Module 4: Recognizing a Firm’s Intellectual Assets: Moving Beyond a Firm’s

Tangible Resources

Intellectual assets (also known as intellectual property or IP) are intangible assets
created through innovation and creativity. They can take various forms and hold
significant value for businesses, inventors, and creators. Below are examples of
intellectual assets, along with real-world cases to review:

1. Patents

Definition: Patents grant the holder exclusive rights to an invention or a process that
provides a new way of doing something or offers a new technical solution to a
problem.

Examples:

Apple Inc. vs. Samsung Electronics

Case Overview: One of the most famous patent infringement cases involved Apple
suing Samsung for copying key features of its iPhone, including the design and
functionality of the iOS operating system. Apple won a large settlement for patent
infringement, and the case highlighted the importance of protecting design patents and
utility patents.

Lesson: The case emphasizes the significance of protecting technological innovations

through patents, especially in highly competitive industries like electronics.

Eli Lilly and Co. v. Teva Pharmaceuticals

Case Overview: Eli Lilly sued Teva for infringing on its patent for the drug Alimta, a
cancer treatment. The court ruled in favor of Eli Lilly, reaffirming the importance of
maintaining exclusive rights to patented drug formulas.

Lesson: This case underscores the value of patents in the pharmaceutical industry and
the strategic use of patents to maintain market dominance.

"Moringa Oleifera Seed Oil Extraction" (Patent No.

1-2008-000225)

Inventor: Dr. Eduardo C. Guzman

Patent Overview: This invention pertains to a process for extracting oil from Moringa
Oleifera seeds, also known as "Malunggay." The seeds have been known for their rich
nutritional value and use in cosmetics and food supplements. The extraction process
preserves the health benefits of the oil while allowing for higher yield and more
efficient production.

Health and Wellness Industry: Moringa is widely regarded as a "superfood," and its
oil has diverse applications. The patent highlights the growing interest in plant-based
products and the potential for Filipino innovations in the global health and wellness
market.

Intellectual Property and Market Potential: The commercial scalability of this

technology is a point of discussion. How could Filipino businesses scale this
innovation, and what role does IP protection play in expanding access to global
markets for Filipino inventors?

The "Bamboo Houses and Construction Materials" (Patent No. 1-2006-000548)

Inventor: Engr. Felipe A. San Pedro

Patent Overview: This patent relates to the use of bamboo as a sustainable building
material, specifically in the design of a house structure. Bamboo is abundant in the
Philippines and is considered an environmentally friendly and cost-effective building
material. The patented design is intended to help improve housing conditions while
making use of local resources and promoting sustainability.

Case for Discussion:

Sustainability and Resilience: Bamboo is a fast-growing and renewable resource,

making it ideal for disaster-prone regions like the Philippines. The use of bamboo in
construction could help address the country’s housing challenges while also
contributing to eco-friendly building practices.

Global Market: As demand for sustainable and eco-friendly building materials grows
worldwide, how can Filipino innovators like Engr. San Pedro take advantage of this
market shift while protecting their intellectual property?
2. Trademarks

Definition: Trademarks protect distinctive signs, symbols, logos, or words that

identify goods or services from a particular source, preventing confusion in the
marketplace.

Examples:

Coca-Cola vs. PepsiCo (Trademarks and Trade Dress)

Case Overview: Coca-Cola has aggressively protected its trademarks, including its
iconic bottle design (trade dress) and logo, to prevent confusion with PepsiCo. In
various cases, Coca-Cola has sued for infringement, resulting in significant
settlements and damages.

Lesson: Trademarks are vital for brand recognition and protection against
counterfeiting or copycats.

Tiffany & Co. v. Costco Wholesale Corp.

Case Overview: Tiffany sued Costco for using the term "Tiffany" to describe
engagement rings that were not from the Tiffany brand. The case involved the
strength of the trademark and whether the use was confusing to consumers. Tiffany
won the case, affirming the protection of brand names from misuse.

Lesson: This case highlights how companies should vigilantly protect their
trademarks and brand identity from misleading associations.

McDonald’s "Golden Arches" and "I’m Lovin’ It"

Case Overview: The "Golden Arches" logo and the iconic slogan "I’m Lovin’ It" are
central to McDonald’s global branding strategy.

Discussion Points:

Global Trademark Protection: McDonald’s has established its "Golden Arches" in

markets around the world. How does the company manage its trademarks across
multiple countries with varying IP laws?

