BBA 3210 Columbia Southern University Protecting Intellectual Property Discussion Burger King, the national
franchise, is banned from opening a restaurant within 20 miles of Mattoon, Illinois.
So, there is not a Burger King there; no problem, right? Not so fast! In the
late 1950s, Gene and Betty Hoots trademarked the iconic name. Well, they
trademarked it in Illinois at least. When the national company decided to open
a chain close by, the Hoots sued and won their case. However, the national
chain was able to keep the name Burger King, but the Hoots were also able to
keep the name in accordance with the stipulation that the national chain could
not open a store within a 20-mile radius of the original store in Mattoon,
Illinois.Your assignment must be at
least two pages in length and explain the methods for protecting
intellectual property, the reasons why this decision was made,
and the significance of this case in U.S. trademark law jurisprudence.
Define the limitations of business ownership and protecting property. Include
an introduction in your paper.For this assignment, please
find one article from the CSU Online Library that discusses intellectual
property; elaborate on how the article relates to the Burger King case to
support your answer. Identify the main issues with copyright and trademark in
the article, and explain how these issues were either upheld or overturned.Adhere to APA Style when creating citations and references for this assignment. **See attached article Disclaimer: This is a machine generated PDF of selected content from our databases. This functionality is provided solely for your
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The competitive advantage of intellectual property
Authors: George R. Wagman and Stephen B. Scofield
Date: Summer 1999
From: SAM Advanced Management Journal(Vol. 64, Issue 3)
Publisher: Society for the Advancement of Management
Document Type: Article
Length: 3,221 words
The effective protection of intellectual property rights should be implemented throughout the world if US businesses aim to maintain
their competitiveness. The US economy is losing its competitive edge from research and development because intellectual property
protection has remained elusive and problematic. One solution is for managers to come to terms with their business environment
within the global realm. Another important factor is to ensure that new laws, innovative technologies and new methodologies are
developed and utilized for the protection of intellectual properties since it is through such efforts that the nation’s strength and the
success of individual citizens are guaranteed.
Technology is an increasingly significant product for the economies of developed nations. It is an item of intellectual property, a
barrier to infringement of intellectual property rights and, paradoxically, a means of diminishing its own effectiveness as a barrier to
infringement. This paper will trace the historical development of the concept of intellectual property as evidenced in the history of
patent, copyright, and trademark law, describe and examine international agreements pertaining to intellectual property rights,
examine problems posed by the frontier of the technological revolution to the definition and protection of intellectual property in
international trade, and also examine the effect on international trade of infringement of intellectual property rights. The objective is to
illuminate contemporary management problems presented by intellectual property rights in international trade by placing the topic in
historical, legal, and international perspectives.
For the intention of this paper, intellectual property consists of physical manifestation of original thought in compliance with statutes,
specifically patent, copyright, or trademark statues. Also, for the purposes of this paper, infringement of intellectual property rights
consists of the following:
(1) patent infringement – piracy: the unauthorized reproduction, use, or imitation of an invention, creation, or product with the objective
of having the result pass as genuine;
(2) copyright infringement – the definition of which strains the statutory fabric by which copyright is codified as discussed later;
(3) product counterfeiting – branding goods with a mark identical to, or substantially indistinguishable from, a legally registered
trademark where those goods are similar or identical to the product for which the trademark is registered (definition used in the
proposed General Agreement on Tariffs and Trade International Anticounterfeiting Code);
(4) the unauthorized use of a trademark on a substantially nonsimilar product;
(5) “passing off” – the use of a similar, but not identical, trademark on a substantially similar product, or the use of similar or identical
packaging without the trademark, and
(6) “gray market” or parallel sales – the sale of products bearing an authorized trademark in contravention of a marketing agreement
(such as exportation and reimportation: purchasing goods from a domestic manufacturer, allegedly for overseas destinations, then
returning them and selling them at lower cost in the domestic market).
