Chapter 4Patents, Trademarks and

Trade Secrets

PgP BUSA331 2

Trademarks, Servicemarks

• Word, name, symbol or device• Used in trade with goods to indicate the source of

the goods (or service) and to distinguish them from the goods of others• Goal- consumer protection

PgP BUSA331 3

Trademarks, Servicemarks

• Mixture of:• Lanham Act of 1945• Madrid System• US Anti-Dilution Act• State Law

PgP BUSA331 4

Registration

• Ownership arises from use, not registration, but…• Registration has benefits• Public record of claim• Proof of ownership• Invocation of federal jurisdiction• Basis for foreign registration• Customs prevent importation

• IZOD alligator, gray market goods

PgP BUSA331 5

Search

• TESS• Trademark Electronic Search System• Not current, not all inclusive

• WHO IS• AllWhoIs

PgP BUSA331 6

Loss of Trademark

• Abandonment-Failure to use trademark• Enter common usage, public domain• Dry Ice, Corn Flakes, Zipper

• Trademark owners must promote use of trademark as adjective, not noun• Benefits Advertising Industry

PgP BUSA331 7

International Trademarks

• Nike conflict in Spain• European Community registration• Madrid System- international• One global application

• Madrid Agreement• Madrid Protocol-• Single application valid for 10 years

PgP BUSA331 8

Symbols

• TM -Trademark, not federally registered• ® - Trademark, federally registered

PgP BUSA331 9

Trademark Infringement

• Test- likely to cause confusion

PgP BUSA331 10

Trademark Dilution

• Requires• Commercial use• Famous mark• Causes dilution of the distinctive quality

PgP BUSA331 11

Trademark Blurring

• Famous trademark used on noncompeting goods• Smith & Wesson toasters

PgP BUSA331 12

Trademark Tarnishment

• Ridiculing mark’s distinctive quality• Hormel vs Muppets over SPAM or Spa’am

PgP BUSA331 13

Trademark Parody

• Conveying two simultaneous contradictory messages• PETA-People for the Ethical Treatment of Animals• PETA-People Eating Tasty Animals• Not a parody• Google vs Booble

PgP BUSA331

Patent

• Government grant• Monopoly rights• Exclude others from making, using, offering for sale

or selling invention for a period of 20 years from the filing date

PgP BUSA331

Patent

• Like Copyright, Patent cannot cover idea• Not a law of nature• Not a physical phenomena• Must be invention

PgP BUSA331

Inventions-Utility Patent

• Process• Machine• Manufacture• Composition of matter• Improvements on above

PgP BUSA331

Patent vs Trade Secret

• Patent-full disclosure of invention in return for 20 year monopoly-federal law• Trade Secret-secret, no disclosure required, infinite

life-state law

PgP BUSA331

Patent Value-Licensing!

• Exclusive license-to one licensee• Nonexclusive license- to multiple licensees• Limited use license• Cross licensing-create a cartel

PgP BUSA331

Patent Types

• Utility patent-most common, inventions• Design patent-appearance of object• Plant patent-appearance and color

PgP BUSA331

Utility Patent Requirements

• Novel• Non-obvious• Useful

PgP BUSA331

Utility Patent Application

• Filing application required, not optional• Prior art search• Patent Attorney-specialist• Process is expensive and time consuming• Patent Litigation is extremely expensive

PgP BUSA331

Utility Patent Application Sections• Petition• Abstract• Specification• Claims• Drawings• And strict time limits!

PgP BUSA331

Internet & Patents

• Protect software-.gif files• Protect business methodology- Amazon ‘One-click’

PgP BUSA331

Business Methods Criticism

• Not ‘Novel’• Not ‘Non-obvious’

PgP BUSA331

Patent Infringement

• Compare patent claims to infringing product• All claim elements must be present in product• Patent presumed valid (court assumes examiners

competent), therefore infringer must proved patent invalid• Threat of litigation expensive, use patents as shield

PgP BUSA331

International Patents

• World Intellectual Property Organization (WIPO)• Based on Paris Convention of 1883• One year filing deadline for intl

• Patent Cooperation Treaty of 1970• One intl patent application

PgP BUSA331

Trade Secrets

• Business Practices• Methods• Processes• Designs

PgP BUSA331

Trade Secret Elements

• Not generally publicly known• Information secrecy confers economic benefit• Secrecy maintained by reasonable efforts

PgP BUSA331

Trade Secret Law

• State Law-except Economic Espionage• Varies by Jurisdiction• Model statute-Uniform Trade Secrets Act• 45 states adopted

PgP BUSA331

Trade Secret Examples

• Google Search code• Supplier lists

PgP BUSA331

Misappropriation

• Independent research or reverse-engineering is allowed• Remedies• Injunction• Lost profits• Royalties

PgP BUSA331

Economic Espionage Act of 1996• Misappropriation or theft of trade secrets• Federal offense• Fines up to $5 million• Jail terms up to 10 years• Apple sues Ciarelli over leaks