Branding and Consumer Perception: How does the consistent use of the "I’m Lovin’
It" slogan shape McDonald's branding and consumer perception? Is it more than just a
catchy slogan?

Trademark Disputes: McDonald's has been involved in trademark disputes, such as

with the use of similar "arches" by other food chains. How does McDonald’s defend
its trademarks in such situations?

Coca-Cola’s Bottle Shape

Trademark Overview: While Coca-Cola’s name and logo are trademarked, its
distinctive bottle shape is also protected as a trade dress (a type of trademark that
protects the visual appearance of a product).

Discussion Points:

Trade Dress: What is the difference between a trademark and trade dress, and how
does Coca-Cola’s bottle shape fall under trade dress protection?

Uniqueness and Recognition: How has Coca-Cola used the bottle’s shape to build
recognition and brand value?

Challenges in Protecting Trade Dress: How does Coca-Cola protect its bottle shape
against imitations and counterfeits, especially as competitors attempt to mimic the
design?

3. Copyrights

Definition: Copyrights protect original works of authorship, such as literature, music,

films, software, and art, ensuring the creator has exclusive rights to reproduce,
distribute, and display their work.

Example: Warner Bros. v. RDR Books

Case Overview: Warner Bros. sued RDR Books for publishing an unofficial reference
guide to the Harry Potter series, arguing that it violated copyright laws. Warner Bros.
succeeded in blocking the publication of the book, stating it violated the intellectual
property rights of J.K. Rowling.

Lesson: Copyright protection is crucial in maintaining the integrity of creative works

and preventing unauthorized use.

Example: Google Books Library Project

Case Overview: Google scanned millions of books to create a searchable library but
faced multiple copyright infringement lawsuits from authors and publishers, arguing
that the project violated their exclusive rights. Ultimately, a settlement was reached
allowing limited access to the books.

Lesson: This case reveals the complexity of balancing innovation and copyright law
in digital environments.

4. Trade Secrets

Definition: Trade secrets are confidential business information that provides a

company with a competitive edge. Examples include formulas, processes, designs, or
methods that are not publicly known.
Example: Tesla v. Zoox

Case Overview: Tesla sued Zoox for stealing trade secrets related to electric vehicle
technology after Zoox hired former Tesla employees who allegedly took confidential
data. The case was settled, with Zoox agreeing to pay a settlement.

Lesson: The protection of trade secrets is crucial in industries like technology, where
innovation and competitive advantage rely on confidential information.

Example: Waymo (Google) vs. Uber

Case Overview: Waymo, the self-driving car division of Google, filed a lawsuit
against Uber, claiming that a former employee had stolen trade secrets related to
autonomous vehicle technology before joining Uber. Uber settled, paying Waymo
$245 million.

Lesson: This case highlights the importance of safeguarding proprietary technology

and trade secrets, especially in high-tech industries.

5. Design Rights

Definition: Design rights protect the visual and aesthetic aspects of an object, such as
its shape, color, pattern, or decoration, which are novel and original.

Example: Apple Inc. v. Samsung Electronics (Design Patents)

Case Overview: Apple sued Samsung for infringing on its design patents regarding
the look and feel of its iPhone. Apple claimed that Samsung's smartphones copied the
design of the iPhone, including the shape, icons, and overall design. The case ended
with a significant financial award for Apple.

Lesson: This case highlights the importance of protecting unique product designs in
competitive markets.

Example: Louboutin vs. Yves Saint Laurent

Case Overview: Louboutin filed a lawsuit against Yves Saint Laurent for using red
soles on its shoes, claiming that it had a trademark on the red sole design. The case
went to court, and it was ruled that Louboutin's trademark was only valid for shoes
where the red sole contrasted with the upper part of the shoe, which protected its
distinctive design.

Lesson: This case showcases the challenges in design rights and trademarks in the
fashion industry, especially when it involves iconic visual elements.

6. Licensing Agreements

Definition: Licensing agreements are arrangements where the owner of intellectual

property allows another party to use their IP under specific conditions in exchange for
compensation.
Example: Disney Licensing and Marvel Comics

Case Overview: Disney acquired Marvel Comics in 2009 and entered into various
licensing agreements for Marvel characters in films, merchandise, and theme parks.
The licensing deals allowed Marvel to expand its brand presence while generating
revenue from the use of its characters.

Lesson: Licensing can significantly increase revenue and brand reach, allowing the IP
owner to benefit from others' expertise and market access.

