Pamantasan ng Cabuyao

College of Computing and Engineering

Katapatan Subd., Banay-banay, City of Cabuyao, Laguna

Course Code: CCS101lec

Course Description: Introduction to Computing
Course Intended Learning Outcomes:
1. Discuss about fundamentals of Information Technology and Computing.
2. Discuss about fundamentals of computer software/hardware and Office Application
Software
3. Explain the Social Issues in Computing

Learning Materials for Week #13

I. TITLE : Intellectual Property

II. OBJECTIVES

After week 13, you are expected to:

1. Identify the coverage of intellectual property;

2. Examine strengths and limitations using copyrights. patents and trade secret to
protect property rights; and
3. Explain the essential between competitive intelligence and industrial espionage
and how intelligence gathered.

III. INTRODUCTION

The topic includes show casing some literature in related to intellectual property.
Emphasizing the advantages and disadvantages of copyrights, patents and trade secret
especially in the aspect of software protection.

IV. BODY
VIGNETTE

Apple Trade Secrets Revealed?

 Nicholas Ciarelli an avid fan of Apple who has operated Apple Web site
(www.thinksecret.com) since he was 13. He is now a student at Harvard and editor
of The Crimson, the school's newspaper. Ciarelli, whose site dishes out information
and speculation about Apple, incurred the firm's wrath heralding arrival of a new Mac
mini for $499 and the iLife software package, two weeks were officially announced at
the Macworld Conference and Expo in San Francisco.

Apple, which notorious for being excessively secretive about its business
plans and products, reacted to the unauthorized announcement as an attack on its
valuable trade secrets. Its attorneys filed a law suit claiming that Ciarelli‘s solicited
information about unreleased products... from individuals who violated their
confidentiality agreements with Apple by providing details that were later posted on
the Internet."

Ciarelli was quoted as saying, “I employ the same legal newsgathering

practices used by any other journalist. I talk to sources of information, investigate tips,
follow up on leads, and corroborate details. I believe these practices are reflected in
Think Secret's track record."

On one side of the dispute, some believe that the Uniform Trade Secrets Act
prevents third parties from revealing information obtained from people bound by
nondisclosure agreements. On the other hand, many believe that Ciarelli's actions
were protected on the basis of free-speech on the rights, and that Apple should have
focused on identifying and punishing the employees who leaked the information.

Intellectual Property

Intellectual property is a term used to describe works of the mind, such as art, books,
films, formulas, inventions, music, and processes, that are distinct and "owned" or
created by a single person or group.

Copyright law protects authored works such as art, books, fil, and music. Patent laws
protect invention's success. Together, copyright, patent, and trade secret legislation
form a complex body of law that addresses the ownership of intellectual property.
Such laws can also present potential ethical problems for IT companies and users -
for example, some innovators believed that copyrights, patent, and trade secrets stifle
creativity by making it harder to build on the ideas of others.
 Defining and controlling the appropriate level of access to intellectual property
are complex tasks

Copyrights
Copyright and patent protection which specifies that government shall have the power "to
promote the Progress Science and useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Rights to their respective Writings and Discoveries.” A copyright
grants the creators of "original l works of authorship in any tangible medium of expression,
now known or later developed, from which they can be perceived, reproduced, or otherwise
communicated, either directly or with the aid of machine or device, the exclusive right to
distribute, display, perform, or reproduce the work in copies or to prepare derivative works.

Term of Protection

1. The copyright in works shall be protected during the life of the author and for fifty (50
years after his death. This rule also applies to posthumous works.
2. In case of works of joint authorship, the economic rights shall be protected during the
life of the last surviving author and for fifty (50) years after his death.
3. In case of anonymous or pseudonymous works, the copyright shall be protected for
fifty (50) years from the date on which the work was first lawfully published: Provided,
That where, before the expiration of the said period, the author's identity is revealed
or is no longer in doubt, the provisions of above guidelines shall apply, as the case
may be: Provided, further, That such works if not published before shall be protected
for fifty (50) years counted from the making of the work. (
4. In case of works of applied art the protection shall be for a period of twenty-five (25)
years from the date of making.
5. In case of photographic works, the protection shall be for fifty (50) years from
publication of the work and, if unpublished, fifty (50) years from the making.
6. In case of audio-visual works including those produced by process analogous to
photography or any process for making audio-visual recordings, the term shall be fifty
(50) years from date of publication and, if unpublished, from the date of making.

Protection for Performers, Producers and Broadcasting Organizations

(1.) The rights granted to performers and producers of sound recordings under this law shall
expire:

(a) For performances not incorporated in recordings, fifty (50) years from the end of
the year in which the performance took place; and

(b) For sound or image and sound recordings and for performances incorporated
therein, fifty (50) years from the end of the year in which the recording took place.

