LSB 3213 1st Edition Lecture 18Current LectureSchedule:- Today (March 24)o Discuss extra credit assignment for next Tuesday (March 31)o Discuss extra credit material for Exam 2 (Intellectual Property)- Thursday (March 26)o 2:00 in Engineering South 317o Guest speaker: CEO of i2E, Scott Meachamo Ethics in Business: can we learn or are we born with them?o Won’t meet for lecture- Tuesday (March 31)o Review for Exam 2 – please bring clickerso Extra credit assignment in class- Thursday (April 2)o Exam 2 in classPreparing for Exam 2:- PowerPoints and study guide on D2L- Extra credit assignment posted on D2L – bring to class on March 31- First step: learn contract law terminology- Second step: apply concepts (review scenarios, examples from class)Law and Entrepreneurship Update:- Tesla in Michigan: October 21, 2014- Old law: “an auto manufacturer may not sell new vehicles directly to retail customers except through its franchised dealers.”- New law: deletes the word “its”o Why? The effect of the old law was to protect dealers from competing with manufacturers. But the new law forces manufacturers to sell through dealerships. Tesla now can’t argue that the law doesn’t apply to themIntellectual Property Law- Laws protecting ideas: creations of the mind, such as inventions, literary and artistic works, designs, symbols, names and images used in commerce.These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.- 4 types:o Patentso Trade Secretso Copyrightso TrademarksIntellectual Property Law and the Constitution- To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”- Do economic incentives spur creativity?- How often is personal creativity financially motivated?o People who are passionate and creative about their passions are not influenced by incentivesPatent Law- Patentable ideas are inventions or discoveries of new, useful, and non-obvious processesor machines- Patent protection: exclusive rights for 20 years (utility patent )or 14 years (design patent)o A utility patent is for the function of the deviceo A design patent is just for the design of the device- File patent application before public disclosure of ideao If you file in the US, you have a one year grace period in which if you made your invention public knowledge, you have one year after disclosing it to file and get legal protection- Patents are public knowledge. Users pay royalty (license) fee.o Amazon got a patent for their 1- click purchasing systemo Apple vs Samsung- phones look very similar and use each others designs o Western Union vs. AT&T: When Alexander Graham Bell invented the telephone he approached Western Union which already had lines laid for transmitting telegrams and asked if they would buy his company and use the lines they already laid to use the telephone. The Western Union boss didn’t think that the telephone would ever have any commercial use and rejected Bell’s offer. So, Bell started his own company, AT&T to use the telephone nationwideo Pfizer’s Lipitor- a well-know and expensive cholesterol medication. It is very expensive and takes a lot of time to develop and the company uses the 20 years for their patent to sell as much of the drug as possible before other companies can make generic and less expensive versions of the drugTrade Secret Law:- Definition: valuable business information that a company makes efforts to keep confidentialo If you can keep a secret (for any amount of time), then you have legal protection, but if the secret is revealed then you no longer have legal protection- Patents: public disclosure and monopoly for about 20 years- Trade secrets: monopoly for as long as it remains secreto Coca-cola recipe Also: WD-40, McDonald’s Big Mac Sauce, Krispy Kreme Doughnutso New York Times Best Seller List: their algorithm for choosing the best seller list is a trade secreto Barbie v. Bratz Dolls: A Barbie employee thought of a new design for a Barbie dolland brought it to their manager, but management was slow to pursue the idea, so the employee quit and went to work for the Bratz doll company and used the same design they suggested at Barbie for a Bratz dollCopyright Law:- Exclusive right to use “original works of authorship”- Books, plays, music, art, and other original works o Software and web pages- Automatic protection once “fixed in a tangible form of expression” (i.e., written down)- Protection for author’s life, plus 70 years (then public domain)- Works-made-for-hire: publication + 95 yrs or creation + 120 yrs- Derivative works: if you derive any of your work from the work of others, you must pay them royalty feeso Ex: if you use characters from another book for your own book- Why register with the Copyright Office?- Necessary, to sue for copyright infringement- And treble damages and attorney’s fees (you can get three times damages if registered for copyright laws within 3 months)- Copyright notice: symbol, author, date of first creationo © Jane Doe 2011- Exception to Copyright law: Fair use:o Fair use is an exception to an owner’s exclusive rightso Factors to consider Commercial vs. non-commercial use? Factual vs. creative material?- The more creative the material is, the more protection you have Portion vs. whole? Effect on potential market for the work?- Examples:o Mike Tyson’s tattoo artist vs. The Hangover, Part II Mike Tyson’s tattoo artist of the famous tattoo on the side of his face suedUniversal Studios for replicating the famous tattoo on a character on the Hangover Part II- Universal claimed fair use, but the tattoo artist had a good argument as it was used for commercial use and people recognized the tattoo as Tyson’s, and so Universal Studios settled with the tattoo artist out of courto Napster vs. Music Studios If you contribute songs to a database, get to download the same number of songs  This was considered copyright infringement as it took others material andgave it to others for free Taken down because it affected the market for musicTrademark Law- Word, symbol, phrase to identify and distinguish products- Strong vs. weak trademarkso Arbitrary/fanciful (Exxon, McDonalds) Strongest trademark Symbol does not relate at all to the nature of the producto Suggestive