Introduction

In simple terms, intellectual property is a product of the human intellect that has commercial value. Intellectual property encompasses a wide range of creations—from fiction, poetry, songs, designs and artwork to ads, product names, mechanical inventions, processes, chemical formulas, machines and software.

The commercial value of intellectual property comes from the ability of its owner to control its use. If the owner could not legally require payment in exchange for use, ownership of the intellectual property would have intellectual worth but no commercial value.

EXAMPLE 1: Jayna writes a novel about romance in cyberspace. As the author/owner, she has the legal right to prevent others from reprinting the book, making a movie or creating a television miniseries based on the novel. It is this right that can produce revenue for Jayna: she can sell publishing rights to a publisher, movie rights to a movie producer and television rights to a network in exchange for royalties based on book, movie and TV proceeds.

EXAMPLE 2: Todd invents a process for inserting modified genes into cancer cells. He applies for and receives a patent, a monopoly awarded by the federal government that allows Todd to require anyone who wants to use the process to pay him a negotiated license fee. If no one wants to use the process, Todd won’t make any money (unless he uses it in his own gene therapy clinic).

A. How Intellectual Property Law Works

Intellectual property law is an umbrella term for all the statutes, government regulations and court decisions that together determine who owns intellectual property and what rights go along with that ownership. In addition, intellectual property law specifies:

• the conditions under which intellectual property rights may be sold or loaned (licensed) to others for specific purposes

• how to settle contract disputes that arise from marketing intellectual property, and

• how to take advantage of government procedures and programs that establish or enhance protection of intellectual property rights.

Intellectual property law primarily offers protection to the owner of intellectual property by giving the owner the right to file a lawsuit asking a court to enforce whatever rights are being transgressed. As a result, some experts describe intellectual property laws as “affirmative rights” rather than as “protection.” Noted patent attorney and author David Pressman suggests thinking of intellectual property laws as tools that can be used when needed, but not as any kind of defensive shield. In other words, intellectual property laws won’t prevent someone from stepping on the owner’s rights. But the laws do give an owner the ammunition to take a trespasser to court. For example, upon request of the copyright owner, a court will halt unauthorized copying of material protected by the copyright. But if the copyright owner does not sue the copier, no action will be taken and the copier will get away with this illegal behavior.

1. Types of intellectual property laws

Intellectual property law consists of several discrete legal categories. Although these categories can overlap with respect to a particular intellectual property, they each have their own characteristics and terminology.

• Trade secret law affords the owner of commercial information that provides a competitive edge the right to keep others from using such information if the information was improperly disclosed to or acquired by a competitor and the owner of the information took reasonable precautions to keep it secret.

• Copyright law protects all types of original creative expression, such as that produced by authors, composers, artists, designers, programmers and Web page designers. However, copyright law does not protect the ideas and concepts underlying an expressive work; it only protects the literal form the expressive work takes. For example, copyright protects the actual words used to write a novel about life on a submarine where the crew faces almost certain death because of damaged engines. But copyright won’t prevent other writers from either writing novels about submarine life or using the same basic plot, as long as they don’t copy the first novelist’s literal expression. Copyright protection lasts a long time, often 100 years or more.

• Trademark law protects the distinctive (unique, creative or well known through use) names, designs, logos, slogans, symbols, colors, packaging, containers and any other devices that are used by businesses to identify the source of their goods and services, and distinguish them in the marketplace. This protection can last indefinitely.

• Patent law gives the inventor of a new and nonobvious invention the right to exclusive use of that invention for a limited term. How long the inventor retains the exclusive right depends on the kind of patent. A utility patent (the most common type of patent) goes into effect when issued by the U.S. Patent and Trademark Office and expires 20 years after the application for the patent was filed. A design patent (for an inventive but nonfunctional design) lasts 14 years after the date the patent issues. A plant patent expires 20 years from the date the patent was filed.

2. Unfair competition laws

Courts are frequently asked to intervene when one business uses unfair tactics to compete with another business. Among the unfair tactics the courts have condemned is a business trying to lure customers away from a competing business by confusing customers as to which business or products they are dealing with. The most common way to confuse customers is for a second business to market its goods or services under a name or other mark that is confusingly similar to that used by the first business on its goods or services.

Although courts originally decided these types of disputes without the benefit of a legislative enactment, Congress and most state legislatures have now legislated the basic principles developed by the courts to deal with unfair business practices. All together, these court decisions and statutes are termed unfair competition law. And under this body of law, a business may obtain a court order preventing a competitor from engaging in unfair business practices.