Not included in the definition of infringement are reproductions – less than exact copies of a patented product that escape legal
definition of infringement because of restrictions on patent scope (U.S. Executives; International Trade Commission, 1984). To
elaborate on this exclusion, many patents can be “invented around” meaning that functionally similar inventions or aesthetically
similar products are freely produced where the manufacturers are careful to remain on the far side of the limits established by the
relevant copyright or patent.
In sum, protection of intellectual property in international trade is elusive and problematic, and the United States economy is “losing
the competitive edge (gained) from research and development, innovation and creativity” (Hills, 1989).
June 19, 1421:
THE MAGNIFICENT AND POTENT LORDS, LORDS MAGISTRATE AND STANDARD BEARER OF JUSTICE,
CONSIDERING that the admirable Filippo Brunelleschi, a man of most perspicascious intellect, industry and invention, a citizen of
Florence, has invented some machine or kind of ship, by means of which he thinks he can easily, at any time, bring in any
merchandise and load on the river Arno and any other river or water, for less money than usual, and with several other benefits to
merchants and others; and that he refuses to make such machine available to the public; in order that the fruit of his genius and skill
may not be reaped by another without his will and consent; and that if he enjoyed some prerogative concerning this, he would open
up what he is hiding, and disclose it to all;
AND DESIRING that this matter, so withheld and hidden without fruit, shall be brought to the light, to be of profit to both said FILIPPO
and to our whole country and others; and that some privilege be created for said FILIPPO, as hereinafter described, so that he may
be animated more fervently to even higher pursuits, and stimulated to more subtle inventions, . . . (Bugbee, 1967).
So reads the first known patent, issued in the Republic of Florence. The term was three years and infringing vessels were to be
burned. The significance of the patent to the subject of this paper is that it demonstrates the practical reasons underlying the social
construction of intellectual property: primarily that society is benefited by granting to inventors temporary monopolistic control over,
and thus the fruits of, their own efforts. This establishes an incentive for the investment of time, intellect, and capital in invention and
development of invention. However, in awarding early patents the parochial scope of economics concerns of the time resulted in
greater concern with potential usefulness than with the inventive originality of technology. Patents were granted for original inventions
and for imported ideas new to a country but not for the fruit of the patent holders invention. These latter types of patents were of the
nature of exclusive franchises or importation licenses granted by the government of the nation to which the ideas were introduced.
This lack of distinction between original inventions and imported ideas is further apparent in the wording first general patent statute
drafted by the Republic one half century later:
March 17, 1474:
Be it enacted that, by the authority of this Council, every person who shall build any new and ingenious device in this City, not
previously made in our Commonwealth, shall give notice of it to the office of our General Welfare Board when it has been reduced to
perfection so that it can be used and operated. It being forbidden to every other person in any of our territories and towns to make
any further device conforming with and similar to said one, without the consent of license of the author, for the term of 10 years. And
if anyone builds it in violation hereof the aforesaid author and inventor shall be entitled to have him summoned before any magistrate
of this City, by which magistrate the said infringer shall be constrained to pay him one hundred ducats; and the device shall be
destroyed at once (Bugbee, 1967).
One patent issued under the Venetian statute was granted to Galeleo Galilei, whose reasoning evident in the application below
reflects that of Brunelleschi more than a century and a half earlier. This reasoning became evident in the English Statute of
Monopolies a little more than 30 years later and in modern systems of intellectual property law that have evolved from the English
I, Galeleo Galilei, have invented a machine for raising water and irrigating land with small expense and great convenience, which,
with the motive power of a single horse, will continuously discharge water through twenty spouts to be found thereon. I desire at
present to reduce it to practice, but, it not being fit that this invention, which is my own, discovered by me with great labor and much
expense, be made common property of everybody, I humbly petition your Serene Highness that you deign to favor me with that which
by your benignity is readily granted to any expert in every profession in similar cases; that is, that no one but myself or my heirs or
those obtaining the right from me or from (my heirs) be allowed to make, cause to be made, or, if made, use my said new instrument,
nor with alterations to apply it to other uses with water or other things, for the period of forty years or for whatever term it pleases
Your Serene Highness under whatever pecuniary penalty, in the proceeds of which I would have a share, that seems fit to you in
case of infringement. By reason thereof I shall the more attentively apply myself to new inventions for universal benefit; and I humbly
hold myself recommended to you in this capacity (Bugbee, 1967).
