Chapter 7: Intellectual Property
and Unfair Competition
By: Anne Freeman, Justine Stigge, Christian Binkholder, Kevin Hayes, Courtney
Dinwiddie, Emmamarie Melyon, and Salisa Suwanprathip, Emily Wilson, Colin Guthrie,
Eric Borman, Tony Speno
I. Patents
Patents are select rights given to a person or persons by the government for a set
amount of time for the full disclosure of their invention. By doing this, the design(s) of the
invention are made available to the public; however, during the patent’s duration, the
design(s) can only be used at the discretion of the inventor because he/she is given “the
right to exclude others from making, using, offering for sale, or selling the invention in the
United States or ‘importing’ the invention into the United States.” With this in mind, what
can be patented?
A. What is patentable?
There are three types of patents that are recognized by the United States Patent and
Trademark Office: Utility, Design, and Plant patents. Utility patents are issued for
discoveries of a new or useful process or machines. Design patents are issued for designs
that are considered new, original, and ornamental for a product. One of the most famous
examples of a patented design is the shape of the Coca Cola bottle. Plant patents are
inventions of asexually reproduced distinct variety of plant. One such patent was granted
for an apple tree called “Wildung.”
A patent may not be granted if the invention fails any of 4 requirements: novelty,
utility, not obvious, or inventor(s) lacks proof of being the sole creator(s). To be novel, an
invention may not be any of the following: previously known or used in the United States,
patented in the United States or in a foreign country, or written in any sort of publication,
regardless of the country. Utility means that the invention must have a useful purpose or
perform the intended operations. Not obvious refers to the idea that any person in a certain
field could not have easily thought of the invention. Proof of being sole creator(s) is
important to weed out fraudulent claims that are made and to make sure credit resides only
with the actual creator(s).
One controversial issue is drug patents. Currently there is no law that prevents
modifications of drugs to be patented. This means that someone can experiment with a
drug and create a new patent based on observations. If the person conducting the
experiment finds a new ingredient or modifies the drug, that person can receive a new
patent for the modified drug under the current laws.
Chapter 7: Intellectual Property and Unfair Competition
Page 1
B. How to obtain a patent
Granting of patents is conducted solely by the United States Patent and Trademark
Office. The creator must include specific details and instructions for the invention,
including what its general purpose is and how it is achieved through this invention. If it
will help people better understand the invention, creators should include a drawing to
illustrate the details given in the application of the product. Once applications are received
by the United States Patent and Trademark Office, it is determined whether the invention
meets all of the prior requirements for receiving a patent. If the request for the patent is
rejected, the creator has one final chance to resubmit his/her invention. If rejected the
second time, the creator may appeal to the Office’s Board of Patent Appeals and
Interferences.
Once a patent is granted, it is good for twenty years in accordance with the General
Agreement on Tariffs and Trade. Depending on the success of the product, it could cause a
legal monopoly in the market. One example is AT&T. Until 1982, AT&T was allowed a
legal monopoly because the government thought that it was important to have a cheap and
reliable long distance telephone service for everyone. In 1984, AT&T was broken up,
allowing MCI and Sprint to capture portions of the market share. NOTE: Utilities are often
allowed a legal monopoly, but not always as a result of a patent.
Did You Know?
 A Patent Troll is a person or company who forcefully defends patents
against infringers, even though the troll never intends on using the patent
themselves.
 To design around a patent is to create an invention that does the same
thing in a different way, so as not to infringe on the patent.
 The United States Patent and Trademark Office allows genetic sequence
discoveries to be patented. For more information on genetic patenting go
to: “http://www.uspto.gov/web/offices/com/sol/notices/utilexmguide.pdf”
C. Life of a Patent
Inventions that were patented before June 8, 1995 usually had a life of 17 years
from the date on which the patent was issued. That law has since been changed. Now, if
an invention is patented on or after June 8, 1995, the patent will last for 20 years.
A written assignment allows the ownership of the patent to be transferred from the
patentee to another party. The patentee can also license to use some of the patent rights,
Chapter 7: Intellectual Property and Unfair Competition
Page 2
which allows the patentee to retain some of the ownership of the invention.
