& j a w o r s k i l.l.p. surfaces in biomaterials ... · surfaces in biomaterials foundation...

F U L B R I G H T & J a w o r s k i L.L.P.Surfaces in Biomaterials Foundation

BioInterface 2011Bloomington, MN

©2011 Fulbright & Jaworski L.L.P.

Identifying, Creating and Commercializing Intellectual Property: Managing Patent Portfolios, Offensive

and Defensive use of Intellectual Property

October 24-26, 2011When You Think INTELLECTUAL PROPERTY,

Think Fulbright.TM

©2011 Fulbright & Jaworski L.L.P. 2

Presentation Overview

1. What is Intellectual Property?

2. Why Protect Your Company's IP?

3. Developing and Protecting IP Rights

4. America Invents Act – Changing Rules in IP

5. Introduction to IP Business Strategy

6. Avoiding Infringement of Other’s IP Rights


INTELLECTUAL CAPITAL

INTELLECTUAL PROPERTY (IP)

PatentsTrade SecretsTrademarksCopyrights

HUMAN CAPITAL

Employee SkillsCreativityKnow-HowCorporate KnowledgeLeadershipCustomer

Relations

INTELLECTUALASSETS

InventionSoftwareBrandsBusiness PlansCustomer ListsCustomer

InformationMarketing Plans

CREATION

UTILIZATION


Types of Intellectual Property

Types of Rights Scope of Coverage Examples

Patents New and Useful Inventions

“Anything under the sun useful to man” - Products and

Processes for Manufacture; Chemical Compounds; Software and Business

Methods

Trade Secrets Secret Information with Economic Value

Manufacturing Processes, Business Plans, Databases,

Customer Information

Trademarks/Trade Dress

Identification of Source ofProduct or Service

Northwest Airlines®, Coca-Cola®, Pepsi®, Xerox®

CopyrightsUnique Expressions of

IdeasSoftware Code,Manuals, Books


Why Protect Your Company’s IP?

Corporate valuations is enhanced by IP • strong correlation between total number of patents

issued and increase in total revenue • Intellectual Capital and IP—not Bricks & Mortar—are

the basis of today’s leading companies

Creates ValueCreates and protects market shareCreates a competitive advantage


Benefits of IP Protection

Protect Income Streams & Recover R&D Investment

Create Strong Identity with Customers

Develop Licensing Revenue

Create Bargaining Chips (e.g., for litigation and cross-licensing)

Validate Technological Expertise

Attract and Secure Investors


Developing & Protecting IP Rights

Patent Protection

Trade Secret Protection


Patent ProtectionProvisional Patent Application

● Cannot mature into a patent

● Provides filing date

● Expires after 12 months

Utility Patent

Provides owner a legal right to exclude others from making, using, offering to sell, or selling the invention

-Does NOT provide owner the right to practice the patented invention

Life is 20 years from the filing date


What Can Be Patented

“Process, machine, method of manufacture, or composition of matter”● Business methods (in the U.S.)

● Mathematical algorithms, when used to achieve a concrete and useful result

● Small improvements to or differences between prior technology is frequently patentable


Useful

Novel

Not known or used by another

● Not publicly disclosed

Not Obvious● Differences between invention and what is publicly

known are not obvious to one “skilled in the art”

Basis for Patentability


Identifying an Invention?

Where something different is created and that difference offers an advantage

Engineering/Product Development/Operations Projects

● Value often exists even in cancelled or suspended projects

May be found within technical papers or reports

Supporting systems such as product concepts, visible selling features, interfaces, content creation tools, transmission and delivery systems, networks, and software


Who Is an Inventor?

Research and Development Personnel

Non-Operations Groups

● e.g., sales staff providing solutions to a customer need, finance specialists devising innovative methods for funding projects

ANYONE CAN BE AN INVENTOR

● there is no job prerequisite to create innovations


Patent-related Best Practices

Implement Invention Submission & Review Program

Ensure Proper Patent Marking

Employee Agreements

Joint Development Agreements

Avoid Public Disclosures (Non-disclosure Agreements)


NOT INVENTED HERE!

Does the company have an outside disclosure program?

Is there a policy in place to prevent employees from receiving “inventions” from third parties?

