Exam 4 (final) Flashcards
Rights of ownership in intellectual property
Very important
Intellectual rights
Can be even more importatnt than personal/property rights
Protection of intellectual property rights are in…
US Article 1, Section 8 of the Constitution
Where did the idea of incentivizing creative works protection originate?
Venice, Italy during the Renaissance
Intellectual property makes your idea/creative work like
Real property
Intellectual property protection is primarily an area of
Federal law
Legal concern of intellectual prop. is
Illegal use of the property - called infringement
What is illegal use of intellectual property called
Infringement
Damages on intellectual property
Can be extensive, and can provide that defendant pays succesful plaintiff’s attorney fee
Types of intellectual property to know
Trademarks, service marks, trade dress, patents, copyrights, and trade secrets
You copyright the (blank) , not the (blank)
song, not the invnetion.
Trademarks
TM or R with circle
- Protects distinctive marks about a company from anotehr comapny copying that
- Protects its value
Statutory Protection (part of TM)
federal Trademark Dilution Act
What does Statutory Protection protect
- Distintive marks
- Not all carbonated beverages are coke
- Don’t want people confusing companies
How long does a trademark last
Indefinitely as long as it is continuously used in commerce
- Renewed between 5th and 6th years after being made, adnn every 10 years after that
- If you don’t use it, you might lose it
tradmemark infringement
Can get cease and desist order and ciolates common law or statuoory protections
- Coke, Xerox, and Kleenex all use
To be considered infringement, it must
- Be Used without permission
- Created a likelihood of confusion about the origin of defendatnt’s goods and services
S
Service Marks
Registered like a Tm but distinguishes services rather than products
- Ex. “You’re in good hands” - Allstate. “I’m Lovin’ it” - Mcdonald’s
Duration of Service Marks
Sames as Trademarks
Trade Dress
Image and overall appearance of a product (very broad)
What do Trade Dresses’ protect
- Placement of words
- Colors of Company (sometimes)
- Layout of a restaurant
Trade Dress Duration and protections
Both same as Trademarks
Trade Name
Related to a businesss’s name and good will - protected as trade mark if it is same name as companyn’s product
- Ex. Coca Cola
Trade name’s are protected
under common law like TM’s
TM’s, SM’s, TN’s (Trade Names),
All are protected the same
- TM’s appply to products
- SM’s apply to services
- TN’s apply to a busineess’ name
Trade Secrets
Protection for business processes and informatiion that cannot be patented/copyrighted/trademarked
- Don’t register them as TM’s (because they are secrets)
- Ex. Coke’s formula. google algorithms. Customer lists. WD-40 Spray. Cane’s Sauce.
Way to protect against disclosure of secrets
- Non disclosure agreements
- Confidentiality
Licensing
The key to all intellectual property protections.
- The owners of the property have the right to grant a license to allow otehr people to use their property
Examples of licenses (there are tens of thousands)
- Licensing of songs in movies
- The licensor receives a ROYALTY for teh use of their intellectual property **
- Licensor gratns the permission, licensee receives [ermission to use it for a $ **
Patent
Highly technical**
- attorneys who do this work usually have advanced technical degrees and are certified in specialty of patent law
PROTECTION RESULTS FROM FEDERAL LAW and STATUTES
give inventors exclusive rights to make, use, sell invention for a limited time.
- The first person to file receives it**
THREE REQUIREMENTS IN ORDER TO HAVE POSSIBILITY OF GETTING SOMETHING PATENTED
- Has to be new
- Useful
- Not obvious in use of current technology
patent infringement
Sue for damaegs, royalties, lost profits and damages can be tripled
NOTICE TO THE WORLD THAT AN ARTICLE OR DESIGN IS PATENTED BY USE OF
Patent # or Pat. #
Patents can go on anything
Examples
- Handle on cup handle
- keyless entry to cars
Benefit of owning patent
people pay you royalties to use your thing
Patent duration
20 years (does end)
- Ex. Medicaitons (once they’ve been around for so long, they beceome GENERIC and become much much cheaper)**
Copyrights
More artistic side of creative process, not scientific process.
