Patents, Secrecy, and Trademarks Flashcards

50 vocabulary flashcards covering the key concepts from Case Study 7 regarding Apple vs Samsung, LEGO process innovations, and intellectual property law.

Strategic Deterrent

Apple's use of litigation not just to recover damages, but to establish legal risk for competitors copying their design philosophy.

Thermonuclear War

The phrase used by Steve Jobs to describe his aggressive litigation strategy against Android and Samsung's copies of the iPhone.

Trade Dress

Legal visual characteristics of a product or its packaging, such as the overall look and design language used by Apple for the iPhone.

Injunctions

Legal orders sought by Apple to ban certain Samsung models from sale to protect Apple's competitive position and slow competitor time-to-market.

Competitive Moat

Strategic barriers, like Apple's User Experience (UX) differentiation and design elegance, that protect a firm's market share and premium pricing power.

Brand Premium

The extra amount consumers are willing to pay for a product due to its perceived quality and design, which Apple defended through litigation.

Dubious Patents

Questionable patents granted despite having weak novelty or lacking a significant inventive step.

Patent Thicket

A dense network of overlapping intellectual property rights that a firm must navigate to develop or commercialize new technology.

Freedom-to-Operate Search

The process of checking if an original product can be commercialized without infringing existing technically valid but potentially weak patents.

Patent Trolls

Entities that acquire dubious patents without intending to commercialize them, solely to extract licensing fees from productive firms.

Pure Deadweight Loss

An economic concept referring to the rent extracted by patent trolls which provides no benefit to the economy.

Social Bargain of Patents

The exchange of a temporary monopoly for the public disclosure of innovations that advance public knowledge.

Hydraulic Drive

A traditional injection moulding machine technology favored by European LEGO suppliers for its potential to benefit from process innovations.

Electric Drive

An injection moulding machine technology primarily used by Asian producers for lower energy consumption and running costs.

Additive Manufacturing

A 3D manufacturing revolution in tool-making, specifically utilizing high-powered lasers to fuse steel into complex shapes.

Selective Laser Sintering

A specific type of additive manufacturing that allows the creation of mould designs previously impossible through subtractive methods.

Subtractive Methods

Traditional mould production involving the physical cutting of tool steel, which constrains mould geometry to specific grinding paths.

Appropriability Problem

The challenge of whether a firm can successfully capture the value of its own innovations or if they will be exploited by competitors.

Spillover

The unintended flow of technical ideas and knowledge from a company like LEGO toward its tool-making suppliers.

Reverse Engineering

The process of inferring a product's manufacturing details by subjecting the final artefact to material analysis or microscopic inspection.

Tacit Process Knowledge

Specialized manufacturing expertise and engineering judgment held by employees that cannot be easily documented or inferred from a product.

Trade Secrecy

A protection mechanism for process innovations that requires no filing costs or mandatory disclosure but offers no protection against independent discovery.

Mandatory Disclosure

A requirement of the patent system where the inventor must publicly share the technical details of their invention.

Parallel Development

The risk that a competitor or researcher will independently develop the same invention or technique at the same time as the original firm.

Inventing Around

The strategy used by competitors to study a public patent and design a slightly different method to avoid infringement while achieving the same result.

Voluntary Disclosure

The strategic publishing of technical descriptions to prevent others from patenting an idea by creating prior art.

Prior Art

Existing public evidence of an innovation that blocks future patent applications for that same idea by anyone else.

Technical Functionality Doctrine

A legal principle preventing shapes necessary to achieve a technical result from being registered as trademarks.

Indicator of Commercial Origin

The primary function of a trademark, identifying the brand or source of a product to consumers.

Network Effect

A competitive advantage LEGO holds by being the world's most widely adopted compatible building standard.

Patent (Definition)

A formal grant for new, inventive technical inventions that allows the owner to block even independent discoverers for a limited time.

Trademark (Definition)

A sign such as a word, logo, or shape used to distinguish one firm's goods from another, potentially lasting indefinitely if renewed.

Brand Equity

The commercial value derived from consumer perception of a brand name rather than just the product itself.

Strategic Defensive Patents

Filing patents to establish priority and prevent competitors or suppliers from blocking a firm's use of its own technology.

European Court of Justice (ECJ)

The court that ruled in $2010$ and $2015$ regarding the legality of LEGO's minifigure shape as a trademark.

Multi-component Product Rule

The Supreme Court ruling that damages for design patent infringement cannot equal the entire profit of a complex product like a smartphone.

Form Factor

The physical size and shape of a device, which Apple accused Samsung of copying.

Consumer Cynicism

A negative attitude by the public toward the patent system caused by prolonged, aggressive litigation between firms.

Incumbent Advantage

The strategic benefit large firms get from maintainable weak patents, which create barriers to entry for smaller rivals.

Cycle Time

The time required to complete one manufacturing process, which additive manufacturing can significantly reduce.

Mould Geometry

The 3D shape of a tool used in injection moulding, which is less constrained by additive manufacturing than by subtractive methods.

Appropriability

The ability of an innovating firm to protect its investments and prevent imitation by competitors.

Independent Discovery

When a competitor develops a similar innovation on their own without copying, protected by secrecy but not by patents.

Three-Dimensional Shape Mark

A type of trademark registration attempted by LEGO to protect the iconic shape of the minifigure character.

Technical Purpose

The reason the ECJ struck down LEGO's minifigure trademark, stating shapes that enable building system compatibility are functional.

Patent Term

The duration for which technical exclusivity is granted, generally $20 \text{ years}$ from the date of filing.

Trademark Renewal

The process by which a trademark can last indefinitely as long as it is still used in commerce and formally updated.

Licensed Themes

Ecosystem components like Star Wars and Marvel that LEGO uses to maintain a competitive advantage without relying solely on shapes.

Design Patent

A type of intellectual property protecting the ornamental design of a functional item, central to the Apple vs Samsung case.

Original Apple Award

The initial damages amount sought by Apple which was approximately $1.05 \text{ billion}$ before being reduced.