Ch 41 Intellectual Property

Question 1

Chapter Introduction

For much of history, land was the most valuable form of property. It was the primary source of wealth and social status. Today, intellectual property is a major source of wealth. New ideas—for manufacturing processes, computer programs, medicines, and books—bring both affluence and influence.

Answer 1

Lenz uploaded the 29-second video of her dancing child to YouTube for friends and family to enjoy.

Question 2

3

Patents

Answer 2

• Patents: Gives inventors the right to prevent others from making, using, or selling their inventions for a limited time

Question 3

Types of Patents
(Design Patents, Plant Patents, Utility Patents )

Answer 3

[Design Patents]
A design patent protects the appearance, not the function, of an item. These types of patents protect the design of products ranging from Star Wars action figures to Coca-Cola bottles, from Nike shoes to Ferrari chassis.

[Plant Patents]
Anyone who creates a new type of plant can patent it, provided that the inventor is able to reproduce it asexually—through grafting, for instance, rather than by planting its seeds.

[Utility Patents]
-. Utility patents are valid for 20 years from the date of filing the application.

Question 4

Requirements for a Utility Patent
(The Limits of Patentable Subject Matter: Living Organisms and Business Methods, )

Answer 4

To receive a patent, an invention must be:
Novel. An invention is not patentable if it has already been
1.patented,
2.described in a printed publication,
3.in public use,
4.on sale, or
5.otherwise available to the public anyplace in the world.

• ** Nonobvious**. An invention is not patentable if it is obvious to a person with ordinary skill in that particular area.
• Utility. To be patented, an invention must be useful. It need not necessarily be commercially valuable, but generally, it must do something.
• Patentable subject matter. Not every innovation is patentable. A patent is not available solely for an idea, but only for its tangible application.

[The Limits of Patentable Subject Matter: Living Organisms and Business Methods]
(Living Organisms.)
Issues: Is naturally occurring DNA patentable? Is man-made cDNA patentable?
Decision: No, naturally occurring DNA is not patentable, but man-made cDNA is patentable.

(Business Method Patents.)

Question 5

Patent Application and Issuance
(Priority between Two Inventors, Prior Sale, )

Answer 5

[Priority between Two Inventors]
When two people invent the same product, who is entitled to a patent—the first to invent or the first to file an application? For most of American history, the person who invented and first put the invention into practice had priority over the first filer

[Prior Sale]
An inventor must apply for a patent within one year of selling the product commercially anywhere in the world.

Question 6

Patent Infringement

Answer 6

-A patent holder has the exclusive right to make, use, or sell the patented invention during the term of the patent.

Question 7

International Patent Treaties

Answer 7

Because patents are territorial, an inventor must apply for a patent in each country where patent protection is sought. This is no easy feat. Nevertheless, about half of all patent applications are filed in more than one country.

Question 8

Copyrights

Answer 8

-A copyright gives its creator the exclusive right to reproduce, distribute, and perform his original work for a limited time.

Question 9

Copyright Term

Answer 9

-Today, a copyright is valid until 70 years after the death of the author or, in the case of works owned by a corporation, for 95 years from publication or 120 years from creation, whichever is shorter.

Question 10

Copyright Infringement

Answer 10

-To prove a violation, the plaintiff must present evidence that the work was original
* The infringer actually copied the work or
* The infringer had access to the original and the two works are substantially similar.

A court may
1.prohibit the infringer from committing further violations;
2.order destruction of the infringing material; and
3.require the infringer to pay damages, profits earned, and attorney’s fees.

Damages can be substantial. One jury ordered software multinational SAP to pay Oracle $1.8 billion for copyright infringement of Oracle’s software.

Question 11

Defenses to Copyright Infringement
(First Sale Doctrine, Fair Use )

Answer 11

[First Sale Doctrine]
-. The first sale doctrine permits a person who owns a lawfully made copy of a copyrighted work to sell or otherwise dispose of the copy.

[Fair Use]
Because the period of copyright protection is so long, it has become even more important to uphold the exceptions to the law.
* fair use doctrine: Permits limited use of copyrighted material without permission of the author for purposes such as criticism, comment, news reporting, scholarship, or research

1.The purpose and character of the use.
2.The nature of the copyrighted work.
3.The amount and proportion of the work that is used.
4.The effect of the use upon the potential market.

• moral rights: Intellectual property rights protecting the creator’s personal and reputational values, such as the right of attribution and the right of integrity

Question 12

Digital Music and Movies

Answer 12

One of the major challenges for legal institutions in regulating copyrights is simply that modern intellectual property is so easy to copy.

