Protecting Your Ideas

Information Technology and Intellectual Property

Copyright 2001, 2002 Brett J. Trout

What is Intellectual Property

• A useful invention • A brand name• The expression of an

idea• A commercially

valuable secret.

Tangible vs. Intangible Property

• Limited use– Only one person on a

workstation at a time

• Limited life– Vehicles wear out

• Easy to value• Protect with padlocks

• Many can use at once– Microsoft Office

– Licensing

• Unlimited usefulness – Coke trademark

• Difficult to value• Protect with procedure

Types of Intellectual Property

• Patents• Trade Secrets• Copyrights• Trademarks• Domain Names• Mask Works

Why Worry About IP?

• Your Company is Built on Intellectual Property

• Without Intellectual Property Development and Protection, your Job would not exist

Why Worry About IP?

• Marlboro trademark is worth $31 billion

• $909 Million patent infringement judgment against Kodak

• Formula for Coke Invaluable

Identifying Intellectual Property

• Inventions (Patents)• Trademarks• Copyrights• Trade Secrets

Patent

• Protects – New and useful

process

– Machine

– Manufacture

– Composition of matter

– New and useful improvement thereof.

Patents

• Do not protect – Ideas

– Obvious combination of prior art

– Illegal or immoral matter

– Pure research

– Novelty or curiosity.

Patents

• Advantages– Covers various

alternatives

– Provides triple damages

– Covers items subject to reverse engineering

• Disadvantages– Expensive $5K-$20K

– Slow 18-48 months

– Does not protect you from infringement

– Expires 20 years after filing

Patents

Business Method/Internet Patents

Business Method Patents

• Amazon.Com– One-Click Shopping

• AskJeeves.com– Plain English search service

• Lycos– Spider technology

• Cybergold– Cash for eyeballs.

Business Method Patents

• 1996-2000• First Upheld in 1998• U.S. now files over

50% of European Business Method Applications

0

1000

2000

3000

4000

5000

6000

7000

8000

1996 1997 1998 1999 2000

Year

Why the Rush?

• Often the primary asset of an IT company

• Delays competitors

• Provides potential revenue stream

• Marketing advantage

• Increases the value of the company

• Great bargaining chip in litigation

Identifying “Business Method” Inventions

• Novel – Are you aware of it being done before?

• Non-obvious – Given the problem, would the solution be

obvious to a colleague?– Not whether colleague understands solution

• Useful – Typically not an issue.

Patent Do’s and Don’ts

• Do– Keep accurate records– Determine if method meets patent criteria– Determine if method is worth protecting– Take immediate steps to protect method– Determine all potential alternatives– Give patent attorney ALL of the information

you have

Patent Do’s and Don’ts

• Do Not– Disclose

• Third parties

• Offer for sale

– Delay– Make decision not to pursue patent without

input from others in company

Trademarks

Special Concerns with Information Technology

Trademark

• A word, name, phrase or symbol used to identify source or origin of a good or service provided through commerce.

Types of Trademarks

• Color – Pink for fiberglass

• Sound – NBC chimes

• Scent – Floral scent for yarn.

IT Trademarks

• Domain names - Amazon.Com– Over 500 pending

• Animated browser icon – Netscape

• “E” “O” and “I” marks – eVideo, oMusic.

Correct Usage

• Use ® only for federally registered trademarks

• Use TM or SM for all non-registered marks

• ALWAYS use trademark as adjective– Correct “Hand me that Firewire cable”– Incorrect “Hand me that Firewire”

Incorrect Usage

• Incorrect Usage destroys valuable TMs– thermos- King Seely

– escalator- Otis Elevator

– cellophane- E.I. Du Pont

– yo-yo- F. Duncan

• Xerox spends over $100,000/yr making sure people do not say “Xerox this for me”

Trademark Do’s and Don’ts

• Do– Choose unique trademarks– Investigate domain name availability– Report all infringements– Use all trademarks as adjectives

Trademark Do’s and Don’ts

• Do Not– Allow unauthorized use of trademarks

• Even as metatags

– Use trademarks of others without permission– Use a trademark similar to that of a competitor– Use trademarks as nouns

Copyright

Special Concerns with Information Technology

Copyright Protects

• Original works of authorship

• Works fixed in a tangible medium

• Expression– Not functionality– Not ideas

Copyright Protects

• Software– Source code, not the functionality– Graphics– Other unique expression

Copyright Does Not Protect

• Ideas• Procedures• Processes• Systems

• Methods of operation• Concepts• Principles• Public Domain.

Copyright Does Not Protect

• Certain aspects of software– Items dictated by efficiency– Aspects required by external factors

• Scenes a faire

• Industry demands, etc.

– Items taken from the public domain.

Copyright Rights

• Reproduce work

• Make derivative works

• Distribute copies

• Perform work publicly

• Display work publicly.

Copyright

• Advantages– Registration not

required

– Inexpensive

– Protection automatically attaches

• Disadvantages– Registration required

to bring suit

– Does not protect functionality

– Requires specific assignment for transfer

Avoiding Copyright Infringement

• Clean Room– Programmers have no access

• Copyrighted program

• Public Domain– OK to use– Avoid Open Source and Freeware

• Unless you are absolutely sure

• Could have been taken from protectable material

ALWAYS Obtain Assignment of Copyright

• Paying contractor for project– Not sufficient to transfer copyright

• Get assignment from “author”– Custom software – Website design– Logo or graphic art

• Get assignment up front.

Fair Use

• Very rarely applicable • Do Not rely on fair

use protection• Rarely upheld in

commercial context unless– Parody

– News

– Critical Commentary

Software Infringement Analysis

• Abstract– Source code protectable– Idea not protectable

• Filter– Non-protectable elements

• Compare– Substantial Similarity

Copyright Notice

• Copyright Notice– © or Copyright

• Year of first publication– Include all years new material published

• 2001

• 1997, 1998, 2001

• 1997-2001

• Copyright Owner

Copyright Notice

• © 2002 ABC Corp., Inc.

• Apply to all – Original works of authorship

• Software

• Documentation

• Graphics

– Created by your company, its employees or copyrighted work assigned to your company

Trade Secrets

Special Concerns with Information Technology

Trade Secret

• Information– formula, pattern, compilation, program, device, method, technique

or process

• Derives economic value from not being known to others– Actual or potential

– Not easily ascertainable by proper means

– Persons who can obtain economic value from TS

• Subject of efforts that are reasonable under circumstances to maintain secrecy.

Uniform Trade Secrets Act

• 40 states modeled law on UTSA

• Iowa law based upon UTSA

Trade Secrets

• Advantages– Lasts forever

– Inexpensive

– Covers Ideas

• Disadvantages– Could be gone

tomorrow

– Not applicable if you can reverse engineer

– Must take precautions to prevent disclosure

Trade Secrets and Software

• Customer Lists

• Vendor Information

• Anticipated Return on Investment

• Software Architecture

• Functional Specifications

• Module Interactivity

• Alpha/Beta/Full Releases

Trade Secrets Dos and Don’ts

• Do– Maintain secrecy – Follow all security protocols– Appropriately mark all trade secret material

Trade Secrets Dos and Don’ts

• Don’t– Disclose Trade Secrets to anyone who has not

signed a confidentiality agreement– Attempt to extract trade secrets from others

under confidentiality agreement with third party– Misappropriate Trade Secrets

• Criminal penalties• Punitive damages• Attorney Fees

Take Home

• Identify and protect inventions immediately

• Develop and protect unique trademarks

• Do not use copyrightable material without a written license or assignment

• Maintain the strict confidentiality of all Trade Secret information.

Thank You