IP for the GC:Protecting Innovation

April 28, 2016

Dwayne GoetzelAlex Knapp

Stephen Mason

Roadmap of presentation

Copyright – For the protection of the expression of ideas in software, literary, artistic and

musical works.

Trademarks – A brand (words, names, symbols, devices or images) used with goods or

services to identify their source.

Patents & Trade Secrets – For the protection of inventions and improvements to existing inventions.

Business Case – Is there commercial value?

A Quick Map of Intellectual Property:

PATENT/TRADE SECRETS

IDEAS

FUNCTION

COPYRIGHT TRADEMARK

EXPRESSION IDENTIFICATION

Copyright

Copyright examples:

Literary works

Motion pictures and other audio visual works Musical works (including accompanying words) Sound recordings Software Plans and Designs Semiconductor Masks

Requirements for copyright

The work must be original (someone wrote it for the company)

The work must be fixed in a tangible medium of expression (floppy disk, paper, hard disk)

Cannot register simple symbols, phrases, or ideas

Why register a Copyright

Registration enables suit against unauthorized copiers in Federal Court

Registration discourages some copiers Registration is not necessary to use the ©, but is good

evidence that you were the first to write/compose/draw/code

Registration is a necessary prerequisite to filing suit Timely registration is required to recover attorney’s

fees and statutory damages

The rights afforded under a copyright

Prevent others from: Making copies Modifying the copyrighted work (“derivative work”) Distributing the copyrighted work Performing the copyrighted work publicly Displaying the copyrighted work publicly

Trademark

What is a Trademark?

Words, devices, symbols or composite of both–also sounds, smells, colors, buildings, package shapes….

Distinguish your goods or services from others

No requirement to register trademark to be protectable–but registration increases protection–common law rights more difficult to enforce

Variations

® = Registered mark TM = Claimed mark SM = Claimed service mark

New = Nu = new= nuevo

NEW = new = New= neW

What Rights Does a Trademark Protect?

Protects most precious assets of an enterprise - its goodwill

Provides quality assurance to customers

Protects against unauthorized use of owner’s mark

Spectrum of Distinctiveness

Generic — Descriptive — Suggestive — Arbitrary

Patent & Trade Secret

What can be patented? Anything people have invented:

– Machine – Article of manufacture – Process– Composition of matter – Improvement of any of the above

Note: In addition to utility patents, encompassing one of the categories above, patent protection is available for – (1) ornamental design of an article of manufacture (design patents) and – (2) asexually reproduced plant varieties (plant patents)..

Well . . . Almost Anything

Alice v. CLS Bank 134 S.Ct. 1247 (2014)– Case involved generic computer implementation of two parties using

a third party as an intermediary to mitigate settlement risk in financial transactions. This was found to be an “abstract idea.”

– Under Alice, “abstract ideas” implemented on generic computers are not patent eligible subject matter without “significantly more” than just the abstract idea.

Why would I want a patent?

1. To stop others - from making, using, or selling the invention

2. Licensing revenue- Monetize innovation, no matter who is selling

3. Marketing - The product itself, because we all know that “patented” means “better”

When do I want to apply for a patent:

Immediately, unless:– You want to keep it secret– You never want a foreign patent

Within one year (or else) from: – Any public use of invention– Any offer to sell invention– Any publication describing the invention

Failure to apply for a patent within one year from any of these events will bar you from ever getting a patent on the invention.

The patent tradeoff

Nature of patent – a complete disclosure of the invention – a 20-year monopoly

Whether this is a good deal, depends on your industry – Pace of change– Detectability– Reverse Engineering

Three-phase patent process (Identify Assets)

Identify important inventions– Product discussions – If an idea is innovative and important, suggest

disclosure submission

– Increase awareness– Whenever possible, refer employees to the patent legal wiki

– Submit disclosures at …

Three-phase patent process (Define Protection)

Filing and prosecution:– A patent committee or in-house patent counsel identifies cases on

which to undertake filing and routes them to outside patent counsel (hopefully by day 90)

– Outside counsel, working with the inventor, files a patent application (hopefully by day 180).

