2023 Lecture OUTLINE 13 - Intellectual Property

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George Washington University *

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3601

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Law

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Jan 9, 2024

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Intellectual Property Lecture Outline INTELLECTUAL PROPERTY (IP) refers to something you own (i.e., property) that comes from the intellect. 4 types of intellectual property: 1. Patents 2. Copyrights Protected against infringement (Protected against the use of your thing) 3. Trademarks 4. Trade Secrets - IP is protected by federal and state statutes, treaties, and the common law. INFRINGMENT – The rights are RESERVED and protected from any UNAUTHORIZED use. MISAPPROPRIATION – The rights are not exclusive and are protected only from WRONGFUL taking or use. IP rights can be ASSIGNED or LICENSED. Which transfers greater rights, assignment or license?  Assignment  If you transfer a patent they have the rights to that patent, they own it  If you license it, you’re only giving them permission to use your intellectual property If you are a licensee, would it be better to receive an EXCLUSIVE or NON-EXCLUSIVE license?  Exclusive, because the licensor allows the licensee to use their technology, but only give it to them and no one else Instagram’s Terms of Use When you share, post, or upload content that is covered by intellectual property rights (like photos or videos) on or in connection with our Service, you hereby grant to us a non-exclusive, royalty-free, transferable, sub-licensable, worldwide license to host, use, distribute, modify, run, copy, publicly perform or display, translate, and create derivative works of your content (consistent with your privacy and application settings).  Royalty-free: you don’t get paid  Transferable: Instagram can transfer this license (Like if they merge or create a new company)  Sub-license: Instagram can grant a license to someone else (Reposting stuff)  Create derivative works: To take your story (Words or images) and turn it into another story (To take your idea and derive something from it) Protected against misappropriation (Somebody else is wrongfully taking or using your secret)

page 2 of 7 Protecting My Voodoo Idea Several years ago, I had an idea for a new business: I would produce and sell personalized voodoo dolls. If you sent me a picture of your worst enemy, I would convert it to a three-dimensional doll. I’d send you the doll in a cool package along with needles and a witty instruction manual for how to perform voodoo. Later I saw something like that advertised for sale, but I can prove I thought of it first. Based only on these facts, can I sue somebody?  No, because intellectual property does not protect against a mirror idea If I had told several people about my idea, could they then use my idea for their own purposes?  It depends on whether you told them of your idea, they knew or should have known that you were giving it to them in confidence or expected payment to use your idea  So if you wanted to sue, you’d have to prove the requirements above What can you do to prevent others from using ideas you share with them?  You can get them to sign an N.D.A. (Non-disclosure agreement) CONFIDENTIALITY (NON-DISCLOSURE) AGREEMENT (N.D.A.) Patent Law If no one else has, can I patent the process of voodoo?  No, because the process is not new. In order to patent something, the patented technology must be new and not being used by people already Patents are only available when the invention is NEW and USEFUL. What aspect of my voodoo doll idea could I patent?  Yes, the idea of taking a two dimensional image and making it into a three dimensional doll A patent gives exclusive rights, in effect a MONPOPLY. So, if patents interfere with COMPETITION, why does the law provide patent rights?  If anyone can take your idea, you have no incentive to share it and society cannot benefit from it  Example: A drug company spends millions of dollars on a drug, then another company copies the drug and undercuts the drug price Because they prevent competition, patent rights are limited in a couple ways: 1. 20 YEARS FROM THE TIME OF APPPLICATION 2. Lose SECRECY

page 3 of 7 The patent applicant must COMPILE AND PUBLICLY DISCLOSE all details of the invention. https://www.uspto.gov/patents/search Copyrights Could Copyright Law give me exclusive rights to any or all of my idea?  No, but you’d have rights to the packaging and instructions What copyrights do you own?  Any time you create something, a copyright arises  Examples: Text messages you send, documents you write, photographs you take, music (Lyrics, notes, and performance of them), scripts, presentations, words you speak (quotes), designs Why should the law protect these things?  To have society benefit from the ideas Copyright protection lasts for the LIFE of the AUTHOR plus 70 years. Multiple Choice Who owns the copyright to work an employee creates on the job a. The employee b. The employer c. The first to file with the U.S. Copyright Office d. All of the above The EMPLOYER owns the copyright if the work was created within the scope of employment. This is called a WORK FOR HIRE, and it will be protected for the shorter of 95 years from PUBLICATION or 120 years from CREATION. Suppose your employer tells you that you can keep the work you created. Do you own it now?  The only way to transfer copyright is by writing tip If employer says you can keep it, get it in writing! The Work for Hire Rule applies to copyrights but not PATENTS. Most companies requite their employees, as a condition of employment, to give the patent or share the patent When a professor posts copies of an article (Wall Street Journal) , is that infringement?

