Intellectual Capital. Does IP really matter? Copyright. Trademarks. Trade Secrets. Types of Patents. Domestic vs. International. Patent Portfolio Strategy. IP in the 21st Century. Patent Quality.

1. June 29, 20181
Intellectual Property Business Basics
November 28, 2009
Intellectual Capital
Does IP really matter?
Copyright
Trademarks
Trade Secrets
Types of Patents
Domestic vs. International
Patent Portfolio Strategy
IP in the 21st Century
Patent Quality

2. Intellectual Property
Business Basics
November 28, 2009
© 2009 Patterson, Thuente, Skaar & Christensen, P.A., some rights reserved - www.ptslaw.com
RIGHT TO USE: This presentation may be freely distributed, used and/or modified, so long as appropriate attribution is made that
includes retention of the PTSC logo in connection with any materials from this presentation.
DISCLAIMER: This presentation and any information contained herein is intended for informational purposes only and should not be
construed as legal advice. Seek competent legal counsel for advice on any legal matter.

3. Intellectual Capital1
June 29, 20183
1. 1995 Intellectual Capital Management Group
Value Creation Value Extraction
Human
Capital
Intellectual
Assets
Intellectual
Property

4. Does IP Really Matter? Ask Rambus.
June 29, 20184
August, 2000: Hynix sues Rambus,
Rambus files patent infringement
claims against Hynix
April, 2006: Rambus initially wins $100
million-plus jury verdict against Hynix
for patent infringement, but lawsuits
continue
March 26, 2008: - Jury finds for
Rambus in final stage of patent suit.
Rambus stock jumps $7.25 / 39%

5. Why Codify Your IP?
Protect your technology/brand
Establish barriers to entry
Obtain financing
Provide an entity on which to establish value for your company
Leverage against lawsuits against your company
Facilitate higher book value
IP = Insurance for Gross Profit Margin
June 29, 20185

6. IP Categories & Comparison
PATENT TRADE SECRET TRADEMARK COPYRIGHT
Subject
Matter
Devices, apparatus,
machines, systems, kits
All things listed under
PATENTS, but kept
secret instead of
patenting
Company names and
logos, product names
Books, articles,
brochures, photos,
architectural and
artistic designs,
software code
Right to
Exclude
Making, using, selling,
importing
Unfairly acquiring Using similar mark on
similar product
Copying (all or part)
Scope of
Protection
Potentially broad, defined by
the claims
Typically narrow,
limited to the secret
Proportional to the
commercial strength of
the mark
Typically narrow,
limited to the work, fair
use exceptions
Duration of
Protection
20 years from the application Perpetual (until not
secret)
Perpetual (until not
used or abandoned)
Varies (usually 50+
years)
Cost Expensive Inexpensive Moderately expensive Inexpensive
Legal
Requirements
New, useful & non-obvious Commercial value &
secret
Source indicating &
creative
Original work &
fixation (on tangible
medium)
June 29, 20186

7. Use the Right Tool for the Job
December 3,
2009
7
Patents
Strongest protection
Most expensive and difficult to obtain
Copyrights
No protection against independent
development
Easiest and least expensive to obtain
Trademarks/Domain Names
Protection grows based on fame
Trade Secrets
Must be secret
No protection against independent
development

8. COPYRIGHT
June 29, 20188

9. What is a Copyright?
A grant from the US government giving the
owner of a creative workd the right to keep
others from using the work without the
owner’s permission
Protects the form of Creative Expression
Does not protect the underlying idea
Subject matter must be:
Originally created
Fixed in a tangible medium
Have some measure of creativity
Non-copyrightable subject matter usually
lacks the element of creativity
June 29, 20189

10. Obtaining Copyright Protection
Copyright protection arises automatically
Can be enhanced by Federal Registration
Fill out simple form
Submit form with samples of creative work and filing fee to United States
Copyright Office
Copyright Office performs limited examination
June 29, 201810

