19 E Chapter 3 Business Torts and Crimes ©© 2014 Cengage Learning. AllAll Rights Reserved. May notnot be be copied, scanned, or or duplicated, in whole or or in part, except for for useuse as permitted in ain a license distributed with a certain 2017 Cengage Learning. Rights Reserved. May copied, scanned, duplicated, in whole in part, except as permitted license distributed with certain product or service or otherwise on afor password-protected product or service or aotherwise on a password-protected website classroom use. website for classroom use. 1 Learning Objectives 1. Discuss the basis for intentional and negligent tort liability. 2. List and explain the generally recognized business torts. 3. Explain what business crimes are. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 2 Learning Objectives 4. Describe what computer crimes are and the three types that affect businesses. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 3 3-1 Torts A tort is a private civil wrong or injury by a ‘tortfeasor’ for which the law provides damages. A tort may be intentional or unintentional (negligence). • Negligence is the failure to exercise reasonable care. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 4 3-1 Torts 3-1a Intentional Torts • To recover for an intentional tort, the injured person must show three things: An act by the defendant. An intention to cause the consequences of the act. Causation—the injury was caused by the defendant’s act or something set in motion by the act. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 5 3-1 Torts 3-1a Intentional Torts • Intentional torts include: Assault Battery Trespass False imprisonment © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 6 3-1 Torts 3-1b Negligence Torts • To recover for a negligence tort, the injured party must show all of these elements: Duty of tortfeasor to the injured party Breach of that duty Breach was the actual and a proximate cause of the injury Actual damage or injury © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 7 3-1 Torts 3-1b Negligence Torts • • • Injury must be foreseeable (proximate cause) Negligence on the part of the injured party is called contributory negligence, which completely bars recovery In other states, comparative negligence is when the parties share fault and damages © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 8 3-1 Torts 3-1c Business Torts • • Product Liability: manufacturers, dealers, suppliers, and rental companies can be sued based on negligence or strict liability. Negligence: manufacturers and suppliers are liable for use or condition of the product, design defect, or failure to warn. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 9 3-1 Torts 3-1c Business Torts • Strict Liability: any business in the product chain (manufacturer, wholesaler, or retailer) can be liable without fault if the product is defective and dangerous to consumer. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 10 3-1 Torts 3-1d Interference with a Contract or Economic Advantage • Occurs when a business relationship has been formed, and a third party causes a breach of that business relationship. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 11 3-1 Torts 3-1e Confusion About a Product • • Injurious falsehood (also called commercial disparagement or trade libel). Confusion of source. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 12 3-1 Torts 3-1e Confusion About a Product. • Trademarks: words, symbols, or devices used to distinguish one’s goods from another’s. Includes only those marks used by a business that distinctively differentiate it from others. An non-distinct mark may acquire secondary meaning through common use and become a trademark. © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 13 3-1 Torts 3-1e Confusion About a Product. • Trademark Infringement Factors: Similarity of the marks Similarity of products Similarity of marketing and customers Similarity and amount of advertising Area of overlapping use Intent of parties in adopting the marks Strength of the marks Actual confusion by the public © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 14 3-1 Torts 3-1e Confusion About a Product. • Trademark dilution occurs when the capacity of a famous mark to identify and distinguish goods or services is reduced. • Anticybersquatting Consumer Protection Act Unfair Competition © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 15 3-2 Business Crimes 3-2a Types of Business Crimes. • • • Theft: shoplifting, embezzlement, larceny RICO cases (The Racketeering Influenced and Corrupt Organizations (RICO) Act of 1970) Computer crimes. Committed with aid of a computer © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 16 3-2 Business Crimes 3-2a Types of Business Crimes • Computer crimes. Computers can: be objects of the crime the method of committing the crime represent where the crime is committed, such as infringement on the Internet Electronic Communications Privacy Act © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 3-2 Business Crimes 3-2a Types of Business Crimes • Trespass: unauthorized use of or access to a computer. Can involve hackers or rogue programs (viruses, bacteria, worms, Trojan Horses, time bombs) Computer Fraud and Abuse Act © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 18 3-2 Business Crimes 3-2a Types of Business Crimes • Criminal Copyright Infringement. To establish, a prosecutor must prove: Copyright infringement occurred Infringement was willful Infringement was for financial gain © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 19 3-2 Business Crimes 3-2a Types of Business Crimes Privacy and Data Security Laws - Businesses must collect and store customer data in a secure manner. - No single, overarching privacy law in the U.S.; there are many laws that govern privacy in different industries. Children's Online Privacy Protection Act (COPPA) © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 20 3-2 Business Crimes 3-2a Types of Business Crimes • Foreign Corrupt Practices Act. Applies to any US person or business who bribes a foreign official and to any foreign business which acts in furtherance of such bribe. Bribes Consequences: Fines, Debarment, Imprisonment © 2017 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as © permitted 2014 Cengage Learning. All Rightswith Reserved. May not be or copied, scanned, or duplicated, in whole or in part,website except for use as permitted in a license distributed a certain product service or otherwise on a password-protected classroom use. in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 21
