How to Protect Your Intellectual Property

© 2020 Hay nes and Boone, LLP
How to Protect Your
Intellectual Property
Gary J. Edwards and Jason Novak

© 2020 Hay nes and Boone, LLP© 2020 Hay nes and Boone, LLP
Outline of Topics
 The value of IP to your company
 Common Mistakes in managing IP
 Descriptions of IP
 Trademark
 Copyright
 Trade Secret
 Patent Protection
 Strategic IP Management
2

Why Should I Care about IP?
 On average, a tech company is valued as such:
 ~20% - Tangible assets
 The rest - pure IP (intangible assets)
 IP gives company deserved competitive advantage for brand &
tech development
 Does IP have to be related/cover our products? NO
 IP can have value regardless of product relevance
 Many times the most enduring and important aspect of your
work is the IP related to it
 Examples?
• Xperia Holding Corporation and TiVo Corporation to Xperi Holding
Corp. (June 1, 2020) -- $3B
• Marvell Technology acquires Avera Semiconductor (Nov. 5, 2019) --
$600 M
3

Increased importance of Intangible Assets
Source: Jenna Ross, “Intangible Assets: A Hidden but Crucial Driver of
Company Value,” Visual Capitalist, Publ. Feb. 11, 2020.
4

Why Should I Care about IP? Case Study #1
 1998: filed a patent application in response to a product that was
NEVER launched.
 2013: received a US patent from this application, covering a key
feature on many qPCR and ePCR thermal cyclers
 2013: competitor X agreed to pay royalties for this patent
 2014: competitor X paying ~$2.5M/yr in royalties
 Late 2014: received a EP patent from this application, covering
similar feature in similar way to US patent
 2015: project increase to ~9.0M/yrin royalties
 Takeaway: (1) IP can take awhile to bear fruit and (b) IP cares about
your non-launched ideas (even if others don’t)
5

Why Should I Care about IP? Case Study #2
 Acquired license to university IP covering one type of technology
 Acquired IP from a company covering a similar technology
 Goal: Launch a product utilizing that technology
 Instead: Launcheda product using internal technology
 2013: licensed university IP to chief competitor for $12M
 2014: discovered company and university IP applies to multiple
competitors – new licensing program
 Takeaway: IP can be leveraged specifically to impact competitors,
even if failing internally
6

Largest Mistakes in Handling IP
 Not considering Trademark issues when Naming the Company
 Not filing for Patent Protection early enough
 “File Early and File Often”
 Not having formal agreements amongst the founders that covers IP
ownership and assignments
 Not having formal agreements with employees and contracts that
covers IP ownership and assignment
 Letting service cost impact decision whether to file or not
 Not having a clear IP strategy (particularly start-ups)
7

Largest Mistakes in Handling IP
 Not considering misappropriation of Trade Secrets when forming the
company or hiring employees
 Not assigning patents in a timely fashion
 Not capturing IP from departing personnel
 Not capturing and documenting the development of IP
 Failing to consider the overlapping nature of IP rights (trade secret vs.
patent; trade dress vs. design patent, etc.)
8

What is IP?
 Trademarks
 Protection of Commercially Used Marks
 Trade Dress
 Copyright
 Protection of Expression
 Trade Secret and Know-How
 Patents
 Data?
9

Trademark
10

Trademarks
 Word, logo, design, device identifying the origin of a product or
service
 Mark identifies source -- Not a name of a product
 Loosing your mark to Dilution/Generic
 Kleenex tissue, Xerox photocopier
 Use as noun risks loss of trademark
 Escalator, trampoline, aspirin, thermos, refrigerator
 Term indefinite so long as the mark continues to be used
 Registration requires periodic renewal
 U.S.—10 years
 U.S. also requires at 5-6 years a showing of continued use
11

