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Intellectual Property
St. Johns University School of Law
Sheff, Jeremy N.

Intangible property (ideas, music, inventions) is subject to the system of intellectual property
*The holder of the property right gets to decide the rights others have w/ respect to the property
>RT for IP rights
-Moral Arguments “Natural Law” – it is fair
 >Locke- property is mixing your labor w/ nature, making it your own. Have a natural right to use your body
     and to the fruits of you body’s labor. 
      -Assumes that labor will not result in depletion of resources (monopoly)
      -Limitation- others may have rights to the same thing, the same rights must be left for others
      -Exclusive rights to ideas (patents) would not leave as much good left for others
        >some1 else may come up w/ idea independently-so limit on time
     -labor can add value to society, and the value should be rewarded
-Personhood Arguments -Radin, Hegel
   >The whole purpose of being a person is having control of physical environment
       -Ppl feel that object becomes part of them- giving rights is derived from this relationship
         >some objects are more personal than others- so levels of protection vary
            -Problem- if you can sell it, not really attached
-Economic Argument Jefferson- Difference b/n qualities of ideas and things
     >Cant exclude others from entertaining idea like can from physical things
        >Once idea is expressed it is in everyone’s head
     -But encouragement is needed b/c more ideas is a good thing
        >market mechanism that moves property to highest and best use   
        >No one will produce books/inventions if everyone else can copy it & sell it cheaper
        >But can sometimes lead to inventor charging very high prices
      -Strikes a balance b/n incentive to innovate and dissemination of ideas for the public good
        >limits on exclusivity/time of rights allows creators to recoup initial investment so there is still incentive
Art 1 sec 8                                                                                  
-Gov has power to promote science & useful arts, by securing for a limited times to authors and inventors
 exclusive rights to writings and discoveries (no relation to trademark)
-To regulate commerce w/ foreign nations and b/n several states (relates to trademark)
Alternatives to property rights existing alongside IP system (selection bias in all these systems)
-Pay people to innovate out of public trusts, government grants, prizes
 >may be to controlled and restricted in subject matter by gov & organizations
-Open-source movement- free information for all & Educational institutions
Trade Secret
Elements of TS Claim *Protectable Subject Matter; *Efforts to Maintain Secret; *Misappropriation by
 Improper Means/by Breach of Confidential Relationship
>Overlap b/n property, tort & K law (No agency that issues ‘trade secrets’ but laws exist)
 -Has to be relatively secret, No time limit on trade secrets (but once it is disclosed, protection is lost)
 -Not based on economic bargain that TMs and patents are based on
>TS protect research & development costs- On incremental innovations &/ those not worth enough to get Pat
Protectable Subject Matter
Rest 1st of Torts- A TS may consist of any formula, pattern, device, compilation of info which is used in 1s biz & which gives him an opportunity to obtain an advantage over competitors who dont know/use it
    -Prevents unfair competition, discourages misappropriation
Uniform Trade Secrets Act sec 1(4)- TS means info, including a formula, pattern, compilation, program, device, method, technique, or process, that derives independent value, actual or potential, from not being generally known to & not being readily ascertainable by proper means by others who can obtain economic value from its disclosure or use, & is the subject of reasonable efforts to maintain its secrecy
Rest 3d of Unfair Competition Sec 39- TS is any info that can be used in the operation of a biz or other enterprise & that is sufficiently valuable & secret to afford an actual/potential economic advantage over others
Metallurgical Industries v Fourtek P modified product it bought from bankrupt company-its employee was told modifications were TS but Kd to build them-(Had duty not to disclose).
-Trade secret holder may divulge secret to a limited extent w/o destroying its requisite secrecy
    *Ask- was the holder trying to further his economic interest w/ the disclosure?
     -May be relevant P made reasonable effort to keep info a secret
     -May be relevant that D made effort in getting info (egregious conduct?)
     -May be relevant info was of value- Because of secret P had competitive advantage
     -May be relevant that there were developmental costs
Rest of Torts sec 757 (factors used to infer value/secrecy)
1. Extent to which info is known outside of p’s business- Substantial not perfect secrecy
2. Extent to which it is known by employees & others involved in p’s business
    -Reasonable precautions to limit info it employees
3. Extent of measures taken by P to guard secrecy of info- reas amount based on their cost
4. Value of the information to p and p’s competitors- Competitive advantage
5. Amount of effort/money expended by P developing info- Signal of value to the business
6. Ease/difficulty w/ which info could be properly acquired/duplicated by others
     -Reverse engineering does not destroy ts status, can be owned be jointly held
     -Strict novelty is not required for TS’s, could have been used by some, just not openly
Rockwell Graphic Systems v DEV
Two former employees went to competitors with printing press drawing from employer.
