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Intellectual Property
University of Pennsylvania School of Law
Abrams, David S.

Intro to IP Outline
General Concepts
a.       Difference between Physical Property and Intellectual Property
                                   i.      Physical property is exclusive, rivalrous, and generally exhaustable. [tangible] 1.      exclusive – I can exclude others from using it – this is the core of Western conceptualizations of property generally.
2.      rivalrous – my use generally means you cannot use the good.
3.      exhaustable – using the good will deplete it or degrade its quality.
                                 ii.      IP – nonexclusive, nonrivalrous, non exhaustable [intangible] 1.      nonexclusive – if I tell you the idea, I cannot prevent you from using it.
2.      Nonrivalrous – My use of the Idea does not prevent you from using the good.
3.      Nonexhaustable – the use of the idea does not deplete or harm it.
a.       Public Goods – nonexclusive and nonrivalrous goods
                               iii.      Government/central planning-you need to assume that they know the best method of getting things done or have the best planning.
b.      Jurisdiction 
                                   i.      Cases heard in Fed. USSC
                                 ii.      Copyright and Patent in Constituion.
                               iii.      TM and unfair completion, TS, commerce clause authorized Fed.
** States have concurrent power to regulate IP via 10th amendment and supremacy clause
          – only preempted if state law stands as an obstacle to accomplishment and execution of Congress’ objectives in enacting federal law 
c.       IP POLICY Args
                                   i.      Incentive to create – a greater variety of products, services, etc in the workplace
1.      provides creators, inventors, artists, etc property rights in their intangible creations
                                 ii.      promotion of competition – ensure free public access to the new products
1.      Potential conflict: at first, granting property rights may hinder public access to it and rights owner can charge monopoly prices
2.      Reaching a balance: limit the monopoly for a certain frame
iii.  IP, monopoly like. Recoup high fixed costs. In competitive markets, stuff gets sold at close to marginal costs (costs of producing one more of it), which becomes a problem for those with high fixed costs bc they can’t recoup them.
d.      Philosophical Perspectives
                                   i.      Natural Rights Perspective – Utilitarian theory
1.      Locke –Labor Theory – once you mix your labor with it, you own it
2.      The economic justification lies not in rewarding people for their labor but in assuring that creators have adequate incentives to engage in creative activities
a.      Public policy rationale
3.      Public goods problem – if ownership of intellectual property, the public goods nature of IP could result in a lessening of the incentive to create and therefore, less ideas being created
4.      A 1 § 8 Con establishes patent system. Consequentialists: “to promote the progress of science and useful arts.”
5.      Fairness/moral/distributional argument – people deserve the fruits of their efforts
a.       Offers incentives for creativity
b.       By connecting your labor to something, you gain rights in it.
6.      Problems:
a.       What if the effort is small? Should you have rights in the result even if your effort was negligible?
b.      Locke still believes in balancing the ownership interest with the interest of the public and consumers of the good.
                                 ii.      The Personhood Perspective
1.      Radin – personhood is connected to property.
a.       People feel invested in the goods they created and they want acknowledgement for their creation.
b.      Property allows one to express their personality
2.      Hegel – A person is actualized through property. 
a.       Creation vests moral rights in the person who created the item – this is a big deal in Europe and we will see it later in copyright.
3.      Personhood Theory – the need, desire for humans to express their will in external objects. A painting you make is fused with who you are. This doctrine remains very influential in European copyright law
a.       Moral rights: ex – if you paint a painting, put it on the market, and it’s bought. The buyer takes the name off, scratches the face off, and draws a moustache. This is okay in the US, because the buyer owns it. This is not the case in Europe. There’s a right of integrity and a right of retribution. By defacing my painting, you are infringing on my personhood
b.      The focus on these rights is about the creator – retribution, just desserts
e.       Overview of Intellectual Property
                                   i.      In general
1.      Always ask whether a right should exist for any given “property.” 
2.      Then ask, what should be the scope of the property right?
                                 ii.      Patents– needs disclosure, will expire. Usually, if you have a trade secret, you can get a patent. Patents are on inventions, “useful arts.”  Ex: can opener. Strongest IP protection. Also most expensive to obtain and to enforce
1.      Five primary requirements of Patentability
a.       Patentable subject matter
b.      Novelty
c.       Utility
d.      Non-obviousness
e.       Enablement
2.      Gives you a right to exclude others from making use of something
3.      Lasts 20 years from filing
                               iii.      Trade Secrets – needs to be understood in the context of patent law. If someone doesn’t get a patent, they may get a trade secret law. Why doesn’t Coke get a patent? Disclosure, expiration
1.      Allows you to keep right as long as it remains secret and gives a competitive edge
2.      Can’t bring suit for trade secret appropriation unless someone uses improper means in acquiring the trade secret, or if there’s a breach of K either express or implied. (I’ll tell you the secret if you . . . )