– The United States Patent and Trademark Office Examines the application and issues a patent (hopefully in less than 3 years from filing).

Three phase patent process

Identify Potential licensees– Keep on the lookout for infringers stealing the company’s property. If

the interface looks too familiar or the new feature sounds like something we pioneered, inquire.

– Be aware of opportunities to sell company’s innovation to partners.

Negotiate licensing arrangements

The small print: Patents

Patent term– Starts on issue date– Ends 20 years from earliest effective filing date

Right to exclude others:– Making– Using– Selling, – Offering to sell– Importing

Protection for function & structure– Prohibits all use, not just copying– Independent creation is not a defense– Caveat- A patent does not convey to patentee the right

to practice invention

Trade Secrets:

Really must be secret (take steps to suppress theft)

Last forever (Coca-Cola)

Does not prevent reverse-engineering

Must prove the theft itself

Tips for protecting trade secrets: Limit access to technical information on a “need to

know” basis.

Limit physical access to sensitive areas to approved personnel only.

Institute proper sign out procedures for software, documents etc.

Label confidential information as “SECRET AND CONFIDENTIAL.”

Require confidentiality agreements, non-disclosure agreements and licenses for parties with access to trade secrets.

The Small Print: Trade Secrets Definition: A device, method,

formula or information that gives one an advantage over the competition and which is kept secret to be of special value

Examples:– soft drink formulas– customer lists– business processes

Limits: – Must be kept secret– Independent development permitted– Reverse engineering may be used to

discover a Trade Secret

On the Horizon

On April 4, 2016, the “Defend Trade Secrets Act” was unanimously passed by the Senate.  On April 20, 2016, the House Judiciary Committee approved the DTSA by voice vote.  The Act is expected to be passed by the House and will be delivered to the President for consideration.  As a result, a federal civil cause of action for misappropriation of trade secrets is likely to soon become law.

The Act is similar to the Uniform Trade Secrets Act (adopted by 48 states including Texas), although ex parte relief may be available, and “reverse engineering” is expressly excluded from the definition of “improper means.”

Business Case

Which protection is most appropriate to my business?

Patents– Pros: Strongest form of protection (protects ideas, not expressions); covers innocent infringers; term is

reasonable (20 years from filing date)– Cons: More expensive and time consuming to obtain

Trade Secrets– Pros: Inexpensive and term can be forever– Cons: Only protected for so long as secret; some things are not protectable as a trade secret (e.g., visible to all

in product)

Copyrights– Pros: Relatively inexpensive; copyright term is long (life of author + 70 years)– Cons: Thin form of protection; infringement only when expression copied.

Trademarks– Pros: Relatively inexpensive; term so long as used in commerce– Cons: Non-use, non-enforcement can destroy mark. – (e.g., Escalator, Linoleum, Kerosene, Cellophane, Thermos, Aspirin, Yo Yo and Bikini)

A quick outline on relative costs

Copyright registration is cheap and automatic– on the order of $300 for a typical application

Trademark registration is less expensive, but it’s not automatic– on the order of $1000 for a typical application, and an additional $3000-$5000

in prosecution to achieve registration, assuming no 3rd party opposition

Patents are neither cheap nor automatic– On the order of $15,000-$25,000 for an application, and an additional

$10,000-$25,000 over five years to get the patent to issue

What we learn from the relative costs…

Copyright and trademark registrations are “no brainer” business decisions, if they are appropriate.

But we need to think about patents. The costs are high.

Why would I spend that much money?

An example from MSFT – I don’t represent them.

MSFT has made five times more money from Android than from Windows Phone 7.– Microsoft gets $5 for every HTC phone running Android, according

to Citi analyst Walter Pritchard, thanks to a patent settlement with HTC over intellectual property infringement.

