Warranty: a promise about quality that is part of a contract, often implied even if not expressly stated
Note that there are special Federal rules for consumer products: Magnuson-Moss Act: full warranty disclosure
Warranties are the contract counterpart of tort law product liability
Express warranties of quality
Distinguish warranty from opinion and advertising "puffery". Warranty is a factual promise
UCC Implied Warranties:
Significance: ability to sue someone making an express or implied warranty using a claim based on contract. Avoids need to show negligence, "defective design", and allows recovery when no physical injury, for difference beteen value promised and value actually received.
Warranty of good title
no 3rd party security interest
Warranty of no infringement on others' rights (e.g Patents)
Merchantable quality (in sales between merchants)
Food products: implied warranted fit for human consumption
Fitness for particular purpose: implied, depending on seller's knowledge of buyer's purpose
Warranties may be expressly disclaimed
Procedural requirements: indicate what is being disclaimed, and be "conspicuous"
Can't disclaim if disclaimer is "unconscionable"
Procedural and substantive tests
Different rules for consumers
Federal Magnuson-Moss Act
State "lemon laws"
How can a thought or an idea be "property"?
"If nature has made any one thing less susceptible than all others of exclusive property, it is the action of the thinking power called an idea, which an individual may exclusively possess as long as he keeps it to himself; but the moment it is divulged, it forces itself into the possession of every one, and the receiver cannot dispossess himself of it. Its peculiar character, too, is that no one possesses the less, because every other possesses the whole of it. He who receives an idea from me, receives instruction himself without lessening mine; as he who lights his taper at mine, receives light without darkening me. That ideas should freely spread from one to another over the globe, for the moral and mutual instruction of man, and improvement of his condition, seems to have been peculiarly and benevolently designed by nature, when she made them, like fire, expansible over all space, without lessening their density in any point, and like the air in which we breathe, move, and have our physical being, incapable of confinement or exclusive appropriation."
Thomas Jefferson, letter to Isaac McPherson, August 13, 1813
Business Identity, Reputation and Know-How
Counterfeit Goods
Common law tort of representing false origin for goods. Fake Rolexes and fake designer clothing.
Issue is whether the real goods have acquired a secondary identification with their source. Fake Rolex vs. real watch that happens to look like a Rolex.
Trade Libel
Publication of false statement about competitor's goods, etc. with malicious intent to injure.
Lanham Act (US Trademark law) allows injunction and damages against false comparative advertising
Misappropriation of Trade Secrets
A process, formula, know-how, customer list etc. that is *treated* as a secret by a business
Legal protection only against *illegal* acquisition -- reverse engineering and independent invention are OK
Note role of corporate confidentiality agreements
Made misappropriation of such secrets a Federal crime. Concern that local prosecutors lacked resources
Question the real, as opposed to symbolic, effectiveness of criminalization
Patents
Defined
A grant of a limited period (now 20 yrs) of legal monopoly to the inventor of a novel, non-obvious, useful machine, process or composition of matter
Grant is in exchange for public disclosure
Administered by the US Patent & Trademark Office
A quasi-adversary process, with patent examiners as "devil's advocates"
Trivia Question: who was the most famous patent examiner of all time? <ANSWER>
Once issued, patent is enforced by an "infringement" suit. Validity can be challenged again here.
Recent Changes:
US adoption of WTO rules: extended period from 17 to 20 years, and it starts to run with filing, not at time of grant
"Submarine" patent abuse
File application and keep delaying grant by the patent office. (P) stays confidential while being processed. Then, years later, get (P) granted and sue all who have possible infringed in the meantime
Significant Current Issues have to do w/ extension of "process" to software and business techniques, and extension of "machine" to genes.
Copyrights
Federal statutory right of authors, musicians, etc. to control publication of their work
Ability to "license" rights and sub-rights
Administered by the US Copyright Office in the Library of Congress
Distinguished from Patents
Duration is life of author + 70, or 95 years from publication if "work for hire"
Copyright protects only the expression of an idea, not the idea itself.
Copyright "inheres in the work". Not an adversarial process.
No registration necessary, except as prelude to suit. (c) year and author is permissive to clarify author and start period running
Concept of "derivative work"
Fair Use
Note copyright problem: the technological ease of duplication
An important but fuzzy public protection against the privatization of language. Note the economic/political imbalance that tends to over-protect intellectual property and turn (c) into economic rent.
Trademarks
(under construction 8/7/01)