Intellectual Property

Joseph E. Maenner

Maenner & Associates, LLC

What is a patent?• The right to exclude

others from making, using or selling a patented product or method for a limited amount of time

• The exclusionary rights of a patent are defined by the claims (numbered paragraphs at the end of the patent)

Why bother to patent?

• Can exclude competitors from marketplace

• Time/resources/$$ for competitor to design around your patent is time/resources/$$ that your competitor is not spending elsewhere.

• Can use your patents to cross-license with a competitor

• A patent portfolio looks impressive to investors

How long does a patent last?• GATT (June 8, 1995) – A subsisting patent or a pending patent

application lasts for the longer of 17 years from issue or 20 years from earliest claimed filing date.*

• Post-GATT – 20 years from the earliest claimed filing date.*

• Post-AIPA (May 29, 2000) – Patent Office delays can add day-for-day extensions after the 20 years.

• Pharmaceutical patents can be extended as a result of delays in FDA approval

• Design patent – 14 years; no maintenance fees

*Subject to payment of maintenance fees (3-1/2, 7-1/2, 11-1/2 years)

What are the statutory requirements for a patent?

• Patentable subject matter: “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof” (35 U.S.C. §101). – “Anything under the sun made by man.” USSC.

• Novel (35 U.S.C. §102*)• Not obvious (35 U.S.C. §103*)• Enabling disclosure; best mode of making/using

invention is disclosed (35 U.S.C. §112)

* Most common claim rejections by U.S. Patent and Trademark Office (USPTO)

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Novelty (35 USC §102)

• U.S. – relative novelty– Inventor has 1 year from first public

disclosure, sale, or offer for sale within which to file a patent application, or he is forever barred from obtaining a patent on that invention.

• Rest of world – as a rule, absolute novelty– Must file a patent application somewhere in

the world prior to first public disclosure, sale, or offer for sale

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How much/how long to patent?

• Provisional patent application fee (good for one year/must be followed up by non-provisional/PCT filing) -- $260/$130/$65

• U.S. non-provisional fee starts at about $1,600/$730/$400

• PCT filing fees start at about $3,500 (plus fees for each elected country)

• Search, formal drawing, assignment fees run between about $1,000 - $1,500

• Attorney fees (depending on complexity/scope) – between about $5,000-$15,000

• Typical pendency in USPTO is about 3 to 5 years– Can pay a fee (about $3,000 for a small entity) to accelerate

examination

First inventor to file A person shall be entitled to a patent unless –

(1) 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 of the claimed invention; or(2) the claimed invention was described in a patent issued under section 151, or an application for patent published were deemed published under section 122 (b), in which the patent or application, as the case may be, names and other inventor and was effectively filed before the effective filing date of the claimed invention.

ExceptionsA disclosure made one year or less before the effective filing date of the claimed invention shall not be prior art to the claimed invention if-(A) the disclosure was made by the inventor or joint inventor or by another who obtained the patent matter disclosed directly or indirectly from the inventor or jointinventor; or(B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or joint inventor.

Using Patents as a Research Tool

“Keep your friends close, and your enemies closer”-Sun Tzu

Research the USPTO database to find out the state of your particular technology

www.uspto.gov

Can locate issued patents and printed publications (use pat2pdf.org to print patents)

Can save a lot of time and effort

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So now that you have a patent, what do you do with it?

• Make/use/sell patented product (maybe)

• Assign patent• License patent

– Exclusive– Non-exclusive– Cross-license (potential Antitrust issues)– Licensing pools (potential Antitrust issues)

• Sue for infringement

A patent does not guarantee that you can make/sell the

patented productIt is possible to obtain a patent on a product, but someone else’s patent may bar you from making/selling your patented product (dominant patent)

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Patent Infringement

• A product infringes a claim of a patent if every element/limitation in a claim is present in the product, either literally or by equivalent– The product may include more features than

are included in the claim and still infringe the claim

– The product may look nothing like the patented invention and still infringe the claim

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Defenses to patent infringement

• Non-infringement– Product is missing an element recited in claim– Patent expired

• Invalidity– Prior art– Unclean hands/fraud on the Patent Office– On-sale bar

• Laches– Patent owner waited too long to enforce patent

Infringement clearance

• The most important patent to your well-being may be someone else’s patent!– A third party patent that covers your product

can keep that product out of the market and can cost you a bundle!!!

– Prior to the introduction of a new product to market, it is advisable to obtain an opinion of non-infringement from competent counsel.

