INTELLECTUAL PROPERTY RIGHTS

Intellectual property is a term used to cover goods and services protected under the laws governing patents, trademarks, copyrights, and trade secrets. Although the legal rights concerning different kinds of intellectual property are similar in a general sense, they differ specifically in what they protect and in how the particular rights are established. Patents protect an inventor's right to exclude others from making, manufacturing, using, or selling an inventor's invention. Trademarks protect words, phrases, symbols, and designs. Copyrights protect original artistic, musical, and literary works, including software. Intellectual property rights can also encompass state trade secrets laws, which protect a company's proprietary and confidential information, such as methods of manufacturing, customer lists, supplier information, and the materials used during the manufacturing process.

PATENT RIGHTS

A patent is a grant of a property right by the United States government, through the Patent and Trademark Office (PTO), to the inventor of an invention. The term of this property right is 17 years from the date the patent is granted, as long as the holder of the patent pays maintenance fees. A patent is not a grant of the right to make, manufacture, use, or sell the invention, but rather the right to exclude others from making, manufacturing, using, or selling the invention.

The power to grant rights in patents arises from Article I, section 8 of the U.S. Constitution. The first patent law was passed in 1790, and the current law governing patents took effect in 1953. Since the first statute, over 5 million patents have been granted. The current statute set forth the subject matters for which patents may be granted and the conditions under which a patent will be issued. It also established the Patent and Trademark Office.

Under the law, anyone who "invents or discovers any new and useful process, machine, manufacture or composition of matter, or any new and useful improvements thereof, may obtain a patent." Courts have interpreted this language to include nearly anything that could be fabricated. One cannot, however, patent methods of doing business or printed matter, such as books. An invention must meet the test of being "new" under the standards in the law before a patent will be granted. The subject matter of an invention must be sufficiently different from what has been described before in a printed publication of some sort anywhere in the world, or on sale in the United States before the date of the application for the patent. In addition, the invention must not be obvious to a person who has ordinary skill in the relevant technical or scientific area at the time the inventor applies for the patent. Finally, an invention must be determined "useful" before a obtaining a patent, although this requirement is interpreted very broadly.

Only the inventor may apply for a patent, unless he has died or has been declared insane. An inventor applies for a patent by sending to the Commissioner of Patents and Trademarks a written specification, which is a description of the invention and of the process in which the invention is made and used. The specification must contain one or more claims about the subject matter that the applicant believes pertains to the invention, and include necessary drawings. The specification must be accompanied by a sworn oath or declaration by the inventor that he or she is the original and first inventor of the subject matter of the application, and the necessary filing fees.

TRADEMARK RIGHTS

A trademark is a word, name, phrase, symbol, or design, or a combination of these elements, which identifies and distinguishes the source of goods or services. The term trademark also encompasses service marks, which identify and distinguish the source of a service rather than a product. Trademark rights are used to prevent others from making, promoting, or selling goods or services which have a name, symbol, or design that is confusingly similar to that of an established trademark. It does not, however, prevent others from making or selling the same goods or services, as long as it is under a different, non-confusing mark.

There are two distinct types of rights in a trademark or service mark: the right to use the mark and the right to register the mark. These rights arise from either using the mark in actual commerce, or filing an application for registration of the mark with the PTO.

The Trademark Act of 1946, 15 U.S.C. Section 1051 et seq.; the Trademark Rules, 37 C.F.R. Part 2; and the Trademark Manual of Examining Procedure (2nd ed. 1993) control the registration of marks. The first party who either uses a mark in the course of commerce or business or files an application for registration with the PTO usually has the right to register that mark. A party can use a mark, or establish rights in it, without filing an application for registration. The registration, however, creates a presumption that the party who has registered the mark is the owner of the mark for the goods and services set forth in the registration application, and therefore has the right to use the mark anywhere in the country. This presumption can become important when two parties unintentionally begin using similar marks and become involved in a lawsuit over who has the right solely to use the mark. This is not determined by the PTO, but by a federal court, which has the power to issue an injunction to stop a party from using a mark, and to award damages for a party's improper use of another's mark.

Similarly, the owner of a mark may use the trademark (™) or service mark ( ^SM ) designation with the mark to make it clear that the owner is claiming rights in the product or service so designated. The trademark or service mark designation may be used without the owner having registered the mark with the Patent and Trademark Office. If it is registered, however, the owner may use the registration symbol (®) with the mark.

