INTELLECTUAL PROPERTY AND CYBER PIRACY CHAPTER 2 INTELLECTUAL PROPERTY AND CYBER PIRACY © 2010 Pearson Education, Inc., publishing as Prentice-Hall

Intellectual Property Rights Patent Copyrights Trademark Trade Secrets Trade and Domain Names

Trade Secrets Product formula, design, compilation of data, customer list, or other business secret. Many states have adopted the Uniform Trade Secrets Act to give statutory protection to trade secrets.

Trade Secrets (continued) State unfair competition laws allow owner of trade secret to bring lawsuit for misappropriation against anyone who steals a trade secret. Defendant must have obtained the trade secret through unlawful means. E.g., theft or bribery.

Trade Secrets (continued) Owner is obliged to take all reasonable precautions to prevent those secrets from being discovered by others. E.g., locking doors, hiring security guards If owner fails to take precautions, the secret is no longer subject to protection.

Trade Secrets (continued) Successful civil plaintiff can: Recover profits made by offender Recover damages Obtain injunction prohibiting offender from divulging trade secret

Federal Patent Statute Intended to provide incentive for inventors to make their inventions public. Protects patented inventions from infringement. Federal patent law is exclusive; no state patent laws.

Federal Patent Statute (continued) Patents for inventions are valid for 20 years Design patents are valid for 14 years Patent term runs from date application filed.

Patent Applications Must contain a written description of invention Must be filed with the U.S. PTO Patent will be assigned a patent number if granted Any party can challenge the validity of a patent or the issuance of one.

Patenting an Invention To be patented, an invention must be: Novel Useful Nonobvious Only certain subject matters can be patented.

Patentable Subject Matter Includes: Machines Processes Compositions of matter Improvements to: Existing machines Business methods

One-Year “On Sale” Doctrine Public use doctrine Patents will not be granted if an invention was in the public domain for one year prior to application filing Forces inventors to file within proper time

American Inventors Protection Act (continued) Requires PTO to either issue or deny a patent within three years after filing of application Provides that non-patent holders may challenge a patent as overly broad Decisions of PTO appealed to U.S. Court of Appeals

Patent Infringement Patent holders own exclusive rights to use and exploit their patent. In case of unauthorized use, plaintiff may recover: Money damages equal to royalty rate Other damages, e.g., loss of customers Order for destruction of infringing items Injunction against infringer Treble damages for intentional infringement

Copyright Revision Act of 1976 Protects work of authors and creative persons. Only tangible writings are subject to copyright registration and protection. E.g., books, newspapers, lectures, musical compositions, radio and TV productions.

Copyright Term Extension Act of 1998 Grants copyright terms to: Individual Copyright Holder Life of author plus 70 years Corporate Copyright Holder The shorter of 95 years from the year of first publication, or 120 years from the year of creation After copyright expires, work enters public domain

Copyright Infringement Occurs when a party copies a substantial and material part of the plaintiff’s copyrighted work without permission. Successful plaintiff may recover: Profit Damages Order requiring impoundment and destruction Injunction

Contributory Copyright Infringement Secondary liability on parties who knowingly contribute to another’s copyright infringement.

Fair Use Doctrine Copyright holder’s rights in the work not absolute. Law permits certain limited unauthorized use of copyrighted materials.

Trademark Act (continued) Original registration of a mark is valid for 10 years. Can be renewed for unlimited number of 10-year periods.

Registration of Trademarks Mark may be registered if it has been used in commerce Can be registered six months prior to use Will lose mark if not used within six months Mark may be opposed by third parties

Marks That Can Be Trademarked Distinctive mark, name, word, or device that identifies the goods of a particular business. e.g., Coca-Cola; Better Pizza. Service Mark Distinguishes the services of the holder from those of its competitors. e.g., The Friendly Skies; Big Brown

Marks That Cannot Be Registered Flag or coat of arms of the United States, any state, municipality, or foreign nation. Marks that are immoral or scandalous. Geographical names . Surnames . Any mark that resembles a mark already registered with the U.S. PTO.

Trademark Infringement Owner of a mark can sue a third party for the unauthorized use of a mark. Owner must prove that: Defendant infringed the plaintiff’s mark by using it in an unauthorized manner Use likely to cause confusion, mistake, or deception

Trademark Infringement (continued) Successful plaintiff can recover: Profits Damages to business and reputation Possibility of treble damages for intentional infringement Order for destruction Injunction