LEGL 2700 Hackleman Exam 3

justification for intellectual property law

Article 1 Section 8 of constitution

Incentives innovation, but doesn't lock the rights to IP forever

What classifies as IP

brands & logos

business practices

employee skills and talents

Inventions

Trade Secrets

any knowledge that has economic value because nobody else knows it, and you've taken reasonable steps to guard it

doesn't have to be unique

How to establish a trade secret

Internal audits to identify confidential knowledge

preserve security:

lock written material in safes, firewalls, confidentiality restrictions, regulate visitors

Al Minor and Associates V Martin

Al minor consulting firm that madd retirement plans and kept his customer list very secret

Martin memorized the list, left the company, and used it to scalp clients

Al Minor sues, wants $ and an injunction

However, no prior law against memorizing trade secrets

Court: ruled against Martin because he knew it was a trade secret and still used it

How to demonstrate misappropriation of a trade secret

improperly acquired info

improperly provided info

does not protect independent creation of info or reverse engineering

Economic Espionage Act

Protects misappropriation of trade secrets to forgone governments

confidentiality contracts

forbid employees from disclosing the knowledge obtained in workplace

only when its valid and business related

Utility patent

new, non-obvious useful process, machines, compositions of matter or improvements thereoff

20 years

design patent

new, original and ornamental design for an article of manufactured

15 years `

design of coke bottle

plant patent

asexually produced new species of plant

20 years

obtaining a patent

1. File application

2. Filing fee

3. Explain invention

4. Show difference from prior art

5. Describe patentable aspects

6. Evaluation by the patent examiner

patent agents

only deal with application process

registered with patent bar exam

patent lawyers

more expensive than an agent

handles litigation and patent application

America invents Act

2011 Obama

first to file with PTO gets the patent

patentable subject matter

can sell the patent and the right to use invention

courts can challenge patents by proving the PTO made a mistake in approving the patent

plaintiffs can challenge your patent if it's already been sold/ seen out in the world

Lose your right if your application isn't descriptive enough

characteristics of patent

Novelty: something new and different

Nonobvious: ability to produce surprising/ unexpected results

Utility: must be useful

What isn't patentable

natural phenomenon: discovery, not invention

Cant patent certain formulas

near abstract ideas

cant patent a whole field of discovery

Association for molecular pathology V Myriad Genetics

Myriad found 2 genes isolated to link them to breast and ovarian cancer

patented it so they would get a testing licensing fee

plaintiffs sued because its a natural phenomenon

Court: naturally isolated genes are not patentable because its a discovery

Alice Corp V CLS Bank International

Alice corp patented a software used to mitigate risk on financial trades

It had usually been done by humans, but Alice Corp made a software for it

sued because it's telling the computer to do something humans did, not an invention

court agreed- Alice 2 step test

1) Must determine if the patent is acceptable

If it's near abstract or a natural phenomenon -> 2)

examine elements if it claims to have added inventive acts on top of the phenomenon or idea

patent enforcement

can sue against others for patent infringement to get money or injunction

inventions can cover articles and methods of invention

Protect against patent trolls who steal patent rights

universities track their researchers and their work stays at the University and then they sell the patents

Trademarks

mark on what is produced to represent the origin of good and service

recognize the distinctive mark to protect against against confusion

TM pending approval

R w/ circle after its registered

Lanham act of 1946

Protects trademarks

service marks

mark associated with a service not a good

used for advertising

R w/ circle

certification mark

used by others to certify the good meets the standard of the mark's owner

certification owner must ensure the goods are up to standard

collective mark

Membership in a group only used by its members.

trade dress

total visual image that makes an impression

patron bottle, makers mark bottle, McDonald's restaurants

color marks

very unique situations, not all business can have one

Tiffany robin's egg blue- only bars use from other jewelers

John Deere's green and yellow combination

cant be functional for the industry

Sound marks

identify commercial sound of product/ service

what can stop trademark registration

Use for interstate commerce is required

Pro can deny based on:

similarity to another mark

prohibited name / design

name or likeness w/o permission

descriptive mark

generic mark

No longer count:

disparaging- offensive to group

immoral / scandalous

Metal V Tam

Asian band wanted to name their band the slants

Court: got rid of the disparaging clause in the Lanham act because of 1st amendment

Iancu V brunetti

Brunette made the Fuct skateboard clothing band

PTO denied trademark because it's immoral

court: got rid of the immoral clause in the Latham act because 1st amendment

Principle Register

where all the trademarks get registered in

Official Gazette

Legal publication that includes logos requested for trademark

lets other mark owners monitor that nobody is stealing their mark

Supplemental register

If it is in this register for 5 years it gets a second meaning as a mark aside from what it really means