Rights in a trademark, unlike rights in a copyright or a patent, can last for an indefinite period if the owner of the mark continuously uses the mark for its products or services. Federal registrations last for ten years, but between the fifth and sixth year after the date of the initial registration, the person who registered the mark must file an affidavit with information about the mark and ownership. If the registrant does not file this affidavit, the registration is cancelled. After the initial registration period, the mark can be renewed for successive ten-year terms. Registration of a mark with the PTO provides protection from others using the mark in the United States and its territories, but does not extend to its use in other countries.

COPYRIGHTS

A copyright gives an owner of "original works of authorship" the exclusive right to reproduce the work; prepare derivative works based on the copyrighted work; and distribute, perform, or display the work. The first Copyright Act was passed in 1790, and it has been revised many times, most recently in 1976. This act sets forth eight categories of works that can be copyrighted. These are

1. literary works
2. musical works, including lyrics
3. dramatic works, including music
4. pantomimes and choreographic works
5. pictorial, graphic, and sculptural works
6. motion pictures and other audiovisual works
7. sound recordings
8. architectural works

These categories are interpreted broadly, so that, for example, software is considered copyrightable as a literary work. However, the act does not protect an "idea, procedure, process, system, method of operation, concept, principal or discovery regardless of the form in which it is described, explained, illustrated or embodied in such work."

The term of a copyright is for the period of the life of the owner, plus 50 years. An entity or person can become the owner of a copyright in two ways, either by creating the work personally, or through owning a work for hire. Works for hire cover situations where an employee creates a work at the request of an employer (and the employer thereby owns the copyright), or where someone commissions the creation of a work, and the party commissioning the work and the creator have agreed in writing that the commissioning party shall be the owner and that the work shall be a work for hire.

In 1988, the United States became a signatory to the Berne Convention, by enacting the Berne Convention Implementation Act. The Berne Convention provides copyright protection for a copyright owner simultaneously in most countries in the world. To become a signatory country, the United States had to amend the Copyright Act to create a copyright in a work automatically upon completion of the creation. Now, as soon as a composer finishes a work or an author writes the last words of an article, there exists a copyright. However, if an owner wishes to sue for copyright infringement, the owner must register the copyright with the United States Copyright Office by completing an application, and sending it with two copies of the "best edition" of the work and the filing fee.

INTELLECTUAL PROPERTY
IN THE INTERNET AGE

Efforts to protect intellectual property became vastly more complicated with the growth of Internet technology in the late 1990s and early 2000s. The global computer network gave people greater access to all kinds of creative works, and in many cases enabled them to copy such works without regard to legal protection. "Virtually all creative content can be digitized, even if it was not initially created on a computer, and the Internet has become the primary distribution channel for every kind of digital material," Jonathan Cohen explained in his article "Copyright and Intellectual Property in the Age of the Internet."

Since the Internet has an international reach, the digital age has also brought to light discrepancies in intellectual property laws between nations. Several attempts have been made to bring the protection granted by developed and developing nations in line. In 2002, for example, the World Intellectual Property Organization Copyright Treaty (WCT) was ratified by the United States, Japan, and the European Union. The WCT updated the Berne Convention to apply to the Internet age, setting international standards for the protection of literary and artistic works in digital form.

Simultaneously, major content providers have taken steps to protect their own intellectual property from unauthorized reproduction through digital rights management (DRM) technology. DRM systems involve anti-piracy measures that are built into software, video, and music files sold over the Internet to ensure that the owners of intellectual property are compensated for its use. DRM has proved cumber-some to consumers, however, because different content providers have established their own, usually incompatible, DRM systems—making it difficult for users to access content packaged and distributed with one DRM technology using a device that supports a different technology.

Some legal experts have also expressed concern that content providers will use DRM technology to erode the rights previously granted to the public under the "fair use" doctrine of copyright law. Whether a specific use of copyrighted material is determined to be fair depends on four factors: the purpose and character of the use; the nature of the work; the portion of the work used; and the effect of the use on the market for the work. Fair use protects such activities as videotaping a television program for later viewing, posting a newspaper cartoon on an office bulletin board, and quoting from a book in a report. In view of the rapidly evolving nature of intellectual property protection in the Internet age, business managers should seek legal advice in order to protect their own creative works as well as to avoid infringing on the rights of others.