Chapter 8: Intellectual Property Rights

Introduction: definition, constitution, types, examples & non-examples, & licensing agreements

Intellectual property: intangible rights

Definition: IP is the “work of the human mind which consists of the products that result from intellectual and creative processes

U.S. Constitution, article 1, section 8: Congress is authorized “[t]o promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.”

Types:

1. Trademarks

2. Patents

3. Copyrights

4. Trade secrets

Examples of intellect & creativity that can become intellectual properties: company names/logos, source codes/software, game cover, business processes in game, name/logo/motif, secret recipes, menu design

Non-examples: land, computer, cars

Licensing agreements: to avoid a lawsuit for infringement on an 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: definition, statutory protection, registration, infringement, distinctiveness, SCC, trade dress, trade names, licensing, pros & cons

Definition: a distinctive mark, motto, device, or implement that a manufacturer stamps, prints, or otherwise affixes to the good it produces so that they can be identified on the market and their origins made known. A trademark is a source indicator

Statutory protection of trademarks: the Lanham trademark act of 1946 and as amended in 1995 by the federal trademark dilution act

1. Trademark dilution revision act: 2006

   π must prove:

   1. π owns a famous mark

   2. Δ has begun using mark on commerce that allegedly is diluting famous mark

   3. Similarity gives rise to an association between marks

   4. Association is likely to impair the distinctiveness of the famous mark or harm its reputation

Trademark registration: trademarks may be registered with the state or federal government. To register federally, a person must file an application with the U.S. patent and trademark office in Washington D.C.

1. A trademark can be registered if (either or):

   1. It is currently in commerce

   2. The applicant intends to put it into commerce within 6 months

Trademark infringement: whenever a trademark is copied to a substantial degree or used in its entirety by another, intentionally or unintentionally, the trademark has been infringed

Distinctiveness of mark: a trademark must be sufficiently distinct to enable consumers to identify the manufacturer of the goods easily and to distinguish between those goods and competing products

1. Strong marks: ?

   1. Fanciful trademarks: include invented words

   2. Arbitrary trademarks: those that use common words in an uncommon way that in non-descriptive

   3. Suggestive trademarks: imply something about a product w/o directly describing the product

2. 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.

3. Generic terms like bicycle and computer do not receive protection even if they acquire a secondary meaning.

Service, certification and collective marks: not good; service

Trade dress: motif (layout of menu, design of mini golf, shape or cracker)

Trade names: business name (Coca Cola)

Licensing: ?

Pros/cons

1. Inexpensive

2. Longest lasting (McDonald’s & Walt Disney

Patents: definition, what is patentable, infringement, remedies, pros & cons

Patents are more expensive, so owners are more protective of them

Definition: a grant from the government that gives an inventor the right to exclude others from making, using and selling an:

1. Invention for a period of 20 years

2. Design for a period of 14 years

3. Business processes for a period of 20 years (every step must be copied to count)

4. Since 2011 the protections begin when the application is filed - not when the patent is issued

5. “Race to patent office”: first person to file the patent application receive the patent protection

6. Challenges to a patent on any grounds are prohibited for the first 9 months

What is patentable? Ideas

1. Federal law states: “[w]hoever 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, subject to the conditions and requirements of this title”.

2. So basically, anything that is novel and not obvious can be patented

3. Not patentable: the laws of nature, natural phenomena; abstract ideas, including algorithms

4. Patent infringement: if a firm makes, uses, or sells another’s patented design, product, or process without the patent owner’s permission, the tort of patent infringement occurs.

Remedies for patent infringement

1. Injunctions: patent holder must prove they suffered irreparable injury and that the public interest would not be disserved by a permanent injunction

2. Damages for royalties and lost profits

3. Attorney’s fees (some cases)

4. Treble (triple) damages if infringement is proven to be intentional

Pros/cons

1. 20 year right to exclude others - that’s relatively short

2. Expensive ($5k to $100k+ and sometimes millions)

Copyright law: definition, acts, registration, protections, infringement, software protection, questions, pros & cons

Copyright law: protests literature, art, etc.

