Ch 7: Intellectual Property

Intellectual Property

Property that’s developed through an intellectual and creative process. Intangible rights that give their owners or holders monopoly rights for specified periods of time.

Forms of Intellectual Property

• Trade Secrets, Patents, Copyrights, Trademarks

Trade Secrets

• Product formula, pattern, design, compilation of data, customer list, supplier lists, social media contact lists, ingredients, proprietary information, manufacturing processes, etc.

• Many are not qualified to be patented, copyrighted, or trademarked.

Uniform Trade Secrets Act:

• many states adopted to give statutory protection to trade secrets

Secrecy Requirement:

• An owner must take all legal, technical, and physical precautions to document and protect the trade secret, or it loses protection under state unfair competition laws.

Defend Trade Secrets Act (DTSA)

• A 2016 federal statute granting trade secret owners the right to file civil lawsuits in federal court for misappropriation without preempting state laws.

• Allows actual damages, unjust enrichment, infringer profits, injunctions, and ex parte seizure orders; carries a 3-year statute of limitations.

Economic Espionage Act (EEA)

• A 1996 federal statute making the theft or conversion of trade secrets a federal crime.

  • Enacted largely to combat computer and electronic espionage; penalizes individuals and organizations with fines and prison time, with heightened penalties if foreign governments benefit.

Reverse Engineering:

• Lawfully discovering an unpatented trade secret by taking apart, examining, or recreating a competitor's product or recipe.

  • The party may use the underlying formula or design, but is strictly prohibited from using the creator’s trademarked name.

Misappropriation of a Trade Secret:

• Unlawfully acquiring, disclosing, or using a trade secret through improper means (e.g., theft, bribery, industrial espionage).

  • Civil remedies include recovering offender profits, compensatory damages, and obtaining an injunction against further use.

Patent

• A federal grant issued by the federal government giving an inventor the exclusive legal right to make, use, sell, or offer for sale an invention for a limited period of time.

U.S. Court of Appeals for Federal Circuit

• special federal appeals court that hears appeals from the patent trial and appeal board of the U.S. Patent and trademark office and U.S. district courts concerning patent issues

Patent Application

• Must be filed with the PT O in Washington D C

• PTO provides for online submission of the application

• Must contain a written description of the invention

• PTO must make a decision whether to grant a patent within

three years from the date of filing

Utility Patent:

•  Protect the functionality of the item.

• Twenty years fromt he date the patent application is filed

Plant Patent:

• invented or discovered and asexually reproduced any distinct and new variety of plant, including cultivated sports, mutants, or hybrids

• Lasts for 20 years from the date of filing the patent application

Design Patent:

• obtained for the decorative nonfunctional design of an item that protects the appearance of an item and not the function or internal mechanical operation of the item

• Term limit of 15 years from the date of the issuance of the patent. 

Requirements for Obtaining Patent

• Invention must be (1) novel, (2) useful, and (3) nonobvious:

Enablement Requirement:

• patent application must explain enough about the invention so that someone skilled in the art can both make and use the invention. 

First-to-File Rule:

• Under the Leahy-Smith America Invents Act (AIA), the U.S. uses a "first-inventor-to-file" rule—the first person to properly file a patent application receives priority, rather than the first person to invent.

Public Domain:

• point in time when anyone can produce and sell a prior patented invention, copyrighted material, or trademark after the period runs out, the trademark isn’t renewed, or is abandoned.

Patent Infringement

• When someone makes unauthorized use of another’s patent

• Claims must be brought in the U.S. district court that has jurisdiction to hear the case.

• Patent decisions of the U.S. district courts can be appealed to the U.S. Court of Appeals for the Federal Circuit

Treble (3x actual) damages if infringement was intentional

Patent Infringement Recoveries

• 1.) money damages equal to a reasonable royalty rate on the sale of the infringed articles

• 2.) other damages caused by the infringement (e.g., loss of customers)

• 3.) an order requiring the destruction of the infringing article

• 4.) an injunction preventing the infringer from such action in the future

Copyright

• A legal right granting authors of qualifying subject matter the exclusive right to publish, produce, sell, license, and distribute their work.

• Shields creative work from unauthorized use, incentives creative production, and permits selling or licensing of rights.

Tangible Medium of Expression

• Only original works of authorship fixed in a tangible medium of expression qualify for registration and protection.

• Does not require physical touch; the work simply must be stored in a permanent medium accessible or communicable directly or with a machine/device.

• ex.) Writing on paper, saving to a hard drive, recording smartphone videos, posting images on social media, or sculpting with clay.

Berne Convention (1989):

• Eliminated the legal requirement to use the © symbol or the word "copyright," though using the notice is still advised to defeat "innocent copyright" defenses.

Copyright Period

• Individuals: Lifetime of the author plus 70 years.

• Businesses (Works for Hire / Commissioned Works): The shorter of 95 years from first publication or 120 years from creation.

