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Intellectual Property. Microsoft Case Essay

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Updated: Apr 16th, 2022

Patents and trade secrets

A patent is an agreement between the inventor and the federal government under which the inventor receives an exclusive right to use the invention while having an obligation to make it public. A trade secret refers to any information or method giving the owner an exclusive competitive advantage if used in the business. The aim of a patent is to make the invention public while the aim of a trade secret is to keep the information hidden from publicity. While patents are limited in time, trade secrets are not. Another distinctive feature of a patent is its ability to protect the invention from being used by anyone except the owner of the patent for commercial purposes. A trade secret is not provided with such protection, as it can be used by another person if being discovered by legitimate means. The person can patent already existing trade secret if he/she discovers it. Therefore, patents appear to have a higher level of protection than trade secrets do. However to be eligible for attaining a patent, the person has to comply with certain formalities while the process of becoming an owner of a trade secret is less complicated.

Identifying the main differences between these forms of intellectual property helps to determine the factors influencing the choice between them. The first factor that needs to be taken into account is whether the information that needs to be protected can be easily developed or discovered by another person or company. Patents are more suitable for such cases, as they grant protection in case of reinvention. Trade secrets have weak protection, and in the event of reinvention, the owner will lose the exclusive right to keep the information. The costs needed to be spent on keeping the information in secret is another factor that should be considered. If these costs are higher than the initial value of the invention, a patent can be more suitable. Besides, the objective of the inventor and the type of invention influence the choice. If the invention’s usefulness is limited to a particular business area, and the owner wants to use it in private business and receive material benefits in such way, then trade secret appears to be a better option. If the invention is useful for society and the owner wants to share it with publicity while keeping certain rights for it, a patent can be chosen. For example, if the person possesses a secret recipe, shared only among the members of the family, related to preparing a unique homemade cheese that is considered exclusive and expensive, trade secret can be a good solution. If the process of making the cheese can be repeated only in this certain region and only by following the unique recipe, the chances for the reinvention of the process is rather low. Besides, the process of maintaining the invention in secret does not involve any big investments. The invention of the recipe is useful for this particular business and can benefit the owner if used in this area. The invention cannot be regarded as extremely useful to the society, and is more likely to benefit the owner if kept in secret.

Fair Use in File-Sharing Cases

The successful use of fair use doctrine for a defense to a copyright infringement suit based on file-sharing highly depends on the purposes of the act. Four factors should be considered to determine whether an act of digital file-sharing can be considered eligible for a fair use. The first factor is related to the purpose and the character of the use. File-sharing can be used both for commercial and nonprofit educational purposes. If the file is used for non-profit activity such as educating students about some phenomena, then we can weigh the first factor in favor of fair use. If some Web site uses a file to attract users and earns money on this, then the first factor tilts against a finding of fair use. The second factor is related to “the nature of the copyrighted work” (Mallor, Prenkert, Barnes, McCrory, & Langvardt, 2015, p. 275). This factor tends to weigh against a finding of fair use in digital file-sharing, as it usually does not include any transformation. The third factor reveals “the amount and substantiality of the portion used in relation to the copyrighted work as a whole” (Mallor et al., 2015, p. 275). If the file displays the entire work, then we the third factor tilts against a finding of fair use. If the work is used only partially, then we can weigh the third factor in favor of fair use. The fourth factor is related to “the effect of the use on the potential markets for the copyrighted work or on its value” (Mallor et al., 2015, p. 275). The use of original work in file-sharing presents an obvious threat to the possibility of receiving revenues from selling the work by the owners. File-sharing has a potential impact on the rates of sales of copyrighted products, such as hard copies of songs and movies. Therefore, sharing of full versions of copyrighted products for commercial purposes tilts against a finding of fair use. However, sharing parts of copyrighted products for educational purposes can be regarded as appropriate for a fair use. The analysis of four factors of defining fair use applied to file-sharing demonstrates that fair use defence is not likely to work in most file-sharing cases, as files usually contain full version of products and influence the profit of the owner. However, file-sharing used for educational purposes and including only important fragments of original works can be considered as a part of fair use.

Trademark Infringement and Trademark Dilution

To define whether “Windows” is a term that can be trademarked, it is necessary to analyze whether any category of distinctiveness can apply to the term. As the word “windows” is used as a term describing graphical user interface, it can be regarded as a generic term and, therefore, prevent considering “Windows”, naming a graphical operating system, a trademark. To prove trademark infringement, Microsoft should prove that it owns a valid and protectable mark. Besides, Microsoft should demonstrate that Lindows.com uses the similar version of the mark in commerce and without the consent of Microsoft, which is easy to be proved. However, the main factor, determining the likelihood of confusion, is difficult to be identified, as the goods the marks identify are not identical, and the actual confusion is rather difficult to be proved. Trademark dilution by blurring does not appear to be possible to be found in this case, as Lindows.com does not put a threat on the distinctiveness of Windows trademark or cause it to be diluted. Dilution by tarnishment also cannot be applied in this case, as the similarity between the discussed trademarks does not cause any harm to the reputation of Microsoft, as Lindows.com mark is not used in an unwholesome context. Therefore, a court is more likely to find that Lindows.com was committing trademark infringement.

Reference

Mallor, J., Prenkert, J. D., Barnes, A. J., McCrory, M. A., & Langvardt, A. (2015). Business law: The ethical, global, and e-commerce environment (16th ed.). New York: McGraw-Hill Education.

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