Chapter 5: Intellectual Property And Internet Law

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Intellectual Property

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Property resulting fromintellectual and creative processes.

The products of an individual’s mind.

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Trademark

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A distinctive word, symbol, ordesign that identifies the manufacturer as thesource of particular goods and distinguishes itsproducts from those made or sold by others.

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Statutory Protection of Trademarks

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and related property is provided at the federal level bythe Lanham Act of 1946. The Lanham Act was enacted in part to protect manufacturersfrom losing business to rival companies that used confusingly similar trademarks. The actincorporates the common law of trademarks and provides remedies for owners of trademarkswho wish to enforce their claims in federal court. Many states also have trademarkstatutes.

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Trademark Dilution

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Before 1995, federal trademark law (Lanham Act) prohibited only theunauthorized use of the same mark on competing—or on noncompeting but “related”—goods or services.

protect “distinctive” or “famous” trademarks (such as RollsRoyce, McDonald’s, Dell, and Apple) from certain unauthorized uses even when the useis on noncompeting goods or is unlikely to confuse.

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Use of a Similar Mark May Constitute Trademark Dilution

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A famous mark may be diluted not only by the use of an identical mark but also by the use of a similar mark, provided that it reduces the value of the famous mark.

The federal court ruledthat use of the “Sambuck’s” mark constituted trademark dilution becauseit created confusion for consumers, Starbucks.

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Trademark Registration

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with the state or with the federal government.To register for protection under federal trademark law, a personmust file an application with the U.S. Patent and Trademark Office inWashington, D.C. A mark can be registered (1) if it is currently in commerce or (2) if theapplicant intends to put the mark into commerce within six months

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Trademark Infringement

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Wheneversomeone else uses that trademark in its entirety or copies it to a substantial degree, intentionallyor unintentionally. (used without authorization).

To prove it the trademarkowner must show that the other party’s use ofthe mark created a likelihood of confusion aboutthe origin of that party’s goods or services.

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Distinctiveness of the Mark

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A central objective of the Lanham Act is to reduce the likelihood that consumers willbe confused by similar marks.

only those trademarks that are deemed sufficiently distinctive from all competing trademarks will be protected.

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Strong Marks

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Fanciful, arbitrary, or suggestive trademarks are generally consideredto be the most distinctive (s trademarks.

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Fanciful trademarks

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include invented words, such as Xerox for one manufacturer’s copiers and Google for search engines.

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Arbitrary trademarks

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use common words that would not ordinarily be associated with the product, such as Dutch Boy as a name for paint.

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Suggestive Trademarks

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bring to mind somethingabout a product without describing the product directly

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Secondary Meaning

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arises when customers begin to associate a specific term or phrase,such as “London Fog,” with specific trademarked items (coats with “London Fog” labels)made by a particular company.

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Generic Terms

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are terms that refer to an entire class of products,such as bicycle and computer.

receive no protection, even if they acquire secondarymeanings

For instance, aspirin and thermos were originally trademarked products,but today the words are used interchangeably.

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Service Mark

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A trademark that is used todistinguish the services (rather than the products)of one person or company from those of another.

For instance, eachairline has a particular mark or symbol associated with its name.

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Certification Mark

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A mark used by one ormore persons, other than the owner, to certify theregion, materials, mode of manufacture, quality, orother characteristic of specific goods or services.

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Collective Mark

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A mark used by membersof a cooperative, association, union, or otherorganization to certify the region, materials, modeof manufacture, quality, or other characteristic ofspecific goods or services.

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Trade Dress

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The image and overall appearance(“look and feel”) of a product that is protected bytrademark law.

the fish shape of a cracker

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Counterfeit Goods

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copy or otherwise imitate trademarked goods but are not genuine

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Stop Counterfeiting in Manufactured Goods Act

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to combat counterfeitgoods. The act made it a crime to intentionally traffic in, or attempt to traffic in,counterfeit goods or services, or to knowingly use a counterfeit mark on or in connectionwith goods or services.

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Penalties for Counterfeiting

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may be fined up to $2 million or imprisoned for up to ten years (or more if they are repeatoffenders).

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Trade Name

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A name that a business usesto identify itself and its brand.

isdirectly related to a business’s reputation andgoodwill and is protected under trademark law.

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License

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An agreement by the owner of intellectualproperty to permit another to use a trademark,copyright, patent, or trade secret for certain limitedpurposes.

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Cyber Mark

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A trademark in cyberspace

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Domain Name

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Part of an Internet address,such as “cengage.com.” The part to the right ofthe period is the top level domain and indicates thetype of entity that operates the site, and the partto the left of the period, called the second leveldomain, is chosen by the entity.

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Cybersquatting

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The act of registering adomain name that is the same as, or confusinglysimilar to, the trademark of another and thenoffering to sell that domain name back to thetrademark owner.

