Intellectual Property Issues Professor Matt Thatcher, MIS 748

2 Comparing Protections (Copyright, Patents, Trade Secret) What is protected? What is protected? For how long? For how long? Penalties for infringement? Penalties for infringement? Is there protection from independent discovery? Is there protection from independent discovery? Application process? Application process? Is the innovation placed in the public domain? Is the innovation placed in the public domain?

3 Copyright Laws: Information vs. Expression Feist Publications v. Rural Telephone Service (1991) Feist Publications v. Rural Telephone Service (1991) Rural Rural telephone provider under statutory obligation to compile phone directory for all customers free of charge telephone provider under statutory obligation to compile phone directory for all customers free of charge Feist Feist Specialized in compiling directories Specialized in compiling directories Copied 4,000 entries from Rural’s directory Copied 4,000 entries from Rural’s directory Rural sued for copyright infringement of its collections of information Rural sued for copyright infringement of its collections of information Court decision Court decision Favor of Feist since Rural’s directory had no creative expression Favor of Feist since Rural’s directory had no creative expression Can you copyright recipes? Can you copyright recipes?

4 Copyright Laws: What is covered? Graphical User Interfaces (look and feel)? Graphical User Interfaces (look and feel)? Apple v. Microsoft (1994) Apple v. Microsoft (1994) Apple sued to prevent Microsoft and Hewlett-Packard from using visual GUI elements that were similar to Apple’s MacIntosh OS Apple sued to prevent Microsoft and Hewlett-Packard from using visual GUI elements that were similar to Apple’s MacIntosh OS Apple lost all claims in the lawsuit Apple lost all claims in the lawsuit Lotus v. Borland (1995) Lotus v. Borland (1995) Quattro Pro released a spreadsheet that had a mode that imitated the Lotus menu structure (but not the code) Quattro Pro released a spreadsheet that had a mode that imitated the Lotus menu structure (but not the code) Lotus sued saying the look and feel is copyrightable Lotus sued saying the look and feel is copyrightable Courts disagreed saying the menu system is a method of operation – Courts sided with Borland Courts disagreed saying the menu system is a method of operation – Courts sided with Borland

5 Copyright Law: Fair Use Doctrine The purpose of the use The purpose of the use Commercial use vs. non-profit use Commercial use vs. non-profit use Education, research, news, critiques Education, research, news, critiques The nature of the copyrighted work The nature of the copyrighted work Creative works (novels) get more protection than informational works (databases of information) Creative works (novels) get more protection than informational works (databases of information) The portion of the copyrighted work used The portion of the copyrighted work used The effect of use upon the value of the copyrighted work The effect of use upon the value of the copyrighted work

6 Copyright Law: Fair Use Doctrine (cont.) Consider the following along the fair use doctrine Consider the following along the fair use doctrine The use of quotes and short passages from a novel in a negative book review in a newspaper The use of quotes and short passages from a novel in a negative book review in a newspaper

7 Copyright Law: Fair Use Doctrine (cont.) Sega v. Accolade (1992) Sega v. Accolade (1992) case about the use of reverse engineering to enable interoperability case about the use of reverse engineering to enable interoperability Sega had a computerized lock so that only Sega game cartridges would work on its gaming system Sega had a computerized lock so that only Sega game cartridges would work on its gaming system Accolade reverse engineered the lock to produce compatible cartridges Accolade reverse engineered the lock to produce compatible cartridges Court decision Court decision It is fair use to disassemble protected, copyrighted work to allow interoperability and avoid monopoly concerns It is fair use to disassemble protected, copyrighted work to allow interoperability and avoid monopoly concerns

8 Copyright Law: Fair Use Doctrine (cont.) Sony v. Universal Studios (1984) Sony v. Universal Studios (1984) Betamax case Betamax case Universal sued Sony claiming that manufacturers of technologies that enable copyright infringements should be held liable for any infringements committed by its purchasers Universal sued Sony claiming that manufacturers of technologies that enable copyright infringements should be held liable for any infringements committed by its purchasers Sony claimed that there are many non-infringing fair uses of betamax and VCRs Sony claimed that there are many non-infringing fair uses of betamax and VCRs Time-switching Time-switching Supreme Court Ruling (5-4) Supreme Court Ruling (5-4) Betamax has substantial non-infringing uses (fair use) Betamax has substantial non-infringing uses (fair use) Manufacturers of home video recording devices cannot be held liable for copyright infringement of consumers Manufacturers of home video recording devices cannot be held liable for copyright infringement of consumers

