EO Nerve 2012 Breakout

1. Maximizing and Protecting
Your Intellectual Property
by
Dale W. Malik
dalewmalik@gmail.com

2. Agenda
• What constitutes Intellectual property (IP)and
how do you have any?
• The Importance and Value of Intellectual
Property (Stories from the frontline)
• Making money from your IP
• Protecting your IP from competitors
• Business continuity and Employee IP coverage
• Q&A

3. What Constitutes Intellectual
Property?
• Patents
• Copyrights
• Trademarks
• Trade Secrets

4. The Importance of IP
• Dip and Dots (A lesson learned the hard way)
• Qualcomm ( High yield at low cost)
• Nortel (Hidden value in a company gone bust)
• IBM (A business unit un to itself)
• What about your company?

5. Looking for IP Value and Risk in
Your Company
• What are the tangible elements of what
makes your product or service different?
• What elements of your business, if a
competitor had them, would change the value
of your company?
• Where are the single points of knowledge and
information that are critical elements of your
business?

6. Patents
• (Utility, Design, or Plant) protect inventions and improvements to existing inventions.
• What cannot be patented:
– Laws of nature and Physical phenomena
– Abstract ideas
– Literary, dramatic, musical, and artistic works (these can be Copyright protected
– Inventions which are:
• Not useful (such as perpetual motion machines); or
• Offensive to public morality
• What can be patented – utility patents are provided for a new, nonobvious and useful:
– Process
– Machine
– Article of manufacture
– Composition of matter
– Improvement of any of the above

7. So You have a Great Idea
Does it Pass the Test
• Novel
• Non-obvious
• Adequately described or enabled (for one of
ordinary skill in the art to make and use the
invention)
• Claimed by the inventor in clear and definite
terms

8. To Patent or not to Patent
• Can anyone reverse engineer what you have
designed?
• Is there a short shelf life on this design or
market changes that would make it obsolete?
• Do you have the resources to pursue one?
• Are you planning to raise capital?
• Have you developed something that another
industry or market could use?

9. The Patent Process
• It takes 3-5 years for a Patent to issue?
• Protection begins from the moment you file (pending), but is
not legally enforced until it issues.
• Having a plan of what you want to stake your claim to, is
critical and must be done right.
• Costs to file 1 patent can range from $4,000 to over $10,000
depending on complexity and type.
• Patent laws are changing from “First to Invent” to “First to
File”. This is a critical change that will affect how you protect
your business.

10. Valuating Patents
• Defensive cost of doing business
• Protects investors in your company
• Creates an intangible factor of being a
innovative company.
• Enables licensing to other industries and
companies.
• Investment firms will perform a valuation as a
capital asset.

11. What are Copyrights
Any material you create for your company can be, and should be
copyright protected. But you must mark the material with as
being such (2012 Copyrights reserved by “EO Company”).
• Training materials
• Manuals (all “how to” guides)
• Marketing materials
• Presentations
• Media – music, videos

12. What are Trademarks and Service Marks
• Trademarks are typically Logos/Designs that a
company uses that are uniquely identifiable and
distinguishes the source of goods to be that
company. But it can be a word, phrase or
combination as well.
• You must register and maintain them with the
USPTO. Failure to do so will invalidate your claim and
damage your brand.

13. Trade Secrets
• Anything that your company creates or has
knowledge of that is not known outside your
company.
• Protecting them is critical and can be done via
– Non-disclosure agreement (NDA)
– Contract (embedded NDA)
– Proprietary markings
– Limited access and control

14. Shh…It’s a secret
All companies have secrets. Some are technical such
as the detailed specification of a manufacturing
process; some are business-related such as a list of
customer names and addresses, which would be
useful to a competitor. Some are of enormous value,
e.g. the recipe for Coca Cola; others are less
valuable. Some are simple, even one word long, such
as the name of a company takeover target, others
are complex, such as the details of a planned
advertising campaign. The common factor is that all
can be protected.

