HELP COLLEGE OF ARTS AND TECHNOLOGY

IN COLLABORATION WITH
SOUTHERN NEW HAMPSHIRE UNIVERSITY
____________________________________________
BUSINESS LAW [BUS 206]

LECTURE 15
PROTECTION OF
INTELLECTUAL PROPERTY

PROTECTION OF INTELLECTUAL PROPERTY

INTRODUCTION

The economic system in the U.S. is based upon free and fair competition

The law prevents businesses from taking unfair advantage of their

competitors

Essential to this legal prevention is the protection of intellectual property

Protection includes trade secrets, trade symbols, copyrights and patents

TRADE SECRETS

Definition- commercially valuable information that is guarded from disclosure and is not
general knowledge

A famous example of a trade secret is the formula for Coca-Cola

(i) Misappropriation

Misappropriation of a trade secret is the wrongful use of a trade secret

A person misappropriates a trade secret of another [1] by knowingly acquiring it

through improper means or [2] by disclosing or using it without consent, if her
knowledge of the trade secret came under circumstances giving rise to a duty to
maintain secrecy or came from a person who used improper means or who owed the
owner of the trade secret a duty to maintain secrecy

Trade secrets are most frequently misappropriated in two (2) ways: [1] an employee
wrongfully uses or discloses such information or [2] a competitor wrongfully obtains it

Another improper method of acquiring trade secrets is industrial espionage conducted

through methods such as electronic surveillance or spying

Improper means of acquiring another persons trade secrets also include theft, bribery,
fraud, unauthorised interception of communication and inducement or knowing
participation in a breach of confidence

Remedies damages and where appropriate injunctive relief

Criminal Penalties Congress enacted the Economic Espionage Act of 1996

prohibiting the theft of trade secrets and providing criminal penalties for violations

TRADE SYMBOLS

One of the earliest forms of unfair competition fraudulent marketing of one persons
goods as those of another deceives the public and deprives honest businesses of
trade

Common today and sometimes referred to as passing off or palming off

Trade symbol infringement law protects both consumers from being misled by the use
of infringing trade symbols as well as producers from unfair practices by competitors
(i) Types of Trade Symbols

The Federal Trademark Act (the Lanham Act) recognises four (4) types of trade
symbols or marks:
(a) Trademark is a distinctive symbol, word, name, device, letter, number, design,
picture or combination in any arrangement that a person adopts or uses to identify
goods that he manufactures or sells and to distinguish them from those manufactured
or sold by others

Example Kodak, Xerox, rainbow apple logo on Apple computers

(b) Service mark distinctive symbol, word, or design that is used to identify a
providers services may also consist of trade dress (packaging, labels, containers
and the product itself or its features) such as the dcor or shape of buildings in which
services are provided examples Hard Rock Cafe
(c) Certification mark distinctive symbol, word, or design used with goods or
services to certify specific characteristics examples Good Housekeeping Seal of
Approval and Underwriters Laboratory owner does not produce or provide the
goods or services with which the mark is used
(d) Collective mark - is a distinctive mark or symbol used to indicate either that the
producer or provider is a member of a trade union or trade association owner is not
the producer or provider but rather is the group of which the producer or provider is a

TRADE SYMBOLS (Contd)

(ii) Registration

To be protected by the Lanham Act a mark must be distinctive enough to

identify clearly the origin of goods or services and not immoral, deceptive or
scandalous

A trade symbol may satisfy the distinctiveness requirement in either of two

(2) ways:
[1] Inherently distinctive if prospective purchasers are likely to associate
it with the product or service it designates because of the nature of the
designation and the context in which it is used fanciful, arbitrary or
suggestive marks satisfy the distinctiveness requirement a descriptive or
geographic designation is not inherently distinctive example Apple
cannot be a trademark for apples although it may be a trademark for
computers
[2] Secondary meaning Descriptive or geographic designations may
however satisfy the distinctiveness requirement through this method a
designation acquires a secondary meaning when a substantial number of
prospective purchasers associate the designation with the product or
service it identifies

A generic name is one that is understood by prospective purchasers to

denominate the general category, type or class of goods or services with
which it is used a user cannot acquire rights in a generic name as a trade
symbol examples of marks that have lost protection because they became
generic include aspirin, thermos and cellophane

TRADE SYMBOLS (Contd)

(iii) Infringement

Occurs when a person without authorisation uses an identical or substantially

indistinguishable mark that is likely to cause confusion, to cause mistake, or to
deceive

In deciding whether infringement has occurred, the courts consider various

factors, including the strength of the mark, the intent of the unauthorised user, the
degree of similarity between the two marks, the relation between the two
products or services the marks identify, and the marketing channels through
which the goods or services are purchased

(iv) Remedies

The Lanham Act provides several remedies for infringement:

[1] injunctive relief;
[2] an accounting for profits;
[3]damages;
[4] destruction of infringing articles;
[5] attorneys fees in exceptional cases; and
[6] costs