9 Copyright Law: DMCA Digital Millennium Copyright Act (1998) Digital Millennium Copyright Act (1998) Illegal to: Illegal to: Circumvent technical protection of copyrighted work Circumvent technical protection of copyrighted work Manufacture or distribute technology that enables others to circumvent copyrighted work Manufacture or distribute technology that enables others to circumvent copyrighted work Penalties Penalties 5 years in prison / $500,000 for each offense 5 years in prison / $500,000 for each offense Exception Exception Allows reverse engineering for interoperability and computer security research Allows reverse engineering for interoperability and computer security research Intermediary Liability (and safe harbors) Intermediary Liability (and safe harbors) ISPs ISPs

10 Copyright Law: DMCA (cont.) Universal v. Reimerdes (2000) Universal v. Reimerdes (2000) first test of the DMCA first test of the DMCA Universal sued three new York men who made DeCSS (a reverse engineering tool for overriding DVD protections) available on their websites Universal sued three new York men who made DeCSS (a reverse engineering tool for overriding DVD protections) available on their websites The men claimed DeCSS has a fair use (interoperability) The men claimed DeCSS has a fair use (interoperability) Court ruling Court ruling DeCSS violated the DMCA DeCSS violated the DMCA The individuals were forced to take DeCSS off their sites The individuals were forced to take DeCSS off their sites How can you protect fair use? How can you protect fair use?

11 Copyright Law: DMCA (cont.) The Napster case The Napster case Dec 1999 – RIAA sues Napster for $100,000 per copied song and claims that 90% of files copied via Napster violate record label copyrights Dec 1999 – RIAA sues Napster for $100,000 per copied song and claims that 90% of files copied via Napster violate record label copyrights Defense Defense Safe harbor under DMCA Safe harbor under DMCA Some works were not copyrighted Some works were not copyrighted Fair use (sampling, space-shifting) Fair use (sampling, space-shifting) Permissive distribution Permissive distribution Court ruling Court ruling Rejected Napster’s arguments Rejected Napster’s arguments Napster had an adverse impact on the market for CDs, especially among college students Napster had an adverse impact on the market for CDs, especially among college students Pay creators and copyright owners a $26 million settlement for past, unauthorized uses of music, and an advance against future licensing royalties of $10 million. Pay creators and copyright owners a $26 million settlement for past, unauthorized uses of music, and an advance against future licensing royalties of $10 million.

12 Copyright Law: DMCA (cont.) MGM Studios v. Grokster MGM Studios v. Grokster Ruling led to a controversial new test to determine if software is protected by Sony ruling Ruling led to a controversial new test to determine if software is protected by Sony ruling It has to be shown that the distributors of the program have advertised and/or otherwise induced it use for copyright infringement It has to be shown that the distributors of the program have advertised and/or otherwise induced it use for copyright infringement Grokster forced to pay $50 million to the music and recording industries Grokster forced to pay $50 million to the music and recording industries

13 Digital Rights Architecture Trusted systems Trusted systems Digital Rights Management Systems Digital Rights Management Systems How do you ensure fair use? How do you ensure fair use? How do critics, scholars, and teachers access material? How do critics, scholars, and teachers access material? Is there an invasion of privacy as creators track what we read, use, etc. with the trusted systems Is there an invasion of privacy as creators track what we read, use, etc. with the trusted systems

14 Trademarks Definition Definition Anything that enables a customer to differentiate one company’s product from another’s Anything that enables a customer to differentiate one company’s product from another’s Word, phrase, symbol, graphic, sound Word, phrase, symbol, graphic, sound Law prevents the use of a mark or a confusingly similar mark Law prevents the use of a mark or a confusingly similar mark Exceptions for fair use and parodies Exceptions for fair use and parodies Trademark Court Cases Trademark Court Cases Universal v. Nintendo (1984) Universal v. Nintendo (1984) the Donkey Kong case the Donkey Kong case Hasboro v. Internet Entertainment Group (1996) Hasboro v. Internet Entertainment Group (1996) the Candyland case the Candyland case

