Chapter 7: Intellectual Property and Unfair CompetitionBy: Anne Freeman, Justine Stigge, Christian Binkholder, Kevin Hayes, Courtney Dinwiddie, Emmamarie Melyon, and Salisa Suwanprathip, Emily Wilson, Colin Guthrie, Eric Borman, Tony SpenoI. Patents

Patents are select rights given to a person or persons by the government for a set amount of time for the full disclosure of their invention. By doing this, the design(s) of the invention are made available to the public; however, during the patent’s duration, the design(s) can only be used at the discretion of the inventor because he/she is given “the right to exclude others from making, using, offering for sale, or selling the invention in the United States or ‘importing’ the invention into the United States.” With this in mind, what can be patented?

A. What is patentable?

There are three types of patents that are recognized by the United States Patent and Trademark Office: Utility, Design, and Plant patents. Utility patents are issued for discoveries of a new or useful process or machines. Design patents are issued for designs that are considered new, original, and ornamental for a product. One of the most famous examples of a patented design is the shape of the Coca Cola bottle. Plant patents are inventions of asexually reproduced distinct variety of plant. One such patent was granted for an apple tree called “Wildung.”

A patent may not be granted if the invention fails any of 4 requirements: novelty, utility, not obvious, or inventor(s) lacks proof of being the sole creator(s). To be novel, an invention may not be any of the following: previously known or used in the United States, patented in the United States or in a foreign country, or written in any sort of publication, regardless of the country. Utility means that the invention must have a useful purpose or perform the intended operations. Not obvious refers to the idea that any person in a certain field could not have easily thought of the invention. Proof of being sole creator(s) is important to weed out fraudulent claims that are made and to make sure credit resides only with the actual creator(s).

One controversial issue is drug patents. Currently there is no law that prevents modifications of drugs to be patented. This means that someone can experiment with a drug and create a new patent based on observations. If the person conducting the experiment finds a new ingredient or modifies the drug, that person can receive a new patent for the modified drug under the current laws.

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B. How to obtain a patent

Granting of patents is conducted solely by the United States Patent and Trademark Office. The creator must include specific details and instructions for the invention, including what its general purpose is and how it is achieved through this invention. If it will help people better understand the invention, creators should include a drawing to illustrate the details given in the application of the product. Once applications are received by the United States Patent and Trademark Office, it is determined whether the invention meets all of the prior requirements for receiving a patent. If the request for the patent is rejected, the creator has one final chance to resubmit his/her invention. If rejected the second time, the creator may appeal to the Office’s Board of Patent Appeals and Interferences.

Once a patent is granted, it is good for twenty years in accordance with the General Agreement on Tariffs and Trade. Depending on the success of the product, it could cause a legal monopoly in the market. One example is AT&T. Until 1982, AT&T was allowed a legal monopoly because the government thought that it was important to have a cheap and reliable long distance telephone service for everyone. In 1984, AT&T was broken up, allowing MCI and Sprint to capture portions of the market share. NOTE: Utilities are often allowed a legal monopoly, but not always as a result of a patent.

C. Life of a Patent

Inventions that were patented before June 8, 1995 usually had a life of 17 years from the date on which the patent was issued. That law has since been changed. Now, if an invention is patented on or after June 8, 1995, the patent will last for 20 years.

A written assignment allows the ownership of the patent to be transferred from the patentee to another party. The patentee can also license to use some of the patent rights,

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Did You Know? A Patent Troll is a person or company who forcefully defends patents

against infringers, even though the troll never intends on using the patent themselves.

To design around a patent is to create an invention that does the same thing in a different way, so as not to infringe on the patent.

The United States Patent and Trademark Office allows genetic sequence discoveries to be patented. For more information on genetic patenting go to: “http://www.uspto.gov/web/offices/com/sol/notices/utilexmguide.pdf”

which allows the patentee to retain some of the ownership of the invention. If an invention is developed because an employer asks an employee to do so, the employee’s incentive and creative work can result in a patent for the employer’s benefit exclusively.