When a person intentionally traffics in goods or services known to bear a

counterfeit mark, both civil and criminal remedies are available

Goods bearing the counterfeit mark may be seized and destroyed

Counterfeit mark is a spurious mark that is identical with or substantially

indistinguishable from a registered mark and the use of which is likely to cause
confusion, to cause mistake or to deceive

TRADE NAMES

A trade name is any name used to identify a business, vocation or

occupation

Not eligible for Federal registration under the Lanham Act but
infringement is prohibited

Protected and a person who palms off her goods or services by

using the trade name of another is liable in damages and also may
be enjoined from doing so

Remedies - damages and injunctions are available if infringement

occurs

COPYRIGHTS

A form of protection provided by Federal law to authors of original works, which, under the
Copyright Act, include literary, musical and dramatic works; pantomimes; choreographic
works; pictorial, graphic, and sculptural works; motion picture and other audiovisual
works; sound recordings; and architectural works
(i) Procedure

Copyright applications are filed with the Register of Copyrights in Washington, D.C.
Copyright registration is not required as copyright protection begins automatically as soon
as the work is fixed in a tangible medium

However, registration is advisable because it is a condition of certain remedies (statutory

damages and attorneys fees) for copyright infringement
(ii) Rights

Copyright Act gives the owner of the copyright the exclusive right to:
[1] reproduce the copyrighted work in copies or recordings
[2] prepare derivative works based upon the copyrighted work
[3] distribute copies or recordings of the copyrighted work to the public by sale or other
transfer of ownership or by rental, lease or lending
[4] perform the copyrighted work publicly, in the case of literary, musical, dramatic,
choreographic, pantomime, motion picture and other audiovisual works and
[5] display the copyrighted work publicly, in the case of literary, musical, dramatic, and
choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including
the individual images of a motion picture or other audiovisual work

COPYRIGHTS (Contd)
(iii) Ownership

The author of a creative work owns the entire copyright

Ownership of a copyright may be transferred in whole or in part by

conveyance, will, or intestate succession

A transfer of copyright ownership other than by operation of law, is not valid

(iv) Infringement and Remedies

Infringement occurs whenever somebody exercises, without

authorisation, the rights exclusively reserved for the copyright owner

Infringement need not be intentional

Remedies for infringement occurring after registration, the following

remedies are available:
[1] injunction

[2] the impoundment and possibly destruction of infringing articles

[3] actual damages plus profits made by the infringer that are additional to
those damages or statutory damages

[4] costs including reasonable attorneys fees; and

[5] criminal penalties

PATENTS

Through a patent, the Federal government grants an inventor a monopolistic right to

make, use or sell an invention to the absolute exclusion of others for the period of the
patent

The patent may not be renewed upon expiration, the invention enters the public
domain and anyone may use it

To be patentable as a utility patent, the process, machine, manufacture, or

composition of matter must meet three (3) criteria:
[1] Novelty the invention must not conflict with a prior pending application or a
previously issued patent
[2] Utility the invention must possess specific and substantial usefulness, which
must be affirmatively disclosed by the application; and
[3] Nonobviousness the invention, in light of the prior art, must not be obvious to a
person skilled in such prior art

Utility patents Section 101 of the Patent Act whoever invents or discovers any
new and useful process, machine, manufacture, or composition of matter, or any new
and useful improvement thereof, may obtain a patent therefor, subject to the
conditions and requirements of this title

Plant patent protects the exclusive right to reproduce a new and distinctive variety
of asexually reproducing plant

Design plant protects a new, original, ornamental design for an article of

manufacture protects only the appearance of an article not its structural or
functional features

(i) Procedure

PATENTS (Contd)

The United States patent and Trademark Office issues a patent upon the basis of a patent
application containing a specification, which describes how the invention works, and claims,
which describe the features that make the invention patentable

The applicant must be the inventor

Unlike rights under a copyright, no monopoly rights arise until the Patent Office actually issues a
patent therefore anyone is free to make, use and sell an invention for which a patent application
is filed until the patent has been granted

(ii) Infringement

Occurs when anyone who without permission, makes, uses, or sells a patented invention direct
infringer

A person who actively encourages another to make, use, offer to sell, or sell a patented invention
without permission is an indirect infringer

Contributory infringer is one who knowingly sells or offers to sell a part or component of a
patented invention, unless the component is a staple or commodity or is suitable for a substantial
noninfringing use

Good faith and ignorance defenses to contributory negligence but not to direct infringement

(iii) Remedies

Patent owner may sue for relief in Federal court

Remedies for infringement under the Patent Act:

[1] Injunctive relief
[2] Damages adequate to compensate the plaintiff but in no event less than a reasonable royalty
for the use made of the invention by the infringer
[3] Treble damages, when appropriate
[4] Attorneys fees in exceptional cases, such as those that involve knowing infringement; and