CHAPTER 8: INTELLECTUAL PROPERTY RIGHTS 13
• The trend is not to extend copyright protection to programs’ “look and feel” (general appearance,
menus, windows, and other displays). Trademark laws may apply, however.
IV. Trade Secrets
Some business processes and information that cannot be patented, copyrighted, or trademarked are pro-
tected against appropriation by a competitor as trade secrets. Customer lists, plans, research and develop–
ment, pricing information, marketing techniques, production techniques, formulas, and generally anything that
makes an individual company unique and that would have value to a competitor constitute trade secrets.
A. STATE AND FEDERAL LAW ON TRADE SECRETS
B. TRADE SECRETS IN CYBERSPACE
The nature of technology (especially e-mail) undercuts a firm’s ability to protect its confidential in–
formation, including trade secrets.
ENHANCING YOUR LECTURE—
HOW CAN YOU PROTECT YOUR TRADE SECRETS?
Most successful businesses have trade secrets. The law protects trade secrets indefinitely, provided that
the information is not generally known, is kept a secret, and has commercial value. Sometimes, of course, a
CONFIDENTIALITY AGREEMENTS
In a confidentiality agreement, one party promises not to divulge information about the other party to
anyone else or to use the other party’s confidential information for his or her own benefit. Confidentiality
agreements are often included in licensing and employment contracts, but they can also be separate
DEFINING THE SCOPE OF THE AGREEMENT
Confidentiality agreements must be reasonable. Businesspersons should consider what information
needs to be protected and for how long. Make certain to define what you mean by confidential information in
the agreement. Do you want to protect just your customer list or all financial, technical, and other business
14 UNIT TWO: TORTS AND CRIMES
The duration of the agreement usually depends on the nature of the information. Very important secret
information should remain confidential for a longer time than less important secrets. Sometimes, as with an
advertising campaign, the time period for confidentiality may be self-evident (if the campaign ends in six
CHECKLIST FOR THE OWNER OF TRADE SECRETS
1. Determine what your trade secrets are and who may need access to them.
2. Make sure that confidentiality agreements define, in an all-inclusive manner, what information should be
considered confidential.
3. Specify a time period that is reasonable under the circumstances.
4. Identify the agreements to which the confidentiality provisions apply.
5. Require that the confidential materials be returned to you.
6. Create a mechanism to enforce the policy.
V. International Protection for Intellectual Property
A. THE BERNE CONVENTION
Under the Berne Convention, if an American writes a book, every country that has signed the convention
must recognize his or her copyright in the book. Also, if a citizen of a country that has not signed the
convention first publishes a book in a country that has signed, all other countries that have signed the
convention must recognize that author’s copyright.
ADDITIONAL BACKGROUND—
The Berne Convention
International protection of copyright is provided by international treaties, including the Berne Convention,
BERNE CONVENTION
FOR THE PROTECTION OF LITERARY AND ARTISTIC WORKS
OF SEPTEMBER 9, 1886
* * * *
CHAPTER 8: INTELLECTUAL PROPERTY RIGHTS 15
(Source of Text: Paris Act of July 24, 1971, as amended on October 2, 1979, provided by the World
Intellectual Property Organization, Geneva, 1987.)
The countries of the Union, being equally animated by the desire to protect, in as effective and uniform a
manner as possible, the rights of authors in their literary and artistic works, * * * have agreed as follows:
Article 1
* * * *
The countries to which this Convention applies constitute a Union for the protection of the rights of authors in
their literary and artistic works.
Article 2
* * * *
(1) The expression ‘literary and artistic works’ shall include every production in the literary, scientific and
* * * *
(3) Translations, adaptations, arrangements of music and other alterations of a literary or artistic work shall be
protected as original works without prejudice to the copyright in the original work.
(4) It shall be a matter for legislation in the countries of the Union to determine the protection to be granted to
official texts of a legislative, administrative and legal nature, and to official translations of such texts.
without prejudice to the copyright in each of the works forming part of such collections.
(5) Collections of literary or artistic works such as encyclopedias and anthologies which, by reason of the
(6) The works mentioned in this Article shall enjoy protection in all countries of the Union. This protection
shall operate for the benefit of the author and his successors in title.
(8) The protection of this Convention shall not apply to news of the day or to miscellaneous facts having the
character of mere items of press information.
(7) Subject to the provisions of Article 7(4) of this Convention, it shall be a matter for legislation in the
16 UNIT TWO: TORTS AND CRIMES
Article 2[b]
* * * *
(1) It shall be a matter for legislation in the countries of the Union to exclude, wholly or in part, from the
(2) It shall also be a matter for legislation in the countries of the Union to determine the conditions under
which lectures, addresses and other works of the same nature which are delivered in public may be
CHAPTER 8: INTELLECTUAL PROPERTY RIGHTS 17
Article 3
* * * *
(1) The protection of this Convention shall apply to: (a) authors who are nationals of one of the countries of
(2) Authors who are not nationals of one of the countries of the Union but who have their habitual residence in
one of them shall, for the purposes of this Convention, be assimilated to nationals of that country.