D. Infringement and Challenges to Patents

If an invention is used within the twenty year disclosure of the patent without permission from the creator, the infringer can be sued for tort infringement. Even if a similar, but not identical, product is used or invented, the infringer may still be liable for infringement under the doctrine of equivalents. The doctrine of equivalents states that if the parts of an invention are seen as equivalent to that of a patented invention, even if they are not identical, they may be liable. Infringers may be sued for up to three times the actual damages caused by the infringement plus the court costs and interest. In some cases, the infringer may also be liable for any attorney fees. Other reliefs available for infringement violations are injunctions (the prevention of further infringements). In the fall of 2006, Pioneer brought suit against Samsung for infringement of Pioneer’s patent on plasma televisions. The courts finally ruled in October 2008 that Samsung did indeed infringe upon the patent and awarded $59.3 million in damages.

In some cases, a patent can be challenged by the defendant on grounds of patent misuse. Patent misuse is the action of unreasonably exploiting the monopoly of the patent. This is commonly brought about with tying products. The defendant in the case can also question the validity of the patent or can try to convince the court that the actions are not infringement. Infringement is determined primarily by the context included in the claims of the patent, and if the product the defendant is creating does not fall within the claims, there is no infringement.

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The Controversy over Gene Patents

A gene patent is a patent on a particular gene sequence, including its usage and chemical composition. The controversy revolves around the question of whether gene patents improve technology by creating motivation for discovery of new ideas or whether it hinders technology by not allowing scientists to share their new discoveries and possibly raising the costs of genetic testing. It may seem strange to be able to patent biological processes and products, but this has been the case since 1907 when adrenaline was the first product to be patented.

As of today, there has been little agreement as to which products/processes can be patented and which cannot. The controversy will likely continue until this issue is resolved.

II. Copyrights

Copyrights protect original works by an author that have been fixed in a form that allows for the work to be able to be perceived, reproduced, or communicated. A copyright gives the author exclusive rights to the work by restricting other people from using the authors words, expression of ideas, or musical compositions without the author’s permission.

A. Protected Works

There are many categories of works protected by copyrights: literary, music, drama, pantomimes, choreography, pictures, graphics, sculptures, motion pictures, (such as videos and movies), sound recordings, and architectural.

To obtain copyright protection, a work must be fixed, which means to be set out in a tangible and expressible way so that it can be received, reproduced, or communicated. A work must also be original and creative. An example of a copyrighted material is the Lord of the Rings by J.R.R. Tolkien.

Copyright patents do not protect ideas, facts, procedures, processes, systems, concepts, or discoveries. Instead, it covers the works that express these ideas. An exception to the protection of facts is in nonfictional works, which can have exclusive rights like any other copyright patent.

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Pfaff v. Wells Electronics, Inc.525 U.S. 55 (1998)

Wayne Pfaff developed a new computer chip socket in November of 1980. He later sold it to Texas Instruments. In April of 1982, Pfaff applied for a patent and received one in January of 1985. Later, Pfaff filed an infringement action on Wells Electronics, who were producing a competing socket. Wells Electronics argues that the patent was not valid because of the Patent Act of 1952, which says that a patent cannot be given for an invention that has been “on sale” for more than one year before the patent application was filed. The district court said that Wells Electronics was liable because no sockets actually existed one year before the date of application and, therefore, they were not “on sale.” However, the Court of Appeals said that Pfaff’s patent was indeed invalid because he had received an “oral purchase order for 30,200…sockets” on April 8, 1981 from Texas Instruments, making the products “on sale” over one year prior to the date of application. The Supreme Court agreed with the decision of the Court of Appeals.

Although copyrights are typically thought of as protection for individuals seeking to protect their intellectual works, copyrights are also used to protect the intellectual works of corporations. One such corporation is the Disney Corporation, who has a copyright on Mickey Mouse.

B. Creation

Any literary work, song, dance, etc. are all considered copyrighted simply by creating and fixing the work. The creator may want to register the work with the United States Copyright Office for infringement purposes, but it is not necessary. By registering the work with the Copyright Office, the holder of the copyright then has the right to file a lawsuit for infringement on the work. For most works, federal law does authorize the creator to give a notice of the copyright; this is not required or necessary but is advisable for anyone who may need to defend the work in court. An example of notice occurs when an author publishes a book. The notice may include the year that it was first copyrighted and the company that copyrighted it.

C. How Long Does a Copyright Last?

Patents and copyrights cannot last forever according to the United States Constitution’s Copyright Clause. This clause protects art and science, which enables authors and any other creator of a copyright or patented work to have exclusive power over their work for a limited amount of time. The amount of time that copyright laws give the creator exclusive power over his/her work has been lengthened multiple times throughout history.

