BUSINESS LAW BBA 2

Chapter-5 Intellectual Property Law Chapter Objectives 1. Summarize the laws protecting trademarks, patents, and copyrights. 2. Describe how trade secrets are protected by the law. 3. Discuss what is meant by the term virtual property. 4. Indicate what legal protection exists for trademarks, copyrights, and other intellectual property existing in digital form. 5. Give examples of how technological developments are affecting the laws governing intellectual property. What is Intellectual property? Intellectual property is a legal concept referring to the protection of works created by the human intellect. It consists of an exclusive right conferred upon the creator or/and the owner of an intellectual work. The owner can be the creator of the work (most usual case) or a transferee, in the event of a transfer of copyright. Intellectual property is that which results from intellectual, creative processes of ones mind. Forms of intellectual property include: Trademarks and service marks Patents Copyrights Trade secrets Case 11.1 Coca-Cola Co. v. Koke Co. of America Koke alleged that since Coca-Cola no longer contained cocaine, the trademark was fraudulent, and not entitled to protection. (Koke wanted to use the name "Koke" for its product.) On appeal, the U.S. Supreme Court held that since few, if any, would now be led to believe Coca-Cola contained cocaine, there was no fraud and the trademark was valid.
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How can a court determine when a particular nickname for a branded product has entered into common use?

Trademarks and Related Property

Definition: A trademark is a distinctive mark, motto, device, or implement that a manufacturer stamps, prints, or otherwise affixes to the goods it produces so that they may be identified in the market and their origins made known. Duration of Protection: Trademark protection is renewable indefinitely. Trademark Infringement Trademark infringement occurs when one uses the protected trademark, service mark, or trade name of another without permission when marketing goods or services. Case 11.2 America Online, Inc. v. At&T Corp. In the 1960s and early 1970s, AT&T Corp. developed UNIX, a computer operating system facilitating communications over the Internet. When a user connects to UNIX, if the user has email, the system displays a phrase similar to "You have mail." In the 1980s, America Online started using "You have mail" in its e-mail notification service for its members. AT&T provides Internet service through its WorldNet service and has "You have mail!" on its homepage. AOL filed a suit claiming it owned the phrase. The court ruled that "You have mail" is a generic expression and therefore cannot be owned by AOL. Generic marks will not be protected as trademarks even if they have acquired secondary meanings. Can you see any reason for this principle of trademark law?

Patents
Definition: A grant from the government that gives an inventor the exclusive right to make, use, and sell an invention for a specified period.

BUSINESS LAW BBA 2

Duration of Protection: Twenty years from the date of filing the application for a patent.

Patent Infringement Occurs when one uses or sells anothers patented design, product, or process without the patent owners permission. Patents for Software Although computer software is most often protected by copyrights, it may also be patented. A patent may be obtained for computer software if: It is part of a process or procedure That process or procedure itself is patentable Patents for Cyber products Cyberproducts, such as data-compression software, encryption systems and various other network software are particularly difficult to protect on the Internet. One of the best ways to protect such property is through a licensing agreement, which permits the licensee to make, sell, or use the patented item. Because the Internet has no geographical boundaries, such an agreement should consider all U.S., foreign, and international laws.

Copyrights
Definition: An intangible property right granted by federal statute to the author or originator of a literary or artistic production of a specified types. Duration of Protection: Copyright begins at the moment of creation, and lasts for the life of the author plus 50 years. Copyrights owned by publishing houses may last longer. Copyright Infringement
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Occurs whenever the form or expression of an idea is copied without the permission of the copyright holder. An exception applies if the copying is deemed a "fair use." Fair use includes: Criticism, comment, news reporting Teaching, scholarship, or research "Fair Use" Section 107 of the Copyright Act gives four factors to consider in determining whether something is fair use: The purpose and character of the use The nature of the copyrighted work The amount and substantiality of the portion used The effect of the use upon the potential market Case 11.3 Repp v. Webber Ray Repp wrote and published more than 120 musical compositions in over 30 years, including "Till You," which was copyrighted in 1987. Andrew Lloyd Webber wrote the musical Phantom of the Opera in 1983-84. Repp claimed one of the songs in Phantom of the Opera infringed on the copyright of "Till You," and filed a suit against Webber and others. Webber denied knowing about Repp or "Till You." The court issued a summary judgment for Webber. The case was remanded in the appellate court. Considering that there are a limited number of musical notes and a limited number of works into which those notes can be composed, should the fact that infringement might be "subconscious" affect liability in a copyright suit?

