Intellectual Property(redirected from Information goods)
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Intangible rights protecting the products of human intelligence and creation, such as copyrightable works, patented inventions, Trademarks, and trade secrets. Although largely governed by federal law, state law also governs some aspects of intellectual property.
Intellectual property describes a wide variety of property created by musicians, authors, artists, and inventors. The law of intellectual property typically encompasses the areas of Copyright, Patents, and trademark law. It is intended largely to encourage the development of art, science, and information by granting certain property rights to all artists, which include inventors in the arts and the sciences. These rights allow artists to protect themselves from infringement, or the unauthorized use and misuse of their creations. Trademarks and service marks protect distinguishing features (such as names or package designs) that are associated with particular products or services and that indicate commercial source.
Copyright laws have roots in eighteenth-century English Law. Comprehensive patent laws can be traced to seventeenth-century England, and they have been a part of U.S. law since the colonial period. The copyright and patent concepts were both included in the U.S. Constitution. Under Article I, Section 8, Clause 8, of the Constitution, "The Congress shall have Power … 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." The first trademark laws were passed by Congress in the late nineteenth century, and they derive their constitutional authority from the Commerce Clause.
The bulk of intellectual Property Law is contained in federal statutes. Copyrights are protected by the Copyright Act (17 U.S.C.A. §§ 101 et seq. ); patents are covered in the Patent Act (35 U.S.C.A. §§ 101 et seq. ), and trademark protection is provided by the Lanham Act (also known as the Trademark Act) (15 U.S.C.A. §§ 1501 et seq. ).
Napster and Intellectual Property
In early 1999, Shawn Fanning, who was only 18 at the time, began to develop an idea as he talked with friends about the difficulties of finding the kind of MP3 files they were interested in. He thought that there should be a way to create a program that combined three key functions into one. These functions included a search engine, file sharing (the ability to trade MP3 files directly, without having to use a centralized server for storage), and an Internet Relay Chat (IRC), which was a means of finding and chatting with other MP3 users while online. Fanning spent several months writing the code that would become the utility later known world-wide as Napster. Napster became a nonprofit on-line music-trading program which became especially popular among college students who typically have access to high-speed Internet connections.
In April 2000 the heavy metal rock group Metallica sued the on-line music-trading Website Napster for Copyright infringement. Several universities were also named in this suit. Metallica claimed that these universities violated Metallica's music copyrights by permitting their students to access Napster and illegally trade songs using university servers. A number of universities had banned Napster prior to April 2000 because of concerns about potential copyright infringement and/or because traffic on the Internet was slowing down university servers. Yale University, which was named in the suit, immediately blocked student access to Napster.
Metallica argued that Napster facilitated illegal use of digital audio devices, which the group alleged was a violation of the Racketeering Influenced and Corrupt Organizations (RICO) act, 18 U.S.C. § 1961. Napster responded that the Fair Use Act allows owners of compact discs to use them as they wish. Therefore if an owner of the disc decides to copy it into a computer file, he or she should be allowed to do so. If this file happens to be accessible on the Internet, then others can also access or download it without being guilty of a crime. Napster further claimed that since it made no profit off the trades, it owed no money in royalties. The Ninth Circuit held that Napster's operation constituted copyright infringement.
Alderman, John. 2001. Sonic Boom: Napster, P2P, and the Battle for the Future of Music. New York: Perseus.
Merriden, Trevor. 2001. Irresistible Forces: The Business Legacy of Napster and the Growth of the Underground Internet. New York: John Wiley and Sons.
Intellectual property laws give owners the exclusive right to profit from a work for a particular limited period. For copyrighted material, the exclusive right lasts for 70 years beyond the death of the author. The length of the right can vary for patents, but in most cases it lasts for 20 years. Trademark rights are exclusive for ten years and can be continually renewed for subsequent ten-year periods.
Intellectual property laws do not fall in the category of Criminal Law, per se. Some copyright laws authorize criminal penalties, but by and large, the body of intellectual property law is concerned with prevention and compensation, both of which are civil matters. This means that the owner, not the government, is responsible for enforcement.
