Dynamic Business Law The Essentials 4th Edition Kubasek Solutions Manual

Dynamic Business Law The Essentials
4th Edition Kubasek Solutions Manual

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Chapter 08 - Real, Personal, and Intellectual Property
Chapter 8: Real, Personal, and Intellectual Property

1. CHAPTER OVERVIEW
What is real property? The American dream seems to typically include owning real
property. Why should one own real property, ways of transferring real property, and
restrictions on land use are all important issues to address when learning about real
property.
You might want to begin by asking students to read the chapter and reply to the review
and case questions at the end of the chapter. Focus on the nature of real property, its
interests, the differences between voluntary and involuntary transfers, and restriction on
land use.
The chapter continues with discussion of personal property and intellectual property.
Personal property consists of tangible, movable objects. Expressions of ideas are
protected through intellectual property law. Intellectual property protects property that is
the result of mental creativity rather than physical effort. One way to begin a discussion
of IP law is to explain that the different types of protection depend on the way that the
idea is expressed. For example, if a party wants to protect a distinctive design or logo
associated with its product, the party would probably want a trademark. In contrast, if
the party has created a song or work of art, it would want a copyright. Thus, the type of
protection sought depends on the form in which the idea is being expressed.
2. LEARNING OBJECTIVES
After reading this chapter, students will be able to answer the following questions:
1. How are the topics of real and intellectual property related?
2. How does real property law balance private and public rights?
3. What are the interests in real property that one can hold?
4. What are the types of personal property?
5. How do you transfer personal property?
6. How does intellectual property law balance private and public rights?
7. What are the similarities and differences among the methods for protecting various types
of intellectual property?
3. BUT WHAT IF SECTIONS
1. If Samsung presented evidence at trial that half of the phones that were currently on the
market and were made by companies other than Apple or Samsung also shared the
iPhone’s design of being rectangular with rounded corners, then this evidence may lead
the court to the assumption that the design was actually generic, and therefore should not
be registered as a trademark for a specific company. As such, Apple’s claim of
infringement may not hold in court.
2. Yes. In the Case Opener, Apple claimed that Samsung “copied Apple’s design of the
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iPhone…specifically, that Samsung copied the rounded rectangle shape of the iPhone.” If
Samsung presented evidence that they had sold a phone with a design similar to the
iPhone’s before the iPhone came out, this evidence may call into question Apple’s claim
of infringement.
4. LECTURE NOTES WITH DEFINITIONS
A. In the news…
Teaching tip: For each chapter, consider asking students to relate current
news items to material from the chapter.
In addition to ideas students come up with on their own, consider weaving

in news stories provided by the textbook publisher. Stories are available via
a McGraw-Hill DVD, and on the publisher’s web site.
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For Chapter Eight, McGraw-Hill offers the following story:
“Viacom sues YouTube for Copyright Infringement”

• Why did Viacom sue YouTube? Be specific.
• How has the Internet made it more difficult to balance the rights of intellectual
property creators with others?
B. How are the topics of real and intellectual property related?
• Real property is land and everything permanently attached to it.

• Intellectual property consists of the fruits of one’s mind.
o Therefore, the laws of intellectual property protect property that is primarily the
result of mental creativity rather than physical effort.
C. How does real property law balance private and public rights?
Real property law balances private and public rights by allowing the government to
require involuntary transfers of property in order to benefit the public, and to protect public
health, safety, and welfare.
D. What are the interests in real property that one can hold?
Teaching tip: Students are likely to be most interested in the Kelo case, so save time
for it.
• The nature of real property:

