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    Best Practices for Employers in Protecting Intellectual Property Best Practices for Employers in Protecting Intellectual Property Presentation Transcript

    • IDAHO EMPLOYMENT LAW SEMINAR Best Practices for Employers in Protecting Intellectual Property John N. Zarian Peter M. Midgley October 17, 2013 Boise, Idaho parsonsbehle.com
    • Overview  The protection of intellectual property is of critical importance to companies in the modern economy.  Overview of intellectual property issues, including patents, trademarks, trade dress, domain names, copyrights and trade secrets.  Best practices for employers to avoid common pitfalls and secure valuable intellectual property. 2
    • 3
    • “Call the patent office. Copyright the name „Green Goblin.‟ I want a quarter every time somebody says it.” 4
    • What Is Intellectual Property?  “Intellectual property” refers to creations of the mind.  Intellectual property (IP) is an umbrella term for various legal rights which attach to certain types of information, ideas, or other intangibles in their expressed form.  Two basic categories of intellectual property: – Copyright, including literary and artistic works such as novels, poems and plays, films, musical works, drawings, paintings, photographs, sculptures, and architectural designs. – Industrial property, which includes inventions (patents), trademarks, industrial designs, and trade secrets. 5
    • Importance of Intellectual Property  Today, intellectual property represents more than 85% of wealth in the largest U.S. companies.  In 1978, roughly 80% of U.S. corporate assets lay with tangible goods, with the remaining 20% resting in intangible goods such as intellectual property.  By 1997, this ratio had shifted dramatically -- tangible assets represented only 27% and intangible assets accounted for 73%.  In the modern economy, intellectual property is very often the key to success (or survival) of a business. 6
    • IP & Intangible Assests The Dominance of Intellectual Property, 2011  In 2005, the value of U.S. intellectual capital was estimated to be $5.0 to $5.5 trillion. By 2011, that value increased to between $8.1 and $9.2 trillion, and the total value of U.S. intangible assets – intellectual capital plus economic competencies – was $14.5 trillion.  Intellectual capital now pervades most industries, from the most advanced goods and services to traditional manufacturing.  Economists estimate that innovation in its various forms accounts for 30% to 40% of the gains in growth and productivity by the American economy during the 20th century, more than any other factor.  The successful application of new ideas in innovations does not occur by chance; rather, it requires identifiable conditions. Source: Hassett & Shapiro, “The Value of Intellectual Capital And Intangible Assets in the American Economy” (www.sonecon.com) 7
    • One Lawyer’s Epiphany (early 21st Century)  Started with case involving securities, contractual issues, corporate control  Ended with case involving patents, trade secrets and related IP claims 8
    • Why Pursue Intellectual Property Protection?        Exclude competitors Obtain licensing revenue Attract investors Form strategic relationships Enhance marketing efforts Increase company valuation Add impressive wall hanging 9
    • Basic Policies of Intellectual Property Law        Encourage/reward creative activity Promote investment in innovation Discourage/punish unfair conduct Protect private “property” Avoid undue restraints on broad adoption Avoid monopolistic conduct Avoid undue impact on free speech 10
    • Forms Of Intellectual Property  Trade Secrets – Keeping information confidential.  Patents – Excluding others from using your inventions.  Trademarks – Developing recognition with consumers.  Copyrights – Protecting creative content.  Right of Publicity – Protecting one‟s name, image and likeness. 11
    • Forms Of Intellectual Property 12
    • What is a Trade Secret?  Information not generally known or readily ascertainable, conferring economic benefit on holder, and secrecy protected by reasonable efforts.  Can include customer lists, proprietary recipes and formulas, business plans, R&D information. 13
    • Subject Matter of Trade Secrets  Trade secrets can include such things as customer lists, food recipes, proprietary formulas, strategic business plans, genetic information, marketing strategies, R&D information, software codes, manufacturing processes, plans for drilling equipment, numeric equations, statistical analyses, price lists, customer information, and product design information. 14
    • Compare: Confidential Information  Information a company creates or acquires, held in confidence, the improper disclosure of which would be harmful.  Best Practices …  Potential Agreements: – Non-disclosure? – Non-competition? 15
    • Maintaining the Secrecy of a Trade Secret 16
    • Trade Secrets: Benefits  Potentially perpetual duration  Competitors have no access  May be fewer upfront costs  Since competitors have no access to technology, there may be reduced cost of enforcement 17
