Intellectual Property Outline
Professor Seaman
Fall 2016
_____________________________________________
Overview Types of IP Protections
The principle objective of IP is the promotion of new and improved works (promoting innovations and creativity)- whether technological or expressive. On the other hand trademark focuses primarily on ensuring the integrity of the marketplace.
IP law ideally should balance:
Rights and interest of originator-
Protect their ideas and preserve incentive to create ideas with
Rights and interests of using public-
Desire for indivisibility-unrestricted public access, in order to
Ensure widespread social benefits
Encourage cross-polinization of ideas, and
Discourage monopolies.
Argument against IP: it creates a deadweight social cost/ those with the rights can charge super competitive profits (net transfer of social wealth from consumers to right holders)
Patent
Copyright
Trademark
Trade Secrets
Subject Matter
Process, machine, manufacture, or composition of matter; plans (asexualally reproducing); designs-excluding laws of nature, natural substances, printed matter (forms), mental stops
Literary, musical, choreography, dramatic and artistic works as well as softwares and aesthetic elements of useful articles limited by idea/expression dichotomy (no protection for ideas, systems, methods, procedures); no protection for research/fact
Things that tell consumer where the product came from (anticipate to use in commerce); no protection for functional features, descriptive terms, geographic names, misleading aspects or generic names (“thermos)
Formula, pattern, compilation, program, device, method, technique, process
Source of Law
U.S. Con Art. 1 §8 (35 U.S.C) Patent Act
17 U.S.C- Copyright Act, CL(limited)
Commerce Clause (15 U.S.C.)- Lanham Act, CL (unfair competition)
State statutes (uniform trade secret act); CL
How protection is obtained
By applying with the Patent office
Create original work in a tangible form then apply
Register it (optional)
none
Source of protection
Exclusive rights to make, use, sell, offer to sell, or import innovations as limited by contribution to art; extends to “equivalents”
Rights of performance, display, distribution, reproduction, derivative works limited protection for attribution and integrity afforded some works of visual art; protection against circumvention of technical protection measures
Exclusive rights in the U.S.; likelihood of confusion; false designation of origin; dilution for famous works
Protection against misappropriation—acquisition by improper means or unauthorized disclosure
Duration
20 years from filling; extensions up to 5 years for drugs, medical devices and additives; 14 years (design)
Life of author + 70 years, “works for hire” 95 years after publication or 120 years after creation
Perpetual, subject to abandonment
Until it becomes public knowledge
Attributes of IP (vs. Property):
IP is non-rivalrous
Your use of the property doesn’t interfere with the use of another (unlike ice-cream that’s already consumed)
It’s non-excludable (absent legal protection)
It’s of limited duration (public domain)
Theories for Legal Protection for IP
Lockean Labor theoryà argue that rights are justified in relation to labor and merit
à they maintain that intellectual property is an extension of individual personalities
à IP rights are useful means to a useful end even though they are not good by themselves. They ground the rights in social progress and incentives to innovate.
Protections for Ideas in the Absence of IP Rights
Prizes – Ex post compensation, gets government involved
Liability Rule – Pay a fee for use (relates to patent reform)
Government Regulation – does this fit our economic system?
Trade Secrecy
Arrow’s disclosure paradox – nobody wants to buy a secret if they don’t know what it is, but once they know there’s no need to buy it
Trade Secrets à tell people on a need to know basis, but people are liable of they steal
à Lower transaction costs; no application fees
Requires loyal employees, bankers, etc.
People might independently invent the secret
Most secrets eventually become public
– people should commission products (e.g. textbooks). Problem: insufficient incentive on private side
How Magicians protect IP without Law
à wouldn’t work b/c it doesn’t protect the method (their live stage performance)
à they would have to reveal secret which defeats the purpose
Trade secretà does not permit the magicians to secure the benefits of sharing without bearing the cost of exposure.
By having different types and classes of magic, they protect their secrets/ difficult to get access.
Trade secret Protection
Trade secret law reflects economics policy judgments about how to encourage innovation, competition, and consumer welfare and ethical notions about proper business behavior, the general norms of morality and good faith that are also reflected in the torts of unfair competition and breach of confidence.
Trade Secrets (restatement 1st §757)- any information that can be used in business that is sufficiently valuable and secrets to afford an economic advantage over others.
Elements are:
Protectable information (Must be the type of secret the law meant to protect + it cannot be known to all + must add economic value to P)
P must take reasonable precautions to prevent its disclosure
Misappropriation by D (P must prove D got it wrongfully)
UTCA Definitionà What is a trade secret? à information including a formula, pattern, compilation, program, device, method, technique, or process).
Derives value “from not being generally known to, and not being read
involve 3 related issues: (1) the owner’s precautions, (2) the level of general knowledge in an industry, and (3) the ascertainability of information by proper means.
The UTSA states that “information is readily ascertainable if it is available in trade journals, reference books, or published materials.
Metallurgical Indus. v. Fourtek, Inc. (5th Circ)- D competitor copied P’s zinc recovery furnace (tungsten carbide). H: 1) Secrecy need not to be absolute!/ P’s limited disclosure (they took precautiaus steps) did not estop its claim b/c it merely revealed its secrets to potential contractor to further its economic interests).
Justification: Posner’s cost/benefit analysisà if it wasn’t for TS law, employers would disclose less to employeesà less efficient/ less incentive to create economic incentives that may be TS/ limits dissemination v. higher contractual and physical security cost that outweighs its benefit
Rockwel Graphic Sys, Inc. v. DEV Industries, Inc, (7th Circ)- former employer stole “piece part drawings” and claimed not a TS b/c the P had distributed to vendors. TC granted SJ to D. 7th circ reversed b/c TS cases are very factual (std- “no genuine issue of material fact”à reasons why they never get resolved at this stage) and that the issue is whether the P took reasonable efforts to maintain secrecy which should have been submitted to jury.
covering machinery with a temporary might have been too expensive and unreasonable
COMMERCIAL VALUE AND USE – the information must be sufficiently valuable to afford an actual or potential economic advantage over others.
The “value” requirement is implicit in the Restatement but it is intermingled with the “secrecy” requirement. The UTSA makes the value requirement explicit by requiring that the information “derives independent economic value” from its secrecy. Some factors are:
Cost of development
Expenditures of money and time to develop information are not required for TS protection BUT court sometimes refer to such expenditures as evidence of commercial value and as an indicator of damages.
Exclusive Rights
Can prevent unauthorized use or disclosure but cannot prevent if acquired through other means.
Duration and Termination
Trade secret may be protected as long as the owner successfully prevents them from becoming widely known.