(2.) In case of broadcasts, the term shall be twenty (20) years from the date the broadcast
took place. The extended term shall be applied only to old works with subsisting protection
under the prior law.

Software Copyright Protection

The use of copyrights to protect computer software raises complicated issues of

interpretation. For example, a software manufacturer can observe the operation of a
competitor's copyrighted program and then create a program that accomplishes the same
results and performs in the same manner. To prove infringement, the copyright holders must
show a striking resemblance between their software and the new software that could be
explained only by copying. However, if the new software’s can establish, there is no
infringement. For example, two software manufacturers could conceivably develop two
separate programs for a simple game such as tic-tac-toe without infringing the other's
copyright.

Patents

A patent is a grant of a property right to inventors. A patent permits its owner to exclude the
public from making, using, or selling a protected invention, and it allows legal action against
violators. Not only does a patent prevent copying, it prevents independent creation, unlike a
copyright. Even if someone else invents the same item Independently and with no prior
knowledge of the patent holder's invention, the second inventor is excluded from using the
patented device without permission of the original patent holder.

Prior art is the existing body of knowledge that is available to a person of ordinary skill in the
art. An invention must pass the following four tests to be eligible for a patent:
  It must fall into one of five statutory classes of items that can be patented: processes,
machines, manufactures (such as objects need by humans or machines),
compositions of matter (such as chemical compounds), and new uses in any of the
previous four classes.
 It must be useful.
 It must be novel.
 It must not be obvious to a person having ordinary skill in the same field.

The Court has ruled that three classes of items cannot patented: abstract ideas, laws
of nature, and natural phenomena. Mathematical subject matter, standing alone, is also not
entitled to patent protection. Thus, Pythagoras could not have patented his formula for the
length of the hypotenuse of a right triangle (c² = a²+ b²).

Patent infringement occurs when someone makes unauthorized use of another's patent.
Unlike copyright infringement, there is no specified limit to the monetary penalty if patent
infringement is found. In fact, if a court determines that the infringement is intentional, it can
award up to three times the amount of the damages claimed by the patent holder. The most
common defense against patent infringement is a counterattack on the claims of infringement
and the validity of the patent itself. Even if the patent valid, the plaintiff must is still prove
every element of at least one claim and that the infringement caused some sort of damage.

Software Patents

A software-patent "claims as all or substantially all of invention some function, or embodied

instructions are executed on a computer. Applications software, business software, expert
systems, and system software have been patented, as well as software processes such as
compilation routines, editing and control functions, and operating system techniques. Even
electronic font and icons have been patented.

Submarine Patents and Patent Farming

A standard is a definition or format that has been approved by a recognized standards

organization or is accepted as a de facto standard by the industry. Standards exist for
programming languages, operating systems, data formats, communications protocols, and
electrical interfaces. Standards are extremely useful because they enable hardware and
software from different manufacturers to work together.

A technology, process, or principle that has been patented may be embedded--

knowingly or unknowingly—within a standard. If so, the patent owner can demand a royalty
payment from any party that implements the standard, or may refuse to permit certain parties
from using the patent, thus effectively blocking them from using the standard. A patent that
is hidden within a standard and does not surface until the standard is broadly adopted is
called a submarine patent. A devious patent holder might influence a standards
organization to make use of its patented item without revealing the existence of the patent.
Then, later, the patent holder might demand royalties from all parties that use the standard.
This strategy is known as patent farming.

One possible example of a submarine patent could be Patent no. 5,838,906, which
is owned by the University of California and licensed exclusively to a small software company
called Eolas Technologies. The patent describes how Web browser can use external
applications. The patent holder did not make the patent known for years and then sued
Microsoft for use of the principle. The university and Eolas received a $520 million award in
August 2003 after a federal jury found that Microsoft's Internet Explorer browser infringed the
patent. In November 2003, the patent office began a review of the patent based on request
from world-renowned Tim Berners-Lee, father of the World Wide Web and director of the
World Wide Web Consortium. He argued that the 1998 patent should be invalidated because
of the existence of prior art, or previous examples of the technology's use. In January 2004,
a federal judge upheld the original decision, requiring Microsoft to pay $520 million on
grounds that Internet Explorer infringed the patent. The judge rejected Microsoft's request for
a new trial and, adding insult to injury, ordered the payment of more than $45 million in
interest.

Trade Secret Laws

A trade secret was defined as business information that represents something of economic
value, has secret required effort or cost to develop, has some degree of uniqueness or
novelty, is generally unknown to the public, and is kept confidential. A trade secret is an
"information, including a formula, pattern, compilation, program, device, method technique,
or process, that:
  Derives independent economic value, actual or potential, from not being generally
known to, and not being readily ascertainable by, persons who can obtain economic
value from its disclosure or use.
 Is the subject of efforts that are reasonable under the circumstances to maintain its
secrecy.
Information is considered trade secret only if companies take steps to protect it.
Trade secret protection begins by identifying all the information that must be protected --from
undisclosed patent applications to market research and business plans and developing
comprehensive strategy for keeping the information secure.

