https://www.bardehle.com https://www.bardehle.com/en/team/karl-christof In an online event organized by German-American Business Council of Boston, Christof Karl of BARDEHLE PAGENBERG talked with his US colleagues Susan Glovsky and Alexander Adams of Hamilton Brook Smith Reynolds about IP issues which entrepreneurs and managers of technology-oriented companies should keep in mind. Do you have a plan for securing your innovations through patents? How can you avoid pitfalls that can forfeit your patent rights? In which situations would it be better to protect the innovations as secret know-how rather than to patent them?

1. Strategic Focus on
Innovation Protection and
Rights Enforcement
Susan G. L. Glovsky
Alexander Adam, Ph.D.
BARDEHLE
PAGENBERG
Dr. Christof Karl

2. • 28 years at Hamilton Brook Smith
Reynolds
Alexander Adam
Principal
Registered Patent Attorney
Susan G. L. Glovsky
Principal
Registered Patent Attorney
• 12 years at Hamilton Brook Smith
Reynolds
• University of Vermont, B.S. in Chemistry
• Boston University School of Law, J.D.
• International invention protection strategy
• Patent rights analysis, enforcement, and
defense
• Contested matters in the Patent Office
and ITC
• Practice in diverse technology areas,
including biotechnology, chemistry, and
pharmaceuticals
• Boston University, B.S., M.S., Ph.D. in
Biomedical Engineering
• Suffolk University Law School, J.D.
• Experience in trademark opposition and
cancellation proceedings
• Advises clients on U.S. and international
patent strategy
• Practice in diverse technology areas,
including medical devices, biotechnology
and life sciences, and computer systems
Presenters
2

3. Presenters
• Since 2010, Partner at Bardehle Pagenberg
in Munich; 2011 European Patent Attorney
Christof Karl
Partner
Bardehle Pagenberg
• University of Munich Law
• George Washington University Law
• Attorney-at-law licensed to practice in
Germany and New York, a computer
scientist, and a German and European
Patent Attorney
• Clients include leading U.S. companies in
the computer, computer-network,
telecommunications and financial-services
sectors
• Advises clients on issues of licensing,
employee invention law, copyright law and
Internet law
3

4. • Patents provide protection for technical inventions
• They give the patentee a monopoly of up to 20 years
from filing
▪ Inventor (or his employer) needs to file a patent application
to obtain protection
▪ This is different, e.g., for copyright
• Protection limited to a certain territory
4
What is a patent and what protection
does it provide?

5. • The idea must be new over the prior art
• Basically any kind of prior disclosure (not only earlier
patent applications) destroys novelty
▪ Written publication (e.g. on web site)
▪ Orally (e.g. presentation)
▪ Commercial or other use (e.g. in products)
5
What is a patentable idea?

6. • This includes disclosures by the inventor or his employer
himself
• If you have an idea which you might want to patent, you
should not disclose it to anyone before the patent
application has been filed
• If you need to disclose it to business partners, a non-
disclosure agreement (NDA) must be in place
6
What is a patentable idea?

7. • The idea must be inventive, i.e. it must not be obvious in
light of the prior art
• For deciding about inventive step, any prior art published
anywhere in the world may be considered, even if the
inventor was not aware of the prior art
7
What is a patentable idea?

8. • In most jurisdictions (e.g. in the European Patent Office),
it must be a technical idea
• The non-technical domain includes:
▪ Business methods
▪ Aesthetic creations
▪ Mathematical methods
• For non-technical innovation, protection may be available
by design, copyright, trademark
8
What is a patentable idea?

9. • Created by keeping it confidential
• Lasts as long as it is kept confidential
• Until 2016, governed in the U.S. by state law
• Economic Espionage Act of 1996 makes it a criminal offense to
steal or attempt to steal trade secrets for the benefit of someone
other than the owner, including for the benefit of a foreign
government
• Trade secret is a formula, device, process, method, or
compilation of information that, when used in a business, gives
the owner an advantage over competitors who do not know it
• Must be the subject of efforts that are reasonable under the
circumstances to maintain its secrecy
9
Trade Secrets

10. 10
Trade Secret Examples
• Plans, designs, and patterns
• Processes and formulas for drugs, foods, chemicals or
other materials (e.g., the formula for Coca-Cola)
• Manufacturing methods and techniques
• Laboratory and engineering notebooks
• “Negative” information -- designs that didn’t work
• Computer software (programs or source code)

11. 11
Cookie recipe determined to be trade secret:
• Carefully guarded the cookie recipe
• One copy of the recipe was locked in an office safe
• A duplicate was secured in a desk
• To satisfied customers who asked for the recipe, an individual at
the company wrote that the formula was a trade secret
• For work day use, the individual broke down the formula into
baking ingredients, small ingredients (e.g., secret nut dust), and
bulk ingredients
• The three components were kept on separate cards that
contained gross weights
• Even though cards concealed the true proportions of the
ingredients, access to the cards was limited to long-time trusted
employees
Massachusetts Example

12. • Five years later DTSA, “changed everything and changed
nothing”
• Provides access to U.S. federal courts
• Created federal system of trade secret law
• State trade secret laws were not eliminated
• Many cases include state law and DTSA claims
• In practice, federal courts have interpreted DTSA consistent with
their prior interpretations of similar state laws
• Statute may have global reach
▪ Illinois federal judge ruled DTSA should be read as a cohesive whole that applies
overseas and found in favor of Motorola against a Chinese firm
▪ So long as the misappropriator was a U.S. citizen or entity or an act in
furtherance of the theft occurred in the U.S. plaintiff can sue under DTSA
Defend Trade Secrets Act (DTSA)
Signed May 11, 2016

