Business Law Notes: Intellectual Property Law


course notes from my core MBA business law class covering intellectual property (IP) law
Subject: Business Law

Products of minds; result from intellectual, creative processes

Trademark (TM)

A distinctive mark, motto, device or emblem that a manufacturer stamps, prints, or affixes to product, so that they can be distinguished.

  • Distinctiveness of Mark: more distinctive to avoid confusion. Very distinctive marks are considered strong (fanciful, arbitrary, or suggestive) & are the most protected.
  • TM Infringement: Once a TM has been registered with the state or federal government, a firm is entitled to its exclusive use for marketing purposes. If copied to a substantial degree or used (intentionally or not) it’s infringed.
  • Owner need not register to get protection, but it proves date of inception & is renewable between 5-6yrs after 1st & every 20yrs after 2nd.
  • A mark is not required to be used before an application is filed, if bona fide intention to use the mark in commerce.
  • Intent to Use Provision – requires that the mark be put into commerce within 6 months after filing with PTO. This can be extended to 30 months or total 3 years from the date of notice of TM approval to make use of mark & file the required use statement. The act has cut the costs for small company’s marketing.

Service Mark (SM)

Similar to a TM but is used to distinguish the services of one person or company from those of another.

Certification Mark

Used by 1+ persons, other than the owner, to certify the region, materials, mode of manufacture, quality, or accuracy of the goods or services.

Collective Mark

When members of cooperative, association use a certification mark, or other organization it is called a collective mark. (For ex, the “Good Housekeeping Seal of Approval”) They appear at the end of movies to indicate the various associations & organizations that participated in making of the movies.

Trade Names

TMs apply to products, trade names to business. May be protected as trademarks or service marks if used as such (e.g., Apple Computer, Inc. uses the trade name Apple). It is directly related to a business & to its goodwill.


A grant from the fed government that conveys & secures to an inventor the exclusive right to make, use, & sell an invention for a period of 17 years. Lesser periods are given for designs, as opposed to inventions.

  • Requirement: the invention, discovery, or design is
    • Genuine
    • Novel
    • Useful
    • Not obvious in the light of the technology of the time.
  • Patent Infringement: if a firm makes, uses, or sells another’s patented design, product, or process without the patent owner’s permission, the tort of patent infringement exists. All features don’t have to be copied unless it is a patented process. Cost of detection & monitoring can be so high that owners can’t protect their patents, making them valueless.
  • Patents for Computer Software: Before computer programs did not meet the novel & non-obvious requirements because many software products simply automated procedures that can be performed manually. Basis for software is often a mathematical equation or formula, which is not patentable. In 1981, the Supreme Court held right to obtain a patent for a process that incorporated a computer program.


Intangible right granted by statute to the author or originator of certain literary or artistic productions. Works crafted after 1/1/78 are automatically given statutory copyright protection for the life of author plus 50yrs. Publishing houses get 75 years from date of publication or 100 years from date of creation, which ever is first.

  • Protected Expression: Books, records, films, works of art, architectural plans, menus, music videos, & product packaging. Must be original and:
    • Literary works
    • Musical works
    • Dramatic works
    • Pantomimes & choreographic works
    • Pictorial, graphic, & sculptural works
    • Films & other audiovisual works
    • Sound recordings.
    • Recently, include software & architectural plans.
  • Protected: if fixed in a durable medium from which it can be preconceived, reproduced, or communicated. DOESN’T include idea, procedure, process, system, method of operation, concept, principle or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in a work may be freely used by others. Notable Fact: math, history, names & addresses not protected (thus white pages are not copyright protected).
  • Copyright Infringement: When the form or expression of an idea is copied. Doesn’t need to be exact; nor a replica. Penalties range from actual damages or statutory damages (<=$100K) imposed at the court’s discretion, to criminal proceedings for willful violations (which may result in fines &/or imprisonment).
    • Fair Use Doctrine: copyright infringement may not apply for criticism, comment, news reporting, teaching, scholarship or research. Consider:
      • The purpose & character of the use
      • The nature of work
      • The amount & substantiality of the copy
      • The effect of the use upon the potential market for or value of the work.
  • Software: programs in the list of creative works; because of the unique nature of programs, the courts have had many problems in applying & interpreting the ’80 act.
    • Language Problem: readable by machines, source code, & binary-language; a program’s source code was held to be copyrightable.
    • Program Structure, sequence, & org protection: also copyrightable.
    • Look & feel protection: Apple’s Mac computer is not protectable under a look & feel theory.
    • TEST requires a court to divide a program into its component parts & then determine whether each individual component is
      • Protectable as an expression of an idea or
      • Unprotectable because it is an idea or a technique dictated by utilitarian considerations.
  • International Copyright Issues: US is a party to a number of international treaties, including the Berne Convention (covers all who sign) & the Universal Copyright Convention.

Trade Secrets

Info that cannot be patented, copyrighted or trademarked are protected against appropriation by a competitor (i.e., customer lists, plans, R&D, pricing, marketing technology, production technology, & anything that makes an individual company unique & that would have value to a competitor). Definition: formula, pattern, device, or compilation of info, which is used to obtain advantage.

Ideas & their expression: unlike copyright & trademark protection, trade secrets extend to both ideas & to their expression (no registration or filing requirements, this may be well suited for software.)

Rule: one who discloses or uses another’s trade secret, without a privilege to do so, is liable to the other if

  • He discovered the secret by improper means or
  • His disclosure or use constitutes a breach of confidence reposed in him by the other disclosing the secret to him.

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