intellectual property triage
DESCRIPTION
Realistically, innovators must work within a budget to protect IP. This presentation explores IP basics and considerations when determining whether and how to allocate limited funds for maximum IP protection.TRANSCRIPT
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Based on Presentations for Idaho Technology Counciland Univ. Idaho College of Law, Business Law Ass’n
SEPTEMBER 2012
INTELLECTUAL PROPERTY TRIAGEALLOCATING LIMITED RESOURCES FOR MAXIMUM IP PROTECTION
ELIZABETH HERBST SCHIERMANUS Patent Attorney
© 2012 E.H.Schierman
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HYPOTHETICAL
Widget 2.0: Inventors have developed a new and
improved widget Started a partnership No employees Hired designers for:
Logo Website Product packaging
Expecting big salesin U.S. and oversees
Instructions:Lots and lots and lots of fine print
The hypothetical is meant to be purely fictitious. Any similarity to real inventions, businesses, etc. is unintended
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IP 101 - PATENTS
Inventions Article of Manufacture Process Machine Composition of matter Ornamental design for
article of manufacture Plants
Patent Types, e.g.: Utility Design Plant
In Widget 2.0 World:(1)Article – the widget(2)Process – method of making(3)Composition – polymer from which widget is made
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IP 101 - TRADEMARKS
Symbols indicating source, origin, sponsorship, or endorsement of goods or services
E.g.: Product name, business name, logo Note: Trademarks often used in domain names
(www.trademark.***), but the domain name is not necessarily a trademark In Widget 2.0 World:
(1)Plain word mark: WIDGET 2.0(2)Stylized mark:
Note: www.widget.*** - not a trademark
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IP 101 - COPYRIGHTS
Work of original authorship fixed intangible form
E.g.: packaging, website design, source code,photographs, advertisementsIn Widget 2.0 World:
(1)Product packaging design(2)Website design(3)Logo design
Instructions:Lots and lots and lots of fine print
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PATHS TO ENFORCEABLEPROTECTION U.S. Patents:
Invent File Patent Application w/ U.S.P.T.O. …wait years (~3 yrs, avg.)… Receive issued U.S. patent (Pay maintenance fees)
This is the ONLY path to establishing patent rights for an invention
CREATION OF PATENT RIGHTS
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PATHS TO ENFORCEABLE PROTECTION Trademarks:
Use in commerce in distinctivemanner
Optionally… File Trademark Application (before or after starting
use) w/ State w/ U.S.P.T.O.
…wait months (~11 mos., avg.)… Receive Trademark Registration (Renew Registration every 5-10 years)
POTENTIALCREATION OF COMMON LAWTRADEMARK RIGHTS
CREATION OF REGISTERED TRADEMARK RIGHTS
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PATHS TO ENFORCEABLEPROTECTION Copyrights:
Fix creative work in tangible form File Copyright Application
w/ U.S. Copyright Office …wait a few months
(2.5 – 6.5 mos., avg.) Receive Registration Certificate
Note: Registration is not a prerequisite to having copyright rights, but it is prerequisite to take legal action against an infringer.
CREATION OF COPYRIGHT RIGHTS
CREATION OFABILITY TO SUE FORCOPYRIGHT INFRINGEMENT
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PROTECTION BENEFITS
(Utility) Patents: Rights: Exclusive right, in the U.S. to:
Make, Use, Sell, Offer to sell, and Import the patented invention as claimed
Duration: 20 years from earliest filing date (except provisional filing date)
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PROTECTION BENEFITS
(Utility) Patents: Value of Formal Protection:
ONLY means to acquire patent rights & stop others from making/using/ selling/importing the patented invention
Can stop patent infringement Something to license – get royalties? Something to assign – sell business? Collateral for loans/investments – build business? Clarify ownership
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PROTECTION BENEFITS
Trademarks: Rights: Exclusive right, within area*,
to stop junior users from adopting or using marks likely to cause confusion Common law: *area = area of actual use State Registration: *area = all of State Federal Registration: *area = all of U.S.
Duration – For as long as it is used (registrations maintained)
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PROTECTION BENEFITS
Trademarks: Values of Formal Protection:
Expands constructive area of use – broader trademark rights
Avoids conflict? – easier for others to discover your rights
Something to license – start franchises? Something to assign – sell business? Clarifies ownership Easier to stop cyber squatters?
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PROTECTION BENEFITS
Copyrights: Rights: Sole right to
Reproduce; Adapt to create derivative works; Distribute copies by sale, rental, lease, lending; Perform/display publicly
Duration: Generally: Life of author + 70 years Work Made for Hire: Earlier of 120 yrs after creation or
95 yrs after publication Values:
Can stop copyright infringers
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PROTECTION BENEFITS
Copyrights: Values:
Statutory damages ($750-$150,000)… if copyright registered w/i 3 mos. of publication or before infringement begins
Required before lawsuit to stop copyright infringer Clarifies ownership Something to license/assign Eases licensing?
In Widget 2.0 World:Important – because the hired designers (independentcontractors) may own the copyright rights absent anassignment to the business.
