Fundamentals of Business Law Summarized Cases, 8 th Ed., and Excerpted Cases, 2 nd Ed. ROGER LeROY MILLER Institute for University Studies Arlington, Texas GAYLORD A. JENTZ Herbert D. Kelleher Emeritus Professor in Business Law University of Texas at Austin

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage 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?

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 3Introduction 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.

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 4 Trademarks and 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 of Trademarks. –Federal Lanham Act of –Federal Trademark Dilution Act of 1995.

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 5 Trademarks and 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.

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 6 Trademarks and Related Property Distinctiveness of Mark: reduce likelihood of confusion. –Strong Marks: Xerox, Kodak, Dairy Queen. –Secondary Meaning. –Generic Terms. What happens when a trademark becomes “common” like aspirin or escalator?

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 7 Trademarks and Related Property Trade Dress. –Image and appearance of a product or shop (Example: Starbucks coffee stores). Counterfeit Goods. –Stop Counterfeiting in Manufactured Goods Act (2006). Trade Names. –Applies to a business (not a product).

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 8 Cyber Marks Meta Tags –Keywords in web pages used by internet search engines. Dilution in the Online World. –Trademarks can be diluted on the web. –Hasbro v. IEG (over candyland.com). Licensing. –Permits use of trademark, copyright, or other IP.

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 9Patents Patent. –A Government monopoly that gives inventor the exclusive right to make, use or sell and invention for 20 years. What is Patentable? –Invention. –Design. –Process (software patent). –CASE 5.2 KSR International Co. v. Teleflex, Inc. (Supreme Court, 2007).

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 10Patents Patent Infringement. –Manufacture, use or sale of another’s product or design without permission (license). Remedies for Infringement. –Patent holder may sue for relief in federal court. –Can also seek injunction and damages for royalties, attorney’s fees. –If willful infringement, court may award treble damages.

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 11Copyrights 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.

Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 12Copyrights 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). –CASE 5.3 Leadsinger, Inc. v. BMG Music Publishing (9 th Circuit 2008).