Employees are the greatest threat to the company trade secrets—they might
accidentally disclose trade secrets or steal them for monetary gain. Organizations must
educate employees about the importance of maintaining the secrecy of corporate
information. Trade secret information should be labeled clearly as confidential and should
only be accessible by a limited number of people. Most organizations have strict policies
regarding nondisclosure of corporate information.

Because organizations can risk losing trade secrets when key employees leave, they
often try to prohibit employees from revealing secrets by adding nondisclosure clauses to
employment contracts.

Another option for preserving trade secrets is to have an experience member of the
Human Resources Department conduct an exit interview with each departing employee. A
key step in the interview is to review a checklist that deals with confidentiality issues. At the
end of the interview, the departing employee is asked to sign an acknowledgment of
responsibility not to divulge any trade secrets.

Employees can also use noncompete agreements to protect intellectual property

from being used by competitors when key employees leave. Such agreements require
employees not to work for any competitors for a period of time, perhaps one to two years.

LEGAL OVERVIEW

The Battle Over Customer Lists

Losing customer information to competitors is a growing concern in industries in

which companies compete for many of the same clients. There are numerous cases of
employees making use of their employer's customer list. For example, Harrah’s
Entertainment charged that a former employee copied a customer list of 450 wealthy patrons,
including names, contact information, and credit and account histories, from a Harrah's
database before leaving to work at a competing casino.

Also, a hacker accessed AOL's subscriber list and used the e-mail addresses to
promote his Internet gambling business. Information on AOL's 30 million subscribers is
maintained in the company's data warehouse, and access is limited to a few employees. The
hacker, who had worked at AOL for more than five years, didn't have access to the data, but
impersonated another employee to reach it. The hacker got screen names, zip codes, credit
card types, and telephone numbers, but not credit card numbers because AOL stores them
separately.

So, does a firm's customer list represent a trade secret that is protected by intellectual
property law? Legally, customer list is not automatically considered a trade secret. If a
company doesn't treat the list as valuable, confidential information internally, neither will the
court. The courts must consider two mains making this determination. First, did the firm take
prudent steps to keep the list secret by taking the following actions?

 Labeling confidential
 Storing in locked facility or in a password-protected computer
 Limiting access to a small number of people on a need-to-know basis
 Requiring employees to sign nondisclosure agreement that specifically mentions
customer lists

Second, did the firm expend money or effort to develop the customer list? The more
firm invested to build it customer list and the more the list provides the firm with a competitive
advantage, the more likely the courts are to accept the list as a trade secret. A customer list
that can be easily recreated by accessing publicly available sources, such as trade journals
or even the telephone book, will not qualify as a trade secret.

Many people wrongly assume that customer lists are public information, so workers
should be educated about the confidentiality of such lists. At some companies, employees
are briefed on court cases involving stolen customer lists and threatened with prosecution
for stealing trade secrets.
KEY INTELLECTUAL PROPERTY ISSUES

Plagiarism

Plagiarism is the theft and passing off of someone's ideas or words as one's own. The
explosion of electronic content and the growth of the Internet have made it easy to cut and
paste paragraphs into term papers and documents without proper citation or quotation marks.
To compound the problem, hundreds of Internet "paper mills" enable users to download
entire term papers. Although some paper mills post warnings that their services should be
used for research purposes only, many users pay scant heed. As a result, plagiarism has
become an issue from elementary schools to the highest levels of academia. Plagiarism is
also common outside academia. Popular literary authors, playwrights, musicians, journalists,
and even software developers have been accused of it.

Reverse Engineering

Reverse engineering is the process of taking something apart in order understand it, build
copy of it, or improve it. Reverse engineering was originally applied to computer hardware,
but is now commonly applied to software as well. Reverse engineering of software involves
analyzing it to create a new representation of the system in a different form or at a higher
level of abstraction. Often, reverse engineering begins by using program code from which
you can extract design-stage details, which is a higher abstraction the life level in the life
cycle. In other words, design-level details about an information system are more conceptual
and less defined than the program code of the same system.

Other reverse engineering issues involve tools called compilers and decompilers. A
compiler Is a language translator that converts computer program statements expressed in
a source language (such as COBOL, Pascal, or C) into machine language (a series of binary
codes of Os and 1s) that the computer can execute. When a software manufacturer provides
a customer with its the software, it usually provides the software in machine language form.
Tools called reverse engineering compilers or decompilers can read the machine language
and produce the source code.

Decompilers and other reverse engineering techniques can be used to analyze a

competitor's program by examining its coding and operation to develop a new program that
either duplicates the original or that will interface with the program. Thus, reverse engineering
provides a way to gain access to information that another organization may have copyrighted
or classified as a trade secret.

