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e-Commerce and Intellectual Property Introduction With the rapid development and diffusion of e-Commerce globally, there has been a series of significant developments in Internet law with respect to ”intellectual property.” The Internet has for the first time has combined all the basics of intellectual property and associated issues within the realm of one technology. The intellectual property basics concerned include: patents, copyrights, trademarks, and trade secrets. This paper identifies and discusses the impending legal issues and implications associated with the current trend to do business on the Internet. Since the Internet was conceived and created, it had the demeanor of free and unregulated technological infrastructure. The nature of the Internet’s technological architecture and its promise of accessibility, privacy, and protection of free speech a mere three years ago, has given way to restrictive protocols, security systems, filters, and laws---creating a potential for one of the most regulated conveyances that we have known. [4], [3] It is the protocols like TCP/IP, the coding tools like HTML, Javascript, JAVA, the customs, and other common technologies that have already regulated the unregulated Internet. Along with the technical issues of regulation arise the issues of privacy, free speech, technological innovation, and intellectual property. It is these issues brought forth by the rapid growth of e-Commerce that have the potential for governmental regulation that extend beyond national borders to the potentially alter the direction of technological growth and development. The four dimensions of intellectual property with respect to e-Commerce and the identification of such will be discussed in the context of an intellectual property audit. Then the implications of Internet legal issues for the next decade will be discussed and presented within a frame of potential impact on e-Commerce and the Internet. The Basics of Intellectual Property While the Internet and e-Commerce are respectively regarded as a technology and applied technology, they are both rooted in the realm of intellectual property. For all intent and purposes, intellectual property can be viewed as four distinct and separate notions: patents (new and useful inventions), copyrights (original works of authorship), trademarks (distinguish source of goods), and trade secrets (corporate secrets and processes). All four of these intellectual property dimensions can simultaneously apply to the e-Commerce world. e-Commerce combines technological inventions and innovations (patents), original design, script, materials (copyright), recognized brand and product names (trademarks), and unique ingredients, processes and ways of doing business (trade secrets) all into one complex and historically compressed time period—without the benefit of long standing acceptable practice, convention, and binding legal precedent. To facilitate the impact of intellectual property impacts on an organization using e-Commerce an intellectual property audit is not only useful but necessary. Such an audit includes:
Identification of Intellectual Property Assets The identification of intellectual property assets allows the organization doing business with e-Commerce to evaluate the inventory of vulnerable as well as potential arenas for business competitive advantage. Under patents, which typically relates to physical inventions, an organization would evaluate invention disclosures, patent applications, and improvements. However, as has been recently been litigated by the courts of the United States, utility and design considerations also must be considered. The best example of this is the Amazon.com patenting of the ”one click” shopping cart. The implication of this patent and supporting court decision is that Amazon.com was able to patent a business process—not a physical invention. [6] The same identification process would apply to trademarks as to whether they were registered or not or covered under common law, copyrights, and trade secrets. Furthermore, given the dynamic growth of Internet based business agreements related to employment, confidentiality, non-use, non-compete, and assignment and licensing should be identified and/or evaluated for relevancy and currency. Internet domain name registrations need to be identified and confirmed. Finally, Internet e-Commerce specific databases also need be identified and evaluated as to their exclusivity and inherent connection to the business process. Protection of Intellectual Property Assets In order to protect the identified intellectual property assets of an organization, a number of precautions or actions should be evaluated and/or implemented. For instance, with respect to patents, an organization should have in place an invention disclosure policy. A business should be aware of the statutory bar dates to file patent applications, i.e., in the United States it is a one year grace period while elsewhere in the world there is no grace period, and as a result, an application must be filed immediately to attain protection. Businesses also should review all products offered to confirm that they are underwritten by existing company patents. Patent marking on all products is also another consideration to insure intellectual property protection. Trademarks require proper and consistent use both internal and external to the company to insure protection. If the trademark is not used in a regular and consistent manner, the company could potentially lose it to someone else. Registering the trademark with appropriate supporting documents will provide evidence of the validity, ownership, and exclusive rights of use of the mark. Public notice of rights of the mark is also necessary. Furthermore, there have been numerous court decisions over trademark usage in which the originator of the trademark lost rights to the trademark through an inadvertent technological indiscretion. For example: a trademark used for years replicated on a web page using a font and color similar to but not exactly the same as the original mark—puts the trademark open for re-registration by anyone taking the initiative. [5] While copyrights attach to authored materials and web sites at creation, they must, however, be registered