BUS205 Study Guide

Unit 6: Intellectual Property

6a. Identify the requirements to hold a valid trademark, and determine what can and cannot be trademarked

  • What are the legal requirements for a trademark?
  • What cannot be trademarked?

A trademark is any kind of name, logo, motto, device, sound, color, or look that identifies the origin of a particular good or service. To qualify for trademark protection, a mark must be either distinctive or have acquired a secondary meaning. Arbitrary and fanciful marks meet the distinctiveness requirement. An arbitrary mark makes random use of a word and it does not describe the product (Apple computers, for example). A fanciful mark is distinctive because it is a made-up word (Gatorade, for example). A suggestive mark meets the distinctiveness requirement because it hints at the product's function ( Theraflu, for example). Marks that have a secondary meaning acquire trademark protection when consumers associate the mark with a particular good or service.

Trademarks lose their protection if they become generic. Genericide is a process through which a mark refers to a class of goods as opposed to being associated with a specific producer or origin.

Marks that cause confusion among consumers cannot be trademarked. The law also prohibits trademark dilution, which results from a party using the same or similar mark as an established trademark with the purpose of diluting its reputation. It is not necessary to prove consumer confusion in a trademark dilution case. The trademark owner must prove injury and actual economic harm. Finally, trademarks must be used in commerce in order to receive trademark protection. Abandoned marks lose their trademark protection due to non-use.

To review, read Trademarks.


6b. Identify the requirements to hold a valid patent, and apply this knowledge to determine what can or cannot be patented

  • What are the legal requirements to hold a valid patent?
  • When can a patent be granted? When can a patent not be granted?

Patent Requirements

An inventor can qualify for patent protection by meeting three requirements. First, the invention must be novel, which means it is brand new and has not been previously used. Second, the invention must be useful, meaning it serves a practical purpose. Third, the invention must be non-obvious, meaning that it must not be evident in light of current technology. To review, read Patents.

Types of Patents

There are 3 types of patents: utility, design, and plant patents. Utility patents may be granted for machines, processes, articles of manufacture, compositions of matter, or for improvements to any of those items. A design patent may be granted for ornamental designs for an article of manufacture. A plant patent covers inventions or discoveries of asexually reproduced plants (e.g., plants produced through methods such as grafting).

It is important to note that physical phenomena, the laws of nature, abstract ideas, and artistic works cannot be patented. Mere ideas for an invention cannot be patented.

Big Pharm, Inc.

Dr. Katz is a botanist and he works for the Big Pharm, Inc. drug company. His employer invests a considerable amount of money and resources in the development of a medicine to combat asthma. As part of his research, Dr. Katz conducts experiments on rare plant species from tropical rainforests. Dr. Katz has had much success with his experiments and Big Pharm, Inc. would like to seek a plant patent for Dr. Katz's work. Some of the plants Dr. Katz has produced by grafting. Others were produced from seeds collected in the field. Big Pharm, Inc. would also like to patent a general idea Dr. Katz has for plant grafting techniques. Are any of these patentable?


  • Plants produced from seeds: Big Pharm, Inc. cannot patent inventions or discoveries from the plants because they were naturally produced from seeds.
  • Grafted plants: Big Pharma, Inc. can seek a patent for Dr. Katz's asexually reproduced plants. The plants were produced through grafting.
  • General Ideas: Big Pharma, Inc. cannot seek a patent for Dr. Katz's general idea for plant grafting techniques. An idea alone cannot be patented.

To review, read Patents.


6c. Define copyright, and determine when a copyright has been or has not been violated

  • What is a copyright?
  • How can a copyright be violated?
  • What is fair use?

Copyright Law

Copyright protects a creative expression. The creative expression is automatically copyrighted if it is an original work (not copied) and fixed in a durable medium. Copyright protection lasts for seventy years after the death of the author. If there is more than one author, the copyright expires seventy years after the death of the last surviving author. If a company, such as a publisher, owns a copyrighted work, the copyright expires ninety-five years from the date of publication, or one hundred twenty years from the date of creation, whichever comes first.

Copyright Infringement

Copyright infringement occurs when someone uses a copyrighted work without permission or violates the terms of a copyright license. Copyright infringement also occurs when a party assists someone in violating a copyright, or in the creation of a device that assists in violating a copyright.

Fair Use Exception

Fair use is a legal exception to copyright infringement. In limited circumstances, party can reproduce a copyrighted work for commentary, criticism, news reporting, teaching, or research. The party does not have to seek the owner's permission or pay the owner royalties. To determine whether a use is fair, the court will examine the following factors:

  • the purpose and character of the use
  • the nature of the copyrighted work
  • the amount and substantiality of the portion used
  • the effect of the use on the potential market for the copyrighted work

To review, read Copyright.


6d. Identify and describe the body of law that protect trade secrets, and apply this knowledge to determine situations in which trade secrets will or will not be protected

  • What is a trade secret?
  • When are trade secrets be protected or unprotected under the law?

Trade Secret

A trade secret is any secret information that an organization has in its possession that gives the organization a competitive advantage over its competitors. This information may include a process, formula, pattern, program, device, method, technique, or compilation. An owner of a trade secret can sue for misappropriation and seek damages against infringers. Damages may include actual loss and unjust enrichment not captured by actual loss. Additionally, in cases of willful or malicious misappropriation, double damages may be awarded, as well as attorney's fees.

Trade Secret Protection

To qualify as a trade secret, an organization's information must remain unknown to others. The information must be of sufficient originality and actual or potential economic value so as to make the trade secret owner more competitive over others in its industry. An organization loses its trade secret protection once it is revealed to others.

To review, read Trade Secrets.


6e. Analyze the impact of the digital era on intellectual property rights

  • What impact has the digital era had on intellectual property rights?

The digital era has posed great challenges for intellectual property owners. To combat abuse, Congress enacted the Anticybersquatting Consumer Protection Act (ACPA) in 1999. The act prohibits cybersquatting where a party registers a domain that is the same or confusingly similar to another party's trademark. The law also prohibits cybersquatting where a party has a bad faith intent profit from the misuse of the registered domain name.

To combat intellectual property theft, the government enacted the Digital Millennium Act which prohibits the pirating of copyrighted material. The law also prohibits third parties from circumventing security measures used to protect copyrighted material.

To review, read Trademarks.


Unit 6 Vocabulary

This vocabulary list includes terms that might help you with the review items above and some terms you should be familiar with to be successful in completing the final exam for the course.

Try to think of the reason why each term is included.

  • trademark
  • trade dress
  • service mark
  • certification mark
  • collective mark
  • genericide
  • dilution
  • patent requirements
  • utility patent
  • design patent
  • plant patent
  • patent trolls
  • copyright
  • fair use
  • trade secret
  • misappropriation
  • Anticybersquatting Consumer Protection Act (ACPA)
  • Digital Millennium Act