Honey baked Ham

Ford

Enforcement of trademarks

Unlimited period of protection

- must prove it's still used every 6 years

-must renew registration every 10 years

criminal and civil punishments

Fair use exceptions of trademarks in Lanham act

Criticism/ parody of mark

discussion

jack Daniels V VIP products

VIP made a dog toy in the shape of jack bottle with similar font and label

jack sues because it's diminishing their brand

Court: agreed with Jack, humor cannot protect infringement

When does a trademark lose protection

When it becomes the same as the product

cleaned, escalator, linoleum

Kraft Foods V Cracker Barrel

Kraft sells their own cheese called Cracker Barrel

Both had trademarks, but it's ok because their in different industries

Cracker Barrel started to make their own cheese in grocery stores

Court: cracker barrel has to change their cheese's name because it's too confusing for consumers

trademark dilution act of 1995

prohibits using marks similar to famous marks

because it dilutes it's significance and goodwill

no blurring distinctiveness of a famous mark:

mcdowells

no tarnishnment- mark that creates negative impression of another mark

copy rights

monopoly on copying and marketing original expression for a limited period of time

must be:

original

tangible medium

show effortful creative expression

How long do copy rights last

Authors: the author's whole life + 70 years

for companies: 120 years from creation/ 95 years from publication

What public domain is free this Jan 1st

All work from before 1928

infringement of copy rights

Prove they violated your rights of:

reproduction

creation of derivative works

distribution

performance

display

exceptions for copy rights

Criticism

comment

reporting news

teaching

research

Google V oracle

google used Java API made by oracle to run their systems

country ruled google had fair use

basic business organizations

sole proprietorships, partnerships, corporations

hybrid business organizations

limited partnerships, s corporations, limited liability companies, limited liability partnerships

5 factors to decide what BO is best

cost of creation- time & $ to create

continuity of organization: stability and durability when you change owners

managerial control: who's in charge

owner liability: owner's personal liability for wrongdoings

taxation

dissolution

Change in ownership that changes the legal structure

termination

going out of business

Sole proprietorship

owned and run by 1 person w/ no distinction between the owner and the business

makes up 75% of al businesses

least expensive to create, just need a business license

continuity tied directly to the will of the owner

can dissolve and create a new type, but cant change ownership

creditors can hold owner personally liable with un limited liability

not taxed as an organization, just the owner

General partnership

agreement between 2 or more persons (businesses or individuals) that share common interest in a commercial endeavor

most states dont require a legal agreement, but it's recommended

if the name is not the partners name it must be registered with state

if there's a change in partners the business must dissolve

all partners ahem unlimited liability

tax income straight from partners and profits are shared

corporations

artificial and intangible entity created under state law authority

domestic- state you originated in

foreign- different state

alien- different country

creation is complex and expensive. State issues a charter of incorporation w/ proposed name

perpetual existence- change in ownership wont change structure

corporations pay income tax

why is Delaware popular to incorporate in

Court of Chancery

- prestigious high level business court

-1 chancellor and 6 PCs

-nonjury trails

supportive legislature

no state income tax

order of members of corporations

shareholders

board of directors- elected. sets objectives

officers- CEO, CFO, COO

employees

proxy

agent appointed by shareholders for purpose of voting

fiduciary duties

obligation to act in best interest of other parties

one must have a special trust/ reliance on fiduciary to exercise their expertise/ discretion

derivative suit

shareholders believe majority shareholders have not acted in the best way for the corporation

bad deals, CEO slurry too high etc

piercing the corporate vail

usually shareholders have very limited liability

creditors able to come after them if:

shareholders used corporation to defraud customers

commingle corporate funds and assets

Alli V US

Alli family own apartments in Detroit under BSA corp

BSA corp entered contract with HUD for government housing tenants

They didn't do maintenance on the houses and HUD investigated them

They got caught commingling funds

Court: BSA breached contract and they pierced the corporate vail and took a lot of their personal assets

double tax

profit taxed as corporate income and dividends

nonprofits

public purpose

doesn't benefit owners or members

contributions not investment

limited partnership

similar to general partnership

limited partner: not responsible for debts of business

general: unlimited liability, but has complete control of management

must update who's who in each county

S corporation

shareholders elect to change corp to s corp

Gets rid of the double tax

requirements:

domestic corp

all shareholders are individuals

no more than 100 shareholders

cannot be a financial or insurance firm

Limited Liability partnership

All partners are limited partners and not responsible for the debts and other liabilities of other partners

accountants, lawyers, drs

limited liability company 6784464602

treated as a nontaxable entity

limited liabilities for its members

more flexibility than a S corp

created by filing Articles of organization with sec of state

transfer of owners like a partnership, dissolve and reform

operating organizations through agents

agents do work for the principal

doesn't have to be an employee, some are contractors

actual, implied, and apparent authority

actual: the boss says that the agent has authority

implied: agent makes incremental decisions derived from boss

apparent: ex-employee makes a decision that they shouldn't have made

respondent superior

vicarious liability

employers are responsible for actions of their employees

escape the liability when the employee "frolics and detours"

- does something/ goes somewhere they weren't instructed to do

Benefit corp

permitted to make profit while also doing social/public benefit

"every shoe that we sell we will donate 50%"

B corp

certification that the corporation is doing good work

FCC V At&T

matter of corporate personhood

FCC contract with At&t for public libraries

At&t overcharged them, FCC looks through At&ts documents and they settle out of court

Because FCC is a federal admin At&ts competitor's requested their documents and they complied

