2. VALUE DEFENSE Objective: Defend against actual and potential actions of competitors Defense as creative and sustaining process  Basic economic process: new products, quality, efficiency, timeliness  Legal defenses of property Intellectual Property:  Patents  Copyrights  Trade Marks  Trade Dress  Trade Secrets

3. VALUE DEFENSE--DARK SIDE (Don't Do These!!!)  Destroy competitors plants,...  Predatory pricing (below variable costs)  Buy out best competitors leaving the weak  Purchase key suppliers and lock out competitors  Smear campaigns of competitors' products  Disrupt competitors' production facilities

4.  Obstruct competitors' management processes  File nuisance lawsuits  Spy on competitors' product development  Hire competitors key employees  Lock out competitors/exclusive purchase agreements  Copy products/services and sabotage in market ____________________________________  Remedies: criminal, antitrust, common law but due care, security, observation action needed.

5. PATENTS  Federal law and international treaty apply  Patents filed in Federal Patent Office: About $30K in costs  Simultaneous filings in treaty countries common  Must be defended to have value  Types  Utility 20 New, non-obvious, useful 5.8M  Drug 20* from FDA approval  Design 14? Ornamentation, no function 310K  Plant 20 Asexual plant 7.5K Variety 20 Seeds, Agr. Dept. (years changed to 20 with GATT)  Utility patents must be new, useful, and not obvious  Design patents must be ornamental only

6.  Many product designs can be copied because obvious/utility  Patents may be bought, sold, licensed

7. COPYRIGHTS  Federal Copyright office (small cost $100)  Filing not required, but need filing for remedy  First tangible expression  Damages up to $100,000 + fees per instance  Treaty, world wide, except...  Life of author plus 75 years  Types: Literary (software), musical, dramatic, choreographic, pictorial, graphic, sculpture, 3-d architecture, data compilations  Excludes product designs currently  Rental of sound recordings/computer software prohibited  Copyrights may be bought, sold, or licensed

8. TRADE MARKS  Federal (interstate) and State (local) law applies  Strictly territorial  Use of mark builds rights, must use  non use for 2 years, abandoned  Unlimited life, but renewed periodically  Specific products, not general  May be licensed provided quality control

9. TRADE SECRETS  State Law (uniform act in 36 states, common law others)  Formulae, devices, processes, or information  Not generally known, secrecy by reasonable means  Unlimited life, not filed  Complaint: employees, spying  Remedy: Entire profit over a number of years

10. TRADE DRESS  Appearance of business premises and overall impression  Restaurants, service businesses, retailers  Common law, local only, interpretation  Emerging area, but developing quickly