- protection by federal law
Copyright protected expresssions
Ideas in your head are not protected, the expression of the idea is protected if it’s in some tangible form
- Ex. Statue, painting, theatre play, motion picture, sound recordings, architecture
Public performance of a play
Have to pay the creator of the play because it is a public exppression of their creation
Underlying ideas
Can be copied, not covered by the Copyright
Multiple Choice Test vs. Questions composed
MQ Test - underlying idea, not copyrightable
Questions composed - copyrightable
Benefit of owning copyright
Get paid royalties for other people to use
- Ex. songs in movies, the artists gets paid royalties
Concern with copyright
When copyright ends, it goes into the public domain
Karaoke bars can be sued how much
up to 75k per song for not paying royalties
“FAIR USE” EXCEPTION carved out by statute
fair use is not an infringement of copyright for purposes such as:
criticism, comment, news reporting, teaching, scholarship, and research
“FIRST SALE” EXCEPTION
Buying a book and selling it to a friend for more
“CHURCH MUSIC” EXCEPTION
Church that displays lyrics on the screen have to pay for the lyrics, but playing church music itself does not.
Parody exception
Weird-Al Yankovic
“PUBLIC PERFORMANCE” OF COPYRIGHTED PORPERTY (MUSIC)
Cover badns at bars, the bar has to pay
Duration of copyrights
Life of the author PLUS 70 years after death
Who getes paid all the copyright royalties?
Songwriteers, publishers, and artists
How do they get their royalties?
Performance rights socities/organizations
- ASCAP
- BMI
- SESAC
(1) 1620 (1)
English and Dutch Settlers like their alcohol, especially beer
Escaping religious persecution in Europe, they loved their alc
1776 Independence
1791 (2)
Whiskey Rebellion
Federal forces strike down Rebellion aginst whiskey tax
whiskey rebellion was against teh tax on alc that the gov instated
1800s to Civil War (3)
Intoxicating Beverages More Plentiful and Cheaper than Tea, Safer than Water
First Wave of Temperance Movement
The divisions between people of faith and relionin and others more interested in intoxication rooted this politcal and social movement (temperance movement)
Post Civil War -Early 1900s(4)
Increase of immigrants moving to bigger cities
Temperance Movement peaks
Must stop “demon” alcohol
Growth of Hospitality industry/ Saloons Proliferate
Industrial revolution shoots up, causing tons of europeans to move to the cities and drink on off time
1913-1920 (5)
WW1
Amendment 16-19
beer and ww1 germans
anti immigrantt sentiment is intense
wets vs. drys
Amendement 18 set prohibition to be in effect in 1920
PROHIBITION (6)
1920-1933
Failure of Enforcement
Great Depression
“Roaring 20s”
Invention of “cocktail”
Unintended Consequences
Moonshine, bootleggers, rumrunners
1933 (7)
Repeal of Prohibition
Amendment 21
Repeal of Prohibition
Role of Great Depression
- states now in charge of beverage laws
1933-1970’s (8)
States responsible for their own alcoholic beverage laws/”Dry” counties
Social forces: Vietnam Amendment 26
18 year olds get right to vote
Late 1970’s-1980’s (9)
Traffic fatalities increase
Mothers Against Drunk Driving (MADD)
Irresponsible drinking from 18, 19, 20 year olds
1984 (10)
National Minimum Drinking Age Law
State law minimum now 21 year of age or lose highway funding
- fed gov threatens to take away 10% of a states hgihway fed funds if they don’t enforce this law
“Dram” shop acts
21st century (11)
Amethyst Initiative
Should minimum age be lowered to 18 or kept at 21, or somewhere in between?
- College presidents think the age for drinking should be younger to avoid “binge drinking”
How much did Kate Bush make off of Stranger things
$2.3 million dollars in royalties in a MONTH
Ed Sheeran wins trail over Marvin Gaye
The underlying basic chords are similar but not exact.
