![The problem that IP solves
Society wants / needs innovative and creative things, to make people
happy / wealthy / safe / healthy / productive
In market capitalism, generally, people / firms produce things and sell
them for money; the profit motive provides the incentive to do this;
taking things without paying for them is either theft (criminal law) or a
tort (civil law unfair competition, conversion); competitive markets
regulate supply, demand, and price (in principle)
Inventive and creative things are “nonrival” and “nonexcludable,”
which means that in a competitive market, supply is inexhaustible, the
competitive price is zero, and (mis)appropriation is impossible;
copying is welfare-enhancing
The problem: appropriability and motivation: A zero price means no
incentive to produce
IP law creates artificial, legal boundaries around intangible products
of the mind “things” – inventions, creations, and so forth – so that
(mis)appropriation can be punished (infringement) and so that
producers and distributors can rely on those legal “things” to sell /
license them for a price
[An important footnote: This is a summary of the standard theory. Empirically, it is more
speculative than true. But the legal system has largely taken it as gospel. In truth, IP rights are
products of history, path dependence, efforts by firms to extract monopoly rents from
competitive markets, and large doses of ideology]
The solution: elements and
variations
How IP lawyers think
Patent law basics
Copyright law basics
Trademark law basics
Trade secret law basics
Patent law v trade secret law
Know your options
Patent law v copyright law
Copyright v trademark
Design patents
Patent law v trademark law
The problems that IP solves](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)
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Intellectual Property Overview.pdf
- 1. AN INTRODUCTION TO INTELLECTUAL PROPERTY LAW, FOR LAWYERS AND NON-LAWYERS ALIKE Michael Madison University of Pittsburgh School of Law Pittsburgh, Pennsylvania, USA @profmadison https://michaelmadison.net
- 2. The problem that IP solves Society wants / needs innovative and creative things, to make people happy / wealthy / safe / healthy / productive In market capitalism, generally, people / firms produce things and sell them for money; the profit motive provides the incentive to do this; taking things without paying for them is either theft (criminal law) or a tort (civil law unfair competition, conversion); competitive markets regulate supply, demand, and price (in principle) Inventive and creative things are “nonrival” and “nonexcludable,” which means that in a competitive market, supply is inexhaustible, the competitive price is zero, and (mis)appropriation is impossible; copying is welfare-enhancing The problem: appropriability and motivation: A zero price means no incentive to produce IP law creates artificial, legal boundaries around intangible products of the mind “things” – inventions, creations, and so forth – so that (mis)appropriation can be punished (infringement) and so that producers and distributors can rely on those legal “things” to sell / license them for a price [An important footnote: This is a summary of the standard theory. Empirically, it is more speculative than true. But the legal system has largely taken it as gospel. In truth, IP rights are products of history, path dependence, efforts by firms to extract monopoly rents from competitive markets, and large doses of ideology] The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves
- 3. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves The solution: elements and variations IP solves an “underproduction” problem associated with the so- called “tragedy of the commons” IP creates appropriability via legal rule Standard elements of the solution, with variations in specific legal domains: A “thing” defined by law (an invention, a work of authorship, a design, a mark or a secret), defined by some subject matter domain (technology, arts, advertising, and so on) A source of authority to define the thing (e.g., the Patent Office) Some types of legal exclusivity associated with the production or use of that thing Leakiness, meaning some exceptions or limitations associated with the initial scope of the exclusivity (patentable subject matter) or with the exclusive rights (fair use), together adding up to an idea of the public domain Some duration for the exclusivity (number of years)
- 4. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves How IP lawyers think Lawyers in general: think in flexible terms, not algorithmic terms Focus on ownership Focus on exclusivity Focus on appropriation (bad), commercialization (good) Two styles of thinking: Let’s make a deal v. let’s sue Don’t sell or assign all rights (unless you have to); instead “license” (grant permission or grant rights in exchange for money – one-time payments or continuing payments (royalties)) IP may be a part / parcel of broader business strategies (build a company, manage a portfolio of assets) or a standalone business asset IP lawyers who represent IP owners (focus on exclusivity) v IP lawyers who represent IP users/consumers (focus on limitations and exceptions to exclusive rights, invalidity/nonexistence of rights) Open access, open distribution as a valid, credible, and successful IP / business strategy
- 5. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Patent law basics Exclusive rights in technology or technical “inventions” US federal law: for utility patents, inventions are processes, machines [devices that make things], manufactures [things that devices make], compositions of matter [compounds] [design patents are different]. No non-federal patent law Utility patents granted after application/negotiation with the US Patent Office Legal standards: utility (usefulness), novelty (not previously invented), nonobviousness (a/k/a ‘inventive step’) (not an obvious advance over the prior art or prior work in the relevant field(s), and disclosure (adequate description of the invention so that the PO and the ‘public’ may understand the scope of the thing for which the patent is being granted) Duration: 20 years from the date of application; ‘first to file’ system of priority for two people who invent the same thing The writing of the patent ‘claims,’ and the related ‘written description’ or specification of the patent, define the scope of the exclusivity Patent owner receives exclusive rights to make, use, sell, offer to sell, and import the invention, where the invention is identified by the claims. The meaning of the claims becomes a critical contest between patent owners and accused infringers. The human inventor(s) = always the initial owners. Limitations / exclusions: laws of nature, natural phenomena, mathematical formula. Controversies: biotech, genetic inventions, computer software