Unfair competition is not usually considered a separate branch of intellectual property law, as it targets general business practices rather than intellectual property as such. However, because the use of misleading names and marks to improperly lure customers away from another business is also very much what trademark law is concerned with, the two types of law often overlap.

EXAMPLE: The name used by Joe’s Pizza is very ordinary and not distinctive enough to be considered a trademark. If, however, another business opens up down the street under a “Joes’s Pizza” sign, the courts may use unfair competition laws to force the second user to modify the name to distinguish it from the first.

3. International laws

Under a variety of treaties, most countries in the world offer protection to U.S. intellectual property used abroad. And under these same treaties, the U.S. protects intellectual property created in these other countries. Several major international treaties—the Berne Convention is the most important—govern rights in copyrights in most countries. International patent rights are broadly recognized under the Paris Convention and the Patent Cooperation Treaty. Trademark owners also have some international rights under the Paris Convention. And trade secrets receive international protection under GATT (General Agreement on Tariffs and Trade).

Legal Basis of Intellectual Property Laws

The sources of intellectual property laws vary according to the subject matter. Trade secret law derives both from federal and state legislation, and from court cases that have developed their own set of principles used to decide new trade secret cases that come before them (termed the “common law”). Trademark and unfair competition laws originate primarily in both federal and state statutes, but also, especially in the area of unfair competition, come from court decisions that apply principles developed by earlier courts as part of the common law. Copyright and patent laws originate in the U.S. Constitution and are specifically and exclusively implemented by federal statutes. In all these intellectual property areas, court decisions interpreting and enforcing applicable statutes also provide an important source of intellectual property law.

4. Intersection of intellectual property laws

Although each category of intellectual property law is aimed at a particular type of intellectual property, trade secret, copyright, patent and trademark laws occasionally intersect with each other with respect to a particular intellectual property item. Some common examples of this are as follows:

• Trade secret and copyright. It is possible to maintain a work of expression as a trade secret and still have it protected by copyright up until the time that it is published—that is, distributed to the public on an unrestricted basis. This is because the nature of trade secret law arises from the actions taken by the owner of the work to keep the work secret for the purpose of getting a jump on competitors, while copyright law automatically applies to any work of expression the instant it becomes fixed in a tangible form. The best example of an intellectual property item that is usually protected by both copyright and trade secret law is the written code underlying most computer software (called source code).

• Trade secret and patent. It is possible to pursue a patent application while simultaneously maintaining the invention as a trade secret, at least for the first 18 months of the U.S. patent application process. The U.S. Patent and Trademark Office (PTO) treats applications as confidential until they are published. Unless the applicant files a Nonpublication Request at the time of filing, and doesn’t file for a patent outside the U.S., the PTO will publish the application within 18 months of the filing date. This publication effectively ends trade secret protection. If the applicant will not be filing abroad, the trade secret information in the patent application is kept confidential and is only published if the PTO grants the patent. At that point, the applicant gives up trade secret rights in order to obtain patent rights. If the applicant is not filing abroad and the patent application is rejected, the trade secret will remain intact and the competition will not know about the invention.

• Copyright and trademark. These laws may apply to the same item. For instance, the expressive artwork in a package design may be protected by copyright while the overall look and feel of the package may be protected as trade dress (a form of trademark). Likewise, an advertisement may include some material covered by copyright (for example, a jingle) and other material covered by trademark (the product or company name). The difference here is that copyright protects the literal expression while trademark protects whatever is used to designate the source of a product or service being offered in the marketplace.

• Patent, copyright and trademark. Patent law can intersect with copyright and trademark law in the area of product configuration. In short, when it comes to a product design—say, jewelry or a toy—the creator may, at least theoretically, be able to invoke any or all of these three approaches to intellectual property protection. (The reason we use the word “theoretically” is that courts always are trying to distinguish between the different forms of intellectual property and are prone to restrict the contexts in which they overlap.)

  EXAMPLE: A design patent can issue on the new, unobvious, nonfunctional design of an article of manufacture—for example, stylistic ornamentation added to a pair of eyeglasses. Trademark law may be used to protect the appearance of the ornamentation if it is intended to be—and is—used to distinguish the particular brand of eyeglasses in the marketplace. And copyright law may also be used to protect certain expressive aspects of the design.