The following information supplements the discussion in Chapter 2.
TRADE SECRETS
Trade secrets can protect any original thought or work product covered by the other forms of IP. They protect any knowledge that, for economic reasons, is ei- ther kept secret or requires nondisclosure by any third party. A trade secret may be thought of as “know-how”—which may include business or technical knowl- edge—that is kept secret to gain an advantage over competitors. Some examples of trade secrets may be special customer lists, sources of scarce materials, secret processes, formulas, techniques, advertising ploys, and unique business plans. Unlike other forms of IP, there are simply no standards to meet for trade secrets, as long as the trade secret provides some value and remains a secret. Trade secrets last only as long as the information is kept secret. As a result, as long as the
knowledge or information is kept secret, trade secrets may be protected eternally against disclosure by all who have received such secrets in confidence and all who would have obtained the secrets by theft. For example, the formula of Coca- Cola™ (originally developed in the late 1800s) is considered a trade secret, even though many copies of the beverage have been developed by others and are avail- able on the market.
Trade secret protection is established by state laws. A majority of states have adopted the Uniform Trade Secrets Act (UTSA). The UTSA defines a “trade se- cret” as follows:
“Trade secret” means information, including, but not limited to, technical or non-technical data, a formula, pattern, compilation, program device, method, technique, drawing or process, financial data, or list of actual or potential customers that: (i) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other per- sons who can obtain economic value from its disclosure or use, and (ii) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.1
The disadvantage of trade secrets is that no protection exists against discovery or use by fair means (i.e., accidental disclosure, independent invention, and reverse engineering). Many important inventions, such as lasers and airplanes, were de- veloped simultaneously by different persons. In such cases, unlike patents, trade 1
Based on the Uniform Trade Secrets Act (P.L. 1987, c. 143), a compilation of state laws, which has been adopted in 36 states and the District of Columbia.
secret protection would not enable the first inventor to preclude the second or any subsequent inventors from exploiting the invention.
The owner of a trade secret must take measures to guard the secrecy of the infor- mation, as it remains a secret only as long as it is not revealed without restriction. Although the information must be kept secret in order to retain trade secret pro- tection, sharing the trade secret is possible as long as the owner communicates it to others under a pledge of secrecy. Third parties receiving trade secrets under an obligation of confidentiality (e.g., a nondisclosure agreement) also are held re- sponsible for their protection by state trade secret laws.
Federal statutes do not establish any proprietary interest in trade secrets. Trade secret protection is not provided in the Constitution, nor has Congress—under other enumerated powers, such as the commerce clause—sought to provide broad protection for the owners of trade secrets. However, there are exceptions where Federal statues do address the treatment of trade secrets. For example, under the Trade Secrets Act,2 it is a crime for Federal employees to release or disclose the trade secrets of a private party without that party’s permission. Further, the Eco- nomic Espionage Act3 makes trade secret theft illegal, and the Freedom of Infor- mation Act4 expressly excludes trade secrets from its coverage of records that are to be released under its provisions.
Because a trade secret is valuable property, its theft is a criminal offense under both Federal and state laws. However, these criminal cases are prosecuted very selectively. Injunctive relief, the only truly effective remedy for a trade secret owner, is available to prevent the wrongful party from disclosing or using the in- formation. The owner also may receive damages for actual loss and damages for twice the amount of actual damage in cases of willful or malicious appropriation.
COPYRIGHTS
Copyright protection derives from Article 1, Section 8, clause 8 of the U.S. Con- stitution, wherein Congress is given the power to pass laws that: “promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” The current version of the copyright law was passed in 1976 and is contained in Title 17 of the U.S. Code.5
A “copyright” allows authors to exclude others from copying, performing, dis- playing, or distributing their expressions of original thought or works of author- ship. Works of authorship include
2
18 U.S.C. 1905, Disclosure of Confidential Information Generally.
3
18 U.S.C. 1831-1839, Economic Espionage and following.
4
5 U.S.C. 552, Public Information; Agency Rules, Opinions, Orders, Records, and Proceed- ings.
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IP Basics—Supplemental Materials
u literary works; u musical works; u dramatic works;
u pantomimes and choreographic works; u pictorial, graphic, and sculptural works; u sound recordings;
u motion pictures and other audiovisual works; u architectural works; and
u computer programs.