- 6. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Copyright law basics Exclusive rights in artistic and creative “works” US federal law: copyright attaches to “original works of authorship” “fixed” in any “tangible medium of expression.” Examples: books, songs, film, graphic design, video games. No state or common law copyright Copyrights arise automatically once an “original” work is “fixed” in some form. Copyright registration with the US Copyright Office is optional Legal standards: originality (the work must be something that differs, even modestly, from what the author began with; no copyright in copies), authorship (a human being to whom the originality can be traced), fixation (so that the work is persistent, even briefly, and legible to humans or machines) Duration: Life of the author plus 70 years Copyright owner receives exclusive rights to reproduce, distribute, adapt, publicly perform, publicly distribute the work, either in identical form or substantially similar form. Authors are initial owners. Authors must be human, unless they are employees acting as employees. In company settings, the employer is the author. Limitations / exclusions: no copyright in ideas, facts, or in individual words/sentences; broad fair use for research, teaching, criticism, parody, reverse engineering Controversies: algorithms to produce works, algorithms to enforce copyrights online, copyright in computer software
- 7. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Trademark law basics Exclusive rights in signs, symbols, slogans, names, and “devices” used in advertising and marketing to “distinguish” a company’s products or services US law (mostly federal law, some overlapping but substantially identical state law): trademarks, service marks, trade dress (including both product shape, or design, and product packaging) can consist of anything that is distinctive relative to the underlying product or service, even if the mark is not creative or innovative in any other respect Rights in trademarks arise with use of the mark in some commercial respect. Trademark registrations may be obtained from the US Trademark Office (together with the US Patent Office, the USPTO) but are optional. Rights belong to user, usually an entity, not to human creators Legal standards: distinctiveness from the perspective of consumers of the product/service (is the mark unusual v ordinary relative to the product or service that it is associated with). Marks may be “born” distinctive or may acquire distinctiveness through long use. Marks may also “lose” distinctiveness Duration: No expiration, so long as the mark is still in use as a distinctive mark Trademark owner receives exclusive rights to stop competing uses of the mark that cause “likelihood of confusion” in the marketplace, or that cause “likelihood of dilution” of the mark’s distinctiveness Limitations / exclusions: No protection for generic marks or functional things; fair use by competitors and parodists; free speech and the First Amendment Controversies: Trademarks are not property rights with a basis in exclusivity (as patents/copyrights are). Some judges, lawyers, & many lay people think that they are
- 8. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Trade secret law basics Exclusive rights in technical or business information and data that is maintained in secrecy US law (mostly state law, but increasingly federal law, too): a trade secret is information that is valuable precisely because it is secret. Examples: chemical formulas, recipes, business strategies, customer databases Trade secrecy protection arises automatically upon production of the “thing” under secret or confidential conditions Legal standards: secrecy (reasonable steps to ensure secrecy are required, but not absolute or perfect secrecy), and value (commercial value or other utility) by virtue of the secrecy Duration: No expiration, so long as the information is secret Owner of the trade secret may voluntarily disclose it, as in a patent application (this destroys trade secret protection by trading it for patent protection), or may license it, as “know how” (this preserves trade secret status) Know how as such is not a recognized category of IP “thing” in the law, but parties in business deals are free to negotiate and license it as it if it were, subject to possible conflicting federal (patent) law Trade secret owner receives broad rights to prevent appropriation of the trade secret by improper means, and/or power to collaborate with law enforcement in criminal prosecutions Limitations / exclusions: Fair competition, including reverse engineering
- 9. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Patent law v trade secret law The public policy problem: Patents are said to consist of a bargain. The inventor fully and fairly discloses the invention to the public (via the Patent Office) in exchange for the strong exclusive rights embodied in a patent, for a term of 20 years. Applying for a patent involves forfeiting any possible trade secrecy rights associated with the device or technology. Because trade secrecy potentially lasts forever, inventors would prefer to retain trade secrecy rights associated with an invention while simultaneously obtaining a patent. They may try to do this by complying only narrowly with their disclosure obligations in connection with patenting, sharing required information but not all secret information, such as know how and R&D data. Solution: Patent scholars assert that there is no conflict; instead, the two bodies of law are complementary. The USPTO and federal courts struggle to fully enforce the patent owner’s disclosure obligations.