Starting before 1978, copyrights were protected for 28 years from their first publication with an additional 47 year renewal. This gave all pieces of work copyrighted before 1978, 75 years of protection. Congress then decided to establish a normal rule that would apply to all works after 1978. This rule stated that copyrights would last for the life of the author plus an additional 50 years.

In 1988, the Sonny Bono Copyright Term Extension Act (CTEA) was created. This Act added 20 years to the duration of all works created before and after 1978. This now gave works published or registered pre-1978 a 95 year protection term (a 28 year initial

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Examples of Forms of Notice The notice for visually perceptible copies should include the symbol ©, (or the

word “Copyright,” or “Copr.”), the year of first publication of the work, and the owner’s name. An example of a notice from a book is Copyright © 1978 by Donald M. Dible.

The notice for phonorecords of sound recordings should consist of the symbol P, the year of first publication, and the owner’s name. For example, P 2000 American Records Inc.

term plus a 67 year renewal term). Works copyrighted from 1978 on (including works created before 1978 but not published or registered) have a protection term for the life of the author plus 70 years. If the copyright is owned by a corporation, the life is 95 years from first publication or 120 years from creation, whichever is shorter.

The Copyright Term Extension Act directly affected Walt Disney’s cartoon character Mickey Mouse. The first set of pre-1978 copyright terms would have made Mickey Mouse available to the public domain in the next couple of years if CTEA had not enacted the extension period. While CTEA has protected the copyright of Mickey Mouse, the works of people like Shakespeare are now open for public use.

Eldred vs. Ashcroft

537, US 186 (2003)

“In January 1999, Eric Eldred, creator of Eldritch Press, an Internet provider of public domain works, filed a constitutional challenge to the CTEA. Eldred alleged that the statute violated his First Amendment rights, and that the extension of the copyright protection term exceeded Congress's enumerated powers under the Copyright Clause of the Constitution. Eldred also alleged that the constitutional purpose of "promoting the progress of science and useful arts" was not furthered by CTEA's retroactive extension of copyright in existing works, particularly for deceased authors for whom the increased incentive to create would be irrelevant. Furthermore, Eldred argued that the CTEA violated the "public trust doctrine," a theory traditionally applied in cases of transfer of public lands to private ownership. The court rejected this argument and concluded that the public trust doctrine was not relevant because it applied only to navigable waters, not copyrights.

The United States District Court for District of Columbia rejected Eldred's arguments and held that the CTEA was constitutional. The court first held the First Amendment claim was not supported by case law. It stated that the First Amendment does not provide a right to use the copyrighted work of others. The court then held that retrospective extension of copyright protection did not violate the "limited times" provision of Copyright Act because Congress has the right to define the scope of the copyright period and can enact laws retrospectively. The court finally held that CTEA did not violate the "to authors" language of the Copyright Clause because an author may agree in advance to transfer future benefits that ultimately may be conferred by Congress.”

("Eldred vs. Ashcroft.")

D. Infringement

Copyrights enable the author of a piece of work to maintain exclusive rights over his/her work for a limited amount of time. Therefore anyone who violates one the exclusive copyright laws may be liable for infringement. In order to prove infringement

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there are three requirements: (1) the defendant was able to obtain the copyright material; (2) the defendant copied enough material from the copyrighted work to deem it non-coincidental; and (3) there is a significant amount of similarities between the copyrighted work and the infringed work. A copyright infringement can also include the public distribution of the copyrighted work.

Infringement cases must break one of the author’s exclusive rights. Stating that a similar work copied your ideas, themes, or facts of the copyrighted work are not liable under infringement. If the defendant paraphrases or credits that author in their work, they are not liable for infringement.

If copyright infringement is proven, the owner will usual receive money for damages plus any profit the guilty party makes from the material. If the plaintiff elects to receive statutory damages, the amount the plaintiff receives would fall between $750 and $30,000. If the infringement is considered willful, the maximum may rise to $150,000. If the infringement was considered willful and was for commercial advantage or private financial gain, the federal government may decide to press criminal charges.

An example of copyright infringement involves Napster. Napster provided customers with downloadable music free of charge. Owners of the copyrighted songs were upset because they were not receiving payment for their work, and soon filed lawsuits against the company. Today, Napster requires the users to pay for the songs they want to download.

