Chapter 11
Intellectual Property
and Cyberlaw
Chapter Objectives
1. Summarize the laws protecting
trademarks, patents, and copyrights.
2. Describe how trade secrets are
protected by the law.
3. Discuss what is meant by the term
virtual property.
4. Indicate what legal protection exists for
trademarks, copyrights, and other
intellectual property existing in digital
form.
5. Give examples of how technological
developments are affecting the laws
governing intellectual property.
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What Is Intellectual Property?
Intellectual property is that which
results from intellectual, creative
processes of one’s mind.
Forms of intellectual property
include:




Trademarks and service marks
Patents
Copyrights
Trade secrets
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Case 11.1 Coca-Cola Co. v.
Koke Co. of America
Koke alleged that since Coca-Cola no longer
contained cocaine, the trademark was
fraudulent, and not entitled to protection.
(Koke wanted to use the name “Koke” for its
product.)
On appeal, the U.S. Supreme Court held that
since few, if any, would now be led to believe
Coca-Cola contained cocaine, there was no
fraud and the trademark was valid.
How can a court determine when a particular
nickname for a branded product has entered
into common use?
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Trademarks and
Related Property
Definition:
 A trademark is a distinctive mark, motto,
device, or implement that a manufacturer
stamps, prints, or otherwise affixes to the
goods it produces so that they may be
identified in the market and their origins
made known.
Duration of Protection:
 Trademark protection is renewable
indefinitely.
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Trademark Infringement
Trademark infringement occurs
when one uses the protected
trademark, service mark, or
trade name of another without
permission when marketing
goods or services.
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Case 11.2 America Online, Inc.
v. At&T Corp.
In the 1960s and early 1970s, AT&T Corp. developed
UNIX, a computer operating system facilitating
communications over the Internet. When a user
connects to UNIX, if the user has e-mail, the system
displays a phrase similar to “You have mail.” In the
1980s, America Online started using “You have mail”
in its e-mail notification service for its members. AT&T
provides Internet service through its Worldnet service
and has “You have mail!” on its homepage. AOL filed a
suit claiming it owned the phrase. The court ruled that
“You have mail” is a generic expression and therefore
cannot be owned by AOL.
Generic marks will not be protected as trademarks
even if they have acquired secondary meanings. Can
you see any reason for this principle of trademark law?
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Patents
Definition:
 A grant from the government that
gives an inventor the exclusive right
to make, use, and sell an invention
for a specified period.
Duration of Protection:
 Twenty years from the date of filing
the application for a patent.
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Patent Infringement
Occurs when one uses or sells
another’s patented design,
product, or process without the
patent owner’s permission.
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Patents for Software
Although computer software is
most often protected by copyrights,
it may also be patented.
A patent may be obtained for
computer software if:
 It is part of a process or procedure
 That process or procedure itself is
patentable
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Patents for Cyberproducts
Cyberproducts, such as data-compression
software, encryption systems and various
other network software are particularly
difficult to protect on the Internet.
One of the best ways to protect such
property is through a licensing
agreement, which permits the licensee to
make, sell, or use the patented item.
Because the Internet has no geographical
boundaries, such an agreement should
consider all U.S., foreign, and
international laws.
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Copyrights
Definition:
 An intangible property right granted by
federal statute to the author or originator of
a literary or artistic production of a specified
types.
Duration of Protection:
 Copyright begins at the moment of
creation, and lasts for the life of the author
plus 50 years.
 Copyrights owned by publishing houses
may last longer.
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Copyright Infringement
Occurs whenever the form or
expression of an idea is copied
without the permission of the
copyright holder.
An exception applies if the
copying is deemed a “fair use.”
Fair use includes:
 Criticism, comment, news reporting
 Teaching, scholarship, or research
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“Fair Use”
Section 107 of the Copyright Act
gives four factors to consider in
determining whether something is
fair use:
 The purpose and character of the use
 The nature of the copyrighted work
 The amount and substantiality of the
portion used
 The effect of the use upon the potential
market
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Case 11.3 Repp v. Webber
Ray Repp wrote and published more than 120
musical compositions in over 30 years, including
“Till You,” which was copyrighted in 1987. Andrew
Lloyd Webber wrote the musical Phantom of the
Opera in 1983-84. Repp claimed one of the songs
in Phantom of the Opera infringed on the copyright
of “Till You,” and filed a suit against Webber and
others. Webber denied knowing about Repp or
“Till You.” The court issued a summary judgment
for Webber. The case was remanded in the
appellate court.
Considering that there are a limited number of
musical notes and a limited number of works into
which those notes can be composed, should the
fact that infringement might be “subconscious”
affect liability in a copyright suit?
