© 2007 West Legal Studies in Business, A Division of Thomson Learning Chapter 5 Intellectual Property

© 2007 West Legal Studies in Business, A Division of Thomson Learning 2 What is intellectual property? Why are trademarks and patents protected by law? 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 steps have been taken to protect intellectual property rights in today’s digital age? Learning Objectives

© 2007 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. 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.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 4 Trademarks and 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 (1920). Statutory Protection of Trademarks. –Federal Lanham Act of –Federal Trademark Dilution Act of 1995.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 5 Trademarks and 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. –Strong marks vs. generic terms.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 6 Trademarks and Related Property Service Mark. –Similar to trademark but used for services. –Includes characters in TV and radio. Certification Mark. –Used to certify accuracy of owner’s goods or services. “Good Housekeeping”. Collective Mark. –Certification used by members of an organization.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 7 Trademarks and Related Property Trade Names. –Applies to a business (not a product). Trade Dress. –Image and appearance of a product or shop (Example: Starbucks coffee stores).

© 2007 West Legal Studies in Business, A Division of Thomson Learning 8 Cyber Marks Domain Names. –Trademarks in Cyberspace (example: Nike.com). –Conflicts—ICANN. Anticybersquatting Legislation. –Cyber squatting 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.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 9 Cyber Marks Meta Tags –Keywords in web pages used by internet search engines. –CASE 5.2 Playboy Enterprises, Inc. v. Welles (2002). Dilution in the Online World. –Trademarks can be diluted on the web. –Hasbro v. IEG (over candyland.com).

© 2007 West Legal Studies in Business, A Division of Thomson Learning 10 Patents Patent. –A Government monopoly that gives inventor the exclusive right to make, use or sell and invention for 20 years. Patents for: –Invention. –Design. –Process (software patent).

© 2007 West Legal Studies in Business, A Division of Thomson Learning 11 Patents Infringement. –Manufacture, use or sale of another’s product or design without permission (license). 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.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 12 Copyrights Copyright: –Intangible property right granted by federal statute to the author for life plus 70 years. –Automatic protection. –Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 13 Copyrights Infringement. –Form or expression is copied (does not have to be in its entirety). –Penalties, damages and criminal action are possible. Exception: “Fair Use”. –Certain persons or organization can copy materials without penalty (e.g., education, news, research).

© 2007 West Legal Studies in Business, A Division of Thomson Learning 14 Copyrights in Digital Information Digital media can easily be copied. –CASE 5.3 New York Times Co. v. Tasini (2001). Software Copyright Act of 1980: –Copy of a program into RAM is infringement. –Revision or re-sale of freelance authors works can be infringement. MP3 and File-Sharing Technology. –Napster case. –P2P sharing, distributed network.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 15 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.

© 2007 West Legal Studies in Business, A Division of Thomson Learning 16 International Protection for Intellectual Property 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.