P A R T P A R T Crimes & Torts Crimes Intentional Torts Negligence & Strict Liability Intellectual Property & Unfair Competition 2 McGraw-Hill/Irwin Business Law, 13/e © 2007 The McGraw-Hill Companies, Inc. All rights reserved.

Intellectual Property & Unfair Competition PA E TR HC 8 “I dream for a living.” Steven Spielberg, quoted in Time magazine, July 1985

Learning Objectives  Infringement of intellectual property rights  Misappropriation of trade secrets  Unfair competition - intentional torts  Unfair competition – the Lanham Act 8 - 4

 PATENT:  Engine design, business methods  TRADEMARK  Logo, trade name  COPYRIGHT  Sales materials, artwork Types of Intellectual Property Marketing materials for Case Construction Equipment 8 - 5

 Intangible right granted by statute to the author or creator of certain tangible literary or artistic productions  Can’t copyright an “idea”  Registration not required, but recommended  Applicable law: Copyright Protection Act and the Copyright Term Extension Act  Copyright 8 - 6

 Grant from federal government to an inventor in which inventor obtains exclusive right to make, use, and sell his invention for a period of 20 years (14 years for designs)  U.S. Patent Act requires registration  Patent 8 - 7

 Protection for:  Process, a machine, a manufacture or product, a composition of matter ( such as a new chemical compound), an improvement of any of the above, an ornamental design for a product, a plant produced by asexual reproduction, certain business methods  Invention may not be patentable if it lacks novelty, is obvious, or has no utility Patent 8 - 8

 Distinctive mark, motto, device, or emblem that a manufacturer or service provider stamps, prints, or affixes to products it produces or services it performs to distinguish from those of competitors  Applicable law: Lanham ActLanham Act  Registration with state or federal government recommended, but not required Trademark 8 - 9

Trademark  “Trademark” applicable to trade name, image, logo, and dress  Trademark dilution is the diminishment of the capacity of plaintiff's marks to identify and distinguish plaintiff's goods or services

 Trade secret: any secret formula, pattern, process, program, device, method, technique, or database used in the owner’s business that gives the owner competitive advantage  Misappropriation of a trade secret occurs when a person discloses or uses after acquiring the secret Trade Secrets

Infringement  Violation of intellectual property right: when someone uses, makes, or sells another’s trademarked, patented, or copyrighted intellectual property without owner’s permission, license, franchise  Penalties -- actual or statutory damages in civil proceedings or criminal penalties for willful violations

The “Fair Use” Defense  For copyright and trademark infringement, a “fair use” defense or exception exists when the copyrighted work or trademark is used without the property holder’s permission  “For purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research” Section 107 of the Copyright Act

 International intellectual property law is governed by multilateral agreements  Paris Convention  Madrid Agreement Concerning the International Registration of Trademarks  Madrid ProtocolWorld Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights  See World Intellectual Property OrganizationWorld Intellectual Property Organization International Law

 Intentional torts involving business include :  Injurious falsehood (product disparagement): publication of false statements disparaging another’s business, property, or title to property, that harms economic interests  Intentional interference with contractual relations: one party to a contract claims the defendant’s interference with other party’s performance wrongly caused plaintiff to lose the benefit of the performance Commercial Torts

 Intentional interference with prospective advantage parallels the elements for interference with contractual relations, except prospective relations are the focus rather than existing contracts  Section 43(a) of the Lanham Act creates civil liability for unfair competition, including misleading, confusing, or deceptive representations made in connection with goods or services Commercial Torts

Test Your Knowledge  True=A, False = B  You may copyright an idea  Copyright protection requires registration with the U.S. Copyright Office  The U.S. Patent Act requires registration of a patent to obtain protection for the intellectual property  The Lanham Act protects trademarks

Test Your Knowledge  True=A, False = B  Trademark dilution refers to the overuse of a trademark on products or services  An employee who creates a new software program has made a work-for-hire  The “fair use” defense is an absolute defense to an infringement claim

Test Your Knowledge  Multiple Choice  A trademark refers to:  (a) trade name  (b) trade image  (c) trade logo  (d) trade dress  (e) all of the above  Trademark dilution on the internet is prohibited by:  (a) Anticybersquatting Consumer Protection Act  (b) Patent & Trademark Act  (c) Berne Convention

Thought Question  Music is intellectual property. What do you think about people who download music illegally? Have they committed theft?