    • Trade Secrets: Risks  Information becomes common knowledge? – Reverse engineering – Independent invention – Information becomes public  If patented by another person, could potentially be excluded  Loss of patent rights  Diminished licensing opportunities 18
    • TRADE SECRETS – BEST PRACTICES         Develop an overall IPR identification/protection program Conduct an audit of IP rights (including trade secrets) Consider relationship between trade secrets & patents Limit access to trade secrets & confidential information Document the actual/potential value of trade secrets Review employee policies, procedures and training Review hiring/exit practices for employees/contractors Review/adopt appropriate agreements (including confidentiality, non-disclosure and non-use agreements) 19
    • What is a Patent?  Only the inventor may apply.  Invention must be new, useful, non-obvious.  A patent gives a person the right to exclude others from making, using, selling, offering to sell, or importing the claimed invention. 20
    • Patent Process Patent Preparation Invention Date Filing Date Issue Date Expiration Date 21
    • Patent Process Prosecution (“Patent Pending”) Invention Date Filing Date Issue Date Expiration Date 22
    • Patent Process Patent Term (Litigation & Licensing) Invention Date Filing Date Issue Date Expiration Date 23
    • What Is Invention? CONCEPTION + REDUCTION TO PRACTICE 24
    • Patentability Criteria  Eligible Subject Matter  Useful  Novel  Nonobvious 25
    • Eligible Subject Matter    26
    • Laws of Nature E=mc2 27
    • Laws of Nature 28
    • AMP v. Myriad Holding  Held: rev‟d in part, aff‟d in part: – “[W]e hold that a naturally occurring DNA segment is a product of nature and not patent eligible merely because it has been isolated . . .” 133 S.Ct. 2107, 2111. Further, “[w]e merely hold that genes and the information they encode are not patent eligible under § 101 simply because they have been isolated from the surrounding genetic material.” Id. at 2120. – “[B]ut that cDNA is patent eligible because it is not naturally occurring. We, therefore, affirm in part and reverse in part the decision of the United States Court of Appeals for the Federal Circuit.” Id.
    • Abstract Ideas 30
    • Useful 31
    • Novel & Nonobvious 32
    • Novel & Nonobvious 33
    • Novel & Nonobvious  Edison – Jan. 27, 1880 1. An electric lamp for giving light by incandescence, consisting of a filament of carbon of high resistance, made as described, and secured to metallic wires as set forth. 34
    • Novel & Nonobvious          Lee – Oct. 1, 2013 1. A bulbtype AC power LED lamp comprising: an AC power LED board (20) on which an AC power LED (21) is mounted; a diffuser (20a) fixed to the AC power LED board (20) to surround the AC power LED (21), the diffuser (20a) diffusing light of the AC power LED (21); a board base (30) in which the AC power LED board (20) is insertedly attached to the inside of a board fixing groove (31), side surfaces and a bottom surface of the AC power LED board (20) are in contact with an inner surface of the board fixing groove (31), a bulb fixing groove (31′) extends along a circumference of the board fixing groove (31), a first power connection hole (32) passes through the board base (30); a heat sink (33) disposed along an entire outer surface of the board base (30), wherein the heat sink (33) comes in contact with an outer periphery of the board base (30); an insulation base (40) in which a second power connection hole (41) passing through the inside of the insulation base (40) and communicating with the first power connection hole (32) is defined, the insulation base (40) being connected to a lower end of the board base (30); a socket (50) connected to a lower end of the insulation base (40), the socket (50) being inserted into the first power connection hole (32) and the second power connection hole (42) to supply an AC power to the AC power LED (21) through a power connection unit electrically connected to the AC power LED board (20); and a bulb (60) inserted into the bulb fixing groove (31′) to cover the AC power LED board (20), wherein two or more AC power LEDs (21) are mounted on the AC power LED board (20), and all of the two or more AC power LEDs (21) are surrounded by a single diffuser (20b) to diffuse light, the single diffuser (20b) having a tube shape with a threaded outer periphery surface. 35
