Intellectual Property and Copyrights

  • 11,363 views
Uploaded on

www.christopher-pappas.com …

www.christopher-pappas.com

INTRODUCTION

In 1883, the importance of intellectual property was recognized for first time in the Paris Convention for the Protection of Industrial Property followed by the Berne Convention for the Protection of Literary and Artistic Works in 1886. Nowadays, the Universal Declaration of Human Rights, and to be more specific Article 27, protects the intellectual property rights that a creator or an owner of a patent or copyright has on his/her own work or investment (“What is intellectual property?” n.d.).
It is true to say that countries realized that intellectual property is a powerful tool for economic development and social and cultural welfare. Furthermore, countries wanted to promote creativity and invention especially when the interests of the innovator are the same as those of the public interest. As a result, countries created laws to protect intellectual property.

Moreover, each of us should promote intellectual property rights because of the benefits we join. For example, with the patent system an inventor of a new and highly effective drug for cancer will continue his/her research in order to produce a better and more efficient product. The results of this invention will benefit the members of the society with several ways. Patients will have more possibilities of being cured and the inventor will be rewarded for his creativity.

Intellectual property refers to the intangible property, such as patents, copyrights, trademarks, and trade dress, which belong to a person or a company. To be more specific, it refers to the creations of the mind like: symbols, inventions, artistic works, literary, and images (“Introduction to intellectual property: theory and practice” (1997).

General speaking, intellectual property is divided into two categories:
1. Patent or industrial property, which includes trademarks, inventions, industrial designs, and geographic indications of source; and
2. Copyright, which includes literary and artistic works, such as poems, paintings, plays, films, musical works, novels, drawings, photographs, architectural designs, and sculptures (“What is intellectual property” n.d.).

Moreover, a patent for an invention is an exclusive right granted to the inventor, issued by the United States Patent and Trademark Office. A patent provides protection for the invention to the owner of the patent for a limited period, generally 20 years from the date the application for the patent was filed in the United States and the maintenance fees were paid. Moreover, U.S. patent grants are effective only within the United States, U.S. territories, and U.S. possessions. Patent protection means that the invention cannot be commercially made, used, distributed, or sold without the patent owner’s consent. Furthermore, a patent owner can sell the right of the invention to someone else, who will become the new owner of the patent. When a patent expires the protection ends, and as a result, the invention becomes available to commercial exploitation by others (“What is a patent?” 2005).

Also, there are several types of patents but the most common are three:
1. Utility or function patents, such as a process, machine, article of manufacture, or composition of matter,
2. Design patents, such as a new, original, and ornamental design for an article of manufacture; and
3. Plant patents, such as a distinct and new variety of plant (“What is patent? n.d).

Furthermore, the purpose of copyrights is to protect the expression of ideas. In other words, it protects the rights of the authors and creators in any field, such as literary, dramatic, musical, artistic, and certain other intellectual works, both published and unpublished. As Jennings M. (2006), states: “A copyright gives the holder of the copyright the exclusive right to sell, control, or license the copyrighted work.” (p. 624)

According to the Section 106 of the 1976 Copyright Act, the holder

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
  • Fioricet is often prescribed for tension headaches caused by contractions of the muscles in the neck and shoulder area. Buy now from http://www.fioricetsupply.com and make a deal for you.
    Are you sure you want to
    Your message goes here
No Downloads

