Chapter 8: Real, Personal and Intellectual Property
Chapter 8 Case Hypothetical and Ethical Dilemma: Timothy Ackers is a “stay-at-home dad” living in Falling Waters subdivision in Olympia, Washington. Timothy’s wife Julia earns a six-figure income at the largest accounting firm in Olympia, and both husband and wife feel fortunate that one of them is able to stay at home with their two young children, four-year-old Hope and two-year-old Matthew.
Timothy is part of the community watch organization in his subdivision, and as a stay-at-home parent, he has ample opportunity to observe the daily neighborhood “goings-on.” For the past six months, Timothy has noticed heightened activity at the house down the street owed by the Penningtons (Clara and Jonathan;) approximately eight to twelve cars come and go from the Pennington driveway every day, and four months ago, handicapped access ramps were installed at the front and back entrances to the home. On several occasions, Timothy has seen elderly people sitting in wheelchairs in the Penningtons’ front yard.
Curious, Timothy knocks on the front door of the Pennington home one Monday morning. Clara Pennington answers. Ackers states “Good morning, Clara. I know the old saying that ‘curiosity killed the cat,’ but I can’t help myself. What’s going on at your house? Why are all the elderly people here? I though both of your parents were deceased, and I thought Jonathan’s parents had ‘passed on’ as well. Are these people related to you?”
Clara responds: “Timothy, Jonathan and I decided six months ago to open up an elderly care facility. We didn’t have the money to purchase a separate building, so we decided to care for the elderly in our home. This gives me a wonderful opportunity to stay at home, and I wouldn’t be able to do that just on Jonathan’s income. Plus, think of the advantages for our clients. Isn’t this so much better than a regular rest home? These folks have cried tears of joy, and they thank me every day for providing them the quality of care they had hoped for in their ‘golden years.’”
Falling Waters subdivision is zoned exclusively residential. Should Timothy report the Penningtons’ zoning violation? What ethical issues are involved in Timothy’s decision?
Chapter 8 Case Hypothetical and Ethical Dilemma: John “Jack” Franklin and Ruby Huss are next-door neighbors. Jack’s narrow road from the state-maintained highway to his house is approximately two-tenths of one (1) mile long, and runs along the edge of his property. On the left side of Jack’s road is a drainage ditch running the length of his road, while on the right side is the property line dividing the two neighbors’ landholdings. One day, Ruby was out gardening (she loved to cultivate roses) and Jack approached her with the following question “Ruby, I am going to have my road graveled, and I would like lay enough gravel to expand my road about four feet in width. I can’t expand it on the left side because of the drainage ditch, so I was wondering if you would mind if I widened the road on the right side. It sure would mean a lot to me, since my road is so narrow right now that I have a hard time driving my truck up to the house.” This meant that the gravel would extend approximately four feet onto Ruby’s property.
Ruby believed in the power and value of friendly neighborly relations. She responded, “Yes Jack, you may certainly do that. That gravel won’t do me or my property any harm. Tell Ann and the kids (Jack’s wife and children) I said hello when you get back to the house.”
Based on the facts presented, is Ruby’s four-foot-wide strip of land subject to Jack’s adverse possession of it? If the gravel remains on this strip of land for the statutorily-prescribed period of time for adverse possession (twenty years in many states), will Jack become its owner?
Chapter 8 Case Hypothetical: Jason Binghamton is a huge fan of the Montana State Teacher’s College (M.S.T.C.) men’s basketball team, nicknamed the “Flying Elk.” The M.S.T.C. team has enjoyed the best season in its 52-year history, and they are a favorite to win the Lewis and Clark League (L.C.L.) men’s basketball title. In fact, the team has advanced to the L.C.L. men’s basketball tournament championship, a contest against the Billings Technical College “Fighting Prairie Dogs.”
Jason drives to the championship game at Lewis and Clark Stadium in Helena, Montana. He approaches the stadium parking lot, and pays the attendant $25 for parking; in return, the attendant hands Jason a parking stub. On the back of the stub is the following language: “Lewis and Clark Stadium and the city of Helena shall not be held liable in any way for loss of or damage to visitor’s property, including loss of or damage to automobiles parked in the stadium parking lot. In accepting this parking privilege, the patron agrees that he will hold harmless Lewis and Clark Stadium, and the city of Helena, for such damage.” Jason does not read the language on the parking stub; instead, he places the ticket on his dashboard, parks his car in area B1 of the lot, locks the car doors and puts his keys in his pocket, and heads to the stadium.
By all accounts, the game is the proudest moment in the history of the Flying Elk. They defeat the Fighting Prairie Dogs 82 to 58, and Binghamton leaves the stadium ecstatic, knowing he attends a college of “winners.”
Upon returning to his car, Jason’ happiness deflates to consternation and anger. His windshield has been shattered by a stuffed and mounted prairie dog that now lays upside-down in his driver’s seat, along with countless shards of broken glass. It is obvious to Jason that the “deed was done” by some disgruntled Fighting Prairie Dog fan, but that individual is probably well on his way back to Billings by now, and he will never be able to locate the criminal.