If an invention is developed because an employer asks an employee to do so, the
employee’s incentive and creative work can result in a patent for the employer’s benefit
exclusively.
D. Infringement and Challenges to Patents
If an invention is used within the twenty year disclosure of the patent without
permission from the creator, the infringer can be sued for tort infringement. Even if a
similar, but not identical, product is used or invented, the infringer may still be liable for
infringement under the doctrine of equivalents. The doctrine of equivalents states that if the
parts of an invention are seen as equivalent to that of a patented invention, even if they are
not identical, they may be liable. Infringers may be sued for up to three times the actual
damages caused by the infringement plus the court costs and interest. In some cases, the
infringer may also be liable for any attorney fees. Other reliefs available for infringement
violations are injunctions (the prevention of further infringements). In the fall of 2006,
Pioneer brought suit against Samsung for infringement of Pioneer’s patent on plasma
televisions. The courts finally ruled in October 2008 that Samsung did indeed infringe
upon the patent and awarded $59.3 million in damages.
In some cases, a patent can be challenged by the defendant on grounds of patent
misuse. Patent misuse is the action of unreasonably exploiting the monopoly of the patent.
This is commonly brought about with tying products. The defendant in the case can also
question the validity of the patent or can try to convince the court that the actions are not
infringement. Infringement is determined primarily by the context included in the claims of
the patent, and if the product the defendant is creating does not fall within the claims, there
is no infringement.
The Controversy over Gene Patents
A gene patent is a patent on a particular gene sequence, including
its usage and chemical composition. The controversy revolves
around the question of whether gene patents improve technology by
creating motivation for discovery of new ideas or whether it hinders
technology by not allowing scientists to share their new discoveries
and possibly raising the costs of genetic testing.
It may seem strange to be able to patent biological processes
and products, but this has been the case since 1907 when adrenaline
was the first product to be patented.
As of today, there has been little agreement as to which
products/processes can be patented and which cannot. The
controversy will likely continue until this issue is resolved.
Chapter 7: Intellectual Property and Unfair Competition
Page 3
Pfaff v. Wells Electronics, Inc.
525 U.S. 55 (1998)
Wayne Pfaff developed a new computer chip socket in November of
1980. He later sold it to Texas Instruments. In April of 1982, Pfaff
applied for a patent and received one in January of 1985. Later, Pfaff
filed an infringement action on Wells Electronics, who were producing a
competing socket. Wells Electronics argues that the patent was not
valid because of the Patent Act of 1952, which says that a patent cannot
be given for an invention that has been “on sale” for more than one year
before the patent application was filed. The district court said that Wells
Electronics was liable because no sockets actually existed one year
before the date of application and, therefore, they were not “on sale.”
However, the Court of Appeals said that Pfaff’s patent was indeed
invalid because he had received an “oral purchase order for
30,200…sockets” on April 8, 1981 from Texas Instruments, making the
products “on sale” over one year prior to the date of application. The
Supreme Court agreed with the decision of the Court of Appeals.
II. Copyrights
Copyrights protect original works by an author that have been fixed in a form that
allows for the work to be able to be perceived, reproduced, or communicated. A copyright
gives the author exclusive rights to the work by restricting other people from using the
authors words, expression of ideas, or musical compositions without the author’s
permission.
A. Protected Works
There are many categories of works protected by copyrights: literary, music, drama,
pantomimes, choreography, pictures, graphics, sculptures, motion pictures, (such as videos
and movies), sound recordings, and architectural.
To obtain copyright protection, a work must be fixed, which means to be set out in
a tangible and expressible way so that it can be received, reproduced, or communicated. A
work must also be original and creative. An example of a copyrighted material is the Lord
of the Rings by J.R.R. Tolkien.
Copyright patents do not protect ideas, facts, procedures, processes, systems,
concepts, or discoveries. Instead, it covers the works that express these ideas. An exception
to the protection of facts is in nonfictional works, which can have exclusive rights like any
other copyright patent.
