978-1285197159 Chapter 6 The types of work that can be copyrighted include

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Chapter 6

Intellectual Property

At a Glance

Instructor’s Manual Table of Contents

Overview

Objectives

Teaching Tips

Quick Quizzes

Discussion Questions

Additional Projects

Additional Resources

Key Terms

Lecture Notes

Overview

Chapter 6 provides an overview of intellectual property issues, including copyrights, patents and

trade secret laws. It discusses cross-licensing and software patents. The chapter presents a

discussion of plagiarism and plagiarism detection services. Ethical issues in reverse engineering

are introduced, and the chapter ends with a discussion of competitive intelligence and

cybersquatting.

Objectives

As students read this chapter, they should consider the following questions:

What does the term intellectual property encompass, and why are organizations so

concerned about protecting intellectual property?

What are the strengths and limitations of using copyrights, patents, and trade secret laws to

protect intellectual property?

What is plagiarism, and what can be done to combat it?

What is reverse engineering, and what issues are associated with applying it to create a

lookalike of a competitor’s software program?

What is open source code, and what is the fundamental premise behind its use?

What is the essential difference between competitive intelligence and industrial espionage,

and how is competitive intelligence gathered?

What is cybersquatting, and what strategy should be used to protect an organization from

it?

Teaching Tips

Vignette—Sinovel Steals Millions in Trade Secrets from American Superconductor

1. In 2006, the Chinese government passed a clean air energy law that mandated the creation

of seven giant wind farms, each of which would, within a decade and a half, produce as

I. What is Intellectual Property?

1. Intellectual property is a term used to describe works of the mind—such as art, books,

Teaching

Tip

Give examples of materials that may be copyrighted, and materials that may be

patented.

II. Copyrights

1. Begin this section by explaining that copyright and patent protection was established

through the U.S. Constitution, Article I, section 8, clause 8, which specifies that Congress

shall have the power “to promote the Progress of Science and useful Arts, by securing for

limited Times to Authors and Inventors the exclusive Rights to their respective Writings

Teaching

Tip

Discuss the advantages and disadvantages of extending the period of a

Teaching

Tip

Emphasize that an idea cannot be copyrighted, but its expression can, and

discuss why this is central to the notion of copyrighting.

A. Copyright Term

1. Copyright law guarantees developers the rights to their works for a certain amount of

B. Eligible Works

1. The types of work that can be copyrighted include architecture, art, audiovisual works,

choreography, drama, graphics, literature, motion pictures, music, pantomimes, pictures,

sculptures, sound recordings, and other intellectual works, as described in Title 17 of the

U.S. Code.

C. Fair Use Doctrine

1. The fair use doctrine allows portions of copyrighted materials to be used without

D. Software Copyright Protection

1. The use of copyrights to protect computer software raises many complicated issues of

interpretation. Note that to prove infringement, the copyright holder must show a

striking resemblance between its software and the new software that could be explained

only by copying.

E. The Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of

2008

1. The Prioritizing Resources and Organization for Intellectual Property (PRO-IP)

Act of 2008 increased trademark and copyright enforcement and substantially increased

penalties for infringement.

F. General Agreement on Tariffs and Trade (GATT)

G. The WTO and the WTO TRIPS Agreement (1994)

1. Introduce the Agreement on Trade-Related Aspects of Intellectual Property Rights.

Use Table 6-1 to aid the discussion.

H. The World Intellectual Property Organization (WIPO) Copyright Treaty (1996)

1. Point out that the WIPO Copyright Treaty, adopted in 1996, provides additional copyright

protections to address electronic media. The treaty ensures that computer programs are

protected as literary works and that the arrangement and selection of material in

databases is also protected.

I. The Digital Millennium Copyright Act (1998)

1. The Digital Millennium Copyright Act (DMCA) was signed into law in 1998 and

implements two 1996 WIPO treaties: the WIPO Copyright Treaty and the WIPO

Performances and Phonograms Treaty. Note that the act is divided into five sections,

Titles I–V.

Teaching

Tip

Take time to discuss criticisms of the DMCA, including the fact that it gives

holders of intellectual property so much power that it restricts the flow of

information.

Quick Quiz 1

1. A(n) _____ is the exclusive right to distribute, display, perform, or reproduce an original

work in copies or to prepare derivative works based on the work.

2. _____ is a violation of the rights secured by the owner of a copyright.

3. The _____ allows portions of copyrighted materials to be used without permission under

certain circumstances.

4. (True or False) The Copyright Term Extension Act is also known as the Sonny Bono

III. Patents

1. A patent is a grant of a property right issued by the United States Patent and Trademark

Office (USPTO) to an inventor. A patent permits its owner to exclude the public from

making, using, or selling a protected invention, and it allows for legal action against

violators. Note that unlike a copyright, a patent prevents independent creation as well as

copying. Use Figure 6-2 to aid the discussion.

Teaching

Tip

It may be helpful to use an example to give students some idea of the relative

difficulty of proving an infringement claim.

A. Leahy-Smith America Invents Act (2011)

1. Introduce that the Leahy-Smith America Invents Act represents a major change in U.S.

patent law. Under this law, which was passed in 2011, the U.S. patent system changed

from a “first-to-invent” to a “first-inventor-to-file” system effective March 16, 2013.

2. Further, explain that the America Invents Act also expanded the definition of prior art

used to determine the novelty of an invention and whether it can be patented.

B. Software Patents

1. Provide a summary of the 1981 Diamond v. Diehr case. Note that based on its ruling, the

courts have slowly broadened the scope of patent protection for software-related

inventions.

C. Cross-Licensing Agreements

1. Explain that many large software companies have cross-licensing agreements in which

each party agrees not to sue the other over patent infringements.

2. Point out that major IT firms usually have little interest in cross-licensing with smaller

firms, so small businesses often have no choice but to license patents if they use them.

Teaching

Tip

Discuss the implications of small companies paying more to license their

technology than larger companies, and how this affects innovation by smaller

companies.

IV. Trade Secrets

1. Remind students that a trade secret is defined as business information that represents

something of economic value, has required effort or cost to develop, has some degree of

uniqueness or novelty, is generally unknown to the public, and is kept confidential.

A. Trade Secret Laws

1. Trade secret protection laws vary greatly from country to country. For example, the

Philippines provides no legal protection for trade secrets.

Uniform Trade Secrets Act (UTSA)

1. The Uniform Trade Secrets Act (UTSA) was drafted in the 1970s to bring uniformity

to all the United States in the area of trade secret law. The first state to enact the UTSA

was Minnesota in 1981, followed by 39 more states and the District of Columbia.

The Economic Espionage Act (EEA) (1996)

1. The Economic Espionage Act (EEA) of 1996 imposes penalties of up to $10 million

and 15 years in prison for the theft of trade secrets. Before the EEA, there was no

B. Employees and Trade Secrets

1. An important point to make is that employees are the greatest threat to the loss of

company trade secrets—they might accidentally disclose trade secrets or steal them for

monetary gain. Organizations must educate employees about the importance of

maintaining the secrecy of corporate information.

2. Introduce the terms nondisclosure clauses and noncompete agreement.

There have been several examples in the past several years where confidential

data has been lost because an employee stored it on a laptop that was lost or