Intellectual Property
Love
Fall 2013
Final = ~~75% 80 Multiple Choice
25% 1 Essay, Word Limit ~~ Around 1,000
Overview of Intellectual Property (IP)
– Regimes(制度) & IP Theory:
Why IP exist? ß(Be able to say why!!)
– No need to exist in some area (even though highly innovative and lucrative)
o Examples:
§ Sports;
· First-to-use strategy have high incentives by winning until counter strategy is made
§ Recipes (restaurants);
· No such thing as exact copy of dish
§ Art;
· Comedians have their own method of enforcing copycats – Too much copying can kill career
§ Fashion;
· Copying is important way of changing trend (theory on premise that all trends are based on copy), or else, no one will buy new clothes.
– Public Benefit
§ Invention/creation disclosure is “public good”
(theory that these ideas helps the public)
· Non-rivalrous ß
o Ex. Light house
§ Numerous people can use it at same time w/o interference w/ one another
o Ex. National defense
§ Everyone inside border gets this defense benefit
· Non-excludable
o You can’t exclude people from the benefit of this type of good (Can’t wipe people’s memory)
– Theories
o A. Natural Rights Perspective (Europe)
§ To ownership of your creation
· John Locke real property analogy
o “Fruits of your labor”
o “Sweat of the brow”
· **Cumulative Invention/ Creation
o Invention is highly cumulative
o Building on what already exist
· **Independent Invention/creation
o Many people reach invention right around same time
§ Bell (fought Edison, Grey), Morse (fought 4 people) – both got patent, one on telephone, one on telegraph, had to get up to supreme court, both won legal fight.
o B. Utilitarian/Economic (Incentive) Perspective (US)
Promoting Innovation and Creativity by IP
§ Justification
· IP “Quid-pro-Quo (This-for-That)” Theory
o Quid = “Receive Limited exclusivity”
§ If you are sole source…
· Can set competitive prices
o To re-coupe upfront cost to invent/create
o Quo to society = “invention that otherwise wouldn’t exist for use”
§ People would not have invented w/o IP
§ But eventually ideas will become free to public use (after “Quo” expired)
· Balance Requirement for overall success
o 1. Too little IP (no incentive)
§ à too little invention
o 2. Too much IP (Cumulative invention becomes impossible) –
§ à Backlash : too little invention
· why? Because encourages pioneer inventor but excludes cumulative inventors from invention.
§ Possible Problem
· Free-rider – Lots of users using it (benefiting) without paying for it
· Non-excludable/Arrow’s Paradox – Don’t know if people want it until they see it
§ Requirement
· Integrity of the Market Place is required for entities to compete
§ Alternative
· **Government Funding
o But then, only government can choose what gets funding….
· Awards – (recognition and prize)
· Marketing lead time
Overview
– Trade Secret
o Law:
§ 100% state law
§ Uniform Trade Secret Act (Most state, incl. CA + 45 other states) ß Use this for class test purpose
o Subject Matter:
§ Virtually anything 1. Secret + 2. Valuable
· Secret = “not necessary ‘fully secret’ ”
o Requirement:
§ No need to apply, no registration, but MUST BE SECRET
§ MUST take reasonable precaution to keep the information secret
o Duration:
§ Possibly indefinite. As long as secret
§ How about “precaution part”
· And also, if precaution was gone, but then reinstated again, without secret being out in public, is it still lost?
o I see circumstance where D is bring sued for TS theft or something, and you defend that under the record, the TS was public on website. However, there was no access to that data and counter to the website was 0 when it was public. No one saw it, but was online. Is that enough????
o Damage by;
§ TS misappropriation – Copying w/ intent
o Defenses:
§ Reverse engineering
§ Independently Created Idea
– Patent
o Law:
§ 100% federal(no state) law (35 U.S.C.)
· WTO requireme
/ Tarnishment (Enjoy Cocaine, instead of enjoy coke) ß apply to famous trademarks only
o Defenses:
§ Abandonment by owner – Stopped using it
§ Fair Use (2 kinds)
Trade Secrets
o
– Trade Secret
o Law:
§ Common law tort (1939àRST 1st of Torts)
§ RST (2d) à (1979 Uniform Trade Secrets Act)
o Theory: (Why we should have it)
§ Concept in single word
· Illegal to steal valuable secrets
· To solve Arrow’s Paradox
o Can’t sell Idea, w/o telling them what the idea is.
§ Less need to spend on security and reduce inefficient employment practice. (Reasonable precaution is ok, no need for unreasonable level)
§ Less inefficient Employment practice (like hiring family member to protect secret)
· Hire based on loyalty, not on skill.
· We don’t need to do that anymore because TS allows you to sue now.
– Comparisons
o TS vs Patent
§ Much Cheaper – Patent has USPTO fee, Lawyer fee, maintenance fee = $25k
§ 43% of small company suits are trade secret, not patent. (too expensive for small company)
§ Can be TS until Patent is issued or published.
§ TS = faster, immediate, no need to wait, cheaper
· Lasts longer – as long as secret, not reverse engineered, or independently created.
§ Broader applicable subject matter
· Includes list of customers, while things patentable is small
o TS v. Contract
§ K remedy only, as opposed to you can get more in TS
§ Remedies – you can never get injunction in K
o Profit disgorgement in TS
– Exam Approach – Finding Prima Facia
o 1st, determine the existence of TS status, then
o 2nd see whether you have claim of infringement