In 1559, Giacopo Acontio, a renaissance inventor, migrated to England from Florence as a religious refugee. In a petition to the
Crown, Acontio wrote that an inventor’s labors were of great cost to the inventor and of great potential to society and should be
protected as a matter of justice and as an incentive to the inventor. This significance of the petition is that the wording emphasized
true invention in its present day sense.
United States Patent Laws
The function of U.S. patent law can be traced to its European origins. United States patent law is intended to provide an incentive to
invent by offering the possibility of reward to inventors, to encourage expenditure of time and private risk capital in research and
development efforts, to encourage early public disclosure of technological information thus reducing duplication and misdirection of
effort, and to promote beneficial exchange of products, services, and technological information across national boundaries (Goldstein,
The legal system as it is today provides certain rights and protections for owners’ property. The kind of property that results from the
fruits of mental labor is called intellectual property. Rights and protections for owners of intellectual property are based on federal
patent, trademark, and copyright laws and state trade secret laws. In general, patents protect inventions of tangible things; copyrights
protect various forms of written and artistic expression; and trademarks protect a name or symbol that identifies the source of goods
or services (AIPLA, 1995).
There are two primary barriers to the infringement of intellectual property rights – law and technology. Unlike tangible personal
property, which can be reduced to possession, intellectual property is intangible and is defined by the limits to which it is protected
under law, primarily patent, copyright, and trademark law. Laws define intellectual property rights, and in so doing stipulate that which
constitutes infringement of such rights and provide remedies that constitute a barrier to infringement. These are laws of nations,
however, and as such are insufficient in reach to define and protect intellectual property in an increasingly global economy.
Accordingly, such rights are an increasingly salient part of international trade negotiations and agreements, but international
agreements are themselves limited in reach and effect. Intellectual property is a subtle and esoteric area of the law that evolves
response to technological change. Advances in technology particularly affect the operation and effectiveness of copyright law.
Changes in technology generate new industries and new methods for reproduction.
For many years, general tension has existed between authors (lyricists), composers, and musicians on one side and technology on
the other, growing out of the threat that technology poses to their livelihood. Photocopy technology, tape recorders, and VCRs
generated the first real crisis, and digital technology has now generated the second. While analog recordings can be copied with
home entertainment systems, the copies are inferior compared with the original, and copies of copies are degraded even more. With
digital technology, however, degeneracy does not occur when copying recorded material and, therefore, it presents a real competitive
and economic disadvantage to copyright holders.
It is difficult for intellectual property laws to keep pace with technology. When technological advances cause ambiguity in the law,
courts look to the law’s underlying purpose to resolve that ambiguity. However, when technology gets too far ahead of the law, and
adapting the specific statutory proviso to comport with the law’s principles becomes difficult, it is time for reevaluation and change.
Technology has altered the balance of the present copyright laws, in some instances in favor of copyright owners, and in others in
favor of users. Laws should be adapted to accommodate technological changes so that the intended balance is maintained and
constitutional purposes are served (USPTO, p.3).
Exchange of technology (technological development) empowers a free market economy. But if these barriers to development persist,
the laws that protect technological development are not effective, and an international system of enforcement is not established, then
the economic profits that should be obtainable will not accrue to the rightful owners of intellectual properties. From an economists
point of view, in the long run, profits will attract more companies to an industry, and the substantial economic profits that are earned
will be reduced as more companies enter the industry. As long as there are economic profits within an industry, there will be
incentives for other individuals, organizations, or nations to seek a share of such profits. Intellectual property theft is one way to
obtain a share of economic profits and achieve competitive advantage.
