COPYRIGHT © 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson, the Star logo, and West Legal Studies in Business are trademarks

COPYRIGHT © 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson, the Star logo, and West Legal Studies in Business are trademarks used herein under license.

West’s Business Law 10th Edition

Kenneth W. Clarkson, University of MiamiRoger LeRoy Miller, Institute for University Studies, Arlington, Texas

Gaylord A. Jentz, University of Texas, Austin, EmeritusFrank B. Cross, University of Texas, Austin

CHAPTER 8CHAPTER 8INTELLECTUAL PROPERTYINTELLECTUAL PROPERTY

1

COPYRIGHT © 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson, the Star logo, and West Legal Studies in Business are trademarks used herein under license. 2

Introduction Introduction Intellectual property (or “I.P.”) is becoming Intellectual property (or “I.P.”) is becoming

more important because the value of many more important because the value of many corporations (e.g., Microsoft) is based primarily corporations (e.g., Microsoft) is based primarily on I.P. on I.P.

Founders of America understood the value of Founders of America understood the value of I.P.: Article I § 8 authorizes Congress to I.P.: Article I § 8 authorizes Congress to “secur[e] for limited times to Authors and “secur[e] for limited times to Authors and Inventors the exclusive Right to their respective Inventors the exclusive Right to their respective Writings and Discoveries.”Writings and Discoveries.”


Types of Intellectual PropertyTypes of Intellectual PropertyTrademarks.Trademarks.

Service Marks.Service Marks. Trade Dress.Trade Dress.

Patents.Patents.Copyrights.Copyrights.Cyberspace I.P.Cyberspace I.P.


§1: §1: Trademarks and Trademarks and Related PropertyRelated Property

DistinDistincctive mark, motto or device or emblem that tive mark, motto or device or emblem that a manufacturer stamps, prints or othea manufacturer stamps, prints or otherrwise affixes wise affixes to the goods it producesto the goods it produces..

Distinguish Distinguish product/service from goods of other product/service from goods of other manufacturers and merchants.manufacturers and merchants.

Avoids consumer confusion.Avoids consumer confusion.Case 8.1Case 8.1: : The Coca Cola Co. v. The Koke Co. of The Coca Cola Co. v. The Koke Co. of

AmericaAmerica (1920). (1920).


Statutory Protection Statutory Protection of Trademarksof Trademarks

Lanham Trademark ActLanham Trademark Act (1946) creates (1946) creates incentives for incentives for companiescompanies to invest to invest; ; prevents prevents unjust enrichmentunjust enrichment of companies who infringe. of companies who infringe.

Federal Trademark Dilution ActFederal Trademark Dilution Act (1995) (1995) creates cause of action regardless of competition creates cause of action regardless of competition or confusion based on a “similar” mark.or confusion based on a “similar” mark.


Trademark RegistrationTrademark RegistrationRegister with U.S. Patent Trademark Register with U.S. Patent Trademark

Office (www.uspto.gov) if:Office (www.uspto.gov) if: Mark is currently in commerce; orMark is currently in commerce; or Applicant intends to put it into commerce Applicant intends to put it into commerce

within 6 months.within 6 months. Registration allows use of “®” symbol.Registration allows use of “®” symbol.


Trademark InfringementTrademark InfringementWhenever a trademark is copied or used, Whenever a trademark is copied or used,

intentionally or unintentionally, there is intentionally or unintentionally, there is infringement.infringement.

Trademark owner has cause of action against Trademark owner has cause of action against infringer,unless trademark is a “generic” term.infringer,unless trademark is a “generic” term.

Lanham Act designed to prevent consumer Lanham Act designed to prevent consumer confusion about similar marks.confusion about similar marks.


Distinctiveness of MarkDistinctiveness of MarkTrademark must be sufficiently distinct.Trademark must be sufficiently distinct.‘‘Strong’ Marks:Strong’ Marks:

Fanciful.Fanciful. Arbitrary.Arbitrary. Suggestive marks.Suggestive marks.

Secondary Meaning.Secondary Meaning.Generic Terms: escalator, aspirin.Generic Terms: escalator, aspirin.


Trade DressTrade DressRefers to the image and overall appearance of Refers to the image and overall appearance of

the product or service: distinctive décor at a the product or service: distinctive décor at a restaurant product names, or packaging. restaurant product names, or packaging.

Same protection as trademark.Same protection as trademark.Issue is consumer confusion.Issue is consumer confusion.


Service, Certification, and Service, Certification, and Collective MarksCollective Marks

Similar to trademark but used to distinguish Similar to trademark but used to distinguish services of one person/company from another.services of one person/company from another.