and marked with the ©, all rights reserved symbol. To protect trade secrets, they must first be identified as such. Then to maintain secrecy, a set of established procedures are necessary to limit access to the trade secret, and implement employee and confidentiality agreements. With respect to the Internet, businesses need to register and/or reserve relevant domain names as well as resister domain names as trademarks. Ownership of Intellectual Property Assets While most attention is identifying and protect current business intellectual property, another area of concern revolves are ownership issues. One of the greatest concerns coming out of an intellectual property audit is whether or not a company owns all of its intellectual property rights. If the company does not, company must concern itself with how it acquire the rights it does not own. Another potential outcome of the audit is to determine if all the business owned intellectual property assets are held in the name of the business. The final concern is whether or not all the assignment have been recorded and registered by the appropriate trademark and patent offices. [6] Maintenance of Intellectual Property Assets It is not enough to own intellectual property rights on patents, trademarks, copyrights, trade secrets, and/or agreements. Intellectual property rights must be monitored and maintained or they potentially could be lost. Patents, in the United States, for instance, have a 20 year term from the filing date. They, however, are subject to modest maintenance fees payable at 3 1 , 7 1, and 11 1 year intervals. If the maintenance fees are forgotten and not paid—the patent could be lost. Keep in mind, patents now include business process—the way you do business. Likewise trademarks have a limited term of registration. The registration term is 10 years and is renewable only if the mark in incontestable and continuous regular and periodic use in commerce doing business. [5] Copyrights have until 1998 lasted the life of the author plus 50 years. Since 1998, copyrights extend the life of the author plus 70 years. Corporations are entitled to a 75 year copyright term. The implication, given the extremely short workable life of technology based products like web sites, is that an individual or corporate entity could conceivably monopolize and control a technology or series of products. The best and most recent example is Microsoft Corporation. Microsoft owns the brand name, a series of authored products, and the underlying technology. Finally, with respect to agreements, the business must determine whether it has responsibly paid out required royalties, reported necessary requirements, or committed any breach of any existing and binding agreements. Valuation and Utilization of Intellectual Property Assets Once critical and key intellectual property assets are identified, protected, and maintained, they must be valued. While there is no one definitive valuation methodology, values must be established for intellectual property inherent to the business like patents, and trade marks. For instance, Coca Cola values its trade mark at $85 billion while the other assets of Coca Cola might not be greater than $80 billion. Another example is Amazon.com suing Barnes and Noble for violation of Amazon.com’s patented one click technology. [6] To facilitate the valuation of an e-Commerce business’s intellectual property assets utilization concerns must be designed and implemented. Licensing for royalties, cross licensing, and no licensing are three options to be considered along with enforcement realities (i.e., how effectively can licensing and royalties be enforced). The Next Decade: Internet Legal Issues and e-Commerce Beyond the direct concerns of intellectual property on Internet e-Commerce applications, there are a number of legal issues that are currently developing. These issues will have the greatest impact on the commercial future of the Internet and e-Commerce. These issues include:
While the Internet has grown rapidly because of its weakly regulated nature, Internet legal experts like Lawrence Lessig argue it will be well regulated in the future. E_Commerce and its potential as the ultimate facilitator for selling products and reaching new customers while at the same time cutting distribution and support costs will require tight regulation [4.] While the Internet has tremendous commercial potential, it also simultaneously is a threat by being a place where stolen trade secrets and pirated software can easily be distributed. As a result, it appears that there is much evidence that a significant focus of e-Commerce technological innovation is directed to security issues. One particular innovation being implemented is the use of unique personal identifiers or serial numbers. Intel uses a unique Processor Serial Number on each Pentium III microprocessor. Microsoft uses a unique Globally Unique Identifier (GUID) into every document created by Microsoft Word. These identifiers were designed to make it easier to track people and computer on the Internet—producing accountability and destroying anonymity. [1.] Concluding Remarks While the perceived free and unregulated nature of the Internet has facilitated a dynamic growth for technological commercial innovation like e-Commerce, it is not without cost. The cost is in opening up for ”grabs” what had previously been an historically stable and understood set of rules regarding intellectual property. The Internet enabled e-Commerce technology has the potential to make established and successful business enterprises vulnerable. What is at stake for the unsuspecting and unprepared are threats to patents, copyrights, trade marks, and trade secrets. Furthermore, resources and design energies are directed to understanding and defending legal issues as well as devising self defense methods and techniques for tracking and identifying users and machines. The once unregulated Internet has the potential to become one of the most complex and bureaucratic systems ever conceived. This is an important problem that has an enormous impact. The task at hand is quite difficult to balance and provide for continued commercial opportunity and growth while maintaining a degree of individual privacy rights. References
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