Trade Secrets
Definition: Any formula, pattern, device, or compilation of information that give a business an advantage over competitors who do not know the information or processes.

BUSINESS LAW BBA 2

Duration of Protection: Indefinitely, as long as the party adequately protects his or her trade secrets from disclosures.

Forms of Intellectual Property PATENT COPYRIGHT TRADEMARKS (SERVICE MARKS AND TRADE DRESS) Any distinctive word, name, symbol, or device (image or appearance), or combination thereof, that an entity uses to identify and distinguish its goods or services from those of others. TRADE SECRETS

Definition

A grant from the government that gives an inventor exclusive rights to an invention.

An intangible property right granted to authors and originators of a literary work or artistic production that falls within specified categories.

Requirements

An invention must be: 1. Novel. 2. Not obvious. 3. Useful.

Any information (including formulas, patterns, programs, devices, techniques, and processes) that a business possesses and that gives the business an advantage over competitors who do not know the information or processes. Literary or artistic works Trademarks, Information must be: service marks, and and processes trade dress must be that have sufficiently commercial 1. Original distinctive (or value, that are must have not known or 2. Fixed in a durable acquired a easily medium that can ascertainable be perceived, reproduced, secondary meaning) to enable by the general or communicated. consumers and public or others, and 3. Within a copyrightable others to distinguish the that are category.
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manufacturers, sellers,orbusiness users products or services from those of competitors. Forms of Intellectual Property, cont.

reasonably protected from disclosure.

Types or Categories

1. Utility (general). 2. Design.

1. Literary works (including computer programs). 2. Musical works.

1. Strong, distinctive marks (such as fanciful, arbitrary, or suggestive marks).

1. Customer lists. 2. Research and development. 3. Plans and programs. 4. Pricing information. 5. Production techniques. 6. Marketing

3. Plant (flowers, vegetable, and so on).

2. Marks that have 3. Dramatic works. acquired a secondary meaning 4. Pantomime and by use. choreographic 3. Other types of works. marks, including certification marks 5. Pictorial, and collective graphic, and marks. sculptural works. 6. Films and audiovisual works. 7. Sound recordings. 4. Trade dress (such as a distinctive dcor, menu, or style or type of service). 1. At common law, ownership is created by use of mark. 2. Registration.

techniques. 7. Formulas. 8. Compilations. Through originality and development of information and processes that are unique to a business, that are unknown by others.

How Acquired

By filing a patent application with the U.S. Patent and Trademark Office and receiving that offices approval.

Automatic (once in tangible form); to recover for infringement, the copyright must be registered.

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International Protection for Intellectual Property International protection for intellectual property exists under various international agreements, including: Berne Convention (1886)every country that has signed the convention must recognize copyrights granted to authors in all others. TRIPS (Trade-Related Aspects of Intellectual Property Rights) Agreement Copyright Protection for Software The Computer Software Copyright Act of 1980 specifically classifies computer programs as "literary works" thus giving them full protection under U.S. copyright law. The No Electronic Theft Act of 1997 now provides criminal penalties for copyright infringement of software, even where there is no intent on the part of the infringer to make a profit. Case 11.4 Playboy Enterprises v. Welles Playboy Enterprises, Inc. (PEI), maintains websites to promote Playboy magazine and PEI models. Terri Welles was featured as "Playmate of the Year" in June 1981. She maintains a website titled "Terri Welles Playmate of the Year 1981." As meta tags, Welles uses the terms "Playboy" and "Playmate," among others. PEI filed a suit against her asking the court to order her to stop using those terms as meta tags. The court held that Welles was entitled to the "fair use" of the "Playboy" and "Playmate" marks as tags. Why would PEI encourage its models to use its own marks outside cyberspace but attempt to block such uses within cyberspace? Trade Secret Take reasonable steps to protectgenerally, a trade secret protection program Copyright None required. However, notice and registration can strengthen rights. Patent Detailed filing with U.S. Patent and Trademark Office, which performs a search for prior art and imposes hefty fees Trademark Only need to use mark in commerce. However, filing with U.S. Patent and Trademark Office is

Required Steps

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U.S. Rights Valid Internationally

No. Trade secret Generally, yes laws vary significantly by country, and some countries have no trade secret laws.

