Legal Aspects of Managing Technology, 5th Edition (West legal studies in business academic series)

625 Pages·2010·4.6 MB·English

by  Lee B. Burgunder

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Legal Aspects of
Managing Technology
FIFTH EDITION
LEE B. BURGUNDER
Professor of Business Law and Public Policy
California Polytechnic State University
San Luis Obispo
Australia•Brazil•Japan•Korea•Mexico•Singapore•Spain•UnitedKingdom•UnitedStates
LegalAspectsofManaging ©2011,2007South-Western,CengageLearning
Technology,FifthEdition
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Contents
Preface ...................................................................... xi
CHAPTER 1
An Overview of the Technology Policy Environment in the United States......... 1
Introduction 1
TheIntellectual Property System 2
Patents 4
Copyrights 5
TradeSecrets 6
Trademarks 6
ThePublicPolicy ProcessintheUnited States 8
ThePower Struggle:Federal versus State 8
HowIntellectual PropertyPolicies AreMadeintheUnitedStates 11
TheExpanding ScopeofIntellectual Property Protection 13
TheRising Importance oftheFirst AmendmentinTechnology PolicyDisputes 15
Two RunningExamples 18
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DeCSS 20
Conclusion 21
CHAPTER 2
The International Technology Policy Environment ............................. 23
Introduction 23
Unilateral Measures: ActionsAgainst ImportsintotheUnited States 24
PrivateActionsforUnauthorized ImportsintotheUnitedStates 24
Enforcementthrough Administrative Action 25
Bilateral Arrangements andthe Importanceof TradeSanctions 26
Section 301and TradeSanctions 26
Special301andIntellectual PropertyProtection 27
Multilateral Approaches 29
GlobalIntellectual PropertyAgreements 30
WorldTradeOrganization 32
Regional TradePacts 39
International LawandtheInternet 40
PersonalJurisdiction: Where CantheLawsuit BeBrought? 41
WhatLawApplies? 53
CanaJudgment BeEnforced? 54
TheYahoo!Litigation 55
TheElcomSoft Controversy 57
Conclusion 59
iii
iv Contents
CHAPTER 3
Fundamental Requirements for Patent Protection in the United States .......... 61
Introduction 61
Overview ofPatent PoliciesandProcesses 64
BasicRequirements 65
PatentDuration 67
EnforcementIssues 70
Novelty 72
IstheInvention New 75
WasthePatentApplication FiledinTime? 81
WhoGetsthePatentWhen ThereAre MultipleInventors? 84
Nonobviousness 88
PatentableSubjectMatter andUtility 96
Patentable SubjectMatter 96
Utility 97
Design Patents 98
InternationalProtection ofIndustrial Designs 101
Conclusion 103
CHAPTER 4
Obtaining and Defending Patent Rights in the United States and Globally...... 105
Introduction 105
ThePatentAAppplicaatigonoPr ocePss:DInFitia lCEonnsidheraationnsce105r
PatentOwnershipand theRighttoFilethePatentApplication 107
Invention AssignmentAgreements 107
ImportantSteps beforeApplying 109
Expected FeesandCosts toObtainandMaintain aPatent 111
ElementsofthePatent Application 111
Enablement 112
BestMode 115
Information DisclosureStatement 116
TheClaims 117
PTOProcedures and Appeals 118
Secrecy Orders 118
Secrecy ofInformation Submitted tothePTO 119
ThePatentExamination Process 120
Appeals 121
LossofPatent Rights 121
Reexamination 121
OppositionProcedures 123
Litigation 124
Infringement andRemedies 124
LiteralInfringement 125
DoctrineofEquivalents 126
ProsecutionHistoryEstoppel 127
Infringementof ProcessPatents 131
RemediesforPatentInfringement 131
International PatentProtection Issues 136
SubstantivePatentPolicyIssues 136
ProceduralPatentPolicyIssues 142
Conclusion 147
Contents v
CHAPTER 5
Patent Protection for Computer Programs and Internet Business Methods...... 149
Introduction 149
PatentProtection forComputerPrograms: TheLongand Winding Road 150
ComputerProcesses Are Patentable SubjectMatter 150
OldStandards andtheImportance ofPhysicalTransformations 152
TheFederal Circuit Relaxes theStandards forComputer-Related Patents 153
1996PTO Examination Guidelines forComputer-Related Inventions 154
TheFederal Circuit’sStateStreet Decision: The PendulumContinues ItsLiberal Swing 154
TheFederal Circuit’sBilski Decision: ThePendulum BeginstoRetreat 155
RecentEvents InvolvingComputerProgramPatents 158
Other IssuesRegarding PatentsforComputerPrograms 159
ReceivingaPatentfromthePTO 159
ThePossibility ofCopyright Protection 160
