Varadarajan, Intro to IP, Spring 2012
UNDERLYING THEORIES OF IP
-Utilitarian/economic incentives
· incentives to invent/create
o primary rationale for ip law
o Constitution Article I Section 8
§ “The Congress shall have power…
ú to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries…
o Maser v. Stein
§ Focus on public, not to reward for the creators’ labor but to make sure that have proper incentives to engage in the creation/labor
o ADEQUATE INCENTIVES TO CREATE
o Recognition/award/prestige
o Altruism/benefit to humanity
o Government funding
§ This requires government selection (ex. identify certain areas that need to be funded and need inventive efforts)
§ A number of inventions where the government couldn’t have recognized a need that would have funded (ex facebook) [biases of government decision makers]
o Getting there first
§ Ex. fashion (there are certain benefits of being first)
§ There may be other business advantages (like the first mover advantage) that can provide sufficient enough incentive to create
o Imitation costs are really high
· reduce consumer search costs (trademark)
-Non-utilitarian
· natural rights/reward to labor (Locke)
o “Every man has a “property” in his own “person” The “labour” of his body and the “work” of his hands, wa may say, are properly his” [locke]
· personhood (Radin)
o certain things so wrapped up in our identity that mere economic compensation wouldn’t make up for the loss of it
-Social Costs of IP and potential alternatives
· Less competition, higher prices
· Deter improvement
· Suppression of technology
– The “tort” structure of IP Doctrines
· (1) requirements for the ip rights (in torts = is there a duty?)
· (2) infringement of the ip owner’s rights (in torts = is there a breach of a duty?)
· (3) defense (in torts = is there a justification for what I’ve done)
· (4) remedies
OVERVIEW OF IP DOCTRINES
Trade Secret
· creature of state statute
· protects companies from the misappropriation of certain kinds of confidential business information (ex. scientific formulas, customer lists, marketing strategies)
· protects from competitors, departing employees, etc.
Patent
· creature of federal statute (but federal courts play important role in the interpretation of the statute and telling us what each of those requirements are all about)
· inventor has to submit a patent application demonstrating that the invention meets certain requirements
· term up to 20 years
Copyright
· like patent law, largely creature of federal statute
· covers forms of artistic and literary expression (books, movies, songs, computer programs)
· gives the owner the exclusive rights to copy (etc.)
· doesn’t require any formal registration process
· longer period
Trademark
· largely federal statute
· covers company names, symbols, logos that identify the source of the goods
· don’t have to register their mark (although doing so carries some benefits with it)
TRADE SECRETS
Trade Secrets Overview
· Elements of a Trade Secret Claim =
o Protectable Subject Matter
§ Very broad subject matter (includes technical and business info); must have value; must be “secret” (not generally known/readily ascertainable)
o Reasonable Efforts to Maintain Secrecy
§ Context-dependent – eg restricted access, legend, confidential Ks, password protections, other forms of notice to employees
o Misappropriation
§ By “improper means”
§ By breach of confidential relationship
ú Express in contract or implied by circumstances
ú Problem of employee mobility and right to earn a livelihood
§ Defenses
ú Proper means à eg reverse engineering, independent creation
-Definition of Trade Secret
· A trade secret is “information including a formula, pattern, compilation, program, device, method, technique or process that (1) derives actual or potential economic value from the fact that it is not known or readily ascertainable by others; and (2) is subject to reasonable efforts to maintain its secrecy.”
-Theories of Trade Secret Protection
· Incentives to create
· Incentive to disclose/share info
· Commerci
s behind whether info is protectable subject matter:
§ Is the information or idea secret?
§ Does the information or idea have competitive value?
§ These 2 issues are the focus of 6 factor balancing test to determine if info is protectable subject matter [Restatement of Torts § 757]:
ú (1) How widely is the idea/information know outside business?
· It isn’t necessary that no outsiders know the information
· Information must be substantially secret
ú (2) Who within Who within π’s company knows the idea/information?
· Info may be disclosed to select employees and others within company, but should be done on need-to-know basis
ú (3) What measures has π taken to ensure the secrecy of the idea/information?
· SEE BELOW
ú (4) How difficult would it be for others properly to acquire or duplicate the idea or information?
· If the info/idea could be easily learned through reverse engineering, then it’s probably not protectable as a trade secret
· Public disclosure automatically ends the protection for the info:
o Patenting the invention or secret
o Publication in academic/trade journal or on the Internet
o Selling a commercial product that embodies the secret, or if disclosure takes place freely (without requiring confidentiality) during the manufacture or development of the product.
o Public disclosure by someone other than the inventor. For example, if a second inventor comes up with the same invention and publishes it, she defeats not only her right to trade secret protection, but that of the first inventor as well.
o Inadvertent Disclosure, either by accident or carelessness even with reasonable secrecy efforts in place
o Government required disclosure to serve some other social purpose
§ list of food ingredients or pesticide
