Basics Of Intellectual Property


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An overview of intellectual property including patents, trademarks, copyrights, and trade secrets.

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  • Thank you for attending Introduce
  • We are going to discuss copyrights, trademarks, patents, and trade secrets, as well as factors a company may consider to determine which of these avenues to pursue to best protect its intellectual property.
  • Covers copyrights and patents (Inventor’s discoveries)
  • Copyright laws are standardized through international conventions such as the Berne Convention and are required by international organizations such as the World Trade Organization from their member states. Works prepared by officers or employees of the U.S. government are in the public domain. The Berne Convention provides for national treatment of other countries' copyright. In other words, the U.S. must treat a work that is copyrighted in the UK as if it were copyrighted in the U.S. The original holder of the copyright may be the employer of the actual author rather than the author himself if the work is a "work for hire". Copyrights are generally enforced by the holder in a civil law court, but there are also criminal infringement statutes.
  • The Bass Red Triangle was the first trademark registered in Britain in 1876.
  • Copyright laws are standardized through international conventions such as the Berne Convention and are required by international organizations such as the World Trade Organization from their member states. Works prepared by officers or employees of the U.S. government are in the public domain. The Berne Convention provides for national treatment of other countries' copyright. In other words, the U.S. must treat a work that is copyrighted in the UK as if it were copyrighted in the U.S. The original holder of the copyright may be the employer of the actual author rather than the author himself if the work is a "work for hire". Copyrights are generally enforced by the holder in a civil law court, but there are also criminal infringement statutes.
  • A company may be faced with the decision of pursuing either patent protection or trade secret protection for a particular piece of intellectual property, but choosing one will preclude the other.
  • Obtaining a patent provides a company with a monopoly over the particular technology for a set period of time. Specifically, a patentee is entitled to exclude its competitors from making, using, selling, or offering to sell a product that is covered by the patent. Note the right to exclude others from using – means that customers and end users may also be liable for infringement. In practice, though, most companies would refrain from suing customers as the customers of its competitors are likely their own or potential customers. Patent protection is not limited to a tangible product but can encompass methods of use and methods of manufacture. For example, a company may obtain a patent on its medical device, methods for using the device, and also methods of manufacturing the device. [contributory infringement: activity where, although not technically making, using, or selling, the defendant displayed sufficient culpability to be held liable – joint tortfeasor theory – one who intentionally caused, aided, or abetted the infringement. Ex., a seller sells a component not technically covered by the patent but has no other use except with the patented product or process. Need only knowledge, not intent, that activity causes infringement.] [active inducement: requires proof of actual intent to cause acts that constitute infringement.] Important to understand that, strictly speaking, a patent does not confer the right to practice the invention but, instead, enables the patentee to exclude. There are situations in which a patentee, by practicing its own covered invention, might also infringe another party’s patent. Ex., Microsoft sells a product, portions of which are covered by its patents – ex. MSFT owns patents covering methods and systems for protecting digital content that are implemented in its Windows Media Player. By selling that system it can still infringe another party’s patent. Recently, Microsoft was found liable for $1.52 billion for infringing patents relating to MP3s by selling its Windows Media Player. Patentee receives a monopoly, but only for a limited time – twenty years after the filing date of the application.
  • Competitive advantages protect products or services from copying block competitor’s access to technology marketing advantages Litigation – sword and shield (shield – bargaining chips to avoid litigation) Additional economic value generate revenue from licensing (even when not practicing the invention) Intangible value reward / recognize employee contributions intangible asset for financing and valuation
  • Utility – Promoting useful arts and sciences. See Section 8 of the U.S. Constitution: Congress shall have the 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. Novelty – cannot be something already known Obvious Cannot be patented if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art (kind of like a reasonably prudent person instead of a particular individual/tortfeasor - that’s why it’s an objective and not subjective standard). Cannot be an obvious variation of something known. Ex. if a blue pen is known, cannot obtain patent on a fuschia pen even if there had never been a fuschia pen (unless there is something other than color that provides utility). Secondary considerations (commercial success, long felt but unsolved needs, failure of others). Commercial success. Disclosure Sufficient written description to allow any person skilled in the art to make and use the invention. Best mode – the inventor must disclose the best way of carrying out the invention.