(3) The expression ‘published works’ means works published with the consent of their authors, whatever may
be the means of manufacture of the copies, provided that the availability of such copies has been such as to
(4) A work shall be considered as having been published simultaneously in several countries if it has been
published in two or more countries within thirty days of its first publication.
Article 4
* * * *
The protection of this Convention shall apply, even if the conditions of Article 3 are not fulfilled, to: (a) authors
Article 5
* * * *
(1) Authors shall enjoy, in respect of works for which they are protected under this Convention, in countries of
(2) The enjoyment and the exercise of these rights shall not be subject to any formality; such enjoyment and
such exercise shall be independent of the existence of protection in the country of origin of the work.
(3) Protection in the country of origin is governed by domestic law. However, when the author is not a
national of the country of origin of the work for which he is protected under this Convention, he shall enjoy in
18 UNIT TWO: TORTS AND CRIMES
that country the same rights as national authors.
(4) The country of origin shall be considered to be: (a) in the case of works first published in a country of the
Union, that country; in the case of works published simultaneously in several countries of the Union which
B. THE TRIPS AGREEMENT
More significant is the agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
TRIPS was part of the agreement creating the World Trade Organization (WTO).
1. Establishes Standards and Procedures
TRIPS established standards for the international protection of intellectual property rights.
2. Prohibits Discrimination
C. THE MADRID PROTOCOL
Under this treaty, a U.S. company wishing to register its trademark abroad can submit a single application
and designate other member countries in which they would like to register the mark.
D. THE ANTI-COUNTERFEITING TRADE AGREEMENT
1. Goals and Provisions
The goal of the Anti-Counterfeiting Trade Agreement (ATA) is to increase international cooperation,
2. Border Searches
Member nations are required to establish border measures that allow officials, on their own initiative,
TEACHING SUGGESTIONS
1. It could be pointed out that disputes arising in the areas covered in this chapter are among the most
volatile and most extensively—and expensively—litigated disputes in the law.
CHAPTER 8: INTELLECTUAL PROPERTY RIGHTS 19
2. One of the issues raised in this chapter is whether an instructor should be allowed to photocopy (has the
common use of the brand name “Xerox” to refer to photocopying rendered the brand name generic?) all or
part of one or more copyrighted works to hand out to a class of students. Should a single student be
allowed to photocopy a chapter of a library book for later study? Would students feel differently if
they owned the rights to the work and would receive royalties if the work were purchased instead of
3. To help students analyze problems that focus on topics in this chapter, you might outline the following
three steps. First, it should be determined if the party who is bringing the suit has a protectable interest (that
Cyberlaw Link
Questions that students might be asked include the following.
• Is linking to a Web site without authorization an infringement of the site’s copyright? Is it a
violation of trademark law? Would it make any difference if the URL included a person’s name
or a trademark?
• Is framing another’s site a violation of any of the laws that protect intellectual property?
• Should there be a different copyright law for cyberspace?
DISCUSSION QUESTIONS
1. What is a trademark? A trademark is a distinctive mark, motto, device, or emblem that a manufacturer
2. What is infringement? Trademark infringement occurs when a trademark is copied to a substantial degree
20 UNIT TWO: TORTS AND CRIMES
3. Would the use of a purported trademark solely on a Web site satisfy the “use in commerce”
requirement for trademark protection? The use of a purported mark on a Web site alone would likely qualify as
“use in commerce,” assuming of course that the use was sufficiently prominent. Together with other uses of the
4. Why is it important to allow those who have applied for trademark protection to defend preemptively
against the use of the mark by another party? Policy considerations, especially the promotion of certainty in
5. What are some of the pros and cons of having an international standard for trademark protection? An
international standard for trademark protection promotes progress and development in the arts and sciences, and
6. What are service, certification, and collective marks? A service mark distinguishes services rather than
goods. A certification mark is used by one or more persons, other than the owner, to certify the region, materials,
7. Why don’t all software products qualify for patent protection? A patent is a grant from the federal
government securing the exclusive right to make, use, and sell an invention for seventeen years (designs are covered
8. What is a copyright? A copyright is an intangible right granted to an author or originator of certain literary or
artistic productions. The right is granted automatically; the protection lasts for the life of the author plus fifty years.
9. Discuss the fair use doctrine and what factors are considered in determining whether a use is fair.
Reproduction of copyrighted works is permitted without payment of royalties under the fair use doctrine. The factors
CHAPTER 8: INTELLECTUAL PROPERTY RIGHTS 21
10. What’s the difference between a patent and a trade secret? Both patents and trade secrets are forms of
ACTIVITY AND RESEARCH ASSIGNMENTS
1. News reports of local, national, and international controversies involving the subjects considered in this
2. In discussing trademarks, trade names, service marks, and collective marks, ask students to bring to class an
example of each. Discuss as a large group whether the examples are properly identified.
