THE LEGAL ENVIRONMENT OF BUSINESS The Legal Environment
THE LEGAL ENVIRONMENT OF BUSINESS The Legal Environment of Business A Critical Thinking Approach 5 th Edition Nancy K. Kubasek Bartley A. Brennan M. Neil Browne © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -1 1 14 --1
THE LEGAL ENVIRONMENT OF BUSINESS CHAPTER 14 Law of Property: Real, Personal, and Intellectual © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -2 2 14 --2
THE LEGAL ENVIRONMENT OF BUSINESS Property Law q “A bundle of rights” q “In relation to others” q “With reference to objects, tangible and intangible…” © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -3 3 14 --3
THE LEGAL ENVIRONMENT OF BUSINESS Attributes of Property q Right to exclude q Property provides power q Property facilitates acquisition of more property q “The rich get richer, the poor get poorer” © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -4 4 14 --4
THE LEGAL ENVIRONMENT OF BUSINESS Property as a “Bundle of Rights” q Possess q Lend or Lease q Use q Donate q Enjoy q Sell q Pledge as Security q Destroy © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -5 5 14 --5
THE LEGAL ENVIRONMENT OF BUSINESS Types of Property q Real Property q Personal Property q Intellectual Property q Tangible and Intangible Property © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -6 6 14 --6
THE LEGAL ENVIRONMENT OF BUSINESS Real Property Definition: Land things attached to the land, including: q raw land q water on and q the airspace above below the surface q the earth and q buildings and minerals below the structures on the surface land © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -7 7 14 --7
THE LEGAL ENVIRONMENT OF BUSINESS Fixtures Definition: Those things ‘permanently’ attached to the building Usually, fixtures are transferred with possession, use or ownership of land Exceptions: q By agreement q Trade fixtures © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -8 8 14 --8
THE LEGAL ENVIRONMENT OF BUSINESS Interests in Real Property q An “Estate” is the term used to describe the extent of the ownership interest q Ownership may be divided into units based on duration, type, or condition © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -9 9 14 --9
THE LEGAL ENVIRONMENT OF BUSINESS Typical Estates q Fee Simple Absolute q Conditional Estate q Life Estate q Leasehold Estate q Easement q Future Interest © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -10 10 14 --10
THE LEGAL ENVIRONMENT OF BUSINESS Non-Ownership Estates q Leasehold Estate q Easement q License © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -11 11 14 --11
THE LEGAL ENVIRONMENT OF BUSINESS Co-Ownership Estates q Tenancy in Common q Joint Tenancy q Tenancy by the Entirety q Condominiums q Cooperatives © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -12 12 14 --12
THE LEGAL ENVIRONMENT OF BUSINESS Voluntary Transfer of Property q Transfers documented via Deed q Statutory warranty deed q Quitclaim deed q Execution q Delivery q Acceptance q Recording © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -13 13 14 --13
THE LEGAL ENVIRONMENT OF BUSINESS Deed - Instrument of Conveyance Required Terms: q Grantor and Grantee q Intent to convey q Define ownership interest q State q Legal description q Restrictions or easements q Warranties or promises consideration © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -14 14 14 --14
THE LEGAL ENVIRONMENT OF BUSINESS Warranty Deed Contains conveyance and covenants q Covenant of Seisen q Right to convey q Against encumbrances q Quiet enjoyment q Further assurances © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -15 15 14 --15
THE LEGAL ENVIRONMENT OF BUSINESS Quitclaim Deed q Grantor transfers whatever interest he has q No guarantees q No covenants q Useful in certain situations: intra-family transfers; transfers between business partners © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -16 16 14 --16
THE LEGAL ENVIRONMENT OF BUSINESS Involuntary Transfer q Adverse Possession q Taking by private party q Condemnation-Eminent Domain q Taking by the state for public purposes © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -17 17 14 --17
THE LEGAL ENVIRONMENT OF BUSINESS Restrictions on Land Use q Restrictive Covenants q Zoning q Other Statutes: q Historic preservation q Conditional permits q Environmental laws © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -18 18 14 --18
