Chapter 6
Business Torts, Intellectual
Property and Cyberlaw
©2002 by West Legal Studies in Business
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Business Torts
 Wrongful Interference with a
Contractual Relationship:
– Valid enforceable contract must exist
– Third party must know about contract
– Third party must intentionally cause either
of the parties to breach the contract.
– Case 6.1 Kallok v. Medtronic (1998).
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Business Torts
 Wrongful Interference with a
Business Relationship:
–Distinguish predatory (illegal) vs.
competitive (legal) behavior.
 Defenses: Wrongful Interference
is Justified or Permissible.
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Business Torts
 Appropriation
–Use of a person’s name or likeness
–Without permission
–For the benefit of the user.
–Case 6.2 National Basketball Assn.
vs. Sports Teams Analysis (1997).
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Business Torts
 Defamation in the Business
Context:
–Defamatory statement
–Involving a business reputation that
–Adversely affects a business’ credit
rating or financial dealings.
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Business Torts
 Slander of Quality or Trade
Libel:
–Publication of false information
–About another’s product
–Alleging it is not what the seller
claims
–Plaintiff must prove actual damages
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Business Torts
 Slander of Title
–Publication that casts doubt
–On another’s legal ownership of
property
–Resulting in financial loss to owner
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Trademarks
 Distinctive mark or emblem
affixed to a product that easily
identifies, or distinguishes, the
product in the marketplace.
 Case 6.3 Coca-Cola Co. v. Koke Co.
of America (1920).
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Trademarks
 Statutory Protection of
Trademarks
–Lanham Trade Mark Act (1946)
–Federal Trademark Dilution Act
(1995): federal cause of action for
“dilution” (confusion of similar marks
on goods or services)
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Trademarks
 Trademark Registration
–Federal protection requires
registration with U.S. Patent
Trademark Office (www.uspto.gov)
–Mark can be registered if
• In current use or
• Applicant intends to put the mark into
commerce within 6 months
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Trademarks
 Distinctiveness of Mark
– Strong Marks
– Secondary Meaning
– Case 6.4 Qualitex v. Jacobson Products
(1995).
– Generic Terms
– Service, Certification and Collection Marks
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Trademarks
 Trade Names applies to all or
part of business’s name; directly
related to goodwill.
 Trade Dress refers to the image
and appearance of the product.
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Patents
 Patents: grant from government
gives inventor exclusive right to
make, use and sell invention for
20 years from filing the
application.
 Infringement
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Copyrights
 Copyright:
–Intangible property right to author for
her life plus 70 years.
–Automatic protection after 1978.
–Works can be protected by
registration at U.S. Copyright Office.
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Copyrights
 Can only copyright the expression of
an idea, not the idea itself.
 Work must be original and fixed in a
durable medium.
 Compilation of facts must be
original.
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Copyrights
 Copyright Infringement
–Whenever form or expression of idea
is copied
–“Fair Use”: exception to infringement
if educational, news reporting,
scholarship or research.
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Trade Secrets
 Trade Secrets: business process or
information that cannot or should
not be patented, copyrighted or
trademarked.
 Protected from competitors.
 Uniform Trade Secrets Act.
 Economic Espionage Act of 1996.
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Trade Secrets
 Can include: customer lists, plans,
research, formulae, pricing
information, marketing techniques.
 Hacking into a competitor’s
computer may be criminal.
 Economic Espionage Act (1996).
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International
Protection
 Berne Convention (WIPO).
 Trade-Related Aspects of
Intellectual Property (TRIPS) of
1994 (WTO).
 World Intellectual Property
Organization (WIPO) Copyright
Treaty 1996.
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Virtual Property
 Virtual property exists in cyberspace.
 Cyber Marks: rights of trademark
owners in cyberspace.
– Cybersquatting: occurs when person registers a
domain name that is similar to the trademark
of another and offers to sell the domain back to
the trademark owner.
– Anticybersquatting Consumer Reform Act of
1999
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Virtual Property
 Meta Tags: key words on webpage
that are indexed by search engines.
– Case 6.5 Playboy Enterprises vs. Welles
(1998).
 Dilution on the Web.
 Licensing: permits use of
intellectual property by licensee.
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Patents Online
 Increasing number of software
business patents issued by
USPTO.
 Availability of online patent
databases.
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Copyrights in Digital
Information
 Most important protection on the
internet.
 WIPO give international protection
 Digital Millennium Copyright Act
gives safe harbors for internet
providers from copyright
infringement.
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Trade Secrets in
Cyberspace
 Internet facilitates illegal
copying and distribution of
confidential information.
 Sometimes mistakes can
transfer information.
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RICO
 Racketeer Influenced and
Corrupt Organizations Act of
1970
 Federal Crime to engage in
racketeering
 Civil Liability
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