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Bus law today 9th ed ch05

BUSINESS LAW TODAY
Essentials 9th Ed.

Roger LeRoy Miller - Institute for University Studies, Arlington, Texas
Gaylord A. Jentz - University of Texas at Austin, Emeritus

Chapter

5

Intellectual Property
and Internet Law

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

1


Learning Objectives
 What is intellectual property?

 Why does the law protect trademarks and

patents?
 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?
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

2


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.”
Ownership of I.P. is strategically important in the
global economy.

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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Trademarks & 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.

Name “Coke” was so common that use of
“Koke” by competing company was a
trademark infringement.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

4


Trademarks & Related Property

 Statutory Protection for Trademarks.
Lanham Act of 1946 provides federal
protection of manufacturers from loosing
business to rivals that used confusingly
similar brands and products.

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

5


Trademarks & Related Property

 Trademark Dilution Act of 1995.
Amended Lanham Act to bring federal
cause of action in federal court for
trademark dilution –even when mark is
unlikely to confuse. “Similar” marks may
give rise to dilution suit.

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

6


Trademarks & 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.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

7


Distinctiveness of the Mark
 Strong Marks: fanciful, arbitrary, or suggestive
trademarks are most distinctive marks,
normally not related to product (Apple, Xerox,
Starbucks).
 Secondary Meaning: descriptive,
geographical, or personal names do not
acquire protection until consumers associate
term with product (London Fog).

 Generic Terms: no protection (bicycle, computer).
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

8


Service, Certification, and
Collective Marks

 Service Mark: similar to trademark but
used for services (includes TV and
radio).
 Certification Mark: quality of goods (UL
tested, Good Housekeeping).
 Collective Mark: used by members of a
cooperative, association, union.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

9


Trade Dress
 Trade Dress.





Protects image and appearance of a product or
store (Example: fish shape of cracker, Starbucks
stores).
Counterfeit Goods.
Stop Counterfeiting in Manufactured Goods Act
criminalizes intentional trafficking in counterfeit
goods.
Trade Names.
Indicates all or part of a business name that is
protected (Example: Safeway).

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

10


Cyber Marks
 Domain Names.
Trademarks in Cyberspace (example: Nike.com).
Conflicts—ICANN.

 Anticybersquatting Legislation.
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.

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

11


Cyber Marks

 Meta Tags
Keywords in web pages used by internet
search engines.
Playboy Enterprises, Inc. v. Welles
(2002).

 Dilution in the Online World.
Trademarks can be diluted on the web.
Hasbro v. IEG (over candyland.com).
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

12


Cyber Marks
 Licensing.
Agreement that permits use of trademark,
copyright, or patent in cyber space.
Owner is licensor, user is licensee.
Terms of the use are delineated in the license
agreement.

 CASE 5.2

George V Restauration S.A. v. Little Rest
Twelve, Inc. (2009).

Owners of mark would suffer ‘irreparable
harm’ and consumer confusion if use of mark
continued by licensee.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

13


Patents
 Patent: government monopoly that gives inventor


the exclusive right to make, use or sell and
invention for 20 years.
What is Patentable?

Item must be novel and not “obvious”.
Almost anything is patentable (excluding
laws of nature, natural phenomena,
abstract ideas).

 CASE 5.3
(2007).

KSR International Co. v. Teleflex, Inc.

 Patent for automobile pedal sensor was invalid because
it was obvious and combined pre-existing inventions.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

14


Patents
 Patent Infringement.
Manufacture, use or sale of another’s
product or design without permission
(license).

 Remedies for Patent Infringement.
Injunction.
Damages for royalties.
Reimbursement for attorney’s fees and
costs.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

15


Copyrights
 Intangible property right automatically granted by


federal statute to the author for life plus 70 years.
What is Protected Expression?

Work must be original and “fixed in a
durable medium.” Ideas are not
protected, but the expression of an idea
is.
Section 102 Exclusions.
Compilation of facts is protected.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

16


Copyrights
 Copyright Infringement.
Form or expression is copied (does not
have to be in its entirety).
Penalties, damages and criminal action
are possible.

 The “Fair Use” Exception.
Certain persons or organization can copy
materials without penalty (e.g., education,
news, research).

 Copyright Protection for Software.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

17


Copyrights in Digital
Information

 Digital media can easily be copied.
Anytime a copyright work is downloaded
and stored in RAM or hard drive without
permission, there is infringement.

 Copyright Act of 1976:
Copy of a program into RAM is
infringement.
Revision or re-sale of freelance authors
works can be infringement.
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

18


Copyrights: MP3 and File
Sharing

 Napster case.

P2P sharing, distributed network.
Metro-Goldwyn-Mayer Studios, Inc. v.
Grokster, Ltd., Supreme Court held that a
software company that distributes software
intending it to be used to violate copyright
laws can be vicariously liable for users
infringement.
What about the new “cloud network”?
© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

19


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.

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

20


International Protection
 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.

 Madrid Protocol (2003).

U.S. company can submit
a single application to register its trademark with all
73 member nations.

© 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in
a license distributed with a certain product or service or otherwise on a password-protected website for classroom use.

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