Transcript What is intellectual property?

Intellectual Property Basics
11-4-2005
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What is intellectual property?
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Intellectual properties are intangible products
of the mind. These include:
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inventions (devices, compositions, plants, designs)
publications
videotapes
computer programs
works of art.
They must be reduced to a tangible form in order to
be protected.
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What is intellectual property?
Intellectual property (IP) refers to works of the
mind such as ideas, art, music. It can also be
products such as a chemical formula or computer
software.
Intangible creative work—not necessarily the
physical form on which it is stored or delivered.
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What is intellectual property?
IP is given legal protection in the form of
copyright, patent, trademark, and trade
secret laws.
This is becoming one of the hottest issues
in international business
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Why do we want to protect and
license IP?
IP is a marketable commodity that can be
used to leverage additional research
dollars and income to support the
inventors and help in the formation of
new companies and jobs.
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Why do we want to protect and
license IP?
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It is very difficult to license technology
that is not protected.
Makes the technology available to the
public and provides opportunities for
further research and development.
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Protecting IP
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Paris Convention of the Protection of
Industrial Property, Madrid Agreement,
and others have tried to make
protection easier for international
registration
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Protecting IP
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The main international trademark treaty is the Paris
Convention.
It is an agreement between member nations (of
which there are over 110) to allow foreign nationals
of member countries the same treatment in each of
the member countries as that country makes
available to its own citizens.
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Protecting IP
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Under the Paris Convention, six months after
a trademark application is filed in the US, the
applicant can file an application in one of the
foreign member nations and receive the filing
date of the US application. If an application is
filed more than six months after the US filing
date then the claim to priority is lost.
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Innovation
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Since 1998, over 2200 new products have
been introduced in the market place.
In 2003 in the U.S. and Canada
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Over 15,500 Invention Disclosures, 4500 new
Licenses
7921 patent applications were filed; 3933 new
patents issued
374 new companies formed; 2279 start-ups still
operating.
License revenue was over $1,310,000,000
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Problems in intellectual property
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In the U.S., ownership is established by
prior use due to our common law
system
Many code-law countries use a
registration system, where the first
company to register is the one who has
rights
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Protection of IP
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Companies spend millions of dollars
establishing brand names or trademarks
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To symbolize quality and design
To entice customers
Millions are spent on research
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To develop products, processes, designs,
and formulas
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Protection of IP
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Lost sales from the unauthorized use of
U.S. patents, trademarks, and
copyrights
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Amount to more than $100 billion annually
The piracy industry has grown so
sophisticated
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Many counterfeit goods are
indistinguishable from original
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Protection of IP
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Piracy actually can serve come
companies
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HBO and Game of Thrones
Counterfeit pharmaceuticals
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2% of the $327 billion worth of drugs sold
each year
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Figure 2.2: Regional Piracy Rates for Software
Eastern Europe
Asia Pacific
Latin America
Middle East and Africa
Western Europe
North America
0
20
40
60
80
Percentage of Software that is Pirated
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International licensing
agreements
Contracts by which the holder of intellectual
property will grant certain rights in that
property to a foreign firm to use for a period of
time under certain conditions in return for a
licensing fee
Technology transfer: exchange of technology
and know how between firms in different
countries through licensing
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How do we protect intellectual property?
Copyrights
 Trademark
 Trade Secret
 Plant Variety Certification
 Patents
A major bone of contention especially in
info-based economies.
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Bayh-Dole Act (1980)
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The Bayh-Dole Act was intended to promote
investment by the private sector in the
commercialization of discoveries made using
research funds provided by the federal
government.
Prior to the Act, the government retained title
to these inventions, and because it was
cumbersome to get a license, few
technologies were licensed and
commercialized.
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Copyrights
Copyrights are granted for a limited, but long, time.
Fair-Use Doctrine
 Permission to use the work is not required.
 Allows uses of copyrighted material that
contribute to the creation of new work and do
not significantly affect sales of the material,
thus depriving copyright holders of their
income.
 Allows some research and educational uses as
well as news reporting and critiquing.
 Guidelines for determining Fair Use are found
in law.
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Copyrights
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Legal rights to a work by authors,
composers, playwrights, artists or
publishers.
