Chapter 5
• Intellectual Property
Learning Objectives
• What is intellectual property?
• Why are trademarks and patents protected
by law?
• What laws protects authors’ rights in works
they produce?
• What are trade secrets, and what laws offer
protection for this form of intellectual
property?
• What steps have been taken to protect
intellectual property rights in the digital age?
• Intellectual Property: property resulting
from intellectual and/or creative
processes
•
•
•
•
Books
Computer software
Movies
Music
– Article I, Section 8 of the Constitution – authorized Congress
to “promote the progress of science and the useful arts by
securing for limited times to authors and inventors the
exclusive right to their respective writings and discoveries”
– Ownership of I.P. is strategically important in the global
economy.
Forms of Intellectual Property
Patent: a grant from the government
that gives an inventor exclusive rights to
an invention
• Acquired: file a patent application with the U.S.
Patent and Trademark Office
• Duration: 20 years from date of application (design,
14 years)
• Remedy for Infringement: money damages,
including royalties and lost profits, attorney fees
» Triple damages ($$$ x 3) for intentional infringements.
• Patents – given a number (#) by the
U.S. Patent and Trademark Office
• File vs. invent
– Bell verses Gray versus Antonio Meucci
– http://www.loc.gov/rr/scitech/mysteries/telephone.html
Historical Inventions
• http://www.crf-usa.org/bill-of-rights-inaction/bria-23-4-a-the-origins-of-patentand-copyright-law
• http://online.wsj.com/article/SB1000087
2396390444358404577609810658082898
.html#printMode%3D%26project%3DAP
PLESAMSUNGVERDICT%26articleTabs
%3Dinteractive
Copyright: right of an author or originator
of a literary or artistic work or other
production that falls within a specified
category to have the exclusive use of that
work for a given period of time.
• Acquired: Automatic (once the work or creation is
put in tangible form) (how to prove?)(poor man’s
copyright)
• Only the expression of an idea, not the idea itself
can be protected by Copyright
• Duration: life of author plus 70 years; publishers 95
years after the date of publication or 120 years after
creation (which ever comes first)
Copyright (continued)
– Remedy for Infringement: Actual damages plus
profits received by the party who infringed OR
statutory damages under the Copyright Act plus costs
and attorney’s fees in either situation
• Copyright: Copyright Act enacted in 1976
– Compilation of facts vs. facts
Royalties – monies paid for the
use of copyrighted material
Derivatives
• A typical example of a derivative work received for
registration in the Copyright Office is one that is
primarily a new work but incorporates some previously
published material.
• This previously published material makes the work a
derivative work under the copyright law. To be
copyrightable, a derivative work must be different
enough from the original to be regarded as a "new
work" or must contain a substantial amount of new
material.
• Making minor changes or additions of little
substance to a preexisting work will not qualify the
work as a new version for copyright purposes.
• ******* In parody, the transformativeness is the new
insight that readers, listeners, or viewers gain from
the parodic treatment of the original work
• Fair use – may use certain copyrighted
info for things such as non-profit
educational endeavors, “small” amount
in context of the whole, the use does
not diminish copyright value
and/or…the use of the copyrighted
information is to promote the progress
of science and useful arts
yearbook – lyric versus entire song
What symbol shows copyright? ©
• Fair Use Doctrine – may use
copyrighted material for criticism
(including parody), comment, news,
teaching purposes, academic
endeavors or research.
Factors to consider for Fair
Use
• 1. purpose and character of the
use…commercial or non profit
educational
• 2. nature of the work…(ex. Sienfeld
(Trivia book)…not facts but creative
episodes)
• 3. how much is being used?
• 4. effect upon potential market for or
value of copyrighted work
Trademark
any distinctive word, name, symbol, or
device (image or appearance) or combination that an entity
uses to distinguish its goods or services from those of
others.
The owner has the exclusive right to use that mark.
• Acquired – based on common law, ownership was
created by the use of the mark. Registration with the
appropriate federal or state office gives notice and is
permitted if the mark is currently in use or will be within
the next six months.
Three Elements must be met to sue:
• 1) Goodwill owned by a trader
• 2) Misrepresentation
• 3) Damage to goodwill
• TM – unregistered
• R - registered
– Duration: Unlimited as long as it is use. To
continue notice by registration, owner must renew
by filing between the 5th and 6th years and
every10th thereafter
– Remedy For Infringement: Injunction prohibiting
future use of the mark. Actual damages plus
profits received by those who infringed (can be
increase under Lanham Act). Destruction of
articles that were infringed. Plus costs and
attorney’s fees.
– CASE 5.1: The Coca-Cola Co. v. Koke Co. of
America (1920).
• Trademarks: registered with state or federal
government.
– Once registered, the business may use the ®
– May sue if infringed upon
– Need not be registered to sue (except in federal
court)
• Strong Marks
Fanciful, arbitrary (Nike Swoosh, Apple)or
suggestive (Coppertone) trademarks are the
strongest
• made up or no literal connection (Holiday Inn, Magic Kingdom )
• Cannot be common phrases, Paris Hilton’s “That’s hot!”  denied
• Secondary Meaning: descriptive terms, geographic
terms or personal names DO NOT receive protection
under the law UNTIL they acquire a secondary
meaning. (London Fog, Holiday Inn)
• Generic Terms: no protection and if a word becomes
“generic” no longer will be protected. (tissue, aspirin,
linoleum)
• Service Marks: marks used in the service industry
(McDonald’s, Starbucks, H&R Block)
• Certification Marks: stating something other than the
owner’s description of the product
• Trade Names: protection for a business name
(goodwill) (may be protected as trade marks if
it is the same name as the product)
• Trade Dress: image or overall appearance of
a product (the arches, Starbuck’s Storefront)
• Licensing: an agreement to use another’s
trademark (NIKE logo on college sport
uniforms)
• Lanham Act – 1946
– Protect manufacturers from losing business
to rival companies using confusingly similar
trademarks with “similar” or “related goods”
Amended in 1995
• Federal Trademark Dilution Act
No longer had to be related or similar goods
Hasbro v. Internet Entertainment Group
Candyland Case
• Trade Secret: Any information a business
possesses and that gives the business an
advantage over competitors (Coca Cola
formula), lists (databases of customers),
patterns, plans, processes, programs
•How Acquired? Through the originality and
development of the information and processes that
constitute the business secret and are unknown to others.
– McDonald’s “special sauce”
– Popeye’s Batter Recipe
– Intel’s chip manufacturing technique
– Goldman Sachs’ client list
Trade Secrets
– Duration – Unlimited, so long as not
revealed to others. Once revealed they are
no longer trade secrets
– Remedy for Infringement – Money
damages for misappropriation (the
Uniform Trade Secrets Act also permits
punitive damages if willfull) plus costs and
attorney fees