INTELLECTUAL PROPERTY
BRIDY
FALL 2012
Chapter 1: introduction
1. Study of IP
a. Study in the protection of intangible assets
b. Federal patent act
c. Federal copyright act
d. State and federal trademark and trade secret laws
e. Statutory and common law protections
i. “allied rights”
A: intellectual property laws basic policies
2. Giving creators exclusive rights to the fruits of their productivity
3. Rights to exclude others from taking newly created information without permission, or from marketing competing embodiments
4. IP regimes
a. Patent
i. Inventions and Discoveries
1. Utility
2. Design
3. Plants
ii. Federal statute
a. Only federally governed, not by states
2. Patent act
a. Title 35
iii. Duration of rights
1. 20 years from date you apply for the patent
a. Can take 2-2.5 years to be approved
b. Copyright
i. Creative and artistic works
1. Expression
2. Not ideas
ii. Federal statute
1. Copyright act
a. Title 17
iii. State statutes
1. Residual; mostly pre-empted
2. Rights of publicity
3. “hot news” act
4. Sound recordings
a. Late comer to the group that states want to protect
iv. Duration of rights
1. Life of the author + 70 years
a. Corporations à 90 or 95 years
c. Trade secret-have origin in unfair competition
i. Methods
ii. Processes
iii. Compilations of information
iv. State statutes
1. The uniform trade secrets act
v. Federal statute
1. The economic espionage act
a. Title 18
vi. Duration of rights
1. As long as the secret stays under wraps
d. Trademark-have origin in unfair competition
i. Phrases
ii. Signs and symbols used in commerce
iii. Federal statute
1. The lanham act
a. Title 15 of US code
iv. State statutes and common law
v. Duration of rights
1. As long as the mark is source identifying and used in commerce
5. “related rights”
a. Right of publicity
b. Power or quasi IP rights
c. Rights of a famous person to control the rights of their image or voice
6. Ideasà intangible objects
a. Nonexcludable and nonrivalrous
b. Aka: “public goods”
c. Risk of underproduction, not overuse
i. Inability to recoup investments
1. R&D
ii. “free rider” problem
1. piracy
7. Tangible objects
a. Excludable
i. Can be kept by their owners
ii. Can be kept away from others
b. Rivalrous
i. If jack eats the apple, jill cannot
8. Jefferson 1813
9. Traditional economic justification of property fails with IP
a. Do not worry about scarcity
b. No danger of overuse
i. No “tragedy of the commons”
1. Theoretical justification for creating private property rights
10. Granting exclusive rights is a way to guarantee creators a return on their investments and to spur future innovation
a. This is why government creates IP rights
11. IP as trade regulation
a. Regulation of competition
b. A grant of a limited monopoly
i. Set terms for competition in the market for the protected work
c. Solve the problem of underproduction
i. Regulate the competitive behavior of 2nd, 3rd, and 4th-comers
12. 2 theoretical justifications of recognizing exclusive rights in IP
a. Natural rights à john locke
i. “sweat of the brow” theory
ii. Your labor makes it your property
iii. Limits?