Intellectual property laws provide owners with the power to enforce their property rights in civil court. They provide for damages when unauthorized use or misuse has occurred. They also provide for injunctions, or court orders, to prevent unauthorized use or misuse.
The property protected by copyright laws must be fixed in a tangible form. For example, a musician may not claim copyright protection for a melody unless it has been written down or somehow actualized and affixed with a recognizable notation or recorded. A formula or device may not receive patent protection unless it has been presented in whole to the U.S. Patent and Trademark Office; even then, it must satisfy several tests in order to qualify. A symbol may not receive trademark protection unless it has been placed on goods or used in connection with services.
Copyright laws grant to authors, artists, composers, and publishers the exclusive right to produce and distribute expressive and original work. Only expressive pieces, or writings, may receive copyright protection. A writing need not be words on paper: In copyright law, it could be a painting, sculpture, or other work of art. The writing element merely requires that a work of art, before receiving copyright protection, must be reduced to some tangible form. This may be on paper, on film, on audiotape, or on any other tangible medium that can be reproduced (i.e., copied).
The writing requirement ensures that copyrighted material is capable of being reproduced. Without this requirement, artists could not be expected to know whether they were infringing on the original work of another. The writing requirement also enforces the copyright rule that ideas cannot be copyrighted: Only the individualized expression of ideas can be protected.
Copyrighted material must be original. This means that there must be something sufficiently new about the work that sets it apart from previous similar works. If the variation is more than trivial, the work will merit copyright protection.
Functionality can be a factor in copyright law. The copyrights to architectural design, for example, are generally reserved for architectural works that are not functional. If the only purpose or function of a particular design is utilitarian, the work cannot be copyrighted. For instance, a person may not copyright a simple design for a water spigot. However, if a person creates a fancy water spigot, the design is more likely to be copyrightable.
Copyrighted material can receive varying degrees of protection. The scope of protection is generally limited to the original work that is in the writing. For example, assume that an artist has created a sculpture of the moon. The sculptor may not prevent others from making sculptures of the moon. However, the sculptor may prevent others from making sculptures of the moon that are exact replicas of his own sculpture.
Copyright protection gives the copyright holder the exclusive right to (1) reproduce the copyrighted work; (2) create derivative works from the work; (3) distribute copies of the work; (4) perform the work publicly; and (5) display the work. The first two rights are infringed whether they are violated in public or in private. The last three rights are infringed only if they are violated in public. Public showing is defined under the Copyright Act of 1976 as a performance or display to a "substantial number of persons" outside of friends and family (17 U.S.C.A. § 101).
Infringement of copyright occurs whenever someone exercises the exclusive rights of the copyright owner without the owner's permission. The infringement need not be intentional. Copyright owners usually prove infringement in court by showing that copying occurred and that the copying amounted to impermissible appropriation. These showings require an analysis and comparison of the copyrighted work and the disputed work. Many general rules also relate to infringement of certain works. For example, a character created in a particular copyrighted work may not receive copyright protection unless he or she is developed in great detail and a character in the disputed work closely resembles that character.
The most important exception to the exclusive rights of the copyright holder is the "fair use" doctrine. This doctrine allows the general public to use copyrighted material without permission in certain situations. To varying extents, these situations include some educational activities, some literary and social criticism, some Parody, and news reporting. Whether a particular use is fair depends on a number of factors, including whether the use is for profit; what proportion of the copyrighted material is used; whether the work is fictional in nature; and what economic effect the use has on the copyright owner.
The rise in electronic publication in the late twentieth century, particularly the widespread use of the Internet since the mid 1990s, caused new concerns in the area of copyright. A web site called Napster, which provided a file-sharing system whereby users could trade electronic music files, became one of the most popular sites on the Internet. The company had an estimated 16.9 million worldwide users, and the system accommodated about 65 million downloads. The Recording Industry Association of America sued Napster, eventually causing Napster to close down.
