Chapter 7 Intellectual Property and Piracy PowerPoint Slides to Accompany CONTEMPORARY BUSINESS AND ONLINE COMMERCE LAW 6th Edition by Henry R. Cheeseman Chapter 7 Intellectual Property and Piracy Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Intellectual Property Rights Intellectual property rights include: Patents Copyrights Trademarks Trade Secrets Trade Names Domain Names These are very valuable business assets Protected by federal and state laws from misappropriation and infringement Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Trade Secrets (1 of 3) A product formula, pattern, design, compilation of data, customer list, or other business secret Many states have adopted the Uniform Trade Secrets Act to give statutory protection to trade secrets. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Trade Secrets (2 of 3) State unfair competition laws allow the owner of a trade secret to bring a lawsuit for misappropriation against anyone who steals a trade secret. To be actionable, the defendant must have obtained the trade secret through unlawful means. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Trade Secrets (3 of 3) The owner of a trade secret is obliged to take all reasonable precautions to prevent those secrets from being discovered by others. If the owner fails to take precautions, the secret is no longer subject to protection under state unfair competition laws. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Online Commerce and Internet Law: Economic Espionage Act of 1996 Makes it a federal crime to steal another’s trade secrets It is a federal crime for any person: To convert a trade secret to his or her benefit or for the benefit of others, Knowing or intending that the act would cause injury to the owner of the trade secret Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Landmark Law: Federal Patent Statute of 1952 This law is intended: To provide an incentive for inventors to invent and to make their inventions public; and To protect patented inventions from infringement Federal patent law is exclusive There are no state patent laws Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Changes in U.S. Patent Law (1995) The General Agreement on Tariffs and Trade (GATT) caused the following changes in U.S. patent law: Patents are valid for 20 years, instead of the previous term of 17 years The patent term begins to run from the date the patent application is filed instead of when the patent is issued, as was previously the case. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Patenting an Invention To be patented, an invention must be: Novel Useful Nonobvious Only certain subject matters can be patented. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Patentable Subject Matter Includes: Machines Processes Compositions of matter Improvements to: Existing machines Designs for an article of manufacture Asexually reproduced plants Living material invented by a person Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Patent Infringement Unauthorized use of another’s patent A patent holder may recover damages and other remedies against a patent infringer. Patent holders own exclusive rights to use and exploit their patent. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

One-Year “On Sale” Doctrine A patent may not be granted if the invention was used by the public for more than one year prior to filing of the patent application. This doctrine forces inventors to file their patent applications at the proper time. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

The American Inventors Protection Act Federal statute that permits inventors to file a provisional application with the PTO Requires the PTO to issue a patent within three years in most circumstances Provides for contested reexaminations within the PTO Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Copyrights and Internet Law: Copyright Revision Act of 1976 Establishes the requirements for obtaining a copyright Protects copyrighted works from infringement To be protected under federal copyright law, the work must be the original work of the author. Only tangible writings are subject to copyright registration and protection. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Registration of Copyrights To be protected under federal copyright law: The work must be the original work of the author A copyright is created when an author produces her work. Published and unpublished works may be registered with the U.S. Copyright Office. Registration is permissive and voluntary and can be effected at any time during the term of the copyright. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Copyright Terms Individual Copyright Holder – life of author plus 70 years. Corporate Copyright Holder – 95 years from the year of first publication or 120 years from the year of creation, whichever is shorter. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Copyrighting Software Key legislation to afford protection to software and computer chips: Computer Software Copyright Act of 1980 Semiconductor Chip Protection Act of 1984 Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Copyright Infringement Occurs when a party copies a substantial and material part of the plaintiff’s copyrighted work without permission. A copyright holder may recover damages and other remedies against the infringer. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

The Fair Use Doctrine (1 of 3) The copyright holder’s rights in the work are not absolute. The law permits certain limited unauthorized use of copyrighted materials. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

The Fair Use Doctrine (2 of 3) The following are protected under this doctrine: Quotation of the copyrighted work for review or criticism or in a scholarly or technical work Use in a parody or satire Brief quotation in a news report Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

The Fair Use Doctrine (3 of 3) Reproduction by a teacher or student of a small part of the work to illustrate a lesson Incidental reproduction of a work in a newsreel or broadcast of an event being reported Reproduction of a work in a legislative or judicial proceeding Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Online Commerce and Internet Law: No Electronic Theft Act (NET Act) of 1997 Digital Millennium Copyright Act (DMCA) of 1998 Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Landmark Law: Lanham Trademark Act of 1946 (as amended) Establishes the requirements for obtaining a federal mark Protects marks from infringement Trademarks are registered with the U.S. Patent and Trademark Office (PTO) Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Trademark Law The original registration of a mark is valid for 10 years. It can be renewed for an unlimited number of 10-year periods. The registrant is entitled to use the registered trademark symbol ® in connection with a registered trademark or service mark. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Distinctiveness of a Mark To qualify for federal protection, A mark must be distinctive – i.e., a brand name that is unique and fabricated; or Have acquired a “secondary meaning” – i.e., when an ordinary term has become a brand name. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Marks That Can Be Trademarked (1 of 2) Trademark – a distinctive mark, symbol, name, word, motto, or device that identifies the goods of a particular business. e.g., IBM, Coca-Cola Service Mark – used to distinguish the services of the holder from those of its competitors. e.g., United Airlines, Weight Watchers, Marriott Hotels Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Marks That Can Be Trademarked (2 of 2) Certification Mark – used to certify that goods and services are of a certain quality or originate from particular geographical areas. e.g., “Florida” oranges, “Napa Valley” wines Collective Mark – used by cooperatives, associations, and fraternal organizations. e.g., Boy Scouts of America Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Marks That Cannot Be Registered The 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 federal PTO Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Trademark Infringement The owner of a mark can sue a third party for the unauthorized use of a mark The owner must prove that: The defendant infringed the plaintiff’s mark by using it in an unauthorized manner, and Such use is likely to cause confusion, mistake, or deception of the public as to the origin of the goods or services. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Generic Names Generic name – a trademark that that becomes a common term for a product line or type of service. Once a trademark becomes a generic name, the term loses its protection under federal trademark law because it has become descriptive rather than distinctive. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Federal Dilution Act of 1995 (1 of 2) Protects famous marks from dilution The act provides that owners of marks have a valuable property right in their marks that should not be eroded, blurred, tarnished, or diluted in any way by another. The act is designed to stop those who attempt to benefit from the time and money spent by a company to develop and promote its famous marks. Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

Federal Dilution Act of 1995 (2 of 2) The act has three fundamental requirements: The mark must be famous The use by the other party must be commercial The use must cause dilution of the distinctive quality of the mark Copyright © 2009 by Pearson Prentice-Hall. All rights reserved.

International Protection of Intellectual Property Rights 1. Paris Convention 2. Berne Convention 3. WIPO Copyright Treaty 4. WIPO Phonogram Copyright © 2009 by Pearson Prentice-Hall. All rights reserved. 4