Page 180 - Business Principles and Management

Chapter 7 • Legal Aspects of Business

7.2 Regulations Protecting Business and the Public

Goals Terms
• Explain how patent, copyright, • patent • intrastate commerce
and trademark protection benefits • copyright • licensing
business. • trademark • public franchise
• Describe the ways in which govern- • information liability • building codes
ment regulations protect consumers. • zoning
• cookies
• Describe three methods used by • interstate commerce
state and local governments to
regulate business.

n the previous section, you learned about regulations that help to make the
economic system work by establishing rules of fair competition. In this section,
Iyou will learn about regulations that protect those who create goods and
services and those who use them.

Intellectual Property

The federal government has passed laws to protect the rights of those who create
uniquely different products and new ideas. Specifically, it grants intellectual prop-
erty rights to inventors, authors, and creators of distinct symbols and names for
goods and services (see Figure 7-3).

PATENTS
A patent is an agreement in which the federal government gives an inventor the
sole right for 20 years to make, use, and sell an invention or a process. No one
is permitted to copy or use the invention without permission. This protection is
a reward for the time and money invested to create the new product. An inventor
may allow others to make or use a product by giving them a license to do so.
In a sense, through the Patent and Trademark Office, the government gives
the inventor a monopoly on newly invented products, designs, and processes.
This temporary monopoly provides a profit incentive that encourages manufac- Success tip
turers to spend the huge amounts of money required to research and develop
new ideas. Research departments have produced many inventions. For example,
Apple, Sony and other companies have developed digital players that allow Are you an inventor? It is
users to listen to music and view videos on display screens. Even synthetic tissue possible for individuals to
and altered vegetable plants are patentable. For example, insulin that diabetics patent their inventions. This
need and a new rot-resistant tomato are products of biotechnology (biology plus does not gaurantee success,
technology) innovations. however. An invention must
New processes as well as new products can be patented, but process patenting be backed by a market need
can be undesirable at times. For example, Priceline.com, Inc., received a patent and a good marketing plan;
for its auction price-bidding system on the Internet. If other companies used this otherwise it is just one of
simple process, they would be violating the owner’s patent rights. However, the thousands of patented prod-
process is so fundamental to many Internet practices that competitors believe the ucts with no sales potential.

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