Chapter 42 "Intellectual Property"

A patent is a grant by the government permitting the inventor exclusive use of an invention for 20 years from the date of filing (or 14 years from the date of issuance in the case of design patents). During this period, no one may make, use, or sell the invention without permission. In return, the inventor publicly discloses information about the invention that anyone can use upon expiration of the patent.

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Anyone who uses copyrighted material without permission is violating the Copyright Act. To prove a violation, the plaintiff must present evidence that the work was original and that either: • The infringer actually copied the work, or • The infringer had access to the original and the two works are substantially similar. A court may (1) prohibit the infringer from committing further violations, (2) order destruction of the infringing material, and (3) require the infringer to pay damages, profits earned, and attorney's fees.

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However, in 2011 Congress passed the America Invents Act (AIA). Under this statute, anyone who has been charged with infringement of certain financial service business method patents has the right (from 2012 to 2020) to challenge the validity of that patent

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In 1980, the Supreme Court ruled that living organisms could be patented.3 That case involved genetically engineered bacteria that was used to treat oil spills. The bacteria could be patented because it was different from anything found in nature and was also useful.

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In recent years, so-called "businessmethod patents" have been controversial. These patents involve a particularway of doing business that often includes data processing or mathematical calculations. Business method patents have been particularly common in e-commerce.

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The United States PTO has bilateral agreements with 16 other patent offices under a so-called Patent Prosecution Highway. Under this system, once a patent is approved by one country, it goes to the head of the line for patent examination in the other country. In addition to these treaties, any country that joins the World Trade Organization (WTO) must agree to trade-related aspects of intellectual property rights (TRIPS). This agreement does not create an international patent system, but it does require all participants to meet minimum standards for the protection of intellectual property. How individual countries achieve that goal is left to them. Finally, the European Union is in the process of developing a single European patent that would require only one application.

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There are three types of patents: utility patents, design patents, and plant patents.

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Under the Paris Convention, if someone registers a trademark in one country, then he has a grace period of six months, during which he can file in any other country using the same original filing date. Under the Madrid Agreement, any trademark registered with the international registry is valid in all signatory countries. (The United States is a signatory.) The Trademark Law Treaty simplifies and harmonizes the process of applying for trademarks around the world.

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first sale doctrine, you have the legal right to sell that CD. The first sale doctrine permits a person who owns a lawfully made copy of a copyrighted work to sell or otherwise dispose of the copy.

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oday, a copyright is valid until 70 years after the death of the work's only or last living author, or, in the case of works owned by a corporation, the copyright lasts 95 years from publication or 120 years from creation, whichever is shorter. Once a copyright expires, anyone may use the material.

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Trade secret

A formula, device, process, method or compilation of information that, when use din business, gives the owner an advantage over competitors

However, the AIA now permits the PTO to charge lower fees to individuals or small entities. In addition, the PTO permits inventors to make a simpler, shorter filing called a provisional patent application (PPA). This application provides a provable date of filing. Once filed, the application sits dormant for a year, giving the inventors an opportunity to show their ideas to potential investors without incurring the full expense of a patent application. PPA protection lasts only one year. To maintain protection after that time, the inventor must file a nonprovisional patent application.

A patent holder has the exclusive right to use the invention during the termof the patent. A holder can prohibit others from using any product that is substantially the same, license the product to others for a fee, and recover damages from anyone who uses the product without permission.

But in 2013, the AIA changes the law so that the first person to file a patent application has priority. Because inventors will now be applying earlier than they have done in the past, this statute makes it easier for them to amend their applications.

An inventor must apply for a patent within one year of selling the product commercially.

Trademark

Any combination of words and symbols that a business uses to identify its products or services and distinguish them from others

A design patent protects the appearance, not the function, of an item. It is granted to anyone who invents a new, original, and ornamental design for an article.

Anyone who creates a new type of plant can patent it, provided that the inventor is able to reproduce it asexually—through grafting, for instance, rather than by planting its seeds. For example, one company patented its unique heather plant.

Before Congress passed the Federal Trademark Dilution Act of 1995 (FTDA), a trademark owner could win an infringement lawsuit only by proving that consumers would be deceived about who had really made the product. This statute prevents others from using a trademark in a way that (1) dilutes its value, even though consumers are not confused about the origin of the product; or (2) tarnishes it by association with unwholesome goods or services.

Congress then passed the Anticybersquatting Consumer Protection Act (ACPA), which permits both trademark owners and famous people to sue anyone who registers their name as a domain name in "bad faith." The rightful owner of a trademark is entitled to damages of up to $100,000.

parody is a fair use of copyrighted material so long as the use of the original is not excessive.12 The parody may copy enough to remind the audience of the original work, but not so much that the parody harms the market for the original.

