{ Chapter 11 Property: Personal & Intellectual

Property Types  Real property: Land and property permanently attached to it  Buildings, fixtures, trees, soil, minerals, timber, and plants  Personal property: Property that is not real property  Fixture: Personal property that is permanently affixed to land or buildings 1 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Personal Property Types  Tangible property: All real property and physically defined personal property, such as buildings, goods, animals, and minerals  Intangible property: Rights that cannot be reduced to physical form, such as stock certificates, certificates of deposit, bonds, and copyrights 2 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Ownership of Personal Property  Minimum formality required to transfer or acquire ownership  Methods of acquiring ownership:  Possession or capture  Purchase  Production 3 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Gifts  Voluntary transfer of title to property without payment of consideration by the donee  Elements of a valid gift:  Donative intent  Delivery  Acceptance 4 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Types of Gifts  Gift inter vivos: A gift made during a person’s lifetime that is an irrevocable present transfer of ownership  Gift causa mortis: A gift that is made in contemplation of death 5 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Abandoned Property  Property that an owner has discarded with the intent to relinquish his or her rights in it and mislaid or lost property that the owner has given up any further attempts to locate 6 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Lost & Mislaid Property  Lost Property: Property that the owner leaves somewhere due to negligence, carelessness, or inadvertence  Mislaid property: Property that an owner voluntarily places somewhere and then inadvertently forgets 7 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Estray Statute  A statute that permits a finder of mislaid or lost property to clear title to the property if certain prescribed legal formalities are met 8 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Bailment  Bailment: A transaction in which an owner transfers his or her personal property to another to be held, stored, or delivered, or for some other purpose  Title to the property does not transfer  Bailor: The owner of property in a bailment  Bailee: A holder of goods who is not a seller or a buyer 9 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Bailment 10 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Elements necessary for bailment 1. Only personal property can be bailed 2. Delivery of possession:  The bailee has exclusive control over the personal property  The bailee must knowingly accept the personal property 3. Bailment agreement 11 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Types of Bailments 1. Bailments for the sole benefit of the bailor  Duty of slight care: Duty owed by a bailee not to be grossly negligent in caring for the bailed goods 2. Bailments for the sole benefit of the bailee  Duty of great care: Duty owed by a bailee not to be slightly negligent in caring for the bailed goods 3. Mutual benefit bailment:  Duty of reasonable care: Duty owed by a bailee not to be ordinarily negligent in caring for the bailed goods 12 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Duration &Termination of Bailments  Bailment for fixed term: A bailment that terminates at the end of the term or sooner by mutual consent of the parties  Bailment at will: A bailment without a fixer term; can be terminated at any time by either party 13 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Special Bailments 1. Warehouse company 2. Common carrier 3. Innkeeper 14 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

1. Warehouse company  A company Engaged in the business of storing personal property for compensation  Warehouse receipt: A document of title issued by a warehouse company stating that the bailor has title to the bailed goods 15 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

2. Common Carrier  Companies that offer transportation services to the public, such as airlines, railroads, and trucking firms 16 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Common Carrier Parties  Consignor (shipper): A person shipping goods  Consignee: A person to whom bailed goods are to be delivered 17 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Common Carrier  Duty of strict liability of a common carrier: Duty owed by a common carrier whereby if the bailed goods are lost, damaged, destroyed, or stolen, the common carrier is liable even if the loss or damage was not its fault  Bill of lading: A document of title issued by a common carrier stating that the bailor has title to the bailed goods 18 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Common Carrier 19 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

