Chapter 9
What is Intellectual
• Different from personal property
• It is “the work of the human mind”
• Examples: Books, paintings, computer software,
music, inventions
• Expensive and time consuming to create
• Easy to copy
• Once copied can be used by millions
What’s the Big Deal?
(Two sides to the story)
When intellectual property is shared freely (at no
charge), the creators of that property are not
compensated. They feel this is unfair and costs them
billions annually. ($51 billion in 2009)
• For every $100 of legitimate software sold, another $75
worth is pirated (copied illegally)
• To protect themselves, inventors in the U.S. in 2009 filed
for more than 483,000 patents
• Human genes are even patented!
2. On the other hand, when intellectual property is
shared freely, society is enriched and no one
company has a monopoly on intellectual property
Rick James or MC
• In 1981, Rick James wrote and recorded Super
• In 1990, MC Hammer had a big hit with Can't
Touch This
• Here’s what happened when that came out:
James against the Hammer
• If you hold the “copyright” to intellectual
property, it means you have “the exclusive
right” to use it. No one else has that right
unless you grant them permission.
• In copyright cases, the plaintiff must prove:
• That he/she owned the copyright for the
intellectual property
• That the defendant copied the intellectual
Bridgeport Music v UMG
• George Clinton’s “Atomic Dog”
• PublicAnnouncement’s “D.O.G. in Me”
• Was this a case of copyright infringement?
• Who won?
Copyright Law
• Copyright holder controls the right to reproduce and
• Ideas that are “fixed in a tangible medium of
expression”-photos, paintings, music, movies,
computer programs-can be copyrighted.
• Rights are held for 70 years beyond the author’s life.
• Work must be signed, dated and have the copyright
• Register with the Federal Copyright Office to protect if
Fair Use
• The “fair use” defense is commonly used in cases of
copyright infringement
• Fair use is based on the notion that the free flow of
ideas at times requires quoting or otherwise
borrowing from a copyrighted work.
• Examples of fair use: Critics reviewing books, news
reporters using video clips, teachers making copies of
articles to use in the classroom.
Sony v Tenenbaum
• Who was the plaintiff? The defendant?
• Why was the defendant sued?
• Is it “fair use” when you copy something for
free but then don’t resell it or use it for profit?
Is every non-commercial use, fair use?
4 Factors in Fair Use
Why was the material copied? i.e., To make money? To
educate without making money? For criticism,
comment, news reporting, research? The copying must
benefit the public.
What is the nature of the work? Is it a book? Poem?
How much was copied compared to the whole original
What effect does it have on the market for the original
work? (Will people still buy the original work or does
the copy take its place?)
Using the 4 Factors Analysis:
In Sony v Tenenbaum
• Why were the songs copied?
• For Tenenbaum and his friends to listen to for free, over and over
• What is the nature of the work?
• Music
• How much was copied compared to the whole original work?
• Entire songs
• What was the effect on the potential market for the work?
• People didn’t need to buy the songs because they already had
them when they got the copies. And those who choose to pay
would probably soon switch to the free downloads.
Collective Copyrights
• A copyright holder can license their rights to someone else to reproduce
and/or distribute the work.
• Microsoft and Apple hold copyright for their operating systems. If a software
engineer wants to write a program to run on Windows he must pay Microsoft for
a license to use its Windows code.
• A copyright holder can give up some of their rights in exchange for
royalties-like when a songwriter receives a royalty every time his song is
played on the radio
• Individual authors can retain their rights to their individual contributions of
a “collective work”, ie newspapers, magazines, or our textbook, but the
publisher holds the copyright in the overall work..the collective copyright.
• Example: Movies….individual musicians, screenwriters, cinematographers all
make varied contributions but the movie studio holds the collective
copyright. The composer of the score will retain her individual copyright to
the music used in the film.
Public Domain
• Public domain-Material that is always freely usable
by anyone, without permission.
• Many times public domain material is public domain
because the copyright has expired or it never had a
• Examples: Grimm’s Fairytales, Pride and Prejudice,
Alice in Wonderland, many of Charles Dickens’
• Any music published in the United States before
• What about eReaders? (Kindle, Nook) Are there
restrictions against printing pages from there?
