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LAW & ETHICS IN THE BUSINESS ENVIRONMENT 8e
Instructor Manual
CHAPTER NINE
OWNERSHIP, CREATIVITY, AND INNOVATION: INTELLECTUAL
PROPERTY
MAIN CONCEPTS
Copyright
Traditional copyright law
Fair use
Beyond copyright: misappropriation, trademark, patents, and trade secrets
Global Intellectual Property Rights (IPR)
INTRODUCTORY TIPS
Begin this chapter with class discussion around the following scenario: Assume you are a student
in a Marketing 1 class. Your team's project--a "marketing proposal" for a new product--is terrific.
After you give a presentation to the class, complete with Microsoft PowerPointtm visuals and
pop-musical interludes, you receive the first "A" of your college career. However, 6 months later,
you discover your idea was even better than you thought when you watch your own marketing
plan in action on local cable television. Your teammates are as excited and disappointed as you
are. What can you do about it?
Discussion can begin to outline some of the issues that will be explored in this chapter:
(a) Different kinds of IP law. Patents for truly inventive products or processes, trade-secret law
for unpatentable ideas; copyright protection for the expression, but not the ideas themselves.
(b) The complexity of ownership issues (e.g. an individual's marketing plan vs. one that is an
amalgam of student presentations, organized and sold by the marketing professor).
(c) Plagiarism vs. fair use of copyrighted material (songs, etc.).
COPYRIGHT
Bridgeport Music, Inc. v. UMG Recordings, Inc., Questions, p. 326 - 327
1. How does a copyright holder prove that its rights have been violated? Did the plaintiff
here meet that standard?
2. Were any parts of Atomic Dog copyrightable? Which ones?
According to the judge, the generic terminology was not copyrightable, but the way in which the
3. Is there an ethical difference between Shakespeare’s use of Plutarch for Romeo and
Juliet and Laurent’s’ use of Shakespeare for West Side Story? Is the creative process
inherently derivative?
Online Piracy or Cultural Jamming?
TRADITIONAL COPYRIGHT LAW
No cases or questions in this section.
FAIR USE
Sony BMG Music Entertainment v. Tenenbaum, Questions, p. 336 - 337
1. Why does Tenenbaum lose this case? Does the outcome seem fair?
Tenenbaum lost this case because he did not present any sort of narrow fair use exception to the
copyright law and instead launched an attack on established copyright principles. The court
Student answers may vary on the second part of this question. It may be that this defendant
2. The music industry asked the judge to prevent Tenenbaum from promoting illegal file
sharing and the judge refused. Articulate an ethical analysis of Tenenbaum’s actions
and of the music industry’s attempt to silence him.
3. Using the fair use analysis from the case, discuss the following:
a. Seventh-grade teacher copying newspaper clippings for her class to discuss
Purpose and Character: The purpose is educational in nature, which tends to be a fair
use and not an infringement.
b. College professor creating a “class anthology” made up of chapters from various
textbooks and copying it at a local copy shop
Purpose and Character: The college professor’s use is educational – though it is not
clear that he is not selling it to his students
Details of the Blackwell v. Excel Research Group:
c. Same as (b) but instead of copying the chapters, she scans them and posts them on
the course website.
Purpose and Character: The college professor’s use is educational – in this
circumstance there is no profit
A comprehensive discussion of Cambridge University Press v. Becker is found here:
d. A literary critic’s use of quotes from six short stories in a review of the
author’s newest collection
Purpose and Character: The purpose is to educate and inform others of the
work – leans to fair use
4. Research: Find a case that involves a “transformative” use that is deemed fair.
For more information on the transformative theory, see the following blog:
Many websites, including the Stanford website below, discuss the transformative factor as if
it is part of the “purpose of use” factor and not a separate fifth factor.
5. Patrick Cariou versus Richard Prince
(a) What arguments can you make that Cariou’s rights were violated? What defenses
might Prince raise?
(b) Research: Find out how the court ruled in the actual case.
The Supreme Court declined review of the case:
6. Which should qualify as a parody?
a. Jon Stewart mocking public access television.
b. Alice Randall’s The Wind Done Gone, retelling the famous Gone With the Wind story
from the perspective of a slave.
In SunTrust v. Houghton Mifflin Co., 252 F. 3d 1165 (11th Cir. 2001), the Eleventh Circuit
allowed the publishing company to move forward with the book despite a lawsuit by the
c. Leslie Nielson’s “Due this March” and Demi Moore’s Vanity Fair photo.
This was a parody. Leibbovitz sued for copyright infringement and lost the case both in the
lower court and on appeal:
7. Consider the case involving “Atomic Dog” and “D.O.G. in Me.” Can you articulate
a fair use argument on behalf of Public Authority? How might the copyright holder
respond?
Answers may vary by student. In excerpts of the Bridgeport case (not used in the textbook),
the judge addressed fair use. The defendants in the case argued that the fact that the portions
Joint Copyrights and Collective Rights
No cases or questions in this section.