During the late 1990s, Congress enacted a series of laws that had significant impacts on the law of copyright. In 1998, Congress enacted the Sonny Bono Copyright Term Extension Act, Pub. L. No. 105-298, 112 Stat. 2827 (17 U.S.C.A. §§ 101 et seq.), which extended the terms of existing and new copyrights by 20 years, against the protests of several Lobbying groups. Also in 1998, Congress approved the Digital Millennium Copyright Act (DMCA), Pub. L. No. 105-304, 112 Stat. 2860 (17 U.S.C.A. §§ 101 et seq.), a broad-based piece of legislation that was designed to bring copyright law into the digital age.
Patent laws encourage private investment in new technologies by granting to artists the right to forbid all others to produce and distribute technological information that is new, useful, and non-obvious. The statutory requirements for patent protection are more stringent than those for copyright protection. Furthermore, because patent protection for commercial products or processes can give a tremendous market advantage to businesses, those seeking patents often find opposition to their applications. Patent protection can be obtained only through the U.S. Patent and Trademark Office.
The novelty requirement focuses on events that occur prior to the invention. Under Section 102 of the Patent Act, an invention is not novel if it is publicly used, sold, or patented by another inventor within 12 months of the patent application. This definition implements the public policy that favors quick disclosure of technological progress.
Often, two inventors apply for a patent for the same product or process within the same 12-month period. Three factors determine who wins the patent: the date and time that the product or process was conceived; the date and time that the product or process was reduced to practice; and the diligence that was used to pursue patent protection and to perfect the discovery. Generally, the first inventor to conceive the product or process has priority in the application process. However, if the second inventor is the first to reduce the product or process to practice, and the first inventor does not use diligence to obtain patent protection, the second inventor is given priority in the application process.The utility requirement ensures that the product or process receiving patent protection will have some beneficial use. The inventor must specify in the application a specific utility for the invention. If the application is for a patent on a process, the process must be useful with respect to a product. A process that is new and non-obvious, yet useless, does not increase knowledge or confer any benefit on society.
Non-obviousness is not the same as novelty. Not everything that is novel is non-obvious. Anything that is non-obvious is novel, however, unless it already has been patented. The nonobviousness requirement focuses on existing technology, or "prior art." In determining whether an invention is non-obvious, the U.S. Patent and Trademark Office analyzes the prior art, examines the differences between the invention and the prior art, and determines the level of ordinary skill in the art. Generally, if an invention is obvious to a person of ordinary skill in the relevant art, it is not patentable.
When an inventor claims that his or her patent has been infringed, the court generally engages in a two-step process. First, it analyzes all of the relevant patent documents. It then reads the patent documents and compares them with the device or process that is accused of infringement. If each element of the accused device or process substantially duplicates an element in the patented device or process, the court may declare that the patent has been infringed. Infringement can occur only if another person uses, makes, or sells the patented device or process without the permission of the person who has received the patent.
When a patented device or process is infringed, the patent holder, or patentee, may recover in damages an amount equal to a reasonable royalty. If the infringement was willful, the infringing party may be forced to pay three times the reasonable royalty. If successful in court, the patent holder also may recover court costs and attorneys' fees. If the patent holder anticipates infringement, he or she may apply for an Injunction, which would prohibit a certain party from infringing the patent. An injunction may also issue after a finding of infringement, to prevent repeat infringement.
Trademark laws allow businesses to protect the symbolic information that relates to their goods and services, by preventing the use of such features by competitors. To receive trademark protection, a mark usually must be distinctive. Distinctiveness generally applies to any coined or fanciful word or term that does not closely resemble an existing mark. A mark generally will not receive trademark protection if it is a common or descriptive term used in the marketplace.
To receive trademark protection, a mark must be used in commerce. If two or more marketers claim ownership of a certain mark, the first user of the mark will usually receive the protection. When the mark is known to consumers only in a limited geographic area, though, it may not receive protection in areas where it is unknown.