11. Copyright Protection
Copyright protection gives you the right to:
Exclude others from
• Making copies
• Making derivative works
• Selling
• Displaying
• Performing
Bring a lawsuit in Federal Court for copyright infringement
Obtain monetary damages for copyright infringement for a term of the
author’s life + 50 years or 75 years (work for hire)
June 29, 201811

12. Copyright Notice
Should be placed in a noticeable position on the creative work in the
following form:
© (year of publication) (author or owner)
Notice prevents a claim of innocent infringement
June 29, 201812

13. Copyright Limitations
Doctrine of fair use
Non-commercial or incidental nature
• Teaching
• Research
• Journalism
• Parody
June 29, 201813

14. TRADEMARKS
14 June 29, 2018

15. What is a Trademark?
A trademark or service mark relates to any word, name, symbol or device
that is used in trade with goods or services to indicate the source or origin of
the goods or services and to distinguish them from the goods or services of
others.
A trademark protects the good will that a consumer associates with a
business in the firm of
Reputation for quality
Reliability
June 29, 201815

16. What Does a Trademark Protect?
Inherently distinctive marks
Coined words
Unique symbols or logos
Fanciful marks
Suggestive marks
Marks that have acquired a secondary meaning
Public recognition
Long use
Generic marks and surnames are not entitled to trademark protection
June 29, 201816

17. Obtaining Trademark Protection
Be the first to use the mark
Without Federal Registration, a trademark owner is entitled to protection only
in the geographic area in which the mark is used
By filing a Federal Intent-to-Use Registration Application
June 29, 201817

18. TRADE SECRETS
June 29, 201818

19. December 3,
2009
19
Trade Secrets
MUST be secret
Information derives value by virtue of being a secret
Tradeoff between trade secret protection and © or patent protection
MUST be documented
Once decision made to use trade secret protection, document the secrets
Develop and enforce policies on keeping the secret

20. December 3,
2009
20
Trade Secrets
Physical and legal protection for trade secrets
Use secure storage for tangible forms of information
Use passwords and security measures for computer stored data
Restrict access, particularly for consultants/contractors
Use NDAs
Mark documents

21. PATENTS
June 29, 201821

22. What Does a US Patent Do?
Right to exclude others from
• Making
• Using
• Selling
• Importing
The invention (as defined by the claims), for 20 years (from the filing date)
in the United States
Can sue a competitor for infringement
Can assign or license in exchange for payment
June 29, 201822

23. What Does a US Patent NOT Do?
Provide a government enforced monopoly on the invention
Claims must be self-enforced
Protect from being sued for infringement
May still infringe other’s patent
Guarantee
May be found invalid or not infringed
Stop competitive R&D
Stops “commercial” activity only
June 29, 201823

24. Patents as Insurance: What are you buying?
 Most people look at front of patent
The Abstract
 The actual investment is at the back of
the patent
The claims
December 3,
2009
24

25. Types of Patents
Utility Patent
Process – manner of doing something
Machine – moving parts
Composition of matter
Item of manufacture – no moving parts
Improvement on existing item above
Term: 20 years from date of filing
June 29, 201825

26. Types of Patents
Design Patent
Protects the ornamental, aesthetic of non-functional appearance of an
article
Term: 14 years from date of filing
Plant Patent
Protects asexually reproduced plants
Term: 17 years from date of issue
June 29, 201826

27. Patentable Subject Matter
Articles of manufacture, machines, processes (methods) and improvements
thereof
Apparatus, equipment, systems
Methods of making an article, performing a task (business methods),
storing or manipulating data
Software, UI techniques, Internet-related businesses
Purely mathematical algorithms or abstract ideas are not patentable
A process containing a mathematical algorithm is patentable where
process applies the algorithm (using a particular apparatus) to produce a
useful and concrete or tangible result
Likewise a pure signal is not patentable
But, a signal embodied in a physical medium is patentable
June 29, 201827