- 10. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Patent law v trademark law The public policy problem: Inventors may claim two sets of IP rights in a single invention, a patent on the innovation (with an expiration after 20 years) and a claim of trade dress protection for the distinctive design of the innovation (with no expiration if the distinctive design continues in use). Result: continuing IP coverage of innovative material that is meant to pass into the public domain after the expiration of that patent Solution: The trademark may be invalid because it covers functional material. If a claim of trade dress protection covers material that was embodied in a patented invention, then the fact of the patent represents “strong evidence” that the design is functional rather than distinctive. TrafFix Devices v Marketing Displays: patent on hinged spring design means that no trademark exists in that same design
- 11. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Patent law v copyright law The public policy problem: Computer software is a square innovation peg in a set of round IP holes. It has never fit well with any IP system. • Computer technology is a domain of technical innovation that appears to be suited to patent law, but determining the patentability of a computer program relative to prior art, known mathematical formulas, and programming skill is extremely difficult. • Computer technology is also a domain of text that appears to be composed or written much as a musical score or a work of literature is produced, so copyright appears to be a suitable legal match. But copyright’s exclusive right to reproduce the work causes havoc when applied to computer software, because virtually all computer software is copied by virtue of its ordinary operation and much computer software is written specifically to “interoperate” with other computer software. • So: Is everyone constantly infringing software copyrights? Does everyone need a license to undertake daily living? Moreover, copyright’s adaptation right arguably blocks much needed work on interoperable programs. Solution: Until recently, the scope of software copyright had steadily narrowed, to the point that only literal code was covered; innovative system ideas could be patented. Now, both patent law and copyright law as applied to computer software are evolving. The patent system’s coverage of software has narrowed, in light of Alice Corp v. CLS Bank. The scope of software copyright is again an open question under Google v. Oracle.
- 12. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Copyright law v trademark law In the event of overlapping but inconsistent rights, such as Warhol’s banana painting for the Velvet Underground (the banana became VU’s trademark, but the painting was in the public domain), then copyright wins.
- 13. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves The rapidly emerging future: design patents Design patents can be obtained from the US Patent Office for new and “ornamental” designs of “objects of manufacture.” Historically, design patents offered the only IP protection for the appearance (not the function) of three-dimensional objects. Today, the appearance of things (both three-dimensional and digital/virtual, such as app icons) might be covered by design patents and trademark (as “trade dress”) and copyright. The recent case of Varsity Brands v Star Athletica (cheerleader uniforms can be copyrighted) creates many potential, unresolved conflicts with design patent law as well as with trade dress law.
- 14. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Know your options Who owns your work? • Patent law (both utility and design): The human inventors own patent rights in their inventions, but virtually all enterprises have mandatory duties to assign all rights to the enterprises for things that fall within the enterprise’s scope of business. Royalties may / may not come back, as part of the bargain. [Also, human inventors may risk waiving patent rights via public disclosure in articles, presentations.] Check employment contracts, enterprise policies, and handbooks. • Copyright law: The enterprise automatically owns the copyrights, for employment-related work, as “works made for hire.” Contractors and consultants should review their contracts. • Trade secret law: The enterprise that benefits from the secrets automatically owns the secrets. Check employment contracts, etc. Take care with documented know-how (owned by the enterprise) v. “in the head” expertise (usually “owned” by the human beings). • Trademark law: The mark is owned by the enterprise that uses the mark or plans to use the mark commercially. Get help and more answers • University of Pittsburgh Innovation Institute, https://www.innovation.pitt.edu/ • UPMC Enterprises, https://enterprises.upmc.com/ • BioBreakfast, https://www.biobreakfast.com/
- 15. The solution: elements and variations How IP lawyers think Patent law basics Copyright law basics Trademark law basics Trade secret law basics Patent law v trade secret law Know your options Patent law v copyright law Copyright v trademark Design patents Patent law v trademark law The problems that IP solves Citations • Patent law: Title 35 of the United States Code • Copyright law: Title 17 of the United States Code • Trademark law: Sections of Title 15 of the United States Code • U.S. Patent and Trademark Office: uspto.gov (includes FAQs) • U.S. Copyright Office: copyright.gov (includes FAQs)