Trade Dress
 Protects the visual appearance that indicates
source of a product.
 Shape, color, and arrangement of materials
in clothing
 Magazine cover design
 Restaurant design
 Methods of display
 Maker’s Mark Distillery, Inc., v. Diageo North
America, Inc.,
Nos. 10-5508/5586/5819 (6th Cir. 2012).
 Must have secondary meaning indicating source
and not be functional.
 Can be registered but does not need to be.
12

Copyright
13

Copyrights
 Protection of Expression (offers no protection to the underlying idea)
 Romeo & Juliet = West Side Story
 Software code, not concept
 Literary, musical, dramatic, choreographic, pictorial works; sound
recordings, software
 Allows the owner to prevent others from copying the material
 Right attaches to original work of authorship fixed in any tangible
medium of expression
 Common Law and Statutory Rights (Title 17, U.S.C) on creation of
the work
 No formalities necessary
 May need publication and registration to enforce
14

Copyrights
 Term
 Life of author plus 70 years (in most countries)
 Works made for hire
 95 years from publication or
 120 years from creation
 Scope
 Protects only expression, not the idea or concept
 Protects against copying; does not prevent independent creation
 National in scope, but international recognition by treaty—not the
same everywhere
 Assignability
 Requires written document, which in the U.S., may be revoked
after 35 years
15

Trade Secret
16

Trade Secrets
 Anything of Commercial Value That is Kept Secret (and is not known to the
public)
 State Protections (details depend on the state)
 Federal Espionage Act Economic Espionage Act (18 U.S.C. §§1831,
1832)
 Makes trade secret misappropriation subject to substantial fines and
imprisonment "Knowing theft, unauthorized duplication, receipt and/or
possession of a trade secret”
 Definitions of Trade Secret
 Defined broadly as anything secret (formula, program, device, method,
technique)
 Having independent economic value from not being generally known
 Is the subject of reasonable efforts to maintain its secrecy
 “All forms and types of financial, business, scientific, technical,
economic, or engineering information" that is kept secret and has
reasonable independent economic value 18 U.S.C. §1839(3)
17

Trade Secrets
 Keeping a Trade Secret
 Only valid and enforceable as long as it is a secret
 To enforce, Reasonable Steps must have been taken to protect the
Secret (i.e. employment agreements, procedures to control spread,
controlling access, training, non-disclosure agreements)
 Benefits
 Trade secret may be assigned or licensed
 Revenue from license may last indefinitely without geographic restriction
 Damage potential similar in scope to patent infringement (e.g. Lost profits,
unjust enrichment, reasonable royalty, injunction)
 Protect Your Company From Accusation
 New Hires (especially from competitors)
 Joint Development Agreements
18

Patent Protection
"[the United States Congress shall have
power] To promote the Progress of Science
and useful Arts, by securing for limited
Times to Authors and Inventors the
exclusive Right to their respective Writings
and Discoveries.“ U.S. Const. Article I,
Sec. 8, Clause 8.
19

Patents
 Patents are the exclusive jurisdiction of the Federal Government
 Grant of a limited duration monopoly in return for publicly disclosing
the invention
 The patent right is a right of EXCLUSION
 The patent right allows the owner to prevent others from
practicing the invention
 The patent right does not provide a right of the patent owner to
practice the invention
20

Patents
 Design Patents
 35 U.S.C. § 171 “any new, original and
ornamental design for an article of
manufacture”
 Differs from Trade Dress that protects
an appearance related to source
 Utility Patents
 35 U.S.C. § 101 “any new and useful
process, machine, manufacture, or
composition of matter, or any new and
useful improvement thereof . . .”
 Provisional Application
 one year protection of the material
actually filed 35 U.S.C. § 111(b)
21