Software license agreements increasingly forbid reverse engineering. Reverse

engineering can also be a useful tool in detecting software bugs and security holes.

Open Source Code

Historically, the makers of proprietary software have not made their source code
available, but same developers do not share that philosophy. Open source code refers to
any program whose source code is made available for use or modification as users or other
developers see fit. The basic premise behind open source code is that when programmers
can read, redistribute, and modify code, the software improves, can be adapted to meet new
needs, and bugs can be the rapidly identified and fixed. Open source code advocates believe
that this process produces better softwares than the traditional closed model. A considerable
amount of open source code is available, including the Linux operating system; the MySQL
AB, Ingres etc.

Competitive Intelligence

Competitive intelligence is the gathering of legally obtainable information to help a company

gain an advantage over its rivals. For example, some companies have employees who
monitor the public announcements of property transfers to detect any plant or store
expansions of a competitor. An effective competitive intelligence operation requires continual
gathering, analysis, and evaluation of data with controlled dissemination of the useful
information to decision makers. Competitive intelligence is often integrated into a company's
strategic plans and decision making.

Competitive intelligence is not industrial espionage, which employs illegal means to obtain
business information that is not available to the general public. Industrial espionage is a
serious crime that carries heavy penalties. Almost all the data needed for competitive
intelligence can be collected from examining published information or interviews. By coupling
this data with analytic tools and industry expertise, an experienced analyst can make
deductions that lead to significant information.

Failure to act prudently with competitive intelligence can get analysts and companies
into serious trouble. For example, the Procter & Gamble Company (P&G) admitted publicly
in 2001 that it unethically gained information about Unilever, its competitor in the had
multibillion-dollar hair-care business. Competitive intelligence managers at P&G had hired a
contractor, who in turn hired subcontractor to spy on P&G’s competitors. Unilever was the
primary target; it markets brands such as Salon Selectives, Finesse and Thermasilk, while
P&G manufactures Pantene, Head & Shoulders, and Pert.

In at least one instance, the espionage included going through dumpsters on public
property outside Unilever corporate offices in Chicago. In addition, competitive intelligence
operatives were alleged to have misrepresented themselves to Unilever employees,
suggesting that they were market analysts. (P&G confirms the dumpster diving, but it denies
that misrepresentation took place.) The operatives captured critical information about
Unilever's brands, including new-product rollouts, selling prices, and operating margins.

When senior P&G officials discovered that a firm hired by the company was operating
unethically, P&G immediately stopped the campaign and fired the three managers
responsible for hiring the firm. P&G then did something unusual--it blew the whistle on itself,
confessed to Unilever, returned stolen documents to Unilever, and started negotiations with
them to set things straight. P&G's chairman of the board was personally involved in ensuring
that none of the information obtained would ever be used in P&G business plans. Several
weeks of high-level negotiations between P&G and Unilever executives led to a secret
agreement between the two companies. P&G is believed to have paid tens of millions of
dollars to Unilever. In addition, several hair-care product executives were transferred to other
units within P&G.

Experts in competitive intelligence agree that the firm hired by P&G crossed the line
of ethical business practices by sorting through Unilever's garbage. However, they also give
P&G credit for going to Unilever quickly after it discovered the damage. Such prompt action
was seen as the best approach. If no settlement has been reached, of course, Unilever could
have taken P&G to court, where embarrassing details would have been revealed, causing
more bad publicity for a company that is generally perceived as highly ethical. Unilever also
stood to lose from a public trial. The trade secrets at the heart of the case may have been
disclosed in depositions and other documents during a trial. which could have devalued
proprietary data.
 Cybersquatting

A trademark is anything that enables a consumer to differentiate one company's products

from another's. A trademark may be a logo, package design, phrase, sound, or word.
Consumers often cannot examine goods or services to determine their quality or source, so
instead they rely on the labels attached to the products. Trademark law gives the trademark's
owner the right to prevent others from using the same mark or a confusingly similar mark.
Trademark protection lasts as long as a mark is in use.

Companies that want to establish an Internet presence know that the best way to
capitalize on the strength of their brand names is to make the names part of the domain
names for their Web sites. When Web sites were first established, there was no procedure
for validating the legitimacy of requests for Web site names, which were given out on a first-
come, first-served basis. Cybersquatters registered domain names for famous trademarks
company names to which they had no connection, with the hope that the trademark’s owner
would buy the domain name for a large sum of money.

V. REFERENCES

[1] Caoili-Tayuan, Ronina R.; Eleazar, Mia V Living in the Information Technology Era
2019, C & E Publishing Inc. Quezon City Philipppines

[2] Vermaat, Misty E.;et.al. Enhanced Discovering Computers 2017; Cengage Learning
Publishing Co.