  • On the front of the patent is bibliographic data such as the title of the invention, the names of the inventors, when assigned the name of the assignee. The specification provides the substance of the patent. A person of skill in the art should be able to pick up the patent and, based on the specification, proceed to make and use the invention. Typically includes drawings, background of the invention, a summary of the invention, and a detailed description of the invention. Finally, each patent includes a series of claims that distinctly points out the subject matter that the inventors consider to be their invention. Oftentimes, the claims themselves are narrower in scope than what is described by the rest of the patent. Whether or not a third party infringes a patent is dependent on whether that party makes, uses, offers to sell, or sells a product that is covered by a claim.
  • A company needs to identify whether it has an invention and, if so, whether it is sufficiently valuable to seek patent protection for the invention. And, if the company decides to seek patent protection, there is an involved process that is more complex, time consuming, and expensive than filing for a trademark or copyright registration.
  • Something gets invented. How to go about identifying an invention? Many companies implement incentive programs. Document the invention. Invention disclosure forms, notebooks. Decide whether to pursue patent protection. Ex. Consideration by invention review committee. Factors: Importance of invention to core business. Potential to block competitors. Value added to patent portfolio. Disclose or keep secret. Invention complete or return to drawing board. But note placeholder function of application. Assign invention disclosure to patent counsel for patent preparation.
  • Provide complete description of the invention; discuss points of novelty; discuss what is already out there Drafting of application; already noted parts (specification, drawings, claims) Inventor should review for accuracy and completeness
  • Like a negotiation with the patent office; office actions (citation of prior art, rejection of claims); claim amendments, rebuttal arguments Allowance, issuance Or, final rejections, appeals Time? Varies; can be three years before even receive initial office action for certain technology groups; even more prior to issuance (if at all). Cost? Again, varies based on time it takes to prosecute the application. Tens of thousands.
  • In CA, statutorily defined. Generally speaking, a trade secret is: information not known to the public that provides economic benefits for the owner by virtue of not being known to the public or to competitors who could gain from its use and is the subject of protective measures by the owner to maintain the information secret
  • “ Traditional” trade secrets: customer and supplier lists manufacturing processes technical product information computer source code business plans and marketing strategies pricing and costs data “ Negative” information is also protectable (unexpected results, shortened time to market, avoiding blind alleys). For example, when writing a software program knowing that a particular, widely known algorithm is not the most efficient way to produce an intended result. But, “negative” information such as knowing what methods do not work or do not work as well may be more difficult to establish as it is often based on public information.
  • No set rules or strict def. for meeting the “reasonable efforts” req. Based on particular circumstances “reasonable under the circumstances” Fact intensive, include the type (and sophistication) of the company, industry standards, company resources, the type of trade secret. The Coca Cola formula. Original copy of the formula is held in SunTrust Bank's main vault in Atlanta. Rule restricting access to only two executives, each knows the entire formula and others, in addition to the prescribed duo, have known the formulation process. 1 Employees, independent contractors and temporary personnel execute confidentiality agreements (define trade secrets, limit how can utilize trade secrets, types of monetary and injunctive relief that a company can recover if breach). 2 Conduct regular meetings with employees to remind them about what company considers confidential and why it wants to protect it. 3 Id any info co. considers TS as conf. & proprietary by either placing it in a separate file or label “confidential and proprietary” on it. 4 Limit access to only those persons who absolutely must see it. Ex. a separate locked file cabinet or require a password to gain access to it. 5 When establishing a new employment relationship, inquire whether that person’s previous employer required him or her to sign a confidentiality agreement. Promotes awareness by the new employee that his future employer respects the confidential and proprietary information of that person’s former employer. 6 If this is the case, advise other employees, independent contractors and temporary personnel that the company has been required to enforce a confidentiality agreement. 7 Include confidentiality provisions in personnel manuals. 8 Require vendors, suppliers and potential customers to sign non-disclosure agreements about the confidential and proprietary information made available to them, and make the company’s employees aware of that policy. A non-disclosure agreement is similar to a confidentiality agreement in that both seek to protect trade secrets. (Non-disclosure agreements are typically signed by vendors, suppliers and potential customers whereas confidentiality agreements are signed by employees.) A company’s employees will develop a better understanding that the company places a significant value upon its confidential and proprietary information if they see that third parties are being required to sign non-disclosure agreements. 9 Create an understanding among employees that any conf info that they create on behalf of the company belongs to the company. 10 Hold thorough exit interviews and require personnel who have terminated their relationship with the company to return all confidential information that had been in their possession, including any information that is on their office or home computer. Compare with specific patent requirements such as a disclosure requirement, detailed description and claims, need to file within one year of a sale or public disclosure.