o Real property—land and everything permanently attached to the land.
o Type of ownership interest determines an individual’s right to the property.
o Disputes arise over whether an item is permanently attached to the land.
o Fixtures—originally a piece of personal property but becomes real property
because it is attached to the property.
o Extent of ownership— issues can relate to airspace rights, water rights, and
mineral rights.
• Interests in real property:
o Fee simple absolute—exclusive rights to ownership and possession. Passed to
an owner’s heir when owner dies.
o Conditional estate—same interests as a fee simple absolute but with a
condition. If the condition is not met, the interest is terminated.
o Life estate—granted for the life of the individual. Terminates at one’s death.
Life tenant cannot neglect or abuse the property so that it decreases in value.
o Future interest—person’s right to property ownership and possession in the
future. Usually, this interest consists in conjunction with a life or conditional
estate.
o Leasehold estate—owner had possessory interest but not ownership interest.
o Nonpossessory estate—includes easements and profits.
o License—right to use another’s property. This interest is temporary and
revocable.
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• Co-ownership:
o Tenancy in common—person has the right to sell his/her interest with the
consent of the owners. Heirs of a tenant in common will receive the property
interest upon the tenant’s death.
o Joint tenancy—may sell his/her interest with the consent of the owner. If a
tenant dies his/her property is divided equally among the remaining joint owners.
o Tenancy by the entirety—co-ownership by marriage. One owner cannot sell
his/her interest without the other’s consent. A surviving spouse assumes full
ownership.
• Condominiums and cooperatives:
o Condominiums—holder of interest has exclusive ownership rights of a “unit”
within the condominium. Owner shares tenancy in common with other owners.
o Cooperatives—involved in the ownership of apartments. Investor resident is a
shareholder in the corporation that owns the apartments. Unit owners are
governed by a board of directors.
E. What are the types of personal property?
• Tangible personal property is property that can be identified by the senses – it

can be seen or touched.
• Intangible personal property is property that cannot be identified by the senses –
it is usually memorialized in writing.
F. How do you transfer personal property?
• Voluntary transfers such as through purchases or gifts.

• Involuntary transfers such as abandonment or lost or mislaid property.
• Creation of the property implies ownership.
• Confusion which usually implies the commingling of fungible goods.
G. How does intellectual property law balance private and public rights?
• Since copyright law and freedom of speech sometimes clash, legislators and courts
plan an important role in responding to potential conflicts.
• They also balance the rights of innovators who create intellectual property with the
interests of the community.
• Courts and legislators decide what “sticks” to set aside for creators of intellectual
property and they decide what is left for the public, including artists and other
businesses.
H. What are the similarities and differences among the methods for protecting
various types of intellectual property?
• Trademark- a distinctive mark, word, design, picture or arrangement used by a seller

in conjunction with a product and tending to cause the consumer to identify the
product with the producer
• Copyrights- protect the expressions of creative ideas, but they do not protect the ideas
themselves, only their fixed form of expression
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• Patent- protects a product, process, invention, machine, or plant produced by asexual

reproduction and that meets the criteria of being novel, useful, and nonobvious.
Point/Counterpoint: Teaching tip: Here are some questions to help you tie the
Should Corporations be Point/Counterpoint into class discussion:
Allowed to Patent • What are the ethical issues that accompany the idea of patenting
Genes? genes?
• Are there certain things in the world that no one should be allowed
to patent?
5. CASE BRIEFS WITH ANSWERS TO THE QUESTIONS
Case 8-1 Kelo v. City of New London, 126 S. CT. 326 (2005).
Case Brief
Issue: Does a city violate the Fifth Amendment's takings clause if the city takes private
property and sells it for private development, with the hopes the development will help the
city's bad economy?
Facts: New London, a city in Connecticut, used its eminent domain authority to seize private
property to sell to private developers. The city said developing the land would create jobs and
increase tax revenues. Kelo Susette and others whose property was seized sued New London
in state court. The property owners argued the city violated the Fifth Amendment's takings
clause, which guaranteed the government will not take private property for public use without
just compensation. Specifically the property owners argued taking private property to sell to
private developers was not public use. The Connecticut Supreme Court ruled for New
London.
Procedural History: The Connecticut Supreme Court ruled for New London.
Holding: The city has not violated the Fifth Amendment. Affirmed, for New London.
Reasoning of the majority (5-4 vote):