Digital Millennium
Copyright Act
• Targets people who pirate software or anything that has a
• Targets people who share the decryption software to enable
others to pirate
• In Universal Studios v Corley
• Universal Studios sued Corley (hacker) on the grounds of copyright
infringement because he was sharing code that decrypted DVDs so
they could be copied.
• Corley’s defense was Free Speech of his decryption code because
computer code is a language and should be shared freely.
• The court ruled in favor of Universal Studios stating that it doesn’t
matter what language you use to steal (computer code or whatever),
it’s still stealing, and the government has a substantial interest in
preventing unauthorized access to copyright material.
Trademarks, Patents and
Trade Secrets
• What is a trademark or logo? (Give examples)
• Can you copyright a trademark (the Nike
• Can you copyright a new invention?
• Patent?
• Can you copyright your grandmother’s secret
recipe for fried chicken?
• Trade Secret?
• Trademarks are protected under the Lanham
Trademark Act (1946)
• Trademarks are also protected under the Federal
Trademark Dilution Act (1995)
• Both acts protect a company’s ownership rights to the
name, logo, or symbol that identifies its products.
Infringing and/or Diluting
a Trademark
• Infringing on trademark rights could involve:
• a competitor using the trademark as its own and confusing
customers about the source of the product.
• The competitor suggesting that the original owner of the
mark made an endorsement that it didn’t.
• Dilution could involve:
• A competitor or even non-competitor doing something to
blur or tarnish a trademark by using the mark on a product
that is different from the original product or that is more
“shoddy” (poor quality) than the original product.
• Ralph Nader Commercial
Infringing and/or Diluting
a Trademark (contd)
• MasterCard sued Nader for infringing and
diluting its trademark.
• MasterCard lost. Why?
• Because the court found no infringement Viewers would not be confused into thinking
MasterCard endorsed Nader.
• Also, the court found no “dilution” because it
was a non-commercial use that could not harm
• Patents protect the rights of those who discover new
• Examples: hybrid corn, human genes,’s
“one-click checkout,” new pill to treat heart disease
• Patents are available to the inventor of something
that is
Not obvious
Not in the excluded category (such as “products of
Patents (contd)
• The patent gives the inventor a “complete monopoly” for a limited
time (20 years) so no one else can use or profit from the invention
without the inventor’s permission during that time.
• Example: The patent application contains everything you need to know
to make the invention. So after the patent expires on the new pill to
treat heart disease, all the information about it is available to the public
and competitors can start making a less expensive pill or a generic pill.
The 20 year time period gives the original manufacturer time to recover
their R&D costs that they spent to invent the pill.
• Competitors can challenge the validity of a patent in court
• Examples: Google challenging Yahoo; Apple challenging Motorola,
Assoc of Molecular Pathology v Myriad (breast cancer gene mutation)
• News report from Dec 2011 regarding Assoc of Molecular Pathology v
Trade Secrets
• What about your grandma’s secret recipe for fried
chicken? (Or an example where more money is
involved-Colonel Sander’s recipe for fried chicken)
• If you built a business around this “secret” recipe you
could protect the recipe from being copied by doing
one of 3 things:
1. Writing down the recipe and getting a copyright for it,
but that wouldn’t really help because the secret could
still get out. (“trade secret”)
2. File a patent for it, or
3. Have it protected by the Uniform Trade Secrets Act
The Uniform Trade
Secrets Act
• Protects trade secrets as long as that trade
1. Has some economic value because of the fact
that it’s secret, and
2. The owner of the trade secret can show that
they’ve taken reasonable steps to keep it
• Note: If someone figures out your recipe by trial
and error, that is perfectly legal.
PepsiCo v Redmond
• Who are the plaintiffs? Defendant?
• What is the history of the case?
• What are the issues in the case?
• What was the decision of the court?
• Do you agree or disagree with that decision?
• What would/should Redmond do if he practiced:
Free Market Ethics?
Virtue Ethics?
Virtue of Care?

Intellectual Property