  • Important to note that certain types of information may not be trade secrets at all as the nature of the information is not susceptible to reasonable secrecy measures.
  • Basics Of Intellectual Property

    1. 1. Basics Of Intellectual Property© 2007 O’Melveny & Myers LLPPaul VeravanichAlison TaubCorporate Counsel Seminar SeriesFebruary 27, 2007
    2. 2. Overview Of Presentation Copyright law basics Trademark law basics Patent law basics and contrastwith trade secret protection
    3. 3. Copyright LawBasics
    4. 4. What Is A Copyright? A form of protection provided to theauthors of “original works ofauthorship”. The exclusive right of an author to– copy a work,– distribute copies– create derivative works, and– perform or display a work publicly Is of a limited term
    5. 5. Requirements For Copyright Work must be original– not copied– meet a minimal threshold for originality Work may be any work of authorship– books, poems, plays, movies, dances,ballets, musical compositions, audiorecordings, paintings, drawings,sculptures, photographs, software Work must be fixed in a tangiblemedium of expression
    6. 6. What Is A Copyright? Key statutes:– 1976 Copyright Act– Berne ConventionImplementation Act (1988)– Sono Bono Copyright TermExtension Act (1998)
    7. 7. What Can’t Be Protected By Copyright? Works that have not been fixed in a tangible form ofexpression. Titles, names, short phrases, and slogans; familiar symbols ordesigns; mere variations of typographic ornamentation,lettering, or coloring; mere listings of ingredients or contents.(Trademark can cover some of these) Ideas, procedures, methods, systems, processes, concepts,principles, discoveries, or devices, as distinguished from adescription, explanation, or illustration. (Patents can coversome of these) Works consisting entirely of information that is commonproperty and containing no original authorship.
    8. 8. Term Of A Copyright Life of the author plus 70 years (workscreated after Jan. 1, 1978) Works of corporate authorship: 95years from the date of first publicationor 120 years from the date of creation,whichever expires first Term for works created before 1978 iscomplex Works published before 1923 are all inthe public domain
    9. 9. Copyright Notice Requirements Use of a copyright notice was part ofprevious U.S. statutory requirements– "©“ or "Copyright", followed by the year ofthe first publication of the work and thename of the copyright holder Use of copyright notice now optional– Since 1976, when the U.S. passed a newCopyright Act that followed the 1886 BerneConvention Notice of copyright and damages “All rights reserved”– Result of the Buenos Aires Convention of1910; now superfluous
    10. 10. Other Copyright Concepts Works made for hire Federal works International rights– Berne Convention Remedies– Generally civil law court, but criminal statutes exist
    11. 11. Trademark LawBasics
    12. 12. What Is A Trademark? A distinctive sign of some kindwhich is used to uniquely identifyan entity’s products and/orservices to consumers - an“Indicator of Source”– A trademark comprises aname, word, phrase, logo,symbol, design, image, or acombination of these The function of a trademark is toexclusively identify thecommercial source or origin ofproducts or services.
    13. 13. What Is A Trademark? Trademark rights arise out of the useand/or registration of a mark inconnection only with a specific type orrange of products or services.– Think of Apple Computer v. AppleRecords; United Airlines v. UnitedParcel;– It may be possible to prevent theuse of a mark in relation to productsor services outside the specificrange if it is likely that the businesswould expand into that range.