• The city's taking of private property to sell for private development qualified as a
"public use" within the meaning of the takings clause.
• The city was not taking the land simply to benefit a certain group of private
individuals, but was following an economic development plan. Such justifications
should be given deference.
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• The takings here qualified as "public use" despite the fact that the land was not going
to be used by the public.
• The Fifth Amendment did not require "literal" public use, the majority said, but the
"broader and more natural interpretation of public use as 'public purpose.'"
O’Connor’s Dissent:
• Unelected (therefore voter-unaccountable) private nonprofit corporation was the
primary beneficiary of the government taking.
• "Any property may now be taken for the benefit of another private party, but the
fallout from this decision will not be random. The beneficiaries are likely to be those
citizens with disproportionate influence and power in the political process, including
large corporations and development firms."
• The decision eliminates "any distinction between private and public use of property —
and thereby effectively delete[s] the words 'for public use' from the Takings Clause of
the Fifth Amendment."
ANSWERS TO THE QUESTIONS
Critical Thinking
The majority and dissenting opinions disagree about what constitutes a “public use.” The
reasoning above makes clear the primary dispute between the majority and dissenting
opinions.
Ethical Decision Making

Stakeholders include the land owners, developers, residents of New London, and others. This
decision shows preference for the town, private developers, and the community, in general.
The ones who lost the most were the property owners who were required to sacrifice their
land.
Case 8-2 In Re Simon Shiao Tam, U. S. Court of Appeals Federal Circuit 808 F.3D 1321
(2015).
Case Brief
Issue:
Should Tam be allowed to register The Slants as a trademark despite its potentially
disparaging nature?
Facts:
Simon Shiao Tam is the frontman for the Asian-American rock band The Slants. Tam
claims that he named his band The Slants to “reclaim” and “take ownership” of Asian
stereotypes. In 2011, Tam filed an application in order to register the mark “The Slants”
for “Entertainment in the nature of live performances by a musical band.” The examiner
refused to register Tam's mark under Section 2(a) of the Lanham Act, which forbids
marks that “may disparage” an identifiable group of Americans.
Procedural History:
The Trademark Trial and Appeal Board affirmed this decision, and Tam appealed to the U.S.
Court of Appeals, arguing that the Board had erred and that Section 2(a) is unconstitutional.
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Holding:
The disparagement provision of Section 2(a) was ruled to be unconstitutional. The Board's
holding that Tam's mark is unregistrable was vacated and remanded.
Reasoning:
• Section 2(a) of the Lanham Act states that no trademark shall be refused registration
unless it “Consists of or comprises immoral, deceptive, or scandalous matter; or matter
which may disparage persons, living or dead, institutions, beliefs, or national symbols,
or bring them into contempt, or disrepute . . .”
• The federal government argued that Section 2(a) doesn't implicate the First
Amendment at all because it doesn't actually prohibit speech. Tam was free to name
his band whatever he wished and use the name in commerce without registering a
trademark. The Court rejected this argument, noting that a denial of the benefits that
come with trademark registration has a “chilling effect on speech” and is in effect a
penalty or censorship of speech.
• The Court also argued that the rule was unconstitutional because it failed the Central
Hudson test. To pass the test, the commercial speech in question must concern lawful
activity and not be misleading, and there must be a substantial government interest
justifying the regulation.
• The Court ruled that the first prong was met, as there was no claim that disparaging
trademarks are unlawful or mislead the public.
• The second prong was not met. The Court found that “disapproval is not a legitimate
government interest where there is no plausible basis . . . [for the speech to be]
reasonably attributed to the government by the public.”
Critical Thinking
In light of the Simon Shiao Tam case, the Supreme Court may very well rule in favor of the
Redskins. With the Tam case, the court of appeals has set a precedent that says that denying
potentially disparaging trademarks is, in effect, government censorship of speech, and that
this censorship violates the First Amendment. In the circuit judge's opinion, she
acknowledges that the Tam case may open the gates for offensive trademarks, but asserts
that disparaging speech is as protected under the Constitution as much as complimentary
speech is.
Values upheld in the Tam case include freedom of expression and individualism. Values
upheld in the Redskins case include empathy and prudence.
Case 8-3 Toys “R” Us, Inc. v. Canarsie Kiddie Shop, 559 F. Supp. 1189 (1983).
Case Brief
Issue: Does "Kids 'r' Us" infringe on the mark, "Toys `R' Us"?
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Facts: In 1961, Plaintiff Toys-R-Us, Inc. obtained a trademark for "Toys 'R’ Us" and
aggressively advertised their products, children's clothing, in stores across the country. In the
late 1970s, defendant Canarsie Kiddie Shop opened two clothing shops called "Kids 'r' Us"
within 2 miles of a Toys-R-Us shop. Defendant never tried to register their name.
Procedural History: Toys "R" Us sued for trademark infringement in federal district court.
Holding: Judgment for Plaintiff. Defendant's use of "Kids 'r' Us" was a trademark violation.
Reasoning:
• To determine the likelihood of confusion associated with the Defendant's mark, the
court considers these factors.
• Strength of the Senior User's Mark--A mark can fall into one of four general
categories which, in order of ascending strength, are: (1) generic (entitled to no
protection); (2) descriptive (has a secondary meaning and informs public about uses of
product); (3) suggestive (suggests qualities of product but requires imagination); and
(4) arbitrary or fanciful (do not describe the qualities of the product). Plaintiff's mark
has a strong secondary meaning as a source of children's products, so the court
determines the mark has medium strength. But it falls short of the arbitrary or fanciful
protection.
• Degree of Similarity Between the Two Marks--KEY QUESTION: Do consumers have
the impression that purchasing from the junior user is purchasing from the senior user?
Both parties use the phrase "R Us." However, Plaintiffs use inverted capitalized "R,"
while Defendants use non-inverted lower case "r." Plaintiff uses "Toys" while
Defendants use "Kids." Plaintiff’s letter is usually multicolored.
• Proximity of the Products--Both P and D sell children's clothing and are direct
competitors.
• The Likelihood that Plaintiff Will "Bridge the Gap"--First, senior user will expand
sales efforts to compete with junior user. Second, consumers will assume parties are
related companies.
• Evidence of Actual Confusion
• Junior User's Good Faith--Defendant asserted he did not recall whether he was aware
of Plaintiffs mark. The court does not believe him and concludes that D adopted Kids
`r' Us mark with knowledge of Plaintiffs mark.
• Quality of the Junior User’s Product
• Sophistication of the Purchasers--Because children's clothing is not a major
expenditure, customers will not exercise the same degree of care in evaluating the
clothes.
• Junior User's Goodwill--Junior user did not expend a lot of money advertising and
promoting their own name. Thus, defendants don't have a strong equitable interest in
retaining their name.
• Conclusion: Defendant's use of its mark creates likelihood of confusion and
constitutes trademark infringement.
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Critical Thinking
An alternative reason that supports the court's conclusion is that the location of the defendant's
stores, combined with the content of its mark, could indicate a relation to the plaintiff’s stores.
The two stores were physically close to each other and their names/marks differ by only one
word. The lack of distance that separates the two stores, combined with the tiny difference in
the name, may lead consumers to believe they are different branches of the same main source.
A reason to support a different conclusion would be the difference in the classification of the
majority of items that are sold at each store. Why didn't the court address the fact that the
majority of items at Toys R Us stores are toys while Kids ‘r’ Us sells only clothes? This
difference in content of each store might be persuasive.