15. In recent years, many countries have introduced laws
on the protection of confidential business information
along the lines proposed by the Agreement on Trade
Related Aspects of Intellectual Property Rights
(TRIPS), which states that for information to be legally
protectable:
1. the information must be secret, i.e., not generally
known ore readily accessible to persons that normally
deal with that kind of information
2. It must have commercial value because it is secret;
3. The owner must have taken reasonable steps to
keep it secret.

16. Making Money from IP
• Licensing it to non-competing companies
• Licensing it to other industries
• Creating alliances and cross licensing to build
an industry specific portfolio.
• Selling elements and retaining free usage
rights.

17. Protection from Competitors
• Having an IP defense plan is important and knowing what
your competitors have is critical to survival if you go to battle.
(See TiVO).
• Most companies will cease and desist if notified of an
infringement in writing. They will ask for proof, and you will
have an opportunity to sell them access if it makes good
business sense.
• Cross licensing and trading is quite common and good for
business.
• Non-disclosures are critical to identifying and structuring
methods for sharing information.

18. Non-Disclosure Agreements
• When do you need them?
• What should be in them?
• Are governed by state laws and vary as to
what you can put in them.
• Should have very a very definitive description
of the boundaries of what is being shared.
• Should have reasonable time limits before
expiration.

19. An NDA story
• On December 21, 2006, Robert Emmel signed a non-disclosure agreement with News
America Marketing In-Store, LLC. This LLC is a part of Rupert Murdoch's News Corporation
that performs in store marketing, such as "coupon and promotion dispensers, in-store video,
at-shelf signage and floor and shopping cart advertising."
• Emmel had been terminated by News America the month before in November 2006. Before
his termination, Emmel had provided several government entities, including Senator Charles
Grassley (R-IA) of the Senate Finance Committee, with confidential documents from News
America. (Emmel believed News America had engaged in fraud against its customers,
predatory and anti-competitive schemes, and inflated its earnings.)
• The NDA Emmel signed on December 21 barred him from disclosing any confidential
information—broadly defined—or from disparaging News America.
• The NDA was written in a way that it did not cover his actions up to signing the agreement,
and he was not in violation of it and the courts through out the case.
• The moral of the story – Make sure your NDA really covers the intended protection.

20. Protecting Your IP Assets from
Employee Abuse
• NDA’s
• IP assignment rights
• Creating an Employee IP agreement
• They take more than Blood - Even the Red
Cross has one…

21. So you want to work for the Red
Cross … Sign Here
“Confidential Information” shall include but not be limited to: (i) information relating to Red Cross’
financial, regulatory, personnel or operational
• matters, (ii) information relating to Red Cross clients, customers, beneficiaries, suppliers, donors
• (blood and financial), employees, volunteers, sponsors or business associates and
• partners, (iii) trade secrets, know-how, inventions, discoveries, techniques, processes, methods,
• formulae, ideas, technical data and specifications, testing methods, research and
• development activities, computer programs and designs, (iv) contracts, product plans, sales and marketing
plans, business plans and (v) allinformationnotgenerallyknownoutsideofRedCrossregardingRedCrossandits
• business, regardless of whether such information is in written, oral, electronic, digital or other form and
regardless of whether the information originates from Red Cross or Red Cross’ agents.
• “Intellectual Property” shall include but not be limited to: (i) all inventions, discoveries,
techniques, processes, methods, formulae, ideas,
• technical data and specifications, testing methods, research and development activities, computer
programs and designs (including improvements and enhancements and regardless of patentability),
• (ii) trade secrets and know-how, (iii) all copyrightable material that is conceived, developed, or made by
me, alone or with
• others, (iv) trademarks and service marks and (v) all other intellectual property.
• Intellectual Property shall only include intellectual property created by me: (i) in the course of
Employment or using Red Cross time, equipment, information or
• materials, and (ii) with In one(1)year after termination of Employment and relating directly to wor kdone
during Employment.

22. Dale W. Malik
dalewmalik@gmail.com