IN JOURNAL WEEK 5

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Ethics in Information Technology

Chapter 6

Intellectual Property

George W. Reynolds

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Learning Objectives

What does the term intellectual property encompass, and what measures can organizations take to protect their intellectual property?

What are some of the current issues associated with the protection of intellectual property?

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Intellectual property: Describes works of the mind that are distinct and owned or created by a single person or group

Art and music

Books and film

Formulas, inventions and processes

Intellectual property is protected through:

Patent

Trade secret laws

Owners control and receive compensation for the use of their intellectual property

What is Intellectual Property?

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Copyright: The exclusive right to distribute, display, perform, or reproduce an original work in copies, or to prepare derivative works based on the work

Since 1960, the term of copyright has been extended 11 times; new works are protected for the life of the author plus 70 years.

Eligibility criteria: Work must be original and fall within one of the categories described in Title 17 of the U.S. Code

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Fair use doctrine: Allows portions of copyrighted materials to be used without permission

Court decisions regarding fair use are based on four factors:

Purpose and character of the use

Nature of the copyrighted work

The portion of the work used in relation to the whole

Effect of the use on the value of the copyrighted work

Software copyright protection

Proving infringement requires showing striking resemblance that could be explained only by copying

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Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of 2008: Increased trademark and copyright enforcement and substantially increased penalties for infringement

General Agreement on Tariffs and Trade (GATT)

Multilateral agreement governing international trade

Established the World Trade Organization (WTO)

Despite GATT, copyright protection varies greatly from country to country

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Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS)

Established minimum levels of protection that each government must provide to the intellectual property of all WTO members

The World Intellectual Property Organization Copyright Treaty (1996):

Encourages the use of intellectual property as a means to stimulate innovation and creativity

Ensures that computer programs are protected as literary works; also protects the arrangement and selection of material in databases

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Form of Intellectual Property	Key Terms of the WTO TRIPS Agreement
Copyright	Computer programs are protected as literary works. Authors of computer programs and producers of sound recordings have the right to prohibit the commercial rental of their works to the public.
Patent	Patent protection is available for any invention, whether a product or process. Discrimination is not allowed based on the place of invention.
Trade secret	Trade secrets must be protected against breach of confidence and other acts that are contrary to honest commercial practices.

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Digital Millennium Copyright Act (1998): Implements the WIPO Copyright Treaty and the WIPO Performances and Phonograms Treaty

Unlike traditional copyright law, the DMCA does not govern copying; it focuses on the distribution of tools and software that can be used for copyright infringement.

The DMCA explicitly outlaws technologies that can defeat copyright protection devices, but it does permit reverse engineering for encryption, interoperability, and computer security research.

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Patent: A grant of a property right issued by the U.S. Patent and Trademark Office (USPTO) to an inventor

Permits its owner to exclude the public from making, using, or selling a protected invention

Prevents independent creation as well as copying

Before granting a patent, the USPTO searches the prior art (the existing body of knowledge available to a person of ordinary skill in the art, including existing patents and published material).

The following cannot be patented

Abstract ideas

Laws of nature

Natural phenomenon

Patents, Part 1

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Patent infringement: Unauthorized use of another’s patent

Courts can award up to three times the amount of damages claimed by the patent holder if infringement is found

Leahy-Smith America Invents Act (2011): Enacted a major change in patent law; changed U.S. patent system from a “first-to-invent” to a “first-inventor-to-file” system

Also expanded the definition of prior art used to determine the novelty of an invention and whether it can be patented

The law made it more difficult to obtain a U.S. patent.

Patents, Part 2

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Software patent: Protects a feature, function, or process embodied in instructions executed on a computer

In recent years, the courts have become more restrictive in granting software patents.

Cross-licensing agreements

Each party agrees not to sue the other over patent infringements

Typically involves large software companies

Small businesses, therefore, often must pay additional costs.

Small businesses are also generally unsuccessful in enforcing their patents against larger companies.