Lasts the life of the author plus 70
years
Or lasts 95 years from publication or
120 years from creation, if it was a
work for hire
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Copyrights
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Documents, art, music, motion pictures,
software, etc. are automatically copyrighted
when the document is created.
Can register the copyright with the
government for $30.00. Must be registered
before filing any infringement lawsuits.®
US Copyright Website
http://www.loc.gov/copyright/
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Plant Variety Certification
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Used for plants that reproduce sexually
making it illegal to sell and propagate
them commercially.
Certification protection is for 5 years
and costs ~$2500.
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Trademarks
Exclusive rights to a new product or
process for an inventor assuring them of
the legal right to produce, use and sell
their invention for a period of years.
Used to protect a symbol or phrase that’s
identified with a product (e.g. Coca-Cola,
Gatorade, Xerox). ™
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Trademarks
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Registration costs $325 but is not required
except for federal court proceedings and for
foreign protection; last for 10 years and is
renewable indefinitely®.
Becomes effective when begin selling
commercially.
http://www.uspto.gov/main/trademarks.htm
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Trade Secrets
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Specialized knowledge that can include data,
formulas, compilations, programs, etc. which
are maintained as a secret
Can be used where patents may not have a
long enough term or be possible.
Trade secrets are kept under lock and key,
with restricted access and publications.
Example - Coca-cola formula
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Patents
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Exclusive rights to a new product or
process which assures an inventor the
legal right to produce, use and sell their
invention for a period of years
Used for inventions, processes,
machines, improvements, and
composition of matter.
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Patents
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Not possible to patent scientific
principles, methods of doing business or
most naturally occurring articles.
Software algorithms can often be
patented, but typically software is
protected under copyright.
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Three Patent Requirements
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Novel - new to the patent literature, not
published or described in an enabling
manner. Time limit of one year from
public disclosure to file a U.S. patent.
Foreign patents must be filed BEFORE
any public disclosure.
Utility - must be useful
Non-obvious to one skilled in the art.
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Types of Patents
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Utility – how something works or is used;
multiple claims
Design – how something looks; only one
claim
Provisional – establishes a filing date and
provide 1 year to file a full patent application
with claims
Plant – for asexually reproducing a new plant;
one claim
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Differences between International
& US Patents
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US – First to Invent
Most International – First to File
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Very important to file protection before
publicly disclosing to preserve foreign
patent rights
Foreign protection very important to most
companies
Provisional Patents have great use here
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What does Patent Protection
Provide?
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The right to EXCLUDE others from making,
using, selling of offering to sell the claimed
invention during the patent term.
Must be marked as ‘patented’, or can’t
recover from anyone who infringes on it.
Patent term typically = 20 years from date of
filing
Design patent = 14 years
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Why patents are important to start-up
businesses
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Patents are key to solidifying product
protection
Patent portfolio a significant asset when
company needs funding (from
investors, venture capitol, etc.)
Patent filing/protection needs to be part
of initial company formation/planning
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Industry Patent Policies
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Who owns IP – inventors or employer?
Employee Agreement as condition of
employment
Does the inventor get royalties?
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Employment Agreements
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Typically are a condition at hiring & include
salary, benefit details.
Often include trade secret & confidentiality
language for a term that exceeds termination
from the company.
Includes IP ownership information.
May include non-compete language to
prevent you from working for a competitor
for a period of time.
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Why Patents are Important to
Start-up Businesses
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Patents are key to solidifying product
protection
Patent portfolio a significant asset when
company needs funding (from
investors, venture capitol, etc.)
Patent filing/protection needs to be part
of initial company formation/planning
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Typical Clauses in Company
Agreement
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You cannot disclose or profit (monetarily or
otherwise) from company confidential
information, trade secrets or customer lists.
[disclosing trade secrets is a federal offense]
Anything you invent, discover or improve
belongs to the company if it's related to the
existing or planned scope of the company's
business in any way.
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Determining Inventorship
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Must include all who contributed
intellectually and creatively to the
invention.
Best determined by the IP attorney.
Need to have contributed to at least
one of the claims.
If needed, royalty split can reflect the
relative efforts.
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What you should have for an
invention, besides a great idea
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Bound lab notebooks which
document the conception of the
idea and the research
Periodic witness and dated
signature by someone able to
understand the invention, but
who will not profit from it
Completed ID form noting any
sponsors, publications and all
inventors.
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