THE LEGAL ENVIRONMENT OF BUSINESS Restrictive Covenants q Created via deed q Run with the land q Enforceable if purpose is lawful © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -19 19 14 --19
THE LEGAL ENVIRONMENT OF BUSINESS Zoning q Local government exercise of police power: to protect public health, safety, welfare or morals q Restrictions on use organized by function q. Residential q. Industrial q. Commercial q. Agricultural © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -20 20 14 --20
THE LEGAL ENVIRONMENT OF BUSINESS Zoning Issues q Nonconforming use q Variance q Rezone q Downzone q Constructive Takings © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -21 21 14 --21
THE LEGAL ENVIRONMENT OF BUSINESS Personal Property Definition: All property that is not real property Tangible: Furniture, cars, computers Intangible: Bank accounts, stocks, bonds © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -22 22 14 --22
THE LEGAL ENVIRONMENT OF BUSINESS Transfers of Personal Property Voluntary: by gift Involuntary: abandoned, lost, mislaid Bailments: transfer of possession, not ownership q bailor (owner) gives possession to q bailee (holder) for limited time/purpose (e. g. , valet parking) q © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -23 23 14 --23
THE LEGAL ENVIRONMENT OF BUSINESS Intellectual Property q. TRADEMARKS q. TRADE DRESS q. TRADE SECRETS q. PATENTS q. COPYRIGHTS © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -24 24 14 --24
THE LEGAL ENVIRONMENT OF BUSINESS Trademarks Definition: “Any word, name, symbol, or device or any combination thereof adopted and used by a manufacturer or merchant to identify his goods and distinguish them from those manufactured or sold by others” © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -25 25 14 --25
THE LEGAL ENVIRONMENT OF BUSINESS Trademarks q Mark, word, design, picture or arrangement q Used in conjunction with a product q Intended to cause consumer association of mark and product © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -26 26 14 --26
THE LEGAL ENVIRONMENT OF BUSINESS Trademark Laws State: Trademarks can be created via common law use q Federal: Registration with USPTO q Statutes: Lanham Act 1947 q Note: Federal registration required for enforcement in federal courts © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -27 27 14 --27
THE LEGAL ENVIRONMENT OF BUSINESS Trademarks - How to Obtain q By Use (available in U. S. as a common law trademark) q By registration with USPTO q Submit a drawing q When first used & how it is used q No infringement on another’s mark q Must be distinctive (‘fanciful’ or ‘arbitrary’… not merely descriptive) © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -28 28 14 --28
THE LEGAL ENVIRONMENT OF BUSINESS Trademarks – Toys “R” Us case factors q Test of “Strength”: Generic; descriptive; suggestive; arbitrary and fanciful q Degree of similarity q Proximity of the products q “Bridge the Gap” q Evidence of actual confusion q Junior user’s good faith q Quality if the junior user’s product q Sophistication of the purchasers q Junior user’s goodwill © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -29 29 14 --29
THE LEGAL ENVIRONMENT OF BUSINESS Former Trademarks--Now Generic q Aspirin q Linoleum q Nylon q Raisin bran q Escalator © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -30 30 14 --30
THE LEGAL ENVIRONMENT OF BUSINESS Trade Dress q Overall image of product and packaging q Protectable as trademark where: q Nonfunctional q Secondary meaning q Likelihood of confusion © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -31 31 14 --31
THE LEGAL ENVIRONMENT OF BUSINESS Trademark Litigation q Infringement q. Plaintiff alleges unauthorized use of similar mark on competing goods q Dilution Plaintiff alleges unauthorized use of similar mark on unrelated goods, which use devalues plaintiff’s mark “Greatest Show on Earth” vs. “Greatest Snow on Earth” © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -32 32 14 --32
THE LEGAL ENVIRONMENT OF BUSINESS Trade Secrets Definition: “Process, product, method of operation, or compilation of information, not known to the public, that gives the owner competitive advantage” Enforcement: q Must prove trade secret existed q It was acquired through unlawful means q Used without permission © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -33 33 14 --33
