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Protecting Innovations
Using Patents and Trade Secrets
October 18, 2005
Presented By:
Davy E. Zoneraich
Norris McLaughlin & Marcus, P.A.
721 Route 202-206
Bridgewater, NJ 08807
908-722-0700
[email protected]
Davy E. Zoneraich, Esq.
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Specializing in:
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preparation and prosecution of
patent, trademark and
copyright applications
opinion preparation
patent infringement litigation
counseling on domestic and
international transactions
Program
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Recognizing an Invention
Protecting an Invention
 Patent
 Overview and Economic Benefits
 Formal Definition and Requirements
 Types
 Enforcement and Exploitation
 Overview of Patent Application
 Trade Secret
 Definition and Examples
 Keeping a Secret a “Secret”
What Is an Invention?
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A solution to a technical problem
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Improvement to an existing device or process
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Combination of old elements
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A new device – better mousetrap
A new process – improved cookie recipe
Light in Dental Handpiece
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Old: Light Bulb on the floor connected via fiber cable to handpiece
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Long fibers easily broken
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Very powerful bulb required
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New: Light bulb included in handpiece with shorter fiber optic
piece
New use for an old composition or process
What Is an Invention?
Types of Technology
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Traditional Industrial Applications
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Automotive, Farming, etc.
Computer Software
Biotechnology
Chemistry
E-Commerce/Business Methods
Invention is Confidential Information
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Confidential Information –not publicly known
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Technical Information –
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Known – certain types of equipment used to make pipes
Not known – specific arrangement, settings of
equipment
Value of Confidential Information
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Cost savings
Improved Products and Process
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Provides Competitive Advantage
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Patents – exclude others
License fees
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Protecting an Invention
√ Recognize the invention
Determine how best to maximize its value $$$$$
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Patent
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Tell the world what you discovered
Stop others from making, using and selling your invention for about
17 years
Trade Secret
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Don’t tell anyone
Not easily discovered (i.e., cannot be reverse engineered)
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Processes are not easily reverse engineered
Coke® – formula secret for more than 100 years
Short Product Lifetime
- Software
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Use Trademark/Goodwill to exploit value
Toughest job – keeping a secret
Patents
What is a Patent?
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Invention:
Process
Apparatus
Improvement to a Process or Apparatus
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New – not described, sold, offered for sale, publicly
displayed more than one year before filing date
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foreign patent protection – absolute novelty requirement
Useful – must identify intended use
Non-obvious – mythical “person of ordinary skill in the
art” would not have developed invention based on what
was known in the art
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Products, publications including other patents
Types of Patents
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Utility
 Product, Process, Machine, Composition,
Improvement
 Term: 20 years from filing date
Design
 New, Original, Ornamental Design for article of
manufacture
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Protects only appearance, not concept
 Term: 14 years from issue date
Plant
 New variety that is distinct and asexually reproduced
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Sneaker design, handles
What is Not an Invention and
Cannot Be Patented
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Law of Nature
 Gravity
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Physical Phenomenon
 Lightning
Exploitation of Patent Rights
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Exchange with government
 Patent rights
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Exclude others from making, using and selling
No right to make, use or sell subject matter of the patent
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Patent Clearance
Territorially limited
Value of patent rights
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Protect against imitations
Block competitor’s progress
Defensive/Build a Portfolio
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Horse-trading with competitors who have their own patents
Add to Intangible Value of Company
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More Attractive for raising funding
Sale or License
The Patent Application
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Tells a “story”
Background of the Invention –
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“In the beginning …”
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Summary of the Invention
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Tells of existing problems, disadvantages
Tells what is desired or needed
Eureka!!! –problem solved; provides broad description
Detailed Description of the Invention
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Examples of how to make, use
Often includes and references drawings
Describes advantages
The Patent Application (cont’d)
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CLAIMS
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Fence around your property (invention)
 Biggest - most desirable, but easier to attack
 If Technology is New – easy to obtain big
fence
 Smaller - gives less protection, harder to attack
 Crowded Technology Field – smaller fence
likely
MAINTAINING
PROPRIETARY
INFORMATION
AS A TRADE SECRET
What Is A Trade Secret?
