Intellectual Property Outline
Professor Varadarajan
Fall 2012
I. Introduction
A. Theoretical foundations of IP
i. Non-excludability – excludability of tangible things is much easier to achieve than excludability of ideas.
ii. Non rivalrousness- ideas do not have the characteristic of excludability. If an idea is shared, both people can possess it. Everyone can use an idea without diminishing its value.
B. IP Doctrines
i. Utilitarian/ Incentive Theory
1. The principal objective of much of intellectual property law is the promotion of new and improved works, whether technological or expressive.
a. Trademark and related bodies of unfair competition law focus primarily on ensuring the integrity of the marketplace.
2. The Constitution expressly conditions the grant of power in the patent and copyright clause on a particular end, namely “to promote the progress of science and useful arts.”
3. Supreme court ruled in Mazer v. Stein, to grant Congress the patent and copyright power is the best way to advance public welfare.
C. Incentives to create
i. IP
ii. Business advantages
1. 1st mover advantages
iii. Prestige/Fame/reputation
1. Non economic reasons
iv. Prizes
v. Government Funding
1. The government could be useful for funding some creations but not all because the government can’t foresee certain desires.
D. Costs of IP
i. Increased prices/ monopoly concerns
ii. Suppression of technology
iii. Discourages improvement and cumulative innovation
E. The goal is to find an optimal balance between the social costs of limiting diffusion of knowledge and the social benefits of providing economic incentives to create.
F. Utilitarian justification for trademark
i. Lower consumer search costs and preserve the integrity of the marketplace. Makes inventors more inclined to make the initial investment in research and development.
ii. Trademarks give producers incentives to produce goods of high, consistent quality.
iii. The first consideration is to enrich the public at large.
G. Non Utilitarian Justifications for IP
i. Natural rights/ reward for labor
1. John Locke
2. You have a natural right to the fruit of your labor and to exclude people from the fruits of your labor
3. In the natural rights framework, the creator is entitled to all the benefits attained.
a. Utilitarian views only secondarily care about this; the focus is more on society as a whole.
ii. Personhood
1. There are certain things that are so tied up in your identity that their loss would be detrimental to the person
a. Therefore people should have the right to exclude people from their property
iii. Utilitarian view is the dominant view in the US
1. Outside of US, other theories are more prominent
H. Trade Secrets
i. Trade secret laws are state law doctrines that protect against the misappropriation of certain confidential information. Doesn’t have any formal application process.
I. Patent
i. Offers the possibility of a limited period of exclusive rights to encourage research and development aimed at discovering new processes, machines, and composition of matter, and improvements thereof.
ii. 5 requirements
1. Patentable subject matter
2. Usefulness
3. Novelty
4. Non obviousness
5. Disclosure sufficient to enable others skilled in the art to make and use the invention.
iii. The inventor obtains exclusive rights to make, use and sell the innovation for a term of up to 20 years.
J. Copyright
i. Are easier to secure and last substantially longer than patents, although the scope of protection afforded copyrights is narrower and less absolute.
ii. A work must exhibit a modicum of originality and be fixed in a tangible medium of expression to receive protection.
iii. A copyright lasts for the life of the author plus 70 years or a total of 95 years in the case of entity authors. Doesn’t require any formal application process.
iv. Ownership of a valid copyright protects a copyright holder from unauthorized copying, public performance, and display, and it entitles the holder to make derivative works and to control sale and distribution of the work.
v. Others may make fair use of the material in certain circumstances.
K. Trademarks
i. The federal power to regulate trademarks derives from the commerce clause of the Constitution.
ii. The Lanham Act protects words, symbols, and other attributes that serve to identify the nature and source of goods or services. Trademarks do not expire on any particular date but continue in form until their owner abandons them or become unprotectable.
iii. Benefits: prima facie evidence of validity, constructive notice to others of the claim of ownership, federal subject matter jurisdiction, incontestability after 5 years, which confers exclusive right to use the mark, authorization to seek treble damages and attorney fees and the right to bar importation of goods bearing the infringing.
iv. Infringements turn on whether consumers are likely to be confused to the origin of the goods or services.
L. Approach to IP doctrine is similar to tort structure
i. Requirements for the IP right – Is there a duty?
ii. Infringement of the IP owners rights – is there a breach of duty?
iii. Defenses – is there a justification for what I’ve done?
iv. Remedies
II. Trade Secret Protection
A. Theories of Trade Secret Protection
i. Incentive to create
ii. Incentive to disclose/share info
iii. Commercial morality
B. Elements of a trade secret claim
i. Protectable subject matter (value, secret)
ii. Reasonable secrecy efforts
iii. Misappropriation (did the (D) do something wrong)
C. A trade secret is any information that has an economic value and as long as it is secret, and not generally ascertainable. Trade secrets protects business information like customer lists.
D. Uniform Trade Secrets Act –§1 Def. (4) Trade secret means information, inc
eral v. Digital Computer Controls Inc.)
K. Acts that destroy the secret:
i. Publication in academic/trade journal, Internet. When it’s on the Internet for a short period of time with a limited audience that might not be enough for public disclosure.
ii. Publication in patent. Patent law requires public disclosure of an invention and sufficient specificity to enable one of ordinary skill to make it. An inventor must elect either patent or trade secret protection.
iii. Selling commercial product that embodies the secret – “self disclosing” invention like a wheel or a paper clip. The question is whether the secret is apparent from the product itself.
iv. Trade secret can be disclosed by someone other then the trade secret owner. Once it’s disclosed the status of the trade secret is terminated. May be publicly disclosed through publication or the sale of a product by someone other than the trade secret owner.
v. If someone reverse engineers your trade secret, and they disclose it, you can’t sue them because law allows reverse engineering.
vi. May be disclosed inadvertently. Ex. by being left on a train or elsewhere in public view. Case law dictates that a truly accidently disclosure should not defeat trade secret protection if reasonably precautions have been taken.
vii. In theory there is not a set term of protection but it’s a pretty fragile right because public disclosure by you or anyone else can destroy it.
L. Misappropriation of Trade Secrets
i. Acquisition of a trade secret is illegal only in two situations
1. Where it is done through improper means, or
2. Where it involves a breach of confidence.
3. Before a material change in position, use or disclosure of secrets that you knew were disclosed by accident.
ii. Improper Means –
1. E.I. DuPont deNemours &Co v. Christopher – There were improper means used in this case, in general they are means, which fall below generally accepted standards of commercial morality. You have to properly obtain something from a market place. (P) could not have foreseen that (D) would rent a plane and spy on them. Most improper means are individually actionable, because they contain things like trespassing. There is no catalog of improper means, its meaning is expansive. “Means, which fall below the generally accepted standards of commercial morality”. “Commercial privacy must be protected from espionage which could not have been reasonably anticipated or prevented.”