Titles and character names used in media are Titles and character names used in media are frequently registered as service marks.frequently registered as service marks.


Trade NamesTrade NamesTrademarks apply to products: e.g., Pepsi-Trademarks apply to products: e.g., Pepsi-

Cola®.Cola®.Trade name applies to companies and are Trade name applies to companies and are

protected by federal law as well.protected by federal law as well. Example: Safeway®.Example: Safeway®.


§ 2: Cyber Marks§ 2: Cyber MarksOnline trademarks.Online trademarks.Domain Names: www.westlaw.com Domain Names: www.westlaw.com

Conflicts: ICANN, WIPO.Conflicts: ICANN, WIPO.Anti-Cybersquatting Consumer Protection Anti-Cybersquatting Consumer Protection

Act (1999) amended the Lanham Act.Act (1999) amended the Lanham Act.


Cyber MarksCyber MarksMeta Tags.Meta Tags.

Case 8.2:Case 8.2: Playboy Enterprises v. WellesPlayboy Enterprises v. Welles (2002).(2002).

Dilution in the Online World.Dilution in the Online World. Candyland.com.Candyland.com.

Licensing allows use of trademark.Licensing allows use of trademark.


§3: §3: PatentsPatentsExclusive federal grant from U.S. Patent and Exclusive federal grant from U.S. Patent and

Trademark Office to make, use and sell an Trademark Office to make, use and sell an invention for 20 years.invention for 20 years.

Patent Infringement.Patent Infringement.Patents for Software are now available.Patents for Software are now available.Patents for Business Processes.Patents for Business Processes.

State Street Bank & Trust Co. v. Signature Financial State Street Bank & Trust Co. v. Signature Financial Group, Inc.Group, Inc. (1998). (1998).


§4: §4: CopyrightsCopyrights

Automatic protection after 1978.Automatic protection after 1978.Intangible property right to author for her life Intangible property right to author for her life

plus 70 years.plus 70 years. For publishing houses, copyright expires 95 years For publishing houses, copyright expires 95 years

from publication or 120 years from creation, from publication or 120 years from creation, whichever is first.whichever is first.

Works can be protected by registration at U.S. Works can be protected by registration at U.S. Copyright Office (Copyright Office (www.loc.gov/copyrightwww.loc.gov/copyright/)./).


Copyrights: What Copyrights: What is Protected Expression? is Protected Expression?

Can only copyright the expression of an idea, Can only copyright the expression of an idea, not the idea itself (Section 102).not the idea itself (Section 102).

Work must be original and fixed in a durable Work must be original and fixed in a durable medium: medium: literary, musical, choreographical literary, musical, choreographical and dramatic works, pictoral, graphic and and dramatic works, pictoral, graphic and sculptures, films/ audiovisual/ TV/ sounds, sculptures, films/ audiovisual/ TV/ sounds, computer software and archcomputer software and archiitectural planstectural plans..


Compilations of facts are copyrightable but the Compilations of facts are copyrightable but the compilation must be “original.”compilation must be “original.” See, Bellsouth Advertising & Publishing Co. v. See, Bellsouth Advertising & Publishing Co. v.

Donnelley Information Publishing, Inc.Donnelley Information Publishing, Inc. (1993). (1993).““Works Made For Hire”.Works Made For Hire”.

Unless agreed otherwise, the authorship of works Unless agreed otherwise, the authorship of works created by an employee within the scope of created by an employee within the scope of employment, remains with the employer.employment, remains with the employer.

Copyrights: What Copyrights: What is Protected Expression? is Protected Expression?


Copyright InfringementCopyright InfringementCopyright Infringement: whenever unauthorized Copyright Infringement: whenever unauthorized

copying occurs.copying occurs. Damages: actual to criminal prosecution.Damages: actual to criminal prosecution.

““Fair Use”: Section 107Fair Use”: Section 107 of the Copyright Act of the Copyright Act provides for exception to liability from provides for exception to liability from reproduction of copyright under the the “fair reproduction of copyright under the the “fair use” doctrine when material is used for criticism, use” doctrine when material is used for criticism, comment, news, criticism, teaching, research.comment, news, criticism, teaching, research.


Copyright Protection for SoftwareCopyright Protection for Software

Computer Software Copyright Act (1980).Computer Software Copyright Act (1980). Classifies computer software as a “literary work.” Classifies computer software as a “literary work.”

• Apple Computer, Inc. v. Franklin Computer Co.Apple Computer, Inc. v. Franklin Computer Co. (1983). (1983).

