Chapter 11 Intellectual Property and Cyberlaw

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 that which results from intellectual, creative processes of one’s 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. 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 e-mail, 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: Duration of Protection: A grant from the government that gives an inventor the exclusive right to make, use, and sell an invention for a specified period. Duration of Protection: Twenty years from the date of filing the application for a patent.

Patent Infringement Occurs when one uses or sells another’s patented design, product, or process without the patent owner’s 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 Cyberproducts 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: Duration of Protection: 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 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: Duration of Protection: Any formula, pattern, device, or compilation of information that give a business an advantage over competitors who do not know the information or processes. Duration of Protection: Indefinitely, as long as the party adequately protects his or her trade secrets from disclosures.

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?

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 party’s 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 party’s 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

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 doesn’t 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, browsing—any of these activities conducted in cyberspace can infringe on a copyright owner’s 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 have paternity 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 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?

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?