LEB 320F Book Notes/Outline Chapter 9

LEB 320F Book Notes/Outline Chapter 9 - LEB Chapter 9...

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LEB: Chapter 9 INTELLECTUAL PROPERTY: Trademarks, Trade Secrets, Patents, and Copyrights. The law of intellectual property has become far more important recently because the value of these intangible assets has increased in recent years. Intellectual property law is based on several fundamental concepts: 1. Intellectual property law protects certain types of knowledge, ideas, and expressions by granting exclusive rights to creators. These exclusive rights are a type of intangible property right. 2. When someone else violates these rights, the violator is actually engaging in a form of competition. It is a type of competition that has been declared unlawful, but is competition nonetheless. (EXAMPLE) Suppose X (or the company he works for) invests time, energy, and money in coming up with a new invention that provides a benefit to society. Using the knowledge that X developed, Y begins making and selling a new product that is the same as X’s invention. If X has no way to protect his investment in inventing, he is less likely to make these kinds of investments in the future. If we have patent laws, if his invention meets the requirements for obtaining a patent, and if he is able to successfully sue Y for patent infringement, X is more likely to continue investing in the inventive process in the future. IN MANY SECTORS OF THE ECONOMY, THE MOST IMPORTANT TYPE OF COMPETITION IS THE COMPETITITVE RIVALRY TO INNOVATE. The same can be said of investing time and money in the creative efforts of writing books, music, and software. Here, copyright law creates certain exclusive rights that are intended to encourage people to continue engaging in these socially desirable creative activities. Thus, intellectual property laws essentially prohibit certain kinds of conduct (such as infringing on someone else’s patent, copyright, trade secret, or trademark) that are competitive in the short run, with the objective of creating greater incentives for people and companies to engage in innovative and creative activities that tend to promote competition and also benefit society in other ways (such as the cultural value of creativity) in the long run. 3. Such laws can go to far. For example, patents are granted on inventions that really don’t deserve such protection, society pays the short-term price of less competition but does not receive the long-term benefits from innovation. If a copyright law protects too much or too long (which many knowledgeable observers believe to be the case today), society pays more for access to creative works in the short run without receiving properly corresponding benefits in the long run. An IDEAL SYSTEM provides protection to intellectual property that is no greater than is necessary to create and maintain the desired incentives to innovate and create over time. A country cannot fully participate in today’s global economy without a full slate of intellectual
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This note was uploaded on 05/11/2008 for the course LEB 320F taught by Professor Bredeson during the Spring '08 term at University of Texas.

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LEB 320F Book Notes/Outline Chapter 9 - LEB Chapter 9...

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