CHAPTER
5CHAPTER
5OBJECTIVES: 1. Define unfair competition
2. Define the business torts of disparagement, misappropriateing the right ot pubilicity, and fraud.
3. Define racketeering under the civil RICO statute.
4. Describe inventions.
5. Describe copyrights.
6. Describe legal rights to computers and software.
7. Define trademarks and service marks.
8. Decribe the generaic name doctrine.
A. RESTRICTIONS ON ENTERING CERTAIN BUSINESSES AND OCCUPATIONS
Freedom to enter certain businesses and occupations are limited by the government because of considerations of public health and safety and limited public availability.
Limited Availability broadcast space, local telephone service, cable service.
Public Health and Safety mostly occupations, but also airlines, common carriers
B. UNFAIR COMPETITION
Competition that violates the law is referred to as unfair competition or predatory practices.
1. Palming off - a person tries to pass one of its products as that of a rival. State law.
2. Misappropriation of Trade Secrets. These include processes, customer lists, designs, patterns, and other business secrets that because they are actively protected by the owner from discovered receive protection under state law.
3. Disparagement is also called product disparagement, trade libel, and slander of title
a. made an untrue statement about another's product, service, property or business reputation
b. published
c. knew the statement was untrue
d. acted maliciously (intent to injure)
4. Lanham Act, Section 43(a) false and misleading advertising
McNeil-P.C.C., Inc. v. Bristol-Myers Squibb Co., 938 F.2d 1544 (2nd Cir., 1991).
FACTS: Bristol-Myers began advertising Excedrin as working better than Tylenol. They based this claim on the results of a cross-over study conducted by Bristol-Myer. McNeil believed that the claim was false and sued under Sec. 43(a) of the Lanham Act.
ISSUE: Did Bristol-Myers make a false claim under the act.
DECISION: Yes
REASONING: The Act prvents disparaging or false or misleading statements about another's product. The cross-over test did not clearly demonstrate that Excedrin was better than Tylenol.
5. Misappropriation of the Right of Publicity is one of the four right of privacy torts. It is based upon the exclusive right of the individual to control and profit from the commercial use of his or her name and perosnality during his or her lifetime.
White v. Samsung Electronics America, Inc., 971 F.2d 1395 (9th Cir. 1992).
FACTS: Samsung's advertising agency was placing Samsungs current products in a futuristic setting for the purpose of showing that Samsung's products would exist in the future. In one ad, a Samsung VCR was used in a future setting that was recognizable as the TV game show Wheel of Fortune. On the set a robot that dressed and preformed like Vannna White was used. The ad was captioned "Longest-running game show. 2012 AD." White did not consent to the ad.
ISSUE: Did Vanna White have a proper claim for misappropriation?
DECISION: Yes
REASONING: Neither a robot dressed like Vanna White nor a futuristic Wheel of Fortune setting along would have been enough, but put them together and they clearly capitalize on Vanna White's value.
6. Intentional Misrepresentation (fraud or deceit)
a. false representation of material fact
b. knowledge or falsity and intent to deceive
c. justifiable reliance
d. injury
7. Civil RICO. The act outlaws a pattern of racketeering activity, including arson, counterfeiting, gambling, dealing in narcotics, bribery, embezzlement, mail and wire fraud, securities fraud, and other enumerated criminal activities. In all, the act incorporated 26 federal crimes and 9 types of state felony crimes.
The civil RICO permits the federal government to seek civil penalities including forfeiture of the business or dissolution of the business.
Individuals who have suffered economic or property damages can sue and recover:
treble damages for
economic or property damages and
attorney fees
C. INTELLECTUAL PROPERTY
Intellectual property is an product of the human mind that is protected by law.
U.S. Constitution: Art. I, Sec. 8, clause 8
The Congress shall have Power......To 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;"
D. Patents machines, processes, compositions of matter, or improvements thereon, asexually produced plants, living matter invented by man, and designs.
E. Copyrights books, newspapers, addresses, musical compositions, motion pictures, works of art, architectural plans, greeting cards, photographs, sound recordings, computer programs, and mask works fixed in semiconductor chips.
F. Trademarks Trade name, symbol, logo, design or device that distinguishes the owner's goods or services.
Marks are referred to collectively as trademarks:
a. Trademark identifies goods
b. Service mark identifies services
c. Certification mark certifies goods or services
d. Collective mark used by collective groups, Tri-Delts, Girl Scouts of America, Farmer's Co-op