Definition: an intangible property right granted by federal statute to the author or originator of a literary or artistic production of a specific 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: gives the author or originator the exclusive rights to their works for a specific amount of time as follows:

1. Works created after 01.01.1978: statutory copyright protection for life of author + 70 years

2. Works owned by publishing houses: 95 years from date of publication or 120 years from date of creation

3. Works by 1+ author: life of authors plus 70 years after death of last surviving author

4. When protection ends - public domain: when copyrights expire, protected works return to the public domain. It is a “creative commons” where the law cannot control what you do with the material you find

Registration: copyrights can (but is not required) be registered with the U.S. copyright office in Washington D.C. A copyright owner no longer needs to place the symbol or term “Copr.” or “Copyright” on the work to have the work protected against infringement. Chances are that if somebody created it, somebody owns it.

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

3. Fall into 1 of the following 8 categories

   1. literary works

   2. musical works and accompanying words

   3. dramatic works and accompanying music

   4. pantomime or choreographic work

   5. pictorial, graphic, or sculptural work

   6. motion pictures and other audiovisual works

   7. sounds recordings

   8. architectural works

4. It is not possible to copyright an “idea”. Ideas embodied in a work may be freely used by others. What is copyrightable is the particular way in which an idea and an expression is expressed.

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

Copyright infringement

1. Remedies: ?

   1. Damages: ?

   2. Injunctions: ?

2. “Fair use” exception to copyright infringement:

   1. 6 protected “fair uses”

      1. Criticism

      2. Commentary

      3. News reporting

      4. Teaching

      5. Scholarship

      6. Research

   2. 4 statutory factors used by courts to determine on a case by case basis if the use of a work is a “fair use”

      1. The purpose and character of the use

      2. The ? ? of the copyrighted work

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

      4. Effect of the use on potential market or value of the work

   3. First sale doctrine: ?

Copyright protection for software: ?

Is plagiarism the same thing as copyright infringement? What is plagiarism? Academic dishonesty. Can you be engaged in “fair use”, therefore, not infringement, and still committing plagiarism?

Pros/cons

1. Inexpensive: $20 to register a copyright

2. Long lasting

3. Doesn’t protect ideas

4. Still lots of controversy with technology

Trade secrets: protections, examples, different, registration, state & federal law, confidentiality, pros & cons

Trade secrets: connections with tort law (misappropriation)

Trade secret law protects some business processes and information that are not or cannot be patented, copyrighted or trademarked against appropriation by competitors

Examples: customer lists, plans, R&D, pricing info, marketing methods, production techniques, recipes, and generally anything that makes an individual company unique and that would have value to a competitor

Unlike copyright and trademark protection, protection of trade secrets extends to both ideas and to their expression

Trade secret involves no registration or filing requirements

State and federal law on trade secrets:

1. §757 of the restatement of torts, states: “One who discloses or uses another’s trade secret, without a privilege to do so, is liable to the other if (either or):

   1. He discovered the secret by improper means

   2. His disclosure or use constitutes a breach of confidence reposed in him by the other in disclosing the secret to him.”

2. Uniform trade secrets act of 1979. This unfirm 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 the 47 states as of 2013 (TX is the 47th).

3. Economic espionage act of 1996: makes theft of trade secrets a federal crime

Confidentiality agreements: 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

1. Can be longest lived form of IP: as long as the secret…?

2. Can be inexpensive

3. Can be expensive (stealth fighters)

4. Doesn’t always work

International protections for intellectual property: Boerne convention, TRIPS agreement, Madrid protocol, anti-counterfeiting agreement

International protections for intellectual property

The Boerne convention

The TRIPS agreement

The Madrid protocol

The anti-counterfeiting trade agreement