Initially, I would bring the resemblance between the Kids 'r' Us and the Toys 'R.' Us
trademarks to the company's attention. I might recognize that a possible consequence of the
trademark resemblance could be that our company could be sued (and face significant costs)
by Toys 'R.' Us for trademark infringement. Thus, I might want to compare the potential costs
of being sued with the potential profits of using "Kids ‘r’ Us." If the costs of being sued are
lower, we might want to take a chance in using the mark. However, if I were guided by the
Golden Rule, my decision would probably be different. By recognizing that I would not want
a competitor infringing on my company name, I would realize our company was infringing on
the Toys `R' Us mark and would conclude that we should use a different mark.
TOYS R US UPDATE: The Toys R Us Company now has several related companies: "Kids
`R' Us" and "Babies 'R.' Us." The Toys R Us company website reports that as February 2001,
there were 710 toy stores under the name "Toys "R" Us," 200 children's clothing stores under
the name "Kids "R" Us," 145 infant-toddler stores under the name "Babies "R" Us." The first
"Kids `R' Us" store opened in 1983, while the "Babies 'R.' Us" stores opened in 1996.
6. TEACHING SKILLS: HAVE SOME FUN WITH POPULAR CULTURE!
The “Teaching Skills” and “Teaching Ideas” sections for the intellectual property aspect
of Chapter Six ask you to have some fun with spam.
Especially for the intellectual The best way to motivate yourself to increase your
property material, consider having students’ interest in intellectual property, read
some fun with popular culture. Susan Scafidi, Intellectual Property and Cultural
Products, 81 BOSTON UNIVERSITY LAW
REVIEW 793 (2001).
Scafidi points out that:
The overriding goal of our legal scheme is:
“To balance the social and economic value of
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innovation with other national interests, such as