Government and industry are striking back. The Prioritizing Resources and Organization for Intellectual Property Act (Pro-IP) permits law enforcement officials to confiscate any equipment used to steal copyrighted material. In addition, the Recording Industry Association of America (RIAA) developed a strategy of aggressively suing those who download music illegally.

To win an infringement suit, the trademark owner must show that the defendant's trademark is likely to deceive customers about who has made the goods or provided the services

In the event of infringement, the rightful owner is entitled to (1) an injunction prohibiting further violations, (2) destruction of the infringing material, (3) up to three times actual damages, (4) any profits the infringer earned on the product, and (5) attorney's fees.

A trade secret is a formula, device, process, method, or compilation of information that, when used in business, gives the owner an advantage over competitors who do not know it. In determining if information is a trade secret, courts consider: • How difficult (and expensive) was the information to obtain? Was it readily available from other sources? • Does the information create an important competitive advantage? • Did the company make a reasonable effort to protect it? It has been estimated that the theft of trade secrets costs U.S. businesses $100 billion a year. In response, most states have now adopted the Uniform Trade Secrets Act (UTSA). Anyone who misappropriates a trade secret is liable to the owner for (1) actual damages, (2) unjust enrichment, or (3) a reasonable royalty. If the misappropriation was willful or malicious, the court may award attorney's fees and double damages.

Only civil penalties are available under the Uniform Trade Secrets Act. To safeguard national security and maintain the nation's industrial and economic edge, Congress passed the Economic Espionage Act of 1996, which makes it a criminal offense to steal (or attempt to steal) trade secrets for the benefit of someone other than the owner, including for the benefit of any foreign government

PTO

Patent and Trademark Office

Fair use doctrine

Permits limited use of copyrighted material without permission of the author for purposes such as criticism, comment, news reporting, scholarship or research

Under common law, the first person to use a mark in trade owns it. Registration with the federal government is not necessary. However, under the federal Lanham Act, the owner of a mark may register it on the Lanham Act Principal Register.

Registration has several advantages: • Even if a mark has been used in only one or two states, registration makes it valid nationally. • Registration notifies the public that a mark is in use because anyone who applies for registration first searches the Public Register to ensure that no one else has rights to the mark. • Five years after registration, a mark becomes virtually incontestable because most challenges are barred. • The damages available under the Lanham Act are higher than under common law. • The holder of a registered trademark generally has the right to use it as an Internet domain name.

The Copyright Act protects literature, music, drama, choreography, pictures, sculpture, movies, recordings, architectural works, and computer databases, and computer programs "to the extent that they incorporate authorship in the programmer's expression of original ideas, as distinguished from the ideas themselves

Registration with the Copyright Office of the Library of Congress is necessary only if the holder wishes to bring suit to enforce the copyright. Although authors still routinely place the copyright symbol (©) on their works, such a precaution is not necessary in the United States. However, some lawyers still recommend using the copyright symbol because other countries recognize it. Also, the penalties for intentional copyright infringement are heavier than for unintentional violations, and the presence of a copyright notice is evidence that the infringer's actions were intentional.

Patent troll

Someone who buys a portfolio of patents for the purpose of making patent infringement claims.

Digital Millennium Copyright Act (DMCA), which provides that: • It is illegal to delete copyright information, such as the name of the author or the title of the article. • It is illegal to circumvent encryption or scrambling devices that protect copyrighted works It is illegal to distribute tools and technologies used to circumvent encryption devices Online service providers (OSPs) are not liable for posting copyrighted material so long as they are unaware that the material is illegal and they remove it promptly after receiving notice that it violates copyright law. This type of provision is called a safe harbor.

The Berne Convention requires member countries to provide automatic copyright protection to any works created in another member country. The protection does not expire until 50 years after the death of the author.16 The WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty add computer programs, movies, and music to the list of copyrightable materials.

These treaties were drafted by the World Intellectual Property Organization (WIPO) of the United Nations. The Paris Convention for the Protection of Industrial Property (Paris Convention) requires each member country to grant to citizens of other member countries the same rights under patent law as its own citizens enjoy.

The Patent Law Treaty requires that countries use the same standards for the form and content of patent applications (whether submitted on paper or electronically). This treaty reduces the procedural conflicts over issues such as translations and fees. The Patent Cooperation Treaty (PCT) is a step toward providing more coordinated patent review across many countries. Inventors who pay a fee and file a socalled PCT patent application are granted patent protection in the 143 PCT countries for up to 30 months

To be valid, a trademark must be distinctive—that is, the mark must clearly distinguish one product from another. There are five basic categories of distinctive marks: • Fanciful marks are made-up words - Arbitrary marks use existing words that do not describe the product - Suggestive marks indirectly describe the product's function. "Greyhound" implies that the bus line is swift, a - Marks with secondary meaning cannot, by themselves, be trademarked unless they have been used for so long that they are now associated with the product in the public's mind. - Trade dress is the image and overall appearance of a business or product. It may include size, shape, color, or texture.