Of course, MSFT also lost $200M on a patent infringement case in 2009.– McKool Smith announced a $200m patent infringement verdict

against Microsoft in favor of i4i Inc. The complete verdict amount also included awards for lost profits and royalties.

Questions?

About Dwayne Goetzel:

Dwayne Goetzel divides his practice between intellectual property trial work, anti-piracy protection, and securing rights to intellectual property through applications and agreements.

The subject matter of Dwayne’s cases have run the gamut from automotive products, anti-piracy, computer and electronic devices, exercise equipment, fishing tackle, medical devices, and telecommunications equipment, to name just a few.

With respect to securing intellectual property rights, Dwayne has filed hundreds of trademark and copyright applications in just the last few years and is involved in all aspects of copyright and trademark prosecution practice.

Dwayne graduated summa cum laude with a Bachelor of Arts in history from Angelo State University in 1986. Dwayne received a Rotary International Graduate Fellowship, and attended German law studies at Philipps-Universität in Marburg, Germany from 1986 to 1987.

After legal studies in Germany, Mr. Goetzel attended the University of Texas School of Law and received his Doctor of Jurisprudence degree in 1990.

About Stephen Mason: Stephen Mason’s practice focuses on patent application preparation and prosecution in

technical areas including semiconductors, microprocessors and memory, testing and verification, databases and storage, graphics processing, electronic commerce, network equipment and software, and mobile computing and sensor systems.

From 2006 to 2007, Stephen served as the general counsel of an Internet advertising company in Austin, Texas. His practice has previously included intellectual property aspects of merger and acquisition transactions, software licensing agreements and research contracts.

Stephen began his legal career at Bracewell & Giuliani. Prior to entering law school, Mr. Mason worked in PBX configuration and competitive intelligence at Nortel Networks in Richardson, Texas.

Mr. Mason is admitted to practice in Texas and before the United States Patent and Trademark Office. He received his Bachelor of Science degree in Electrical Engineering from Texas A&M University in 1999 and his Juris Doctor degree from Baylor University in 2003. Stephen has served as president of both the Texas Aggie Bar Association (2008) and the Capital City A&M Club (2007).

About Alex Knapp: Alex Knapp’s practice focuses on patent application preparation and prosecution in technical

areas including data center infrastructure, networking equipment, mobile devices, graphic processing and general mechanical devices.

Alex began his legal career with Meyertons Hood after graduating from Baylor Law School in 2013. He is registered to practice in Texas and before the United States Patent and Trademark Office.

In addition to being an attorney, Alex is a licensed professional engineer in the state of Texas and worked for The Dow Chemical Company in Freeport, Texas for 5 years prior to law school. While at Dow, Alex completed a three-month assignment in Tarragona, Spain and participated in manufacturing conferences in Ternuezen, the Netherlands. He received his Bachelor of Science degree in Mechanical Engineering, Magna Cum Laude, from Texas A&M University in 2005.

Alex is involved in various organizations in the Austin community including the Ronald McDonald House, “Friends of the House,” Austin Symphony BATS, AYLA, and the Texas Aggie Bar Association.

About MHKKG:

Meyertons, Hood, Kivlin, Kowert & Goetzel, P.C. is a full service intellectual property law firm with a nationwide practice located in Austin, Texas. We have approximately 80 employees, including approximately 40 attorneys, patent agents and technical advisors specializing in the procurement, prosecution, litigation, licensing and counseling of intellectual property matters, such as patents, copyrights, trademarks, unfair competition and domain names.

Ranked in the top 5 law firms nationwide for providing the highest quality of issued patents (Intellectual Asset Management magazine, May/June 2016)

Ranked in the top 45 law firms nationwide for the number of patent applications filed (Intellectual Property Today, 2015).

For More Information, please contact:

Stephen A. Mason

Meyertons, Hood, Kivlin, Kowert & Goetzel, P.C.

Building 2, Suite 3001120 S. Capital of Texas HighwayAustin, Texas 78746smason@intprop.comPhone: 512-853-8826Fax: 512-853-8801http://www.intprop.com