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Trade Secrets

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What is a trade secret?

“The whole or any portion or phase of any scientific or technical information,

design, process, procedure, formula or improvement or customer or sales information

or any other privileged or confidential information which is of value and has been

specifically identified by the owner as of a confidential character, and which has not

been published or otherwise become a matter of general public knowledge.

There shall be a rebuttable presumption that scientific or technical information or

customer or sales information or any other privileged or confidential information

has not been published or otherwise become a matter of general public knowledge

when the owner thereof takes measures to prevent it from becoming available to

persons other than those selected by him to have access thereto for limited purposes.”

18 Pa.C.S.A. §3930

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Subject matter eligible for trade secret protection

• Concrete information -- process or device

• Non-technical information -- sales data; marketing plans;

bid price information

• Combinations

• Customer lists

Some courts have held that a trade secret must be in continuous use to be protected as such

Some courts have held that “negative information” is protectable as a trade secret

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What is the difference between a patent and a trade secret

• LifetimePatent - 20 years from priority dateTrade Secret - if properly protected -- forever

• DisclosurePatent - tell the worldTrade Secret - tell no one

• Practice by othersPatent - Not until patent expiresTrade Secret - When legally discovered by others

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How to decide whether to patent or keep a trade secret

• If others can copy something by looking at it(device, method of operating device):

patent it

• If others cannot copy something by looking at it and it is important to the business (process):

protect as trade secret

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Factors to be considered in determining whether your client’s information is a trade

secret

• The extent to which the information is known outside ofthe client’s business• The extent to which it is known by employees and others involved in his business• The extent of measures taken by him to guard the secrecy of the information• The value of the information to him and his competitors• The amount of effort or money expended by him in developing the information • The ease or difficulty with which the information could be properly acquired or duplicated by others

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How to maintain trade secrecy• Mark technical documentation as “CONFIDENTIAL”

• Establish codes

• Restrict access (employee and visitor)

• Do not discuss secret information outside your “group”

• Perform trade secret review prior to public disclosurepatent applicationmarketing materialjournal/technical articles

• Remind departing employees of duty of non-disclosure

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How to maintain trade secrecy (cont’d)

• Separate steps– personally– physically– on paper– on computer

• Restrict access to documentation– passwords– lock and key

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How to legally obtain someone else’s trade secret

• Independent developmentlab notebooks

• Public domainpatents; publications; general knowledge;

combination

• Reverse engineering

• Innocent receipt

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Who can misappropriate a trade secret?

• Outsider– Industrial espionage– Unauthorized disclosure via NDA or license

• Insider– Departed employee– Current employee

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Remedies for trade secret misappropriation

• Damages– Compensatory– Punitive– Attorney fees and court costs

• Injunction– However, damage may have already been done

• Seizure of Tangible Embodiments of the Secrets

• Criminal penalties– Pennsylvania law -- 18 Pa.C.S.A. §3930– Federal law -- 18 U.S.C. §1832

(15/$10,000,000; 10/$5,000,000)

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New employee’s use of prior employer’s information

• New employees often come from competitors• A new employee may know some of his previous

employer’s secrets• You should let the new employee know (verbally

and in writing) that you do not want the employee to use or discuss those secrets (“Do not tell me how you did it in your last job.”)

TRADEMARKS

What is a Trademark?

• A distinctive mark of authenticity that links a product or service with its vendor or service provider

What is a Trademark?

A word - Photon-X®

A name - McDonald’s®

A design - Microsoft’s flying window

A phrase – “We bring good things to life”

used by a manufacturer/dealer to distinguish his product/service from competitors

Rolls Royce automobile v. Yugo automobile

Types of marks

Trademarks (Exxon®)

Service marks (Marriott®)

Collective marks (ANSI®)

Certification marks (UL®)

How to identify a trademark

TM - Trademark not registered (common law)

SM - Service mark not registered (common law)

® - Trademark/Service mark registered in USPTO

Strengths of Marks

Fanciful - EXXON, pentium Strong

Arbitrary - Apple (computers), Old Crow (whiskey)

Suggestive - Sno-Rake (snow shovel)

Descriptive - Quik-Print (printing services)* Weak

Generic - aspirin, escalator**

*Registrable with proof of secondary meaning**Not registrable

How to use a trademark

A trademark is an adjective

Microsoft ® software

Xerox ® copier

Failure to properly use a trademark risks the trademark falling into the public domain

aspirinescalatorcellophanethermosgoogle (?)

