Business Law Scenario: Dana and Ronnie Operate

Business Law

Scenario: Dana and Ronnie operate a Web-based business, TraderRon.com, an Internet swap site that uses a Dutch auction system pioneered by Priceline.com. TraderRon.com allows customers to make offers to other customers to swap such items as their unused frequent flyer miles for other customers' unwanted merchandise, including DVDs, music CDs, used books, and any other merchandise customers might want to trade. No sales involving payment of money are made on the site. Some of the merchandise that has been offered on the site and swapped consists of bootleg or pirated merchandise, as well as designer knockoffs. All of TraderRon.com's income derives from advertising. TraderRon's website and advertising use a black and grey symbol to represent its swapping service. It has used this symbol consistently and registered it with the U.S. Patent and Trademark Office. The symbol is very similar to the Nike swoosh symbol, except it fades from black to grey from left to right. TraderRon.com uses a multimedia presentation to explain its operation to users. The multimedia presentation was created by a friend of Dana's as his senior portfolio project at school, where he was majoring in website design and multimedia. Dana paid him with a free trip to the Caribbean, which she had won in a contest. No copyright was registered in connection with the multimedia presentation. TraderRon.com sends a weekly e-mail update to customers who have registered on the site. The e-mail is sent via an e-mail address Ronnie established at Yahoo.com. TraderRon.com's customers are located throughout the U.S. And some are overseas.

Questions & Answers

Intellectual property is reported as being the same "as any other piece of personal property in that it can be sold, traded, and protected by the owner." (Miami, 2012, p.1) There are four types of intellectual property including: (1) trade secrets; (2) patents; (3) copyrights; and (4) trademarks. (Miami, 2012, p.1) The most dramatic of all change in the U.S. patient system in more than sixty years is reported to have taken place in 2011 when the Leahy-Smith America Invents Act (AIA) reported to have resulted in a conversion of the patient system from a 'first to invent' to a 'first inventor to file' system. It is reported that 70% of patent infringement cases go to trial within three years of being filed and the average since 2005 is reported at 2.5-year. The median damages from patent damage awards between 2006 and 2011 is reported at approximately $4.0 million. The potential to infringe on intellectual trademark or copyright rights is much greater since the advent of the internet. Unless TraderRon's has a disclaimer on the use of its website for training, TraderRon's may be responsible in part for goods sold on the site. The use of a symbol close to that of Nike's symbol might well represent an infringement on Nike's trademark copyright under the laws governing trademark rights. Use of the multimedia presentation by a friend of a friend could well result in an intellectual property lawsuit should the friend who owned the presentation find out about its use by TraderRon's. The Federal Trademark Dilution Act contains the laws that protect trademarks from unauthorized usage. (The Legal Environments of Business, 2013, p.1) It is reported that the Digital Millennium Copyright Act "has made potential criminals out of users without lessening the confusion." (Rappa, 2013, p.1) The applicability of copyright and patent law to software as well as the "patentability of business methods, and the unregulated use of trademarks