    • Novel & Nonobvious  Edison – Jan. 27, 1880 1. An electric lamp for giving light by incandescence, consisting of a filament of carbon of high resistance, made as described, and secured to metallic wires as set forth.          Lee – Oct. 1, 2013 1. A bulbtype AC power LED lamp comprising: an AC power LED board (20) on which an AC power LED (21) is mounted; a diffuser (20a) fixed to the AC power LED board (20) to surround the AC power LED (21), the diffuser (20a) diffusing light of the AC power LED (21); a board base (30) in which the AC power LED board (20) is insertedly attached to the inside of a board fixing groove (31), side surfaces and a bottom surface of the AC power LED board (20) are in contact with an inner surface of the board fixing groove (31), a bulb fixing groove (31′) extends along a circumference of the board fixing groove (31), a first power connection hole (32) passes through the board base (30); a heat sink (33) disposed along an entire outer surface of the board base (30), wherein the heat sink (33) comes in contact with an outer periphery of the board base (30); an insulation base (40) in which a second power connection hole (41) passing through the inside of the insulation base (40) and communicating with the first power connection hole (32) is defined, the insulation base (40) being connected to a lower end of the board base (30); a socket (50) connected to a lower end of the insulation base (40), the socket (50) being inserted into the first power connection hole (32) and the second power connection hole (42) to supply an AC power to the AC power LED (21) through a power connection unit electrically connected to the AC power LED board (20); and a bulb (60) inserted into the bulb fixing groove (31′) to cover the AC power LED board (20), wherein two or more AC power LEDs (21) are mounted on the AC power LED board (20), and all of the two or more AC power LEDs (21) are surrounded by a single diffuser (20b) to diffuse light, the single diffuser (20b) having a tube shape with a threaded outer periphery surface. 36
    • Patent Litigation & Licensing  Infringement  Validity  Enforceability  Inventors And Ownership  Remedies  Cost Expectations 37
    • Remedies  Damages – Lost Profits – Reasonable Royalty  Injunction – Preliminary Injunction – Permanent Injunction 38
    • Remedies  Enhanced Damages & Attorney Fees – Awarded in “exceptional” cases – Inequitable conduct by the patentee – Willful infringement 39
    • CLAIM SCOPE  Example: – 1. A product comprising: • Element A 1: A,B,C 2: A,B,C,D • Element B • Element C – 2. The product of claim 1, further comprising: • Element D 3: A,B,C,E – 3. The product of claim 1, further comprising: • Element E 40
    • CLAIM SCOPE B C A 1: A,B,C 2: A,B,C,D D 3: A,B,C,E E 41
    • What is “prior art”?  Information publicly available before the invention date – Patents or other publications by third parties – Competitors‟ products  Information publicly available before the “critical” date – Includes information disseminated by the inventor 42
    • Novelty  Novelty - must not be publicly known – 1 year “grace period” in the U.S. to file application  Use caution when making any nonconfidential disclosure of technology – Including any experimental development, prototyping, and testing 43
    • Loss of Right: Lessons Learned  Before a patent is filed, keep the invention secret – – – – Don‟t disclose invention to third parties Don‟t publish a paper/website Don‟t allow third parties to use a prototype Don‟t display a prototype at a trade show or any other place the public might have access  If the invention must be disclosed, use a nondisclosure agreement  Maintain proper lab notebooks  File a patent early 44
    • PATENTS – BEST PRACTICES        File early, file often! Obtain invention assignment agreements Incentivize prompt invention disclosures Create a patent review committee Make strategic patent filing decisions Implement a patent monetization strategy Evaluate third party patent claims 45
    • What is a Trademark?  Any word, name, symbol, or device, or any combination thereof, used by a person to identify and distinguish his or her goods or services from those of others 46
    • Trademarks: Sounds 47
    • Trademarks: Trade Dress  Goods/Services Entertainment services, namely, the presentation and promotion of sporting events and sports exhibitions rendered in a stadium, and through the media of radio and television broadcasts, and the global communications network. 48
    • Trademarks: Classification 49
    • Trademarks: Likelihood of Confusion 50
    • Trademarks: Likelihood of Confusion 51
    • Criteria for Choosing a Trademark  Distinctiveness – Arbitrary or fanciful (Apple, Xerox, Kodak) – Suggestive terms (Roach Motel) – Descriptive Terms (Pay-n-Park) • if public understands term to identify source of product, not product itself – Generic Terms (Chocolate, Thermos) 52
    • Important Trademark Dates Date of First Use Filing Date Expiration Date NONE! 53
    • Benefits of Federal Registration  Expands rights throughout United States  Protects against the importation of infringing goods  Provides for stronger marks  Involves minimal cost  ® 54
    • TRADEMARKS – BEST PRACTICES         Select strong marks Search and clear marks before using them Use marks as adjectives Use appropriate mark designations Use marks consistently Designate a trademark manager Register marks Police and protect marks 55
    • What is a Copyright?  Protects the rights of a creator of an original work that has been fixed in a tangible form of expression  Gives owner exclusive rights (reproduce, prepare derivative works, distribute copies, perform/display) 56