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¹Business Software Alliance, “2007 Piracy Study.” Fifth Annual BSA and IDC Global Software, 20 Nov. 2008. <http://global.bsa.org/idcglobalstudy2007/studies/2007_global_piracy_study.pdf>

In the News: Jammie Thomas-Rasset has Been Fined $1.92 Million Dollars in a Music Download Copyright Case. Jammie Thomas-Rasset was found guilty of willfully downloading 24 songs and charged $80,000 per song at a retrial in June 2009. The original jury awarded $220,000 per song to the plaintiff, Recording Industry Association of America (RIAA), but the verdict was thrown out by the presiding judge as being too harsh. The RIAA has been aggressively pursuing illegal downloading of music files and has brought suit against thousands usually settling out of court. Rasset maintains that she is innocent.¹

“Woman fined $1.92M in U. S. file sharing case; 'Kind Of Ridiculous.'” National Post (f/k/a The Financial Post) (Canada) 20 June 2009: A20. LexisNexis Academic. LexisNexis. Truman State University Library. 6 July 2009 <http://www.lexisnexis.com>.

For more information on copyrights go to the United States Copyright Office Website: http://www.copyright.gov/

E. Fair Use

One defense against copyright infringement is the fair use determination. The court weighs four factors for fair use determination. The factors include the purpose of the use, the nature of the work, the importance and amount of the part used, and the effects on the marketability of the copyrighted work. Here are some examples of fair use: criticism or comment, news, teaching, scholarship, and research. It is up to the court to decide if the material qualifies for the fair use determination.

III. TrademarksTrademarks are words or symbols that designate a company’s product. Trademarks

can be a phrase, a single word, such as the name of the product, a symbol, a device, or a combination of these that represents the product. To ensure that companies are able to retain the ability to distinguish their product from other products that may be similar, trademarks are protected under the federal Lanham Act.

Under the Lanham Act, trademarks are usually considered “any word, name, symbol, device, or combination thereof used by a manufacturer or seller to identify its products and distinguish them from products of competitors” (Mallor 250). However, this description is sometimes extended to include things such as designs of labels or packages.

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Did You Know?

A copyright infringer is often referred to as a pirate.

There is no such a thing as an “international copyright.”

USA suffered PC software piracy losses of $8,040 in 2007 which was the highest loss among other nations in the world.¹

In Thailand, within two weeks after movies are released, you can find pirate DVDs of the movies in flea markets and malls.

Software Piracy

Software companies lost some $147 million in potential revenues to piracy in 2007, up from $119 million in 2006. Piracy Rates In 2007¹

Armenia 93% Zimbabwe 91% Vietnam 85% Indonesia 84% China 82% Thailand 78% France 42% Singapore 37% United Kingdom 26% United States 20%

Protection is sometimes recognized for colors, pictures, label and package designs, slogans, sounds, arrangements of letters and numbers, and shapes of goods or containers.

The Lanham Act also protects three other types of marks, which are: service marks, certification marks, and collective marks. Service marks are similar to trademarks, but instead are for services.

Certification marks certify other features of goods and services, such as manufacturing methods or materials.

Collective marks are very similar to trade or service marks, but instead of identifying a company, or their product or service, they identify an organization, or the organization’s service.

We will be focusing on trademarks; however, most of the things discussed apply to the other types of marks as well.

A. Distinctive

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Ex. The shape of the glass Coca-Cola bottles are trademarked, meaning no other

company can use that design for their beverages. (as mentioned earlier the design

is also patented)

Ex. The name McDonald’s is a service mark, no other restaurant can use that name.

Ex. This mark is used to identify goods that contain wool.

Ex. To show that someone is a member of the Society of Certified Public Accountants the mark “CPA” is used.

In order for a trademark to be protected, it has to be distinctive. This meaning that it has to stand out and not be too generic for the product it is identifying, which we will discuss later. To help identify the level of distinction, marks can be separated into five categories: arbitrary or fanciful marks, suggestive marks, descriptive marks, marks that are not inherently distinctive, and generic terms. Arbitrary or fanciful marks do not necessarily describe anything about the product they identify. Arbitrary and fanciful marks are almost always protected. Suggestive marks only describe the product with the use of the imagination. These types of marks tend to give detail about the product only after you know about the product that is being described. Suggestive marks are usually eligible for protection. Descriptive marks allow someone to easily identify the product just by its name. Eligibility of descriptive marks tends to depend on how long they have been in use and how readily potential consumers associate it with a particular product, not just the type of product. Marks that are not inherently distinctive are very similar to descriptive marks, meaning they can describe more than one specific product. Just like descriptive marks, they are eligible for protection only under certain circumstances. Generic terms are words that are already used to describe that type of product, such as “sweater” or “calculator”. Generic terms are not eligible for protection.