Family of marks - very powerful

McDonald’sMcMuffinMcRibMcShake

‘R’ UsToys ‘R’ UsKids ‘R’ UsBabies ‘R’ Us

AppleiPodiPhoneiTouch

RegistersPrincipal

BenefitsNationwide protection from date of registrationIncontestability (after five years of continuous use)Warning to othersBars importsProtection against counterfeitingTreble damages for deliberate infringementEvidentiary advantagesFacilitates settlementUse of ®Proof of ownership - valuable intangible asset

Supplemental used for marks not registrable on the Principal Register (descriptive)

but capable of distinguishing applicant’s goods

Application Based on UseActual use

mark has been used in commerce which is regulated by Congress

interstateinternationalIndian tribes

Intent to Use mark has not yet been used in commerce which

is regulated by Congress

must file a verified statement of use within 6 months after date of Notice of Allowance (can file up to 5 six month extensions)

Remedies for trademark infringement

Damages- compensatory- corrective advertising- punitive

Injunction

Disclaimers“not associated with . . . “

Recalls and destruction

ConclusionTrademarks are a valuable asset

Always use the ® in conjunction with a registered trademark

Trademarks must be properly and continuously used to avoid losing them to the public domain

Use the trademark as an adjective

Use the trademark liberally on goods, packaging, presentations, website, etc.

Keep alert for potentially infringing marks

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Copyrights

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Copyrights

• What is a copyright?– A right to copy

• What can be protected by a copyright?– Literary works -Musical works– Dramatic works -Choreographic works– Vessel hull designs -Pictorial/sculptural works– Motion pictures -Sound recordings– Architectural works -Mask works

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Notice and registration

• © 2013, Maenner & Associates, LLC• A copyright need not be registered to affix

the copyright notice• However, a copyright must be registered

to bring a lawsuit

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How to apply for a copyright registration

• Go to Copyright Office website (www.loc.gov/copyright)

• Go to “How to Register a Work” and select form for the type of work that you have

• Follow the directions and fill out the form• Pay the fee (typically about $40.00)• File the form, pay the fee, and submit the

required specimen(s) to the Copyright Office

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How long does a copyright last?

• For works created on/after January 1, 1978:– For single/joint authors: Life of longest living

author + 70 years– For works made for hire: shorter of 95 years

from first publication or 120 years from creation

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Sale of a copyrighted work

• Does not amount to sale of the copyright in the work

• I can sell the original of a (copyrighted) work of art to you, but you do not get the right to make/sell copies of the work (Absent an agreement to the contrary, I still retain that right)

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Why bother to copyright?

• Copyrights are CHEAP!!!!!• Copyrights last for a LONG time!!!• The copyright laws allow for actual

damages/infringer profits OR statutory damages

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Copyright infringement

• Standard is “Access” + “Substantial Similarity”

• Plaintiff may elect statutory damages in lieu of actual damages (up to $150,000 for willful infringement)

• Criminal penalties are also provided

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Defenses to allegation of copyright infringement

• No access– If Defendant can prove that the creation of the

allegedly infringing article was done without access to the copyrighted article, even if the two articles are identical, then it is likely that infringement will not be found

• Fair use– Educational use, non-profit use, parody

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Computer Software Shrink-wrap Licenses

• “By removing the shrink-wrap over this package, you agree to the terms of the license herein.”– License can be for single user or multiple user– Oftentimes, software licensed for a single

user is installed on multiple computers– Software industry is cracking down on

violators

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Compulsory Licensing

• “Cover versions” of songs– One band can record their own version of

someone else’s song without permission– However, must serve notice on the copyright

owner within 30 days of making the recording and before distribution of the recording

– Must also pay a royalty of a statutory amount per recording or a statutory amount per minute or fraction thereof

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Termination of transfer/license of copyrighted work

• For any work other than work made for hire

• For a transfer/license of rights executed after January 1, 1978

• In a period between 35 and 40 years from date of transfer/license of the rights, author or author’s estate may terminate transfer/license without compensation to purchaser/licensee

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Copyright Counseling Advice

• Register copyrightable material– It’s cheap– It may be a VERY profitable investment

• DO NOT use material from which you do not know the origin– A copyright for the material may still be in force– Using the material may turn out to be VERY costly if

the copyright owner sees your use– The Internet makes it VERY easy for a copyright

owner to see who may be infringing his/her work

Contact information:

Joseph E. MaennerMaenner & Associates, LLC2723 Stockley LaneDowningtown, Pa 19335

215-275-5595jmaenner@maennerlaw.com