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Anti-cybersquatting Legislation

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which amended the Lanham Act—the federal law protecting trademarks discussed earlier. The ACPA makes it illegal to “register,traffic in, or use” a domain name (1) if the name is identical or confusingly similarto the trademark of another and (2) if the person registering, trafficking in, or using thedomain name has a “bad faith intent” to profit from that trademark

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Patent

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A property right granted by the federalgovernment that gives an inventor an exclusiveright to make, use, sell, or offer to sell an inventionin the United States for a limited time.

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What Is Patentable?

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an invention must be novel, useful, and not obvious in light of currenttechnology.

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Patent Infringement

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If a firm makes, uses, or sells another’s patented design, product, or process without thepatent owner’s permission

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Remedies for Patent Infringement

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the patent holder may sue for relief in federal court. The patentholder can seek an injunction against the infringer and can also request damages for royaltiesand lost profits. In some cases, the court may grant the winning party reimbursementfor attorneys’ fees and costs. If the court determines that the infringement was willful, thecourt can triple the amount of damages awarded (treble damages).

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Copyright

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The exclusive right of an authoror originator of a literary or artistic production topublish, print, sell, or otherwise use that productionfor a statutory period of time.

protection for the life of the author plus 70 years.

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What Is Protected Expression?

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Works that are copyrightable include books, records, films, artworks, architectural plans,menus, music videos, product packaging, and computer software. To be protected, a workmust be “fixed in a durable medium” from which it can be perceived, reproduced, or communicated.Protection is automatic. Registration is not required

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To obtain protection under the Copyright Act

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1. Literary works (including newspaper and magazine articles, computer and trainingmanuals, catalogues, brochures, and print advertisements).2. Musical works and accompanying words (including advertising jingles).3. Dramatic works and accompanying music.4. Pantomimes and choreographic works (including ballets and other forms of dance).5. Pictorial, graphic, and sculptural works (including cartoons, maps, posters, statues, andeven stuffed animals).6. Motion pictures and other audiovisual works (including multimedia works).7. Sound recordings.8. Architectural works.

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Section 102 Exclusions

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It is not possible to copyright an idea

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Compilations of Facts

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are copyrightable.Under Section 103 of the Copyright Act

a work formed by the collectionand assembling of preexisting materials or of data that are selected, coordinated, orarranged in such a way that the resulting work as a whole constitutes an original work ofauthorship.

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Copyright Infringement

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The reproduction does not have to be exactly the same as the original, nor does it haveto reproduce the original in its entirety. If a substantial part of the original is reproduced then blank has occured.

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Remedies for Copyright Infringement

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liable for damages or criminal penalties. These range from actual damages or statutorydamages, imposed at the court’s discretion, to criminal proceedings for willful violations

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Actual damages

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are based on the harm caused to the copyright holder by theinfringement, while statutory damages, not to exceed $150,000

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The “Fair Use” Exception

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In certain circumstances, a person or organizationcan reproduce copyrighted material without paying royalties (fees paid to thecopyright holder for the privilege of reproducing the copyrighted material).

for purposes suchas criticism, comment, news reporting, teaching (including multiple copies for classroom use),scholarship, or research, is not an infringement of copyright.

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What Is Fair Use?

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In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—(1) the purpose and character of the use, including whether such use is of a commercialnature or is for nonprofit educational purposes;(2) the nature of the copyrighted work;(3) the amount and substantiality of the portion used in relation to the copyrighted work as awhole; and(4) the effect of the use upon the potential market for or value of the copyrighted work.

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Copyright Protection for Software

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Generally, the courts have extended copyright protection not only to those parts of acomputer program that can be read by humans, such as the high-level language of a sourcecode, but also to the binary-language object code of a computer program, which is readableonly by the computer. Additionally, such elements as the overall structure, sequence, andorganization of a program have been deemed copyrightable.

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Copyrights in Digital Information

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Generally, anytime a party downloadssoftware or music into a device’s random access memory, or RAM, without authorization,a copyright is infringed

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Peer-to-Peer (P2P) Networking

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Thesharing of resources (such as files, hard drives, andprocessing styles) among multiple computers.

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Distributed Network

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A network used bypersons located (distributed) in different places toshare computer files

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Cloud Computing

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A Web-based service thatextends a computer’s software or storage capabilitiesby allowing users to remotely access excessstorage and computing capacity as needed.

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Trade Secret

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A formula, device, idea, process,or other information used in a business thatgives the owner a competitve advantage in themarketplace.

customer lists, plans, research and development, pricing information, marketingtechniques, and production methods—anything that makes an individual companyunique and that would have value to a competitor.

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State and Federal Law on Trade Secrets

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those who disclose or use another’s tradesecret, without authorization, are liable to that other party if (1) they discovered the secretby improper means or (2) their disclosure or use constitutes a breach of a duty owed to theother party.