1. Only as much as you can use
2. Must leave “enough and as good” for others
b. Utilitarian/Incentive
i. Encourage the production of new ideas for the benefit of the public at large
ii. Purpose is NOT to reward past labor, but to provide sufficient incentives for future labor
iii. Foundation for U.S. IP law
1. Article 1 §8 of constitution
a. Copyright and patent clause
2. Compensation for fruits of labor is a means to an end, not an end in itself
13. Social costs of granting exclusive rights in IP
a. Undermines competition in the marketplace
i. Ex: a book
1. NO exclusive copyright
a. Anyone can print novel w/o limitation
b. Printers compete on price
c. Lowest prices sells most copies
d. Lowest price will be close to actual cost of printing
2. Exclusive copyright
a. Copyright owner controls who prints, how many copies printed, and cost of each copy
b. No price competition
c. Copyright owner sets a monopoly price
b. Restricts expressive/first amendment freedoms
i. Copyright law protects expression and prevents others from borrowing or copying it, even if the copy is neither complete nor verbatim
14. IP policy challenge
a. Benefits
i. Spurs creation of new works by ensuring return on investment
b. Costs
i. Inhibits competition
ii. Limits “cumulative creativity”
iii. Limits diffusion of knowledge
15. §48-801
a. Definitions
i. Trade secret
ii. Misappropriation
16. §48-802
a. Injunctive relief
i. Affirmative or negative
ii. For actual or threatened misappropriation
17. §803
a. Damages
i. Actual or unjust enrichment
ii. Punitive available for willful and malicious conduct
18. §804
a. Preservation of secrecy by court
i. Protective orders, etc
19. §805
a. Statute of limitations
i. 3 years from date of discovery
20. §806
a. Effect on other law
i. Other remedies not excluded
1. Contract, tort, criminal
21. Sources of trade secret law
a. Common law
i. Restatement of torts 757
ii. Restatement 3rd of unfair competition 39
b. Statute: uniform trade secrets act UTSA
i. Adopted in all states EXCEPT ma, nj, ny, and tx
ii. Slight variations state to state
1. Idaho à no attorneys fees provision
iii. Intended to codify existing common law
iv. Pre-empts common law claims
22. Underlying Legal theories
a. K
i. You promised you wouldn’t tell
b. Torts
i. You shouldn’t intentionally harm others
c. Property
i. You shouldn’t take stuff that isn’t yours
d. Bottom line
i. Preventing unfair competition and promoting innovation
23. Steps to stating a UTSA claim
a. Step one: Is information a trade secret?
i. UTSA §1(4); Idaho code §48-801
ii. 3 elements
1. It is not generally
i. Trade secret but no misappropriation
ii. Establishes an affirmative defense
c. Whether it is hard or easy to reverse engineer, reverse engineering is always proper
28. You represent a Δ charged with misappropriation of info relating to a secret manufacturing process. Your client was able to reverse engineer the process by disassembling a product sold by ¶. Based on the 2 different ways of conceptualizing reverse engineering under UTSA, what do you plead in your clients answer?
a. Info by definition NOT A TRADE SECRET because it was “readily ascertainable by proper means”
b. Even if info was trade secret, client reverse engineered it, and reverse engineering is NOT AN IMPROPER MEANS OF ACQUISITION
29. Reverse engineering and “proper means”
a. RE of lawfully acquired goods is a proper means of acquiring trade secrets
b. Some public benefits of RE include
i. Faster progress of innovation
ii. Improved goods at lower prices
c. RE Is NOT permitted, however, under patent law
30. Trade secret v. patent
Trade secret
patent
duration
forever, in theory
20 years –utility patent
Publication
Destroys secrecy
Required
Independent discovery
Independent discoverers may use the secret without liability
Independent discoverers may NOT practice the patent
Reverse engineering
Permitted
NOT permitted
Rockwell v. DEV
a. What is the alleged trade secret?
i. Piece part drawing
b. Rockwell is suing DEV
c. Key issue?
i. Did Rockwell do enough to keep the drawings secret
ii. “reasonable efforts to maintain secrecy”
d. Doesn’t matter if you have policies, you MUST ENFORCE the policies
e. Posner’s take on the optimum level of security
i. “But only in an extreme case can what is ‘reasonable’ precaution be determined on a motion for summary judgment…”
ii. Question is whether the additional benefit in security would have exceeded that cost
iii. Cost of extra security should not exceed the benefit
iv. If we require too much, we will reduce incentives
v. Enough to indicate that the secret is valuable and worthy of legal protection
f. What did the trial court get wrong
i. Assembly drawings are widely distributed. Every piece sold came with an assembly drawings
ii. Trial court confused assembly drawings with piece part drawings, which are two completely different things
g. Court makes not of the fact that Rockwell never tried to patent the piece parts and instead elected for trade secret protection. Why?
i. Safe for them to put out in marketplace without a patent because without the drawings, you could not reverse engineer them from the product itself
ii. No danger of losing trade secret protection if you cannot RE it
iii. Trade secret lasts longer than patent
iv. Patent = must disclose the secrets
v. Cost money to “prosecute” (apply for) a patent
