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Andy King owns a small sandwich shop in Boca Raton, Florida. The shop is called “Andy The Burger King” and has been open for about one month.Andy sells typical “burger place” food, including hamburgers, chicken sandwiches, french fries, onion rings, sodas and milkshakes. As a nod to his Cuban heritage – his mother was born in Havana – he also sells Cuban sandwiches in two sizes: “The Regular” and “The Whopper.”In his shop, Andy enjoys playing a variety of music over the speaker system. Generally, he plays whatever music he recently bought on his own and downloaded to his iTunes account. Lately, his favorite to play for his customers has been “Night Visions,” an album by the band Imagine Dragons.Andy receives two letters in the mail. The first is from the Burger King Corporation, demanding that he cease and desist the use of the name of his restaurant and the name of the large Cuban sandwich. The second is from Broadcast Music, Inc., on behalf of Imagine Dragons, advising that he must pay royalty fees to the band or stop playing the music. Both companies write that if action is not taken immediately, they will sue Andy.What are the basics for each potential lawsuit, what are the legal analysis (including the “elements” of each legal claim) that each plaintiff (Burger King and BMI/Imagine Dragons) could use to make its argument, what defenses could Andy use, and how do you think that each case would be decided in court?You shall be graded on your complete and proper explanations, research and language usage, all as noted below. The report must be submitted in typed, double-spaced form.
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QUIZQUIZQUIZ
Intellectual property includes which of the
following:
a. Trademarks and trade secrets
b. Patents
c. Copyrights
d. All of the above
11-1
Justification for Intellectual Property
➢ Similar to the private property system
➢ Exclusive right to intellectual property gives
incentive to new inventions
➢ U.S. Constitution protects intellectual
property for limited times
11-2
Intellectual Property and Competition
➢ Property rights provide exclusivity to firms
and individuals
➢ Economic return on investment
encourages creation of more information
➢ Intellectual property is essential to maintain
the growth of creative research and
development (R&D)
11-3
Capturing Intellectual Property
➢ Certain steps need to undertaken to
transform knowledge into valuable
intangible assets
➢ Strict deadlines are applicable for asserting
rights of some intellectual property
➢ Failure to follow the rules can position the
product in public domain
11-4
Trade Secrets
Knowledge
Or Info
Kept Secret
(reasonable
measures
taken)
Economic
Value
Uniform Trade Secrets Act
11-5
Establishing the Existence
of a Trade Secret
➢ Conduct a trade secret audit to identify
confidential knowledge-based resources
➢ Preserve secrecy
➢ Lock written material
➢ Secure computer-stored knowledge with
firewalls and encryption
➢ Impose confidentiality restrictions
➢ Regulate visitors
➢ Ask employees, customers, and business
partners to sign nondisclosure agreements
11-6
Case 11.1 – Trade Secret
➢ Case
➢ Al Minor & Associates, Inc. v. Martin
➢ 881 N.E.2d 850 (Ohio, 2008)
➢ Court of appeals
➢ Issue
➢ AMA filed a lawsuit against Martin, claiming that
he violated Ohio’s Trade Secrets Act by using
confidential client information to solicit clients
11-7
Demonstrating Misappropriation
➢ Misappropriation occurs when one
improperly acquires or discloses secret
information
➢ Independent creation and reverse
engineering are exempted
➢ Employee mobility and trade secrets
➢ Confidentiality contracts forbid employees from
disclosing the knowledge obtained in workplace
➢ Employers can enforce agreements not to
compete only when there is a valid business
purpose for the contract
11-8
Civil Enforcement of Trade
Secrets
➢ Trade secret owners can acquire injunction
➢ Injunction: Order by a judge either to do
something or to refrain from doing something
