© 2005 West Legal Studies in Business A Division of Thomson Learning CHAPTER 5 Intellectual Property

© 2005 West Legal Studies in Business A Division of Thomson Learning 2 What is intellectual property?What is intellectual property? Why are trademarks and patents protected by the law?Why are trademarks and patents protected by the law? What laws protects authors’ rights in works they generate?What laws protects authors’ rights in works they generate? What are trade secrets, and what laws offer protection for this form of intellectual property?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?What steps have been taken to protect intellectual property rights in the digital age? Learning Objectives

© 2005 West Legal Studies in Business A Division of Thomson Learning 3 Introduction Intellectual Property (I.P.) is any property that is the product of an individual’s mind, e.g, books, software, movies, music.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: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.Ownership of I.P. is strategically important in the global economy.

© 2005 West Legal Studies in Business A Division of Thomson Learning 4 Trademarks & Related Property Trademark.Trademark. –Distinctive motto, mark or emblem. –Stamped or affixed to a product. –So that it can be identified in the market. –The Coca-Cola Co. v. Koke Co. of America (1920). Statutory Protection for Trademarks.Statutory Protection for Trademarks. –Federal Lanham Act of –Federal Trademark Dilution Act of 1995.

© 2005 West Legal Studies in Business A Division of Thomson Learning 5 Trademarks & Related Property Trademark Registration.Trademark Registration. –U.S. Patent and Trademark Office gives notice to 3 rd parties. –A mark can be registered if already in use or will be used within 6 months. Trademark Infringement.Trademark Infringement. –Unintentional or intentional substantial copying of mark. –Strong marks vs. generic terms.

© 2005 West Legal Studies in Business A Division of Thomson Learning 6 Service, Certification, and Collective Marks Service Mark.Service Mark. –Similar to trademark but used for services. –Includes characters in TV and radio. Trade Names.Trade Names. –Applies to a business (not a product). Trade Dress.Trade Dress. –Image and appearance of a product or shop (Example: Starbucks coffee stores).

© 2005 West Legal Studies in Business A Division of Thomson Learning 7 Cyber Marks Trademarks in Cyberspace.Trademarks in Cyberspace. Domain Names.Domain Names. –Trademarks in Cyberspace (example: Nike.com). –Conflicts—ICANN. Cybersquatting.Cybersquatting. –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.

© 2005 West Legal Studies in Business A Division of Thomson Learning 8 Cyber Marks Meta TagsMeta Tags –Keywords in web pages used by internet search engines. –Playboy Enterprises, Inc. v. Welles (2002). Online Trademark Dilution.Online Trademark Dilution. –Trademarks can be diluted on the web. –Hasbro v. IEG (over candyland.com).

© 2005 West Legal Studies in Business A Division of Thomson Learning 9 Patents Patent.Patent. –A Government monopoly that gives inventor the exclusive right to make, use or sell and invention for 20 years. Patents for:Patents for: –Invention. –Design. –Process (software patent).

© 2005 West Legal Studies in Business A Division of Thomson Learning 10 Patents Infringement.Infringement. –Manufacture, use or sale of another’s product or design without permission (license). Business Process Patents.Business Process Patents. –1998 State Street Bank v. Signature Financial ruled that a method of doing business could be patented. –Amazon.com’s “one-click” patent. –Eolas Technologies, Inc. v. Microsoft Corp. (2004).

© 2005 West Legal Studies in Business A Division of Thomson Learning 11 Copyrights Copyright:Copyright: –Intangible property right granted by federal statute to the author for life plus 70 years. –Automatic protection. –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?Section 102 Exclusions? Compilations of Facts?Compilations of Facts?

© 2005 West Legal Studies in Business A Division of Thomson Learning 12 Copyrights Infringement.Infringement. –Form or expression is copied (does not have to be in its entirety). –Penalties, damages and criminal action are possible. Exception: “Fair Use”.Exception: “Fair Use”. –Certain persons or organization can copy materials without penalty (e.g., education, news, research). Copyright Protections for Software.Copyright Protections for Software. –1980-Computer Software Copyright Act.

© 2005 West Legal Studies in Business A Division of Thomson Learning 13 Copyrights in Digital Information Digital media can easily be copied.Digital media can easily be copied. Copyright Act of 1976:Copyright Act of 1976: –Copy of a program into RAM is infringement. –Revision or re-sale of freelance authors works can be infringement. –New York Times Co. v. Tasini (2001). MP3 and File-Sharing.MP3 and File-Sharing. –Napster case. –P2P sharing, distributed network. –New sharing: Morpheus, Kazaa.

© 2005 West Legal Studies in Business A Division of Thomson Learning 14 Trade Secrets Trade secrets are confidential, not filed with the government.Trade secrets are confidential, not filed with the government. Can be customer lists, formulas, pricing, etc.Can be customer lists, formulas, pricing, etc. Theft of trade secrets is now a federal crime under the Economic Espionage Act of 1996.Theft of trade secrets is now a federal crime under the Economic Espionage Act of Cyberspace: employees can easily information to competitors.Cyberspace: employees can easily information to competitors.

© 2005 West Legal Studies in Business A Division of Thomson Learning 15 International Protection Berne Convention (1886).Berne Convention (1886). TRIPS Agreement (1994).TRIPS Agreement (1994). –Each member must include domestic laws protecting intellectual property of other nation- members. World Intellectual Property Organization. (WIPO) (1996).World Intellectual Property Organization. (WIPO) (1996). –Provides for Dispute resolution.