Fundamentals of Business Law
Summarized Cases, 8th Ed., and Excerpted Cases, 2nd Ed.
ROGER LeROY MILLER Institute for University Studies Arlington, Texas
GAYLORD A. JENTZ Herbert D. Kelleher Emeritus Professor in Business Law University of Texas at Austin
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? Copyright © 2010 South-Western
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Introduction • •
Intellectual Property (I.P.) is any property that is the product of an individual’s mind, e.g, books, software, movies, music. U.S. Constitution protects I.P. in Article I Section 8. Congress shall: “promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.”
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Ownership of I.P. is strategically important in the global economy.
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Trademarks and Related Property • Trademark. – Distinctive motto, mark or emblem. – Stamped or affixed to a product. – So that it can be identified in the market. – CASE 5.1 The Coca-Cola Co. v. Koke Co. of America (1920).
• Statutory Protection of Trademarks. – Federal Lanham Act of 1946. – Federal Trademark Dilution Act of 1995. Copyright © 2010 South-Western
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Trademarks and Related Property • Trademark Registration. – U.S. Patent and Trademark Office www.uspto.gov gives notice to 3rd parties. – A mark can be registered if in use or mark will be used within 6 months.
• Trademark Infringement. – Unintentional or intentional substantial copying of mark. – Strong marks vs. generic terms. Copyright © 2010 South-Western
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Trademarks and Related Property • Distinctiveness of Mark: reduce likelihood of confusion. – Strong Marks: Xerox, Kodak, Dairy Queen. – Secondary Meaning. – Generic Terms. What happens when a trademark becomes “common” like aspirin or escalator?
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Trademarks and Related Property • Service Mark. – Similar to trademark but used for services. – Includes characters in TV and radio.
• Certification Mark. – Used to certify accuracy of owner’s goods or services. “Good Housekeeping”.
• Collective Mark. – Certification used by members of an organization. Copyright © 2010 South-Western
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Trademarks and Related Property • Trade Dress. – Image and appearance of a product or shop (Example: Starbucks coffee stores).
• Counterfeit Goods. – Stop Counterfeiting in Manufactured Goods Act (2006).
• Trade Names. – Applies to a business (not a product). Copyright © 2010 South-Western
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Cyber Marks • Domain Names. – Trademarks in Cyberspace (example: Nike.com). – Conflicts—ICANN.
• Anticybersquatting Legislation. – Cyber squatting occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name. – 1999 Anticybersquatting Consumer Protection Act. Copyright © 2010 South-Western
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Cyber Marks • Meta Tags – Keywords in web pages used by internet search engines.
• Dilution in the Online World. – Trademarks can be diluted on the web. – Hasbro v. IEG (over candyland.com).
• Licensing. – Permits use of trademark, copyright, or other IP. Copyright © 2010 South-Western
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Patents • Patent. – A Government monopoly that gives inventor the exclusive right to make, use or sell and invention for 20 years.
• What is Patentable? – Invention. – Design. – Process (software patent). – CASE 5.2 KSR International Co. v. Teleflex, Inc. (Supreme Court, 2007). Copyright © 2010 South-Western
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Patents • Patent Infringement. – Manufacture, use or sale of another’s product or design without permission (license).
• Remedies for Infringement. – Patent holder may sue for relief in federal court. – Can also seek injunction and damages for royalties, attorney’s fees. – If willful infringement, court may award treble damages. Copyright © 2010 South-Western
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Copyrights • Copyright: – Intangible property right granted by federal statute to the author for life plus 70 years. – Automatic protection. – Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is.
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Copyrights • Infringement. – Form or expression is copied (does not have to be in its entirety). – Penalties, damages and criminal action are possible.
• Exception: “Fair Use”. – Certain persons or organization can copy materials without penalty (e.g., education, news, research). – CASE 5.3 Leadsinger, Inc. v. BMG Music Publishing (9th Circuit 2008). Copyright © 2010 South-Western
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Digital Copyrights • Copyright Protection for Software. – Computer Software Copyright Act (1980).
• Copyrights in Digital Information. – Copyrights is the most important IP on the internet; internet requires the data/work be “copied” across the web to view/listen. – Copyright Act of 1976: Copy of a program into RAM is infringement. – Revision or re-sale of freelance authors works can be infringement. Copyright © 2010 South-Western
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Further Developments in Copyright Law • No Electronic Theft Act of 1997: penalties for making copies for personal use (modifies fair use doctrine). • Digital Millennium Copyright Act updates copyright law with World Intellectual Property Organization treaty. Copyright © 2010 South-Western
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MP3 and File Sharing • MP3 and File-Sharing Technology. – Napster case. – P2P sharing, distributed network.
• Evolution of File Sharing. – New software decentralizes storage making it difficulty to apply traditional doctrines of copyright infringement.
• Grokster decision. Copyright © 2010 South-Western
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Trade Secrets • Trade secrets are confidential, not filed with the government. • Can be customer lists, formulas, pricing, etc. • Theft of trade secrets is now a federal crime under the Economic Espionage Act of 1996. • Cyberspace: employees can easily email information to competitors. Copyright © 2010 South-Western
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International Protection for Intellectual Property • Berne Convention (1886). • TRIPS Agreement (1994). – Each member must include domestic laws protecting intellectual property of other nation-members.
• World Intellectual Property Organization. (WIPO) (1996). – Provides for Dispute resolution.
• Madrigal Protocol. – Single application to secure international trademark protection. Copyright © 2010 South-Western
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