Page 36 - DMGT501_OPERATIONS_MANAGEMENT

Operations Management

Notes 2.2 Legal and Environmental Issues

The major legal issues are:
1. Patents: A patent is a grant of property rights by the government to an inventor. Patents
are exclusive property rights that can be sold, transferred, willed, licensed or used as
collateral, much like other valuable assets. In fact, most independent inventors do not
commercialize their inventions or create new products from their ideas. Instead, they sell
or license their patents to others who have the resources to develop products and commercial
markets. Patent law stipulate broad categories of what can and cannot be patented and in
the words of the statute, any person who "invents or discovers any new and useful process,
machine, manufacture, composition or matter or any new and useful improvement thereof,
may obtain a patent."

2. Trademarks: It includes any word, name, symbol, distinguishing device or any combination
thereof adopted and used by a manufacturer or merchant to identify his goods as
distinguishing them from those manufactured or sold by others.

Example: Trademarks can be names used in commerce such as Coke, clearly trademarked
by the Coca-Cola Corporation. A trademark can be a symbol like Apple Computer Corporation's
unusual apple with a bite in the side. A distinguishing device can be artistic renderings of
corporate products, such as the wild mustang horse for the Ford automobile, the intricate shield
and insignia designed NFL football team.
3. Copyrights: A copyright extends protection to authors, composers, artists and it relates to
the form of expression rather than the subject matter. This distinguishing feature is
important because most intellectual property has proprietary information in terms of
subject matter and if that property cannot be patented, the copyright only prevents
duplicating and using the original matter. The probation does not prevent another person
from using the "subject matter" or rewriting the material.

Example: The concept of an electronic spreadsheet is not protected; however the software
program devised to create the spreadsheet (form of expression) is protected by copyright.

4. Product Liability: It refers to the responsibility of a manufacturer or vendor of goods to
compensate for injury caused by defective merchandise that it has provided for sale.
When individuals are harmed by an unsafe product, they may have a Cause of Action
against the persons who designed, manufactured, sold, or furnished that product.

Notes In the United States, some consumers have hailed the rapid growth of product
liability litigation as an effective tool for Consumer Protection. The law has changed from
caveat emptor ("let the buyer beware") to Strict Liability for manufacturing defects that
make a product unreasonably dangerous. Manufacturers and others who distribute and
sell goods argue that product liability verdicts have enriched plaintiffs' attorneys and
added to the cost of goods sold. Businesses have sought TORT reform from state legislatures
and Congress in hopes of reducing damage awards that sometimes reach millions of
dollars.

5. Uniform Commercial Code: Created in 1952, the Uniform Commercial Code (UCC) consists
of uniform acts coordinating the sale of goods and other commercial transactions throughout

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