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Trade Secrets
Definition:
 Any formula, pattern, device, or
compilation of information that give a
business an advantage over
competitors who do not know the
information or processes.
Duration of Protection:
 Indefinitely, as long as the party
adequately protects his or her trade
secrets from disclosures.
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International Protection for
Intellectual Property
International protection for
intellectual property exists under
various international agreements,
including:
 Berne Convention (1886)—every
country that has signed the convention
must recognize copyrights granted to
authors in all others.
 TRIPS (Trade-Related Aspects of
Intellectual Property Rights) Agreement
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Copyright Protection for
Software
The Computer Software Copyright Act of
1980 specifically classifies computer
programs as “literary works” thus giving
them full protection under U.S. copyright
law.
The No Electronic Theft Act of 1997 now
provides criminal penalties for copyright
infringement of software, even where
there is no intent on the part of the
infringer to make a profit.
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Case 11.4 Playboy Enterprises
v. Welles
Playboy Enterprises, Inc. (PEI), maintains
websites to promote Playboy magazine and PEI
models. Terri Welles was featured as
“Playmate of the Year” in June 1981. She
maintains a website titled “Terri Welles—
Playmate of the Year 1981.” As meta tags,
Welles uses the terms “Playboy” and
“Playmate,” among others. PEI filed a suit
against her asking the court to order her to
stop using those terms as meta tags. The court
held that Welles was entitled to the “fair use”
of the “Playboy” and “Playmate” marks as tags.
Why would PEI encourage its models to use its
own marks outside cyberspace but attempt to
block such uses within cyberspace?
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Domain Name Registration
Since 1995, Network Solutions,
Inc. (NSI) has required any party
seeking to register a domain
name to state the following:
 that the party’s use of the name will not
infringe on the intellectual property
rights of any other party
 that the party intends to use the name
on “a regular basis on the Internet”
 that the party’s use of the name will not
be unlawful
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Cyberlaw: Protecting Intellectual
Property in Cyberspace
Because of the unique nature of the
Internet, its use creates unique
legal questions and issues,
particularly with respect to
intellectual property rights.
Such issues include:
 Trademark Protection and Domain Names
 Patents for Cyberproducts
 Copyrights in Cyberspace
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Trademark Protection and
Domain Names
Although trademark law allows
multiple parties to use the same
mark (as long as it is used in
connection with different products
or services and doesn’t create
confusion), only one party can use
a particular domain name.
A domain name is a series of letters
and symbols used to identify a site
on the Internet. (Also called
Internet “address.”)
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Case 11.5 Tasini v.
New York Times Co.
Magazines and newspapers, including the New
York Times, buy and publish articles written by
freelance writers. They also sell the contents to
e-publishers for inclusion in online and other
electronic databases. Jonathon Tasini and
other freelancers filed a suit against the New
York Times and other publishers (including
e-publishers) contending that the e-publication
of the articles violated the copyright act. The
court ruled in favor of the publishers
When technology creates a situation in which
rights such as those in this case are more
valuable than originally anticipated, should the
law be changed to redistribute the economic
benefit of those rights?
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Copyrights in Cyberspace
Uploading, downloading,
browsing—any of these activities
conducted in cyberspace can
infringe on a copyright owner’s
rights.
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Uniform Copyright Laws
One of the main problems for the international
online community is that copyright protection
varies among jurisdictions. The U.S. does not
recognize moral rights, but other countries, like
France, enforce these rights. In Great Britain,
authors have paternity rights to their
copyrighted works. Although the WIPO
Copyright Treaty and the DMCA of 1998 have
been implemented, there are still many
cyberspace copyright issues unsolved.
Should there be a different copyright law solely
for cyberspace? If so, what rights should it
include?
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The Digital Millennium Copyright Act of 1998
Copyright works can be pirated and distributed all over
the world quickly and efficiently. To curb this crime,
the World Intellectual Property Organization (WIPO)
enacted two treaties in 1996 to upgrade global
standards of copyright protection, particularly for the
Internet. In 1998, Congress implemented the
provisions of these treaties to update U.S. copyright
law. The Digital Millennium Copyright Act of 1998
created civil and criminal penalties for anyone who
circumvents encryption software or other technological
anti-piracy protection. Also prohibited are the
manufacture, import, sale, or distribution of devices or
services for circumvention.
How will the Digital Millennium Copyright Act of 1998
spur the growth of commerce online?
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For Review
1. What is intellectual property? How
does the law protect intellectual
property?
2. What is a trade secret? How are trade
secrets protected by law?
3. What is virtual property?
4. What legal protection is there for
intellectual property existing in
digital form?
5. Generally, how has technology
affected intellectual property rights?
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