Views

Total Views
11,363
On Slideshare
0
From Embeds
0
Number of Embeds
10

Actions

Shares
Downloads
215
Comments
1
Likes
29

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. 1 A&M Records, Inc. vs Napster, Inc. Metro-Goldwyn-Mayer Studios vs Grokster, LTD by Christopher Pappas Master of Business Administration 607 Dr. Sue Ann Mota Business Ethics, Law, and Communication Monday, November 3, 2008
  • 2. 2 Objectives What is Intellectual Property? What are the Legal Issues of the covering cases? What are the Ethical Issues of the covering cases?
  • 3. 3 Intellectual Property Intellectual property refers to the intangible property such as patens, copyrights, trademarks, and trade dress, which belong to a person or a company
  • 4. 4 Intellectual Property Intellectual property refers to the intangible property such as patens, copyrights, trademarks, and trade dress, which belong to a person or a company Patents Copyrights
  • 5. 5 Intellectual Property Intellectual property refers to the intangible property such as patens, copyrights, trademarks, and trade dress, which belong to a person or a company Patents Copyrights
  • 6. 6 Intellectual Property Intellectual property refers to the intangible property such as patens, copyrights, trademarks, and trade dress, which belong to a person or a company Patents Copyrights
  • 7. 7 Copyright’s Basics The purpose of the copyrights is to protect the expression of ideas. “A copyright gives the holder of the copyright the exclusive right to sell, control, or license the copyrighted work” (Jennings, 2006). According to Section 106 of the 1976 Copyright Act, the holder of the copyright has the total control over the use of the copyrighted work. After January 1 1978, the creator holds the copyright from the date it has been created until 70 years after his death. The Copyright Office of the Library of Congress registers copyrights.
  • 8. 8 Copyright’s Fair Use Fair use is occasionally and spontaneous use of copyrighted materials for limited purposes. According to sections 107 through 118 of the Copyright Act, “one of the most important limitations is the doctrine of fair use.” Based on Section 107, there are four factors that determine of whether not an activity is within fair: 1. The purpose and character of the use, 2. The nature of the working being used, 3. The amount of the work used, and 4. The effect of the use on the market for or value of the original, copyrighted work.
  • 9. 9 Introduction CASE STUDY I A&M Records Inc. vs Napster Inc. Shawn Fanning, a 19-year-old student at Northeastern University, Boston, created a P2P music file sharing service. The purpose of the service was to enable people copy and distribute MP3 music files with each other. Napster was released in June 1999 and operated in this format until July 2001. Napster had to face legal challenges related to intellectual property and copyrights. Today, Napster operates under a new policy and philosophy.
  • 10. 10 Introduction A&M Records Inc. vs Napster Inc. MP3: It makes an audio file smaller and as a result, it is easier to be transfered over the internet. P2P technology means that individual users connect to each other directly without the need of a central point of management. Napster is a hybrid P2P network. It uses a central server, but users have the responsibility for hosting information, for sharing files, and for downloading.
  • 11. 11 Napster’s Operation A&M Records Inc. vs Napster Inc. Napster was a search engine that was able to find only MP3 files. The MP3 search engine had the ability to trade MP3 files directly, without the use of a centralized server for storage. Napster had an effective way of online interaction between its users. Napster index and directory were uploaded on Napster’s server, all the MP3 files were transfered across the Internet using several Window protocols directly from one user to the other. Napster claimed that one year after the release of the service its unique users’ accounts were more than 20 millions.
  • 12. 12 Legal Issues A&M Records Inc. vs Napster Inc. In 2000, A&M Records along with 18 other record companies sued Napster. Under the US Digital Millennium Act (DMCA) of 1998, A&M accused Napster for contributory and vicarious copyright infringement. Under DMCA Act, A&M accused Napster for three major infringements: 1. Its users were directly infringing plaintiff’s copyright, 2. Napster was liable for contributory infringement of plaintiff’s copyright and, 3. Napster was also liable for vicarious infringement of plaintiff’s copyright.
  • 13. 13 Legal Issues A&M Records Inc. vs Napster Inc. vs With simply words, A&M accused Napster not of violating copyright itself but of contributing to and facilitating other people’s infringement.
  • 14. 14 Legal Issues A&M Records Inc. vs Napster Inc. The defense of Napster was based on the following three major points: The Audio Home Recording Act of 1992, The Digital Millennium Copyright Act (DMCA) of 1998, and Misuse of copyright and implied license.
  • 15. 15 Legal Issues A&M Records Inc. vs Napster Inc. Napster stated that it was a service to be used for “space shifting” of sound recordings and Napster referred to the Betamax case of Sony vs. Universal Studios, where television shows were recorded to be viewed at a later time. However, Napster did not only move content into a more usable format but also hold copies so that files could be shared among Napster’s users.