    • Subject Matter of Copyright          Literary works, including novels and poetry Computer programs Musical works Dramatic works Pictorial, graphic and sculptural works Motion pictures Audiovisual works Sound recordings Architectural works 17 U.S.C. 101, et seq. 57
    • Copyrights: Literary, Artistic Works 58
    • Copyrights: Audio/Visual Works 59
    • Copyrights: Software 60
    • Copyrights: Fair Use  Section 107 contains a list of the various purposes for which the reproduction of a particular work may be considered fair, such as criticism, comment, news reporting, teaching, scholarship, and research. Section 107 also sets out four factors to be considered in determining whether or not a particular use is fair. Source: www.ala.org 61
    • Important Copyright Dates “Fixation” Date Registration Date Expiration Date Life of the author, plus 70 years 62
    • Copyright: Some Key Issues        No Titles, Slogans, Ideas or Facts Automatic vesting Ownership of the Copyright Preemption Registration / remedies Fair use doctrine Works for hire 63
    • Who Owns The Copyright? CONCEPTION + REDUCTION TO PRACTICE (Fixation to a Tangible Medium) 64
    • COPYRIGHTS – BEST PRACTICES      Protect your content through agreements Use work for hire / assignment agreements File copyright registrations for important works Use copyright notices on content/materials Develop guidelines re: public domain / “fair use” – http://www.centerforsocialmedia.org/fair-use/best-practices – http://copyright.gmu.edu/?page_id=1191  Obtain permission / purchase copies as needed  Avoid misconceptions (e.g., online content) 65
    • Domain Names  In 2010, the number of active domain names (or domains) reached 196 million.  The right to use a domain name is delegated by domain name registrars, which are accredited by the Internet Corporation for Assigned Names and Numbers (ICANN), the organization charged with overseeing the name and number systems of the Internet.  Domain names are valuable corporate assets. 66
    • Domains Are Subject to Trademark and Anticybersquatting Laws  Domains are generally subject to trademark law.  Domains may infringe trademarks if they are likely to cause confusion, mistake or deception.  A domain may also give rise to liability if it “dilutes” a famous mark.  Under the Anticybersquatting Consumer Protection Act, owner of a trademark may bring an action against anyone who, with “a bad-faith intent to profit from” the trademark, “registers, traffics in, or uses a domain nam” that is “identical or confusingly similar” to or dilutive of, the trademark. 67
    • Domain Names: Administrative Remedies  The Uniform Domain Name Dispute Resolution Policy (UDRP) provide trademark owners with administrative remedies for resolving domain name disputes in cases of abusive domain name registrations, i.e., cybersquatting. – Trademark owner files complaint with provider. – Domain holder files response within twenty (20) days. – Provider appoints a panel of one to three members (5 days). – Panel issues a decision within fourteen (14) days. – Registrar implements decision ten (10) days later. 68
    • Web Sites  The creation and use of a web site raises many legal issues, including: – domain name concerns – trademark concerns – copyright concerns – defamation – linking and framing 69
    • Web Sites: Defamation  Defamation refers to a false statement made about a person or entity that is damaging to their reputation.  Published to a third party, and person publishing the statement must have known or should have known the statement was false.  Subject to a variety of defenses, such as the First Amendment and defense that statement was true. 70
    • Web Sites: Linking and Framing  Links between pages can raise legal issues – “Derivative work” may be created by linking-in images found on other sites – Passing Off another's work as one;s own – Defamation through a defamatory link – Trademark Infringement by using a mark so as to create a likelihood of confusion, mistake and/or deception with the consuming public – Problems with frames if used to show pages from two web sites at the same time (See http://www.bitlaw.com/internet/webpage.html#linking) 71
    • Right of Publicity  “Right of publicity” is the right to control and profit from the commercial use of one‟s name, image and likeness 72
    • Compare: “Privacy Rights”  Compare “privacy rights” which include the right to privacy of one‟s person, behavior, communications, and personal data 73
    • DOMAINS, WEB SITES & RIGHT OF PUBLICITY – BEST PRACTICES         Research domains before registering / using Register multiple domain names / variants Consider trademark registration of domain names Adopt a program for managing & policing Be careful in using meta tags that may infringe Regularly review all content/links/images Assume others‟ work is protected Use disclaimers on your web sites 74
    • “Call the patent office. Copyright the name „Green Goblin.‟ I want a quarter every time somebody says it.” 75
    • BEST PRACTICES -- Handouts to be supplied at seminar 76
    • Thank You  John N. Zarian direct: (208) 562.4902 email: jzarian@parsonsbehle.com  Peter M. Midgley direct: (208) 562.4904 email: pmidgley@parsonsbehle.com 77