InternationalPatent ProtectionofComputer Programs 161
TheControversy Continues:Should PatentProtection
Be ExtendedtoComputerPrograms? 162
PatentProtection forInternet BusinessMethods 164
TheControversy overAmazon’sOne-Click BusinessMethod Patent 165
ThePTO’s BusinessMethod PatentInitiative 170
ThePotential ImpactofRecent CourtDecisions 171
Conclusion 171
CHAPTER 6
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Protection of Secret Information............................................. 173
Introduction 173
Importance ofTradeSecretProtection 175
Rationales forTrade SecretLaws 176
Important AspectsofTrade SecretLaws 178
Definition ofTradeSecret 178
Misappropriation 180
Proving Misappropriation 187
RemediesforTradeSecretMisappropriation 188
Trade SecretProtection Measures 199
FederalEconomic Espionage Act 204
International Trade SecretProtection 205
Concluding RemarksAbout Trade SecretProtection 207
PresentingUnsolicited IdeastoThirdParties 208
HowCompaniesHandleUnsolicited Ideas 211
AdviceforOffering Unsolicited Ideas 212
Conclusion 213
CHAPTER 7
Fundamental Aspects of Copyright Protection ................................ 215
Introduction 215
WhatMaybeProtected byCopyright 216
Protection ofOriginalExpressions 216
Protection ofDatabases 220
Copyright Protection ofProduct Designs 222
vi Contents
RightsProvided by Copyright 226
TheBasic Exclusive Rights 226
RecentModels forLicensingCopyright Privileges 228
TheDigital Transmission RightforSound Recordings 230
Webcasting 232
Fairuseand OtherExceptions toCopyright Protection 233
CopyrightOwnership 242
WorksMadeforHire 242
JointWorks 247
MoralRights 247
How toObtainCopyright Protection 248
Registration andDeposit 248
CopyrightNotice 251
Durationof CopyrightProtection 252
Infringement andRemedies 253
TheSubstantial SimilarityStandard 253
Remedies 258
Conclusion 259
CHAPTER 8
Copyright Protection for Computer Programs and Digital Media .............. 261
Introduction 261
TheImportance ofDistinguishing IdeasfromExpressions inComputer Programs 262
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LevelsofAbstractions inCopyrightedWorks 262
TheAvailability ofAlternative Expressions 265
LevelsofAbstraction forComputerPrograms 266
TheOriginalApproach inComputerCopyright Cases 267
Protection forComputer Programs 267
TheOriginalApproach: Protection forMenu CommandHierarchies
and UserInterfaces 270
TheRevised TrendinComputerCopyright Cases 272
Protection forComputer Programs 272
TheRevised Trend:Protection forMenu CommandHierarchies andUserInterfaces 275
InternationalCopyright Protection forComputerPrograms 279
ReverseEngineering ofComputer ProgramsandClean-Room Techniques 280
DigitalRemixingof Copyrighted Content 285
AudioRemixing 285
VisualRemixing 287
TheApplication ofFair UsetoDigital Remix 288
OtherDigitalRemix Issues 292
Conclusion 293
CHAPTER 9
Copyright and the Internet .................................................. 295
Introduction 295
Legal Responsibility fortheWrongful Conduct ofOthers 296
AFramework forAnalyzing LegalResponsibility 299
TheControversies Over VideoRecording Devices 299
Application ofSony’sPrinciples toDigital VideoRecorders 301
Contents vii
TheControversies Over Audio RecordingDevices 303
TheAudio HomeRecording Act 304
TheControversy overPortable Digital MusicPlayers 304
Online ServiceProvider Liability 305
ContributoryandVicarious Liability 306
DMCAProtectsOSPsfromCopyright Infringement 309
Responsibility for CopyrightInfringements on Peer-to-Peer File-SharingNetworks 313
TheNapster Dispute 313
TheRecording andMotionPicture Industries Contendwith Post-Napster
Services intheCourts 318
TheEntertainment IndustriesUse aMulti-Prong AttacktoCombatFileSharing 325
TheDMCA andCopyrightProtection Technologies 329
DMCA’sAnti-Circumvention and Anti-Trafficking Provisions 329
OtherRecentDMCAControversies 336
Proposed StatutoryAmendments totheDMCA 338
Internet LinkingIssues 339
Standard Linking 339
Deep-Linking 340
InlineLinking and Framing 340
Conclusion 344
CHAPTER 10
Protecting Trademarks and Product Designs in International Markets.......... 345
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Introduction 345
Fundamental Principles ofTrademark Protection 346
Trademarks andCompetitive Ethics 346
Trademarks andMarketEfficiency 349
GenericMarks 350
DescriptiveMarks 352