B. Registration

In order for a trademark to be protected, it must be registered with the U.S. Patent and Trademark office. To register a trademark, a company must have the particular mark displayed on their product or service. Once submitted to the office, the trademark is reviewed and is accepted or denied based on its distinctiveness. Anyone who believes that registration of the trademark may harm them can contest an acceptance. The applicant may contest the denial if they wish. If the trademark is accepted, it is placed on the Principle Register of the Patent and Trademark Office. There, it is made public, and people can dispute whether or not the mark infringes on another’s mark. While on this list, the trademark is under the protection of the Lanham Act.

Some patents may automatically be denied, regardless of how distinctive they are. These include marks that are immoral, deceptive or scandalous, marks that resemble previously accepted marks, marks that use flags or other government signs, and marks that contain a living person’s picture or name without that person’s consent.

Once a trademark is placed on the Principle Register and is protected, it retains its place and protection as long as the mark remains in use. One exception to this, however, is when a term becomes generic. A generic term is a trademark that is so widely known, it is now used to describe a type of product as opposed to just one specific product.

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The graphic below (right side) shows terms that were once brand names but became generic with use; these terms were once trademark protected but have lost their protection status. On the left are brand names that have been in danger of becoming generic; these are still currently trademarked but they could be challenged, then the Patent and Trademark Office would have to decide if they would continue to be protected or not. This is just a short list; there are many other examples that could be included.

C. Infringement

Infringement is when a company, without consent, uses a mark that resembles another company’s trademark closely enough to cause confusion over which company the product is actually from or what the product is. When this happens, the company with the trademark can take legal action and may receive monetary damages or an injunction. In determining trademark infringement cases, there are eight aspects considered in order to determine whether or not there was indeed significant confusion. It is not necessary to

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Ex. Aspirin used to be trademarked by Bayer, but it became such a widely used term that

people called acetylsalicylic acid produced by any company, not just Bayer, aspirin.

Trademarks Generic TermsBrand Generic Term aspirin

KLEENEX tissue escalatorXerox copier yo-yo

raisin bran

White v. Samsung971 F. 2d 1395 (9th Cir. 1992).

David Deutsch Associates, Inc., made a series of commercials to advertise Samsung VCRs. To show that the VCRs would be around a long time, they depicted cultural references and predicted what they would be like in the 21st century. One of the ads included a caption that read "Longest-running game show. 2012 A.D," while showing a Wheel of Fortune background with a robot dressed and wigged to look like Vanna White. The robot was standing in White’s signature pose. White had neither given permission for this ad to be made nor had she been compensated. The 9th Circuit Court of Appeals reversed the trial court’s verdict and stated “In cases

prove all of these factors, but a strong case for some of them is needed. The eight factors are: 1) strength of the mark; 2) relatedness of the goods; 3) similarity; 4) evidence of confusion; 5) channels of marketing; 6) the extent of consumer care; 7) the intent of the defendants; and 8) the probability of expansion.

D. Dilution

Trademark dilution refers to an instance when someone uses a “famous” trademark as their own, and in doing so reduces the value of the trademark in the public eye. A famous mark does not have to be registered in order to be granted protection under the Federal Trademark Dilution Act. Under this act, it is not necessary to prove likelihood of confusion, as it is for trademark infringement. It only needs to be proven that the public now associates the trademark with not only the original owner, but the defendant as well. Compensation for trademark dilution is usually only an injunction against the party using the mark without permission. There may be monetary damages if it can be proven that the defendant was using the mark to gain from its recognition, or if they were deliberately trying to cause dilution. Someone would be deliberately trying to cause dilution if they started selling a type of soda called “Koca-Kola” because it would dilute Coca-Cola’s brand name. Another example would be naming a new cereal “Especially K.” Dilution could also include copying the design of a product’s box in a general sort of way. Dilution may also occur in non-similar products. A product called Sony Toothpaste would be trademark dilution to Sony.