15 Domain Names Assigning domain names Assigning domain names Pre-1999  Network Solutions Inc. Pre-1999  Network Solutions Inc. Post-1999  Internet Corporation for Assigned Names and Numbers (ICANN) Post-1999  Internet Corporation for Assigned Names and Numbers (ICANN) What domain names can’t you use – Free Speech issues? What domain names can’t you use – Free Speech issues? Scientology-kills.net (OK) Scientology-kills.net (OK) Does not deceive and expresses an opinion Does not deceive and expresses an opinion Jews-for-Jesus.com (not OK) Jews-for-Jesus.com (not OK) Does deceive and tries to intercept those thinking of converting Does deceive and tries to intercept those thinking of converting

16 Linking Ticketmaster v. Microsoft (1997) Ticketmaster v. Microsoft (1997) Can you link to anything any way you want? Can you link to anything any way you want? Linking rules: Linking rules: avoid linking to sites that prohibit it avoid linking to sites that prohibit it Link in the way requested by the linked site Link in the way requested by the linked site Have a familiarity with the content of the linked site Have a familiarity with the content of the linked site Avoid impression that a link implies an endorsement in any way of one’s own product or services Avoid impression that a link implies an endorsement in any way of one’s own product or services

17 Open Source

18 Optimal Protection What does a good protection policy for software products look like? What does a good protection policy for software products look like? This is a good research question – optimal mix of copyright, patent, trade secret, open source, digital rights management This is a good research question – optimal mix of copyright, patent, trade secret, open source, digital rights management

19 Midterm Exam Overview IT value (Class 2) IT value (Class 2) Slides 21 – 26 Slides 21 – 26 Product category (digital good vs. physical good) Product category (digital good vs. physical good) Market structure (monopoly vs. competition) Market structure (monopoly vs. competition) Type of IT (design tool vs. production tool) Type of IT (design tool vs. production tool) Newly Vulnerable Markets (Class 3) Newly Vulnerable Markets (Class 3) Slides 4 and 18 Slides 4 and 18 Easy to enter, attractive to attack, and difficult to defend Easy to enter, attractive to attack, and difficult to defend The case of Capital One Financial The case of Capital One Financial what happened? why did it happen? can it keep happening? where else can it happen? what happened? why did it happen? can it keep happening? where else can it happen? Recording industry, Newspaper industry Recording industry, Newspaper industry

20 Midterm Exam Overview Information Privacy (Class 4) Information Privacy (Class 4) Compare and contrast European and United States approaches to consumer privacy Compare and contrast European and United States approaches to consumer privacy How would you write a website’s privacy policy? How would you write a website’s privacy policy? FTC Consumer Fair Information Practices FTC Consumer Fair Information Practices Notice, choice, integrity, access, enforcement, accountability Notice, choice, integrity, access, enforcement, accountability Privacy seal programs Privacy seal programs P3P P3P Privacy norms (industry) vs. privacy policies (firm) vs. law (govt) vs. technology and education (consumer) Privacy norms (industry) vs. privacy policies (firm) vs. law (govt) vs. technology and education (consumer)

21 Midterm Exam Overview IT Safety and Reliability (Class 5) IT Safety and Reliability (Class 5) Review the Killer Robot case (Slides 3-4) Review the Killer Robot case (Slides 3-4) IT roles and responsibilities (slides ) IT roles and responsibilities (slides ) Intellectual Property (Classes 6) Intellectual Property (Classes 6) Copyright vs. Patents vs. Trade Secret (Slides 2-11) Copyright vs. Patents vs. Trade Secret (Slides 2-11) Definitions, compare and contrast Definitions, compare and contrast see Slide 2 of this class (Class 7) see Slide 2 of this class (Class 7) Patents Patents Know the Patent Outcome Region (POR) and be able to discuss Figures 1a, 1b, and 2 – compare POR areas with Market Outcome (MO) Know the Patent Outcome Region (POR) and be able to discuss Figures 1a, 1b, and 2 – compare POR areas with Market Outcome (MO)

22 Midterm Exam Overview Intellectual Property (Class 7) Intellectual Property (Class 7) Copyright Copyright Fair use doctrine (related court cases) Fair use doctrine (related court cases) Digital Millenium Copyright Act (related court cases) Digital Millenium Copyright Act (related court cases) Trademark Trademark Definition Definition I must say that I like the Donkey Kong court case I must say that I like the Donkey Kong court case Do these protections provide incentive for innovation or stifle innovation? Do these protections provide incentive for innovation or stifle innovation?