P has to show that his efforts to maintain the knowledge a secret were reasonable
-Which is largely a question of fact & circs- balancing of value vs. costs
*Protective measures costly, so not all possible precautions req’d, but enough to keep info from public domain
 -Physical access controls-locks, technological limits, limited # of employees, privacy K’s
>Theoretical Issues
 -To deter theft & efforts to steal; -To Encourage inventive efforts by preventing that theft
 -Instead of focusing on expenditures on preventing theft can focus on innovation
>Evidentiary issues
 -Efforts to maintain sec suggest P subjectively believes info valuable; -Shows D obtained it by imprpr means
>Remedial issues
 -Prevents P from getting award & claiming private property rights on public property/knowledge
 -Encourages others to exploit public knowledge
Electro-Craft v Controlled Motion Alt approach is treating efforts to keep sec as element that has to be proven
BUT Rest 3d of Unfair Competition goes back to view secrecy is evidence
“If value & secrecy of info are clear, evidence of specific precautions may be unnecessary”
Misappropriation
Improper Means
Du pont v Rolf – Special precautions to keep expensive research TS.  D took & sold aerial pics
-The law of the jungle should not be the standard of morality expected in commercial relations
-Tolerance of espionage should cease when the protection required to prevent another’s spying costs so much
 that the spirit of inventiveness is dampened
>To obtain knowledge of process is wrongful, unless holder voluntarily disclosed it or didn’t take  
 reasonable precautions to keep its secrecy
 -Economic incentive concept- Companies may not want to built if they not protected, may lack $ to protect &
   Arms race issue- efforts on fencing in ideas are inherently wasteful- can actually raise prices
 -Morality concept- ties into the economic concept, what would happen if “all is fair”?
Breach of Confidence (easiest way is through K)
Smith v Dravo
Came up w/ design, wanted to sell it to D, D copied it but changed some things
>Confidential relationship may be implied w/o any express promise of trust
No agreement made, but relationship arose as result of conduct, P expected info will be used only for limited purpose & that D understood P’s expectations *Evidentiary factor- D started to make

of appeals
>Any1 can file for patent reexamination; if fear infringement suit can get declaratory judgment
Subject Matter
35 USC sec 101“whoever invents/discovers any new & useful process, machine, manufacture or composition of matter, or any new & useful improvement thereof, may obtain a patent”
 -Process patents- patent can be given over new manner of using known process/product; & -Product patents
>Patents not given to physical phenomena/laws of nature/abstract ideas
 -RT- person hasnt created them & theyre building blocks of invention, But Ps can be given to their applicatns
Diamond v Chakraberty (Living things)
Compositions of matter- chemical/mechanical mixing of 2/more substances-gas, solid, fluid.
Manufacture- production of articles by giving materials new forms, qualities, properties
Oil absorbing bacteria was engineered but cannot occur in nature
Claims on organism; inoculum bacteria w/ object and sending on water; & engineering bacteria
>Congress’ patent laws did not include/exclude living things- law should specify
>Ct drew line bn discovery of naturally occurring living organism & Invention of non-natural living organism
 -Will not put an end to genetic research (need to balance competing interests and values)
>Dissent- Plant Patent Act excludes bacteria
*Mixing bacteria that perform same natural function is nonpatentable discovery of nature’s handiwork
Parke-Davis   (Parts of living things)
Not claiming chemical compound, but concentration & purity of hormone derived by process.
>After certain amount of refinement & isolation matter ceases to be phys phenomena & becomes manufactd m
>Discovery of a property isnt patentable, but invention of a new property/use is patentable
-May be hard to tell when purification exception ends and product of nature begin
-Commercial & therapeutic new use was main factor in decision
   >Price society pays to have patent system is the possibility that a rare & important cure will get patent
        -If product occurs in nature, can give patent to process by which product is extracted
-Genetically engineered life, isolated purified genetic codes, & stem cells are patentable
Moral argument against patenting life?- Other elements may prevent patentability (utility)
Utility
Brenner v Manson “A patent is not a hunting license” (outliner decision)
PTO denied chemical process- compounds not beneficial, but useful in aiding cancer research
CCPA- As long as product not detrimental to society, process by which its made is patentable
 >Not the right standard, the process or product also cannot be insignificant or frivolous
 >Problem- if grant patent, patentee may 1 day have claim to another’s work who discovers product’s
    usefulness- would inhibit other researchers from finding a utility
 >A monopoly is granted for a finished thing w/ substantial utility
 Dissent- not granting patents on such processes would hamper innovation
PTO 66 Fed Reg 1092- Utility must be specific credible &  substantial- (mouse as snake food insubstantial)
   >Req not met if invention has purely aesthetic or descriptive qualities
Novelty 
Does identical invention exist? Invention must be new as of the date of invention