If no policy, how does the company handle situations with third party inventors?

Should the company have a policy to review third party inventions?


Pitfalls of Public Disclosure

Competitors may discover disclosure and destroy competitive advantage

Forecloses ability to provide additional value to company

Under U.S. and Canadian patent law, public disclosure triggers a one-year grace period to file a patent application (administrative headache). **Under America Invents Act, public disclosure abolishes rights for non-disclosing inventors

In most other countries, public disclosure destroys the ability to obtain enforceable patents (i.e., Absolute Novelty)


Public Disclosures

Presentations – (e.g., trade show)

Publications – professional, trade, and industry journals

Public Use● Marginal exception – experimental use (U.S. only)

Offer for Sale/License● Yes, being at a trade show indicates willingness to accept

an offer, and is thus considered an “offer for sale”

Prototyping efforts, initial supplier contacts

ANYWHERE in the WORLD


Trade Secrets (and Confidential Information)

Information of value, kept secret by an owner (e.g., the formula for Coca-Cola®)

● Usually to provide a business advantage over competitors

● Examples: scientific or technical information, designs, processes, procedures, formulae, improvements, confidential business or financial information, customer lists, databases


Trade Secrets (and Confidential Information)

Affirmative measures must be taken to keep the secret

Under AIA prior use rights are a defense against infringement upon showing of

a) reduction to practice and commercial use; and

b) commercial use occurs at least one year before the effective filing date of the claimed invention


Steps to Protect Trade Secrets

Identify Potential Trade Secrets

Limit Access within Your Company

● Limited Dissemination (Need-to-Know)

Implement Program to Maintain Confidential Status

● Security Provisions (Safes, Controlled Access)

Include Confidentiality Provisions in Employee Agreements

Use NDAs with Outside Vendors


Steps to Protect Trade Secrets - Continued

Require confidentiality or non-disclosure agreement with any party receiving the disclosure

File patent applications before any disclosure is made


Confidential Information

Assume EVERYTHING you produce at work is confidential information.

● Different than a determination of whether something is patentable or a trade secret.

Confidential Information includes:

● inventions, product plans, source code, research information, development information, know-how, technical specifications, business strategies, marketing plans, finances, costs, prices, customer names, supplier names, business opportunities, personnel

● Any other information that is of value to or provides your company with a competitive advantage.


Non-Disclosure Agreements

Use of proper non-disclosure agreements (NDAs) is critical to protecting your company’s confidential information

Require NDA confidentiality agreements with:

● Potential Business Partners

● Vendors & Suppliers

● Contractors & Consultants

● Licensees

Mark all documents produced under an NDA with a “CONFIDENTIAL” label


America Invents Act Changing Rules in IP – September 16, 2011

Three Big ChangesFirst to File – with Grace (FTFG)Changes to Post-Issuance Proceedings• Supplemental Examination – cleanse patent• Inter Partes Reexam – Revised New Standard -Reasonable likelihood of Prevailing (RLP)• Inter Partes Review – New – (RLP) Estoppel for later civil action• Post-Grant Review – New – (RLP) Estoppel for later civil action

Fee Setting But Not Fee Spending or RevenueControl

26


AIA Phased in over 18 Months

9/16/2011 9/16/2012 3/16/2013- prior user rights Assignee oath/dec FTFG- micro entity fee 3rd Party Submission New Sec. 102 - virtual marking BPAI PTAB Derivation Proc.- best mode Supplemental ExamPrioritized Exam (9/23/2011) Inter Partes Review< 10,000 Bus Method Pat Review$4800/$2400 Post Grant ReviewFinal disposition 12 mo Inter Partes Reexam

27


First to File with Grace – Scenario 1

A invents first and files first before B

Party A

Party B

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http://www.clipartguide.com/_pages/1386-0902-0317-4532.html

http://www.clipartguide.com/_pages/1386-0902-0317-4532.html

http://www.google.com/imgres?imgurl=http://www.clker.com/cliparts/e/0/f/4/12428125621652493290X_mark_18x18_02.svg.hi.png&imgrefurl=http://www.clker.com/clipart-28652.html&h=591&w=498&sz=18&tbnid=1r1vic3LPFlJpM:&tbnh=135&tbnw=114&prev=/search?q=clip+art+X&tbm=isch&tbo=u&zoom=1&q=clip+art+X&usg=__zSAKP1Dy9SVqzE5eb7JAuVEKIH4=&sa=X&ei=FgGeTr6rO4jmqQG0zKnLDg&ved=0CBQQ9QEwAA



A invents first, B files first

Party A

Party B

29




A invents first, B files first but A publishes first!

