Bài giảng Business Law - Chapter 8: Intellectual Property and Unfair Competition

Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin2CrimesIntentional TortsNegligence and Strict LiabilityIntellectual Property and Unfair CompetitionCrimes and TortsPARTIntellectual Property and Unfair CompetitionPAETRHC8I dream for a living. Steven Spielberg quoted in Time magazine July 1985Learning ObjectivesDifferentiate the various intellectual property rights: patent, copyright, and trademarkDescribe infringement and defensesExplain misappropriation theory and the importance of trade secretsIdentify the elements a plaintiff must prove in unfair competition claimsPATENT:Engine design, business methodsTRADEMARKLogo, trade nameCOPYRIGHTSales materials, artworkTypes of Intellectual Property Marketing materials for Case Construction EquipmentGrant 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 PatentA patent will not be issued if more than one year before patent application the invention was patented elsewhere, described in a printed publication, or in public use or on sale in the United StatesExample: Pfaff v. Wells Electronics, Inc.Inventor sold patented item on April 8, 1981Inventor applied for patent on April 19, 1982More than one year passed, thus the patent was invalidPatentProtection for: a process, a machine, a product or manufacture, 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 Even though an invention fits one of the categories, it is not patentable if it lacks novelty, is obvious, or has no utilityPatentInfringement occurs when defendant makes, uses, or sells patented invention without patentee’s authorizationRemedy: monetary damages Global-Tech Appliances, Inc. v. SEB S.A.Infringement established by literal infringement or doctrine of equivalentsWhether alleged infringer’s subject matter performs substantially same function as protected invention in substantially same way for same resultPatent InfringementIntangible right granted by statute to the author or creator of certain tangible literary or artistic productionsCan’t copyright an “idea”Applicable law: Copyright Protection Act and Copyright Term Extension ActCopyrightVisit the U.S. Copyright OfficeProtection automatic; registration not required, though recommended Works created after 1/78 are given protection for life of author + 70 yearsProtection for a work-for-hire (corporation owns copyright) is 95 years from first publication or 120 years from creation, whichever comes firstCopyrightWork-for-Hire A work-for-hire exists when an employee, in the course of her regular employment duties, creates a copyrightable work; or an individual or corporation and an independent contractor (nonemployee) enter into a written “hire” agreement under which the non-employee creates a copyrightable work for the individual or corporation InfringementViolation 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 Proof of InfringementInfringement generally requires proof that: defendant had access to protected work;defendant engaged in enough copying (deliberately or subconsciously) that resemblance between allegedly infringing work and protected work could not be coincidental; andsubstantial similarity exists between the worksThe “Fair Use” DefenseA fair use defense or exception exists when a copyrighted work or trademark is used without the property holder’s permission, but the use was:“For purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research” Section 107 of the Copyright ActA court weighs several factors in a fair use determination: purpose and character of the use, nature of the copyrighted work, amount and substantiality of portion used in relation to copyrighted work as a whole,effect of use on the potential markets for the copyrighted work or on its valueThe “Fair Use” DefenseDistinctive 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 products or services from those of competitorsApplicable law: Lanham ActRegistration with government recommended, but not requiredTrademark“Trademark” applicable to: Trade name (e.g., McDonald’s, Nike)Trade image (e.g., Ronald McDonald)Trade logo (golden arches, swoosh)Trade dress (orange & red of McDonald’s)Trademark dilution is the diminishment of the capacity of plaintiff's marks to identify and distinguish plaintiff's goods or servicesTrademarkTrade secret: any secret formula, pattern, process, program, device, method, technique, or database used in the owner’s business that offers competitive advantageA firm must take reasonable measures to maintain secrecy Trade SecretsMisappropriation of a trade secret occurs when a person discloses or uses after acquiring the secret:By improper means (theft, trespass, etc.)Through another party who is known or should have been known to have obtained the secret by improper means,By breaching a duty of confidentialitySee Coleman v. Retina Consultants, P.C.Misappropriation Commercial torts are intentional torts that involve business or commercial competitionInjurious falsehood (product disparagement) involves publishing false statements that disparage another’s business, property, or title to property, harming economic interestsCommercial Torts Intentional interference with contractual relations occurs when one party to a contract claims that the defendant’s interference with the other party’s performance of the contract wrongly caused the plaintiff to lose the benefit of that performanceCommercial Torts See the Lewis-Gale Medical Center caseIntentional interference with prospective advantage parallels elements for interference with contractual relations, but prospective relations are focus (not 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 servicesCommercial Torts Thought QuestionsMusic is intellectual property. What do you think about people who download music illegally? Have they committed theft? If you create a new product at your workplace, is it yours?