Question 13

The Digital Millennium Copyright Act

Answer 13

-It is illegal to delete copyright information, such as the name of the author or the title of the article. It is also illegal to distribute false copyright information.

-It is illegal to circumvent encryption or scrambling technologies that protect copyrighted works.

-It is illegal to distribute tools and technologies used to circumvent encryption devices. If you tell others how to fast-forward through the Disney commercials, you have violated the statute.

-Internet service providers are not liable for posting copyrighted material as long as they are unaware that the material is illegal and they remove it promptly after receiving a “takedown” notice that it violates copyright law.

Question 14

International Copyright Treaties

Answer 14

-the Berne Convention for the Protection of Literary and Artistic Works require all 179 member countries to provide automatic copyright protection to any works created in other member countries.

Question 15

Trademarks

Answer 15

-A** trademark **is any combination of words and symbols that a business uses to identify its products or services and distinguish them from others.

Question 16

Types of Marks

Answer 16

There are four different types of marks:

1.Trademarks are affixed to goods.
2.Service marks are used to identify services, not products. McDonald’s (restaurant services), UPS (delivery services)
3. Certification marks are words or symbols used by a person or organization to attest that products and services produced by others meet certain standards.
4. Collective marks are used to identify members of an organization. The Lions Club, the Girl Scouts of America, and the Masons are examples of collective marks.

Question 17

Trademark Registration

Answer 17

• Even if a mark has been used in only one or two states, registration makes it valid nationally.
• Registration notifies the public that a mark is in use because anyone who applies for registration first searches the Public Register to ensure that no one else has rights to the mark.
• Five years after registration, a mark becomes virtually incontestable because most challenges are barred.
• The damages available under the Lanham Act are higher than under common law.
• The holder of a registered trademark generally has the right to use it as an internet domain name.

Question 18

Valid Trademarks

Answer 18

-To be valid, a trademark must be distinctive

1.Fanciful marks and arbitrary marks are immediately protectable as trademarks. Fanciful marks are made-up words such as Exxon or Saucony.
2.Suggestive marks indirectly describe the product’s function, qualities, or characteristics. “Microsoft” suggests software for microcomputers, and “Coppertone” suggests what customers will look like after applying the product
3.Descriptive marks directly describe the product in some way. A calendar named “365-Day Calendar” is one example.

The following categories cannot be trademarked:
* Generic trademarks. No one is permitted to trademark a product or service’s ordinary name—shoe (for a footwear company) or restaurant
* Personal names. The PTO generally will not grant a trademark in a surname unless it has acquired secondary meaning due to an association with a specific business or product.
* Geographical terms. Similarly, geographical names that describe the product’s place of origin, such as Maine lobster or Idaho potatoes, cannot be trademarked because they are generic.
* Deceptive marks. The PTO will not register a mark that is deceptive. It refused to register a trademark with the words “National Collection and Credit Control”
* Similar to an existing mark. To avoid confusion, the PTO will not grant a trademark that is similar to one already in existence on a similar product.

Question 19

Infringement and Dilution

To win a trademark infringement suit, the original trademark owner must show that the alleged infringer’s trademark is likely to confuse customers about who has made the goods or provided the services.

Answer 19

Other infringement remedies include
1.destruction of the infringing material,
2. up to three times actual damages,
3. any profits the infringer earned on the product, and
4. attorney’s fees.

• Trademark dilution occurs in two important ways: blurring and tarnishment. Blurring, or the lessening of a mark’s capacity to identify,
• Tarnishment is an association with unwholesome goods or services

Question 20

International Trademark Treaties

Answer 20

Under the Paris Convention, if someone registers a trademark in one country, then he has a grace period of six months, during which he can file in any other country using the same original filing date. Under the Madrid Agreement, any trademark registered with the international registry is valid in all signatory countries.

Question 21

Trade Secrets

trade secret: A formula, device, process, method, or compilation of information that, when used in business, gives the owner an advantage over competitors.

Answer 21

• 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 i

In determining if information is a trade secret, courts consider:
* How difficult (and expensive) was the information to obtain? Was it readily available from other sources?
* Does the information create an important competitive advantage?
* Did the company make a reasonable effort to protect it?

Anyone who misappropriates a trade secret is liable to the owner for
1.actual damages,
2.unjust enrichment, or
3.a reasonable royalty.

-Economic Espionage Act of 1996, which makes it a criminal offense to steal (or attempt to steal) trade secrets for the benefit of someone other than the owner, including for the benefit of any foreign government.

Question 22

Chapter Conclusion

Answer 22

-Intellectual property takes many different forms.