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COST FOR PROTECTION
U.S. Utility Patents: Application Preparation:
~$2,000-$15,000+ Filing Fees:
Nonprovisional: $1,260 ($630 s.e.) (or, 1st, Provisional: $250 ($125))
Prosecution: ~ $2,000-$15,000+ Issue Fees: ~$1,770 ($885) Maintenance Fees: ~$1,130 ($565);
~$2,850 ($1,425); ~$4,730 ($2,365) TOTAL – over period of ~ 20 years
~$18,000 ($12,000) – $35,000 ($30,000)
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COST TIMELINE:
Utility Patent – Avg. ComplexityStart with Nonprovisional
0 2 4 6 8 10 12 14 16 18 20$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Large Entity
Small Entity
Nonp. Prep& Filing
Prosecution to Allowance
Maintenance Fees
Time (years)
Cost
In
curr
ed
Totals over 20 year period:~ $27,000 large entity~ $17,000 small entity
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COST TIMELINE:
Utility Patent – Avg. ComplexityStart with Provisional
0 2 4 6 8 10 12 14 16 18 20 $-
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Large Entity
Small Entity
Nonprov. App. Prep & Filing
Prov. App. Prep & Filing
Prosecution to Allowance
Maintenance Fees
Time (years)
Cost
In
curr
ed
Totals over 21 year period:~ $30,000 large entity~ $18,000 small entity
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COST FOR PROTECTION
Trademarks: Common Law: Free State Registration:
ID Sec’y State Fees: $30 Prep. Cost: ~$200-$500 Renewal: $30 every 10 years
Federal Registration: USPTO Fees: $275-$375 Prep. Cost: ~$200-$500 Prosecution: ~$200-$500 Renewal: ~$300-$500 @ 5 years and every 10 years
thereafter
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COST FOR PROTECTION
Copyrights Initial Creation: Free Registration:
Application Fees: $35-$65 Maintenance: $0
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DEADLINES
To File Patent Application: U.S. Patent Protection: 1 year from
1st public disclosure* – not extendable *may include sales, offers for sale, public use,
publications, presentations, non-confidential discussions, etc.
U.S. Patent System changing in March 2013!! 1st Inventor to File Application No more 1 year grace period on public use, offers
for sale, or otherwise making invention available to public ??
Most other countries: No grace period; Barred from patent if application not filed before public disclosure
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DEADLINES
To File Trademark Application: None – as long as trademark is in use
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DEADLINES
To File Copyright Application: Generally, none until copyright expires (decades)
Generally - Life of author + 70 years Work Made for Hire: Earlier of 120 yrs after creation
or 95 yrs after publication However, to get statutory damages –
3 months from publication or before infringement begins
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PRIORITIZING
Considerations: Does business’s success rely upon any of:
Unique product/services? Good reputation in a highly-competitive market? Selling easily-copied creative work?
Is the IP the business uses owned by someone else (e.g., employees, independent contractors)?
Is the business going to grow into other markets, states, countries?
Will the business be sold or franchised? Does the business want to leverage its assets
for funding?
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PRIORITIZING
Prioritize Patent Protection as High if: Unique product (or method/composition/etc.)
is an important asset Someone with skill in the field of art could
copy the product (or method/composition) Competition likely to grow or copy upon examining the
product (or method/composition) There is even a slight possibility that the business may
want patent protection (Because patent rights may be forever lost if the
business/inventor waits too long to file a patent application)
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PRIORITIZING
Prioritize Trademark Protection as High if: Reputation is principle selling point Market is highly competitive Trademark (business name, product name, logo, etc.)
may be something that a competitor might think of on its own
Business wants to stop others from registering website addresses (domain names) using the trademark
Business wants to franchise or license others to use the trademark
Business knows of another who started using a similar trademark after business adopted its trademark
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PRIORITIZING
Prioritize Copyright Protection as High if: Profits rely upon sales or licensing of creative work Business sells a software product and wants to stop
others from copying the code Business knows of copying of its creative work by
another and the copying is hurting the business
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ALLOCATING BUDGET:
Widget 2.0 Hypothetical: With $15,000 budget:
1) Patent search online - $0 2) Nonprov. Patent App. Prep w/ Search - $10,000 -Widget article; Method of making; & Composition3) Nonprov. Filing: - $6304) Trademark Search for WIDGET 2.0 - $8005) File Trademark App. for WIDGET 2.0 - $8506) Get design copyrights assignments from designers & register copyrights - $600TOTAL: $12,880
Start saving for prosecution of trademark application in ~6 mos. & patent application in ~2+ yrs
Instructions:Lots and lots and lots of fine print
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ALLOCATING BUDGET:
Widget 2.0 Hypothetical: With $5,000 budget:
1) Patent search online - $02) Prov. Patent App. Prep w/ Search - $3,8753) Prov. Filing - $1254) Trademark search for WIDGET 2.0 - $8005) Get copyrights in logo design, website design, and product packaging assigned from designers - $200TOTAL: $5,000
Start saving for nonprov. patent app. costs w/i 6 mos.-1 yr. & for filing federal trademark application
Instructions:Lots and lots and lots of fine print
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ALLOCATING BUDGET:
Widget 2.0 Hypothetical: With $500 budget:
1) Patent search online - $02) Independent Prov. Filing - $1253) Trademark search online - $04) Get copyrights in logo design, website design, and product packaging assigned from designers - $200TOTAL: $325
Start saving for nonprov. patent app. costs w/i 6 mos.-1 yr. & for filing federal trademark application
Instructions:Lots and lots and lots of fine print
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TAKE-AWAYS
Find reliable guidance early! Don’t delay in creating an IP Protection Plan There is more than one type of IP protection Budget for an on-going IP protection process A business’s time and effort can save it money if it:
Trains employees/contractors to keep good records Provides its IP att’y with all information without delay Responds on time to the Patent/Trademark/Copyright
Office Quality counts! Get it right the first time!
Mistakes cost money and can mean permanent loss of rights
Instructions:Lots and lots and lots of fine print
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QUESTIONS ?
Elizabeth Herbst SchiermanUS Patent Attorney
© 2012 E.H.Schierman
Find me on: LinkedIn: Twitter: www.linkedin.com/in/EHSchierman@EHSchierman
The information in this presentation is of a general nature. It is not directed to any specific circumstance and should not be taken as legal advice.