market competition and freedom of expression.”
Legal principles help us decide:
• What do we set aside for the owner of

intellectual property (e.g., Hormel’s use of the
word spam)?
• What is left for the public (e.g., artists, other
businesses)?
7. TEACHING IDEAS
Connecting to the Ask students questions about brand equity:

Core • Does Hormel have equity in the name spam?
• How might Jim Henson Productions affect Hormel’s brand
equity?
Teaching Basics Ask students:
In Chapter Six, we studied the two intellectual property cases:

• the Toys “R” Us case, and
• the Ty, Inc.case
Of these two cases, which one is the most relevant in deciding
whether Jim Henson Productions, Inc. has violated Hormel’s
intellectual property rights? Explain your answer.
Advanced Teaching Ask students:
Which side won, the plaintiff Hormel Foods, or the defendant

Jim Henson Productions? Explain, showing what you have
learned from Chapter Six.
Note to the teacher: Jim Henson’s parody of spam was legal, as

evidenced by Spa’am’s debut in “Muppet Treasure Island.” Ask
your students what they think of this result.
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Read the following facts before answering the questions that follow.
Spam and Spa’ am*
“Hormel has made the luncheon meat Spam since 1937, and has sold over five billion
cans of Spam in the United States alone. In addition, Hormel has spent millions of
dollars on advertisements for Spam. In February of 1996, Henson planned to release a
movie entitled Muppet Treasure Island. This movie featured the cast of regular Muppet
characters, including Miss Piggy and Kermit the Frog. Among the new characters
created for the movie was "Spa’ am," the high priest of a tribe of wild boars that worship
Miss Piggy as their queen.”
In creating the character, Henson assumed people would easily recognize the Spa’am
character as a parody. Henson used parodies of well known people and products as the
basis for Muppet characters.
Hormel was not happy about the Spa’ am character. “In anticipation of the release of the
film, Hormel filed suit alleging both trademark infringement and dilution. Hormel
alleged that Henson's characterization of Spa’ am in the movie would damage its
trademark for Spam, by questioning the quality of the meat.” Hormel believed that the
character named Spa'am is a "grotesque and noxious appearing wild boar" that is "evil in
porcine form."
* The first and third paragraphs are taken verbatim from verbatim from Deandra Pellicore, Hormel Foods Corp.
v. Jim Henson Productions, Inc., 6 DEPAUL-LCA JOURNAL OF ART & ENTERTAINMENT LAW 313
(1996), at p. 313. The last line is based upon information in Thomas Lee, The Spam Mystique, STAR TRIBUNE
(Minneapolis, MN), November 19, 2004.
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• In Chapter Eight, we studied the following two intellectual property cases:

the Toys “R” Us case, and
o
o the Ty, Inc. case,
Of these two cases, which one is the most relevant in deciding whether Jim Henson
Productions, Inc. has violated Hormel’s intellectual property rights? Explain your
answer.
• Which side won, the plaintiff Hormel Foods, or the defendant Jim Henson
Productions? Explain, showing what you have learned from Chapter Six.
8. ADDITIONAL TEACHING SKILLS: HAVE STUDENTS CREATE THEIR OWN