- “Basic musical things tobuild off of and have been around forever”
- Win for evryone invloved because even Gaye’s family protected his legacy
Jeapordy 5 facts
- Merv Griffin composed the music and Wheel of Fortune music
- Song is actually called “think”
- Originated as a lullabby for Griffin’s five year old
- Griffin’s made over $100 million from it
- Won best game show theme 2009
Sole Proprietor
- Gets all of the profits but also has unlimited liability beyond what insurance would cover
- Easier to start than any other type of entity, but sometimes if a person operates under another name they must file a Certificate of Assumed Business Name, i.e. “Kanye West d/b/a Ye’s A/C Repair”
- Pays only personal income tax on profits; makes all of the decisions
- Business ends when the owner dies
Franchises
Contractual agreement where owner of trademark, trade name licenses others to use it in selling goods or services
- Franchisor-sells grants the franchise/license
- Franchisee-purchases the franchise rights to conduct business in franchisor’s name
Like Chick Fil A
Distributorship
manufacturer license dealer to sell product in exclusive territory
Examples: Courtesy Cadillac–car dealer; Schilling distributes Anheuser-Busch products
Chain Style Operations
franchise operates under franchisor’s trade name and follows standardized methods of operation; may be obligated to obtain supplies exclusively from the franchisor. Planet Fitness now most lucrative chain style
Examples: McDonald’s, H&R Block, Keller Williams
Manufacturing Arrangement
franchisor transmits to franchisee essential ingredients or formula to make a product, franchisee makes and markets according to franchisor’s standards
Examples: Coca Cola bottlers
Laws Governing Franchises
Laws designed to protect prospective franchisees from dishonest franchisor’s and preventing franchisor from terminating relationship without “just cause”.
FTC Franchise Rule
requires franchisor to disclose material facts to prospective franchisee so they may make an informed decision. Must be in writing. Similar to type of disclosures required by SEC in stock offerings. Very involved.
Franchise Termination
Termination must be “for cause” (breach of franchise agreement for example) and notice must be given.
Lawsuits center on whether there was a wrongful termination by franchisor. Comes down to balancing of rights between both parties. Contractual principle of good faith and fair dealing implied in all franchise contracts.
Walk On’s franchisee guy
got his franchise agreement contract taken away by Walk on’s for posting something innapropriate on Facebook
Two types of partnerships
General and Limited
General Partnerships
- 2 or more people agree to carry on business for profit,
- Taxes the co-owners as their individual income
- All co-pweners share in liability for obligations, losses, damages, and PROFITS
Limited Partnerships (LP)
- one general partner and one or more limited partners
- General partenr is responsible for management of partnership and liability of it
- Limited partner cannot participate in managment of partnership. No liability outside of waht he has contributed/nivested into it
Limited Liability Partnerships (LLP)
- Formed by professionals to limit their liability for negligence
- Pass through entity for tax purposes
- In contrast to general partnership where all partners would be liable for partnerships obligations, LLP allows professionals to avoid personal liability for malpractice of other partners.
Limited Liability Company (LLC)
- Popular form of bus. entity in all 50 states but not uniform
- Combines tax advantages of the partnership with the limited liability of the corporation
- Members own interests in the LLC, participate in management without incurring personal liability
- Members liability is limited to the amount of their investment—not personally liable for debts even if they participate in management
- Profits taxed as personal income to members
Corporations
- Owned by shareholders
- Board of directors elected by shareholders MANAGES business
- Board appoints officers
- Liability of shareholdres limited to their investments
- ## BIG NEGATIVE - DOUBLE TAXATION
Closely held corporation
small amount of shareholders, maybe one or a few. Family owned and does not solicit those outside to purchase shares in corporation. This would describe many incorporated small businesses. No public investment allowed
Publicly held corporation
those who have thousands of people (strangers) invest oi them (i.e. Microsoft, Amazon, etc) Stocks traded on the exchanges and governed by SEC and “insider trading” laws
Quorum
usually requires more than 50% of board of directors to conduct business
Shareholders purchase stock. Who is a shareholder may change, but corporation still exists as long as they are solvent.