Courts generally do not apply copyright Courts generally do not apply copyright protection to the “look and feel” of a computer protection to the “look and feel” of a computer program.program.


§ 5: Copyrights in § 5: Copyrights in Digital InformationDigital Information

Based on the Copyright Act of 1976.Based on the Copyright Act of 1976.Much of the content on the internet consists of Much of the content on the internet consists of

copyrighted I.P.copyrighted I.P. Infringement may occur when a song (or any part of Infringement may occur when a song (or any part of

it) is copied or downloaded into a computer.it) is copied or downloaded into a computer. Case 8.3:Case 8.3: Bridgeport Music, Inc. v. Dimension Bridgeport Music, Inc. v. Dimension

Films, (2003)Films, (2003)..


Digital Copyrights: Digital Copyrights: Further DevelopmentsFurther Developments

No Electronic Theft Act (1997). No Electronic Theft Act (1997). Extends criminal liability for piracy of Extends criminal liability for piracy of

copyrighted materials—even if no profit.copyrighted materials—even if no profit. Also modified the ‘fair use’ exception to Also modified the ‘fair use’ exception to

prevent unauthorized copies of music, books, prevent unauthorized copies of music, books, or movies for personal use.or movies for personal use.


Digital Millennium Copyright Act (1998).Digital Millennium Copyright Act (1998). Provides civil and criminal penalties to Provides civil and criminal penalties to

circumvent encryption software (like DVD).circumvent encryption software (like DVD). Limits ISP liability for subscriber act.Limits ISP liability for subscriber act. ‘‘Fair Use’ Exceptions for Libraries, universities and Fair Use’ Exceptions for Libraries, universities and

others.others.

Digital Copyrights: Digital Copyrights: Further DevelopmentsFurther Developments


Digital Copyrights:Digital Copyrights:MP3 and File Sharing TechnologyMP3 and File Sharing TechnologyPeer to Peer (P2P) Networking.Peer to Peer (P2P) Networking.

Music sharing (Napster, Kazaa, Gnutella).Music sharing (Napster, Kazaa, Gnutella). Music storage and vicarious liability.Music storage and vicarious liability. Case 8.4:Case 8.4: A & M Records v. NapsterA & M Records v. Napster (2001). (2001).

Court found Napster vicariously liable for Court found Napster vicariously liable for copyright infringement by its users.copyright infringement by its users.

New File Sharing Technologies.New File Sharing Technologies. Morpheus and Kazaa.Morpheus and Kazaa.


§6: §6: Trade SecretsTrade SecretsBusiness process or information that cannot or Business process or information that cannot or

should not be patented, copyrighted or should not be patented, copyrighted or trademarked.trademarked.

Can include: customer lists, plans, research, Can include: customer lists, plans, research, formulae, pricing information, marketing formulae, pricing information, marketing techniques.techniques.

Also protection from competitors.Also protection from competitors.Uniform Trade Secrets Act (1979).Uniform Trade Secrets Act (1979).


Trade SecretsTrade SecretsHacking into a competitor’s computer may be Hacking into a competitor’s computer may be

criminal.criminal.Economic Espionage Act (1996).Economic Espionage Act (1996).Trade Secrets in Cyberspace.Trade Secrets in Cyberspace.


§7: §7: International Protection for International Protection for Intellectual PropertyIntellectual Property

Berne Convention (WIPO).Berne Convention (WIPO). Every country who signed the agreement must recognize, Every country who signed the agreement must recognize, e.g.,e.g.,

an American author’s copyright. No notice is required. an American author’s copyright. No notice is required. More safeguards against infringement on the web. More safeguards against infringement on the web. World Intellectual Property Organization (WIPO) Copyright World Intellectual Property Organization (WIPO) Copyright

Treaty 1996.Treaty 1996.TRIPS Agreement of 1994.TRIPS Agreement of 1994.

Created the World Trade Organization.Created the World Trade Organization. Each member country must include in its domestic laws broad Each member country must include in its domestic laws broad

I.P. protection and enforcement measures.I.P. protection and enforcement measures.


Madrid Protocol.Madrid Protocol. Signed by sixty-one countries, including U.S. in Signed by sixty-one countries, including U.S. in

2003.2003. Allows a single country can apply for simultaneous Allows a single country can apply for simultaneous

trademark protection in all member countries. trademark protection in all member countries.

§7: International Protection for §7: International Protection for Intellectual PropertyIntellectual Property

Documents

COPYRIGHT © 2006 West Legal Studies in Business, a part of The Thomson Corporation. Thomson, the Star logo, and West Legal Studies in Business are trademarks