Chapter 41

Intellectual Property

 

Objectives:

1. What trade secrets protect and how infringed

2. Trade symbols

3. Protection of trade names

4. Copyright protection and remedies

5. Patent protection and remedies

 

I. Trade Secrets

          A. Commercially valuable information, guarded from disclosure, not generally known  (ex. Coke formula)

          B. Misappropriation

                   1. Knowingly acquire info through improper means

                   2. Disclosing without consent, if knowledge came with duty of confidentiality

                   3. Common situations: Employee wrongfully discloses, or competitor wrongfully obtains

          C. Civil Remedies (damages and injunctions)

          Ed Nowogroski Insurance, Inc. v. Rucker, 971 P.2d 936 (Wash. 1999)

          Facts: Insurance agents leave company.  They take client list with them, and work for another agency.  Some took written lists, one guy memorized information.

          Issue: Is this a theft of trade secrets?

          Holding: Yes, even the memorized information.

          Reasoning: Have to balance need for competition against need to protect company’s work.  To be protected secret, must be (1) independent economic value; and (2) reasonable efforts to keep secret.  Also, information must not be readily ascertainable.  Client lists meet these tests.  Split of authority on whether the information must be written.  However, statute and logic behind rule favors protecting information, no matter what the form.

          D. Criminal Penalties

                   1. Economic Espionage Act of 1996 (broad protection of secrets from theft)

                  

 

II. Trade Symbols

          A. Lanham Act protects identifying marks to prevent selling fakes of real goods (or putting your own label on someone else’s product)

          B. Types of Trade Symbols

                   1. Trademark (distinctive identifying mark, on goods)

                   2. Service mark (distinctive mark identifying person giving service)

                   3. Certification mark (shows approval by organization, like Good Housekeeping or UL)

                   4. Collective mark (shows producer belongs to a group, like a union)

          C. Registration

                   1. Trade symbol must be registered with federal government

                   2. Requirements

                             a. Inherently distinctive

                             b. or Secondary meaning

          Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000)

          Facts: Samara makes distinctive line of seersucker outfits for kids, with distinctive hearts, flowers, fruits and the like.  Wal-Mart hired one of its suppliers to make copies, with small changes.  Samara threatened to sue, Wal-Mart and its supplier did not stop, so Samara sued.  Lower court awarded $1.6m to Samara.

          Issue: Is the design of the clothing inherently distinctive, or must Samara prove that the look of its clothes has taken on a secondary meaning.

          Holding: Clothing design is not inherently distinctive.  However, Samara can still win if the look of their clothes has taken on a secondary meaning.

          Reasoning:  Statute allows protection of trademark if plaintiff proves its product is either inherently distinctive or it has taken on a secondary meaning.  Goal is to avoid consumer confusion.  Arbitrary word marks like Camel cigarettes or Kodak film are inherently distinctive.  Some products take on meaning, so that the design indicates the maker.

 

                   3. Generic description (not subject to trademark)

                   Note, risk of losing protection, such as linoleum, aspirin, thermos, cellophane, escalator

                   4. Good for ten years, may be renewed without limit

                   5. Must also be used or lost

          D. Infringement

                   1. Look for intent to cause confusion

                   2. Dilution is the tendency to lower the value of the brand name, by putting it on a non-competing product

                   3. Trademark Cyberpiracy Prevention Act of 1999

                   Protects trade names

          E. Remedies

                   1. Injunctions

                   2. Accounting for profits

                   3. Damages

                   4. Destruction of infringing articles

                   5. Attorney fees

                   6. Court costs

          F. Note difficulty of protecting names, Managerial Insight, p. 871

 

III. Trade Names (name that identifies a business)

 

IV. Copyrights

          A. Protects creative works, like books, writings, music, computer programs, films, art, etc.

          B. Berne Convention, international treaty protecting copyrights

          C. Procedure (can register, but not necessary) (put © and date on work)

          D. Rights (exclusive use, exclusive right to grant permission)

                   Exceptions, compulsory license (government forces license under certain circumstances, like Canada and orphaned works) and fair use (education, parody, etc.)

          E. Ownership

                   1. Usually author, unless a work for hire (newspaper owns articles its reporters write)

                   2. Work for hire goes 95 years, or 120 years from creation, whichever expires first

                   3. Copyright lasts author’s life plus 70 years

          New York Times Company, Inc. v. Tasini, 533 U.S. 483 (2001)

          Facts: Newspapers and magazines buy articles from free lancers.  Agreement is to publish in a particular issue, with right to publish in reissues or republications of same body of work.  Publishers want to put articles on internet, with each article posted separately.

          Issue:  May publishers do this?

          Holding: No. Articles were contributed to a collective work, and that does not include separate posting on internet.

          Reasoning: Publisher owns copyright to extent article is part of a collective work.  Collective work includes original paper or magazine, revised versions of the same work, or any later collective work in the same series. However, republication by itself, however, does is not the same collective work. Papers need to get permission for internet posting.

          Note, it looks like this came up because internet was not anticipated.  Now, original contract would cover this point.

          F. Infringement and Remedies

          1. Someone uses rights reserved to the copyright owner

          2. Injunction, destruction of articles, damages, costs and attorney fees, criminal penalties available

 

V. Patents

          A. Protection of inventions

          B. Utility patent, new and useful process, machine, etc. (20 years)

          Note, laws of nature, fundamental truths, etc., not subject to patent

          C. Plant patent (patent on new plant variety) (20 years)

          D. Design patent (new, original ornamental design) (14 years)

          E. Requirements

                   1. Novelty   

                   2. Utility (distinctiveness with plants, ornamentality with design)

                   3. Nonobviousness

          F. Procedure

                   1. Apply to patent office

                   2. Patent office reviews, decides whether patent is appropriate

          G. Infringement

                   1. Make, use or sell patented invention without permission

                   2. Remedies (injunction, damages, treble damages, attorney fees and court costs)