3. Ask students to research online how the design of a Web site can be protected. Here is one possibility: (1)
Register it with the U.S. Copyright Office. This is not necessary but it establishes (a) a public record of your design in
case a claim is filed and (b) prima facie evidence in court of the validity of the copyright. Additional damages and
attorney fees may be available in a court action if the registration occurs before a claim is filed. (2) Put a copyright
mark on the page. This is not required either, but it prevents an infringer from claiming “innocent infringement.” What
EXPLANATIONS OF SELECTED FOOTNOTES IN THE TEXT
Footnote 13: George V Restauration S.A. and others owned the “Buddha Bar Paris,” a restaurant in Paris,
France. Little Rest Twelve, Inc., paid royalties to use the Buddha Bar trademark and concept in New York City under
the name “Buddha Bar NYC.” Little Rest advertised its affiliation with Buddha Bar Paris on its Web site and in the
media. When a dispute arose, the owners of Buddha Bar Paris withdrew their permission for Buddha Bar NYC’s use
of their mark, but Little Rest continued its use. The owners of the mark filed a suit in a New York state court against
Why didn’t Little Rest simply stop its use of the Buddha Bar mark when its owners withdrew their
permission? Reasons that Little Rest did not stop using the Buddha Bar mark might include a belief that the parties
22 UNIT TWO: TORTS AND CRIMES
Suppose that Little Rest had never had the permission of the owners of the Buddha Bar mark to use it. Would
an injunction against that use have been proper? An injunction would have been proper, but it might not have
Could Little Rest prevent confusion between the Buddha Bars in New York City and Paris by posting a
Footnote 17: KSR designed a pedal assembly for General Motors Corp. (GMC) to use in its Chevrolet and
GMC light trucks. Teleflex Inc. filed a suit in a federal district court against KSR for the design’s infringement
Teleflex’s patent titled “Adjustable Pedal Assembly With Electronic Throttle Control” (known as “the Engelgau
patent”). KSR countered that “claim 4” of the Engelgau patent was obvious and thus invalid. The court ruled in KSR’s
favor. The U.S Court of Appeals for the Federal Circuit reversed. The case was appealed. In KSR International Co.
v. Teleflex Inc., the U.S. Supreme Court reversed and remanded. Under the “teaching, suggestion, or motivation”
test (TSM test), a patent claim is obvious “if some motivation or suggestion to combine the prior art teachings can be
found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art.” In other
words, “a patent for a combination which only unites old elements with no change in their respective functions” is
obvious and not patentable. Here, the Court found claim 4 to be obvious. “[W]e see little difference between the
teachings of [prior patents] and . . . claim 4 of the Engelgau patent. A person having ordinary skill in the art could
have” arrived at the same result.”
Can your students rephrase in more succinct terms the Court’s ruling in the KSR case? The Court itself
more eloquently summarized its position at the end of its opinion. “We build and create by bringing to the tangible and
palpable reality around us new works based on instinct, simple logic, ordinary inferences, extraordinary ideas, and
If a person of ordinary skill can implement a predictable variation of another’s patented invention, does
CHAPTER 8: INTELLECTUAL PROPERTY RIGHTS 23
Based on the Court’s reasoning, what other factors should be considered when determining the
obviousness of a patent? The Court explained that a court may need “to look to interrelated teachings of multiple
patents; the effects of demands known to the design community or present in the marketplace; and the background
Footnote 26: Inhale, Inc., held a copyright on a hookah that included skull-and-crossbones images on its
outside. Inhale filed a suit in a federal district court against Starbuzz Tobacco, Inc., alleging copyright infringement for
the sale of identically shaped hookahs (without the skull-and-crossbones images). The court issued a judgment in
Starbuzz’s favor. Inhale appealed. In Inhale, Inc. v. Starbuzz Tobacco, Inc., the U.S. Court of Appeals for the Ninth
Circuit affirmed. “The shape of a container is not independent of the container’s utilitarian function—to hold the
contents within its shape—because the shape accomplishes the function. The district court correctly concluded that
the shape of Inhale’s hookah water container is not copyrightable.”
What is the test for determining whether a creative work has been unlawfully copied? All copying is not
copyright infringement. For example, a copyrighted work may be used without the owner’s permission for purposes
such as “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or
Are there any useful articles whose artistic aspects can be identified separately from and exist
Are most creative works in the public domain—and available for anyone to use without charge? If not,
should they be? Yes, most creative works are in the public domain—and available for anyone to use without charge.
In other words, the availability of works in the public domain is the rule, and the restriction on works with intellectual
24 UNIT TWO: TORTS AND CRIMES
How could Inhale hold a registered copyright on its hookah if the shape of the water container is not
copyrightable? Throughout this litigation, the courts concluded that the shape of the water container on Inhale’s
hookah is not copyrightable. The courts reasoned that “the shape of a container is not independent of the container’s