Chapter 7: Intellectual Property and Unfair Competition
Page 4
Although copyrights are typically thought of as protection for individuals seeking
to protect their intellectual works, copyrights are also used to protect the intellectual works
of corporations. One such corporation is the Disney Corporation, who has a copyright on
Mickey Mouse.
B. Creation
Any literary work, song, dance, etc. are all considered copyrighted simply by
creating and fixing the work. The creator may want to register the work with the United
States Copyright Office for infringement purposes, but it is not necessary. By registering
the work with the Copyright Office, the holder of the copyright then has the right to file a
lawsuit for infringement on the work. For most works, federal law does authorize the
creator to give a notice of the copyright; this is not required or necessary but is advisable
for anyone who may need to defend the work in court. An example of notice occurs when
an author publishes a book. The notice may include the year that it was first copyrighted
and the company that copyrighted it.


Examples of Forms of Notice
The notice for visually perceptible copies should include the symbol ©, (or the
word “Copyright,” or “Copr.”), the year of first publication of the work, and the
owner’s name. An example of a notice from a book is Copyright © 1978 by
Donald M. Dible.
The notice for phonorecords of sound recordings should consist of the symbol P,
the year of first publication, and the owner’s name. For example, P 2000
American Records Inc.
C. How Long Does a Copyright Last?
Patents and copyrights cannot last forever according to the United States
Constitution’s Copyright Clause. This clause protects art and science, which enables
authors and any other creator of a copyright or patented work to have exclusive power over
their work for a limited amount of time. The amount of time that copyright laws give the
creator exclusive power over his/her work has been lengthened multiple times throughout
history.
Starting before 1978, copyrights were protected for 28 years from their first
publication with an additional 47 year renewal. This gave all pieces of work copyrighted
before 1978, 75 years of protection. Congress then decided to establish a normal rule that
would apply to all works after 1978. This rule stated that copyrights would last for the life
of the author plus an additional 50 years.
In 1988, the Sonny Bono Copyright Term Extension Act (CTEA) was created. This
Act added 20 years to the duration of all works created before and after 1978. This now
gave works published or registered pre-1978 a 95 year protection term (a 28 year initial
Chapter 7: Intellectual Property and Unfair Competition
Page 5
term plus a 67 year renewal term). Works copyrighted from 1978 on (including works
created before 1978 but not published or registered) have a protection term for the life of
the author plus 70 years. If the copyright is owned by a corporation, the life is 95 years
from first publication or 120 years from creation, whichever is shorter.
The Copyright Term Extension Act directly affected Walt Disney’s cartoon
character Mickey Mouse. The first set of pre-1978 copyright terms would have made
Mickey Mouse available to the public domain in the next couple of years if CTEA had not
enacted the extension period. While CTEA has protected the copyright of Mickey Mouse,
the works of people like Shakespeare are now open for public use.
Eldred vs. Ashcroft
537, US 186 (2003)
“In January 1999, Eric Eldred, creator of Eldritch Press, an Internet provider of
public domain works, filed a constitutional challenge to the CTEA. Eldred alleged that the
statute violated his First Amendment rights, and that the extension of the copyright
protection term exceeded Congress's enumerated powers under the Copyright Clause of the
Constitution. Eldred also alleged that the constitutional purpose of "promoting the progress
of science and useful arts" was not furthered by CTEA's retroactive extension of copyright
in existing works, particularly for deceased authors for whom the increased incentive to
create would be irrelevant. Furthermore, Eldred argued that the CTEA violated the "public
trust doctrine," a theory traditionally applied in cases of transfer of public lands to private
ownership. The court rejected this argument and concluded that the public trust doctrine
was not relevant because it applied only to navigable waters, not copyrights.
