Commercial Law Development Program Office of General Counsel United States Department of Commerce CLDP TEXT INTELLECTUAL PROPERTY LAW Joe Yang, Attorney-Advisor,

Commercial Law Development ProgramOffice of General CounselUnited States Department of Commerce CLDP

TEXT

INTELLECTUAL PROPERTY LAW

Joe Yang, Attorney-Advisor, Commercial Law Development Program

IMPROVING THE LEGAL ENVIRONMENT FOR BUSINESS WORLDWIDE

Commercial Law Development ProgramOffice of General CounselUnited States Department of CommerceCLDP

I. PATENTS

II. COPYRIGHTS

III. TRADEMARKS IV. TRADE SECRETS



PATENTS- Key Concepts

Anyone who invents or discovers any new and useful process,

machine, article of manufacture or composition of matter, or any

new and useful improvement thereof, may obtain a patent.



PATENTS, KEY CONCEPTS continued..

1/ Main domain of relevance for engineers and scientists Patents are the main form of protection of the research and development work that results in a new product or a new process. 2/ Purpose of the rights The main purpose of patents is to promote research and economic development. In exchange for a detailed description of a new product or new process, the inventor (or its employer – if there is an assignment of right) has the exclusive right to make, use, sell, offer for sale and import the patented product or process, in the country/countries where the patent was granted. 3/ Nature of the rights The patent owner has the right to exclude others from unauthorized making, using, selling, offering for sale and importing the patented product or process, in the country/countries where the patent was granted.




4/ Limits of the rights The rights attached to a patent are only valid in the country/countries where the patent was granted. The rights attached to patents are valid for a limited time period, which in most countries is 20 years from the filing date of a patent application. 5/ Requirements to acquire rights In most countries patents are only granted if the invention meets three conditions: a) It must be useful; b) It must be new; and c) It must be non-obvious (involves inventive step).




6/ Types of disputes Most disputes have to do with claims of patent infringement: organization A claims that

organization B is manufacturing, using, or selling a product or process in a territory in which A has a patent on the product or the process.

The rights of patent holders are enforced either through licensing agreements or

through law suits. 7/ Transfer of rights Patent rights can be sold or licensed. Licenses can be either exclusive (i.e. to one party)

or non-exclusive and (i.e. to more than one party) and can be limited by duration, territory and/or specific products/processes.



Exercise 1 Country X has a long tradition of medicine an important feature of which has always been

the use of herbs. Medicinal properties of some herbs and flowers, in particular periwinkle, have been known

since the Middle Ages. Periwinkle extracts and preparations have been described in numerous books and articles on the subject.

Based upon this knowledge, A, a pharmacist, has developed a syrup consisting mostly, but

not exclusively, of periwinkle extract. She claims that this composition can boost the immune system and protect against common cold.

All of the exercises in this presentation are entirely fictional. Any similarity with real persons,

organizations or countries would be a mere coincidence. Several of the exercises below are excerpted or adapted from CLDP’s Intellectual Property Manual.

Patent Exercise



PATENT EXERCISE continued

Question 1: May A apply for a patent? If yes, what must A demonstrate in order to prove that she is entitled to a patent?




Answer to Patent Exercise Question 1: In order to obtain a patent she must demonstrate:

1/ That her composition is new (novel). 2/ That it involves an inventive step (is non-obvious over similar

products that have been known/described before). 3/ That it is capable of industrial application (useful). Since similar periwinkle-based products have been described before

her invention, most likely she will not be able to satisfy the novelty and/or inventive step requirements.




Assume that A was granted a patent. Another pharmacist, B has bought A’s syrup, analyzed it and made a syrup with the same ingredients. B wants to sell his syrup in the same country under a different name.

Question 2: May B do so?




Answer to Patent Exercise Question 2: If A obtains a patent protection for her invention then she would have an exclusive right to make, use, sell, offer for sale and import the patented product. In that case, B would not be able to sell the same product in that country.




B has bought A’s syrup, analyzed it and made a syrup with the same ingredients. However, B prepares a very diluted version of A’s syrup and wants to sell it as a medicine for very young children.

Question 3: May B do so?




Answer to Patent Exercise Question 3: If A obtains a patent protection for her invention, mostly likely B’s diluted version of the product would infringe the A’s patent since it contains the same formula as the patented invention.



COPYRIGHTS-Key Concepts

Copyright law protects original works of authorship fixed in any tangible medium of expression. Literary works Musical, dramatic and choreographic works Pictorial, graphic and sculptural works Audiovisual works Sound recordings Architectural works Compilations and collective works



Copyrights, key concepts continued..

