Intellectual Property Outline

INTELLECTUAL PROPERTY

SPRING 2013 – Professor Lee

I. General Topics

Course Themes

Intended objectives & unintended consequences of IP

Balancing the rights of creators w/ those of subsequent users and the public at large

i. Rich Public Domain

1. Concept

a. Culture, like science and technology, grows by accretion, each new creator building on the works of those who came before it.

b. IP rights should be considered fairly utilitarian

2. Copyright

a. Scene a Faire

b. Fair Use

3. TM

a. Generic words, concepts

b. Fair Use

4. Right to Publicity

Challenges posed by technological and social evolution.

Philosophical Rationales of IP

Natural Rights Perspective

i. John Locke – Two Treatise on Government

1. When you put labor into something you create a property right in that thing. Own bodies, own labor.

2. Pre-labor, the item is in the commons (in natural state),

3. Can take from the commons but leave “enough and as good” behind for others; can only take what you can make use of.

4. Limitation: two people work independently and create same product…who owns it? Person who patented first.

Personhood Theory (copyright)

i. Hegel, et al.

1. In creating something, your personhood becomes bound-up with that property.

2. This is most relevant to copyright, i.e. Harry Potter’s author feels connected with the book’s moral character

3. People define their personhood by their relationship to things

Utilitarian/Economic Incentive Theory

i. This is the dominant theme for IP protection

ii. Economic take on IP

1. Information is a public good

2. Public goods are (1) non-rivalrous and (2) non-excludable.

3. This is subject to free-rider problem èmust create a private property right (to a public good, i.e. info) to fix the problems of market to induce invention.

4. Ensures the integrity of marketplace transactions

II. Trade Secret

Overview/General

State law doctrines protecting against misappropriation of valuable, secret technical and business information

Source of law: Mostly CL & state law; some federal statutes, specifically the Uniform Trade Secrets Act & Restatement of Torts

Subject matter: anything of value that is secret (formulae, patterns, compilations, programs, devises)

Standard for protection: Information is secret, reasonable efforts to maintain secrecy, commercial value

Length of Protection: until becomes publicly known

Elements:

i. Subject matter must qualify for trade secret protection (a secret, valuable, required effort or expense to obtain)

ii. Reasonable precautions taken to prevent disclosure

iii. Misappropriation; The secret was wrongly acquired

Theories of Trade Secret; used to interpret the elements

Tort v. Economic (promote innovation) Theme

i. Trade Secrets can generally either be seen as a tort issue (deterrence of bad behavior, focuses on misappropriation) or an economic issue (protecting efficiency & incentive structure of industry)

ii. Uniform Trade Secrets Act (1985)

1. Trade Secret means information, including a formula, pattern, compilation, program, device, method, technique, or process that:

a. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use AND

b. Is the subject of reasonable efforts to maintain secrecy

Lockean è if a businessman worked & used his imagination over competitors, then he deserves to have that recognized.

Goals èdon’t want inhibit productivity if had too stringent requirement for secrecy.

Subject Matter

SECRET – absolute secrecy not required {split in definition)

i. Restatement of Torts (deterrence) – not actually known by D

1. “Secret” may encompass known information

2. Information that is knowable, but not known still qualifies as secret.

a. Metallurgical Industries case èthe process of making new furnace was not known.

3. Restatement elements of secrecy:

a. Extent to which info is known outside the claimant’s business

i. Extent it is known by employees and others involved in business

ii. Extent measures taken to guard the secrecy

iii. Value of the info to business & competitors

iv. Effort or money expended by business in developing information

v. Ease or difficulty with which the information could be properly acquired or duplicated by others.

ii. Uniform Trade Secrets Act (property rights, utilitarian) – not knowable to D

1. Only information internal to P

2. Not a secret if generally known or readily ascertainable by proper means

iii. NOTE—Objective indications: treating the info as secret, nondisclosure agreements, etc.

VALUABLE

i. Secret must be economically valuable

ii. Split in definition

1. Restatement Torts (deterrence)

a. Metallurgical Industries èif ∆’s breach to employer was particularly bad, then even if no value, can still seek redress in court

2. UTSA (economic)

a. Secret must give actual economic advantage over competitors.

b. Scientology case –Spiritual value is not enough to meet this requirement; didn’t give economic edge over competitors.

Required effort or expense

Reasonable Efforts to maintain secrecy

General

i. Reasonableness is a fact question – efforts to prevent theft or use by former employee?

ii. Must be optimum security, not perfect – subject to cost-benefit curve

Rationale

i. Evidentiary

1. Tort theory: evidence that trade secret misappropriated

a. Rockwell v. DEV ègreater the precautions, the lower the probability that DEV obtained the information properly

2. USTA: evidence the trade secret was valuable

ii. Remedial – Because there was a wrong, a remedy is necessary

Disclosure

i. Publication by owner/patent application

ii. Selling a product embodying the secret

iii. Disclosure by a party other than the owner

iv. Inadvertent disclosure

v. Required government disclosure (just compensation is due to the owner in this case under 5th Amendment)

Misappropriation

General

i. Restatement: one who discloses or uses another’s trade secret, without a privilege to do so, is liable to the other if (a) discovered by improper means or (b) disclosure is breach of confidence

Improper Means

i. USTA:

1. Improper means includes theft, bribery, misrepresentation, breach or inducement of a breach of duty to maintain secre