Patents
 Patent Term
 Design Patent – 15 years from the date of grant (35 U.S.C. §173)
 Utility and Plant Patents – From the date of issue to 20 years from
the earliest priority date (35 U.S.C. §154)
 Requirements of a Valid Utility Patent
 Patentable Subject Matter (useful process, machine, manufacture,
or composition of matter) 35 U.S.C. §101
 Novelty (Not available to the public prior to the effective filing date)
35 U.S.C. §102 -- The US is now nearly “first-to-file”
 Non-Obviousness (Not obvious from the prior art). 35 U.S.C. §103
 Sufficiency of the Specification (35 U.S.C. §112)
Written Description Enablement
Best Mode Claims
22

Inventorship/Ownership
 Inventorship
 “The term “inventor” means the individual or, if a joint invention, the
individuals collectively who invented or discovered the subject matter
of the invention.” 35 U.S.C. §100(f)
 An inventor contributes to a definite and permanent idea of the
complete and operative invention – conception.
Having the wrong inventorship can result in the patent being
invalid or unenforceable!!!
 Ownership
 Patents are Filed in the Name of the Inventors and are Owned by the
Inventors until Assigned.
 35 U.S.C. §261 allows for assignments; Recordation according to 37
CFR 3.11 et seq.
 Applications for Patent need to be assigned to the owner and recorded in
the patent office.
23

Steps for Obtaining Patent Protection
 Fill out Invention Disclosure
 Collaborate with a patent attorney
 Determine
 If there are any bar dates
 If the inventorship is correct
 If there are any known prior art references
 Prepare the Disclosure (with the Patent Attorney)
 File the application
 Provisional
 Non-provisional
 Be involved with Prosecution
24

Preparing a Strong Disclosure
 Disclose all known and possible embodiments—avoid single
embodiment
 Define terms and use them consistently
 Avoid patent profanity (e.g., “must,” “essential,” “required”)
 Include actual and prophetic examples
 Draft Claims Carefully
 Duty of Disclosure – 37 C.F.R. §1.56
 Required to submit any documents that may be ‘materially
relevant’ to the patent application
25

How to Read a Patent
 U.S. Patent Office requires
 Title
 Background
 Figures (if needed)
 Abstract
 Detailed Description
 “Best Mode”
 Claims
26

 Figures
 Background
art
 Detailed
description
27

 Claims, claims, claims!
 Boundary of what you own
28

Post-Grant Proceedings
 Inter Partes Review (IPR) (35 U.S.C. §311)
 Post-Grant Review (PGR) (35 U.S.C. §321)
 Covered Business Method Proceedings (CBM)
 Reexamination (35 U.S.C. §302)
 Reissue (35 U.S.C. §251)
 Supplemental Examination (35 U.S.C. §257)
29

Enforcement
 Infringement (35 U.S.C. §271)
 Direct Infringement
 Inducement
 Contributory Infringement
 Damages
 Injunctive Relief (35 U.S.C. §283)
 Reasonable Royalties, Lost Profits, Triple Damages (35 U.S.C.
§284)
 Attorney Fees (35 U.S.C. §285)
 Time Limit – 6 Yrs. from filing the claim(35 U.S.C. §286)
30

 The Paris Convention
 The Patent Cooperation Treaty (WIPO)
 The European Patent Convention, ARIPO, GCC, etc.
0 12 24 48301815
First Filing
US Utility
NON-PCT (Taiwan, Bolivia . . . )
PCT
Int’l Search Report
Publication
Optional Entry to Phase II
National Phase
International Protection
31

DATA
Copyright?
Trade Secret?
Patent?
Contract Law?
Licensing?
Compilation of facts
that may be stored or
used in a computer
32

Building and Protecting Value
 File Patent Applications Prior to Any Disclosure
 Insure claims “read-on” your product
 Include aspects that block competitors
 File internationally
 File Trademarks to protect the marks that are in use
 Use copyright protection judiciously
 Consider Trade Secret protection on aspects that can be kept secret
(and manage those secrets)
 Use agreements with founders, employees, and contractors to protect
the IP developed
33