Research underlies the development of patentable products. Firms that gain monopoly power by their own research or by purchasing
the patents of others can consolidate and strengthen their market positions. The profits from one patent can finance the research
required to develop new patentable products. Table 1 shows a 1993 breakdown of losses to U.S. industries – $23.8 trillion – because
of intellectual property infringement. However, by 1996 industry groups estimate that counterfeiting and piracy of intellectual
properties of computer software, compact discs, and movies alone cost the affected copyright holders more than $11 billion (others
believe the figure was closer to $20 billion). By 1996, these losses to American companies within the industry had at least tripled. In
some countries, software piracy rates are as high as 90% of sales. The effect of this volume of theft is substantial: 130,000 lost U.S.
jobs and $5.6 billion in corresponding lost wages, $1 billion in lower tax revenue and higher prices to honest purchases of copyrighted
software (Coble, 1997).
This restates the problem cited in the introduction to this paper. Developing countries continue to steal whatever intellectual property
they feel may be beneficial to their economic development and, to date, retaliation has been ineffective and compromised by political
concerns: an impasse. One estimate (the most recent one from reliable sources) is that, in 1986, the loss in U.S. revenues to
infringement of intellectual property rights was between $43 billion and $61 billion – a conservative figure compared with the likely
annual losses now (Hills, 1989). Nevertheless, beyond issues of developing countries, international agreements, and compliance with
international agreements, technology itself represents a challenge to the definition of intellectual property, and, thereby poses a
constraint to international trade.
Table 1. 1993 Losses to U.S. Industries Because of Intellectual Property Infringement Loss Industry ($1,000,000)
Aerospace 120 Building Materials 739 Chemicals 1,334 Computers & Software 4,130 Electronics 2,288 Entertainment 2,060
Entertainment 2,060 Food and Beverage 86 Forest Products 665 Industry & Farm Equipment 622 Metals & Metal Products 292
Motor Vehicles & Parts 2,194 Petroleum Refining 1,295 Pharmaceuticals 1,909 Publishing & Printing 128 Rubber Products 511
Scientific/Photographics 5,090 Textiles & Apparel 251 Other 151 Total $23,865 (Source: Aharonian, 1994)
Principal international agreements bearing wholly or in part on intellectual property rights are the General Agreement on Tariffs and
Trade, the Berne Convention for the Protection of Literary and Artistic Works, the Paris Convention for the Protection of Industry
Property (Paris Union Convention), the Universal Copyright Convention, the European Patent Convention, and the Patent
Cooperation Treaty. In addition, there are other European, Pan American, and bilateral agreements that are variously limited in scope
and effect. The administrative affiliations of the GATT, Berne Convention, Paris Union Convention, and the Universal Copyright
Convention are depicted in Chart 1.
General Agreement on Tariffs and Trade: The GATT is the main instrument regulating trade among market economy nations of the
world. But, in the original agreement signed in 1947 and in subsequent early revisions, no reference is made to intellectual property
rights as an international trade issue, and early rounds of negotiations focused almost exclusively on reciprocal tariff reductions
(General Agreement on Tariffs and Trade; 1947, 1952).
The Office of the United States Trade Representative, an agency of the Executive Office of the President, is the body involved in the
GATT negotiations on behalf of the U.S. Proposals regarding intellectual property rights introduced by the United States Trade
Representative (USTR) during the Uruguay round of negotiations have been complicated by disagreements over agricultural issues
unrelated to the present topic. One of the top priorities of U.S. is trade-related aspects of intellectual property rights (TRIPS). (The
World Intellectual Property Organization contributed to the intellectual property negotiations in an advisory capacity – .) The key point
in the United States’ proposal is to reach a multilateral agreement that will reduce or eliminate trade distortions and impediments to
legitimate trade through agreement on adequate substantive standards; effective enforcement of those standards, both internally and
at the border; an effective dispute settlem…
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