POINT/COUNTERPOINT
Use the “Rails-to-Trails” facts as In addition to using the facts in the scenario
the basis for students’ own provided, encourage students to use Chapter
Point/Counterpoint. Forty-Nine’s content—both text and cases—to
come up with the Point/Counterpoint.
9. TEACHING IDEAS
Here are some additional teaching skills regarding the real property aspect of Chapter 6.
Connecting to the Ask students:

Core • Using what you have learned about conflict negotiation and
resolution, what could the city have done to prevent the
Preseaults from suing?
Teaching Basics Ask students:
• Fill out the Point/Counterpoint chart.
Advanced Teaching See whether students can find the outcome of the real case, using
their research skills.
10. THE RAILS-TO-TRAILS CASE*
In 1983, the state of Vermont enacted a Rails-to-Trails law. This law provides public
funds to transform abandoned rail lines into public trails for running, walking, bicycling,
cross country skiing, horseback riding, and other purposes. Rail corridors are flat or
have gentle grades, which make them perfect for multiple uses.
* This case is based upon a real case, Preseault v. United States, 100 F.3D 1525 (1992). In the real case, the
Preseaults won. The court ruled that the railroad only acquired easements upon the original conveyances, and
the terms of those easements were for the use of the railway, not for public trails. These easements also ended at
the time the railroad was ended in 1975, and further conveyance from the ICC to the state and subsequently the
city was unauthorized under the 5th amendment without just compensation.
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The Rails-to-Trails program has the support of the federal government, which allows
states to obtain federal money to turn rail lines into trails. Each state is allowed to
develop its own rails-to-trails law and development plan. Vermont’s intent is to make
use of hundreds of miles of track. In addition to recreational purposes, Vermont’s Rails -
to-Trails law promotes historic preservation of structures along the tracks (e.g., train
stations, bridges), economic revitalization (businesses such as bike and snack shops
thrive near a trail) and wildlife preservation (rail-trails provide homes to birds and
plants). Converting rail corridors into trails also preserves the right-of-way for any future
train or transportation use.
Not everyone is happy about the Rails-to-Trails law. In particular, adjacent landowners
are concerned about the impact of the trails on the value and enjoyment of their property.
In 1985, Paul and Patricia Preseault bought a home near the shore of Lake Champlain in
Burlington, Vermont. When they bought the property, they bought it subject to an
easement. An easement is a property right that allows another party to pass through a
property; it grants a right-of-way. This easement was granted to the Rutland-Canadian
Railroad Company (the Railroad). The Preseaults knew of the easement granted to the
Railroad, but they were not concerned because the Railroad had abandoned the tracks
and no trains passed along the rails.
In 1992, the city of Burlington, Vermont, with funds granted to it through the Vermont’s
Rails-to-Trails program, completed an eight-foot wide paved strip on part of the former
right-of-way granted to the Railroad. The path is approximately 60 feet from the
Preseaults’ front door. Concrete posts have been installed to block automobile traffic.
The city has also erected two stop signs on the path and built a water main under the
path. The path is used regularly by members of the public for walking, skating, and
bicycle riding. On warm weekends, up to two hundred people an hour go through the
Preseaults’ property. People using the path often trespass on the Preseaults’ front yard.
On one occasion, Mr. Preseault was nearly run over by a cyclist as he walked across the
path.
The Preseaults want to sue the state of Vermont. They want the state of Vermont to
compensate them for the loss of value in their home and/or to buy their property at an
appropriate price.
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Should the state of Vermont to compensate the Preseaults for the loss of value in their
home and/or to buy their property at an appropriate price?
Yes No
11. CASE OPENER WRAP-UP
When reaching your conclusion, consider the process of registering a trademark with
the U.S. Patent Office. Trademarks can be a distinctive mark, word, design, picture or
arrangement that is used by a producer in conjunction with a product and tends to cause
consumers to identify the product with the producer. To register a mark with the Patent
Office, one must submit a drawing of the mark and indicate when it was first used in
interstate commerce and how it is used. The Patent Office conducts an investigation to
verify those facts and will register the trademark as long as it is not generic, descriptive,
immoral, deceptive, or substantially similar to another’s trademark. “Basic” ideas about
store design and color of a product may fall into those categories that restrict the Patent
Office from registering a trademark.
Intellectual property litigation between competitors affects all of us as it affects which
products become available and how big the market for a given product becomes. When
companies such as Apple and Samsung gain registered trademarks for basic ideas about
design and color, these trademarks restrict the abilities of smaller businesses to enter the same
market.
12. ANSWERS TO QUESTIONS AND PROBLEMS
1) The “bundle of sticks” idea is a metaphor that states that each stick represents a
distinct right an individual can have with regard to property. These sticks include the
rights to possess property, use it, give it away, or take it away. With regard to real
property, some important sticks are the rights to sell, lease or mortgage land, or the
right to allow someone limited access. The public also has the right to take land,
regulate it, and/or tax it.
2) Possessory interests in land include: leasehold estate (right to possess property for an
agreed-on period of time), life estate (right to possess property until death, subject to
the restriction against waste), conditional estate (right that terminates upon the