The United States District Court for District of Columbia rejected Eldred's arguments and
held that the CTEA was constitutional. The court first held the First Amendment claim was
not supported by case law. It stated that the First Amendment does not provide a right to
use the copyrighted work of others. The court then held that retrospective extension of
copyright protection did not violate the "limited times" provision of Copyright Act because
Congress has the right to define the scope of the copyright period and can enact laws
retrospectively. The court finally held that CTEA did not violate the "to authors" language
of the Copyright Clause because an author may agree in advance to transfer future benefits
that ultimately may be conferred by Congress.”
("Eldred vs. Ashcroft.")
D. Infringement
Copyrights enable the author of a piece of work to maintain exclusive rights over
his/her work for a limited amount of time. Therefore anyone who violates one the
exclusive copyright laws may be liable for infringement. In order to prove infringement
Chapter 7: Intellectual Property and Unfair Competition
Page 6
In the News: Jammie Thomas-Rasset has Been Fined $1.92
Million Dollars in a Music Download Copyright Case.
Jammie Thomas-Rasset was found guilty of willfully downloading 24 songs
and charged $80,000 per song at a retrial in June 2009. The original jury
awarded $220,000 per song to the plaintiff, Recording Industry Association of
America (RIAA), but the verdict was thrown out by the presiding judge as
being too harsh. The RIAA has been aggressively pursuing illegal downloading
of music files and has brought suit against thousands usually settling out of
court. Rasset maintains that she is innocent.¹
“Woman fined $1.92M in U. S. file sharing case; 'Kind Of Ridiculous.'” National Post (f/k/a
The Financial Post) (Canada) 20 June 2009: A20. LexisNexis Academic. LexisNexis. Truman
State University Library. 6 July 2009 <http://www.lexisnexis.com>.
there are three requirements: (1) the defendant was able to obtain the copyright material;
(2) the defendant copied enough material from the copyrighted work to deem it noncoincidental; and (3) there is a significant amount of similarities between the copyrighted
work and the infringed work. A copyright infringement can also include the public
distribution of the copyrighted work.
Infringement cases must break one of the author’s exclusive rights. Stating that a
similar work copied your ideas, themes, or facts of the copyrighted work are not liable
under infringement. If the defendant paraphrases or credits that author in their work, they
are not liable for infringement.
If copyright infringement is proven, the owner will usual receive money for
damages plus any profit the guilty party makes from the material. If the plaintiff elects to
receive statutory damages, the amount the plaintiff receives would fall between $750 and
$30,000. If the infringement is considered willful, the maximum may rise to $150,000. If
the infringement was considered willful and was for commercial advantage or private
financial gain, the federal government may decide to press criminal charges.
An example of copyright infringement involves Napster. Napster provided
customers with downloadable music free of charge. Owners of the copyrighted songs were
upset because they were not receiving payment for their work, and soon filed lawsuits
against the company. Today, Napster requires the users to pay for the songs they want to
download.
¹Business Software Alliance, “2007 Piracy Study.” Fifth Annual BSA and IDC Global
Software, 20 Nov. 2008. <http://global.bsa.org/idcglobalstudy2007/studies/2007_global_piracy
_study.pdf>
Chapter 7: Intellectual Property and Unfair Competition
Page 7
Software Piracy
Did You Know?
Software companies lost some $147
million in potential revenues to piracy in
2007, up from $119 million in 2006.
Piracy Rates In 2007¹
 Armenia 93%
 Zimbabwe 91%
 Vietnam 85%
 Indonesia 84%
 China 82%
 Thailand 78%
 France 42%
 Singapore 37%
 United Kingdom 26%
 United States 20%

A copyright infringer is often
referred to as a pirate.

There is no such a thing as an
“international copyright.”

USA suffered PC software piracy
losses of $8,040 in 2007 which was
the highest loss among other
nations in the world.¹

In Thailand, within two weeks after
movies are released, you can find
pirate DVDs of the movies in flea
markets and malls.
E. Fair Use
One defense against copyright infringement is the fair use determination. The court
weighs four factors for fair use determination. The factors include the purpose of the use,
the nature of the work, the importance and amount of the part used, and the effects on the
marketability of the copyrighted work. Here are some examples of fair use: criticism or
comment, news, teaching, scholarship, and research. It is up to the court to decide if the
material qualifies for the fair use determination.