Jason files suit against Lewis and Clark Stadium and the city of Helena, Montana, seeking to hold the defendants “jointly and severally” liable for the damage to his automobile. Will he win the lawsuit?
Chapter 8 Case Hypothetical: The American Pistol Association (APA), a gun-rights activist organization, is headquartered in Laramie, Wyoming. The APA held a ceremonial luncheon at its headquarters, and invited a host of Second Amendment advocates, including the former governor of Wyoming, Sara M. Caine. Dubbed “The Renegade” by her avid supporters, most believed that Sara would make a presidential run in the next election. Known more for her public proclamations than her actual governing acumen, Sara is most-remembered for leading a gun-rights demonstration in Wyoming’s state capital, Cheyenne, at which time she held her Chesterfield rifle above her head and announced that before government officials took her gun away, they would first have to deal with her “sharp, red fingernails!”
As a key part of the ceremony, the APA honored Sara M. Caine’s efforts to uphold the Second Amendment. The APA’s president, Charles T. Hess, presented Sara with a “Bronco 55” pistol, proudly manufactured in the United States of America. Sara enthusiastically accepted the Bronco 55. After the ceremony, Charles approached Sara and informed her that although his organization had planned to get the gun engraved with her initials on each side of its ivory handle before the presentation, the person they had chosen to do the work, Edward “Wild Eddie” Cody, had been away on vacation. He further told Sara that if she would hand the gun to him, he would get Wild Eddie to engrave the gun when he returned from vacation, and return it to her as soon as possible. Sara happily agreed, and transferred the gun to Charles.
Charles put the gun in his office desk at APA headquarters. That night, an unknown perpetrator burglarized APA headquarters, taking only the Bronco 55. Charles suspected the thief was Jean Gigot, a vocal, well-known opponent of gun rights who had moved from Dijon, France to Laramie several months ago. During his presentation of the Bronco 55 to Sara, Charles had observed Jean lurking in the back of the dining room, furtively and feverishly pacing back and forth.
From a legal standpoint, must The American Pistol Association or Charles T. Hess answer to Sara M. Caine for the theft of the gun?
Chapter 8 Case Hypothetical: Bernie Sides is a restaurant entrepreneur and an avid Civil War buff. Over the years, Bernie has collected a “treasure trove” of Civil War memorabilia, and he decides to combine his passions for restaurant ownership and Civil War history by opening a new restaurant called the “Hardtack Café” (“hardtack” is a hard, unsalted biscuit used as a staple for Civil War army rations.) Sides has devised a logo for the restaurant, and the logo (a yellow circle with red lettering for the name of the restaurant) bears a striking resemblance to a certain “rock and roll” themed restaurant of a similar name and logo.
Upon discovering the existence of the new restaurant, attorneys for the rock and roll restaurant immediately sue, requesting 1) a temporary injunction (a court order mandating that the Hardtack Café cease and desist from using its name and logo, pending the outcome of the litigation; 2) a permanent injunction (a court judgment that the Hardtack Café forever cease and desist from using its name and logo;) and 3) money damages representing all profit the Hardtack Café has earned during its existence.
Who wins, and why?
Chapter 8 Case Hypothetical: Davidson’s Microbrew, Inc. is a small beer manufacturer located in Denver, Colorado. The owner of Davidson’s Microbrew, Benjamin Davidson, takes great pride in offering the public a variety of beers, including a particular one that is currently the subject of litigation. “Barley-Davidson” is a dark brew closely resembling motor oil in its appearance. For the past three (3) years, Barley-Davidson has been sold in orange cans. There is a “bar-and-shield” logo on the can’s front closely resembling the iconic Harley-Davidson logo; in the “bar” portion of the logo, the “Barley-Davidson” name appears, and the words “Asphalt-Dark Beer” appear in the “shield” portion of the logo. On the back of the can, in small but legible print, the following disclaimer appears: “Not affiliated with Harley-Davidson Motor Company.” Barley-Davidson has become Davidson’s Microbrew’s most popular product, selling approximately 250,000 units per year.
In its lawsuit against Davidson’s Microbrew, Harley-Davidson has requested an injunction (temporary, pending litigation, and permanent, post-litigation) and money damages based on all profits generated by the defendant in its sale of Barley-Davidson. Davidson’s Microbrew’s defense is based on four (4) contentions: first, its product (beer) is distinguishable from Harley-Davidson’s product (motorcycles); second, its product disclaimer (indicating its non-affiliation with Harley-Davidson Motor Company) is displayed on every can of Barley-Davidson it sells; third, the “Barley” portion of its dark beer’s name has nothing to do with Harley-Davidson; and four, the “Davidson” portion of the beer’s name is proudly associated with the name of the microbrew’s company, and the last name of the microbrew’s founder himself.
What is the likely result of the litigation?
“Real property” is land and everything permanently attached to it.
Land ownership extends to surface rights, airspace, water rights, and mineral rights (also known as “subsurface rights.”)
