OBE 118- Legal Environment

of Business

INTELLECTUAL PROPERTY
Intellectual Property
 An intangible personal property
resulting from mental processes
 Protection of the owners right to
protect or profit from the use of his or
her property
Intellectual Property
 Patent
 Copyright
 Trademarks
 Trade Names
 Trade Dress
Intellectual Property
 Federal rights
 International protections
 Common law rights
Patent
 A legal Monopoly granted by government.
 Allows the inventor an exclusive right to
make, use, and sell an invention for twenty
(20) years.
 Patent applicant must demonstrate to the
patent office that an invention, discovery, or
design is non-obvious, novel, and useful. It
cannot be obvious considering current
technology.
Patent

 Utility
Utilityor
orfunction
functionpatent
patentprotects
protects
“the
“theway
wayananarticle
articleisisused
usedoror
works.”
works.”Must
Mustbebereduced
reducedto totangible
tangible
form.
form.
 Plant

Plantpatent
patentprotects
protectsnew new”asexually
”asexually
reproduced
reproduced distinct
distinctvariety
varietyof
ofplant,
plant,
other
otherthan
thanaatuber
tuberpropagated
propagatedplant
plant
or
oraaplant
plantfound
foundininan
anuncultivated
uncultivated
state.”
state.”
Patent
 Design patents protects the way an
article looks.
 Lesser term protection - 14 years.
 “consists of the visual ornamental
characteristics embodied in, or applied
to, an article of manufacture.”
Patent
 A patent holder gives notice that an article
or design is patented by placing on it the
word ``patent'' or ``pat.,'' plus the patent
number.
 If a firm make, uses or sells another's
patented design, product, or process
without the patent owner's permission, the
tort of patent infringement exists.
Requirements for a Patent
 To obtain a patent, the new invention must
be:
 Novel – not known or used in this country and
not published anywhere.
 Nonobvious – cannot be an obvious way to do
something.
 Useful – must have some application, even if not
commercially practical.
Patent Application & Issuance
 Priority Between Two Inventors – generally, the
person first to invent and use the product is given
the patent, even over an earlier filer.
 Prior Sale –must apply for a patent within one year
of selling the product.
 Provisional Patent Application – a shorter, cheaper
way to file for a patent temporarily, to determine if
the invention is commercially practical.
Patent
 Patent office grant of the patent is
subject to judicial review in a patent
infringement case.
 Amazon.com v Barnes & Noble

http://www.techlawjournal.com/courts199
9/amazon_bn/20010214op.asp
Patent
Major Patent issues
 Human Genome and gene patents

 Pharmaceutical

 Agro-chemical products
Copyright
 An intangible right given to the author or
originator of certain literary or artistic
productions.
 Works created after January 1, 1978, are
automatically given statutory copyright
protection for the life of the author plus
seventy years.
 Copyrights owned by publishing houses expire
ninety‑five years after publication or a one
hundred-twenty-years from the date of
creation, whichever is first.
Copyright
 If multiple authors, expiration is seventy
years after the death of the last surviving
author
 Facts are not copyrightable
 The employer is the owner of works for hire-
work created within the scope of
employment unless otherwise agreed
 The Berne convention provides international
protection for copyright for citizens of the 96
signatory countries http://www.cerebalaw.com/Berne.htm
Copyright
 Exists automatically upon creation of
an original work but
 Placement of copyright symbol ©
gives notice and to
 judicially enforce copyright requires
Registration with the US Copyright
Office
Copyright Fair Use Doctrine

