1. Chapter 8: Intellectual Property Rights
Business Law
Text and Cases
The First Course
Fourteenth Edition
Miller
Chapter 8: Intellectual Property Rights

2. §1: Trademarks and Related Property (1 of 18)
Intellectual Property: Any property resulting from intellectual, creative processes—the product of one or more individual’s minds.
Founders of America understood the value of I.P.: Article I § 8 authorizes Congress to “secur[e] for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

3. Trademarks and Related Property (2 of 18)
Trademark: A distinctive mark, motto, device, or emblem that a manufacturer stamps, prints, or otherwise affixes to the goods it produces.
Distinguish product/service from goods of other manufacturers and merchants.
Trademarks helps avoid consumer confusion.
CASE 8.1 The Coca Cola Co. v. The Koke Co. of America (1920).

4. Trademarks and Related Property (3 of 18)
Statutory Protection of Trademarks:
Lanham Trademark Act (1946) creates incentives for companies to invest; prevents unjust enrichment of companies who infringe.

5. Trademarks and Related Property (4 of 18)
Trademark Dilution: Lanham Act amended with Federal Trademark Dilution Act (1995).
Creates federal cause of action even when unlikely to confuse consumers.
Protects “distinctive” or “famous” marks such as McDonald’s, Dell, and Apple).

6. Trademarks and Related Property (5 of 18)
Marks Need Not Be Identical:
A famous mark may be diluted by the use of an identical mark or by the use of a similar mark.
Similar mark can dilute, especially when the marks provide related goods or compete in the same market.

7. Trademarks and Related Property (6 of 18)
Trademark Registration: Register with U.S. Patent Trademark Office ( to receive federal protection.
Mark can be registered if
it is currently in commerce; or
applicant intends to put it into commerce within six months.
Registration allows use of ® symbol.

8. Trademarks and Related Property (7 of 18)
Trademark Infringement: Use of a protected trademark—or copying it to a substantial degree—without permission.
Registration with USPTO gives national notice.
Whenever mark is substantially copied (intentionally or unintentionally), owner has action for infringement.

9. Trademarks and Related Property (8 of 18)
Trademark Infringement: Most common remedy is an injunction against further infringement.
Lanham Act allows a trademark owner who proves infringement to recover damages plus profits wrongfully received from unauthorized use. The court can also order the destruction of goods.

10. Trademarks and Related Property (9 of 18)
Distinctiveness of the Mark: Fanciful, arbitrary, or suggestive trademarks are usually considered to be the most distinctive (strongest) trademarks.
Fanciful marks use invented words (Google).
Arbitrary marks use common words in an uncommon way (“Dutch Boy” for paint).
Suggestive trademarks suggest something about product’s nature or quality (Blue-ray DVD).

11. Trademarks and Related Property (10 of 18)
Secondary Meaning:
Descriptive, geographical terms are usually not protected, unless there is a secondary meaning, e.g., “London Fog” coats.
Generic terms receive no protection.
Examples: Bicycle, Aspirin, and Computer.

12. Trademarks and Related Property (11 of 18)
Service Mark: Similar to trademark but used to distinguish services of one person/company from another.
Titles and character names used in media are frequently registered as service marks.

13. Trademarks and Related Property (12 of 18)
Certification Mark: A mark used by one or more persons or entities other than the owner to certify the region, materials, mode of manufacture, quality, or accuracy of the owner’s goods or services (e.g., “UL Tested”).
Collective Mark: Used by an organization or association (e.g., union marks).

14. Trademarks and Related Property (13 of 18)
Trade Dress: The image and overall appearance of the product or service, e.g., distinctive shop décor or packaging.
Trade dress is given the same protection as trademark.

15. Trademarks and Related Property (14 of 18)
Counterfeit goods are those that copy or otherwise imitate trademarked goods.
Such goods damage value of the trademark and trademark holder’s reputation and may present serious public health or safety risks (e.g., nutritional supplements and drugs). 

16. Trademarks and Related Property (15 of 18)
Counterfeit Goods:
Stop Counterfeiting in Manufactured Goods Act (2006) criminalizes the trafficking of counterfeit goods
SCMGA Penalties: Up to $2 million and ten years in prison.

17. Trademarks and Related Property (16 of 18)
Combating Foreign Counterfeiters: U.S. officials have combated online sales of counterfeit goods by obtaining court orders to close down the domain names of counterfeiters’ Web sites.

18. Trademarks and Related Property (17 of 18)
Trade Names: A term used to indicate part or all of a business’s name and that is directly related to the business’s reputation and goodwill. 
Trademarks apply to products: e.g., Pepsi-Cola®.
Apply to companies and are protected by federal law as well.

19. Trademarks and Related Property (18 of 18)
License: Agreement or contract permitting the use of a trademark, copyright, patent, or trade secret for certain purposes.
Licensor: Party that owns the intellectual property rights.
Licensee: Party obtaining the license who generally pays fees (royalties) for the use of the intellectual property.

20. §2: Patents (1 of 8)
Patent: A grant from the government giving an inventor the exclusive right or privilege to make, use, or sell his invention for a set period of time. 
A patent may protect an invention, product, process, or design.

21. Patents (2 of 8)
Patent:
The product, process, or design must be genuine, novel, useful, and not obvious in light of current technology.
First person to file, not invent, gets protection.

22. Patents (3 of 8) Access to Searchable Patent Databases:
U.S. Patent and Trademark Office Web site (
European Patent Office Web site (

23. Patents (4 of 8)
What Is Patentable: Almost anything except the laws of nature, natural phenomena, and abstract ideas.
Other patentable items include artistic methods and works of art, certain business processes, plants that are reproduced asexually, and genetically engineered microorganisms and animals.