Strategic IP Management – Creating Value
 “IP Management” includes four basic processes:
1. Creating New Value through the integration of the company’s IP
and new product development strategies to generate IP that
strongly protects the products and products that avoid
infringement of third party rights
2. Maximizing IP Value by aligning the client’s IP portfolio with its
business objectives and coordinating international prosecution
and litigation
3. Assessing IP Value and Risks in various litigation and
transactional scenarios
4. Realizing Value through IP enforcement and/or business
arrangements (licensing, acquisitions, financings, donations,
collaborative arrangements, etc.)
34

Goals of a Strategic Portfolio
 Attractive purpose
 Patents that cover technology perceived to be of future value by
investors (Quality vs. Quantity)
 Trade Secrets and Know-how in a technology perceived to be of
future value by investors
 Documentation of IP in a manner to enhance value (i.e., well
written specifications for patent applications)
 “Clean” and complete prosecution of patent and trademark
applications
 For Start-Ups: spend wisely, have a game plan and budget
estimates for offensive (filing, enforcement) and defensive (FTO,
lawsuit, C&D) IP strategy over reasonable time period.
35

Contact Information
36
Gary J. Edwards, Ph.D.
Gary.Edwards@haynesboone.com
Jason Novak
Jason.Novak@haynesboone.com

Disclaimer
These materials are public information and have been prepared solely for
educational purposes to contribute to the understanding of American
intellectual property law. These materials reflect only the personal views
of the author and are not individualized legal advice. It is understood that
each case is fact-specific, and that the appropriate solution in any case
will vary. Therefore, these materials may or may not be relevant to any
particular situation. Thus, the author and Haynes and Boone, L.L.P.
cannot be bound either philosophically or as representatives of their
various present and future clients to the comments expressed in these
materials. The presentation of these materials does not establish any
form of attorney-client relationship with the author or Haynes and Boone,
L.L.P. While every attempt was made to insure that these materials are
accurate, errors or omissions may be contained therein, for which any
liability is disclaimed
37

Additional Patent Content
38

Patentable Subject Matter
 Patentable Subject
Matter (process,
machine,
manufacture, or
composition of
matter) 35 U.S.C.
§101
 Laws of Nature,
Natural Phenomenon,
or Abstract Ideas
 MPEP §2106
 Usefulness
39

Novelty – Prior Art
 “the claimed invention was patented, described in a printed
publication, or in public use, on sale, or otherwise available to the
public before the effective filing date . . .” 35 U.S.C. § 102 (a)(1)
 “the claimed invention was described in a patent issued under section
151, or in an application for patent published or deemed published
under section 122(b), in which the patent or application, as the case
may be, names another inventor and was effectively filed before the
effective filing date . . .” 35 U.S.C. § 102 (a)(2)
40

Novelty – Exceptions to the Prior Art
 Exception to 102(a)(1) for disclosure made one year or less from the
effective filing date
 made by the inventor or one who obtained the subject matter from
the inventor
 made by another if a disclosure from the inventor or one who
obtained the subject matter from the inventor first
 Exception to 102(a)(2)
 Obtained directly from an inventor
 Been publicly disclosed by the inventor or another who obtained
the subject matter from the inventor
 Owned by the same person or subject to an obligation of
assignment to the same person
 Joint ResearchAgreements
41

Non-Obviousness
 A determination of Obviousness is obtained “if the differences
between the claimed invention and the prior art are such that the
claimed invention as a whole would have been obvious before the
effective filing date of the claimed invention to a person having
ordinary skill in the art to which the claimed invention pertains.” (35
U.S.C. § 103)
42

Sufficiency of the Disclosure
 Written Description – There must be a written description of the
invention.
 Enablement – The description must be sufficient to allow one of
ordinary skill to make and use the invention in full, clear, concise, and
exact terms.
 Best Mode – The best way that the inventors know to practice the
invention must be disclosed.
 Claims – The claims must clearly and concisely define the invention.
43

How to Protect Your Intellectual Property

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