No. Separate patent examinations and filings are required in each country; however, a single filing in the European Patent Office can cover a number of European countries.

usually desirable to gain stronger protections. No. Separate filing are required in foreign jurisdictions, and a mark available in the United States may not be available overseas.

Domain Name Registration Since 1995, Network Solutions, Inc. (NSI) has required any party seeking to register a domain name to state the following: that the partys use of the name will not infringe on the intellectual property rights of any other party that the party intends to use the name on "a regular basis on the Internet" that the partys use of the name will not be unlawful Cyberlaw: Protecting Intellectual Property in Cyberspace Because of the unique nature of the Internet, its use creates unique legal questions and issues, particularly with respect to intellectual property rights. Such issues include: Trademark Protection and Domain Names Patents for Cyberproducts Copyrights in Cyberspace

BUSINESS LAW BBA 2

Trademark Protection and Domain Names Although trademark law allows multiple parties to use the same mark (as long as it is used in connection with different products or services and doesnt create confusion), only one party can use a particular domain name. A domain name is a series of letters and symbols used to identify a site on the Internet. (Also called Internet "address.") Case 11.5 Tasini v. New York Times Co. Magazines and newspapers, including the New York Times, buy and publish articles written by freelance writers. They also sell the contents to e-publishers for inclusion in online and other electronic databases. Jonathon Tasini and other freelancers filed a suit against the New York Times and other publishers (including e-publishers) contending that the e-publication of the articles violated the copyright act. The court ruled in favor of the publishers When technology creates a situation in which rights such as those in this case are more valuable than originally anticipated, should the law be changed to redistribute the economic benefit of those rights? Copyrights in Cyberspace Uploading, downloading, browsingany of these activities conducted in cyberspace can infringe on a copyright owners rights. Uniform Copyright Laws One of the main problems for the international online community is that copyright protection varies among jurisdictions. The U.S. does not recognize moral rights, but other countries, like France, enforce these rights. In Great Britain, authors havepaternity rights to their copyrighted works. Although the WIPO Copyright Treaty and the DMCA of 1998 have been implemented, there are still many cyberspace copyright issues unsolved. Should there be a different copyright law solely for cyberspace? If so, what rights should it include? The Digital Millennium Copyright Act of 1998

BUSINESS LAW BBA 2

Copyright works can be pirated and distributed all over the world quickly and efficiently. To curb this crime, the World Intellectual Property Organization (WIPO) enacted two treaties in 1996 to upgrade global standards of copyright protection, particularly for the Internet. In 1998, Congress implemented the provisions of these treaties to update U.S. copyright law. The Digital Millennium Copyright Act of 1998 created civil and criminal penalties for anyone who circumvents encryption software or other technological anti-piracy protection. Also prohibited are the manufacture, import, sale, or distribution of devices or services for circumvention. How will the Digital Millennium Copyright Act of 1998 spur the growth of commerce online? Advantages And Disadvantages Of Different Types Of Intellectual Property Protection

Benefits

Trade Secret Very broad protection for sensitive, competitive information; very inexpensive

Copyright Prevents copying of a wide array of artistic and literary expressions, including software; very inexpensive

Patent Very strong protection; provides exclusive right to make, use and sell and invention

Duration

For as long as the information remains valuable and is kept confidential

Life of author plus 70 years; for works made for hire, 95 years from year of first publication or 120 years for year of creation, whichever is shorter

20 years from date of filing the patent application

Trademark Protects corporate image and identity by protecting marks that customers use to identify a business; prevents others from using confusingly similar identifying marks Indefinitely as long as the mark is not abandoned and steps are taken to police its use

Advantages And Disadvantages Of Different Types Of Intellectual Property Protection, cont.

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Weaknesses

No protection from accidental disclosure, independent creation by a competitor, or disclosure by someone without a duty to maintain confidentiality

Protects only the particular way an idea is expressed, not the idea itself; apparent lessening of protection for software; hard to detect copying in digital age

High standards of patentability; often expensive and timeconsuming to pursue (especially when overseas patents are needed); must disclose invention to public

Can be costly if multiple overseas registrations are needed

For Review 1. What is intellectual property? How does the law protect intellectual property? 2. What is a trade secret? How are trade secrets protected by law? 3. What is virtual property? 4. What legal protection is there for intellectual property existing in digital form? 5. Generally, how has technology affected intellectual property rights?

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