Chapter 11: Intellectual Property

Intellectual Property

The Constitution lets Congress give exclusive rights to authors and inventors to promote progress. Why? To incentivize innovation How? By granting temporary exclusivity Cost? Less competition = higher prices

Trade Secrets

Sam creates a secret recipe for a best-selling energy drink. He doesn’t patent it but locks the formula in a vault and limits employee access. A competitor tries to steal it. ___ ___ are valuable info kept secret that give a business advantage. They must be protected through reasonable efforts. Covered by common law and the Uniform Trade Secrets Act in most states.

To win a Trade Secret case

The information must be secret and the business must take reasonable measures to keep it secret. By:

• Locking written material

• Secure computer-stored knowledge with firewalls and encryption

• Regulate visitors

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

• Impose confidentiality restrictions

Misappropriation

An ex-employee steals a company’s confidential client list and gives it to a competitor. ____ happens when someone improperly acquires or discloses a trade secret. But if someone independently discovers the same info or uses public sources, it’s not ____.

Patent

Jordan invents a new type of phone charger and applies for legal protection so no one else can make, use, sell, or import it without permission. A ____ is associated with an incentive act.

Utility

A ___ Patent focuses on the function: new, non-obvious, useful processes, etc. This lasts 20 years from filing date.

Design

A ___ Patent focuses on the appearance and form. This last 15 years form the filing date.

Plant

A ___ Patent is a new variety of plant that can be produced asexually.

America Invents Act

Switch from a first-to-invent system to a first-to-file system

Patentable Subject Matter

A startup tries to patent a mathematical formula with no specific application. The application is denied. Courts can review and invalidate patents if the subject matter doesn’t qualify.

Can

Process, machines, article of manufacture, composition of matter, and pharmaceuticals are all examples of subject matter that __ be patented.

Cannot

Law of nature, natural phenomena, abstract idea, and mathematical algorithms and formulas are all examples of subject matter that ___ be patented.

The Alice Two-Step"

A tech company tries to patent software that organizes data using basic math formulas. The court applies a two-part test:

1. Does it cover an ineligible concept (like an abstract idea)?

2. If yes, does it add something more to make it patentable?

Novelty

Something new and different from the prior art

Non obviousness

Ability of an invention to produce new, surprising, or unexpected results

Utility

1. Must do something useful

2. Does not apply to design patents or plant patents

Trademarks

1. Marks on what is produced to represent the origin of goods and services

2. Recognizability or distinctiveness is the function of trademarks 

3. Protects consumers against confusion

Trademark

Mark, word, picture, or design that attaches to goods to indicate their source.

Service Mark

A mark associated with the service

Certification Mark

A mark used by someone other than the owner to certify the quality of goods or service.

Collective Mark

Mark represents membership in a certain organization or association.

Trade Dress

The look or design of a product or service. (I.e. the color or shape of a product)

If the mark is similar to another mark, contains reserved names or designs, merely describes a product, or generic

When can the PTO deny registration?

The descriptive term is listed on the PTO’s Supplemental Register for 5 years AND acquires a secondary meaning

Generally, the PTO will not accept a person’s name unless ___.

Infringement

If someone uses a protected trademark without permission, it’s called _____. This is a civil violation

Criminal

___ Trademark violations involve intentionally making or selling counterfeit products, like fake Rolex watches or Louis Vuitton bags. These actions can lead to serious penalties, including fines and jail time.

Confusion

To prove trademark infringement, the plaintiff must show that the defendant’s use of a mark creates a “likelihood of ___” with their trademark. Courts consider several factors, including the defendant’s intent and any actual consumer confusion.

Trademark Confusion

When Cracker Barrel (the restaurant) tried to sell cheese in stores, the court ruled it would likely confuse consumers with Kraft’s cheese, harming Kraft’s brand, so Cracker Barrel was blocked from selling cheese in grocery stores. This is ONLY for famous trademarks

The mark is generic, little chance of being confused, and is fair use

What can a Defendant argue for a trademark violation?

Federal Trademark Dilution Act

What protects famous trademarks by prohibiting others from using the same or similar marks in a way that would weaken the brand’s uniqueness, reputation, or goodwill—even if there’s no consumer confusion?

Blurring

When another company uses a similar mark in a way that weakens the distinctiveness of a famous brand (e.g., “Google Shoes”).

Tarnishment

When a mark is used in a way that harms the reputation of the famous brand by creating a negative or offensive association (e.g., using a luxury brand’s logo in an inappropriate ad).

Individual’s lifetime + 70 years. Company lasts 95 years from publication or 120 years from creation (whichever one expires first)

How long does copyright protection last?

Piracy

This refers to large-scale copyright infringement, such as illegally distributing movies, music, or software.

Willful

___ infringement (done intentionally) can lead to criminal penalties, including fines and prison time.

International Intellectual

___ ___ property rights (like trademarks, copyrights, and patents) are generally limited to the country where they are registered. To protect your IP in other countries, you must apply for protection in each country individually or through international treaties.

WTO

The ___ administers the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which requires member countries to provide legal protection for all major forms of intellectual property, including copyrights, trademarks, and patents.