There are certain prerequisites for works to be copyrightable. First, the work must be original. This does not mean that the work must be novel or unique, but that the work must originate with the author. (For example, the Supreme Court has held that mere listings of names in a telephone book do not rise to a sufficient level of originality to be afforded copyright protection.6) Also, the work must be fixed in some tangible medium of expression (e.g., printed, recorded, or sculpted) that allows it to be communicated for more than a transitory period.
The purpose of copyright protection is to reward an author with exclusive rights in exchange for benefiting the public with disclosure of the work. Presently, copy- rights are protected for the life of the author plus 70 years and may be registered in the Library of Congress. If the work belongs to an employer of the author, or has been commissioned under a “work made for hire” contract agreement, the copyright lasts 95 years from the date of first publication or 120 years from the work’s creation—whichever is earlier. After the expiration of this period, the copyright is not renewable and the work falls into the public domain.
By U.S. statute, copyright protection is not available for any work of the U.S. Government.7 A “work of the U.S. Government” is a work prepared by an officer or employee of the Government as part of that person’s official duties.8 As a matter of public policy, works that are normal products of the Government (e.g., judicial opinions, administrative rulings, and legislative statutes) or prepared by Government employees in the course of their official duties, may not be copy- righted.
6
Feist Publications, Inc. v. Rural Telephone Service Co., Inc., 499 U.S. 340, 111 S. Ct. 1282 (1991).
7
17 U.S.C. 105.
8 Nash, Ralph C. & Rawicz, Leonard (1999). Computer Software, Information, and Contra c-
In contrast, the Government is not precluded from receiving and holding copy- rights transferred to it by assignment, bequest, or otherwise. For example, soft- ware developed under a Government contract may be copyrighted and transferred or licensed to the Government by an assignment. In this case, the author copy- rights the material and may assign all ownership rights or grant licenses to the Government.
Copyright protection is automatic once a work is put in a tangible medium (e.g., written down or stored on magnetic or optical media). Prior laws required regis- tration and notice of copyright on works in order to have copyright protection. Currently, copyright law protects publicly distributed works without a notice, but a notice will provide the copyright owner with the advantage of invalidating any claim of “innocent infringement.” In order to establish a cause of action for an infringement claim, authors must register their copyrighted works by depositing copies of the work in the Library of Congress.
Once the author or owner has a copyright, he or she has the exclusive right to produce and distribute copies, publicly display or perform the work, or prepare a derivative work. In the event of infringement, the author or owner has many op- tions. He or she may institute suit in district court for an injunction and for actual damages—including profit—or for statutory damages.
TRADEMARKS
A “trademark” is defined as a word, phrase, logo, or other graphic symbol used by a manufacturer or merchant to distinguish its line of products from the products of others. Similarly, a “service mark” distinguishes a provider’s services from simi- lar services provided by others. Trademarks and service marks are protected under the Lanham Trade-Mark Act9 and protected under local state laws. The two basic purposes of the Lanham Act are (1) to eliminate deception and unfair competition in the marketing of goods and services, and (2) to provide a means for the owner of a mark to be protected against the use of a confusingly similar mark by others. The U.S. Patent and Trademark Office (PTO) registers trademarks and service marks. Such a registration may be renewed every 10 years as long as the regis- trant is still using the mark. Many marks currently in the marketplace are more than one hundred years old.
In the Government contracting process, the Government has not traditionally as- serted any rights to the names and logos associated with the products it has made for itself. On occasion, however, Government agencies and patriotic societies have sought and obtained their own trademarks. Examples are “Smokey the Bear,” “Give a Hoot, Don’t Pollute,” “PX,” “FDIC,” “4-H Club,” “Red Cross,”
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IP Basics—Supplemental Materials
“VFW,” “Pentagram News,” “AAFES,” “Tomahawk,” “ZIP Code,” “First Class Mail,” and “Mr. Zip.”10
PATENTS
Patent categories include
u utility patents (also known as patents for inventions), which are the most common type of patent;11
u design patents, which cover new, original, and ornamental designs for ar- ticles of manufacture;12 and
u plant patents, which cover asexually reproduced new varieties of plants.13