Transcript Slide 1

IP Essentials
Stephanie Adamany
Associate General Counsel
WARF
October 15, 2013
What we will cover today
Intellectual Property
• What is it?
• How do you get it?
• How do you protect it?
• How does it add value?
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What makes your company?
People
Ideas &
vision
Products
&
Services
IP Assets
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IP Assets
• Your IP could be:
– Created by your team
– Created with others
– Created by others/Licensed from
others
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Types of Intellectual Property
• Types of Intellectual Property, with varying protection,
may include:
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Patents
Copyrights
Trademarks
Trade secrets and/or know-how
Designs
Materials
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Patents – Overview
• A patent is a set of exclusive rights granted by a sovereign state
to an inventor or their assignee for a limited period of time, in
exchange for the public disclosure of the invention.
• To pursue a patent:
– file a patent application
– go through the patent prosecution process
• Potential for high value, but also for high cost
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Patent Rights
• U.S. Patents give you the right to exclude others in
the U.S. from:
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Making
Selling
Offering to sell
Using
• Freedom to Operate
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Patent Anatomy
• A patent is made up of several sections, notably the
following:
– The “specification”
– The figures
– The claims
• The claims define the metes and
bounds of the protected invention
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Patentability
• Patentable inventions must be:
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Novel
Non-obvious
Useful
Enabled or described adequately
• Can include:
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Processes/Methods
Machines
Articles of manufacture
Composition of matter
Improvements to any of the above
Plants (plant patents)
Designs (design patents)
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Should you invest in a patent?
• Consider:
– Upfront costs
– The fact that your invention will become public (therefore not a
trade secret)
– The likelihood you will get the claims you desire
– Continuing costs: patent maintenance, potential enforcement
– More costs: foreign filings
– Value: the right to exclude, the right to license or cross-license,
increasing your asset list, investor appeal
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Patent filing and life cycle
• 1st Step: File an application with the U.S.P.T.O. (Patent Pending)
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Provisional Patent Application (1 year to convert)
Non-provisional Patent Applications
Design Patent Application
Plant Patent Application
• 2nd Step: “Prosecution” (3-5 years, average)
• 3rd Step: Issuance
– Claims issue that define the patent rights to the invention
– Term is 20 years from U.S. filing date
• 4th Step: Maintenance
– Fees
– Marking
– Challenges & Enforcement (potentially)
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Housekeeping – Patents
• Ownership
– Who are the inventors?
• Are they obligated to disclose and assign? By what contract?
• Each owner has the right to make, use, sell and license under the U.S.
law
• Inadvertent disclosure
– File early (first-to-file)
– Preservation of rights and the public domain
• Blogs
• Conversations
• Offers for sale
– Confidentiality agreements
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Costs – examples
• AIPLA Economic Survey 2013, for Chicago Area:
Type of Application
(U.S.)
Application
Preparation
Amendment/
Argument
(no appeal)
Post Issuance
Total
(appeal can add 6-16K)
Provisional App (prep &
filing)
Mean $4,799
Original Utility App,
minimal complexity
Mean $7,399
Mean $1,928
$877
$10,204
Original Utility App,
Complex bio or chem
Mean $13,575
Mean $4,257
$877
$17,832
Original Utility App,
Complex electrical or
computer
Mean $13,205
Mean $3,836
$877
$17,918
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Cost of Enforcing a Patent
• AIPLA Report of the Economic Survey (2013):
Patent Infringement - Enforcement
Dollars at risk
Cost through Trial
Less than 1 M
909,000
1-10 M
1,882,000
10-25M
2,247,000
> 25 M
5,025,000
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Trademarks
• The term “trademark” refers to any of the four types of
“marks” that are able to be registered with the U.S.P.T.O.
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Trademarks identify the source of goods
Service marks identify the source of services
Can be words, designs, colors, even sounds (NBC’s® 3 tone chime)
Have elected relevant classes (categories) from the U.S.P.T.O. list (if
registered)
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Thinking about trademarks
• What might you trademark as a business?
