Running Head: BMW VS. GRANDMARK 1

Running head: BMW VS. GRANDMARK 1

BMW vs. Grandmark

Jeffrey White, Valencia James, Diana Ali, Audrina Jett, Jennifer Rodriquez

University of Phoenix

Law/531

October 28, 2013

Denise Brown

BMW VS. GRANDMARK 2

BMW vs. Grandmark

The IRAC (issue, rule, analysis, and conclusion) method is representative of an evaluation mechanism to help individuals analyze and comprehend hypothetical scenarios relevant to legal cases (Bittner, 1990, p. 227). The purpose of this study is collaboratively to leverage the IRAC method to analyze the legal case between BMW and Grandmark.

Differentiating elements between personal, real, and intellectual property, and the associated methods to manage prospective property issues is discussed. A case brief is provided using the

IRAC method and the legal concepts developed from this case is applied in the context of various business managerial settings.

Property Issues and Methods

In the legal world, the word “property” can mean several things. Real property is land and that which is attached to the land, such as houses, garages, and the like. Personal property is anything else owned by someone, which is not real property. This could be tangible property or intangible things. Some examples of personal property are bank accounts, jewelry, cars, furniture, stocks and bonds, and time-shares.

Then, there is intellectual property. This is harder to describe, but consists of copyrights, patents, and trademarks. This is any type of property that originates as an idea and is translated to another published form. Instead of a productive piece of land or a house, which can generate rent, a piece of intellectual property may be a cartoon character, a painting, an invention, blueprint, or logo. The value of this property exists in the very idea of it coming into other form.

A new and unique idea itself is not intellectual property until it is made into a form someone can, hear, or so on. Whoever had the idea of the “Golden Arches” for instance, had nothing until he BMW VS. GRANDMARK 3 or she drew them or built them. Ideas themselves cannot be copyrighted, trademarked or patented.

In the BMW case, the company sought to stop another company, Grandmark, from producing parts, which apparently would fit the BMW vehicles. The claim was that these parts were protected under intellectual property laws. BMW claimed that the parts were unique and designed by them. The court disagreed, saying that the designs of the parts were dictated by the function of the items, not by the design. One would assume that a headlight (the example used by the court) would have to very much have the same basic design as every other headlight, and therefore would not be unique to BMW. The design of outside of the BMW car is protected, but that car parts are functional and not protected by intellectual property rights.

IRAC Method Case Brief

The following case brief between BMW and Grandmark leverages the IRAC method to align core elements of the rule with associated facts to validate or disprove court rulings:

· Case- BMW filed suit against Grandmark (a South American parts manufacturer)

13 years ago for intellectual property infringement and aesthetic design breach of

South African law that stipulates a design that “is new and original, and that has

features which “appeal to and are judged solely by the eye." After 12 years BMW

won the case. Grandmark appealed and the original ruling was overturned in favor

of Grandmark on the contention that car parts “must be considered separate from

the entire car” and BMW must demonstrate the “novel and aesthetic features” of

individual parts of the car (Ramsey).

· Issue- would the United States design patent law protecting BMW against

Grandmark manufacturing BMW replacement parts? Would The Patent Law BMW VS. GRANDMARK 4

Treaties Implementation Act signed into law in 2013 protect BMW against

Grandmark manufacturing replacement parts if South African government

honored the treaty?

· Rule- 35 U.S.C. 171 – “Whoever invents any new, original, and ornamental

design for an article of manufacture may obtain a patent therefore, subject to the

conditions and requirements of this title. “ The provisions of this title relating to

patents for inventions shall apply to patents for designs, except as otherwise

provided.” (The United States Patent and Trademark Office, 2013).

· Analysis- design patent law is used to ensure aesthetic design of a utilitarian

object is protected. In many cases pursuant to past case precedence, the aesthetic

design cannot be separated from utility design therefore; a design patent can

protect the ornamental features (Bitlaw, 2013). The nature of the law is to protect

patent owners from copycat products that otherwise provide similar utility and

design of a product jeopardizing the patent owners ability to market their

respective product. In the case of BMW versus Grandmark, Grandmark

manufactures similarly utilitarian parts with the same aesthetic design as BMW

and offers consumers a cheaper part with the same design. This infringes on

BMW’s ability fully to execute in their replacement part market. The nature of the

US design patent law is amply supported by historical design patent court rulings

in favor of protecting the design features of a utilitarian object. The Patent Law

Treaties Implementation Act of 2012 further expands the ability to register

international design patents in an attempt internationally to standardize and

expand the parameters of design patent law (Roberts, 2012). BMW VS. GRANDMARK 5

· Conclusion - BMW should be protected under US utility and design patent law

preventing Grandmark from reproducing BMW parts (as long as design patents

have not expired). The Patent Law Treaties Implementation Act demonstrates

clear precedence in terms of establishing international law relative to design

patent protection and enforcement. This act also demonstrates the government’s

desire to provide international standards that further expand design patent law.

