Intellectual Property Chapter 24 Intellectual Property McGraw-Hill/Irwin Copyright © 2011 by The McGraw-Hill Companies, Inc. All rights reserved.

Chapter Overview Legal protections for trade secrets/business information. Statutory and common law requirements for protection of trademarks, service marks, and trade dress. Requirements for protection under federal copyright laws, consequences of infringement, the fair use test. Overview of protections for inventors through patent law and statutory requirements for obtaining a patent. International treaties and risks concerning intellectual property protection.

TRADE SECRET PROTECTIONS Trade secret protections are provided by state statutes and/or state common law. The Uniform Trade Secrets Act (UTSA) defines trade secrets as information or articles that are to be kept secret because of its particular value.

Misappropriation Acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means, or disclosure or use of a trade secret of another without express or implied consent.

Criminal Sanctions The Economic Espionage Act is a federal statute passed in 1996 providing criminal penalties for domestic and foreign theft of trade secrets.

Exclusive Rights for Unlimited Duration Advantage: protection for trade secrets does not expire after a fixed period of time Disadvantage: owners have recourse only against misappropriation. Discovery of protected information through independent research or reverse engineering is not illegal.

TRADEMARKS A trademark is a word, symbol, or phrase used to identify a particular seller’s products and distinguish them from other products. For example, the word Nike and the Nike “swoosh” symbol identify shoes made by Nike and distinguish them from others.

Trade Dress Increasingly, the U.S. Patent and Trademark Office (USPTO) and courts have granted trademark protection for such trade dress-related characteristics as product shapes, colors, and scents, Company must prove an exclusive link to the source product in the consumer’s mind.

SOURCE OF LAW Lanham Act prohibits the use in commerce, without the mark holder’s consent, of any protected trademark in a way likely to cause consumer confusion.

Classifications of Trademarks Arbitrary or Fanciful Suggestive Descriptive

Custom Vehicles v. Forest River, 476 F.3d 481 (7th Cir. 2007) The register of a name must certify that the product is in use in commerce—defined as the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark. Within six months, the use of the trademark in one commercial sale is not enough to place the trademark in the ordinary course of trade, unless the sale is large enough to seize the attention of the relevant market.

ACQUIRING RIGHTS FOR TRADEMARK PROTECTION (1) by being the first to use the mark in commerce, or (2) by being the first to register the mark with the U.S. Patent and Trademark Office (USPTO or simply PTO).

PETA v. Doughney, 113 F. Supp. 2d 915 (E.D.Va. 2000) The court rejected Doughney’s claim that the Web site was merely a parody of the PETA organization because of the likelihood of confusion. In fact, Doughney admitted that “many people” would initially assume that they were accessing an authentic site sponsored by PETA.

Anticybersquatting Consumer Protection Act (ACPA) KEY POINT In order for a plaintiff to recover under the ACPA, the defendant must have acted in bad faith.

Preserving Trademark Protection The rights to a trademark can be lost through abandonment, improper licensing or assignment, or genericity. A trademark is abandoned when its use is discontinued with intent not to resume its use. Nonuse for three consecutive years is prima facie evidence of abandonment.

Trademark Infringement KEY POINT Likelihood of confusion: In order for a trademark holder to prevent another from using the holder’s mark, the holder must prove that the use of the mark by another will be likely to cause consumer confusion as to the source of the goods. Courts use the eight-factor Polaroid test to assess likelihood of confusion.

COPYRIGHT LAW Fundamentally, in order to gain copyright protection, a work must meet a three-part test: (1) originality, (2) some degree of creativity, and (3) fixed in a durable medium.

Copyright Protection Periods Sole author or originator-70 years from death. More than one author or originator-70 years from the death of the last surviving author. Publisher or work for hire-first of: (1) 120 years from the date of creation, or (2) 95 years from the date of publication.

Direct Infringement Copyright owner can prove legal ownership of the work in question, and The infringer copied the work without permission.

Indirect Infringement Indirect infringement involves three parties: the copyright owner, the direct infringer, and the facilitator of the infringement. The facilitator must have knowledge (direct or imputed) of the infringement and/or contribute to the infringement in some material way.

Vicarious Infringement Based on agency law. Can be used as a theory of liability when the infringing agent is acting on behalf of or to the benefit of the principal. The principal party is vicariously liable.

Defense to Infringement: Fair Use Purpose and Nature of the Use Nature of the Work Amount and Substantiality Used Market Effect

RIAA Lawsuits Example: 2009 case that garnered substantial media attention, a jury imposed damages of $1.92 million against Jammie Thomas-Rasset in a federal court in Minnesota. The award was the result of a lawsuit filed by RIAA against Thomas-Rasset that alleged she shared more than 1,700 songs.

Copyrights in the Digital Age Audio Home Recording Act Digital Millennium Copyright Act File Sharing

MGM Studios v. Grokster, Ltd., 545 U.S. 913 (2005) The Court specifically ruled that anyone who distributes a device with the intent to promote its use to infringe copyright is liable for the resulting acts of infringement (contributory) by third parties.

PATENTS A patent is a government-sanctioned monopoly right that allows an inventor the exclusive entitlement to make, use, license, and sell her invention for a limited period of time.

FUNDAMENTALS OF PATENT LAW In order to obtain a patent, an invention must be: novel, nonobvious, proper subject matter for protection.

Protection Period 20 years from date of filing Except for design patents-14 years

Novelty Standard An invention or process must be unique and original, and a patent applicant must show that no other identical invention or process exists.

Nonobviousness Standard Invention must be something more than that which would be obvious, in light of publicly available knowledge, to one who is skilled in the relevant field.

Patentable Subject Matter Standard The patentable subject matter standard bars laws of nature, natural phenomena, and abstract ideas from being patentable.

Business Method Patents Business methods may be patentable so long as they accomplish something practically useful in a novel and nonobvious way.

Literal Infringement rule of exactness rule of addition rule of omission

Legal Implications in Cyberspace Computer Programs Internet Business Method Patents

learning outcomes checklist 24 - 1 Define a trade secret and other protectable business information and articulate the various legal implications for misappropriation of that information. 24- 2 Classify trademarks marks based on their level of distinctiveness. 24- 3 Express how federal laws aimed at regulating trademarks in cyberspace apply to domain names.

learning outcomes checklist 24- 4 Identify and understand the impact of trademark infringement and dilution. 24- 5 Articulate the fundamental requirements for copyright protection, the legal ramifications of copyright infringement, and the impact of technology on copyright law.

learning outcomes checklist 24- 6 Apply the fair use defense and give examples from case law. 24 - 7 Explain the process for obtaining and maintaining a patent and articulate the basic requirements for an invention to have patent protection. 24- 8 Identify and understand the remedies for acts of patent infringement.