28. Patentable Subject Matter
Business methods, especially those involving a computer somewhere in the
method, may be patentable (e.g., on-line auction); however, this area of
patenting is currently under heavy attack from all fronts
Designs (e.g. lamp shades, machine components, or computer icons); cheap
to obtain and enforce
June 29, 201828

29. Patent Process Timeline
Patentability
Search
Provisional
Application
Utility
Application
Continuation
Application
Continuation in
Part Application
Design
Application
Preliminary
Amendment
June 29, 201829
Notice of
Publication
Notice of
Allowance
Issuance
Maintenance Fee
3.5 years
Maintenance Fee
7.5 years
Maintenance Fee
11.5 years
IDS or
Suppl. IDS
Restriction
Requirement
Terminal
Disclaimer
Office
Action
Amendment
Examiner’s
Amendment
Interview
RCE
Appeal

30. March 31, 200830
Utility Patent: Space Shuttle?

31. March 31, 200831
18
22, 24
30
34
32
68
72
70

32. Reading Claims: What is protected
December 3, 200932
A vessel for holding liquid comprising:
a generally cylindrical side wall that
defines an opening at one end with
a bottom wall at an opposite end;
a handle secured to an outer surface
of the side wall
wherein the handle defines an
opening through which at least two
fingers can be inserted.
As an example, lets write a
claim for a coffee cup
The “invention”
The “prior art”

33. December 3,
2009
33
Patent Application Requirements
US patents are based on First-to-Invent
Application must be filed in the name of the actual inventors of the claims
One-year grace period
Patent must teach the invention
Application must enable persons skilled in the art to make and use
Application must describe the inventor’s best mode for the invention
All known and relevant prior art MUST be disclosed to the Patent Office
May be found invalid or not infringed
International patents are based on First-to-File
Application must be on file before ANY commercial use or publication of
the invention

34. December 3,
2009
34
Patentability Requirements
Patent Claims MUST be
New and Not Obvious
The New requirement - anticipation
Claim is anticipated if a single prior art reference teaches all the elements
and limitations in the claim
The Non-obvious requirement
If all the claim elements and limitations are found in the prior art, but they
are in different references, then claim is new
Question becomes would it have been obvious for a person skilled in the
art to have combined those elements
Recent Supreme Court case (KSR) has raised the bar on what is
considered “obvious”

35. Domestic vs. International Considerations
To obtain patent rights in any given country, you must have a patent in that
country
No such thing as an international or regional patent
Int’l consolidated application process: Patent Cooperation Treaty (PCT)
European consolidated application process: European Patent Office
(EPO)
Cost and Time
Budget $10K/country for filing (more for translations)
Budget $20K/country for prosecution
Allow 3 to 5 years for patent to issue
Extensions and delays available
Enforcement issues
June 29, 201835

36. Domestic vs. International Considerations
Other considerations
Business method patents and software patents generally more difficult to
attain
outside US
Target large markets, manufacturing centers and nations with good
enforcement
record
First to File (outside US) vs. First to Invent (US)
June 29, 201836

37. PATENT PORTFOLIO STRATEGIES
June 29, 201837

38. IP Strategies
IP Portfolio (Build Assets)
Protect Core Technology
• Broad & enforceable IP
• 3-D photocopier protection
Protect Product Development & Extensions
• Early and comprehensive filings
Create Barriers to Entry
• Portfolio mining, continuation practice, picket fencing tactics, feature
protection, future protection, generate license revenue, anticipate
future developments (both yours & competitors’)
June 29, 201838

39. IP Strategies
Freedom to Operate
Establish Clear Path
• Competitive surveillance, opinion of counsel, key licenses, patent
bargaining chips, patent insurance
June 29, 201839

40. March 31, 200840
Decision Drivers
Consider strategic importance to company
Consider standard industry practices
Weigh these factors:
Cost of protection vs. Product margin
Time to establish protection vs. Product life cycle
Duration of protection vs. Product life cycle
Scope of protection (e.g., claims) vs. Commercial value of what’s protected