24. Patents (5 of 8)
Patent Infringement: Making, using, or selling another person’s patented product, process, or design without permission. 
May occur even though product is not identical or put into commerce.

25. Patents (6 of 8) Patent Infringement Suits and High-Tech Companies:
Such firms tend to be holders of numerous patents and are frequently involved in patent infringement lawsuits.
SEE APPLE, INC. v. SAMSUNG ELECTRONICS CO. (2013).

26. Patents (7 of 8) Patent Infringement and Foreign Sales:
Foreign firms can obtain U.S. patent protection on items that they sell within the United States.
U.S. firms can obtain protection in foreign nations where they sell goods.
Under U.S. law, no patent infringement occurs when a patented product is made or sold in another country.

27. Patents (8 of 8) Remedies for Patent Infringement:
Patent holder can seek an injunction, monetary damages, and perhaps attorneys’ fees and costs.
SEE EBAY, INC. v. MERCEXCHANGE, LLC (2006).
The court can triple the amount of damages awarded (treble damages) if it determines that the infringement was willful.

28. §3: Copyrights (1 of 10]
Copyright: An intangible property right granted by federal statute to the author or originator of a literary or artistic production of a specified type.
When copyright protection ends, works enter into the public domain.

29. Copyrights (2 of 10]
Copyrights can be registered with the U.S. Copyright Office, though registration is not required. Copyright owners are usually protected against:
Reproduction of the work.
Development of derivative works.
Distribution of the work.
Public display of the work.

30. Copyrights (3 of 10] What Is Protected Expression?
Work must be “fixed in a durable medium.” Protection is automatic; registration is not required.

31. Copyrights (4 of 10]
What Is Protected Expression? Copyrighted work must fall into one of the following categories:
Literary Works.
Musical Works.
Dramatic Works and Accompanying Music.
Pantomimes and Choreographic Works.

32. Copyrights (5 of 10]
What Is Protected Expression? Copyrighted work must fall into one of the following categories:
Pictoral, Graphic, and Sculptural Works.
Motion Pictures and Other Audiovisual Works (including multimedia).
Sound Recordings.
Architectural Works.

33. Copyrights (6 of 10] Section 102 Exclusions:
Only the expression of an idea can be copyrighted—not the idea itself (Section 102). Anyone can use the underlying ideas in a copyrighted work.
Compilations of facts are copyrightable, but the compilation must be “original.”

34. Copyrights (7 of 10]
Copyright Infringement: Use of a copyrighted form or expression of an idea—even with slight variations—without permission.
CASE 8.2 Winstead v. Jackson (2013).
Remedies range from actual damages to criminal prosecution. 

35. Copyrights (8 of 10] The “Fair Use” Exception (§107).
No infringement if reproduced material is used for criticism, comment, news, teaching, or research.
Since “fair use” guidelines are very broad, the courts determine it on a case-by-case basis.

36. Copyrights (9 of 10] The First Sale Doctrine§109(a):
No infringement occurs when a person who lawfully owns a copyrighted work resells the work, because the original copyright holder no longer has control of content.

37. Copyrights (10 of 10]
Copyright Protection for Software: Generally extends to parts of a program that can be read by humans; the binary-language object code; and the overall structure, sequence, and organization of a program.
Courts generally do not apply copyright protection to the “look and feel” of a computer program.

38. §4: Trade Secrets (1 of 3)
Trade Secret: Information of commercial value such as customer lists, plans, research and development, pricing information, marketing methods, and production techniques. 
Trade secret protection extends both to ideas and to their expression.

39. Trade Secrets (2 of 3)
State and Federal Law on Trade Secrets: Stealing confidential business data by industrial espionage is a theft of trade secrets without any contractual violation and is actionable in itself.
Common law generally protects trade secrets but most states have also enacted some version of the Uniform Trade Secrets Act.

40. Trade Secrets (3 of 3) Trade Secrets in Cyberspace:
Technology undermines many firms’ ability to protect their confidential information.
Dishonest employees can easily appropriate trade secrets via computer hardware, software, and social media.

41. §5: International Protection for Intellectual Property (1 of 6)
Berne Convention: Every country that signed this treaty must recognize authors’ copyrights in the other signatory nations. No notice is required.
In 2011, the European Union altered its copyright rules under the Berne Convention to extend the period of royalty protection for musicians from fifty years to seventy years.

42. International Protection for Intellectual Property (2 of 6)
The TRIPS Agreement of 1994 established standards for the international protection of intellectual property rights.
The domestic laws of member countries must have broad intellectual property rights and effective remedies for violations of those rights. 

43. International Protection for Intellectual Property (3 of 6)
Member nations must ensure that legal procedures are available for parties who wish to bring actions for infringement.
Prohibits Discrimination: Generally, the TRIPS agreement forbids member nations from giving their own citizens favorable treatment without offering the same treatment to nationals of other member countries.

44. International Protection for Intellectual Property (4 of 6)
The Madrid Protocol allows a U.S. company to register its trademark abroad with one application.
Doing so reduces the time and expense of securing international trademark protection.

45. International Protection for Intellectual Property (5 of 6)
The Anti-Counterfeiting Trade Agreement (ACTA) is designed to combat global counterfeiting and piracy by
increasing international cooperation;
facilitating the best law enforcement practices; and
providing a legal framework to combat counterfeiting and distribution of pirated copyrighted works.

46. International Protection for Intellectual Property (6 of 6)
Border Searches: Member nations are required to establish border measures that allow officials—on their own initiative—to search commercial shipments of imports and exports for counterfeit goods.