1/ Main domain of relevance for engineers and scientists Copyright is the main form of intellectual property protection for computer programs. A “computer program”

consists of a set of statements or instructions to be used directly or indirectly in a computer in order to bring about a certain result. This includes both source code and object code.

2/ Purpose of the rights The purpose of copyright is to protect the authors of original (not copied) works of authorship. Computer

programs are considered “literary works” and are therefore copyrightable. The person who actually creates the computer program is generally considered the owner of any copyright that may exist in that program.

Depending on the laws of a particular jurisdiction, the employer of the person who created the computer

program is considered the copyright owner if the computer program was created within the scope of that person’s employment.

A computer program will be protected by copyright only if it contains a sufficient amount of original literary

expression. The protectable “original literary expression” in a computer program consists of the actual statements and instructions (the code) used to express the author’s ideas..




3/ Nature of the rights

The owner of the copyright in a computer program enjoys certain exclusive rights to that program (e.g. the right to authorize the reproduction or distribution of the computer program). The owner of the copyright may also license the use of particular copies of the protected computer program to individual purchasers and, pursuant to such sales, place contractual restrictions on how that particular copy of the computer program may be used. For example, many software licensing agreements for use in places of business will place restrictions on the number of computer terminals to which the computer program may be copied and used.

4/ Limits of the rights

Copyright does not protect ideas, only the expression of ideas. In the case of computer programs, copyright protects the code drafted by the computer program developers.

Copyright protection for a particular computer program does not prevent others from writing their own original machine readable code to achieve the same function as the existing copyright protected program.

Terms of copyright protection vary by jurisdiction. The Berne Convention (Article 7) requires that the minimum term of protection be the life of the author plus 50 years. For non-person copyright owners (such as corporations), the TRIPS Agreement (Article 12) requires a term of at least 50 years measured from the time of the first authorized publication of the work.




5/ Requirements to acquire rights According to the Berne Convention, copyright vests at the moment of creation. The rights for

computer programs exist as soon as the program is developed. 6/ Types of disputes Most disputes have to do with claims of computer program piracy: organization A claims that

organization B is using, copying, distributing, etc. computer programs developed by A without having been authorized to do so.

The rights of copyright holders are enforced either through licensing agreements or through law suits.

7/ Transfer of rights The exclusive rights associated with the copyright in a particular computer program are often

licensed.



Copyright Exercises

Exercise 1 Using directories and websites from all major Country X research institutions

and universities, A creates a web-based database of 1000 scientists from Country X; this database makes it possible to conduct searches by scientific fields and to find scientists who have published scientific papers in each field.

Question 1: Does A have a copyright? Question 2: Can A charge people for using his database?



Copyright Exercises continued…

Answer to Copyright Exercise question 1: Possibly, provided that the selection and arrangement of the contents in the compilation of data constitutes an original intellectual creation. Assuming such originality exists in the selection or arrangement of the data compilation, it is important to note that such copyright protection would extend ONLY to the original manner in which the data has been selected and/or arranged and would not extend to the data or material itself. To the extent the data itself is in the public domain or otherwise not subject to copyright protection, others would be free to copy such data. Copyright protection would also exist for the display of the information on the website.

Answer to Copyright Exercise question 2: Nothing under copyright law

prevents A from charging for access to his website.




Exercise 2 B and C have developed a computer program that makes it possible to conduct

searches in databases of pharmaceutical patents to identify domains of possible pharmaceutical research that are not covered by patents. They call this computer program “Pharmasearch”. B and C send their computer program to Company Y, a software company that specializes in “data mining”, and offer to sell or license this computer program to Company Y. A month later, Company Y sends back the computer program to B and C with a letter saying that Company Y is not interested in buying or licensing the computer program. A year later, Company Y publishes and starts selling computer program that makes it possible to conduct searches in databases of pharmaceutical patents to identify domains of possible pharmaceutical research that are not covered by patents. Company Y calls this computer program “Moleculesearch”. B and C obtain a copy of “Moleculesearch”, analyze it, and conclude that the source code of the computer program, its structure, and the screen displays are different from the source code, the structure, and the screen displays of “Pharmasearch”.

Question: Has Company Y infringed B and C’s copyright?




Answer to Exercise 2 Question: No. Copyright does not protect ideas but the expression of ideas. So long as Company Y has not copied any of the protected expression of “Pharmasearch”, it has not infringed B and C’s copyright. Copyright does not prevent someone from creating a computer program (1) which performs the same functions, as another program (2), so long as program 1 does not reproduce the protected expression of computer program 2, the original. This protected expression includes the code, its screen displays, and, in certain instances, the structure, sequence and organization of the program.



