Monday, May 30, 2011

A Taxonomy of Intellectual Property

In the interest of adding some more substantial content to this blog, I thought I would present a tutorial series. I have already made reference to issues in intellectual property law, but some of my readers might not be familiar with the basics (let along the intricacies) of intellectual property in the US. To that end, this post will be the first in a series of tutorials on intellectual property. Let's begin with a taxonomy of intellectual property.

US intellectual property law recognizes four types of intellectual property.

Copyright concerns creative works fixed in a tangible medium of expression, including musical works, novels, poems, paintings, sculptures, etc. Since it concerns creative media, copyright is likely the form of intellectual property that people have encountered most. Copyright originated as a way to censor seditious or heretical publishers. Once enshrined in British law, from which the American statutes take their original form, copyright allowed publishers to enforce statutory monopolies on books. As of the 1998 Copyright Term Extension Act (CTEA, or the Sonny Bono Act), copyright lasts 70 years after the death of the author for works of individual authorship, and 120 years from the date of publication for works of corporate authorship. Considering the history of copyright these terms are fairly excessive. The earliest copyright term in the United States was a mere 7 years from publication. For much of the 19th century, copyright lasted for 14 years, again counted from the date of publication. Copyright began approaching such long terms only in the 20th century. No matter the term, copyright gives the copyright holder the sole right to sell the work, duplicate it (hence, copyright), and prepare derivative works (ie translations, adaptations to different media, etc). Fair use provides a loophole for certain kinds of use (for instance, reproducing an excerpt of a novel for a book review). For those curious about other such exceptions, fair use will have to be handled in its own tutorial.

In many ways, patent law is to inventions and discoveries what copyright is to creative works. Patent provides innovators, inventors, and researchers, with a temporary monopoly in their creations. Unlike copyright, patent terms are fairly short and have remained mostly unchanged throughout the 20th century. Patents last for 20 years from the date of filing. The Patent and Trademark Office clears patent applications, checking the new invention against “prior art” (previous inventions that might have led to the current invention). Innovation really is the word of the day for patents; to grant a patent, the applicant must show that the invention is both novel and useful in some fashion, not merely a new version of an existing invention. The patent application must disclose prior art, and in some jurisdictions, Europe for instance, the patent holder must actually utilize the invention, licensing it for production or industrial use. The US allows for “patent trolls” to sit on patents, holding them without licensing them until a possible infringement appears, at which time the troll files suit for patent infringement to make money. In practical terms, patent gives the rights-holder the exclusive right to license the invention, in exchange for disclosure. As such, while one might think that patents protect from reverse engineering, in practice the disclosure requirement essentially negates any need for reverse engineering. Nevertheless, the patent holder does have the exclusive right to license the invention for production or use, so patents are a way of securing a living by way of technological innovation.

Somewhat different from the other forms, trademark does not concern creative or technological innovation. Instead, the best way to think of trademark is as a kind of fraud protection. A firm can trademark its logo, name, or mascot, allowing the firm the exclusive use of the mark for the purpose of representing its business. As such, trademark lasts as long as the firm uses the brand for its business. A firm can lose a trademark if the brand becomes disassociated with the firm. The most famous example of losing trademark is likely the case of Bayer and their trademark on “aspirin.” At the time, patents were not granted on chemicals, only new processes for extraction or synthesis, so Bayer took out a trademark on “aspirin.” Nevertheless, aspirin became a household word for the extract of willowbark, so Bayer lost is exclusive claim on the word. Trademark law has evolved along with trends in marketing and advertising, requiring new rules for “non-representational” logos, such as the brown shade used by UPS and the blue/orange combination used by FedEx. Perhaps the most disturbing aspect of trademark is the ability of the mark's owner to control public display of a trademark. As such, a firm can invoke trademark law to suppress a work of art critical of the company if that work features the trademark in some fashion.

Trade Secrets
The final category is perhaps the most unusual category. Trade secrets can be any important business strategy held as confidential within the firm. There is no application for trade secret protection. Instead, the firm must take measures to keep the information confidential, such as requiring employees privy to the secret to sign Non-Disclosure Agreements or Non-Competition Agreements. Trade secrecy is not a very robust form of intellectual property. The primary protection offered is protection against corporate espionage. Once a trade secret is released to the public, there is no recourse. In cases of espionage, the victim firm can sue for an injunction preventing the offender from making use of the trade secret. If the secret is released by other means, such as an irresponsible employee, the secret is simply out. The most famous example of a well-kept trade secret is the formula for Coca-Cola. The formula has been kept secret for over a century, but should it ever find its way into a newspaper, the secrecy would come to an end.