Conclusion:

Each form of intellectual asset—patents, trademarks, copyrights, trade secrets, and

design rights—plays a crucial role in protecting the ideas and innovations that fuel
industries. Reviewing these cases illustrates the complex and dynamic nature of
intellectual property law and how businesses and creators navigate these protections
to gain competitive advantages.

Here's a tabular summary highlighting the key differences between patents,

copyrights, trademarks, trade secrets, design rights, and licensing agreements:

Design Licensing
Aspect Patent Copyright Trademark Trade Secret
Rights Agreement
Grants
Protects Protects
Protects permission to
distinctive confidential
Protects new original works Protects the use
symbols, business
inventions and of authorship visual intellectual
Purpose names, or information that
technical (e.g., books, appearance property
logos that provides a
solutions. music, of products. under
identify goods competitive
software). specified
or services. edge.
conditions.
Subject Inventions, Literary Names, logos, Formulas, The design Patents,
Matter processes, works, music, symbols, recipes, of products, trademarks,
machines, or art, software, slogans, and business plans, including copyrights,
compositions architectural packaging used manufacturing their shape, or other IP
of matter. designs, etc. to identify processes, pattern, or rights for use
goods/services. customer lists, decoration. under agreed
 Design Licensing
Aspect Patent Copyright Trademark Trade Secret
Rights Agreement
etc. terms.
Depends on
10 years or
Life of the Indefinite, as Typically 15 the
Typically 20 indefinitely as
author + 50– long as the years agreement
Duration of years (subject long as the
70 years information (depending terms,
Protection to maintenance trademark is
(depending on remains secret on usually 1-5
fees). used and
jurisdiction). and valuable. jurisdiction). years but can
defended.
be extended.
Must be
Must be Must be
Must be novel, Must be Must be kept formalized
distinctive and new,
non-obvious, original and confidential and through a
Requirements used in original, and
and useful fixed in a provide a contract,
for Protection commerce to have
(industrial tangible business specifying
identify goods individual
application). medium. advantage. the terms and
or services. character.
scope of use.
Protection is Typically,
Protection is granted licensing
Protection is
Protection is Protection is granted country by agreements
granted based
Geographical granted granted country by country are valid
on
Coverage country by country by country, often (some within the
confidentiality
country. country. through regions may territory
agreements.
registration. require specified in
registration). the contract.
Enforcement
Owner has the Owner can
Owner has the Owner has the depends on
exclusive right enforce through Owner can
exclusive right exclusive the contract
to use the mark legal action if prevent
to prevent right to terms, but
and prevent secrets are others from
Enforcement others from reproduce, licensors can
others from misappropriated copying or
making, using, distribute, and take legal
using or disclosed imitating the
or selling the perform the action if
confusingly without design.
invention. work. terms are
similar marks. authorization.
violated.
New A company
Nike "Swoosh" The shape of
pharmaceutical A novel song, Coca-Cola's licensing its
logo, a Coca-Cola
drug, a a software secret recipe, patented
Example McDonald’s bottle, Apple
machine, or a program, or KFC's original technology
"Golden product
manufacturing an artwork. spice mix. to another
Arches". designs.
process. company.
Focuses on
Focuses on Protects against Focuses on
Focuses on Focuses on the
brand identity unauthorized the terms
technical or the expression appearance
Protection and use or under which
functional of ideas but of products
Scope distinguishing disclosure of the IP is used
aspects of an not the ideas rather than
products or proprietary by a third
invention. themselves. their
services. information. party.
function.
Examples of New device, Books, Company Business Product Right to
What It chemical movies, logos, brand strategies, shapes, manufacture,
Protects compound, or music, names, product customer lists, packaging sell, or
process. software, packaging. marketing designs, distribute
choreography, plans, formulas. patterns, and products
photos. textures. using
someone
 Design Licensing
Aspect Patent Copyright Trademark Trade Secret
Rights Agreement
else’s IP.

Summary:

 Patents focus on innovations and grant exclusive rights to inventions, often for functional
products.
 Copyrights protect creative works and expressions like books, music, and software, and are
automatically granted upon creation.
 Trademarks protect brands by ensuring that consumers can identify the source of goods or
services, and they can last indefinitely if maintained.
 Trade secrets protect confidential business information that gives a competitive advantage,
with no expiration as long as secrecy is maintained.
 Design rights protect the visual appearance of products, typically for a limited time.
 Licensing agreements allow the use of intellectual property under specific terms, such as
royalty payments or other conditions.