41. A good IP strategy is like good insurance coverage
Offensive: Filing patent applications
 How much insurance do you need to protect your products or services
Defensive: Obtaining FTO opinions
 How much insurance do you need against third party patents
One Size Does Not Fit All
What is the GPM?
What is the annual market opportunity?
December 3,
2009
41

42. March 31, 200842
Filing Time Line & Options
1 year
Foreign
Application
Provisional
Application
1 year
Regular
Application
Issued
Patent
Prosecution 3+ year avg.
Divisional
Application
C.I.P.
Application
Continuation
Application
Restriction
Requirement
1 year
Foreign
Application
Same Disclosure
New Claims
New Disclosure
New Claims
Same Disclosure
Claims not Elected

43. IP IN THE 21ST CENTURY
June 29, 201843

44. March 31, 200844
Higher Standards & Significant Change
Decrease in percentage of
patent applications allowed in
US
Significant legal changes in
past several years, with more
changes pending
Changes in law require new
approaches to patent practice
2008: 38% vs. Historical: 65% – 75%

45. Patent Reform Act of 2009
S. 515/H.R. 1260: Key Proposed Changes
First-inventor-to-file system
• Changes/expands definition of what is prior art
• Redefines effective filing dates
Damages
• Gatekeeper compromise—judge decides whether each party’s
damages theories are appropriate before trial
Expanded Reexamination Proceedings
• Reexaminations may be requested based on published prior art
• Inter Partes Reexams opened up to all patents (not just those filed
after November 2000)
Additional Post-Grant Review
• Third party can file cancellation petition based on any ground of
invalidity (rather than simply published prior art) within 12 months of
issuance
June 29, 201845

46. Patent Reform Act of 2009
Administration is pushing both Senate and House very strongly to get this
done this year
Reason behind push is two fold
Need to fix Patent Office funding issue
Desire to take advantage of the political compromise reached on
damages issue
It seems there is a chance that patent reform may pass this year
June 29, 201846

47. Significant New Patent Case Law
Supreme Court Cases
In re Bilski
eBay – Injunctions
MedImmune – Declaratory Judgment
KSR – Obviousness
Federal Circuit Litigation Cases
Seagate – Willfulness
DSU Medical – Inducement
BMC – Joint Infringement
Federal Circuit Prosecution Cases
Comiskey – Mental Steps
Liebel – Enablement
McKesson – Inequitable Conduct
June 29, 201847

48. US Patents: Patents Granted and Infringement Cases Filed
December 3,
2009
48

49. December 3,
2009
49
Litigation Complexity/Expense Have Increased
US Patent Litigation: CPI Adjusted Average Damages

50. March 31, 200850
Patent Litigation Trends - 1972-2007
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
1.40%
1.60%
1.80%
2.00%
1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
* Data from Admin Office of US Courts and US Patent Statistic Reports
(Note 1 - values for # of Patent Lawsuits/appl or patent are not %- i.e., 1.2%= 0.012 lawsuits/appl)
(Note 2 - data for 1980-81 and 1984-87 total Federal cases are interpolated)
Patent Lawsuit as
% of All Fed
Lawsuits
# of Patent
Lawsuits/US
Patent Appl Filed
# of Patent
Lawsuits/US
Patent Issued .

51. Patent Quality:
Not a New Problem
Bottom line: recent changes to
patent system will increase patent
quality, but the issue is not new
Example: the “Dead Ringer”
patent of 1882
Useful to ensure that you were
not buried alive
Note rope on chest of body that
can be pulled should you
awake to discover that you
were buried alive!!
June 29, 201851

52. Patent Quality:
Not a New Problem
The “Dead Ringer” patent of 1868
Clearly, good ideas can be
“rediscovered” again and again
June 29, 201852

53. Thank You!
Attorney Name | Phone Number | email@ptslaw.com
June 29, 201853