Chapter 8: Intellectual property and unfair competition -In general, competition is deemed unfair when 1) It discourages creative endeavor

by robbing creative people of the fruits of their innovations 2) It renders commercial life too uncivilized for the law to tolerate I. Protection of intellectual property a. Patents- A patent may be viewed as an agreement between an inventor and the federal government i. What is patentable? (1) a process (2) a machine (3) a manufacture or product (4) a composition of matter (5) an improvement of any of the above (6) an ornamental design for a product (7) a plant produced by asexual reproduction ii. Obtaining a patent- The U.S. patent and trademark office handles patent applications iii. Ownership and transfer of patent rights- Patentee has exclusive rights to exclude others from making, using, or selling the patented invention generally exist until the expiration of 20 years from the date the patent application was filed iv. Patent infringement- Occurs when a defendant, without authorization from the patentee, usurps the patentees rights by making, using, or selling the patented invention v. Defenses to patent infringement1. The subject matter of the alleged infringement is neither within the literal scope of the patent nor substantially equivalent to the patented innovation 2. Patent invalidity 3. Patent misuse vi. Current issues- the notion among critics that the patent rights pendulum may have swung too far in favor of patent owners b. Copyrights- copyright law gives certain exclusive rights to creators of original works of authorship i. Coverage- unlike the inventions protected by patent law, copyrightable works need not be novel ii. Creation and notice- a copyright comes into existence upon the creation and fixing of a protected work. Registration is not necessary for the copyright to exist. iii. Durationiv. Works-for-hire- a work-for-hire exists when: 1. An employee, in the course of her regular employment duties, prepares a copyrightable work 2. An individual or corporation and an independent contractor enter into a written agreement under which the independent contractor is to prepare, for the retaining individual or corporation, one of several types of copyrightable works designated in the copyright act. v. Ownership rightsvi. Infringementvii. Fair usec. Trademarks- help purchasers identify favored products and services i. Protected marks1. Trademark- Any word, name, symbol, device, or combination thereof used by a manufacturer or seller to identify its products and distinguish them from the products of competitors 2. Service marks- identify and distinguish services 3. Certification marks- certify the origin, materials, quality, method of manufacturer, and other aspects of goods and services

4. Collective marks- are trademarks or service marks used by organizations to identify themselves as the source of goods or services ii. Distinctiveness- trademarks must be distinctive to merit maximum lanham act protection. Marks fall into 5 general categories of distinctiveness 1. Arbitrary or fanciful marks2. Suggestive marks3. Descriptive marks4. Marks that are not inherently distinctive5. Generic termsiii. Federal registration iv. Transfer of rights v. Losing federal trademark protection vi. Trademark infringement vii. Trademark dilution d. Trade secrets- are nonpublic by definition. The main justification for trade secrets protection is simply to preserve certain standards of commercial morality i. Definition of a trade secret- any secret formula, pattern, process, program, device, method, technique, or compilation of information used in the owners business, if it gives its owner an advantage over competitors who do not know it use it ii. Ownership and transfer of trade secrets- the owner of a trade secret is usually the person who developed it or the business under those auspices it was generated. iii. Misappropriation of trade secrets- involve disclosure or use of the secret. Misappropriation liability occurs when the secret is disclosed or used by one who did one of the following: 1. Acquired it by improper means 2. Acquired it from a party who is known or should be known to have obtained it by improper means 3. Breached a duty of confidentiality regarding the secret II. Commercial torts a. Injurious falsehood- AKA product disparagement, slander of title, and trade libel. This tort involves the publication of false statements that disparage anothers business, property, or title to property, and thus harm her economic interests i. Elements and damages- plaintiff must prove that the defendant made a false statement of the sort just described, and that the statement was communicated to a third party ii. Injurious falsehood and defamationb. Interference with contractual relations- when one party to a contract claims that the defendants interference with the other partys performance of the contract wrongly caused the plaintiff to lose the benefit of that performance c. Interference with prospective advantage- difference from interference with contractual relations, it involves interference with prospective relations rather than existing contracts