TRADEMARKS KEY CONCEPTS

A trademark is any word, name, symbol, or device, or any combination thereof –(1) used by a person or (2) which a person has a bona fide intention to use in

commerce to identify or distinguish his or her goods from those

manufactured or sold by others and to indicate the source of the goods.



Trademarks, key concepts continued..

1/ Main domain of relevance for engineers and scientists Trademarks or service marks are “signs” used in commerce to identify the goods or services

of a business. Trademarks can be company names--if they are used in commerce to identify goods or services--or can be other signs, names or logos that are used by a business to identify specific goods or services provided by that business. Trademarks can consist of words, letters, numerals, or combinations thereof. They may also consist of designs, symbols, colors, three-dimensional shapes, sounds or scents.

2/ Purpose of the rights The purpose of trademark protection is two-fold: 1/ To prevent consumer confusion as to the source of the goods or services associated with

a trademark. 2/ To provide the owner of the trademark with the exclusive right to prevent others from

using the mark for goods or services where such use would likely cause confusion as to the source of the goods or services.




3/ Nature of the rights The owner of a trademark has the exclusive right to prevent others from using the

mark on goods or services where there would be a likelihood of confusion in the country/countries where the trademark is used or registered, (whether rights are dependent on registration or mere use in commerce depends on the legal regime of the particular country where protection is sought). This protection extends to use of the same or similar marks on same, similar, related, or even unrelated goods or services, depending on the facts of the case.

4/ Limits of the rights Trademark rights are territorial; that is, they only exist in the country where the

trademark is used or registered. A trademark registration generally has a 10 year term in most countries, but can be

renewed every 10 years indefinitely, provided the appropriate maintenance documents are submitted to the national trademark office.




5/ Requirements to acquire rights Whether rights in a trademark exist through mere use in commerce in a country or only through

registration with national authorities depends on the legal regime of a country. However, registration nearly always provides more certainty for trademark owners and an easier burden of proof in court proceedings. The trademark application process at a national office will include examination of the trademark in the application for consistency with formality and statutory requirements. Many trademark offices around the world do a search of their Trademark Register to determine if there is a conflict with a prior registration. If there is a conflict, the Office may refuse the application. Other offices do not search their Trademark Register but merely publish the application for opposition by interested third parties. If a third party objects to an application and files an opposition to the application, a court or administrative tribunal will generally hear the case, with both sides presenting evidence of the conflict or the lack of a conflict.

7/ Types of disputes Trademark infringement occurs when an unauthorized party uses the same or similar mark on the same,

similar, related or unrelated goods or services where such use is likely to cause confusion with the public as to the source of the goods or services. Counterfeiting is a type of infringement where the mark being used by an unauthorized party is an imitation (a “spurious” mark) of a mark that is used on same or similar goods as the protected mark. Counterfeiters, often times crime syndicates, make imitations of original products and sell them under well-known brands.

The rights of trademark owners are enforced through suits brought in courts.




8/ Transfer of rights Trademarks can be sold, although they generally must be sold along with the business

with which the trademark is used. Also, trademarks can be licensed to third party distributors or franchisees, as long as the trademark owner controls the nature and quality of the goods or services being sold or provided under the trademark.



Trademark Exercises

Exercise 1 Two college students have developed a software program that makes access to the Internet

faster. They decide to sell their software program to people and companies that operate “internet cafés.” They use the mark “Moscrosoft” for their new software program because it will tell people that their software is as good as the software developed by “Microsoft.”

Question: Does their use of the “Moscrosoft” mark on their software violate any trademark

rights of the Microsoft Company?



Trademark Exercises continued..

Answer to Trademark Exercise 1 Question: Yes. Although the mark is not identical to the Microsoft mark, it is sufficiently similar, and is used on sufficiently similar goods, that the unauthorized use of the mark is likely to confuse the public regarding the source or affiliation of the Moscrosoft goods.



Trademark Exercises continued.. Exercise 2 PHARMAGALEN is a well-known drug manufacturer. In several countries, PHARMAGALEN

holds a patent for a drug that helps prevent heart attacks in people who suffer from high blood pressure. It markets its patented drug under the registered trademark “Plasmoff.” PHARMAGALEN has discovered a number of counterfeit versions of its patented drug being sold in Country Y. These counterfeit versions are sold under various marks including “Plasmoff” “Plasmaff”, “Plasmov.” PHARMAGALEN does not have a patent in Country Y.

Question: Which of the marks above, if any, violate PHARMAGALEN’s trademark rights?