Patents, Part 3

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Trade secret: Business information that has the following qualities:

Represents something of economic value

Required effort or cost to develop

Has some degree of uniqueness or novelty

Is generally unknown to the public

Is kept confidential

Trade secret law protects only against the misappropriation of trade secrets.

Trade Secrets, Part 1

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Trade secret laws protect more technology worldwide than patent laws do.

Key advantages:

No time limitations on the protection of trade secrets

No need to file an application, make disclosures to any person or agency, or disclose a trade secret to outsiders to gain protection

Trade secrets cannot be ruled invalid by the courts

Trade Secrets, Part 2

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Trade secret laws vary greatly from country to country.

U.S. trade secret laws:

Uniform Trade Secrets Act (UTSA): Established uniformity across the states in area of trade secret law

Economic Espionage Act (EEA) of 1996: Imposes penalties for the theft of trade secrets

Defend Trade Secrets Act of 2016: Amended the EEA to create a federal civil remedy for trade secret misappropriation

Allows for seizure of property under certain conditions to prevent dissemination of the misappropriated trade secret

Trade Secrets, Part 3

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Employees are the greatest threat to the loss of company trade secrets.

Nondisclosure clause: Part of an employment contract that specifically prohibits an employee from revealing company secrets

Noncompete agreement: Part of an employment contract that prohibits an employee from working for any competitors for a period of time

Trade Secrets, Part 4

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Plagiarism: The act of stealing someone’s ideas or words and passing them off as one’s own

Actions that schools can take to combat student plagiarism:

Help students understand what constitutes plagiarism and why they need to cite sources

Show students how to document material found online

Schedule major writing assignments in portions due over the course of the term

Tell students that instructors are aware of Internet paper mills and plagiarism detection services

Incorporate detection software and services

Plagiarism

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Reverse engineering: The process of taking something apart in order to understand it, build a copy of it, or improve it

Applicable for both hardware and software

Violates copyright and trade secret laws

Software license agreements typically forbid reverse engineering.

The courts have ruled in favor of using reverse engineering to enable interoperability.

Reverse engineering can also be a useful tool in detecting software bugs and security holes.

Reverse Engineering

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Open source code: Any program whose source code is made available for use or modification, as users or other developers see fit

Advocates believe open source code produces better software than the traditional closed model

Reasons for developing open source code:

To earn respect for solving a problem

To pay back the developer community

To promote expertise and/or attract new clients

To recover maintenance cost

To avoid the hassle of license and marketing

Open Source Code

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Competitive intelligence: Legally obtained information gathered to help a company gain an advantage over rivals

Integrated into a company’s strategic plans and decision making

Not the same as industrial espionage (the use of illegal means to obtain business information)

Sources of competitive intelligence data:

Annual and quarterly reports

Promotional materials and websites

Credit reports and investment analyses

Software applications, databases, and social media tools, such as Rapportive, Crunchbase, CORI, and WhoGotFunded.com

Competitive Intelligence

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QUESTION	YES	NO
Has the competitive intelligence organization developed a mission statement, objectives, goals, and a code of ethics? Has the company’s legal department approved the mission statement, objectives, goals, and code of ethics? Do analysts understand the need to abide by their organization’s code of ethics and corporate policies? Is there a rigorous training and certification process for analysts? Do analysts understand all applicable laws—domestic and international—including the Uniform Trade Secrets Act, Defend Trade Secrets Act, and the Economic Espionage Act, and do they understand the critical importance of abiding by them?

A Manager’s Checklist for Running an Ethical Competitive Intelligence Operation, Part 1

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QUESTION	YES	NO
Do analysts disclose their true identity as well as the name of their organization prior to any interviews? Do analysts understand that everything their firm learns about the competition must be obtained legally? Do analysts respect all requests for anonymity and confidentiality of information? Has the company’s legal department approved the processes for gathering data? Do analysts provide honest recommendations and conclusions? Is the use of third parties to gather competitive intelligence carefully reviewed and managed?