3. Innkeeper  The owner of a facility that provides lodging to the public for compensation  Duty of strict liability of an innkeeper: A common law rule that makes innkeepers strictly liable to transient guests for personal property that is lost or stolen from the innkeeper’s premises even if the loss was not the innkeeper’s fault 20 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Innkeeper Liability  An innkeeper can avoid liability for loss caused to a guest’s property if:  A safe is provided in which the guest’s valuable property may be kept  The guest is notified of this fact 21 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Intellectual Property  Federal law provides protections for intellectual property rights by means of: 1. Patents 2. Copyrights 3. Trademarks 22 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Trade Secret  Trade secrets  Product formula  Pattern  Design  Compilation of data  Customer list or other business secret  Uniform Trade Secrets Act: Gives statutory protection to trade secrets 23 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Trade Secret Lawsuits  Lawsuits for misappropriation – brought against anyone who steals a trade secret  Defendant must have obtained the trade secret through unlawful means  Discovery of trade secret by reverse engineering is lawful  A trade secret unprotected by the owner is not subject to legal protection 24 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Patent  A grant by the federal government upon the inventor of an invention for the exclusive right to use, sell, or license the invention for a limited amount of time  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 25 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Patent  Subject matter that can be patented  Machines  Processes  Compositions of matter  Improvements to existing machines, processes, or compositions of matter  Designs for an article of manufacture  Asexually reproduced plants  Living material invented by a person 26 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Requirements for a Patent  An invention must be:  Novel  Useful  Nonobvious  Abstractions and scientific principles cannot be patented unless they are part of the tangible environment 27 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Patent Periods  Utility patents – twenty years  Design patents – fourteen years  Patent term begins to run from the date the patent application is filed  The U.S. follows “first-to-invent” rule 28 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Patents & Public Domain  The invention or design enters the public domain after patent period expires  Patents will not be granted if an invention was in the public domain for one year prior to application filing 29 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Patent Infringement  Occurs when someone makes unauthorized use of a patent  Plaintiff may recover:  Money damages equal to royalty rate  Other damages caused by the infringement  Order for destruction of infringing items  Injunction against infringer  Treble damages for intentional infringement 30 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Copyright  Rights of an author for exclusive use of their written work for a period of time  Books & stories  Song lyrics & music  TV shows & Movies 31 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Copyright  Copyright Revision Act of 1976  Establishes the requirements for obtaining a copyright  Protects copyrighted works from infringement  Only tangible writings are subject to copyright registration and protection  Federal copyright law is exclusive  Copyright can be sold or licensed to others 32 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Registration of Copyrights  Must be an original work  Registered with U.S. Copyright Office  Registration  Permissive  Voluntary  Done at any time during term of copyright  Registration permits a holder to obtain statutory damages for copyright infringement  Not required to use © or word “copyright” 33 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Copyright Period  Individuals are granted copyright protection for their lifetime plus seventy years  Copyrights owned by businesses are protected for the shorter of either:  120 years from the year of creation  95 years from the year of first publication 34 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

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 made by the defendant from the infringement  Damages suffered by the plaintiff  Order requiring impoundment and destruction  Injunction preventing future infringement 35 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Copyrights  Fair use doctrine  Permits certain limited unauthorized use of copyrighted materials  No electronic theft act  Makes it a crime for a person to willfully infringe on a copyright  Digital Millennium Copyright Act  Makes it a crime to circumvent encryption technology 36 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Trademark  Used to identify and distinguish goods of a manufacturer or seller or services of a provider from others  Trade name  Symbol  Word  Logo  Design  Device 37 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Registration of a Trademark  Mark may be registered if it has been used in commerce  Can be registered six months prior to use  Mark is lost if not used within six months  Mark may be opposed by third parties  The use of the symbol ® is not mandatory 38 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

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 standing alone  Surnames standing alone  Any mark that resembles a mark already registered with the U.S. PTO 39 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Distinctiveness of Trademark  A mark must be distinctive  A unique word or design  Have acquired a secondary meaning  An ordinary term becomes a brand name 40 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Trademark Infringement  Unauthorized use of a trademark  Owner must prove that:  Defendant infringed the plaintiff’s mark by using it in an unauthorized manner  Use is likely to cause confusion, mistake, or deception 41 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Generic Names  Term for a mark that has become a common term for a product line or type of service and therefore has lost its trademark protection  Name becomes descriptive rather than distinctive 42 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Diluting, blurring, or tarnishing  Federal Dilution Act of 1995  Protects famous marks from dilution  Use by other party is actionable if:  It is commercial  It causes dilution of distinctive quality of mark  Types of dilution  Blurring  Tarnishment 43 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.

Dilution  Trademark Dilution Revision Act  A dilution plaintiff does not need to show that it has suffered actual harm  It only needs to show that there would be the likelihood of dilution 44 Copyright © 2013 Pearson Education, Inc. Publishing as Prentice Hall.