Exercise for Chapter 5

1. Define the term Intellectual Property. (2m)

Any unique product of the human intellect that has commercial value.

2. Explain the importance of intellectual property. (8 m)

 Intellectual Property Creates and Supports High-Paying Jobs
 Strong and Enforced Intellectual Property Rights Protect Consumers and Families
 Intellectual Property Helps Generate Breakthrough Solutions to Global Challenges
 Intellectual Property Rights Encourage Innovation and Reward Entrepreneurs

3. Discuss FOUR (4) forms of intellectual property. Support your discussion with
examples. (12 m)
Copyright: A copyright is an exclusive right held for a limited time by original works
of authorship to reproduce, publicly perform, and publicly distribute copies of their
work. In order to receive copyright protection, a work must be original, and it must
be fixed in some tangible medium (written down, recorded, printed, etc.).

Trademark: Trademark law protects consumers by empowering producers to

prevent the use of their names and/or logos by others in manners that are likely to
confuse consumers. This body of law only applies to words and images used to
identify goods and services, or their source. Trademark rights can last forever, as
long as the name or image is continuously used in commerce.

Patent: Patent law protects inventors by granting them an exclusive right to

manufacture and sell their inventions for a limited period of time, in exchange for
public disclosure of their invention. To receive patent protection, an invention must
be novel, useful, and non-obvious.

Trade Secrets: Trade secret law protects secret information held by businesses, and
allows them to sue when that information is stolen, or if it’s disclosed without their
permission. To be protected by trade secret law, the information must actually be
secret (not known to or easily ascertainable by the general public) and it must have
independent economic value by being secret (this basically means that disclosing the
secret would make the information far less valuable).

4. Choose FOUR types of software piracy and explain. (8 m)

Softlifting, (also called softloading), means sharing a program with someone who is
not authorized by the license agreement to use it. A common form of softlifting
involves purchasing a single licensed copy of software and then loading the software
onto several computers, in violation of licensing terms. On college campuses, it is
rare to find a software program that has not been softloaded. People regularly lend
programs to their roommates and friends, either not realizing it's wrong, or not
thinking that it's a big deal. Softlifting is common in both businesses and homes.
 Hard disk loading -Often committed by hardware dealers, this form of piracy involves
loading an unauthorized copy of software onto a computer being sold to the end
user. This makes the deal more attractive to the buyer, at virtually no cost to the
dealer. The dealer usually does not provide the buyer with manuals or the original
CDs of the software. This is how operating systems, like Windows 95, are often
pirated.

Renting involves someone renting out a copy of software for temporary use, without
the permission of the copyright holder. The practice, similar to that of renting a
video from Blockbuster, violates the license agreement of software.

OEM Bundling. Often just called "unbundling," this form of piracy means selling
stand-alone software originally meant to be included with a specific accompanying
product. An example of this form of piracy is someone providing drivers to a specific
printer without authorization. Counterfeiting means producing fake copies of a
software, making it look authentic. This involves providing the box, CDs, and
manuals, all designed to look as much like the original product as possible. Microsoft
products are the ones most commonly counterfeited, because of their widespread
use. Most commonly, a copy of a CD is made with a CD-burner, and a photocopy of
the manual is made. Counterfeit software is sold on street corners, and sometimes
unknowingly sold even in retail stores. Counterfeit software is sold at prices far
below the actual retail price.

Online piracy - The fastest-growing form of piracy is Internet piracy. With the
growing number of users online, and with the rapidly increasing connection speeds,
the exchange of software on the Internet has attracted an extensive following. In the
past, bulletin board systems (BBS) were the only place where one could download
pirated software. Currently, there are hundreds of thousands of "warez" sites
providing unlimited downloads to any user. Often, the software provided through
these "warez" sites is cracked to eliminate any copy protection schemes.

5. What are the FIVE rights Copyright gives you? (5 m)

a. Make copies of the work
b. Produce derivative (copied) work, e.g translation
c. Distribute copies
d. Perform work in public
e. Display work (e.g., video on website)

6. What is a Fair-Use Doctrine? (1 m)

a. Permission to use the work is not required (research and educational uses).
b. Allows uses of copyrighted material that contribute to the creation of new
work and do not significantly affect sales of the material.
7. Issues that apply to intellectual property and information technology are as
follows. Explain briefly the terms below:
a. Plagiarism (2 m)
Theft and passing off someone’s ideas or words as one’s own.
b. Reverse engineering (2 m)
Process of taking something apart in order to understand it, build a copy of it,
improve it.
c. Open source code (2 m)
Open source software is software with source code that anyone can inspect,
modify, and enhance.
d. Competitive intelligence (2 m)
Gathering of legally obtainable information to help a company gain an
advantage over rivals.
e. Cybersquatting (2 m)
Trademark is anything that enables a consumer to differentiate one
company’s products from another’s.

8. What is not protected by copyright? (2 m)

 Facts
 Ideas
 Concepts
 Processes (including algorithms)
 Methods of Operation
 Reimplementation, reverse engineering is okay.

9. List Four Factors in “Fair Use” (1976). (4 m)

a. Purpose and nature of use, including whether it is for commercial $$
purposes or nonprofit educational purposes.
b. The nature of the copyrighted work. Creative work such as a novel, music,
art, have more protection than factual work – after all the facts are the facts.
c. The amount and the significance of the portion used
(Google and Amazon online books).
d. The effect of the use on the potential market or value of the copyrighted
work. Uses that reduce sales of the original work are less likely to be
considered fair use.
10. Differentiate between the following and explain the process of obtaining the
intellectual rights:
a. Patent (2 m)
I. Keep a careful record of your invention.
II. Make sure your invention qualifies for patent protection.
III. Assess the commercial potential of your invention.
IV. Do a throughout patent search.
V. Prepare and file an application with USPTO.

b. Trademark (2 m)
I. To register a trademark, go to the U.S. Patent and Trademark Office's
Web site, www.uspto.gov.
II. Make sure someone else hasn't already registered the mark your
category by checking the Trademark Electronic Search System
database.
III. Don't add a domain extension to your trademark to prevent others
from registering the same name by adding another extension.

c. Copyright (2 m)
I. Ensure your work is properly marked.
II. Register your work.
III. Keep or register supporting evidence.
IV. Agreement between co-authors.

d. Trade secrets (2 m)
I. Identify your trade secret.
II. Keep trade secret confidential.
III. Educate staff about protection.
IV. Understand law protections.
V. Take civil/legal action for violations.