Trademark Exercises continued..

Answer to Trademark Exercise 2 Question: All of them since they are virtually indistinguishable from the Plasmoff mark. The unauthorized use of the marks violate PHARMAGALEN’s trademark rights. It does not matter whether or not the drugs at issue are subject to patent protection. The violation lies in the unauthorized use of the confusingly similar trademarks.



Trade Secrets Key Concepts

A trade secret is any formula, pattern, device, technique, process or compilation of information that Is the subject of reasonable efforts to maintain

secrecy, and Which derives economic value from not being

generally known or readily ascertainable by others.

Trade secrets are protected by keeping the relevant information secret.



Trade Secrets, key concepts continued..

1/ Main domain of relevance for engineers and scientists Allow companies to protect processes, formulas, patterns, methods, techniques,

programs, devices, techniques that they may otherwise not be able or want to patent.

2/ Purpose of the rights While is it generally legal to try to reverse engineer new products, new processes or

new formulas, it is illegal (and in many countries it is a crime) to try to acquire trade secrets through industrial espionage, theft, bribery, or breach of contract.

3/ Nature of the rights Owners of trade secrets can prevent others from illegally acquiring, disclosing or using

their trade secrets.




4/ Limits of the rights Trade secrets protection lasts for as long as the reasonable efforts have been made under

the circumstances to maintain the secrecy of the information. Once the information is made public, trade secret protection ends.

5/ Requirements to acquire rights In order benefit from the protection of the law, owners of trade secrets must have made

reasonable efforts under the circumstances to maintain the secrecy of the information they wish to protect.




6/ Trade secret misappropriation In general, a trade secret is misappropriated when it is acquired, used or

disclosed without permission by a person through improper means such as theft, bribery, breach of an obligation to not use the trade secret, espionage, etc. Specific examples include: flying over a new plant under construction and taking photographs in order to discover trade secrets, employee who uses a trade secret in breach of a confidentiality agreement not to use or disclose a trade secret after he leaves a company, consultant who developed a machine to make a new product and uses a trade secret to later develop a similar machine to make the same product for another client.

7/ Transfer of rights Owners of trade secrets or of know-how can share these through licensing agreements;

the licensees commit to preserving the confidentiality.



Trade Secret Exercises

Exercise 1 Company CB’s engineers invented an industrial glue that made it possible to glue

composites to metals. CB decided not to apply for a patent on its invention, but rather to keep the formula a secret. CB’s glue is sold under the brand SUPRAMOLECULE. Company AD, a competitor, bought a container of SUPRAMOLECULE and analyzed its content. After several weeks, AD was able to determine precisely the chemical composition of SUPRAMOLECULE. AD then started manufacturing and selling glue with the same composition as SUPRAMOLECULE. AD’s glue is sold under the brand BONDATOM.

Question: Was CB’s intellectual property violated?



Trade Secret Exercises continued..

Answer to Trade Secret Exercise 1 Question: No. AD obtained the bottle of glue through legal channels and

learned BC’s secret composition through appropriate means (i.e. reverse engineering). Consequently, AD is allowed to use this information.



Trade Secret Exercises continued..

Exercise 2 Company CB’s engineers invented an industrial glue that made it possible to glue composites

to metals. CB decided not to apply for a patent on its invention, but rather to keep the formula a secret. As part of its desire to keep the formula a secret, CB asked all the personnel of its research and development department to sign a confidentiality agreement under which each employee agreed not to disclose the glue’s formula without authorization from CB. CB’s glue is sold under the brand SUPRAMOLECULE. Company AD, a competitor, bought a container of SUPRAMOLECULE and tried to analyze its content. After several weeks, AD was unable to determine precisely the chemical composition of SUPRAMOLECULE. AD then asked an executive recruitment firm to hire CB’s head of research and development, Samuel A. by offering him a very high salary. Samuel A. agreed to work for AD.

Six months after Samuel A. started working for AD, AD started selling a glue similar in its

chemical composition to SUPRAMOLECULE. AD’s glue is sold under the brand BONDATOM. Question: Was CB’s intellectual property violated?



Trade Secret Exercises, Questions continued..

Answer to Trademark Exercise 2 Question: If AD acquired the formula improperly

(which would be subject to proof in court proceedings) it might be liable for trade secret misappropriation. If Samuel A. violated his confidentiality agreement by disclosing the trade secret to AD, he might be liable for breach of contract.



Thank you.

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Documents

Commercial Law Development Program Office of General Counsel United States Department of Commerce CLDP TEXT INTELLECTUAL PROPERTY LAW Joe Yang, Attorney-Advisor,