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page 4 of 7  No, articles are copyright material, but it’s not infringement because that distribution/copying falls within the fair use exception FAIR USE EXCEPTION – for news reporting, scholarship, teaching, criticism.  Also has to be a limited use, not excessive (A few pages or graphs, not the entire thing)  No strict limit, just what is fair. Good rule of thumb is if you take enough that you’d usually pay for it, then it’s unfair Trademarks Could Trademark Law give me exclusive rights to any or all of my Voodoo idea?  The company name, the product name, and any symbols used to identify the product or company  You get exclusive right to these Why give trademark protection?  It protects consumers to avoid confusion in the marketplace  Helps you to know the quality you can expect, associate with trademark, protects company, they wouldn’t have a brand without it, and that’s a company’s number one asset by providing excellent goods and services In the US, one gets trademark protection simply from USING a mark or name. REGISTRATION is not required but is recommended to establish THE TIME OF FIRST USE and to give others NOTICE The Case of the Syracuse Coffee Shop A small coffee shop in Syracuse NY called itself "Federal Espresso." Who sued them and why?  FedEx sued them for trademark infringement. They claimed the name Federal Espresso was too similar to Federal Express How good is the Coffee Shop’s argument that "our name is different?"  If a reasonable person would not be confused, then it is not infringement  We are in completely different industries  Doesn’t create any confusion in the marketplace  FedEx loses and appeals the ruling, taking it to real court. They ended up settling. FedEx agreed to pay them money to change their name. They changed it to Ex-Federal Expresso. Then changed it again to Freedom of Espresso. DILUTION – use of a mark that is similar to a FAMOUS mark, making it less VALUABLE [diagram] INFRINGEMENT Confusion in the marketplace Dilution

page 5 of 7 BLURRING – Many companies using a similar name as a famous brand name (Ex: Toys-R-Us and Accountants-R-Us). They went from being unique to having their name be cheapened by everyone using the R-Us at the end of their name. The famous mark loses value due to the fact that many people are using a similar name. TARNISHMENT – When someone uses a similar name to the famous name to convey some disreputable good or service (Ex: Weed-R-Us) The Hypothetical Kitchen Chair Suppose you form a furniture company and decide to call your premier product “Kitchen Chair.” If no one else has done so, can you register a trademark for that name?  No, because it is too widely used. It is the name of the product itself, the generic name, no the brand name.  It is not distinctive. The more distinctive the better Degrees of distinctiveness:  Generic: “Kitchen Chair”  No Trademark, it is the generic name  Descriptive: “Comfortable”  Probably not Trademark, it is a commonly used descriptive term  Suggestive: “Sit-Onz”  Potential Trademark, it is distinctive  Arbitrary: “Mason Chairs”  Yes Trademark, it is distinctive, but if someone else is using the name as well, then no trademark as it will create confusion in the marketplace What do these products have in common: Kleenex; Band-aids; Scotch Tape; Xerox; Google?  They are all famous brand names that have become generic  To protect themselves, they need to ensure they never use their brand names generically o “We make the best Kleenexes”  If they see others using their brand name generically, they need to stop them o Ex: “Puffs is the best Kleenex in the marketplace” Trade Secrets A trade secret is any information which is 1. SECRET, i.e., not in the public domain, Tarnishment Blurring

page 6 of 7 2. Gives a COMPETITIVE ADVANTAGE to one with knowledge of it, and 3. The owner uses REASONABLE MEANS to protect the secret. Patent Trade Secret How to obtain Requirements Privacy Duration Why can’t the same invention be protected by both patent and trade secret?  For it to be a patent, you need to apply and fully disclose the technology, which gives up secrecy If Pepsi uses a powerful microscope to determine the recipe to Coke, can Pepsi use the recipe?  Yes, they could. A trade secret is not protected from infringement, only misappropriation What would be a misappropriation?  The use of threats, bribes, or it is stolen  Sold to you by someone who isn’t authorized to sell it If Coke's CEO accidentally sends Pepsi's CEO an email with a copy of Coke’s recipe, can Pepsi use it?  No, they cannot. If you receive a trade secret by accident and use it, it is misappropriation. However, if it keeps happening, then it is no longer a trade secret. Baker v. Chef Baker licensed a trade secret to Chef for 10 years. The agreement called for Chef to pay royalties to Baker each year. During year 3, the trade secret became public knowledge through no fault of Baker or Chef. Assuming the licensing agreement is silent, should Chef have to continue paying Baker royalties?  Bakers Argument: o You have an existing duty to fulfil our contract, it wasn’t our fault that the trade secret got out.  Chefs Argument: o This is an unforeseeable circumstance that frustrated the purpose of the contract.  The U.S. Rule is that a deal is a deal. There is no excuse for not fulfilling the contract. Arises Automatically 3 Listed Above Secret by definition Potentially Forever Apply for it New and Useful Give it up 20 Years

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page 7 of 7 o If a licensee is no longer liable to pay royalties if a trade secret gets out, they could just leak the trade secret and get out of their contract  Most other countries would forgive the Chef from paying the remainder of the royalties.

2023 Lecture OUTLINE 13 - Intellectual Property

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