THE LEGAL ENVIRONMENT OF BUSINESS Patents Protects inventions, products, processes q Amounts to a kind of state-granted monopoly for a specified term q Reason: To protect private property rights of inventors 2. To encourage invention and industrial development 1. © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -34 34 14 --34
THE LEGAL ENVIRONMENT OF BUSINESS Patents Definition: Rights in new, non-obvious, and useful machines, articles of manufacture, compositions of matter, or processes Protects: Product, process, invention, machine, or plant © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -35 35 14 --35
THE LEGAL ENVIRONMENT OF BUSINESS Patents - Requirements To obtain a patent an inventor must show that the invention is: New Non-obvious © 2009 Pearson Education, Inc. publishing as Prentice Hall Useful Ch. 14 -36 36 14 --36
THE LEGAL ENVIRONMENT OF BUSINESS Patents Restrictions : Patent holder may not use patent for illegal purpose when the effect is to reduce competition. Examples: q. Tying arrangement q. Cross-licensing © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -37 37 14 --37
THE LEGAL ENVIRONMENT OF BUSINESS Patent Process q Contact an attorney licensed to practice before the US Patent Office. q Patent search q Files a patent application q Evaluation of application q Patent issued © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -38 38 14 --38
THE LEGAL ENVIRONMENT OF BUSINESS Patents Enforcement: Patent infringement action in federal court Remedies: Injunction; damages Risk: Holder may lose the patent © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -39 39 14 --39
THE LEGAL ENVIRONMENT OF BUSINESS Issue q Strategic choice: Patent v. Trade Secret q Problem: a patent provides 20 years protection but then passes into “public domain” q Trade secret can protect in perpetuity, but there is a risk that the secret can be discovered lawfully. © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -40 40 14 --40
THE LEGAL ENVIRONMENT OF BUSINESS Copyrights q Artistic expression, fixed in a tangible medium q "Original intellectual creations" (or "works") that the author has infused with creativity q Works in the "fields of art, literature, music or science, " such as: q Literary, dramatic, musical and artistic works q Sound recordings q Films q Radio and television broadcasts q Computer programs (in some countries) © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -41 41 14 --41
THE LEGAL ENVIRONMENT OF BUSINESS Copyrights - Attributes Works mist be “fixed - tangible medium of expression” q q Original q Creative © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -42 42 14 --42
THE LEGAL ENVIRONMENT OF BUSINESS Copyrights Duration: Author: A copyright lasts for 70 years following the author's death. Publisher: A copyright lasts for 95 years after date of publication or 120 years after creation. © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -43 43 14 --43
THE LEGAL ENVIRONMENT OF BUSINESS Copyrights Enforcement: q Under common law—injunction available against infringer. q Registration with Register of Copyright is required for suit for damages. © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -44 44 14 --44
THE LEGAL ENVIRONMENT OF BUSINESS Copyrights Exceptions/Defenses q. Fair use q. In court, administrative hearings, etc. q. Private use q. In quoted material (academic) q. In news, commentary q. In parody (The Wind Done Gone) © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -45 45 14 --45
THE LEGAL ENVIRONMENT OF BUSINESS Global Dimensions TRIPS Convention Berne Convention of 1886 Universal Copyright Convention Paris Convention of 1883 Patent Cooperation Treaty © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -46 46 14 --46
THE LEGAL ENVIRONMENT OF BUSINESS TRIPS Convention National treatment q Most favored nation policy q Added computer programs and rental rights q Governments can curb anticompetitive licensing contracts q © 2009 Pearson Education, Inc. publishing as Prentice Hall GLOBAL DIMENSIO NS Ch. 14 -47 47 14 --47
THE LEGAL ENVIRONMENT OF BUSINESS All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of the publisher. Printed in the United States of America. Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall © 2009 Pearson Education, Inc. publishing as Prentice Hall Ch. 14 -48 48 14 --48
- Slides: 48