                               iv.      Copyrights
1.      Creative arts (computer programs, movies, architecture etc)
2.      Don’t have to register a copyright. Registering it gives advantages, especially for enforcement
3.      Only disallows someone for copying someone else’s expression. 
4.      Can apply to derivative work, ex: making a movie from a book
                                 v.      Trademarks and Trade Dress
1.      Goodwill associated with identification with a product or service.
2.      Owner, consumer, competitors are the only three things TM has in mind.
3.      Trade dress – how something looks; how it’s packaged
4.      Trade mark reputation: information costs of figuring out what a product is. Asymmetric market place (business’s more access to info). TM gives transparency. 
What is the goal/Ends in mind for IP rights?
-Trade marks-concerned with reputation. Since there’s asymmetric information, were’ concerned with market place transparency, there’s information costs to consumer figuring out what the product is. Is it Coca cola or some terrible knock off.
-Intelectual property is non-rival, non-excludable. Similar to public good. 
Public goods are under produced, absent intervention, and this can lead to market failure. We try to remedy this by providing public goods through gov. and taxes.
-in competitive markets, stuff gets sold at close to marginal costs (cost of reproducing it), which becomes a problem for those with high fixed costs. Those costs can’t be recouped unless they have some type of monopolistic advantage.
-comparison chart in book and outlines that compared various forms of IP protections. 
      I.            TRADE SECRETS
1.       Comparison btwn TS and Patent,
a.       Duration: in contrast to patent (20yrs), TS can be indefinite. 
b.      Patent v. TS protection
                                                               i.      ability/costs to keep secret (ease of reverse engineering). Higher, Patent.
                                                             ii.      duration of revenue stream or time structure. (20 yrs v. potential indefinite). Future weighted, TS.
                                                            iii.      how non-obvious. Higher, Patent. 
                                                           iv.      cost of advertisement/development. Higher, Patent. 

– processes, machines, and composition of matter. The right is not to create or do something, but rather, the right to exclude others from doing so.
B.     Constitutional and Federal Statutory Authority
1.      U.S. Const. Article I, § 8, cl. 8 – [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.
2.      The Federal Patent Statute: 35 U.S.C. et seq – Patent law is exclusively federal and thus states cannot have laws covering subject matter even relatively close to the patent statute.
C.     Theory of Patent Law – A patent gives its owner exclusive rights in an invention. It can be viewed as an agreement between the inventor and the public that in return for making and fully disclosing the invention to the public, the public grants the inventor the right to prevent others from making, using, selling, or offering to sell the invention in the Unite States or from importing into the United States for a limited period of time.
1.      Purely Utilitarian Rationale based on Incentives – Inventions are public goods that are costly to make and difficult to control once they’re released. Without patent protection, not enough incentive to invest in creating, developing, and marketing new products
2.      Patents Create Incentives For…
i)         Invention – Can spend resources and be protected
ii)       Disclosure/Documentation – Increases public knowledge
iii)      Commercialization – Incentives inventors to do something with their patents, i.e. they can sell their products without fear of infringement. (need to commercialize to re-coup costs of R&D and patent prosecution)
iv)     Investment in R&D
v)       Design-Around – Encourage finding new ways/methods of accomplishing a goal; can’t use same method, must innovate. This may be the most important incentive because it is often the second or third inventor is the one that gets it right / perfects it for public consumption.
3.      Costs of Patents – Huge administrative costs; impedes follow up research, restrain innovation.
D.     Structure of a Patent – Every patent is numbered for identification purposes. It also includes the following…
1.      Specification – The primary part of a patent is the specification. It contains the description of the invention.
i)         Front page – Includes title, inventor, publishing date, assignee (company that controls patent rights), application number, filing date, class numbers (each patent classified by technological area for ease of finding preemption), field of search (purposes of infringement suits and whether background search was insufficient), references cited, and examiners of the patent.
ii)       Abstract – Summary of the invention written by the applicant (very strategic).   Should include key words (for visibility of others searchers), describe as vaguely and broadly as possible for maximum potential protection from copies/improvements, but as specific as necessary as to not encompass prior patents (and thus to invalidate your patent).
iii)      Written Description – Textual description of the patent including four components…
a.       Description of Technical Field
b.      Background of the Invention
c.       Summary of the Invention