happening, or non-happening, or a specified condition), and fee simple absolute (right
to possess property for life and pass it on to heirs upon death).
3) The “bundle of sticks” idea in relation to intellectual property includes sticks for both
the creator of the property and the community. The creators of intellectual property
often want to keep the property to themselves and therefore one of the most important
sticks is the right to exclude others. For example, holders can put a virtual fence
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around the ideas trademarked of patented, and ask others to refrain from using the
property. Courts and legislatures also decide what sticks to set aside for the creators
of intellectual property, and they decide what is left for the public.
4) A trademark is a distinctive mark, word, design, picture or arrangement used by a
seller in conjunction with a product and tending to cause the consumer to identify the
product with the producer. A patent protects a product, process, invention, machine,
or plant produced by asexual reproduction and that meets the criteria of being novel,
useful, and nonobvious.
5) Copyright infringement is the improper use of copyrighted work, such as reproducing
the copyrighted work without the permission of the copyright owner.
6) The court ruled Poole could be grandfathered because the land use had no interruption
or abandonment of the land when the ownership changed and the transfer of
ownership did not constitute a termination of the lawful, non-conforming use of the
property.
7) The court entered judgment in favor of the HOA. The court concluded that the HOA
had authority to conduct architectural review, and the restrictions were valid and
enforceable. The owners had adequate notice of these provisions but failed to timely
comply with them prior to purchasing the home. The disapproval of their home was
based on objective criteria of community harmony, and thus there was no issue of
arbitrary or capricious enforcement.
8) The court denied the motion for a turnover of the bank deposits. The father overcame
the presumption of joint ownership as it was established that he changed the account
to a joint account providing rights for survivorship due to pending heart surgery in
order to orderly transfer assets in the event of his death. The father retained control of
the account, and the account consisted entirely of the father’s assets or proceeds
thereof. The joint designation was a mere convenience, and true ownership remained
with the father.
9) The Court of Appeals for the Sixth Circuit affirmed the district court’s order. The
engagement ring was a conditional gift and must be returned when the condition was
not fulfilled. The defendant’s claim that she ended the relationship because of the
decedent’s behavior was unavailing. The gift of real property made in contemplation
of marriage was conditional that was to be returned upon proof of a contract. The
court refused to endorse the defendant’s view that fault was relevant to the right to
retain gifts of real property made in contemplation of marriage.
10) The court found that the life estate was granted to Gail Thrasher through an
antenuptial agreement that went into effect when William Thrasher died. In its reading
of the antenuptial agreement, the court found no language that created a conditional
limitation on Gail’s life estate. Thus, Gail was essentially free to do as she wished with
the life estate. The judgment of the lower court was reversed and remanded in favor of
Gail.
11) A party engages in “naked licensing” when it allows another party to use its mark
without any sort of quality control requirements being put in place. Courts often
interpret this action as a party not being concerned with how their mark is used,
and thus the party has abandoned their mark and forfeited its rights to assert how
the mark is used. Nike argued that Fuel had abandoned its mark through naked
licensing through its partnership with Fuel TV. The Fuel clothing company
allowed its mark to be used by Fuel TV with impunity even though the owner of
8-15
the clothing firm acknowledged that the relationship “adversely affects the value
of [his] brand”. This ground of summary judgment was granted to Nike.
One of Fuel's arguments was that Nike's use of the “Fuel” mark was likely to
cause confusion amongst consumers and therefore infringes on Fuel's mark. The
nine “likelihood of confusion” factors as outlined by the Fourth Circuit are:
(1) the strength or distinctiveness of the plaintiff’s mark as actually used in the
marketplace; (2) the similarity of the two marks to consumers; (3) the similarity
of the goods or services that the marks identify; (4) the similarity of the facilities
used by the markholders; (5) the similarity of advertising used by the
markholders; (6) the defendant’s intent; (7) actual confusion; (8) the quality of
the defendant’s product; and (9) the sophistication of the consuming public.
After considering these factors, the court ruled that Nike's alleged misuse of
Fuel's mark was not likely to cause consumer confusion. In the end, the court
ruled in favor of Nike.
12) The court ruled in favor of Oppenheimer, stating that the defendant was using
Oppenheimer's copyrighted photography without his permission and therefore
infringing on the copyright. However, Oppenheimer could not prove that the
damages resulting from the infringement were higher than the $750 minimum
damages for such a case, let alone the $30,000 Oppenheimer had asked for. Thus,
Oppenheimer was awarded $750, plus costs and fees.
13) The court ruled in favor of Schwab, reasoning that the employer’s trade secrets claim
survived summary judgment because there was at least a genuine issue of material fact
as to whether the information the former employee took was ever disclosed to the
public. The court denied defendant Carter’s motion to dismiss.
14) Qiaodan Sports registered the trademark in 2000. The Nike “Jumpman” logo that
Qiaodan Sports’ logo resembles was registered in 1993. So far, the allegations against
Qiaodan have failed, as all legal authorities have rules that “Qiaodan does not
uniquely imply Michael Jordan.” Qiaodan has now filed a countersuit against Michael
Jordan for “misleading the public.”
8-16