For more information on copyrights go to the United States Copyright Office Website:
http://www.copyright.gov/
III. Trademarks
Trademarks are words or symbols that designate a company’s product. Trademarks
can be a phrase, a single word, such as the name of the product, a symbol, a device, or a
combination of these that represents the product. To ensure that companies are able to
retain the ability to distinguish their product from other products that may be similar,
trademarks are protected under the federal Lanham Act.
Under the Lanham Act, trademarks are usually considered “any word, name,
symbol, device, or combination thereof used by a manufacturer or seller to identify its
products and distinguish them from products of competitors” (Mallor 250). However, this
description is sometimes extended to include things such as designs of labels or packages.
Chapter 7: Intellectual Property and Unfair Competition
Page 8
Protection is sometimes recognized for colors, pictures, label and package designs,
slogans, sounds, arrangements of letters and numbers, and shapes of goods or containers.
Ex. The shape of the glass Coca-Cola
bottles are trademarked, meaning no other
company can use that design for their
beverages. (as mentioned earlier the design
is also patented)
The Lanham Act also protects three other types of marks, which are: service marks,
certification marks, and collective marks. Service marks are similar to trademarks, but
instead are for services.
Ex. The name McDonald’s is a service
mark, no other restaurant can use that name.
Certification marks certify other features of goods and services, such as
manufacturing methods or materials.
Ex. This mark is used to identify goods that
contain wool.
Collective marks are very similar to trade or service marks, but instead of
identifying a company, or their product or service, they identify an organization, or the
organization’s service.
Ex. To show that someone is a member of the
Society of Certified Public Accountants the
mark “CPA” is used.
We will be focusing on trademarks; however, most of the things discussed apply to
the other types of marks as well.
A. Distinctive
Chapter 7: Intellectual Property and Unfair Competition
Page 9
In order for a trademark to be protected, it has to be distinctive. This meaning that
it has to stand out and not be too generic for the product it is identifying, which we will
discuss later. To help identify the level of distinction, marks can be separated into five
categories: arbitrary or fanciful marks, suggestive marks, descriptive marks, marks that are
not inherently distinctive, and generic terms. Arbitrary or fanciful marks do not
necessarily describe anything about the product they identify. Arbitrary and fanciful marks
are almost always protected. Suggestive marks only describe the product with the use of
the imagination. These types of marks tend to give detail about the product only after you
know about the product that is being described. Suggestive marks are usually eligible for
protection. Descriptive marks allow someone to easily identify the product just by its
name. Eligibility of descriptive marks tends to depend on how long they have been in use
and how readily potential consumers associate it with a particular product, not just the type
of product. Marks that are not inherently distinctive are very similar to descriptive
marks, meaning they can describe more than one specific product. Just like descriptive
marks, they are eligible for protection only under certain circumstances. Generic terms are
words that are already used to describe that type of product, such as “sweater” or
“calculator”. Generic terms are not eligible for protection.
B. Registration
In order for a trademark to be protected, it must be registered with the U.S. Patent
and Trademark office. To register a trademark, a company must have the particular mark
displayed on their product or service. Once submitted to the office, the trademark is
reviewed and is accepted or denied based on its distinctiveness. Anyone who believes that
registration of the trademark may harm them can contest an acceptance. The applicant may
contest the denial if they wish. If the trademark is accepted, it is placed on the Principle
Register of the Patent and Trademark Office. There, it is made public, and people can
dispute whether or not the mark infringes on another’s mark. While on this list, the
trademark is under the protection of the Lanham Act.
Some patents may automatically be denied, regardless of how distinctive they are.
These include marks that are immoral, deceptive or scandalous, marks that resemble
previously accepted marks, marks that use flags or other government signs, and marks that
contain a living person’s picture or name without that person’s consent.
Once a trademark is placed on the Principle Register and is protected, it retains its
place and protection as long as the mark remains in use. One exception to this, however, is
when a term becomes generic. A generic term is a trademark that is so widely known, it is
now used to describe a type of product as opposed to just one specific product.