Public Domain
The Creative Commons, Lawrence Lessig, Questions, p. 340 - 341
1. What does Lessig mean by the “freedom to Disnify”?
The freedom to Disnify is the freedom to take a creative work and modify or adapt it in to
another creative work. Just as Disney took Grimm’s fairy tales and turned them in to happy
2. Would you rewrite copyright law?
3. Adobe eBook reader.
4. Creative Commons
There are many other articles available on the web about Creative Commons including:
Students should discuss what “some” means in the term “some rights reserved.” The benefits
and risks would depend on how “some” is interpreted and exactly what is spelled out in the
Digital Millennium Copyright Act
Universal City Studios, Inc. v. Eric Corley, Questions p. 344 - 345
1. What is DeCSS?
DeCSS is a software program that enables the user to decrypt the encryption scheme (Content
What was defendant's legal claim, and why did he lose this case?
Corley argued that the DMCA under which he was prosecuted is an invalid law because it
violates the First Amendment to the Constitution. Computer code, he claimed, is protected
The appellate court agreed that computer code is a form of protected speech. However, it agreed
2. Identify the stakeholders in the music-swapping controversy created by Napster and
others. How ethical are these services from a free market perspective? A utilitarian
perspective? A deontological perspective? What would a feminist interpretation bring
to the table?
The stakeholders in the music-swapping controversy include:
Artists and Authors who obtain royalties from sales of creative works
Producers
Answers regarding the ethical analysis will depend upon each students’ point of view. Some
students may believe that copying and sharing music has been happening long before Napster.
3. Is there a difference, ethically, between the copyright infringement activity of a music
file-sharing service and those who use it? Is copyright enforcement fair? Why or why
not?
Students will vary on opinions on this matter. As a practical matter, it would be impossible to
4. Under the DMCA, nonprofit educational providers are protected a when faculty
member or graduate student infringes copyright which teaching or researching as long
as some conditions are met. The faculty member or graduate student can be liable.
(a) Why do you think the law does not apply to undergraduate infringement? Should it?
Student answers will vary. One reason to consider is that undergraduates usually do not
(b) Find out whether, and how, your school informs Internet users of their obligations to
comply with copyright law, and evaluate the effectiveness of the policy.
Students should either interview people in charge of their college’s professors,
5. Research: Viacom sues YouTube
Viacom ultimately lost the case:
6. Is there an ethical distinction between illegally downloaded music and unlicensed
software? Why or why not?
7. Find out what happened to Megaupload and to Kim Dotcom. Has the government gone
after any other “locker services”? What would distinguish lawful locker services from
unlawful ones?
A variety of articles is found here:
The Justice Department released over 190 pages of evidence against Kim Dotcom and the
company. As of the time of this publication, the hearing has been delayed to July 2014:
Beyond Copyright: Misappropriation, Trademark, Patents, And Trade Secrets
White v. Samsung and Deutsch Associates, Questions, p. 350
Background
The Ninth Circuit Court of Appeals in Hollywood was busy protecting the rights of celebrities
vis-à-vis advertisers before this case was decided. In 1988 Bette Midler had been approached by
the advertising agency for Ford, and asked if she would be willing to be paid for a rendition of
her hit song "Do You Want To Dance?" for an ad campaign for the Lincoln Mercury. She refused,
so the agency signed up one of her backup singers, instructed her to sound as much like Ms.
Midler as possible, and recorded the song anyway. The court found that Midler had a right to
publicity under California law. It did not matter that her face was not also attached to the ad; a
close imitation of her voice alone was enough to make consumers think that she had been paid to
endorse Ford's cars. Midler v. Ford Motor Co., 849 F.2d 460 (9th Cir. 1988). The Ninth Circuit
used this new common law tort of voice misappropriation again in 1992, when a less famous
performer, Tom Waits, won against Frito-Lay's advertising agency, which had a singer imitate
Waits' gravelly voice and distinctive delivery in a jingle to sell tortilla chips. This was a "pure
voice" case, since only the sound, not the song, was being copied, yet Mr. Waits won $2.6
million ($2 million in punitive damages). Waits v. Frito-Lay Inc., 978 F.2d 1093 (9th Cir. 1992).
In White v. Samsung, though, the Ninth Circuit stretched these rights even further, extending
potential liability to the imitation of the role played by a celebrity, rather than any particular
aspect of the celebrity's personality.
1. Is there intellectual property at stake in this case? Explain.
The obvious creation of human intellect--the ad itself--is a form of intellectual property entitled
How might copyright law apply to this case?
The dissent suggests that copyright law is indirectly relevant to this case. Copyright law strikes a
2. What moral judgments are involved?
The court explains that "considerable energy and ingenuity" have gone into the creation of
The dissent thinks other important interests are being given short shrift in the majority's analysis:
Overprotecting intellectual property is as harmful as under protecting it.
It goes on to describe the essence of copyright protection as a balance:
Intellectual property law assures authors the right to their original expression, but
The dissent would limit the right to publicity to make room for parody and culture-by-accretion.
Which is more persuasive?
The majority would contrast advertisers' greed with the hard-earned fame of a celebrity, but the
According to the dissent, the moral edge belongs to enhancing the vitality of our popular culture,
