Bug Inc. Case StudyBug Inc. Case StudyIntroductionBUG, Inc is a company based in Any State, U.S.A that deals with surveillance techniques and devices. It designs, manufactures, and sells recording devices that are used by the several law enforcement agencies around the country. Police and FBI are just a few that use these devices to intercept and record sound and voices. The equipment taps into telephone wires, cell phones transmissions and picks up sounds and voices through the walls of a house or in open-air locations through the use of remote microphones. BUG has exclusive contracts with most state and federal law enforcement agencies throughout the United States. As BUG develops and becomes wide spread, newer companies are being critical competitors for their market share, making BUG struggle to protect its intellectual properties and the company itself.
Define Legal Protection of Intellection PropertiesThe four types of legal protections of intellectual property are patent, trademarks, copyrights and trade secrets. A patent is when they register your invention with the government, a process that can take more than a year. BUG, Inc can gain the legal right to exclude anyone else from manufacturing or marketing their products once the patent is approved. Patents cover tangible things (The IDG Network, 2002-2008). They can also be registered in foreign countries, to help keep international competitors from finding out what your company is doing. Patents usually last for 20 years.
A trademark is a name, phrase, sound or symbol used in association with services or products. It often connects a brand with a level of quality on which companies build a reputation. BUG’s logo is a ladybug wearing a set of headphones representing the models it makes. Protection of this trademark is something that BUG needs to ensure. Trademark protection lasts for 10 years after registration. But trademarks do not have to be registered (The IDG Network, 2002-2008). If a company creates a symbol or name it wishes to use exclusively, it can simply attach the TM symbol. This effectively marks the territory and gives the company room to prosecute if other companies attempt to use the same symbol for their own purposes.
Copyright laws are yet another protection that BUG should have for its intellectual property. Copyright laws protect written or artistic expressions fixed in a tangible medium such as novels, poems, songs or movies. A copyright also protects the expression of an idea. The owner of a copyright work has the right to make duplicate, to make unoriginal works from it (such as a movie based on a book), or to sell, perform or display the work to the public (The IDG Network, 2002-2008). A copyright lasts for the life of the author plus another 50 years.
Furthermore, trade secrets are a consideration for BUG as well. Any formulas, patterns, devices or compilation of data that grants the user an advantage over competitors is a trade secret. State law, rather than federal law covers this. To protect the secret, BUG must prove that it adds value to the company which is, in fact, a secret and that appropriate measures have been taken within the company to safeguard the secret, such as restricting knowledge to a select handful of executives.
(a) Civil Liability Steve May FaceWIRETAP Inc, a newly established company and major competitor of BUG Inc, hired employee Steve, to work “undercover” in the research and development department at BUG Inc, in Any State U.S.A. While employed at BUG, Steve used his hacking capabilities to intercept and forward all incoming and outgoing e-mails, both domestic and abroad to WIRETAP. On a weekly basis, Steve met with his WIRETAP boss to share any product information used by BUG Inc.
In this particular case, Steve entered into a contract with BUG Inc. Though the details of this contract are not provided, it is likely as with many major full-time employment contracts, many questions regarding other employment are asked. It is assumed in this case that Steve falsified his answer regarding being currently engaged with any other organizations on a full-time basis. This fact falls under one of four elements of fraudulent misrepresentation; “the wrongdoer made a false representation of material fact” (Cheeseman, 2007, p. Chapter 12, p.10). Another clause included in some contracts with employees, especially one as crucial of a role that Steve had in the research department at BUG, is an agreement to not acquire any position with an organization in the identical market or a major competitor.
In contrast, the document was not signed. In a memo to the company’s vice president for culture services, Robert K. Stokoe, the company wrote that it was not aware of any contract signed with a senior BUG employee, or any position he had for a full-time partner. However, the memo further says that “a number of high-level positions have been assigned to our employee managers and other senior staff” (p. 10). As if the company thought all employees, regardless of their employment status, were employees in its own company with little or no work experience, it made sure that a very high number of contract negotiations between employees and company executives were scheduled for later.
According to K.Stokoe, the company also “reported a number of contracts to our employees and a number of junior people were assigned to these senior staff” (p. 31). The documents indicated that BUG was the “most active place” that employee executives and senior staff could work, and many workers’ union members who worked there were paid full-time, or even part-time, jobs as well. The documents further explained that employees did not appear to be the sole recipients of these contract terms. (In response to a question by the company’s VP at BUG about any such contracts, Stokoe replied, “If we were to look at other agreements, a lot of these will be on offer to employees, but it’s not clear on how often they are sent.”) The documents were not part of BUG’s public filings or even offered in the first place (in a manner of speaking).
In July of this year, CFPB inspectors met with Steve during an interview to ask him about his use of confidential materials in the production of the document. Steve told the inspectors that he had not received the documents and that he wanted to learn how they were produced. CFPB inspectors had asked Steve if he was not “involved in his own production with BUG, or even in the BUG project at present.” Steve denied the allegations and told them that he used the materials “as quickly as possible after they came along” (p. 11). An email from an employee who worked with the same person confirmed that he was aware of the documents. (In a letter sent to the BUG director on October 5, 2007, BUG also stated Steve was “acting as an associate of CFPB on the BUG process” (p. 12-13) which indicated that the employee was not aware of other BUG contracts.) A BUG spokesman had noted in his response to those BUG inspectors that such a correspondence was “consistent with our professional behavior and our practice regarding matters for which no specific policy was enacted” (at p. 14.)
The inspection found no evidence indicating that “Steve used any BUG material to make his impression and to express his views”. While CFPB inspectors found “much of his evidence to be from private documents on BUG which we can’t identify.” (At this point, many employees from the BUG project received paychecks from Steve and that of other senior associates, including Steve Sr.), in many of the documents