Chapter 7: Intellectual Property and Unfair Competition
Page 10
Ex. Aspirin used to be trademarked by Bayer,
but it became such a widely used term that
people called acetylsalicylic acid produced by
any company, not just Bayer, aspirin.
The graphic below (right side) shows terms that were once brand names but
became generic with use; these terms were once trademark protected but have lost their
protection status. On the left are brand names that have been in danger of becoming
generic; these are still currently trademarked but they could be challenged, then the Patent
and Trademark Office would have to decide if they would continue to be protected or not.
This is just a short list; there are many other examples that could be included.
Brand
KLEENEX
Xerox
Trademarks
Generic Term
tissue
copier
Generic Terms
aspirin
escalator
yo-yo
raisin bran
White v. Samsung
971 F. 2d 1395 (9th Cir. 1992).
David Deutsch Associates, Inc., made a series of commercials to
advertise Samsung VCRs. To show that the VCRs would be around a
long time, they depicted cultural references and predicted what they
would be like in the 21st century. One of the ads included a caption that
read "Longest-running game show. 2012 A.D," while showing a Wheel
of Fortune background with a robot dressed and wigged to look like
Vanna White. The robot was standing in White’s signature pose. White
had neither given permission for this ad to be made nor had she been
compensated. The 9th Circuit Court of Appeals reversed the trial court’s
verdict and stated “In cases involving confusion over endorsement by a
celebrity plaintiff, ‘mark’ means the celebrity’s persona” under the
Lanham Act.
C. Infringement
Infringement is when a company, without consent, uses a mark that resembles
another company’s trademark closely enough to cause confusion over which company the
product is actually from or what the product is. When this happens, the company with the
trademark can take legal action and may receive monetary damages or an injunction. In
determining trademark infringement cases, there are eight aspects considered in order to
determine whether or not there was indeed significant confusion. It is not necessary to
Chapter 7: Intellectual Property and Unfair Competition
Page 11
prove all of these factors, but a strong case for some of them is needed. The eight factors
are: 1) strength of the mark; 2) relatedness of the goods; 3) similarity; 4) evidence of
confusion; 5) channels of marketing; 6) the extent of consumer care; 7) the intent of the
defendants; and 8) the probability of expansion.
D. Dilution
Trademark dilution refers to an instance when someone uses a “famous”
trademark as their own, and in doing so reduces the value of the trademark in the public
eye. A famous mark does not have to be registered in order to be granted protection
under the Federal Trademark Dilution Act. Under this act, it is not necessary to prove
likelihood of confusion, as it is for trademark infringement. It only needs to be proven that
the public now associates the trademark with not only the original owner, but the defendant
as well. Compensation for trademark dilution is usually only an injunction against the
party using the mark without permission. There may be monetary damages if it can be
proven that the defendant was using the mark to gain from its recognition, or if they were
deliberately trying to cause dilution. Someone would be deliberately trying to cause
dilution if they started selling a type of soda called “Koca-Kola” because it would dilute
Coca-Cola’s brand name. Another example would be naming a new cereal “Especially K.”
Dilution could also include copying the design of a product’s box in a general sort of way.
Dilution may also occur in non-similar products. A product called Sony Toothpaste would
be trademark dilution to Sony.
V. Trade Secrets
Trade secrets are any valuable information that companies keep to gain economical
advantage over its competitors. Trade secrets may include a formula, pattern, compilation,
program, device, method, technique, or process that is used in producing a product. In
order to be considered a trade secret, it must have enough value, or be original enough, to
possibly provide the business a competitive advantage. The Coca Cola recipe is one of the
better examples of a trade secret. The recipe is one of the most protected secrets in the
world. Competitors have no access to the recipe; therefore, the only way they can legally
obtain the recipe is by experimentation.
