Chapter 7

Intellectual Property and

Internet Law
 Introduction
Wealth consists of tangible and intangible
property.
Intellectual property (or “I.P.”) is
becoming more important because the
value of many corporations (e.g.,
Microsoft) is based primarily on I.P.
See the “Digital Dilemma: Intellectual
Property in the Information Age.”

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 Constitutional Authority
Founders of America understood the
value of I.P. and its impact on interstate
commerce.
Article I § 8 authorizes Congress to
“secur[e] for limited times to Authors
and Inventors the exclusive Right to their
respective Writings and Discoveries.”

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Types of Intellectual Property
Trademarks.
Service Marks.
Trade Dress.
Patents.
Copyrights.
Cyberspace I.P.

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 §1: Trademarks
Overview at Bitlaw.com.
Distinctive mark, motto or device or
emblem that a manufacturer stamps,
prints or othewise affixes to the goods it
produces.
Distinguish product/service from goods
of other manufacturers and merchants.
Avoids consumer confusion.

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 Trademarks [2]
Lanham Trademark Act (1946) creates
incentives for companies to invest;
prevents unjust enrichment of companies
who infringe.
Federal Trademark Dilution Act (1995)
Cause of action regardless of competition
or confusion based on a “similar” mark.

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 Trademarks [3]
Register with U.S. Patent Trademark
Office if:
Mark is currently in commerce; or
Applicant intends to put it into commerce
within 6 months.
Registration allows use of “®” symbol.

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 Infringement
Whenever a trademark is copied or use,
intentionally or unintentionally, there is
infringement.
Trademark owner has cause of action
against infringer,unless trademark is a
“generic” term.

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 Trade Dress
Refers to the image and overall
appearance of the product.
Same protection as trademark.
Issue is consumer confusion.
Example: distinctive décor, product names,
packaging of Starbucks coffee shops.

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 Service Mark
Similar to trademark but used to
distinguish services of one
person/company from another.
Titles and character names used in media
are frequently registered as service
marks.

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 Trade Name
Trademarks apply to products.
Trade name applies to companies and are
protected by federal law as well.
Example: IBM, Coca-Cola, NBC.

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 §2: Cyber Marks
Virtual property exists in cyberspace.
Cyber Marks: rights of trademark owners in
cyberspace.
Cybersquatting: occurs when person registers a
domain name that is similar to the trademark of
another and offers to sell the domain back to the
trademark owner.
Anticybersquatting Consumer Reform Act of 1999.

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 Virtual Property
Meta Tags: key words on webpage that
are indexed by search engines.
Case Playboy Enterprises vs. Welles (1998).
Dilution on the Web.
Licensing: permits use of intellectual
property by licensee.

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 §3: Patents
Exclusive grant from U.S. Patent and
Trademark Office to make, use and sell
an invention for 20 years.
Patent Infringement.
Patents for Software are now available.

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 §4: Copyrights

Introduction to Copyright.
Intangible property right to author for
her life plus 70 years.
Automatic protection after 1978.
Works can be protected by registration
at U.S. Copyright Office.

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 Copyrights [2]
Can only copyright the expression of an
idea, not the idea itself.
Work must be original and fixed in a
durable medium: literary, musical,
choreographical and dramatic works,
pictoral, graphic and sculptures, films/
audiovisual/ TV/ sounds, computer
software and archtectural plans.
“Work Made For Hire” for Employees.
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 Copyrights [3]
Compilations of facts are copyrightable but the
compilation must be “original.”
Feist v. Rural Telephone Co. (1991).
Bellsouth v. Donnelley (1993).
Infringment. Section 107 of the Copyright Act
provides for exception to liability from
reproduction of copyright under the the “fair
use” doctrine when material is used for
criticism, comment, news, criticism, teaching,
research.
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 Software Copyrights
Computer Software Copyright Act
(1980).
Classifies computer software as a “literary
work.”
Does not apply to “look and feel.”
• Lotus v. Borland (1996).

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 §5: Copyrights in Digital
Information
Digital media can easily be copied.
Copyright Act of 1976
 Copy of a program into RAM is infringement.
 Revision or re-sale of freelance authors works can be
infringement. NY Times v. Tasini (2001).
No Electronic Theft Act of 1997.
MP3 and File-Sharing.
 Napster case.

