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Chapter 6 - Intellectual Property Rights


									     Chapter 6

Intellectual Property

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  Chapter 6 - Intellectual Property   1
        Chapter 6 - Objectives
1. Define intellectual property.
2. Discuss copyrights, patents, and trade secrets.
3. Define reverse engineering.
4. Summarize the purpose of the Uniform
   Computer Information Transactions Act.
5. Distinguish competitive intelligence from
   industrial espionage.
6. Outline a strategy to protect your organization
   from cybersquatting.

                Chapter 6 - Intellectual Property   2
         Intellectual Property
•   Intellectual property includes works of the
    mind such as art, books, films, formulae,
    inventions, music, and processes that are
    distinctive and that are “owned” or created
    by a single entity.
•   Copyrights, patents, and trade secrets are
    used to protect intellectual property.

              Chapter 6 - Intellectual Property   3
•   A copyright is a form of protection provided by law
    that grants the authors of “original works of
    authorship in any tangible medium of expression,
    now known or later developed, from which they
    can be perceived, reproduced, or otherwise
    communicated, either directly or with the aid of
    machine or device, the exclusive right to
    distribute, display, perform, or reproduce the work
    in copies or to prepare derivative works base
    upon the work.”
•   1976 Copyright Act prevents others from
    reproducing the work for the authors life plus 70
                 Chapter 6 - Intellectual Property   4
           Fair Use Doctrine
•   Four factors to determine whether a
    copyright is a fair use:
  1. The purpose and character of the use (e.g., is
     the use for commercial or nonprofit,
     educational purposes)
  2. The nature of the copyrighted work
  3. The portion of the copyrighted work used
  4. The effect of the use upon the value of the
     copyrighted work
• Fair Dealing – Wikipedia
               Chapter 6 - Intellectual Property   5
 Software Copyright Protection
• Software copyright is “tricky”.
• To prove infringement, the copyright
  holder must show a resemblance that
  could only be explained by copying.
• Developing a software package
  without prior knowledge is difficult to
  prove or disprove.

            Chapter 6 - Intellectual Property   6
          Digital Millennium
            Copyright Act
• November 1998
• To comply with the global copyright
  protection treaty from the World
  Intellectual Property Organization - Part
  of the United Nations.
• Penalties of 5 years in prison and/or
  fines of up to $500,000.
             Chapter 6 - Intellectual Property   7
       Legal Overview - DeCSS
•   Content Scramble System (CSS) is an
    encryption-based security and
    authentication system used in DVDs.
•   DeCSS software breaks the encoding
    system used in digital video disks.
•   In 2000, eight movie studios sued 2600:”
    The Hacker Quarterly for posting the
    DeCSS program.

               Chapter 6 - Intellectual Property   8
 Legal Overview – DeCSS (contd.)
• The Motion Picture Association of
  America filed injunctions to block
  the Internet distribution of DeCSS
• Courts ruled that unauthorized
  reverse engineering of the DVD
  system violated copyright and trade
  secret laws.
            Chapter 6 - Intellectual Property   9
• A patent enables the inventor to take legal
  action against those who, without the
  inventor’s permission, manufacture, use or
  sell the invention during the period of time
  the patent is in force.
• The United States Patent and Trademark
  Office reviews patent applications and
  issues patents to approved inventions.
• Patents in Canada

              Chapter 6 - Intellectual Property   10
          Patented Invention
• It must fall into one of five statutory
  classes of things that can be patented.
• It must be useful.
• It must be novel.
• It must not be obvious to a person
  having ordinary skill in the art to which
  said subject matter pertains.

              Chapter 6 - Intellectual Property   11
        No Patent Protection
• The U.S. Supreme Court has ruled
  that there are three categories of
  subject matter for which one may not
  obtain patent protection:
  1. Abstract ideas
  2. Laws of nature
  3. Natural phenomena

             Chapter 6 - Intellectual Property   12
           Software Patents
• Since the 1980s, the USPTO has
  granted a large number of
  software-related patents. Examples
  – Applications and business software
  – Compilation and system software
  – Edit, control, and operating system software
• Software patents – Canada

               Chapter 6 - Intellectual Property   13
                   Trade Secrets
•    The UTSA defines a trade secret as “information,
     including a formula, pattern, compilation,
     program, device, method, technique, or process
    1. Derives independent economic value, actual or
       potential, from not being generally known to, and not
       being readily ascertainable by persons who can obtain
       economic value from its disclosure or use
    2. Is the subject of efforts that are reasonable under the
       circumstances to maintain its secrecy
•    Trade Secrets – Canada
                    Chapter 6 - Intellectual Property    14
            Trade Secret
• To qualify as a trade secret, the
  secret must have
  1. Economic value
  2. Must not be readily ascertainable
  3. The trade secret owner must take steps
     to maintain its secrecy