Public Domain Day:

• Expired works enter the public domain on January 1 of the year following expiration.

Exclusive Rights of a Copyright Holder

Reproduction, Distribution, Derivative Works, Public Performance, Public Display, Digital Display

First Sale Doctrine

After the initial lawful purchase/transfer of a physical copy, the owner can resell, rent, or give away that specific copy without permission. (Does not apply to rented, leased, or licensed digital media).

Civil Copyright Infringement

• Occurs when an unauthorized party copies a substantial and material part of a copyrighted work (copying need not be full or word-for-word).

Copyright Claims Board (CCB):

• A voluntary, streamlined administrative forum within the Copyright Office handling claims under $30,000 as an alternative to federal court (frequently used for unauthorized online sharing).

Fair Use Doctrine

A legal limitation allowing specified unauthorized uses without liability for infringement.

• Protected Use Categories:

  1. Quotation for review, criticism, or scholarly/technical analysis.

  2. Parody or satire.

  3. Brief quotation in news reporting.

  4. Reproduction of a small portion by teachers or students to illustrate a lesson.

  5. Incidental reproduction in a broadcast of a reported event.

  6. Reproduction in legislative or judicial proceedings.

Music Modernization Act

• 2018 federal statute regulating digital music streaming and downloads within the music industry.

Blanket Licensing:

• Streaming services obtain a single blanket license from the MLC covering all songs in the U.S. and make one royalty payment, which the MLC distributes to registered composers and songwriters, shielding digital services from infringement lawsuits.

AI and Copyright Law

• AI works created to closely mimic an author's, artist's, or singer's signature output violate copyright if deemed substantially similar.

• Both the end user prompting the output and the AI company providing the platform can be held liable for infringement (the U.S. Supreme Court has not yet resolved an AI copyright case).

Provisional application:

• An application that an inventor may file with the PTO to obtain 12 months to prepare a final patent application

  • Applicant can then use patent pending

Trademark

• Any trade name, symbol, word, logo, design, or device used to identify and distinguish goods of a manufacturer/seller or services of a provider from those of others.

• only IP that is renewable

Lanham Act (1946)

• The primary federal statute providing protection to trademarks, service marks, and other marks.

  • Protects an owner's investment and goodwill in a mark.

  • Prevents consumer confusion regarding the origin of goods and services.

Registration of a Mark

• Must prove actual use in commerce (e.g., selling goods or services), or

• File stating an "intent to use" within 6 months of application; a 6-month extension may be requested and is often granted.

• Valid for 10 years upon initial registration and can be renewed indefinitely for additional 10-year periods.

Service Mark:

• Distinguishes the services of the holder from those of its competitors (e.g., McDonald's dining services, Starbucks food services).

  • Some companies register the same name as both a trademark and a service mark when selling both goods and services.

Certification Mark:

• Usually owned by a nonprofit cooperative or association to establish geographical origin, quality standards, materials, or manufacturing modes.

  • Sellers meeting the criteria are licensed to display the mark without having to join the organization.

Collective Membership Mark:

• Identifies organization members

  • Only members of the organization may use it; identifies membership only, not goods or services.

Trademark Infringement

• Elements to Prove:

  • The defendant used the mark in an unauthorized manner.

  • The unauthorized use is likely to cause confusion, mistake, or deception among the public regarding the origin of goods or services.

Trademark Infringement Recoveries

• The profits made by the infringer

• Damages caused to the plaintiff’s business and reputation

• Order requiring defendant to destroy all goods containing unauthorized work

• Injunction preventing the defendant from future infringement

Trademark fair use

a defense if there is no likelihood of confusion with the mark’s actual owner

Nonuse and Abandonment of a Mark

• Evidence of Abandonment: Nonuse in commerce for 3 consecutive years constitutes evidence of abandonment.

Generic name

A mark that has become a common term for a product line or

type of service and therefore has lost its trademark protection

• Name becomes descriptive rather than distinctive

• Ex: Thermos, Linoleum, Escalator

Trade Dress

• The "look and feel" of a product, packaging, or business establishment that identifies its commercial source and distinguishes it from competitors.

• Aesthetic, inherently distinctive elements including color schemes, designs, shapes, packaging, and store interiors/layouts.

  • Adidas's three stripes

Federal Trademark Dilution Act of 1995:

Protects famous marks from dilution, erosion, blurring, or tarnishing

• Use by the other party is actionable if:

• It is commercial

• It causes dilution of the distinctive quality of the mark

Blurring

trademark used in another market, weakening the unique mark

Tarnishment

Diminishes, ridicules, portrays mark unflattering, immoral, or reprehensible context by using trademark

Work for Hire Rule

An exception to the general rule that the creator of creative work is

the owner of the work.

• Employer owns the work if:

• Prepared by an employee within the scope of employment

• Order or commissioned by the principal to be created by an

independent contractor