BUSINESS LAW
Twomey • Jennings 1stEd.
Twomey & Jennings
BUSINESS LAW
Chapter 10
Intellectual Property Rights
and the Internet
© 2004 West Legal Studies in Business
A Division of Thomson Learning
BUSINESS LAW
Twomey • Jennings 1stEd.
Trademarks and
Service Marks
• Trademark is a distinctive motto, name or
symbol on a product. Service Mark applies
to a service.
• Lanham Act grants producer the exclusive
right to register and use the trademark.
• Owners of marks may obtain federal
protection by registering the mark with the
U.S. Patent and Trademark Office
(www.uspto.gov).
© 2004 West Legal Studies in Business
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BUSINESS LAW
Twomey • Jennings 1stEd.
Marks: Names, Symbols & Designs
Mark distinguishes owner’s goods or services from those of others.
Trademarks identify goods.
Service marks identify services.
Protection by
registration grants
registrant
exclusive rights.
Examples of registrable trademarks:
marks that are coined,
completely fanciful,
or arbitrary
terms suggestive of
some quality of
product
acquired secondary
meaning--surname,
descriptive or geography
Kodak
film
Frigidaire
refrigerators
Philadelphia
cream cheese
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BUSINESS LAW
Twomey • Jennings 1stEd.
Trademarks and
Service Marks
• Generic Terms may also be protected.
Harley-Davidson, Inc. v Grottanelli
(1999) No Hogging Generic Terms: Is
the Word “Hog” a Trademark?
• Trade Dress Protection involves a product’s
total image and the overall packaging look.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Trademarks and
Service Marks
• Limited Lanham Act protection of product
design.
– Courts are now expanding trade dress to
include the design of the product itself.
Fun-Damental Too, Ltd. v Gemmy
Industries Corp (1997) Keeping the
Toilet Bank Flush with Cash.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Trademarks and
Service Marks
• Trademark owner may obtain injunction
from imitating or duplicating the mark.
• A mark can be abandoned and become
generic. Examples: aspirin, thermos.
• Federal Trademark Dilution Act of 1995.
– Cause of action against the commercial use of
another’s mark.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Internet Domain Names
• Cybersquatters: use someone’s trademark as
a domain name.
– Federal Anticybersquatting Consumer
Protection Act (ACPA) of 1995.
– Safe harbor exists for some users.
– Dispute Avoidance under ICANN and WIPO.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Copyrights
• A copyright is the exclusive right given by
federal statute to the creator of a literary or
an artistic work to use, reproduce, or display
the work.
• Copyrights run for the life of the creator
plus 70 years after the creator’s death.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Copyrights
• Copyrights protect literary, musical, dramatic and
artistic work in books, photographs. Even
material on the internet.
• A copyright holder has the exclusive right to:
–
–
–
–
–
Reproduce the work;
Prepare derivative works;
Distribute copies;
Publicly perform the work; and
Publicly display the work.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Copyrights
• “Fair Use” is an exception to the exclusive
rights of copyright holders, depending on
four factors: purpose and character; nature
of the work; amount used; and the effect on
the use.
American Geophysical Union v Texaco,
Inc. (1995) Fair Use or Not Fair Use—
That is the Question.
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A Division of Thomson Learning
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BUSINESS LAW
Twomey • Jennings 1stEd.
Copyrights
• Digital Millennium Copyright Act of 1998.
– “Safe Harbor” provisions protect internet
service providers from copyright liability.
Hendrickson v eBay, Inc. (2001)
Hurricane Hendrickson Howls: eBay
Seeks Safe Harbor.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Patents
• A patent gives the inventor an exclusive
right for 20 years from the date of
application to make, use, and sell an
invention that is new and useful and unique
(not obvious).
– Utility Patents.
– Design Patents.
– Plant Patents.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Patents
• To receive a patent, the invention must be
new and not obvious.
– May lead to highly technical hearings before a
patent officer at the US Patent and Trademark
Office.
• Internet Business Methods can be
patentable. Example: Amazon.com “one
click” for purchases.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Secret Business Information
• Trade secrets are protected under state law for an
unlimited period so long as they are not made
public.
• Defense measures include:
–
–
–
–
Non-disclosure agreements.
Injunctions.
Exit Interviews.
Criminal Sanctions under the Economic Espionage Act
of 1996.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Protection of Computers
and Mask Products
• Protection of computer programs and the design of
computer chips and mask works is commonly
obtained, subject to certain limitations, by
complying with federal statutes, by using the law
of trade secrets, and by requiring restrictive
licensing agreements.
• Many software developers pursue all of these
means to protect their proprietary interests in their
programs.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Protection of Computers
and Mask Products
• Patents have also been obtained for
computer programs.
• Semiconductor Chip Protection Act protects
the design of a computer chip.
• Remedies for violation include:
– Actual Damages and
– Forfeit Profits to Real Owner.
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BUSINESS LAW
Twomey • Jennings 1stEd.
Summary Comparison of
Intellectual Property Rights
Type of
Intellectual
Property
Protection
Applicable
Standard
Where to
Apply
Duration
Trademarks
Copyrights
Patents
Words, names,
symbols or
devices used to
identify a product
or service
Identifies and
distinguishes a
product or service
Original creative
works of authorship
such as writings,
movies, records, and
computer software
Original creative
works in writing or in
another format
Utility,
design, and
plant patents
Patent and
Trademark Office
Register of
Copyrights
Indefinite so long
as it continues to
be used
Life of author plus 50
years or 75 years
from publication for
“work for hire”
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Trade Secrets
Advantageous
formulas,
devices, or
compilation of
information
New and non- Not readily
obvious
ascertainable,
advances in
not disclosed to
the art
the public
Patent and
No public
Trademark
registration
Office
necessary
Utility and
plant patents
20 years from
date of
application;
design
patents 14
years
Indefinite so
long as secret is
not disclosed to
public
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