At&t wasn't happy

Court: coporations dont have the right to personal privacy

Marchand V Barnhill

Bluebell ice cream listeria outbreak

shareholders sued directors because they had 0 protocol or protections against contamination

court: decisions were made in bad faith, not hindsight it was simply a bad move

Business judgement rule

directors are protected from personal liability as long as the decisions were made in good faith

Quasi legislative & judicial

legislative: make rules with the power of law

judicial: make legal decisions and investigate

What do agencies provide

specificity: congress passes a general bill and agencies set the specific standards

expertise: agencies have the experts who know the right level to set laws and regulations at

protection: protect the public from immoral businesses

regulation

services: USPS, Social Security, National Parks

functions of agencies

rule making: uses the force of law to whole industries (OSHA) or specific manufacturers

adjudicating: conduct fact finding and penalize wrongdoing

cease and desists: order to stop work and fix the issues

consent order: acknowledge the wrong doing and fix the issue without stopping work

advising: provide reports to congress, and the executive

tell attorney general to prosecute

tell congress to make a new law

investigate: check out illegal activities with subpoenas.

advisory opinions

agency tells a business "what if's" about what they will do if the find out about misdoings

organization of agencies

5-7 board members with a chairman

not permitted to other employment

can only removed by the president w/ cause

neglect of duty, malfeasance

free enterprise fund V public company accounting oversight board

Free enterprise fund (bekstead & watts) challenged the authority of the PCAOB because the board members could only be removed by SEC chair, not the president

court: severed the limitation of removal because the president couldn't hold them accountable

Sarbanes Oxley act

Sarbanes Oxly act passed by congress because Enron committed fraud and screwed over investors

applies to all public companies and international companies registered with the SEC

ensure accuracy and integrity in financial reporting

-revitalized SEC

------with more power to hold companies accountable

------congres increased power over governance issues

-PCAOB under the SEC with 5 board members

mandated separation of auditing/ accounting and consulting

incorrect financials mean exec have to return their bonuses

protects whistleblowers

-reinstatement & recoop civil damages

-auditors must take them seriously

did not agress mark to market accounting

Secretary of agencies

legal custodian

record proposed laws in the federal register

federal register

official document published daily by secretary of agencies to update the public on proposed laws and regulations

general council

chief legal officer of agency

director of operations

lobby congress

oversee bureaus, investigating, advisory opinions, litigations

executive director of administration

accounting, budget, congressional liaison, public information, research

Administration law judges

quasi judicial inside of the agency

have fact finding and decision making authority

regional agency offices

investigate breaches of regulation

each may have their own council

free Lucia V SEC

challenged the power of ALJs

Lucia was marketing retirement plans with a fishy slide show

Assigned a SEC ALJ who sanctioned him 300K and barred him from financial industry

Lucia appealed the the commission, and then to the SC

ALJ Elliot was not appointed by the president, chairman, or judiciary, he was just hired by staff

Court agreed: ALJs are officers of the court, so they must be appointed because they have the tools of a federal judge

Administrative disciplinary process

Agency finds out you're doing illegal stuff

Agency files a complaint and the business responds

Business assigned an ALJ and there's a pretrial discovery

ALJ alone makes the decision

can be appealed to the commissioner

whole thing happens within the agency

Jarkesy V SEC

ALJ found Jarkesy guilty of fraud and levied civil penalties

appealed to the SCOTUS

Court agreed: 7th amendment- trial by peers in civil fraud charges.

this decision could flood the courts and make trials more expensive for companies

FDA V Brown & Williamson tobacco

FDA had never had the authority to regulate tobacco, but citizens were calling on congress to regulate it

in 1996 FDA said they had the authority and prohibited sale of tobacco to minors, required photo id, and packs must be less than 20

big tobacco sued

court looked at congress' intent in creating the FDA and determined congress intentionally left out tobacco regulations because they got lobbied to. So, FDA overstepped their boundaries

regulation making process

regulators make their own process unless there's a law telling them how tom operate

review of factual determination

did the agency implement the law/ regulation with evidence?

what was their process and does it make sense?

courts hands used to be tied because of chevron deference, because agencies are experts and shouldn't be second guessed

Loper bright / Relentless inc V Department of commerce

the 2 cases that undid Chevron V Natural resource defense council

Fishing industry- fisherman had to pay the inspectors to inspect their boats, even though the inspectors were already Gov employees

court determined that chevron case was legislation from the bench from a very progressive SC at the time and wasn't right to do

Court cut back on administration's power and can now make their own independent interpretation to ambiguous actions

criticisms of federal agencies

personnel:

hard to hire and retain experts with limited pay

hard to fire bad employees because on the president can

leaders hired for political reasons

procedure:

delay in decision making process

lots of paperwork and meetings

complicated legal language

doctoral nature

substance

overlapping and conflicting regulations

enforcement varies

security

investment in common enterprise w/ profits to come solely from the effort of someone other than the investor

SEC V Howey Co

Howey Co was selling orange trees in their grove with a service contract to tend and pick them

investors expected to receive profits and sued howey

Courts agreed: this sale of orange trees was a security

1) expected profits

2) investment

3) effort from other than investor