1. 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

2. 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?

3. 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.

4. 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. Statutory Protection of Trademarks. –Federal Lanham Act of 1946. This is where this week’s DB question comes from. –Federal Trademark Dilution Act of 1995. Think: Kleenex.

5. 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 www.uspto.gov gives notice to 3 rd parties. www.uspto.gov –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.

6. 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: Kodak, Dairy Queen. –Secondary Meaning. –Generic Terms. What happens when a trademark becomes “common” like aspirin or escalator?

7. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 7 Trademarks and Related Property Service Mark. –Similar to trademark but used for services. –Includes characters in TV and radio. Certification Mark. –Used to certify accuracy of owner’s goods or services. “Good Housekeeping”. Collective Mark. –Certification used by members of an organization.

8. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 8 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).

9. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 9 Cyber Marks Domain Names. –Trademarks in Cyberspace (example: Nike.com). Anticybersquatting Legislation. –Cyber squatting occurs when 3d party registers a domain name that is the same or similar to another company’s own trade name. –1999 Anticybersquatting Consumer Protection Act.

10. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 10 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. Licensing. –Permits use of trademark, copyright, or other IP.

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

12. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 12Patents 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.

13. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 13Copyrights 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.

14. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 14Copyrights 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, parody).

15. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 15 Copyright Protection for Software. –Computer Software Copyright Act (1980). Copyrights in Digital Information. –Copyrights is the most important IP on the internet; internet requires the data/work be “copied” across the web to view/listen. –Copyright Act of 1976: Copy of a program into RAM is infringement. –Revision or re-sale of freelance authors works can be infringement. Digital Copyrights

16. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 16 Further Developments in Copyright Law No Electronic Theft Act of 1997: penalties for making copies for personal use (modifies fair use doctrine). Digital Millennium Copyright Act updates copyright law with World Intellectual Property Organization treaty.

17. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 17 MP3 and File Sharing MP3 and File-Sharing Technology. –Napster case. –P2P sharing, distributed network. Evolution of File Sharing. –New software decentralizes storage making it difficulty to apply traditional doctrines of copyright infringement. Grokster decision. SOPA—dead but more to come?

18. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 18 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 1996. Cyberspace: employees can easily email information to competitors.

19. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 19 International Protection for Intellectual Property 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. Madrigal Protocol. –Single application to secure international trademark protection.

20. 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

21. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 21 Learning Objectives What two elements must exist before a person can be convicted of a crime? Can a corporation commit crimes? What are five broad categories of crimes? What is white-collar crime? What defenses might be raised by criminal defendants to avoid liability for criminal acts? What constitutional protections exist to protect a person accused of crimes? What are the basic steps in the criminal process? What is a cyber crime? What laws apply to crimes committed in cyberspace?

22. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 22 Civil Law vs. Criminal Law Key Differences

23. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 23 Civil Liability for Criminal Acts

24. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 24 Criminal Liability To be convicted of a crime, the State must show beyond a reasonable doubt that the Defendant: –Performed an illegal act (actus reus) AND –While performing the act, had the required intent or specific state of mind (mens rea). Without the required intent there can be no conviction.

25. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 25 Corporate Criminal Liability A corporation is a legal “person.” A corporation can be fined or denied legal privileges (license) for criminal activity. “Responsible Corporate Officer” Doctrine: officers and directors can be criminally liable.

26. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 26 Types of Crimes Violent Crimes. –Crimes against persons (murder, rape). –Robbery is a violent crime. Property Crimes - Most common, involves money or property: –Burglary. –Larceny. –Receiving Stolen Goods. –Arson. –Forgery.

27. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 27 Types of Crimes White Collar Crimes: non-violent crimes involving a business transaction: –Embezzlement. –Bribery. –Bankruptcy Fraud. –Theft of Trade Secrets. –Insider Trading. –Mail and Wire Fraud.

28. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 28 Organized Crime Organized crime generally provides illegal services and goods. –Gambling, prostitution, illegal narcotics, and loan sharking, counterfeiting and credit card scams. –Money laundering. RICO.

29. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 29 Classification of Crimes A person’s wrongful act may hold him liable (or guilty) in civil actions (tort) and criminal actions. Classification of Crimes: –Felony: serious crimes punished by death or imprisonment for at least 1 year. –Misdemeanor: punished by fine or confinement for less than 1 year.

30. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 30 Types of Crimes

31. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 31 Immunity.Consent. Statute of Limitations. Mistake. Entrapment.Insanity. Justifiable Use of Force. Intoxication. Duress.Infancy (juvenile). Defenses to Criminal Liability

32. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 32 Fourth Amendment Protections. –Search Warrants: Officer must have Probable Cause. Exceptions to Warrant. –Search and Seizure in Businesses. Warrant required in some cases. No warrant required for contaminated food or highly regulated liquor or gun businesses. Constitutional Safeguards

33. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 33 Constitutional Safeguards Fifth Amendment. –Due Process of Law. Opportunity to Object. Hearing before a neutral Magistrate. –Double Jeopardy. Person cannot be retried for the same offense in the same court. Civil action, however, is permitted. –Self-Incrimination. “Right to Remain Silent” or not testify against yourself

34. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 34 Constitutional Safeguards Sixth and Eighth Amendments. –Right to Speedy Trial. –Right to Jury Trial. –Right to Public Trial. –Right to Confront Witnesses. –Right to Counsel. –Prohibition on cruel and unusual punishment.

35. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 35 Exclusionary and Miranda Rules Evidence obtained in violation of constitutional procedures must be excluded. Evidence derived from illegal evidence is “fruit of the poisonous tree.” –Deters police from misconduct. Miranda Rule. –Inform suspect of his rights. Exceptions: coercion, illegally obtained evidence.

36. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 36 Criminal Process Arrest Initial Appear Booking Charges Filed Prelim Hearing Plea Bargain Trial Guilty Plea Arraign- ment

37. Copyright © 2010 South-Western Legal Studies in Business, a part of South-Western Cengage Learning. 37 Cyber Crime Cyber crimes involve the use of computers in cyberspace to injure a person or property. Most cyber crimes are based on existing common law crimes, with exceptions: –Financial Crimes & Identity Theft. –Cyber Stalking –Cyber bullying –Hacking & Cyber Terrorism. Computer Fraud and Abuse Act helps prosecute computer crime. –Jeremy Jaynes: First Conviction for Felony Spamming.