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Formula, pattern, device or compilation of
information
Used in company's business
Use provides a competitive advantage
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Not known by competitors
Not used by competitors
Examples Of Trade Secrets
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Methods
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Techniques for testing a formula
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Formulas
 Proper order of mixing of various
ingredients
Examples Of Trade Secrets
(cont’d)
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Apparatuses
 Identity of, and specifications for, components
 Means of production
 Process of manufacturing
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Specific equipment used
Specific arrangement relative to other equipment
Specific settings on equipment
Equipment modification
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Minor changes result in
 A better product
 Cheaper, more efficient manufacturing process
Examples Of Trade Secrets
(cont’d)
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Marketing/Sales Information
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Software used to predict and fill customer orders
Product roll-out schedules
Expansion or contraction plans
New marketing plans
Specialized customer lists
Supplier/vendor lists
How To Protect Trade Secrets?
General “DOs”
First , properly identify the trade secret
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Plant tours - restrict or avoid
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if required, shield unique equipment from view
Non-disclosure agreements - vendors, consultants must sign
Markings
 On all plans and specifications that identify the information as
confidential and proprietary
Speeches or published articles
 Obtain prior clearance from counsel
Confidential documents access
 Require sign-in and sign-out procedures
Confidential information on computers -use passwords to protect
Print confidential information on distinctive paper
How To Protect Trade Secrets?
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GENERALLY – question whether an activity,
e.g., LICENSE NEGOTIATION, JOINT
VENTURE, ENGINEERING PURCHASE
ORDER, DISTRIBUTION AGREEMENT,
ETC., relates to the disclosure or receipt of
trade secrets
Then take actions discussed above
How To Protect Trade Secrets?
GENERAL “DON’Ts”
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DO NOT allow audio or video recording equipment on premises
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DO NOT leave a vendor or customer unattended
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DO NOT leave a confidential document unattended (desk/copier)
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DO NOT mark everything as “confidential”
Overuse leads to dilution of protection
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DO NOT enter into secrecy agreement with others
(customers/suppliers) without approval
First determine if there is a need to know such confidential
information of a third party
How To Protect Trade Secrets?
“DO’s” as to EMPLOYEES
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Sign confidentiality agreement acknowledging duty to uphold trade
secrets
Trade secrets only disclosed on a "need to know" basis - disclosure
only to a minimum number of people
When trade secrets are disclosed, remind employee that information is
confidential
Employees must place "confidential" legends when creating
documents disclosing confidential information
If confidential information is highly sensitive, restrictive covenants
should be used
Remind employees of continuing obligation of upholding trade
secrets during course of employment and upon departure
Safeguard third party confidential information in the same way as you
treat your own trade secrets
How Trade Secret Status Is Lost
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Product with “secret” components disclosed
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Public display (trade show, non-restricted customer
sales pitch)
Advertising, marketing
Sale of product including trade secret ingredients,
materials or processes for manufacture
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“Secret” becomes or can become known by simple
inspection of product
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Reverse engineering
Recognize
Invention
Patent
Begin Drafting
Patent
Application
File Patent
Application
Patent Issues,
Enforcement
Possible
Determine Type
of Protection
Desired
Trade Secret
Keep It Secret
Ensure that Protection for Innovation is in
Place before Taking Business Actions
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Due Diligence - Investigate all IP (Patent, Trademark,
Trade Secret)
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Before entering any arrangement : License, Business
Acquisition, joint venture
Before new product release–
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Do not want to infringe 3rd party patent rights
Can patent protection be obtained?
Resources
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Chisum on Patents
USPTO website http://www.uspto.gov
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MPEP – Manual of Patent Examining Procedure
Searching – Published Applications and Patents
Status –
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Ownership
Patent Application Prosecution