  • 16. 16 Legal Issues A&M Records Inc. vs Napster Inc. Moreover, based on the DMCA that protects Internet Service Providers (ISP) Napster stated that is was used as a service for users to sample music before they purchased an entire album. Although, the District Court stated that if Napster was used only to sample music files, it would only require limited usage of songs, and not the entire song or album. Thus, giving the capability to users to download the MP3 files.
  • 17. 17 Legal Issues A&M Records Inc. vs Napster Inc. Furthermore, Napster stated that since the launch of Napster, music sales were increased. Though, the District Court stated that Napster did not provide enough evidence to support that notion, and, plaintiffs presented an incredible amount of evidence indicating that Napster actually harmed overall music sales
  • 18. 18 Legal Issues A&M Records Inc. vs Napster Inc. In July of 2000, the District Court for the Northern District of California decided that Napster was guilty for the above three infringements. In February of 2001, the Ninth Circuit Court of Appeals confirmed the District’s Court decision. In 2001, the Napster case was settled. Napster had to pay $26 million to creators and copyrighters for using their music without authorization and another $10 million for future licensing royalties. In April 2001, Napster had assets of $8 million and liabilities over $100 millions. In June 2002, Napster filed for Chapter 11 bankruptcy.
  • 19. 19 Conclusion A&M Records Inc. vs Napster Inc. Napster still exists but it operates under new structure and policy. Napster’s operation is both legal and ethical. On September 15, 2008, Napster Inc. and Best Buy Co. informed the public that they agreed to merge. Fanning’s idea for creating this software was innovative and highly creative. However, it lacked the legal and ethical base in order to protect intellectual property rights of creators.
  • 20. 20 Introduction CASE STUDY II Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. Grokster was a P2P file sharing service for music and movies. Led by MGM, 28 major entertainment companies sued Grokster with the accusation of contributory and vicarious copyright infringement. The case went to the Court of Appeals and finally to the Supreme Court.
  • 21. 21 Grokster’s Operation Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. Grokster was more sophisticated software than Napster. The main characteristics of Grokster are: 1. It does not have access to the source code for the application, 2. It uses FastTrack networking Technology, not owned by Grokster, and 3. At the start page users see advertisements that are retrieved by Grokster’s client software.
  • 22. 22 Grokster’s Operation Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. vs
  • 23. 23 Legal Issues Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. In October 2001, MGM along with 28 major music and movie firms sued Grokster with the accusation of contributory and vicarious copyright infringement. The defense supported its arguments using the Audio Home Recording Act and won the first and second round. In 2005, the Supreme Court decided that Grokster was liable for inducing copyright infringement. After that decision, Grokster had to pay $50 million to the recording industry and was force to shut down its operation.
  • 24. 24 Legal Issues First Court’s Decision Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. The companies complained that Grokster was acting illegally and that music and movie industry were losing significant profits. The defense supported its arguments using the Betamax case. The court rejected the accusation based on that “file-sharing software could be used for legitimate purposes, and as such was protected under the 1984 Betamax ruling”. The logic behind this decision was simple: electronic firms should not be accused if their products could be used to commit piracy.
  • 25. 25 Legal Issues Second Court’s Decision Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. MGM was not satisfied by this decision, and went to the Ninth Circuit Court of Appeals. Entertainment industry proved that 90% of the daily illegal downloading was happening throughout Grokster. The defense supported that Grokster was no liable since there was no central server, and therefore, it had neither the right nor the ability to control over its users.
  • 26. 26 Legal Issues Supreme Court’s Decision Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. In 2005, the Supreme Court decide that Grokster was liable for inducing copyright infringement. The final decision of the Court was: “One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by 3rd parties” In 2005, Grokster had to pay $50 million to the recording industry and was force to shut down its operation.
  • 27. 27 Conclusion Metro-Goldwyn-Mayer Studios, Inc. vs Grokster, Ltd. Grokster was liable for copyright infringement. The decision of the Supreme Court maid electronic industry to believe that it will block creativity and technological innovation of devices such as iPod.
  • 28. 28 Ethical Issues Institute for Policy Innovation due to piracy copyrighted material. U.S. losses $58 billion every year. 373,375 U.S.’s workers losses their jobs. Worker’s earning is decreased by $16.3 billion every year. Government losses $2.6 billion in tax revenues annually.
  • 29. 29 Ethical Issues How does this make you feel?
  • 30. 30 Questions?
  • 31. 31 Thank you! www.christopher-pappas.com