Class+Notes+3

Intellectual Property 1. Intellectual property is a unique creation of the human mind that has commercial value. Examples of intellectual property include poems, photographs, songs, plays, books, paintings, sculptures, movies, logos, slogans, designs, perfumes, recipes, and computer programs. 2. John Locke holds that when people remove something from Nature through their own labor, they have mixed their labor with it, and therefore they have a property right in that object. 3. If more than two people create the identical intellectual property, there is only one instance of that property, not two, meaning both people cannot claim full rights to that property. Copying an intellectual property is different from stealing a physical property. Perfect copies can be made of objects embodying an intellectual property. When this happens, the original owner has lost exclusive control over use of the property, even though he or she still has the original article. 4. An individual or firm in the United States may protect intellectual property through trade secrets, trademarks, service marks, patents, and copyrights. 5. A trademark is a word, symbol, picture, sound, color, or smell used to identify a product. It is good when a company’s trademark becomes well known to the public. Examples of trademarks are Kleenex, McDonald’s Golden Arches, and Advil. A trade secret is a piece of intellectual property that is kept confidential. Examples of trade secrets are formulas, processes, proprietary designs, strategic plans, and customer lists. The information loses much or all of its value if it becomes public knowledge. 6. The advantage of a trade secret is that it does not expire. The disadvantage of a trade secret is that a company cannot prevent another company from reverse engineering the formula or process. The advantage of a patent is that the government gives the patent owner the exclusive right to the intellectual property. The disadvantage of a patent is that this right expires after 20 years. 7. Fair use refers to those circumstances under which it is legal to reproduce a copyrighted work without permission. 8. As information technology has advanced, companies have begun using digital media (such as CDs and DVDs) to store copyrighted songs, movies, and computer programs. The widespread availability of personal computers and CD/DVD burners has made it much easier for consumers to make copies of CDs and DVDs.

9. The Digital Millennium Copyright Act curtails fair use of copyrighted material by consumers by making it illegal to make copies of DVDs. 10. Digital rights management refers to any of a variety of actions owners of intellectual property stored in digital form may take to protect their rights. Examples of digital rights management include encryption, digital watermarking, and making CDs copy-proof. 11. CD-ROM drives in PCs use a different standard than CD audio players. When a CD audio player encounters a bad block of bits, it skips over it. When a CD-ROM drive in a PC encounters a bad block of bits, it keeps re-reading the block until the bits in the block make sense. By deliberately planting bad blocks of data onto a CD, you can make a CD that sounds good on a CD player but is unreadable by a CD-ROM drive. 12. The Apple/EMI agreement changes the landscape of digital rights management because EMI agreed to let Apple distribute its music without digital rights management, albeit at a 30 percent markup, making it easier for consumers to transfer the music to a variety of devices. 13. A peer-to-peer network is a transient (temporary) network allowing computers running the same networking program to connect with each other and access files stored on each other’s hard drives. Peer-to-peer networks facilitate file sharing. 14. Napster relied on a single central server to mediate requests. FastTrack distributes the index of available files among many supernodes. Shutting down Napster simply requires shutting down the single central server. Shutting down FastTrack would require shutting down all of the supernodes. Hence FastTrack would be more difficult for the judicial system to shut down than Napster. 15. BitTorrent achieves an order-of-magnitude increase in downloading speed, compared with KaZaA and Grokster, by allowing a user to download different pieces of a file from many different sources simultaneously. 16. The answer to this question varies from university to university. 17. MP3 spoofing refers to posting a bogus MP3 file on a peer-to-peer network. In other words, the content of the file does not match the title. The recording industry supports MP3 spoofing because it makes downloading songs more difficult. 18. Sony did not actively encourage its customers to break copyright law. The Supreme Court ruled that timeshifting was not an infringement of copyright. In contrast, Grokster and StreamCast actively encouraged the availability of copyrighted files on their networks and helped consumers download these files, because these actions increased the popularity of their services and heightened their advertising revenues. 19. The answer to this question will vary over time, but Apple is making large profits from its music downloading service. 20. Patents are considered an unreliable way of protecting intellectual property rights in software because the Patent Office has given out many bad software patents than cannot hold up in court. This has happened because for decades the Patent Office did not give out patents on software. During this time a lot of “prior art” was being developed. Now, when a company applies for a software patent, the Patent Office may not be aware of some of the prior art. It may issue a patent even though the algorithm is not novel. Such a patent has little value. The existence of bad patents in software reduces the value of software patents in general.