Intellectual Property

“One of the greatest pains to human nature is the pain of a new idea.” Walter Bagehot, English economist and journalist

 Intellectual property has little economic value unless others use it  It is nonexclusive ◦ Many don’t see is a problem using it for free  Role is to balance the rights of those: ◦ Who create intellectual property ◦ Who would enjoy it

 A grant by the government permitting the inventor exclusive use of an invention for a specific period  Types: ◦ Utility patents ◦ Design patents ◦ Plant patents

 Available to those who invent or significantly improve a: ◦ Mechanical invention ◦ Electrical invention ◦ Chemical invention ◦ Process ◦ Machine ◦ Composition of matter

 A patent is not available solely for an idea, but only for its tangible application ◦ Business method patents – Involve a particular way of doing business that often includes data processing and mathematical calculations ◦ Patents on living organisms

 Protects the appearance, not the function of an item ◦ Last 14 years from the date of issuance  Not 20 years from the fate of filing

 Anyone who creates a new type of plant can patent it ◦ Provided the inventor is able to reproduce it asexually—through grafting

 To receive a patent, the new invention must be: ◦ Novel ◦ Nonobvious ◦ Useful

 Priority between two inventors ◦ The person who invents and puts the invention into practice has 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  Provisional patent application: ◦ A shorter, simpler filing permitted to inventors by the Patent and Trademark Office (PTO)

 Duration of the patent  Patents are valid for 20 years from the date of filing the application  Design patents are valid for 14 years from the date of issuance  Infringement  A patent holder has exclusive rights to use the invention during the terms of the patent  Patent troll:  Someone who buys a portfolio of patents for the purpose of making patent infringement claims

 The Paris Convention for the Protection of Industrial Property (Paris Convention) ◦ Requires each member country to grant to citizens of other member countries the same rights under patent law as its own citizens enjoy  The Patent Law Treaty ◦ Requires that countries use the same standards for the form and content of patent applications  Patent Cooperation Treaty ◦ A step toward providing more coordinated patent review across many countries

 Patent Prosecution Highway ◦ Under which the United States PTO has bilateral agreements with 16 other patent offices  Any country that joins the World Trade Organization must agree to TRIPS (trade- related aspects of intellectual property rights)

 The holder of a copyright owns the particular tangible expression of an idea, but not the underlying idea or method of operation  The Copyright Act protects: ◦ Literature, music, drama, choreography, pictures, sculpture, movies, recordings, architectural works, computer databases, and computer programs

 A work is automatically copyrighted once it is in tangible form ◦ Registration with the Copyright Office of the Library of Congress is necessary only if the holder brings suit to enforce the copyright ◦ Authors routinely place the copyright symbol (©) on their works  Such a precaution is not necessary in the United States

 Currently, copyrights are valid until 70 years after the death of the work’s only or last living author  In the case of works owned by a corporation, the copyright lasts: ◦ 95 years from publication or ◦ 120 years from creation, whichever is shorter

 To prove a violation, the plaintiff must present evidence that the work was original and that either: ◦ The infringer actually copied the work, or ◦ That the infringer had access to the original and the two works are substantially similar  A court may: ◦ Prohibit the infringer from further violations ◦ Order destruction of the infringing material, and ◦ Require the infringer to pay damages, profits earned, and attorney’s fees

First Sale Doctrine Permits a person who owns a lawfully made copy of a copyrighted work to sell or otherwise dispose of the copy

 Permits limited use of copyrighted material without permission of the author for purposes such as criticism, comment, news reporting, scholarship, or research  Parody – A fair use of copyrighted material so long as the use of original is not excessive

 Modern technology is very easy to copy ◦ A major challenge for legal institutions in regulating copyrights  The No Electronic Theft Act: Intended to deter the downloading of copyrighted material  The Family Entertainment and Copyright Act: It is a criminal offence to use a camcorder to film a movie in a theater ◦ Establishes criminal penalties for willful copyright infringement

 Digital Millennium Copyright Act provides that: ◦ It is illegal to delete copyright information ◦ It is illegal to circumvent encryption or scrambling devices that protect copyrighted works ◦ It is illegal to distribute tools and technologies used to circumvent encryption devices ◦ Online service providers are not liable for posting copyrighted material so long as they are unaware that the material is illegal  They should remove it promptly after receiving notice that it violates copyright law

 The Berne Convention: ◦ Requires member countries to provide automatic copyright protection to any works created in another member country

 Any combination of words and symbols that a business uses to distinguish products or services and distinguish them from others  Types of marks ◦ Trademarks: Affixed to goods in interstate commerce ◦ Service marks: Identifies services, not products ◦ Certification marks: Words or symbols used to attest that products meet certain standards ◦ Collective marks: Used to identify members of an organization

 First person to use a mark in trade owns it  Registration with federal government is not necessary ◦ Owner of the mark may register it on the Lanham Act Principal Register

 Advantages: ◦ Makes trademark protection valid nationally ◦ Notifies public of its use ◦ Five years after use, a mark incontestable because most challenges are barred ◦ Damages available under the Lanham Act are higher than under common law ◦ Generally gives first right to use the trademark as an Internet domain name

 To be valid, a trademark must be distinctive  Categories: ◦ Fanciful marks: Made-up words such as Kodak ◦ Arbitrary marks: Use existing words that do not describe the product ◦ Suggestive marks: Indirectly describe the product’s function ◦ Trade dress: The image and overall appearance of a business or product

 To be valid, a trademark cannot be: ◦ Similar to an existing mark ◦ A generic trademark ◦ A descriptive mark ◦ A person’s name alone ◦ Deceptive ◦ Scandalous or immoral

 To win a infringement suit, the trademark owner must show that: ◦ Defendant’s trademark is likely to deceive customers about who made the product or provided the service  The rightful owner is entitled to: ◦ An injunction prohibiting further violations ◦ Destruction of the infringing material ◦ Up to three times actual damages ◦ Any profits the infringer earned on the product ◦ Attorney’s fees

 Prevents others from using a trademark in a way that: ◦ Dilutes its value  Even though consumers are not confused about the origin of the product ◦ Tarnishes it by association with unwholesome goods or services

 Difficult to find a distinctive name for a new business  Cybersquatting ◦ Anticybersquatting Consumer Protection Act (ACPA): Permits both trademark owners and famous people to sue anyone who registers their name as a domain name in “bad faith”  ICANN ◦ Internet Corporation for Assigned Names and Numbers - A private, nonprofit, international organization that handles management of the Internet, including the allocation of names

 Theft of domain name – Accused can convicted under the Computer Fraud and Abuse Act  Trademarking a domain name – The PTO will issue such a trademark only for services offered via the Internet

 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  The Trademark Law Treaty ◦ Simplifies and harmonizes the process of applying for trademarks around the world

 A formula, device, process, method, or compilation of information that gives the owner an advantage over competitors  To determine if information is a trade secret, courts consider: ◦ How difficult was the information to obtain?  Was it readily available from other sources? ◦ Does the information create an important economic advantage? ◦ Does the company make a reasonable effort to protect it?

 Anyone who misappropriates a trade secret is liable to its owner for: ◦ Actual damages ◦ Unjust enrichment ◦ A reasonable royalty  The Economic Espionage Act of 1996 ◦ Makes it a criminal offence 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

“For many individuals and companies, intellectual property is the most valuable asset they will ever own. As its economic value increases, so does the need to understand the rules of intellectual property law.”