30

One year grace

BUT – loss of foreign rights!

Party A

Party B




31

A invents first but files after B has been publicly available for les than 1 year



AIA – New Rules for Novelty

Publication and Grace vs. Absolute Novelty

32

Ideal PatentFiling

Small InventorReality

UniversityReality

Complete disclosureno additional developments

No public disclosure No need for Grace

Large Co.Reality

Initial disclosure Followed by furtherR & D

Vetted by Patent Review Committee

Limited Provisional useLimited need for Grace

Initial concepts and Subsequent development

Patent filings competewith fund raising

Use of Provisionalsto minimize cost

Research concepts as opposed to product development

Patent filings vs. publication

Significant use of Grace


AIA – Take Home

First to File● Can no longer “swear behind”

Reliance on inventors notebooks to prove conception is no longer necessary

● Use of “Grace” after publication will still foreclose foreign filing in absolute novelty countries

Supplemental Examination – cleanse patentEnd of false marking claimsNew post-grant review contains significant estoppel provisions

33


Introduction to IP Business Strategy

Determine value of IP to Company

Conduct Regular IP Audits

Implement Patent Strategy

Focus on Protecting Core Technologies

Prevent “Fencing-in” by Competitors

Pursue “Blocking” of Competitors

Monitor Competitors - Patent “Mapping”


Determining Value of IP to Company

Evaluate business goals

Evaluate technology and product platform

Estimate the impact of IP on profits

● Increase in product’s sale price

● Decrease in product’s production costs

● Increase product’s sales volume

Evaluate competitor’s market presence, products, and technical and patent activities


IP Audits

Obtain a “snap-shot” of your company’s IP rights and confirm ownership

Verify that core technologies and key products are protected

Ensure appropriate procedures are in place to protect IP rights and identify areas for improvement

Assess the quality and scope of those rights

Evaluate a business unit or product line for possible acquisition, sale, or merger

Review employee, joint-development, consulting, non-disclosure, and license agreements


Patent Filing Strategies

1) Assess overall “value” of invention and file when value exceeds procurement costs

2) File on all inventions that apply to core product or family of products

3) File applications for everything developed

4) File to avoid “fencing in”

File patent applications on inventions “surrounding” a base invention

5) File patent applications on inventions that the company does NOT intend to use in a product

Prevents competitors from implementing the invention, or creates a licensing opportunity


Monitoring Competitors

Identify Strategic Acquisitions (or business alliances)

Direct R&D Activity

Block or Fence-in Competitors


Avoiding Infringement of Other’s IP Rights

U.S. patent only gives owner the right to exclude others from the territory covered by the patent’s claims

Patent does not give owner the right to practice the invention, as the invention may require the practice of a “dominating” patent


Strategies for Avoiding Infringement

Conduct Product Clearance Investigations

Obtain Opinions of Counsel

Monitor Competitor’s IP

Challenge Patents in the PTO (as opposed to litigation)

Consider IP Infringement Insurance


Monitoring Competitors

Track and evaluate published patent applications and issued patents

Consider whether potential employees have confidential information of competitors or are under non-compete obligations; weigh benefits and risks of hiring accordingly


Challenge Patents!

Consider submitting prior art relevant to competitor’s published applications

Consider seeking invalidation of issued patents

Consider filing post-grant review


IP Infringement Insurance

Covers litigation expenses incurred in enforcing IP rights against infringers.

Reimbursement for legal expenses to defend infringement lawsuits.

See sample policy at www.infringeins.com

http://www.infringeins.com/


Discussion Points

Red Flags at companiesBest not to refer to competitor’s product/trademark!When in doubt…file!A single claim can be quite valuable even if narrow


When You ThinkINTELLECTUAL PROPERTY

Think Fulbright.TM

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www.fulbright.com • 866-FULBRIGHT [866-385-2744]

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