yeah
Corporate Profits/Taxation
corpporate profits can be distributed as dividends or can be kept as retained earnings
Corporate Management—Shareholders and officers
- Shareholders own corp. but do not manage unless they are an officer—so this is different than a partnership
- Corporate officers operate in a fiduciary capacity to serve the interests of the S/H
- Proxy given by S/H who cannot attend the annual meeting
Proxy
authorizes another shareholder to vote their shares for them on issues before corporation
IMPORTANCE OF THE CORPORATE RESOLUTION
- Document which empowers a corporation to act in any way
- Purchase real estate, take out a loan, must be by resolution of board of directors
- Especially true for smaller corporation
- Point is the President just can’t go out and do something not authorized to do.
CIRUCMSTANCES WHEN SHAREHOLDER OR LLC MEMBER COULD BE PERSONALLY LIABLE-CALLED “PIERCING THE VEIL”
- Applies to both LLCs and corporations because by their nature they are designed to limit the personal liability of the members/shareholders
Reason to pierce the veil for test—Disregard the corporate entity—comingle funds or assets - LAW THEN ALLOWS A PARTY HARMED BY THE CORPORATION TO PIERCE THE CORPORATE VEIL
Ex: Corporation cannot pay creditor because they have used corporate money for personal things
other circumstance when a member or shareholder may be personally liable for a corporate debt
when they personally guarantee a debt of corporation (mortgage for example).
RIGHTS OF DIRECTORS
- Right to participation—right to participate and be notified
- Right of inspection—corporate books, records, facilities
- Right if indemnification (reimbursement) for legal costs, fees and damages
DUTY OF ALL WHO RUN BUSINESSES—FIDUCIARY DUTY
Owe ethical and legal duty to act in best interest of the business organization
DUTY OF CARE—
- Act in good faith
- Exercise care that a reasonably prudent person would exercise in similar circumstances
- Do what is in best interests of corp.
- If they do not—they can be personally liable for negligence
Duty for Reasonable Decisions and Supervision
- Informed on corporate matters
- Conduct reasonable investigation before deciding on action
- Supervision over work delegated to corporate officers and employees
DUTY OF LOYALTY-
- Faithfulness to one’s obligations
- Directors/Officers subordinate their personal interest to welfare of corporation and do not engage in “self-dealing”
- Examples of violating this
Use corporate funds or confidential info for personal advantage
BUSINESS JUDGMENT RULE
- If this rule were not operative—couldn’t get anyone to serve in these capacities as directors
- Presumed they will act as a fiduciary but they can make decisions that impact the company unfavorably
- UNDER THIS RULE—-CORPORATE DIRECTORS OR OFFICERS WILL NOT BE PERSONALLY LIABLE TO THE CORPORATION OR SHAREHOLDERS FOR HONEST MISTAKES OF JUDGMENT AND BAD BUSINESS DECISIONS THAT RESULT IN ECONOMIC LOSSES TO THE SHAREHOLDERS
- So as long as they conducted themselves properly—shareholder who loses his investment can’t sue director personally
Corporations, LLCs and Partnerships are known as
JURIDICAL PERSONS
- recognized as “persons” under the law, separate and apart from the natural persons that formed them
Amendment XVI
Income tax amendment
- slightly did aaway with the whiskey tax beacuse it was so unpopular and this would replace it a little
Amendment XVII
Two senators per state, ELEECTED, not appointed
Amendment XIX
Granted women the right to vote
Amendement XXI
Repealed the 18th amendment (prohibition)
- gave states the power to rule over alc
Amendment XIII
Abolished Slavery
Amendment XIV
Gave former slaves rights the same as in the bill of rights
Amendment XV
Prohibits the denial of the right to vote based on race or color
Amendment XXIII
Gave Washington DC electoral college votes
Amendment XXIV
Citizens cannot be denied the right to vote in federal elections due to failure to pay a poll tax or other tax.
Amendment XXV
Adresses that the VP take over if presidential disability or death were to occur (JFK rule)
Amendment XXVI
Lowered voting age to 18
Amendment XXVII
any law that changes the salary of members of Congress can only take effect after the next election for the House of Representatives