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 §6: Trade Secrets
Trade secrets are confidential, not filed
with the government.
Can be customer lists, formulas, pricing,
etc.
Theft of trade secrets is now a federal
crime under the Economic Espionage Act
of 1996.
Cyberspace: employees can easily email
information to competitors.
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 §7: Licensing
Allows a third party to lawfully use a
patent, trademark, copyright or trade
secret.
The licensee pays the licensor (the owner
of the IP) a fee for use.
U.C.I.T.A. is a uniform code that licenses
the use of software.

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§8: International Protection for
Intellectual Property
Berne Convention (WIPO).
Trade-Related Aspects of Intellectual
Property (TRIPS) of 1994 (WTO).
World Intellectual Property
Organization (WIPO) Copyright Treaty
1996.

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Case 7.1: Coca Cola v. Koke Co.
(Trademark Infringement)

FACTS:
Coca-Cola Company sought to enjoin The Koke
Company of America from using the word Koke for
their products.
Koke defended that the Coca-Cola trademark, by its use
of the Coca-Cola name, represented that the beverage
contained cocaine (from coca leaves)-a fraud.
The trial court granted the injunction against Koke, but
the appellate court reversed.
Coca-Cola appealed to the United States Supreme
Court.

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Case 7.1: Coca Cola v. Koke Co.
(Trademark Infringement)

HELD: FOR COCA-COLA. REVERSED.

The Supreme Court underscored that Coca-Cola was
not “a medicine” and that its attraction did not lay in
producing “a toxic effect.” Since 1900 sales had
increased.
The name had come to characterize a well known
beverage to be had almost anywhere “rather than a
compound of particular substances.”

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 Case 7.2: AOL v. AT&T
(Trademark Infringement)

FACTS:
AOL sued AT&T alleging that AT&T’s use of the
phrase “you’ve got mail” was trademark infringement
of the phrase, which AOL claimed to own.
AT&T filed a motion for summary judgment, asking
the court to rule that the term was generic.
HELD: FOR AT&T. MOTION GRANTED.
The term is generic and therefore can­not be owned by
AOL. The court applied the “primary significance
test,” re­viewing five types of evidence 

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 Case 7.2: AOL v. AT&T
(Trademark Infringement)

HELD:
“(1) competitors’ use of the mark, (2) plaintiff’s use of
the mark, (3) dictionary definitions, (4) media usage,
(5) testimony of persons in the trade,” and dismissed a
sixth type—“consumer surveys”—as indicating
secondary meaning, which would not entitle a generic
term to pro­tection. The court concluded that “mail”
means “e-mail” and that “you” and “have” do not
change the generic nature of the term.

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Case 7.3: NY Times v. Tasini
(Copyright Infringement)

FACTS:
Magazines and newspapers, including the New York
Times, buy and publish articles written by freelance
writers like Tasini.
These publishers sell the contents to e-publishers for
inclusion in online, and other electronic, databases.
Tasini and other freelance writers sued the Times and the
e-publishers, contending that the e-publication of the
articles violated the Copyright Act.
The publishers defended that these were only “revisions”
stored under databases and legal under the Copyright Act.

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Case 7.3: NY Times v. Tasini
(Copyright Infringement)

HELD: FOR TASINI.

The US Supreme Court remanded the case for a
determination as to how the writers should be
compensated.
The Court found that these databases are not “revisions,”
because the databases reproduce and distribute articles
“clear of the context provided by the original periodical
editions”—not “as part of that particular collective work”
which the Copy­right Act allows.

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 Case 7.4: A&M Records v. Napster
(Copyright Infringement)

FACTS:
Napster allowed users to (1) make MP3 music files
stored on individual computer hard drives available for
copying by other Napster users, (2) search for MP3
music files stored on other users’ computers, and (3)
transfer exact copies of the contents of other users’
MP3 files from one computer to another via the
Internet.
A&M sued Napster alleging infringement. The court
issued a preliminary injunction. Napster appealed.

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 Case 7.4: A&M Records v. Napster
(Copyright Infringement)

HELD: AFFIRMED. FOR A&M.

The Ninth Circuit affirmed the lower court’s decision
that Napster was obligated to police its own system and
had likely infringed the plaintiffs’ copyrights.
“Napster’s failure to police the system’s ‘premises,’
combined with a showing that Napster financially
benefits from the continuing availability of infringing
files on its system, leads to the imposition of vicarious
liability.”

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