1. INTELLECTUAL PROPERTY AND CYBER PIRACY
CHAPTER 7
INTELLECTUAL PROPERTY AND CYBER PIRACY
© 2010 Pearson Education, Inc., publishing as Prentice-Hall

2. Basis for Intellectual Property Protection in Constitution
“Congress shall have the power … to 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.”

3. Intellectual Property Rights
Patent
Copyrights
Trademark
Trade Secrets
Trade and Domain Names

4. Trade Secrets
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.

5. Trade Secrets (continued)
State unfair competition laws allow owner of trade secret to bring lawsuit for misappropriation against anyone who steals a trade secret.
Defendant must have obtained the trade secret through unlawful means.
E.g., theft or bribery
Reverse engineering not unlawful

6. Trade Secrets (continued)
Owner is obliged to take all reasonable precautions to prevent those secrets from being discovered by others.
E.g., locking doors, hiring security guards
If owner fails to take precautions, the secret is no longer subject to protection.

7. Trade Secrets (continued)
Successful civil plaintiff can:
Recover profits made by offender
Recover damages
Obtain injunction prohibiting offender from divulging trade secret

8. Economic Espionage Act of 1996
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.
Includes computer espionage
Severe criminal penalties

9. Federal Patent Statute
Intended to provide incentive for inventors to make their inventions public.
Protects patented inventions from infringement.
Federal patent law is exclusive; no state patent laws.

10. Federal Patent Statute (continued)
Patents for inventions are valid for 20 years
Design patents are valid for 14 years
Patent term runs from date application filed
U.S. follows first-to-invent rule

11. Patent Applications Must contain a written description of invention
Must be filed with the U.S. PTO
Patent will be assigned a patent number if granted
Any party can challenge the validity of a patent or the issuance of one.

12. Patenting an Invention
To be patented, an invention must be:
Novel
Useful
Nonobvious
Only certain subject matters can be patented.

13. Patentable Subject Matter Includes:
Machines
Processes
Compositions of matter
Improvements to:
Existing machines
Business methods
Designs for an article of manufacture
Asexually reproduced plants
Living material invented by a person

14. One-Year “On Sale” Doctrine
Public use doctrine
Patents will not be granted if an invention was in the public domain for one year prior to application filing
Forces inventors to file within proper time

15. American Inventors Protection Act
Permits inventor to file provisional application with PTO pending preparation and filing of final and complete patent application.
Provisional rights granted for three months

16. American Inventors Protection Act (continued)
Requires PTO to either issue or deny a patent within three years after filing of application
Provides that non-patent holders may challenge a patent as overly broad
Decisions of PTO appealed to U.S. Court of Appeals

17. Patent Infringement
Patent holders own exclusive rights to use and exploit their patent.
In case of unauthorized use, plaintiff may recover:
Money damages equal to royalty rate
Other damages, e.g., loss of customers
Order for destruction of infringing items
Injunction against infringer
Treble damages for intentional infringement

18. Copyright Revision Act of 1976
Protects work of authors and creative persons.
Only tangible writings are subject to copyright registration and protection.
E.g., books, periodicals, newspapers, lectures, musical compositions, movies, radio and TV productions, maps, paintings, sculpture, photos, cartoons, MP3 files.

19. Registration of Copyrights
Must be an original work
Register with U.S.
Copyright Office
Registration
Permissive
Voluntary
Done at any time during term of copyright
Not required to use © or word “copyright”

20. Sonny Bono Copyright Term Extension Act of 1998
Grants copyright terms to:
Individual Copyright Holder
Life of author plus 70 years
Corporate Copyright Holder
The shorter of 95 years from the year of first publication, or 120 years from the year of creation
After copyright expires, work enters public domain

21. Copyright Infringement
Occurs when a party copies a substantial and material part of the plaintiff’s copyrighted work without permission.
Successful plaintiff may recover:
Profit
Damages
Order requiring impoundment and destruction
Injunction

22. Contributory Copyright Infringement
Secondary liability on parties who knowingly contribute to another’s copyright infringement.
E.g., certain companies that provided free music file-sharing software (Grokster and StreamCast)

23. Fair Use Doctrine Copyright holder’s rights in the work not absolute.
Law permits certain limited unauthorized use of copyrighted materials.
E.g., quotation for review or criticism, use in parody, reproduction of small part for educational use.

24. NET Act Criminalizes copyright infringement
Cannot willfully infringe copyright
Retail value of copyrighted work must exceed $1,000
One year imprisonment
Fines of up to $100,000

25. Digital Millennium Copyright Act
Prohibits unauthorized access to copyrighted digital works by circumventing wrapper or encryption technology.
Prohibits manufacturer and distribution of methods for circumventing wrapper or encryption technologies.
Some exceptions allowed.
Imposes both civil and criminal penalties.

26. Lanham Trademark Act
Establishes the requirements for obtaining a federal mark
Protects marks from infringement
Trademarks registered with PTO

27. Lanham Trademark Act (continued)
Original registration of a mark is valid for 10 years.
Can be renewed for unlimited number of 10-year periods.
Registrant is entitled to use registered trademark symbol ® in connection with registered trademark or service mark.

28. Registration of Trademarks
Mark may be registered if it has been used in commerce
Can be registered six months prior to use
Will lose mark if not used within six months
Mark may be opposed by third parties

29. Marks That Can Be Trademarked
Distinctive mark, symbol, name, word, motto, or device that identifies the goods of a particular business.
e.g., Xerox; Coca-Cola; Better Ingredients, Better Pizza
Service Mark
Distinguishes the services of the holder from those of its competitors.
e.g., FedEx; The Friendly Skies; Big Brown

30. Marks That Can Be Trademarked (continued)
Certification Mark
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

31. Marks That Cannot Be Registered
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 U.S. PTO.

32. 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”
When an ordinary term has become a brand name. E.g., “Just Do It,” “Sexy Little Things.”

33. Trademark Infringement
Owner of a mark can sue a third party for the unauthorized use of a mark.
Owner must prove that:
Defendant infringed the plaintiff’s mark by using it in an unauthorized manner
Use likely to cause confusion, mistake, or deception

34. Trademark Infringement (continued)
Successful plaintiff can recover:
Profits
Damages to business and reputation
Possibility of treble damages for intentional infringement
Order for destruction
Injunction

35. Generic Name
Term for a mark that has become a common term for a product line or type of service and therefore has lost its trademark protection.
Name becomes descriptive rather than distinctive.
E.g., Laser, Escalator, Kerosene, Formica, Frisbee, Yoyo, Raisin Bran.
At risk: Google, Xerox, Rollerblade.

36. Federal Dilution Act of 1995
Marks are a valuable property right that should not be eroded, blurred, tarnished, or diluted in any way by another.
Protects famous marks from dilution.
Use by other party is actionable if:
It is commercial.
It causes dilution of distinctive quality of mark
E.g., someone other than Nike with domain name,