    14. 14. Trademark Rights Trademark rights are establishedthrough actual use in the marketplace Benefits of registration A registered trademark confers abundle of exclusive rights upon theregistered owner– the right to exclusive use of themark in relation to the products orservices for which it is registered. Once trademark rights are establishedin a jurisdiction, these rights aregenerally only enforceable in thatjurisdiction
    15. 15. Types Of Trademarks Fanciful Arbitrary Suggestive Descriptive Generic AppleWindows
    16. 16. Trademark Notice Requirements The ™ symbol may be used whentrademark rights are claimed in relationto a mark, but the mark has not beenregistered Services marks – SM The ® symbol is used to indicate thatthe mark has been so registered. It is not mandatory to use either symbol,but such notice can improve availableremedies in the event of infringement Either symbol is typically placed in thetop left- or right-hand corner of a mark.TM®
    17. 17. Other Trademark Concepts Secondary Meaning Abandonment Genericide Naked Licensing
    18. 18. Patent Law Basicsand Contrast WithTrade SecretProtection
    19. 19. What Is A Patent? Exclusive right for inventions– Right to exclude others frommaking, using or selling apatented invention– Not a right to practiceinvention Limited time duration– Twenty years after filingdate
    20. 20. Public Policy Considerations Objectives of a patent system– Reward inventor for skill and labor– Stimulate further efforts in the field– Secure to the public immediate knowledgeof the invention, and unrestricted right touse after patent expires Contrast with trade secret law Contract theory– Limited monopoly in exchange forcomplete disclosure of invention
    21. 21. Reasons To Get A Patent Competitive advantages Additional economic value Intangible value
    22. 22. Requirements For Patentability Utility (§ 101) Novelty (§ 102)– Anticipation by prior art– Loss of right to patent invention Non-Obviousness (§ 103)– Secondary considerations Sufficiency of Disclosure (§ 112)– Written description– Best mode
    23. 23. Elements Of A U.S. Patent Bibliographical data Specification– Drawings– Background– Invention Summary– Detailed Description ofPreferred Embodiment Claims
    24. 24. Process Of Obtaining A Patent Identification Patent prosecution
    25. 25. Identifying A Patentable Invention Conception Review committee Communicate withpatent counsel
    26. 26. Drafting A Patent Application Meeting betweeninventor and patentcounsel Drafting of application Inventor review
    27. 27. Prosecuting The Patent Application Process Time Cost
    28. 28. What Is A Trade Secret? California Uniform Trade Secrets Act,Civil Code § 3426.1: “Trade secret” means information,including a formula, pattern,compilation, program, device, method,technique, or process, that:– Derives independent economic value,actual or potential, from not beinggenerally known to the public or to otherswho could derive economic value from itsdisclosure or use; and– Is the subject of reasonable efforts underthe circumstances to maintain its secrecy.
    29. 29. Examples Of Trade Secrets “Trade secret” means information,including a formula, pattern,compilation, program, device,method, techniques, or process …. Traditional examples of informationthat may constitute a trade secret “Negative information”
    30. 30. Maintain Secrecy Trade secrets must be thesubject of “reasonable efforts”to maintain secrecy: Cal. Civ.Code § 3426.1(d)(2)– A “trade secret” … “is thesubject of efforts that arereasonable under thecircumstances to maintain itssecrecy.”
    31. 31. Secrecy IssuesWebsitesPatent DisclosuresArticlesSEC FilingsSEC FilingsPlant ToursPlant ToursSpeechesSpeechesTrade ShowsTrade Shows
    32. 32. Comparing Patents & Trade SecretsTrade Secret PatentTerm Potentially unlimited Twenty years after filingdateDisclosure Destroys protection Necessary for protectionRequirements Reasonable efforts tomaintain secrecyFile with USPTO within oneyear of sale or publicationScope ofprotectionAny technical or businessinformation or data ofvalue to a competitor ifknownTechnical apparatus ormethods, compositions ofmatter, business methodsReverseEngineeringNot actionable Actionable as infringement
    33. 33. Thank YouAnyquestions?
    34. 34. O’MelvenyO’Melveny&MyersO’Melveny & Myers LLP610 Newport Center Drive, 17thFloorNewport Beach, CA 92660(949) 760-9600www.omm.comPaul Veravanich(949) 823-6983pv@omm.comveravanich@yahoo.com Taub(949) 823-6979ataub@omm.comFor More Information, Contact: