Intellectual Property – 1
Types of Intellectual Property
§ Trade Secret – valuable to company attempted to be kept secret
o Claim – misappropriation of trade secret
§ Patentable SM
§ Enable others to make and use the invention
o Federal Authority
o Rights to exclude others from making, producing, etc…
o Federal Authority
o Copyright act – specific expression of written artistic things
§ Computer code
§ Architectural design
o Key Elements
§ Fixation – idea it can’t some random act – has to be fixed by film, choreography notes, etc.
o Rights granted under copyright – right to reproduce, prepare derivative works, right to distribute copies, right to perform publicly, or display publicly.
o Biggest Restriction – fair use exception – I’m using this copyrighted material for a reason we’ve decided should be allowed (educational purposes, critique of a politician’s speech – right to critique even though it’s copyrighted.
o Source-identifying – tells consumer where the thing is coming from?
o Goodwill in name of McDonalds – you see that name, you have an association of where that food comes from.
o Two ways to infringe a trademark
§ Likelihood of confusion – look at your product and not know where it came from. Consumer confusion
§ Delusion –
· Tarnishment – image is being tarnished
o Still developing
o Key test – consumer associates a feature with the source manufacturer
o Ex: way things are packaged so you associate it with one company. Like pizza hut buildings all looking exactly the same.
Three Philosophical Theories
§ Natural rights under Locke
o Can’t take more than your share
o Take as long as enough in good nature left for everyone else
o If you put effort forth, you should be able to reap the rewards of that effort.
§ Personhood – Hagle
o We as people are in part defined by how we interact w/ out environment and how it interacts with us.
o Idea that some things so entwined with who we are that affect our personhood and the loss of that would be irreplaceable.
§ Utilitarian Economic (really the theory for IP)
o Idea that we want to incentivise people to create – have to put forth resource, effort, time, etc. to create the new thing.
o Incentivise by giving some form of protection
§ Limit scope by duration, claims you can have, types of steps you have to take to protect it – balancing incentivising and protecting rights.
§ Uniform Trade Secret Act – adopted by most states
§ State by state determination
§ Two criteria
o Derives independent economic value
o Subject of efforts that are reasonable under the circumstances to maintain its secrecy
A. Subject Matter
Defining Trade Secrets
Metallurgical Industries Inc. v. Fourtek (Defining Trade Secrets)
§ Facts: Metallurgical was in business of reclaiming carbide, but wanted to try the more recognized modern method. This was the zinc recovery process which involved a reaction of molten zinc and cobalt at high temperatures. The carbide could then be recovered, used as an alternative to virgin carbide, which was more expensive. Metallurgical then contracted with Therm-O-Vac to design 2 zinc recovery furnaces. However, P had to modify it extensively before the machine worked as they wanted it to. Therm-O-Vac went bankrupt, 4 former employees formed Fourtek – agreed to build a similar furnace for Smith. P sued the 4 employees and Smith for misappropriating its trade secrets
o DC – granted Ds motions for DV.
o Three requirements for trade secret
§ Subject matter must be a secret
§ Cost of devising/developing the secret
§ Value the secret provides to holder
o P disclosed the secret to 2 parties
o Secrecy need not be absolute
o Disclosures not enough to extinguish secrecy
§ 1. not public announcements
§ 2. disclosures made to further Ps economic interests
§ In class
o Is this the kind of info that can be a trade secret?
§ TX restatement
· Info – any formula, pattern, device, or compilation or info which is used to give him an opportunity to obtain an advantage over competitors who don’t know or use it.
· Independent economic value (potential economic value under New Rest)
· Kind of info tried to kept secret
§ New restatement – includes potential economic advantage – makes TX rest even broader.
· Generally known info can’t equal trade secret
§ Restatement of Torts – 6 additional factors
· Extent the info is known outside claimant’s business
· Extent which it is known by employees and others involved in business
· Extent of measures taken to guard secrecy of info
· Value of info to the business and competitors
· Amount of effort or money expended by the business in developing the info
· Ease or difficulty with which the info could be properly acquired or duplicated by others.
o Did P do enough to protect that secret?
§ Yes – P has signs up warning restricted access, security measures to conceal the furnaces, hidden from public view,
§ Limited Disclosure standard – disclosure to further your own company’s interest.
· The disclosures in this case weren’t public announcements.
· Permissible limited disclosures – P adequately protected secrecy
§ Confidentiality agreements, etc.
o D – Elements are generally known, so shouldn’t be a trade secret – but court dismissed this by saying putting the elements together makes it unique and not generally known.
o Strict novelty is not needed for trade secrets – only a modicum of originality! (note 4, p. 38)
§ Restatement of Torts
o Any info used in business
o That gives the owner an opportunity to obtain an advantage over competitor’s who don’t have it
o As long as info was a secret
§ Rest on Unfair Competition (p. 41)
o Info that can be used in operation of a business or other enterprise
o Affords an
aw a line, P did enough to protect the secret. Found for P.
§ In class
o This is a fact inquiry – to determine whether what they did was reasonable to keep it secret based on industry standards. Need extreme case to determine it on SJ.
o Don’t have to take every feasible precaution – balancing test.
o Cost-benefit analysis – benefit to keeping it secret, but will that benefit justify the cost of every step we’re talking about?
o Note 3 – How to keep it secret – confidentiality agreements, physical security measures (fences, safes, and guards), and by designing products so they don’t reveal their secrets upon casual inspection.
o 2 conceptions – related to how much secrecy will we require before we call this a trade secret.
o Note 1, p. 47 – Ct said no reasonable efforts undertaken – employees signed NDA, but that wasn’t enough.
o Reasonable efforts – not in restatement – so not always required. Required in UTSA. Look at jurisdiction.
Disclosure of Trade Secrets
§ How do you disclose?
o Owner does it
§ Submit a patent and is approved, some patent apps are published even if not approved after 18 months
§ Publish in magazine, journal, newspaper
§ Using the TS itself
o TS published by someone other than the TS owner – doesn’t count as publication
§ Religious Tech Center v. Lerma
o Inadvertent public disclosure
§ Not a lot of cases
§ Standard isn’t clear
o If 3rd party knows something has been disclosed through misappropriation
o 3rd party – independent discovery or development
B. Misappropriation of Trade Secrets
§ Two Ways to Misappropriate:
o Improper means
§ Don’t necessarily have to have a relationship b/t TS holder and D (like DuPont v. Rolfe)
o Breach of confidence
§ Have to have a relationship
DuPont v. Rolve (Improper Means)
§ Facts: Ds are photographers hired by unknown 3rd party to take pictures of the new DuPont plant. P filed suit against D alleging D’s had wrongfully obtained the photos revealing Ps trade secrets – photos would enable one skilled in the art to come up with the secret process for making methanol.
§ Restatement of improper means – Ct concludes D used improper means.
§ Rule in TX – reverse engineering, discovering process by independent research is ok, but w/out permission of discoverer when taking reasonable precautions, not ok.
§ Ct – unreasonable to have asked P to put a temporary roof over the plant during construction – unreasonable precaution