➢ Owners can obtain damages from people
who misappropriate trade secrets
11-9
Criminal Enforcement of Trade
Secrets
➢ Economic Espionage Act (EEA)
➢ Considers stealing trade secrets a crime
➢ Punishment
➢ Individuals – Fines and up to 10 years’ imprisonment
➢ Organizations – Up to $5 million in fines
➢ Provisions
➢ Makes one liable for standard trade secret
misappropriation
➢ Addresses misappropriation to benefit a foreign
government
11-10
Patent Law
New
invention
Legal
monopoly
11-11
Figure 11.1 – Types of Utility
Patents
11-12
Obtaining a Patent
2.Filing fee
1.File application
3.Explain invention
Patent –
exclusive right
to invention
4.Show difference
from prior art
5.Describe patentable
aspects
6.Evaluation by
the patent examiner
11-13
America Invents Act
➢ Revised to a first-inventor-to-file system
➢ Increased the ability of companies to:
➢ Keep some internal processes a secret
➢ Avoid infringing another’s patent through prior
user rights
11-14
Patentable Subject Matter
➢ Validity of a patent can be tested by
scrutinizing its subject matter
➢ Certain categories of subject matter cannot
be patented
➢ Do not represent true inventions
➢ Supreme Court’s views on patentable
subject matter refer to concept preemption
11-15
Case 11.2 – Patentable Subject
Matter
➢ Case
➢ Association for Molecular Pathology v. Myriad
Genetics, Inc.
➢ 133 S. Ct. 2107 (2013)
➢ Supreme Court
➢ Issue
➢ Plaintiffs filed lawsuit against Myriad Genetics
objecting their patent claims over genes which
increase the chance of developing cancer
11-16
Characteristics of Patents
Novelty
• Something new and different from the prior art
Nonobviousness
• Ability of an invention to produce surprising or
unexpected results
Utility
• Must do something useful
11-17
Patent Enforcement
➢ Purpose of law
➢ To allow inventions in the public domain after
the limited period of legal property right
➢ Patent owner can sue against infringement
for injunction and damages
➢ Inventions can cover methods and articles
that can overlap
11-18
Figure 11.2 – Overlapping Intellectual
Property Rights
11-19
Patent Trolls and the Litigation
Threat
➢ Overlapping rights provide an opportunity
for firms to purchase patent rights and sue
companies
➢ Patent trolls
➢ Non-producing patent owners who impose high
costs by enforcement
➢ Do not contribute much to the innovation
environment
➢ Subject to fines if the assertions of infringement
are vague and unsupported
11-20
Trademarks
Marks on what is
produced to represent
the origin of goods &
services
Recognizability or
distinctiveness
Protection against
confusion
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Marks Protected by the Lanham
Act of 1946
Trademark
Service mark
Collective mark
Certification
mark
Trade dress
11-22
Food for thought…
Imagine that you were blindfolded and taken into a
national fast food /restaurant franchise or a national
chain department store. When you took the
blindfold off, would you likely know the name of the
department store chain or national fast food
/restaurant franchise?
That is the power and importance of trade dress.
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Trademark Registration
➢ Usage of mark in interstate commerce
requires registration with PTO
➢ Mark must be distinctive
➢ PTO places the mark in the Official Gazette
➢ Registered on the Principal Register if the
mark is acceptable
➢ Must be renewed every 10 years
➢ Provision of full trademark status for a
name or descriptive term
➢ To be listed on the Supplemental Register for
five years and acquire a secondary meaning
11-24
Trademark Enforcement
➢ Law protects the owner from unauthorized
use of the mark
➢ Establishes civil and criminal violation
➢ Infringement: Civil violation of a trademark
➢ Remedies include damages and injunctions
and orders to destroy infringing products
➢ Generic marks cannot be protected
➢ Manufacturing and trafficking counterfeit
trademarked products is a criminal violation
11-25
Case 11.3 – Trademark Confusion
➢ Case
➢ Kraft Foods Group Brands LLC. v. Cracker
Barrel Old Country Store, Inc.