TheSpectrum ofTrademark Protection 353
Trademark Protection ofTrade DressandProduct Designs 356
DistinctivenessofTradeDressandProductDesigns 357
Functionality 361
Trademark Protection forComputersandRelatedDevices 365
FederalRegistration: Standards andProcedures 366
Likelihood ofConfusion 366
UseRequirements 367
Reasons toConduct aTrademark Search 368
Basic Registration Procedures 368
Intent-to-Use Applications 369
LossofRegistration Rights 369
Trademark Infringementand Remedies 370
Likelihood ofConfusion 370
Dilution 374
RemediesforInfringement 376
International AspectsofTrademark Protection 378
InternationalTrademark Registration 378
TheGrayMarket 383
Conclusion 386
viii Contents
CHAPTER 11
Domain Names and Other Trademark Issues on the Internet .................. 387
Introduction 387
TheInitial ProblemswiththeInternet DomainNameSystem 387
NSI’sRevised Domain NameRegistration Policy 391
InternationalDomainName Complexities 392
Preliminary SuggestionstoResolveDomainName Problems 393
Anticybersquatting ConsumerProtection Act 394
ICANNAddresses DomainNameRegistrationIssues 397
NewTop-LevelDomain Names 397
TheUniformDispute ResolutionPolicy 399
“Suck” SitesandCritical Commentary 404
UsingTrademarks inMetatags 407
SearchEngines andSponsored Advertising 410
Trademark Issues withAdware 413
Responsibility of InterentAuction SitesforTrademark Infringement 414
Other RecentTrademark Issues 416
DomainNameTasting andSpeculating 416
Trademark ProblemsWithTwitterProfiles 417
Conclusion 418
CHAPTER 12
Tort Liability for Physical and Economic Harms .............................. 419
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Introduction 419
Negligence 419
Negligence andtheRestatementof Torts 420
CausationIssues inNegligence 421
ProximateCause:Responsibility forNegligence 422
DefensestoLiabilityforNegligence 423
WhatisNegligent Conduct? 424
Strict ProductsLiability 426
PolicyReasonsforStrictProducts Liability 426
FormsofProductDefects 427
TheRevised Restatement ofTortsonProducts Liability 431
ConsumerProduct SafetyCommission Regulations 435
Intentional TortsInvolving ComputerSystems 437
TrespassbyElectronicRobots 437
Spam 440
ComputerViruses, TrojanHorses, andWorms 446
Fraud 447
Conclusion 448
CHAPTER 13
Intrusions on Privacy and Other Personal Rights ............................. 449
Introduction 449
APreliminary Look atPrivacy 449
Sources ofLawsRegulating Privacy 450
ThePrivacyBalance 451
PrivacyConcerns inModernTechnology Contexts 452
Contents ix
Monitoring Communications and PersonalActivities intheWorkplace 457
Monitoring forEfficiency 457
Monitoring InternetActivity 458
Monitoring E-MailCommunications 459
Recommendations Regarding Electronic MonitoringActivities 465
Collection of PersonalInformation from theInternet 466
Spywareand IdentityTheft 471
Legislativeand RegulatoryActionsintheUnitedStates 474
TheChildren’sOnlinePrivacyProtection Act 476
IndustryInitiativestothePrivacyofInformation ontheInternet 477
European UnionDirectiveonInformation PrivacyProtection 478
Recommendations forCoolEdge 479
ContentControl andtheRegulation ofIndecent Speech 480
TheCommunications Decency Actof1996 481
ChildOnlineProtection Act of1998 484
Defamation 484
Other ViolationsofPersonal Rights 490
IntrusionsonPublicityRights 490
Cyberbullying 491
Conclusion 492
CHAPTER 14
Important Contract Issues for Technology Companies......................... 493
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Warranties, Limitations,and Remedies 493
ExpressWarranties 495
Implied Warranties 497
RemediesforBreachofWarranties and LimitationsofRemedies 500
Shrink-Wrap andClick-Wrap Licenses 505
GeneralPrinciples Regarding Standardized Forms 505
Shrink-Wrap Licenses: Standardized FormsintheConsumerContext 505
Click-WrapLicenses 508
TheUniform Computer Information TransactionsAct 513
ElectronicCommerceIssues 514
Mass-Market Licenses 516
Warranties 517
ChoiceofLawand Forum 517
StrategicAlliances and theImportanceof AlternateDispute Resolution 518
StrategicAlliances 518
Alternative DisputeResolution 520
Conclusion 525
CHAPTER 15
Antitrust and Anticompetitive Conduct ...................................... 527
Introduction 527
Overview ofAntitrust 527
PhilosophicalJustifications forAntitrust 528
Federal AntitrustPolicyMakers 529
AntitrustEnforcement andRemedies 530