Ownership in “fee simple absolute” represents the right to possess real property for life, and to will the property to heirs upon death. “Fee simple absolute” is the most complete interest in real property. A “conditional estate” is an interest comparable to fee simple absolute, except that the interest will terminate upon the occurrence or non-occurrence of a specified condition. A “life estate” is granted for the lifetime of an individual; the right to possess property terminates upon the life estate holder’s death, and the property will then pass to another party designated by the original grantor.
A “future interest” in real property is a person’s right to property ownership and possession in the future. A “leasehold estate” represents the right to possess (but not own) property for a stipulated period of time..
“Easements,” “profits,” and “licenses” are examples of “nonpossessory” estates. An “easement” is the irrevocable right to use part of another’s land for a specific purpose, without taking anything from the land. An example of an easement is a utility easement. A “profit” is the right to enter another’s land and take part of the land, or take away a product of it. An example of a profit is the right to harvest timber from another’s land. A “license” is the temporary, revocable right to use another’s property. An example of a license is a theatre ticket.
Voluntary, legal transfer of real property requires execution of the deed, delivery of the deed to the grantee (with the intent to transfer ownership of the real property to the grantee,) the grantee’s expression of the intent to possess and own the property (in other words, the grantee’s acceptance,) and filing the deed with the appropriate county office in order to protect the interests of the grantee (a process known as “recording.”)
“Adverse possession” and “condemnation” are two types of involuntary transfers of real property. Adverse possession occurs when a person openly treats real property as his or her own, without protest or permission from the real owner, for a statutorily-established period of time. Upon satisfaction of the adverse possession requirements, ownership is automatically vested in the adverse possessor. Through condemnation, the government acquires ownership of private property for “public use” after “just compensation” is paid to the owner, even if the property owner protests the condemnation.
Personal Property
“Personal property” is defined as all property that is not land or not permanently affixed to land.
There are two types of personal property: 1) tangible and 2) intangible. Tangible property is identified by the senses. Examples include furniture and automobiles. Intangible property is not identified by the senses. Examples include bank accounts and stocks.
There are two types of voluntary transfer of property: 1) purchase and 2) gift. When transfer of property is by purchase, the buyer gives some consideration (value) to the seller in exchange for title to the property. When transfer of property is by gift, the donee gives no consideration to the donor in exchange for title to the property.
There are three elements necessary for a valid gift. First, there must be a delivery of the gift. Second, the delivery must be made with donative intent. Third, there must be acceptance, a willingness of the donee to take the gift from the donor.
Involuntary transfers of ownership occur when property has been abandoned, lost, or mislaid. Property the original owner has discarded is abandoned property. Anyone finding such property becomes its owner by possessing it. Lost property is property the true owner has unknowingly or accidentally dropped or left somewhere. In most states, the finder of lost property has title to the lost good against all except the true owner. Mislaid property differs from lost property in that the owner has intentionally placed the property somewhere but has forgotten its location. The person who owns the realty on which the mislaid property was placed has the right to hold the mislaid property, since it is likely the true owner will return to the realty looking for the mislaid property.
Intellectual Property
“Intellectual Property” is defined as property that comes from creativity.
Types of intellectual property include trademarks, trade dress, copyrights, patents, and trade secrets.
A “trademark” is a distinctive mark, word, design, picture, or arrangement used by a seller in conjunction with a product and tending to cause the consumer to identify the product with the producer. A trademark must be registered with the United States Patent and Trademark Office; further, the mark must be renewed between the fifth and sixth years of registration, and after the initial renewal, every 10 years. Remedies for mark infringement include the recovery of money damages, and judicial issuance of an injunction.
The term “trade dress” refers to the overall appearance and image of a product. Trade dress is entitled to the same protection as a trademark. The main focus of a trade dress infringement case is usually whether there is likely to be consumer confusion in the comparison of two products.
A “copyright” protects the expression of a creative idea. Examples of copyrighted material include books, periodicals, musical compositions, plays, motion pictures, sound recordings, lectures, works of art, and computer programs. Three criteria are required for a work to be copyrightable. First, it must be fixed; in other words, it must be set out in a tangible medium of expression. Second, the work must be original. Third, it must be creative. Remedies for copyright infringement include the recovery of money damages, and judicial issuance of an injunction.
The “fair use” doctrine provides that a portion of copyrighted work may be reproduced for the purposes of “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarships, and research.”
Factors used to determine applicability of the “fair use” doctrine include the purpose and character of the use, (for example, whether the use is of a commercial nature, or for nonprofit educational purposes;) the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of use on the potential market for or value of the copyrighted work.
A “patent” protects a “product, process, invention, machine, or plant” that is “novel, useful, and non-obvious.” Patent protection lasts for twenty years. Remedies for patent infringement include the recovery of money damages, and judicial issuance of an injunction.
A “trade secret” is an alternative to patent protection, and represents a process, product, method of operation, or compilation of information that gives a businessperson an advantage over his or her competitors. Remedies for trade secret infringement include the recovery of money damages, and judicial issuance of an injunction. The right to a trade secret allows the holder to sue for violation if the owner can prove that the trade secret existed, that the defendant acquired the trade secret through unlawful means, and that the defendant used the trade secret without the owner’s permission.