Management Chapter 8

intellectual property

Work of the human mind which consists of the products that result from intellectual and creative processes.

Types of Intellectual Property

• Trademarks

• Patents

• Copyrights

• Trade Secrets

Examples of things that can become intellectual property and what cant

Ex: Names, logos, art, architectural plans, menus NON ex: Land, consumer goods

Licensing Arrangement

To avoid a lawsuit for infringement on intellectual property a user of another's property can enter into a contract to receive rights to use the property and in exchange pay a royalty.

Trademarks

a distinctive mark, motto, device, or implement that a manufacturer stamps, prints, or otherwise affixes to the goods it produces so that they can be identified on the market and their origins made known

The Lanham trademark act of 1946

Rival competing companies cant use a trademark

Lanham amended in 1995

Competition or not you cant use another persons trademark

Trademark Dilution Revision Act 2006

the federal law that allows owners of distinctive, famous trademarks to sue over the use of similar marks that blur or tarnish their trademarks Plaintiff must prove:

1. Own famous mark

2. Defendant has begun using it in commerce diluting famous mark

3. Similarity gives rise to an association between marks

4. Association is likely to impair distinctiveness of the famous mark

Trademark Registration

Trademarks may be registered with a state or with the federal government. To receive protection under federal trademark law, a person must register with the U.S. Patent and Trademark Office in Washington, D.C. Can be done if trademark is currently in commerce or applicant tends to put it into commerce within 6 months

State trademark

protection of a trademark in specific sates, denoted with TM

Federal trademark

nationwide trademark coverage regulated by the US government, denoted with (R)

Trademark Infringement

Whenever a trademark is copied to a substantial degree or used in its entirety by another, intentionally or unintentionally

Distinctiveness of a mark

A trademark must be sufficiently distinctive to enable consumers to identify the manufacturer of the goods easily and to distinguish between those goods and competing products

What makes a strong trade mark (More likely to be approved)

Fanciful trademarks: Include invented words

Arbitrary trademarks: Common words used in a uncommon way

Suggestive trademarks: Imply something about a product w/o directly doing so

Secondary meaning

Descriptive terms, geographic terms, and personal names are not inherently distinctive and do not receive protection under the law until they acquire a secondary meaning. Ex: Calvin Klein Generic terms: Don't receive protection even if they acquire a second meaning.

Service, Certification, and Collective Marks

• Service Mark: similar to trademark but used to distinguish services of one person/company from another

• Titles and character names used in media are frequently registered as service marks

trade dress

The image and overall appearance ("look and feel") of a product that is protected by trademark law.

Trade names

Refer to a business name itself not product

Licensing

the legal process whereby a licensor allows another firm to use its manufacturing process, trademarks, patents, trade secrets, or other proprietary knowledge

Pro/cons of Trademarks

Inexpensive

Longest lasting

Patents

licenses that give an inventor the exclusive right to make, use, or sell an invention for a set period of time.

• Invention for a period of 20 years

• Design for a period of 14 years

• Since 2011 protections begin when the patent is filed not issued ("Race to the patent office")

• Challenges to a patent is prohibited for first 9 months

What's patentable?

Whoever invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore Basically anything that is novel and not obvious Not patentable: Laws of nature, phenomena, abstract ideas, algorithms.

Patent Infringement

if a firm makes, uses, or sells another's patented design, product, or process without the patent owner's permission Inventions and designs can have infringement for small parts, while business need all the parts to be copied.

Remedies for Patent Infringement

Injunction - Patent holder must prove they suffered irreparable injury and that the public interest would not be disserved by a permanent injunction

Damages for royalties

Reimbursement for attorney's fees - If there was willful intentions

Treble damages - If we can prove we get three times the cash

Pros/cons of patents

• 20 year right to exclude others (short)

• Expensive ($5,000-$100,000)

Copyright law

An intangible property right granted by federal statute to the author or originator of a literary or artistic production of a specified type. An author's exclusive right to publish, print, or sell a product of her intellect for a certain period of time.

Copyright Act of 1976 & Copyright Term Extension Act of 1998

Give the author or originator the exclusive rights to their works for a specific amount of time

• Work created after 1/1/78: Are automatically given statutory copyright protection for life of author plus 70 years

• Works owned by publishing house: 95 years from the date of publication or 120 years from the date of creation

• Works by more than 1 author: 70 years after death of last surviving author (When protection ends its public domain, where law cannot control what you do with the material you find)

Copyright Registration

Copyright owner doesn't need to place the (C) symbol or have "Copr." on the work to have the work protected from infringement.

What is protected expression

1. To be protected, a work must be "fixed in a durable medium" from which it can be perceived, reproduced, or communicated;

2. Original; and

3. Fall into one of the 8 categories

• Literary works

• Musical works

• Dramatic works

• Pantomime

• Pictorial, graphical, or sculptural

• Motion pictures

• Sound recordings

• Architectural works

4. It is not possible to copyright an "idea" only a way in which an idea is expressed

5. If someone other than the copyright owner wishes to use the material a license agreement should be formed and royalties paid

Copyright infringement

Remedies: damages and injunctions 6 protected "Fair use":

• Criticism

• Commentary

• News reporting

• Teaching

• Scholarship

• Research 4 statutory factors for "fair use":

1. The purpose of the use

2. Nature of the copyrighted work

3. Amount/portion of the work used in relation to whole

4. Are we affecting the owners ability to make money with the work.

First Sale Doctrine

Once work is sold copyright owner has no more controll

Copyright Protection for Software

Source code is highly protected

Plagiarism versus copyright

They are not the same, you can be engaged in "fair use" but still commit plagiarism (Think about this)

Pros/Cons of copyright

• Inexpensive ($20)

• Long lasting

• Doesn't protect ideas

• Still lots of controversy with technology

Trades Secrets

Anything that gives a company a competitive advantage. Protects information which cant be patented, copyrighted, or trademarked against appropriation. Ex: Research, plans, customer lists, recipes, techniques (Involve no registration and expand both to ideas and their expression)

State and Federal Law on Trade Secrets

One who discloses or uses another's trade secret, without a privilege to do so, has committed a tort if:

1. he discovered the secret by improper means; or

2. disclosure or use constitutes a breach of confidence

Uniform trade secrets Act of 1979

This uniform law was presented to the states in 1979 in an effort to reduce the unpredictability of the common law amongst the states in this area. Parts of the act have been adopted by about 47 states as of 2013.

Economic espionage act of 1996

makes the theft of trade secrets a federal crime in the US

confidentiality agreement

trade secrets must be disclosed to some persons, particularly key employees. So, businesses protect their trade secrets contractually by having all employees who use the process or information agree in their employment contracts to never divulge it

Pros/cons of trade secrets

• can be longest lived form of IP

• can be inexpensive

• can be expensive

• doesn't always work