 Reproductions of copyrighted works

for, "criticism, comment, news
reporting, teaching (including multiple
copies for classroom use),
scholarship, or research."
Infringement
 To prove a violation, the plaintiff must show
that the work was original, and that either:
 The infringer actually copied the work, or
 The infringer had access to the original and the
two works are substantially similar.
Infringement
 A court may:
 Prohibit further use of the material
 Order destruction of infringing material
 Require infringer to pay damages
Copyright
Fair use determination
1. the purpose and character of use, including
whether such use is of a commercial nature
or for nonprofit educational purposes;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion
used in relation to the copyrighted work as a
whole; and
4. the effect of the use upon the potential
market for or value of the copyrighted work.
Computers
 Software – copyrightable aspects:
 Codes – both source and object codes
 Structure – how a program accomplishes a task
 Look and Feel – the way a program looks and
uses symbols
Internet
 Digital Millennium Copyright Act
 Makes it illegal to delete copyright information,
such as the author’s name, and then distribute the
work via the internet.
 It is also illegal to circumvent encryption or
scrambling devices.
Copyright Remedies
 Registration with the US Copyright Office is
a condition precedent to judicial
enforcement of copyright.
 Actual damages – including profits
 Statutory damages (ranging from $250 to
$10,000) imposed at the court's discretion
 Attorney fees
 Injunctions
 Criminal proceedings for willful violations
(may result in fines and/or imprisonment).
Need not profit from invasion
Copyright Examples
 Writings (novels, textbooks etc.)
 Computer Software
 Song writing
 Song recordings
 My PPT slides (although some parts
included fair use copyrighted
material from textbook authors).
Trade Names
 Identifies a company, partnerships or
business.
 Cannot be registered under federal law unless
they are also used as trademarks or service
marks (used to identify services).
 Common law protection.
Trade Name
Trademark
 Any word, phrase, symbol, design, sound,
smell, color, product configuration, group of
letters or numbers, or combination of these,
adopted and used by a company to identify
its products or services, and distinguish
them from products and services made,
sold, or provided by others
 A distinctive mark, motto, device, or
implement that a manufacturer stamps, or
prints on its goods.
Trademark

 Assists customer in identifying a

product without confusion.
 If a business uses the trademark of
another, consumers are misled as to
who made the goods.
Trademarks
 Types of Marks
 Trademarks—affixed to goods
 Service marks—identify services, not goods
 Certification marks—marks used by an organization to
attest that products meet certain standards
 Collective marks—marks that identify members of an
organization
Trademark
 What can be trademarked
 Words that are used as part of a design or device
or words that are uncommon or fanciful may be
trademarked.
 What cannot be trademarked
 Personal names, descriptive or generic words, or
place names
 Books
 Pencils
 Carper
 Hawaii
Trademark
Ownership and Registration
 First person to use a mark in trade owns it.
 Registration is not necessary, but does have some
advantages.
 Protection becomes nationwide
 Gives public notification of trademark protection
 Damages under the Lanham Act are higher
 Holders of registered marks have first priority to use the
mark as an Internet domain name
Requirement of Enforcement
An alleged infringer may claim that the Plaintiff's
mark was abandoned and thus the protection lost.
 Non use of the mark in question. 
 Intent to discontinue the use of the mark. 
 Presumptive abandonment occurs after two
consecutive years of non use. 
 May be rebutted by proof of intent to resume use.
Requirement of Enforcement

 Legal Abandonment occurs when a trademark

owner fails to protect a TM. 
 ESCALATOR, THERMOS, ASPIRIN,
CELLOPHANE
 Use term as an adjective not a noun Kodak
Camera – not Kodak
Trademark
 Federal registration
 ® ™ (SM) Demonstrates registration of
TM with U.S. Patent and Trademark
Office
 State registration
 symbol next to distinctive use of term
Service Mark
 Any word, name, symbol,
device, or any combination,
used, or intended to be used, in
commerce, to identify and
distinguish the services of one
provider from services provided
by others, and to indicate the
source of the services.
Domain Names
 Internet addresses, (domain names), were originally
assigned with no cost.
 Now, domain names are bought and sold –
sometimes for enormous amounts of money, and
sometimes sold by people who originally registered
those names for free.
 If a domain name infringes on a registered
trademark, the domain name will be suspended
immediately if the trademark owner challenges it.
Additional Concepts
 Product disparagement or product
defamation (note Bose v Consumers Union)
1. False statement about a product or company
2. Publication
3. With malice (companies are considered public
figures)
4. Damages
International Protections
 Registration in each foreign countries
 Use of as variety of treaties
 CTM – Community Trade Mark Registration for all
countries which are part of the European Union
Additional Terms & Concepts
 Palming Off: One company sells its products by
leading buyers to believe it is the product of another
company.
 Gray Goods: "A gray-market good is a foreign-
manufactured good, bearing a valid United States
trademark, that is imported without the consent of
the United States trademark holder."
Trade Secrets
 A trade secret is a formula, device, process, method,
or compilation of information that, when used in
business, gives the owner an advantage over
competitors who do not know it.
 The Economic Espionage Act of 1996.
 This statute prohibits any attempt to steal trade
secrets for the benefit of someone other than the
owner, including for the benefit of any foreign
government.
Intellectual Property
Sources
 Intellectual Property made simple by Nolo Press
 Patent, Copyright & Trademark
by Attorney Stephen Elias
http://www.nolo.com/product/pct_sub62.html
 Outstanding website on copyright law
 http://www.benedict.com/
 U.S. Patent and Trademark Office
 http://www.uspto.gov/
 U.S. Copyright Office
http://www.loc.gov/copyright/