© 2008 West Legal Studies in Business A Division of Thomson Learning 1 BUSINESS LAW TODAY Essentials 8 th Ed. Roger LeRoy Miller - Institute for University Studies, Arlington, Texas Gaylord A. Jentz - University of Texas at Austin, Emeritus Chapter 5 Intellectual Property and Internet Law

© 2008 West Legal Studies in Business A Division of Thomson Learning 2 Learning Objectives  What is intellectual property?  Why are trademarks and patents protected by law?  What laws protects authors’ rights in works they produce?  What are trade secrets, and what laws offer protection for this form of intellectual property?  What steps have been taken to protect intellectual property rights in the digital age?

© 2008 West Legal Studies in Business A Division of Thomson Learning 3 Introduction  Intellectual Property (I.P.) is any property that is the product of an individual’s mind, e.g, books, software, movies, music.  U.S. Constitution protects I.P. in Article I Section 8. Congress shall: “promote the Progress of Science and useful Arts, by securing for limited times to Authors and Inventors the exclusive right to their respective Writings and Discoveries.”  Ownership of I.P. is strategically important in the global economy.

© 2008 West Legal Studies in Business A Division of Thomson Learning 4 Trademarks & Related Property  Trademark. Distinctive motto, mark or emblem. Stamped or affixed to a product. So that it can be identified in the market. CASE 5.1 The Coca-Cola Co. v. Koke Co. of America (1920).  Statutory Protection for Trademarks. Federal Lanham Act of Federal Trademark Dilution Act of 1995.

© 2008 West Legal Studies in Business A Division of Thomson Learning 5 Trademarks & Related Property  Trademark Registration. U.S. Patent and Trademark Office gives notice to 3 rd parties. A mark can be registered if in use or mark will be used within 6 months.  Trademark Infringement. Unintentional or intentional substantial copying of mark. Strong marks vs. generic terms. CASE 5.2 Menashe v. V Secret Catalogue, Inc. (2006).

© 2008 West Legal Studies in Business A Division of Thomson Learning 6 Trademarks & Related Property  Service Mark. Similar to trademark but used for services. Includes characters in TV and radio.  Trade Names. Applies to a business (not a product).  Trade Dress. Image and appearance of a product or shop (Example: Starbucks coffee stores).

© 2008 West Legal Studies in Business A Division of Thomson Learning 7 Cyber Marks  Trademarks in Cyberspace.  Domain Names. Trademarks in Cyberspace (example: Nike.com). Conflicts—ICANN.  Anticybersquatting Legislation. Occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name Anticybersquatting Consumer Protection Act.

© 2008 West Legal Studies in Business A Division of Thomson Learning 8 Cyber Marks  Meta Tags Keywords in web pages used by internet search engines. Playboy Enterprises, Inc. v. Welles (2002).  Dilution in the Online World. Trademarks can be diluted on the web. Hasbro v. IEG (over candyland.com).

© 2008 West Legal Studies in Business A Division of Thomson Learning 9 Licensing  Technology and IP licensing is a huge business. Most of the recent wealth created is based on IP licensing. Think Microsoft Windows. Think McDonald’s.

© 2008 West Legal Studies in Business A Division of Thomson Learning 10 Patents  Patent. A Government monopoly that gives inventor the exclusive right to make, use or sell and invention for 20 years.  What is Patentable? State Street Bank & Trust, Co. v. Signature Financial Group, Inc. (1998). Invention. Design. Process (software patent).

© 2008 West Legal Studies in Business A Division of Thomson Learning 11 Patents  Patent Infringement. Manufacture, use or sale of another’s product or design without permission (license).  Remedies for Patent Infringement. Injunction. Damages for royalties. Reimbursement for attorney’s fees and costs.

© 2008 West Legal Studies in Business A Division of Thomson Learning 12 Copyrights  Copyright: Intangible property right granted by federal statute to the author for life plus 70 years. Automatic protection. Work must be original and “fixed in a durable medium.” Ideas are not protected, but the expression of an idea is.

© 2008 West Legal Studies in Business A Division of Thomson Learning 13 Copyrights  Copyright Infringement. Form or expression is copied (does not have to be in its entirety). Penalties, damages and criminal action are possible.  Exception: “Fair Use”. Certain persons or organization can copy materials without penalty (e.g., education, news, research).  Copyright Protection for Software.

© 2008 West Legal Studies in Business A Division of Thomson Learning 14 Copyrights in Digital Information  Digital media can easily be copied.  Copyright Act of 1976: Copy of a program into RAM is infringement. Revision or re-sale of freelance authors works can be infringement.  MP3 and File-Sharing. Napster case. P2P sharing, distributed network. Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd. (2005). CASE 5.3 Sony BMG Music Entertainment v. Villarreal (2007).

© 2008 West Legal Studies in Business A Division of Thomson Learning 15 Trade Secrets  Trade secrets are confidential, not filed with the government.  Can be customer lists, formulas, pricing, etc.  Theft of trade secrets is now a federal crime under the Economic Espionage Act of  Cyberspace: employees can easily information to competitors.

© 2008 West Legal Studies in Business A Division of Thomson Learning 16 International Protection  Berne Convention (1886).  TRIPS Agreement (1994). Each member must include domestic laws protecting intellectual property of other nation- members.  World Intellectual Property Organization. (WIPO) (1996). Provides for Dispute resolution.