Chapter 24 (Intellectual Property)
I.
Patents
a. Definition of Patent - Gives inventors the right to prevent
others from making, using, or selling their inventions for a
limited time
b. Types of Patents
i. Design Patents
1. Protects the appearance, not the function, of an
item. Lasts for 14 years from the date of
issuance
ii. Plant Patents
1. Anyone who creates a new type of plant can
patent it, provided that the inventor is able to
reproduce it asexually—through grafting
2. Lasts for 20 years from the date of application
iii. Utility Patents
1. While design patents protect the way inventions
look, utility patents protect how they work. Utility
patents are valid for 20 years from the date
of filing the application.
2. 94 percent of all patents are utility patents
c. Requirements for a Utility Patent
i. To receive a utility patent, an invention must be:
1. Novel. An invention is not patentable if it has
already been
a. patented,
b. described in a printed publication,
c. in public use,
d. on sale, or
e. otherwise available to the public anyplace
in the world.
2. Nonobvious. An invention is not patentable if it
is obvious to a person with ordinary skill in that
particular area.
3. Utility. To be patented, an invention must be
useful. It need not necessarily be commercially
valuable, but generally, it must do something.
4. Patentable subject matter. Not every
innovation is patentable. A patent is not
available solely for an idea, but only for its
tangible application.
a. Thus, laws of nature, scientific principles,
mathematical algorithms, mental
processes, intellectual concepts, or
formulas are not patentable.
d. Patent Application and Issuance
i. To obtain a patent, the inventor must file a complex
application with the Patent and Trademark Office.
1. If a patent examiner determines that the
application meets all legal requirements, the
PTO will issue the patent.
2. If an examiner denies a patent application for
any reason, the inventor can appeal that
decision to the Patent Trial and Appeal Board in
the PTO and from there to the Court of Appeals
for the Federal Circuit in Washington, D.C.
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ii. During the patent application process, third parties
have the right to submit evidence that the invention is
not novel.
1. For the nine months after a patent has been
granted, third parties have a broad right to
challenge its validity in the PTO (without having
to go to court).
a. Thereafter, a patent may still be challenged
but the grounds are limited to evidence of a
prior patent or publication.
iii. Priority between two Inventors
1. When two people invent the same product, who
is entitled to a patent—the first to invent or the
first to file an application?
a. After 2013, The first person to file a patent
application has priority.
iv. Prior Sale
1. An inventor must apply for a patent within one
year of selling the product commercially
anywhere in the world.
e. Patent Infringement
i. A patent holder has the exclusive right to make,
use, or sell the patented invention during the term
of the patent.
1. Note that patents, like other areas of intellectual
property, are territorial, meaning that the holder
of a U.S. patent can only enforce those rights in
the United States.
ii. Patent Troll – one who buys a portfolio of patents for
the express purpose of patent infringement lawsuits
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f. International Patent Treaties
i. Several treaties of the World Intellectual Property
Organization now facilitate this process, although it is
still not the one-stop (or one-click) effort that inventors
desire. The Paris Convention for the Protection of
Industrial Property (Paris Convention) requires each
member country to accept and recognize all patent
and trademark applications filed with it by anyone who
lives in any member country.
II.
Copyrights
a. Definition of Copyright - A copyright gives its creator the
exclusive right to reproduce, distribute, and perform
his original work for a limited time.
i. Copyright protects the way things are presented but
not the underlying idea or method
ii. A work is copyrighted automatically once it is in
tangible form.
iii. Copyright protects:
1. literature, music, drama, choreography,
photography, sculpture, movies, recordings,
architectural works, computer programs and
databases, tattoos, and architectural works.
b. Copyright Term
i. Today, a copyright is valid until 70 years after the
death of the author or, in the case of works owned
by a corporation, for 95 years from publication or
120 years from creation, whichever is shorter.
c. Copyright Infringement
i. To prove a violation, the plaintiff must present
evidence that the work was original and that either:
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1. The infringer actually copied the work or
2. The infringer had access to the original and the
two works are substantially similar.
ii. A court may
1. prohibit the infringer from committing further
violations;
2. order destruction of the infringing material; and
3. require the infringer to pay damages, profits
earned, and attorney’s fees.
d. Defenses to Copyright Infringement
i. In some circumstances, copying or selling a protected
work is justified by public policy.
ii. First Sale Doctrine
1. The first sale doctrine permits a person who
owns a lawfully made copy of a copyrighted
work to sell or otherwise dispose of the
copy.
2. Note, however, that the first sale doctrine does
not permit the owner to make a copy and sell it.
If you read the textbook and then decide to sell
it, that is legal.
iii. Fair Use
1. Fair Use Doctrine - Permits limited use of
copyrighted material without permission of the
author for purposes such as criticism, comment,
news reporting, scholarship, or research
2. Understand the following four factors, which
determine whether a use is a fair one.
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a. The purpose and character of the
use. When copyrighted material is used for
purposes such as criticism, parody,
comment, news reporting, scholarship,
research, or education, it is more likely to
be a fair use.
i. When the resulting work transforms
the original in a significant way, it is
also more likely to be fair use.
b. The nature of the copyrighted
work. Facts receive less protection than
fiction. If we were not permitted to use,
say, the facts described in a textbook,
education would be stifled.
c. The amount and proportion of the work
that is used. Less is more. Or, in the
copyright context, less is more likely to be
fair use.
d. The effect of the use upon the potential
market. Courts generally do not permit a
use that will deprive the copyright owner of
income or decrease revenues from the
original work by, say, competing with it.
3. Moral Rights - Intellectual property rights
protecting the creator’s personal and
reputational values, such as the right of
attribution and the right of integrity
e. Digital Music and Movies
i. One of the major challenges for legal institutions in
regulating copyrights is simply that modern intellectual
property is so easy to copy. Many consumers are in
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the habit of violating the law by downloading
copyrighted material—music, movies, and books—for
free.
f. The Digital Millennium Copyright Act
i. To bring copyright law into the internet age, Congress
passed the Digital Millennium Copyright Act (DMCA),
which provides that:
1. It is illegal to delete copyright information,
such as the name of the author or the title of
the article. It is also illegal to distribute false
copyright information.
2. It is illegal to circumvent encryption or
scrambling technologies that protect
copyrighted works.
3. It is illegal to distribute tools and
technologies used to circumvent encryption
devices.
4. Internet service providers are not liable for
posting copyrighted material as long as they
are unaware that the material is illegal and
they remove it promptly after receiving a
“takedown” notice that it violates copyright
law.
g. International Copyright Treaties
i. The Berne Convention for the Protection of
Literary and Artistic Works require all 179 member
countries to provide automatic copyright
protection to any works created in other member
countries.
1. The protection does not expire until 50 years
after the death of the author.
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III.
Trademarks
a. Definition of a Trademark
i. Trademark - Any combination of words and
symbols that a business uses to identify its
products or services and distinguish them from
others
b. Types of Marks
i. Four different types of marks:
1. Trademarks are affixed to goods.
2. Service marks are used to identify services, not
products
3. Certification marks are words or symbols used
by a person or organization to attest that
products and services produced by others meet
certain standards.
a. The Energy Star certification means that
the U.S. Environmental Protection Agency
and the U.S. Department of Energy have
determined that a product meets their
energy conservation standards.
4. Collective marks are used to identify members
of an organization.
c. Trademark Registration
i. Under common law, the first person to use a mark in
trade owns it. Registration with the federal
government is not necessary.
ii. If it is unregistered, a business may protect its
trademark as long as it is in use.
d. Valid Trademarks
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i. To be valid, a trademark must be distinctive—that
is, the mark must clearly distinguish one product from
another and identify the product’s source.
ii. Three categories of trademarks
1. Fanciful marks and arbitrary marks are
immediately protectable as trademarks. Fanciful
marks are made-up words such as Exxon or
Saucony. Arbitrary marks use existing words
that do not describe the product.
2. Suggestive marks indirectly describe the
product’s function, qualities, or characteristics.
3. Descriptive marks directly describe the product
in some way.
a. These marks cannot, by themselves, be
trademarked unless they have
acquired secondary meaning, that is, they
have been used for so long that they are
now associated with the product in the
public’s mind.
iii. The following categories cannot be trademarked
1. Generic trademarks. No one is permitted to
trademark a product or service’s ordinary name
2. Personal names. The PTO generally will not
grant a trademark in a surname unless it has
acquired secondary meaning due to an
association with a specific business or product.
3. Geographical terms. Similarly, geographical
names that describe the product’s place of
origin, such as Maine lobster or Idaho potatoes,
cannot be trademarked because they are
generic.
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4. Deceptive marks. The PTO will not register a
mark that is deceptive.
5. Similar to an existing mark. To avoid
confusion, the PTO will not grant a trademark
that is similar to one already in existence on a
similar product.
e. Infringement and Dilution
i. To win a trademark infringement suit, the original
trademark owner must show that the alleged
infringer’s trademark is likely to confuse customers
about who has made the goods or provided the
services.
ii. In the event of infringement, the rightful owner may be
entitled to an injunction prohibiting further violations.
In the AMF case, the court prohibited Nescher from
using the name “Sleekcraft” ever again—a costly
punishment for any business. Other infringement
remedies include:
1. destruction of the infringing material,
2. up to three times actual damages,
3. any profits the infringer earned on the product,
and
4. attorney’s fees.
iii. Trademark holders can also object to the use of their
mark in a way that dilutes its value. Trademark
dilution occurs in two important ways: blurring
and tarnishment.
1. Blurring, or the lessening of a mark’s
capacity to identify, can occur when a famous
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mark is identified with unrelated products or
services, like Microsoft lipstick or Tesla bicycles
2. Tarnishment is an association with
unwholesome goods or services.
f. International Trademark Treaties
i. Under the Paris Convention, if someone registers a
trademark in one country, then he has a grace period
of six months, during which he can file in any other
country using the same original filing date.
ii. Under the Madrid Agreement, any trademark
registered with the international registry is valid in all
signatory countries.
iii. The Trademark Law Treaty simplifies and harmonizes
the process of applying for trademarks around the
world. Now, a U.S. firm seeking international
trademark protection need only file one application, in
English, with the PTO, which sends the application to
the WIPO, which transmits it to each country in which
the applicant would like trademark protection.
IV.
Trade Secrets
a. Trade Secret - A formula, device, process, method, or
compilation of information that, when used in business,
gives the owner an advantage over competitors
b. In determining if information is a trade secret, courts
consider:
i. How difficult (and expensive) was the information to
obtain? Was it readily available from other sources?
ii. Does the information create an important competitive
advantage?
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iii. Did the company make a reasonable effort to protect
it?
c. Anyone who misappropriates a trade secret is liable to the
owner for
i. actual damages,
ii. unjust enrichment, or
iii. a reasonable royalty.
d. Congress passed the Economic Espionage Act of 1996,
which makes it a criminal offense to steal (or attempt to
steal) trade secrets for the benefit of someone other
than the owner, including for the benefit of any foreign
government.
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