A. Rules
There has to be a certain level of secrecy in order to have a trade secret. If
information is made or becomes public, it is not a trade secret. For it to actually be a trade
secret, the company must take a reasonable measure of action to keep it secret. Such
examples of “reasonable measures” are as follows: having employees sign non-discloser
agreements, advisors reminding employees to keep the trade secrets secret, controlling the
Chapter 7: Intellectual Property and Unfair Competition
Page 12
availability and access to the trade secrets, and having a need-to-know basis for revealing
the trade secret. Also, trade secrets do not apply to information that can be reasonably
discovered by proper means. Proper means applies to people who discover the secret
through invention, observation of the product, advertising, published literature, analysis, or
reverse engineering.
B. Ownership
The owner of a trade secret is usually the person who created it or the business for
which it was generated. If an employee develops a trade secret while employed, the
employer can gain ownership rights under certain circumstances. In order for this to
happen, the employee would have had to been hired to do creative work in relation to the
secret, agreed not to give information, or worked with other employees who assisted in the
discovery.
The duration of trade secrets is unlimited, as long as the companies can keep them
so without any procedural formalities. However, the protection of trade secrets can be
expensive. Some companies may restrict access to important documents, escort visitors,
educate key employees, and closely monitor publications in order to maintain the trade
secret. Many large companies rely on trade secrets when patents are not available.
C. Misappropriation
The Economic Espionage Act of 1996 makes the theft or misappropriation of a
trade secret a federal crime. Most states have also adopted the Uniform Trade Secrets Act,
but some states still rely on common law principles. There are three ways that
misappropriation of trade secrets can occur. The first is if the secret is obtained by
improper means, such as theft, trespassing, wiretapping, or any other illegal activity
(whether personally or by use of a spy). The second is if the secret is obtained from a
person that is known for using improper means. The final way is if an agreement is
breached regarding the confidentiality of the contract. An example of this would be an
employee giving out information about a trade secret during or after employment with the
business.
In any of these cases, the people involved are liable for damages. The remedies
that are available to rectify misappropriations are as follows: the amount of damages
caused plus profits gained from the theft, punitive damages in response of willful and
malicious misappropriation, and injunctions.
V. Passing Off/ Palming Off
Chapter 7: Intellectual Property and Unfair Competition
Page 13
The Lanham Trademark Act enacted in 1947 was established to protect trademarks.
Section A of the act establishes a tort stating that any false representation that could entice
a third party (consumers) to mistake the defendant’s product for the plaintiffs. This can
include, but is not limited to, trademarks, trade names, packaging, labels, or containers. A
second part of Section A includes trade dress infringement. This is rather similar to passing
off. Trade dress describes the outward appearance of a product. The Lanham Act prevents
anyone from producing a product or service that so closely resembles a trademarked item
that consumers are confused as to which product is which. For example, a cheap brand of
shoes could try to use a  in their logo such that it would be confused with the Nike
symbol.
In the News: Former Secretary Convicted Stealing CocaCola’s Trade Secret
Coca-Cola’s secret formula has been kept secure. Only a few
employees, mostly executives, know the formula. However, in July
2006, two former employees of Coke conspired to steal the trade secrets
of a new and upcoming Coke product and sell it to Pepsi. In February
2007, the two men were sentenced to serve time in federal prison: one to
serve 5 years and the other to serve 8 years. Both had to pay $40,000 in
damages in addition to the jail time. Then in May 2007, Coca-Cola’s
former secretary, Joya Williams, was found guilty for trying to sell the
secret formula to Pepsi Co. for $ 1.5 Million. After Pepsi Co. received
the letter offering the deal, they informed Coco-Cola Co. Williams was
arrested by the FBI and sentenced to eight years in prison.
"Eldred vs. Ashcroft." Lexis Nexis. 2003. Web. 29 Nov. 2009.
<http://www.lexisnexis.com/us/lnacademic/search/journalssubmitForm.do>
"Genetics and Patenting." Human Genome Project Information. Human Genome Project,
16 Sept. 2008. Web. 29 Nov. 2009.
<http://www.ornl.gov/sci/techresources/Human_Genome/elsi/patents.shtml>.
Chapter 7: Intellectual Property and Unfair Competition
Page 14