Therefore, a US court should rule in favor of BMW in this respective case.

Legal Concepts Application

Intellectual property is defined as a “property that is developed thru intellectual and creative process” (Cheeseman, 2013, p. 121). This legal concept can be applied to a business managerial setting by applying its rights to both businesses and individuals. Intellectual property is intangible and is protected by both federal and state laws from infringement and misappropriation. These intangible properties are patents, trademarks, and copyrights. Many businesses management settings rely on the protection of such laws, as they are intellectual property driven.

Patents are limited in time and are granted by the federal government. It gives inventors the exclusive rights to sell, and use its products without being infringed upon. An application for a patent must be submitted to the U.S. Patent and Trademarks office in Washington D.C.

(Cheeseman, 2013, p. 124).

Trademarks are names, slogans or symbols used by companies to set themselves apart from others. Trademarks are used to distinguish one product or service form another. Businesses use trademarks for such reasons. Like patents, an application must be submitted to the U.S.

Patent and Trademarks office in Washington D.C. to be granted a trademark. BMW VS. GRANDMARK 6

The legal concepts from the BMW infringement case can apply to the business managerial setting by ensuring the registration for patents and intellectual properties meets legal requirements for protection. The trademark and design patents can protect a business by defining the invention or design; state specific functions are unique to the product or service. Defining the product or service functionality and purpose can protect against other companies from profiting from BMW's oversights. The business will explain how the product or service is original in functionality and appearance, which includes recognition to the business. The product or service for BMW can use the copyright protection, to explain the proper use for the product or service, include the mechanics explanation, blueprint definition, and protecting the business name with the trademark protection. BMW could receive royalties from lost revenue, new consumer base, and business sales.

The BMW v. Grandmark case provide a lesson in the importance of appropriate and applicable legal contracts. Businesses like BMW should consider which contracts to enter into to ensure their products and services are protected in the full capacity the law allows. Traditional, bilateral, unilateral, formal, informal, and valid contracts are different measures businesses take advantage of to avoid costly and timely legal disputes. BMW registered Aesthetic Designs for parts and vehicles to secure intellectual property rights. Although BMW won the case initially 12 years ago, Grandmark eventually won their right to manufacture BMW-like parts because of the invalidity of Aesthetic Design registration. Passera and Haapio (2013) state, “As long as contracts are seen only from a legal perspective, their design and communication issues will not be noticed, and thus their full potential…will not be harnessed” (p. 39). The working relationship between BMW and Grandmark leaders is not documented in the article; perhaps contact BMW VS. GRANDMARK 7 resolution could have been reached sooner and amicably with clear and documented agreements among leaders in relation to the design and manufacturing specifics.

Conclusion

This study collaboratively leveraged the IRAC method to analyze the legal case between

BMW and Grandmark. Differentiating elements between personal, real, and intellectual property, and the associated methods to manage prospective property issues were discussed. A case brief using the IRAC method was provided and the legal concepts developed from this case were applied in the context of various business managerial settings. BMW VS. GRANDMARK 8

References

AllLaw. (2013, October 24) Intellectual property law: Patents, trademarks, and copyrights.

Retrieved October 24, 2013 from http://www.alllaw.com/topics/intellectual_property

Bitlaw. (2013, October 28). Design patents. Retrieved from

http://www.bitlaw.com/patent/design.html

Bittner, M. (1990). THE IRAC METHOD OF CASE STUDY ANALYSIS. Research and

Development in the Social Sciences and Humanities, 81(5), 227.

Cheeseman, H.R. (2013). Business law: Legal environment, online commerce, business ethics,

and international issues (8th ed.). Retrieved from The University of Phoenix eBook

Collection database.

Laws and Regulations (2013, October 24) U.S. Trademark Law: Rules of Practice & Federal

Statute. Retrieved October 24, 2013 from http://www.uspto.gov/trademarks/law/index.jsp

Passera, S. & Haapio, H. (2013). Transforming contracts from legal rules to user-centered

communication tools: a human-information interaction challenge. Communication

Design Quarterly Review. Retrieved from

http://dl.acm.org.ezproxy.apollolibrary.com/citation.cfm?id=2466498

Ramsey, J. (2012, July 30). BMW 'astonished' after losing intellectual property case. Retrieved

from http://www.autoblog.com/2012/07/30/bmw-astonished-after-losing-intellectual-

property-case/

Roberts, J.J. (2012, December 27). Here come the design patents: New law boosts rights in

shapes, designs. Retrieved from http://gigaom.com/2012/12/27/here-come-the-design-

patents-new-law-boosts-rights-in-shapes-designs/ BMW VS. GRANDMARK 9

The United States Patent and Trademark Office. (2011, October 1). Appendix L - Patent Laws.

Retrieved from http://www.uspto.gov/web/offices/pac/mpep/mpep-9015-appx-

l.html#d0e304510