➢ 735 F.3d 735 (7th Cir. 2013)
➢ Issue
➢ Plaintiff filed a suit against the defendant
claiming that consumers will be confused by the
similarity of the logos and Kraft will be blamed
for any dissatisfaction with CBOCS products
11-26
Trademark Issues on the Internet
➢ Relationship between website domain
name and trademark
➢ People attempt to register domain names
containing well-known trademarks that does not
belong to them
➢ Anticybersquatting Consumer Protection Act,
1999
➢ Provides remedy of statutory damages and transfer of
trademark domain name to its owner
11-27
Trademark Dilution
➢ Federal Trademark Dilution Act, 1995
➢ Prohibits the usage of a mark same as or
similar to another’s trademark to dilute its
significance, reputation, and goodwill
➢ Types
➢ Blurring – When usage of a mark blurs
distinctiveness of a famous mark
➢ Tarnishment – When usage of a mark creates a
negative impression about the famous
company
11-28
Copyright
Monopoly
Copying and
marketing
Limited
period of
time
Original
expression
11-29
Copyright Ownership
➢ Copyright law grants property in certain
creative expressions
➢ Prohibits others from reproducing it without the
owner’s permission
➢ Criteria for copyright protection
➢ Work must be original
➢ Must be fixed in a tangible medium of
expression
➢ Must show creative expression
11-30
Copyright Infringement
➢ The owner has to establish that defendant
violated his or her exclusive rights of:
➢ Reproduction
➢ Creation of derivative works
➢ Distribution
➢ Performance
➢ Display
➢ Criminal penalties are applicable for willful
infringement
➢ Piracy: Large-scale copyright infringement
11-31
Copyright Fair Use
➢ Copyright Act
➢ Specifies that fair use of copyrighted materials
is not an infringement of the owner’s property
➢ Fair use includes copying for criticism, comment,
news reporting, teaching, scholarship, or research
➢ Factors considered by courts
➢ Purpose and character of the use
➢ Nature of work
➢ Amount and substantiality of the portion used
➢ Effect of the use upon the potential market
11-32
Case 11.4 – Copyright Fair Use
➢ Case
➢ Campbell v. Acuff-Rose Music, Inc.
➢ 510 U.S. 569 (1994)
➢ Supreme Court
➢ Issue
➢ Acuff-Rose Music, Inc., sued 2 Live Crew
members for recording and selling a parody of
the copyrighted song Oh Pretty Woman
11-33
Copyright in the Digital Age
➢ Illegal to produce or assist in the
production of copies that violate the law
➢ Person is held liable for:
➢ Contributing to another’s infringement
➢ Obtaining financial benefit
➢ Supervising the infringement
➢ Criminal and civil lawsuits for file sharing
copyrighted material persist in the Internet
11-34
Digital Millennium Copyright Act
➢ Prevents the production or sales of a
product or service designed to circumvent
technological protections
➢ Protects Internet service providers from
liability
➢ Violations of the act permit civil remedies
➢ Injunction
➢ Actual and statutory damages
➢ Up to 10 years’ imprisonment for circumventing
for financial gain
11-35
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QUIZQUIZQUIZ
Copyright gives the owner the _____
right to reproduce, distribute, perform,
display the protected work.
a. Exclusive
b. Shared
c. Human
d. Limited
11-36
think think think
TANK TANK TANK
Which is not an allowable fair use of
copyrighted material?
a. Teaching
b. Research
c. Profits
d. Reporting
11-37
International Intellectual Property
Rights
➢ World Trade Organization (WTO)
➢ Administers Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS)
➢ Requires member countries to provide protection for
all forms of intellectual property
➢ World Intellectual Property Organization
(WIPO) administers:
➢ Patent Cooperation Treaty (PCT)
➢ Madrid System for International Registration of
Marks
11-38
Conclusion
➢ Intellectual property serves the common
good
➢ Adequate enforcement and social
recognition are essential to provide
incentive for private productive effort
➢ Enforcement of intellectual property is vital
to nations that are part of the global trading
system
11-39

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