© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 1 Chapter 5: Intellectual Property and Internet Law

2 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Learning Objectives What is intellectual property? Why does the law protect trademarks and patents? What laws protects authors’ rights in works they produce? What are trade secrets, and what laws offer protection for this form of intellectual property? What steps have been taken to protect intellectual property rights in the digital age?

3 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Introduction Intellectual Property (I.P.) is any property that is the product of an individual’s mind, e.g, books, software, movies, music. U.S. Constitution protects I.P. in Article I Section 8. Congress shall: “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.” Ownership of I.P. is strategically important in the global economy.

4 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trademarks & Related Property Trademark. –Distinctive motto, mark or emblem. –Stamped or affixed to a product. –So that it can be identified in the market. Case 5.1 The Coca-Cola Co. v. Koke Co. of America. Name “Coke” was so common that use of “Koke” by competing company was a trademark infringement.

5 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trademarks & Related Property Statutory Protection for Trademarks. –Lanham Act of 1946 provides federal protection of manufacturers from loosing business to rivals that used confusingly similar brands and products. Trademark Dilution Act of –Amended Lanham Act to bring federal cause of action in federal court for trademark dilution –even when mark is unlikely to confuse. “Similar” marks may give rise to dilution suit.

6 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trademarks & Related Property Trademark Registration. –U.S. Patent and Trademark Office gives notice to 3 rd parties. –A mark can be registered if in use or mark will be used within 6 months. Trademark Infringement. –Unintentional or intentional substantial copying of mark.

7 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trademarks and Related Property Distinctiveness of Mark. –Strong Marks: fanciful, arbitrary, or suggestive trademarks are most distinctive marks, normally not related to product (Apple, Xerox, Starbucks). –Secondary Meaning: descriptive, geographical, or personal names do not acquire protection until consumers associate term with product (London Fog). –Generic Terms: no protection (bicycle, computer).

8 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Service, Certification, and Collective Marks Service Mark: similar to trademark but used for services (includes TV and radio). Certification Mark: quality of goods (UL tested, Good Housekeeping). Collective Mark: used by members of a cooperative, association, union.

9 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trademarks and Related Issues Trade Dress. –Protects image and appearance of a product or store (Example: fish shape of cracker, Starbucks stores). Counterfeit Goods. –Stop Counterfeiting in Manufactured Goods Act criminalizes intentional trafficking in counterfeit goods. Trade Names. –Indicates all or part of a business name that is protected (Example: Safeway).

10 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cyber Marks Domain Names. –Trademarks in Cyberspace (example: Nike.com). –Conflicts—ICANN. Anticybersquatting Legislation. –Occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name. –1999 Anticybersquatting Consumer Protection Act.

11 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cyber Marks Meta Tags –Keywords in web pages used by internet search engines. –Playboy Enterprises, Inc. v. Welles (2002). Dilution in the Online World. –Trademarks can be diluted on the web. –Hasbro v. IEG (over candyland.com).

12 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Cyber Marks Licensing. –Agreement that permits use of trademark, copyright, or patent in cyber space. –Owner is licensor, user is licensee. –Terms of the use are delineated in the license agreement. Case 5.2 George V Restauration S.A. v. Little Rest Twelve, Inc. Owners of mark would suffer ‘irreparable harm’ and consumer confusion if use of mark continued by licensee.

13 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Patents Patent: government monopoly that gives inventor the exclusive right to make, use or sell and invention for 20 years. What is Patentable? –Item must be novel and not “obvious”. Almost anything is patentable (excluding laws of nature, natural phenomena, abstract ideas). Case 5.3 KSR International Co. v. Teleflex, Inc. Patent for automobile pedal sensor was invalid because it was obvious and combined pre- existing inventions.

14 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Patents Patent Infringement. –Manufacture, use or sale of another’s product or design without permission (license). Remedies for Patent Infringement. –Injunction. –Damages for royalties. –Reimbursement for attorney’s fees and costs.

15 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Copyrights Intangible property right automatically granted by federal statute to the author for life plus 70 years. What is Protected Expression? –Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is. –Section 102 Exclusions. –Compilation of facts is protected.

16 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Copyrights Copyright Infringement. –Form or expression is copied (does not have to be in its entirety). –Penalties, damages and criminal action are possible. The “Fair Use” Exception. –Certain persons or organization can copy materials without penalty (e.g., education, news, research). Copyright Protection for Software.

17 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Copyrights in Digital Information Digital media can easily be copied. –Anytime a copyright work is downloaded and stored in RAM or hard drive without permission, there is infringement. Copyright Act of 1976: –Copy of a program into RAM is infringement. –Revision or re-sale of freelance authors works can be infringement.

18 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Copyrights in Digital Information MP3 and File-Sharing. –Napster case. –P2P sharing, distributed network. –Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., Supreme Court held that a software company that distributes software intending it to be used to violate copyright laws can be vicariously liable for users infringement. –What about the new “cloud network”?

19 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. Trade Secrets Trade secrets are confidential, not filed with the government. Can be customer lists, formulas, pricing, etc. Theft of trade secrets is now a federal crime under the Economic Espionage Act of Cyberspace: employees can easily information to competitors.

20 © 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. International Protection Berne Convention (1886). TRIPS Agreement (1994). –Each member must include domestic laws protecting intellectual property of other nation-members. World Intellectual Property Organization. (WIPO) (1996). –Provides for Dispute resolution. Madrid Protocol (2003). U.S. company can submit a single application to register its trademark with all 73 member nations.