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Dynamic Business Law The Essentials

4th Edition Kubasek Solutions Manual

Chapter 8: Real, Personal, and Intellectual Property

3. BUT WHAT IF SECTIONS

4. LECTURE NOTES WITH DEFINITIONS

In addition to ideas students come up with on their own, consider weaving

For Chapter Eight, McGraw-Hill offers the following story:

“Viacom sues YouTube for Copyright Infringement”

B. How are the topics of real and intellectual property related?

• Real property is land and everything permanently attached to it.

• The nature of real property:

E. What are the types of personal property?

• Tangible personal property is property that can be identified by the senses – it

F. How do you transfer personal property?

• Voluntary transfers such as through purchases or gifts.

• Trademark- a distinctive mark, word, design, picture or arrangement used by a seller

• Patent- protects a product, process, invention, machine, or plant produced by asexual

5. CASE BRIEFS WITH ANSWERS TO THE QUESTIONS

Reasoning of the majority (5-4 vote):

ANSWERS TO THE QUESTIONS

Ethical Decision Making

ANSWERS TO THE QUESTIONS

Ethical Decision Making

ANSWERS TO THE QUESTIONS

Ethical Decision Making

6. TEACHING SKILLS: HAVE SOME FUN WITH POPULAR CULTURE!

Scafidi points out that:

The overriding goal of our legal scheme is:

“To balance the social and economic value of

innovation with other national interests, such as

Legal principles help us decide:

• What do we set aside for the owner of

Connecting to the Ask students questions about brand equity:

Teaching Basics Ask students:

In Chapter Six, we studied the two intellectual property cases:

Which side won, the plaintiff Hormel Foods, or the defendant

Note to the teacher: Jim Henson’s parody of spam was legal, as

Spam and Spa’ am*

• In Chapter Eight, we studied the following two intellectual property cases:

8. ADDITIONAL TEACHING SKILLS: HAVE STUDENTS CREATE THEIR OWN

Connecting to the Ask students:

10. THE RAILS-TO-TRAILS CASE*

11. CASE OPENER WRAP-UP

12. ANSWERS TO QUESTIONS AND PROBLEMS

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