminal action - piracy laws - federal only

sampling

Cutting and pasting a portion of a song into your song

Needs permission from the owner, or the song must be in public domain, or fair use: parody (Weird Al), use in a news source, education, etc.

copyright fair use

Criticism

News Reporting

Teaching

Research

Parody/satire

Derivative works need permission/licensing UNLESS they fall under fair use

interpolation

Recreating a melody or portions of a melody from a previously recorded song

Courts consider - purpose, amount used, and market impact

fanfiction

legal grey area

derivative works usually require permission

DO CHAPTER 14 SLIDES