The following categories cannot be trademarked: • Similar to an existing mark. To avoid confusion, the PTO will not grant a trademark that is similar to one already in existence on a similar product. Once the PTO had granted a trademark for "Pledge" furniture polish, it refused to trademark "Promise" for the same product. - Generic trademarks. No one is permitted to trademark an item's ordinary name— "shoe" or "book," for example - Descriptive marks. Words cannot be trademarked if they simply describe the product— such as "low-fat," "green," or "crunchy." Descriptive words can, however, be trademarked if they do not describe that particular product because they then become distinctive rather than descriptive. - Names. The PTO generally will not grant a trademark in a surname because other people are already using it and have the right to continue. No one could register "Jefferson" as a trademark - Deceptive marks. The PTO will not register a mark that is deceptive. I - Scandalous or immoral trademarks

Internet Corporation for Assigned Names and Numbers (ICANN). Disputes over domain names can be decided by arbitration under ICANN's Uniform Domain Name Dispute Resolution Policy (UDRP) rather than by litigation under the ACPA.

To bring a UDRP case, the complainant (i.e., the plaintiff) must allege that: • The domain name creates confusion because it is similar to a registered trademark. • The respondent (i.e., the defendant) has no legitimate reason to use the domain name. • The respondent registered the domain name in bad faith. If the respondent is a competitor of the complainant and has acquired the domain name to disrupt the complainant's business (à la Princeton Review), that is evidence of bad faith. So is an attempt by the respondent to sell the name to the complainant.

To receive a patent, an invention must be: • Novel. An invention is not patentable if it (1) is known or has already been used in this country, (2) has been described in a publication here or overseas, or (3) is otherwise available to the public. - Nonobvious. An invention is not patentable if it is obvious to a person with ordinary skill in that particular area. An inventor wasnot allowed to patent a waterflush system designed to remove cow manure from the floor of a barn because it was obvious.6 • Useful. To be patented, an invention must be useful. It need not necessarily be commercially valuable, but it must have some current use. Being merely of scientific interest is not enough.

To obtain a patent, the inventor must file a complex application with the PTO. If a patent examiner determines that the application meets all legal requirements, the PTO will issue the patent. If an examiner denies a patent application for any reason, the inventor can appeal that decision to the Patent Trial and Appeal Board in the PTO and from there to the Court of Appeals for the Federal Circuit in Washington.8 Under the AIA, third parties have the right to submit so-called "prior art"—that is, evidence that the invention is not novel. Even after a patent has been granted, third parties have limited rights to challenge its validity.

Theft of domain name. In this crowded world, few people are the first to do anything. David Goncalves achieved this distinction in an unfortunate way—he became the first person in the United States to be convicted of stealing a domain nam

Trademarking a domain name. Our discussion thus far has been about registering a trademark as a domain name. Sometimes businesses want to do the opposite—trademark a domain name. The PTO will issue such a trademark only for services offered via the Internet. Thus, it trademarked "eBay" for "on-line trading services in which seller posts items to be auctioned and bidding is done electronically."

Enacted in 1997, the No Electronic Theft Act is intended to deter the downloading of copyrighted material. It provides for criminal penalties for the reproduction or distribution of copyrighted material that has a retail value greater than $1,000, even if the offender has no profit motive.

Under the Family Entertainment and Copyright Act, it is a criminal offense to use a camcorder to film a movie in the theater. This statute also establishes criminal penalties for willful copyright infringement that involves distributing software, music, or film on a computer network.

The holder of a copyright owns the particular tangible expression of an idea, but not the underlying idea or method of operation.

Unlike patents, the ideas underlying copyrighted material need not be novel.

A patent is not available solely for an idea, but only for its tangible application.

Utility patent: Mechanical, Electrical, Chemical inventions, process, machine, composition of matter

Patent

a grant by the government permitting the inventor exclusive use of an invention for a specified period of time

4 types:

• Trademarks are affixed to goods in interstate commerce. • Service marks are used to identify services, not products. Fitness First, Burger King, and Weight Watchers are service marks. In this chapter, the terms "trademark" and "mark" are used to refer to both trademarks and service marks. • Certification marks are words or symbols used by a person or organization to attest that products and services produced by others meet certain standards. The Good Housekeeping Seal of Approval means that the Good Housekeeping organization has determined that a product meets its standards. • Collective marks are used to identify members of an organization. The Lions Club, the Girl Scouts of America, and the Masons are examples of collective marks.