A Manager’s Checklist for Running an Ethical Competitive Intelligence Operation, Part 2

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Trademark: A logo, package design, phrase, sound, or word that enables a consumer to differentiate one company’s products from another’s

Can be renewed forever, so long as a mark is in use

Lanham Act of 1946

Defines the use of a trademark and the process for obtaining a trademark from the USPTO

Outlines penalties associated with trademark infringement

Trademark Infringement

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Nominative fair use: A defense employed by the defendant in a trademark infringement case, requires proving the following:

Plaintiff’s product or service cannot be readily identifiable without using the plaintiff’s mark

Defendant uses only as much of the plaintiff’s mark as necessary to identify the defendant’s product or service

Defendant does nothing with the plaintiff’s mark that suggests endorsement or sponsorship by the plaintiff

Nominative Fair Use

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Cybersquatter: An individual or company that registers domain names for famous trademarks or company names to which they have no connection

Goal is to sell domain name for a large sum of money

Tactics to circumvent cybersquatting:

Promptly register all possible domain names and variations

ICANN’s Uniform Domain-Name Dispute-Resolution Policy:

Designed to provide for fast, relatively inexpensive arbitration of a trademark owner’s complaint that a domain name was registered or used in bad faith

Cybersquatting

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What does the term intellectual property encompass, and what measures can organizations take to protect their intellectual property?

Intellectual property: Describes works of the mind that are distinct and owned or created by a single person or group

Intellectual property is protected by copyrights, patents, trademarks, and trade secrets law.

Fair use doctrine established four factors for courts to consider when deciding whether a use of copyrighted property is fair.

Summary, Part 1

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What does the term intellectual property encompass, and what measures can organizations take to protect their intellectual property?

The Prioritizing Resources and Organization for Intellectual Property (PRO-IP) Act of 2008: Increased trademark and copyright enforcement

General Agreement on Tariffs and Trade (GATT)

The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) covers copyrights

Digital Millennium Copyright Act (DMCA): Makes it illegal to access (or develop tools that allow others to access) a technologically protected work; limits the liability of ISPs for copyright infringement by their customers.

Summary, Part 2

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What does the term intellectual property encompass, and what measures can organizations take to protect their intellectual property?

Patent: A grant of property right issued by the USPTO that permits its owner to exclude the public from making, using, or selling a protected invention

Courts can award up to three times the amount of damages claimed by the patent holder if infringement is found

The Leahy-Smith America Invents Act changed the U.S. patent system from a “first-to-invent” to a “first-inventor-to file” system; expanded definition of prior art

Summary, Part 3

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What does the term intellectual property encompass, and what measures can organizations take to protect their intellectual property?

Trade secret:

Information must have economic value, must not be readily ascertainable, and must have been kept confidential

Protected by: The Uniform Trade Secrets Act, the Economic Espionage Act, and the Defend Trade Secrets Act

Key advantages of trade secret law:

No time limits on protection

No need to file an application to gain protection

No risk that a trade secret might be found invalid in court

Employers protect their intellectual property through nondisclosure clauses and noncompete agreements

Summary, Part 4

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What are some of the current issues associated with the protection of intellectual property?

Plagiarism: Stealing someone’s ideas or words and passing them off as one’s own

Reverse engineering: Breaking something down in order to understand it, build a copy of it, or improve it

Open source code: Any program whose source code is made available for use or modification, as users or other developers see fit.

The basic premise behind open source code is that when many programmers can read, redistribute, and modify it, software improves.

Summary, Part 5

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What are some of the current issues associated with the protection of intellectual property?

Competitive intelligence: Legally obtained information that is gathered to help a company gain an advantage over its rivals; not the same as industrial espionage

Competitive intelligence analysts must avoid unethical or illegal behavior, including lying, misrepresentation, theft, bribery, or eavesdropping with illegal devices.

A trademark: A logo, package design, phrase, sound, or word that enables a consumer to differentiate one company’s products from another’s

Summary, Part 6

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What are some of the current issues associated with the protection of intellectual property?

Cybersquatters register domain names for famous trademarks or company names to which they have no connection with the hope of selling the domain name to the trademark’s owner.

The main tactic used to circumvent cybersquatting is to protect a trademark by registering possible domain names (and variations) as soon as possible.

Summary, Part 7

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