Infringement occurs if a mark is likely to cause confusion among consumers. In determining whether confusion is likely, the court examines a number of factors, including the similarity between the two marks in appearance, sound, connotation, and impression; the similarity of the goods or services that the respective marks represent; the similarity of the markets; whether the sale of the goods or services is inspired by impulse or only after careful consideration by the buyer; the level of public awareness of the mark; whether shoppers are actually confused; the number and nature of similar marks on similar goods or services; the length of time of concurrent use without actual confusion on the part of shoppers; and the variety of goods or services that the mark represents (In re E. I. du Pont de Nemours & Co., 476 F.2d 1357, 177 U.S.P.Q. 563 ).
Defenses to infringement include fair use and collateral use. Fair use occurs when the second user, or repossessor, uses a protected mark in a non-conspicuous way to identify a component of a good or service. For example, a restaurant may use a protected mark to advertise that it serves a particular brand of soft drink, without infringing the mark. However, the restaurant may not identify itself by the mark without infringing the mark.
Collateral use is use of the same mark in a different market. For example, assume that a tree surgeon has received trademark protection for the mark Tree Huggers. This protection might or might not prevent a business that sells logging boots from using the same mark. However, if the mark for the boots is written or otherwise appears with the same defining characteristics as the mark for the tree surgeon, it risks being denied trademark protection, depending on whether it can be confused by consumers.
Remedies for infringement of a protected trademark consist of damages for the profits lost owing to the infringement; recovery of the profits realized by the infringer owing to the infringement; and attorneys' fees. A trademark holder also may obtain injunctive relief to prevent infringement.
Other Forms of Intellectual Property
The body of intellectual property law also includes laws relating to trade secrets, Unfair Competition, and the right of publicity. Trade Secret laws protect any formula, pattern, device, or compilation of information that provides a business advantage over competitors who do not use or know of it. A strategy to increase worker productivity, for example, is a trade secret. Trade secrets do not receive patent protection because they are not inventive. Trade secret laws are included in intellectual property laws because, like other intellectual property laws, they prevent the unauthorized use of certain intangible subject matter.
The right of publicity is the right of a person to control the commercial value and exploitation of his or her name, voice, or likeness. Because right-of-publicity laws promote artistic and commercial pursuits, they are included among intellectual property law. These laws are usually reserved for celebrities and other public figures whose name and image are important to their career. By allowing celebrities the right to control the commercial use of their name, voice, and image, right-of-publicity laws protect the commercial potential of entertainers.
Artists face problems protecting their property in other countries because not all countries subscribe to international agreements regarding intellectual property. This has led to widespread unauthorized copying. In the 1990s, China and Mexico were identified as especially serious offenders. In both countries, music and films are copied and sold openly without compensation to the creators. The United States threatened to impose trade sanctions against China if it did not observe international copyright treaties. Such threats illustrate that the United States places a high priority on protecting the right of artists to profit from their work.
Burgunder, Lee B. 2002. "Reflections on Napster: The Ninth Circuit Takes a Walk on the Wild Side." American Business Law Journal 39 (summer): 683–707.
Byrne, John G. 1995."Changes on the Frontier of Intellectual Property Law: An Overview of the Changes Required by GATT." Duquesne Law Review 34 (fall): 121–37.
Goldstein, Paul. 2002. Copyright, Patent, Trademark, and Related State Doctrines: Cases and Materials on the Law of Intellectual Property. 5th ed. New York: Foundation Press.
Gray, Megan E., and Will Thomas DeVries. 2003. "The Legal Fallout from Digital Rights Management Technology." Computer and Internet Lawyer 20 (April): 20–35.
Letterman, G. Gregory. 2001. Basics of International Intellectual Property Law. Ardsley, N.Y.: Transnational Publishers.
McJohn, Stephen M., and Roger S. Haydock. 2003. Intellectual Property: Examples and Explanations. New York: Aspen.
Vaidhyanathan, Siva. 2001. Copyrights and Copywrongs: The Rise of Intellectual Property and How It Threatens Creativity. New York: New York Univ. Press.