V. Trade SecretsTrade secrets are any valuable information that companies keep to gain economical

advantage over its competitors. Trade secrets may include a formula, pattern, compilation, program, device, method, technique, or process that is used in producing a product. In order to be considered a trade secret, it must have enough value, or be original enough, to possibly provide the business a competitive advantage. The Coca Cola recipe is one of the better examples of a trade secret. The recipe is one of the most protected secrets in the world. Competitors have no access to the recipe; therefore, the only way they can legally obtain the recipe is by experimentation.

A. Rules

There has to be a certain level of secrecy in order to have a trade secret. If information is made or becomes public, it is not a trade secret. For it to actually be a trade secret, the company must take a reasonable measure of action to keep it secret. Such examples of “reasonable measures” are as follows: having employees sign non-discloser agreements, advisors reminding employees to keep the trade secrets secret, controlling the

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availability and access to the trade secrets, and having a need-to-know basis for revealing the trade secret. Also, trade secrets do not apply to information that can be reasonably discovered by proper means. Proper means applies to people who discover the secret through invention, observation of the product, advertising, published literature, analysis, or reverse engineering.

B. Ownership

The owner of a trade secret is usually the person who created it or the business for which it was generated. If an employee develops a trade secret while employed, the employer can gain ownership rights under certain circumstances. In order for this to happen, the employee would have had to been hired to do creative work in relation to the secret, agreed not to give information, or worked with other employees who assisted in the discovery.

The duration of trade secrets is unlimited, as long as the companies can keep them so without any procedural formalities. However, the protection of trade secrets can be expensive. Some companies may restrict access to important documents, escort visitors, educate key employees, and closely monitor publications in order to maintain the trade secret. Many large companies rely on trade secrets when patents are not available.

C. Misappropriation

The Economic Espionage Act of 1996 makes the theft or misappropriation of a trade secret a federal crime. Most states have also adopted the Uniform Trade Secrets Act, but some states still rely on common law principles. There are three ways that misappropriation of trade secrets can occur. The first is if the secret is obtained by improper means, such as theft, trespassing, wiretapping, or any other illegal activity (whether personally or by use of a spy). The second is if the secret is obtained from a person that is known for using improper means. The final way is if an agreement is breached regarding the confidentiality of the contract. An example of this would be an employee giving out information about a trade secret during or after employment with the business.

In any of these cases, the people involved are liable for damages. The remedies that are available to rectify misappropriations are as follows: the amount of damages caused plus profits gained from the theft, punitive damages in response of willful and malicious misappropriation, and injunctions.

V. Passing Off/ Palming Off

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The Lanham Trademark Act enacted in 1947 was established to protect trademarks. Section A of the act establishes a tort stating that any false representation that could entice a third party (consumers) to mistake the defendant’s product for the plaintiffs. This can include, but is not limited to, trademarks, trade names, packaging, labels, or containers. A second part of Section A includes trade dress infringement. This is rather similar to passing off. Trade dress describes the outward appearance of a product. The Lanham Act prevents anyone from producing a product or service that so closely resembles a trademarked item that consumers are confused as to which product is which. For example, a cheap brand of shoes could try to use a in their logo such that it would be confused with the Nike symbol.

"Eldred vs. Ashcroft." Lexis Nexis. 2003. Web. 29 Nov. 2009.             <http://www.lexisnexis.com/us/lnacademic/search/journalssubmitForm.do>

"Genetics and Patenting." Human Genome Project Information. Human Genome Project, 16 Sept. 2008. Web. 29 Nov. 2009. <http://www.ornl.gov/sci/techresources/Human_Genome/elsi/patents.shtml>.

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In the News: Former Secretary Convicted Stealing Coca-Cola’s Trade Secret

Coca-Cola’s secret formula has been kept secure. Only a few employees, mostly executives, know the formula. However, in July 2006, two former employees of Coke conspired to steal the trade secrets of a new and upcoming Coke product and sell it to Pepsi. In February 2007, the two men were sentenced to serve time in federal prison: one to serve 5 years and the other to serve 8 years. Both had to pay $40,000 in damages in addition to the jail time. Then in May 2007, Coca-Cola’s former secretary, Joya Williams, was found guilty for trying to sell the secret formula to Pepsi Co. for $ 1.5 Million. After Pepsi Co. received the letter offering the deal, they informed Coco-Cola Co. Williams was arrested by the FBI and sentenced to eight years in prison.