13. Advantages of a trade secret:
• Secret may be kept for more than 20 years
▪ E.g. manufacturing process, ideas hidden in software
• Infringement may not be detectable
• Patent application may be refused by the patent office
▪ But once published, trade secret is gone, too => no
protection whatsoever
▪ Might withdraw application prior to publication in case
of negative search report
• No costs
13
Patenting versus keeping the invention
as a trade secret

14. Advantage of patenting:
• Competitor may make the same invention and patent it
▪ In this case, left with prior use right, which is narrow
• Trade secret may be revealed
▪ E.g., employee may leave with the invention
• Germany: employee oftentimes free to take with him
information which can be stored in his head
14
Patenting versus keeping the invention
as a trade secret

15. • Utility model application
▪ Lower costs, immediate protection
▪ Appropriate where invention is used for short period of time
• Registered design
▪ Can be more appropriate if innovation is primarily esthetical
▪ But scope of protection much more narrow
• Trademark
15
Filing for Other IP Rights (more)
Appropriate?

16. • Will others want to imitate it?
• Can infringement be detected?
• Can I use it as a marketing tool?
• If not worth the effort, may publish the invention to prevent
that others patent it
16
Is an application worth the
effort and costs?

17. National patent offices and EPO
• There are national patent offices in each European country, which
grant national patents
• The European Patent Office (EPO) was established in the 1970ies
to reduce costs caused by of national patent prosecution in Europe
• European (EP) patent application:
• A single examination procedure before the EPO
• After grant, applicant to decide in which of the 38 member states
the EP patent shall be nationalized
17
Process of Obtaining Patents and
Associated Costs

18. 18
Process of Obtaining Patents and
Associated Costs

19. European patent – where to validate?
19
Process of Obtaining Patents and
Associated Costs

20. Main costs arising for an EP patent application until grant typically comprise
Office fees ~4,500 €
Renewal fees(*) ~1,800 €
Translation claims ~300 €
Attorney fees ~12,000 €
(incl. drafting the application)
In addition, validation fees are to be paid depending on the countries in which the EP
patent shall be validated
Nat. office + attorney fees ~ 200 - ~500 €
Translation 0 - ~2,000 €(**)
20
Process of Obtaining Patents
and Associated Costs

21. Patent System Filings and Statutory Timing
21
Priority U.S. Provisional
or Non-Provisional
application
(within 12 months
of Priority Date)
(within 32 months
of Priority Date)
China
Europe
(within 12 months
of Priority Date)
(within 31 months
of Priority Date)
(within 30 months
of Priority Date)
Paris Convention Filing
PCT
Some countries (e.g., U.S.) provide a
grace period after a public disclosure,
but generally Europe and China do not
*Remember to Comply with Data
Export Control Laws and Foreign
Filing Licenses
PCT: Patent Cooperation Treaty

22. 22

23. 23
• Grant by the government permitting the inventor
exclusive use of an invention for 20 years (or 14 years
in the case of design patents)
• Rights require an issued patent (publication at 18
months can provide limited rights)
• The law changed so that U.S. patents go to the “first-
inventor-to-file” instead of the “first-to-invent” for patent
applications filed on or after March 16, 2013
Patents

24. 24
• Utility Patent protects mechanical, electrical,
chemical inventions; processes, machines,
compositions of matter
• Design Patent protects the appearance, not the
function, of an item
• Plant Patent protects a new type of plant, provided
that the inventor is able to reproduce it asexually
through grafting, for instance, not by planting its
seeds
Patents (Continued)

25. Legal Requirements for
Patentability
• U.S. statute: 35 U.S.C. § 100 et seq.
• Utility (not frivolous) 35 U.S.C. § 101
• Novelty (completely new) 35 U.S.C. § 102
• Non-Obviousness (to a person of ordinary skill in
the art) 35 U.S.C § 103
• Measured with respect to “prior art”
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26. • Establish an exclusive position
• Valued by investors, venture capitalists, bankers, joint
venture partners, etc.
• Obtain bargaining position against third parties attempting
to enforce their own patents
• License to produce substantial sources of income
• Prevent others from claiming same subject matter
Why Are Businesses Interested in Patents?
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27. First U.S. Patent
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28. U.S. Patent No. 1 & No. 1,000,000
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29. EUROPE
Popular Jurisdictions
29
UK
FR
NL
DE

30. EUROPE
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Presumably 60 % of all contentious patent
infringement disputes in Europe are litigated before
German infringement courts.
Why?

31. 31
TIME GAP
Complaint Preliminary
Opinion
Decision
Complaint
Enforceable
Decision
Months
24
4 8 12 16 20
District Court
Infringement
Months
8 12 16 20
Federal Patent Court
Invalidity
Infringement and Invalidity

32. • Permanent Injunction is regular remedy, not dependent
on balancing of interests of the parties (no equity
considerations; no EBAY case law).
• Preliminary enforcement of injunction issued by 1st
instance court possible (while appeal is pending) against
bond for securing damage claims of infringer (if injunction is
finally lifted).
►Preliminary enforcement as a very effective tool
for exerting pressure to settle!
32
Permanent Injunction

33. Procedure and timing varies from Court to Court
• Mannheim: 8-12 months
• Dusseldorf: 15-18 months
• Munich: 12-15 months; but “early hearing”
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Infringement Procedure

34. Susan G. L. Glovsky
Principal
Hamilton Brook Smith Reynolds
e:susan.glovsky@hbsr.com
t: 617.607.5900
34
Alex Adam, Ph.D.
Principal
Hamilton Brook Smith Reynolds
e:alex.adam@hbsr.com
t: 617.607.5900
Christof Karl
Partner
Bardehle Pagenberg
e: karl@bardehle.de
t: 49 (0) 89 928 05-0 (dir 474)