Chapter 1: Introduction.
The philosophical bases for protection of private property are well entrenched in our culture. Examples include:
Common Law and Criminal Protections of private property from interference of others
The 5th amendment protects private property against takings by the government without just compensation.
Two Major Parts of Intellectual Property Survey Course
1) Philosophical bases for protection of intellectual property – and how those reasons differ from the justifications for real property
2) Comparative review of the principal modes of intellectual property protection (i.e. Patent, Copyright, Trademark/Trade Dress, and Trade Secret)
Tangible Property – composed of atoms and physical things that can occupy only one place at any given time.
Possession of a physical thing is necessarily exclusive.
Intangible Property – primarily consist of ideas and can be used by another without depriving it from the original possessor.
The ‘nonrivalrous’ nature of ideas essentially moots the traditional economic justifications for real property.
As a result, other theories have been established.
Natural rights, and personhood justifications are often given.
In the US, a UTILITARIAN or ECONOMIC INCENTIVE FRAMEWORK theory provides justification for intangible property protection
Based on John Locke’s “Labor-mixing” theory of property
“The “labor” of his body and the “work” of his hands, we may say, are properly his.
“For this “labor” being the unquestionable property of the laborer, no man by he can have a right to what that is once joined to, at least where there is enough, and as good left in the commons for others.”
Economic Incentive Perspective
Promotion of New and improved works
Includes patents, copyright, and trade secrets
Ensuring the integrity of the marketplace (not investigated in this course)
Promoting Innovation and Creativity
“to Promote the Progress of Science and useful Arts”
The First Consideration is to give knowledge to the public for the benefit of all
“to afford greater encouragement to the production of literary [or artistic] works of lasting benefit to the world”
The second consideration is to reward the inventor/owner
The reasoning for an economic Philosophy behind patents and copyrights is based on the conviction that:
It is the best way to advance public welfare through the talents of authors and inventors in “Science and the useful Arts”
In a private market economy, individuals will not invest in an invention or creation unless the expected return from doing so exceeds the cost of doing so
This is easier to rely on with tangible property over “information”
Information has the characteristics of what economists call a “public good”-it may be “consumed” by many people without depletion, and it is difficult to identify those who are not paying
The wide dissemination of information may have particular effects on secondary markets (ex. Teaching everyone how to fish will have an effect on the number of fish available)
Other than just information, economists generally offer lighthouses and national defense as an example of a public good.
Benefit of Economic Incentive system
Provides incentive for inventors to invent and share their knowledge.
A major concern for innovators is whether they will have sufficient means to get an adequate return on their investment in research and development.
Costs of Economic Incentive system
Excluding others from using ideas of the inventor by definition limits the diffusion of those ideas and therefore prevents many people from benefiting from them.
Society at large can be harmed by intellectual property protection to the extent that it unnecessarily raises the cost of acquiring a product (through monopoly pricing by the right holder) and limits others from making further advances
The principal policy implication of this model is that the term of intellectual property protection should be calibrated to balance the incentive benefits of protection against the deadweight loss of monopoly pricing and the resulting limitation on dissemination.
Problem 1-3 (p. 31) Healthware
How to limit liability?
Identify similar companies, similar practices
Lawsuits in this area?
Disclaimer about medical conditions
Identify proprietary, what can be protected?
Web based program w. sheets
Calories lost/ exercise
Novel as in different, not in patent sense
Perhaps design patent but most likely nothing is patentable
~2 years until issue
be wary of software licenses
watch out for copyright of graphics used, get licenses
copyright could protect worksheets/graphics from exact duplication
but not systems or methods
Trademark that stands out, recognizable for marketing: Healthware(is combination of two ordinary words, not the best)
Tradedress of packaging
Written disclaimer for employees and for her employer on who owns what?
Partnership, silent partner, etc
One time rights for possible photographers/graphics designers
Do not talk about of idea with friend, may disclose idea
Get employees to sign nondisclosure agreement
Are there any agreements?
Needs to be in writing and be very clear
Who owns what?
Terms/conditions for using the program
Freedom of contract; protection against unfair means of competition
Limited monopoly to encourage production of utilitarian works in exchange for immediate disclosure and ultimate enrichment of the public domain
Limited (although relatively long lived) monopoly to encourage the authorship of expressive works; developed initially as a means of promoting publishing
Perpetual protection for distinctive nonfunctional names and dress in order to improve the quality of information in the market place
Source of Law
State statute (e.g., Uniform Trade Secrets Act); common law
Patent Act (federal)
Copyright Act (federal); common law (limited)
Lanham Act (federal; common law (unfair competition)
Originality; authorship; fixation in a tangible medium
Process, machine, manufacture, or composition of m
Licensing and Assignment
Complicated by inherent nature of bargaining (seller wants guarantee before disclosure; buyer wants to know what is offered)
Encouraged by completeness of property rights, subject to antitrust constraints
Assignor has termination right between 36th and 41st years following transfer
No naked licenses (owner must monitor licensee); no sales of trademark “in gross”
Civil suit for misappropriation; damages (potentially treble) and injunctive relief; criminal prosecution for theft
Injunctive relief and damages (potentially treble); attorney fees (in exceptional cases)
Injunction against further infringement; destruction of infringing articles; damages (actual or profits); statutory ($200-150,000 damages within court’s discretion); attorney fees (within court’s discretion); criminal prosecution
Injunction; accounting for profits; damages (potentially treble); attorney fees (in exceptional cases); seizure and destruction of infringing goods; criminal prosecution for trafficking in counterfeit goods or services
The term patent – from the latin ‘patere’ (to be open)-arose in Venice in the late fifteen century and referred to an open letter of privilege from the sovereign
Although Britain implemented policies to encourage the influx of patents and immigration of innovators, a reverse problem occurred as well, when it’s technological superiority began to leak overseas (including the American colonies (see Transatlantic Industrial Revolution; David Jeremy p.36-49 ).
1836: patents are numbered from this date, published in the official gazette
1952: Section 103: Non-obviousness – removed flash of genius test
Before June 8, 1995: 17 years from issue or 20 years from filing date
On or after June 8, 1995: 20 years from filing date
Economic Incentive Theory
That inventions are public goods that are costly to make and that are difficult to control once they are released into the world
Absent protection inventors will not have sufficient incentive to invest in creating, developing, and marketing new products.
Patents provide a market driven incentive to invest in innovation, by allowing the inventor to appropriate the full economic rewards of his invention
Disclosure of inventions get returned to the public domain
Incentive for inventors
Requirements for Patentability (further discussed in later section)
Patentable Subject Matter
Minimal obstacle, must be minimally useful.