Chapter 8 Intellectual Property and Unfair Competition This chapter talks about civil recoveries for abuses of free competition 1 infringement of intellectual property rights protected by patent copyright and trademark law o misappropriation of trade secrets Competition is deemed unfair when 1 it discourages creative endeavor by robbing creative people of the fruits of their innovation 2 it renders commercial life too uncivilized for the law to tolerate o o o Protection of Intellectual Property Patents A patent is an agreement between an inventor and the federal government o Under this agreement the inventor obtains the exclusive right to exclude others from making using or selling his invention in return for making the invention public by giving the government certain information about it the patent holder s monopoly encourages the creation and disclosure of inventions by stopping third parties from appropriating them once they become public The first to invent rule states that the only the true inventor would be eligible for a patent on his invention and if another person creates the same invention after then that person would not be entitled to a patent o the first to file rule is a counter for this rule because this rule states that whoever filed the patent application first is the true inventor What is Patentable o An inventor may patent a process a machine a product and so on naturally occurring things such as a new wild plant are not patentable abstract ideas and scientific concepts as well An invention fits within one of the categories enumerated earlier it o is not patentable if it lacks novelty is obvious or has no utility the novelty requirement states that the invention be new and truly different from past relevant inventions o There can be no patent if the invention would have been obvious to a person having ordinary skill in that area o A patentable invention must have utility or usefulness There should be a patent application filed more than one year prior Patent applications handled by the United States Patent and Trademark office must be specific in describing the invention with sufficient detail to enable a person skilled in the relevant field to utilize the invention o must also contain a drawing of the invention The Patent Office must determine whether the invention meets the requirements and if the application is rejected the application may Obtaining a Patent resubmit but if it s rejected twice then the applicant may appeal to a Patent Office board Ownership and Transfer of Patent Rights Congress amended the patent law to provide that the patentee s exclusive rights to exclude rights to exclude others from making using or selling the patented invention generally exist until it expires 20 years after patent application was filed The patentee may transfer ownership of the patent by making a written assignment of it to another party they may keep ownership and license others to using it For inventions of employees if the invention was developed by an inventor hired for work by the employer they must assign any patents she obtains to the employer if the employee created the invention on company time then the employer has nonexclusive license to utilize the invention Patent infringement is when the defendant uses illegal force to use make or sell the patented invention the alleged infringement activities must have happened in the United States The defendant is liable if the subject matter he sold made or used contained elements that were not identical to those described in the patentee s claims of invention o o o Patent Infringement Global Tech Appliances Inc v SEB S A US Supreme Court 2001 SEB created an innovate deep fryer and it was a commercial success in the US Sunbeam Products Inc asked Pentalpha a Hong Kong company to make them a deep fryer Pentalpha purchased an SEC product and copied all but its cosmetic feature Pentalpha then sold its fryers to Sunbeam and Sunbeam sold them in the U S SEB settled with Sunbeam and sued Pentalpha and Global Tech Appliances DECISION Pentalpha denied knowing of SEB s patent The jury concluded that Pentalpha subjectively believed there was a chance that SEB s fryer was patented deliberately blinded itself to the infringing nature of the sales it encouraged Sunbeam to make Defenses to Patent Infringement o Alleged infringer may defend by attacking the validity of the patent say that the invention was not novel or was obvious Courts have the ability to second guess the Patent and Trademark Office and order the cancellation of a patent on the ground of invalidity One may also challenge the validity of the patent by filing a declaratory judgement action that seeks a court ruling of invalidity Lastly the defendant can assert that the patentee has committed patent misuse patent monopoly ex one who refuses the patentee s terms and later infringes the patent may attempt to escape liability by arguing that the patentee misused his monopoly position One significant change brought by the patent reform bills is the Patent Reform Bills first to file system A patent could be awarded to anyone who was not the first creator of an invention if he developed the same invention and filed a patent application before the first creator did This poses a problem though because well financed firms might have a greater ability to win a race to the Patent Office than the little guy inventors Copyright law gives certain exclusive rights to creators of original works of Copyrights authorship Coverage o prevents others from using their works give them an incentive to innovate and thereby benefits society o The Federal Copyright Act protects a wide range of works of authorship including books articles plays motion pictures etc To merit copyright protection such works must be fixed set out in a tangible medium of expression which they can perceived and reproduced original and creative Copyright protection protects the ways in which such things are expressed ex The story line of a play is protected but the ideas themes or messages underlying it are not Copyright protection extends to program s object code and source code Creation and Notice protected work A copyright comes into existence upon the creation and fixing of a Registration is not necessary for the copyright to exist Registration normally is a procedural prerequisite to filing a suit for copyright infringement Even though it is not required copyright owners often provide notice of the copyright a