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Your company name
Slogan
Product names
Design/logo
• ® versus ™
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Choosing a trademark – searching
• It is not a bad idea to do a preliminary search on the U.S.P.T.O.
website, www.USPTO.gov
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Choosing a trademark – searching
• Here’s a snippet from the search page:
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Choosing a trademark – searching
• From the list of items that came up, I clicked on Coke Zero
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Federal Trademark Registration
• Why?
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Federal Registration provides certain advantages:
Notice
Evidence of ownership
Potential to enforce in federal court
Potential to prevent importation of infringing foreign goods
• How?
– Hire an attorney
– File it yourself online (could run into problems and end up hiring an
attorney anyway)
• What?
– Completed application form (identify classes)
– Fee
– Mark, drawn out, and examples of use in commerce if you have them
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Trademarks – cost
• The cost of applying to register a trademark is $325 for
a single class
• Maintenance costs:
– In about 5 years, the owner must submit an affidavit of
continuing use and pay a fee of $100 per class
– On the 10th anniversary, $400 plus another $100 continuing
use affidavit
– And so on… since the life of a registered trademark is not
limited so long as the owner properly maintains the mark
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Copyrights: What is eligible for copyright protection?
A copyright can cover literary, dramatic, musical and artistic
works, and software, and can protect that expression against
copying.
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Copyright Protection
• Copyright protection gives the owner the exclusive right to:
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Reproduce the work
Prepare derivative works
Distribute copies
Perform the work publically
Display the work publically
Permit others to do any of the above (license)
• Exceptions:
– The most major and notable exception or limitation is the
doctrine of “fair use”
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Copyright protection and registration
• Copyright protection exists from the time the work is
created, but federal registration provides advantages.
• Registering a copyright is relatively straightforward.
• To preserve rights by providing notification, mark the
work by:
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Adding the copyright symbol
The year of publication
The name of the owner of the copyright or its abbreviation
For example: © 2013 WARF All rights reserved.
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Housekeeping – Copyrights
• Ownership
– Who are the authors?
– Are they obligated to disclose and give up their ownership
rights?
• Work for hire?
– Scope of employment or specially ordered/commissioned?
• Contract?
• Is it clear?
• What about follow-on authors who may work on the project
subsequently?
• Registration?
– $35 for electronic registration
– See www.copyright.gov
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Trade Secrets
• A trade secret is:
– a formula, practice, process, design, instrument, pattern, or
compilation of information
– not generally known or reasonably ascertainable
– by which a business can obtain an economic advantage
over competitors or customers
– for which reasonable efforts are made to maintain its
secrecy
• Uniform Trade Secrets Act addresses misappropriation
of trade secrets, relief available and damages.
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Housekeeping – confidentiality
• Businesses with valuable trade secrets take actions to
maintain them.
– No registration process
– Contracts
• Examples: employment, confidentiality agreements, non-compete
– Clear processes and procedures for managing
– Potential for irreparable harm if not maintained in confidence
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The value of IP
• I’ve got IP! Now what?
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What can your IP do?
• It is a company asset
• It can protect your business from competitors
• You can sell it or license it to generate revenue
– Field limited licensing is an option
– Even if you sell it, you can negotiate a retained license
• You can use it to get rights you need by cross-licensing
in some cases
• It is considered in the valuation of the company
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Due diligence
• Keep good records
– Consider maintaining an updated list of all of the company’s IP
• Make sure your company has proper paperwork in place
– Assignment
• Pre-company founders’ inventions or other IP
• Employee agreements with follow-on express assignments (all IP)
• Work for hire (all IP)
– Confidentiality obligations (especially patents, trade secrets)
– Internal Disclosure processes (if you aren’t aware of it, you can’t decide
whether to protect it)
• Have processes and procedures in place for maintaining IP
• Know the relevant IP landscape defensively
• Know the business IP landscape offensively
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The end
Please stay with us for the panel discussion!
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