            Chapter 6 - Intellectual Property   15
    Advantages of Trade Secrets
•   No time limitations on the protection of
    trade secrets
•   No need to file an application, make any
    disclosures, or otherwise disclose a trade
    secret to outsiders
•   Patents are frequently ruled invalid by
    courts, meaning that the then-disclosed
    invention no longer has protection

               Chapter 6 - Intellectual Property   16
 Nondisclosure & Non-compete
• A nondisclosure clause requires
  employees to refrain from revealing
  secrets that they learn at work.
• A non-compete agreement requires
  employees to not work for any
  competitors for a set period of time.

              Chapter 6 - Intellectual Property   17
     Intellectual Property Issues
• Reverse engineering is the process of breaking
  something down in order to understand it, build a
  copy of it, or improve it.
• A compiler is a language translator that converts
  computer program statements into machine
  language that a computer can execute.
• A decompiler is a software tool that reverse
  reengineers a software application.

                 Chapter 6 - Intellectual Property   18
   Intellectual Property Issues
• In 1999 the National Commissioners
  on Uniform State Laws approved the
  Uniform Computer Information
  Transactions Act.
• The UCITA applies uniform
  legislation to software licensing

           Chapter 6 - Intellectual Property   19
   Organizations That Support
• Software and Information Industry
• Information companies like Microsoft and
• Others (Caterpillar, Circuit City, insurance

              Chapter 6 - Intellectual Property   20
    Organizations That Oppose
•   Association for Computing Machinery
•   Computer and Communications Industry
•   Computer Professionals for Social Responsibility
•   Digital Future Coalition
•   Electronic Frontier Foundation
•   International Communications Association
•   Society for Information Management

                Chapter 6 - Intellectual Property   21
• The UCITA defines a software
   license as a contract that grants
   permission to access or use
   information subject to conditions set
   forth in the license.
1. Shrink-wrap
2. Click-on
3. Active click wrap

            Chapter 6 - Intellectual Property   22
     Competitive Intelligence
• The gathering of legally obtainable
  information that will help a company
  gain an advantage over its rivals.
• Competitive intelligence is not
  industrial espionage.

            Chapter 6 - Intellectual Property   23
     Common Sources of
    Competitive Intelligence
• Annual reports                   • Dun & Bradstreet
• Quarterly reports                  credit report
• Press releases                   • Interviews with
• Promotional                        suppliers,
  materials                          customers, former
• Web site                           employees
• Standard and Poor’s              • Calls to customer
  stock report                       service

             Chapter 6 - Intellectual Property           24
    Intellectual Property Issues
• A trademark is anything that enables a
  consumer to differentiate one company’s
  products from another.
  – Trade Mark – Canada
    “A trade-mark is a name, symbol, or slogan which
    identifies or distinguishes a business or a product
    from the businesses or products of others.”
• Cybersquatters are people who register
  domain names to which they have no
  connection in the hope of profiting from
  the legitimate trademark owner.
                 Chapter 6 - Intellectual Property        25
• Intellectual property refers to works of the mind
  such as art, books, films, formulae, inventions,
  music, and processes.
• Copyrights, patents, and trade secrets provide a
  complex body of law regarding the ownership of
  intellectual property.
• Reverse engineering provides a means to gain
  access to information that another organization
  may have copyrighted or classified as a trade

                 Chapter 6 - Intellectual Property   26
     Intellectual Property Issues
•   A decompiler is a software tool that reverse
    reengineers a software application.
•   The 1998 Digital Millennium Copyright Act
    explicitly outlaws technology that can defeat
    copyright protection devices, but permits reverse
    engineering encryption, interoperability, and
    computer security research.

                Chapter 6 - Intellectual Property   27
•   The UCITA is a controversial act that would
    apply uniform legislation to software
    licensing issues.
•   Competitive intelligence is not industrial
•   To avoid cybersquatting problems,
    organizations register their trademarks as
    soon as they know them.

               Chapter 6 - Intellectual Property   28
         Case 1- Napster
• Napster is a Web-based service
  founded in 1999 by Shawn Fanning.
  The goal is to provide music
  enthusiasts with an easy-to-use
  service for discovering and down
  loading music. The recording
  industry strongly objected to Napster.

            Chapter 6 - Intellectual Property   29
    Case 2 - Lotus v. Borland
• The Lotus v. Borland lawsuit lasted
  over five years going all the way to
  the Supreme Court and set a
  precedent that clarified the limits of
  software copyright protection. The
  case dealt with the “look and feel” of

             Chapter 6 - Intellectual Property   30

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