Grow + Sell Your Business Part Two: IP Protections
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Presented by Eric Duffee and Steve Barsotti on 9/19 as Part 2 of a Four Part Series. This seminar introduced the basics of Patent Requirements, Copyrights and confidential information (including Trade Secrets) and explained the strategies for and significance of protecting them. Discussions included necessary criteria for registration, how rights are established, and steps for filing and enforcement.
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Grow + Sell Your Business Part Two: IP Protections
- 2. Be thinking…
- 3. What are the “intellectual” assets of your business?
- 4. Have you conducted an IP audit of the IP in your business?
- 5. What should I be doing to position for exit?
- 6. BUT FIRST…what are we talking about exactly…
- 10. Invention must be novel Not Obvious Full + true inventorship REQUIREMENTS
- 11. How long does a PATENT LAST?
- 12. Rights of a Patent OWNER Exclude others from making the invention Does not require you to actually use or sell invention
- 13. You may lose the right to get a patent if: You use or sell the invention publicly more than a year before filing You disclose the invention publicly more than a year before filing You get a foreign patent more than a year before filing
- 15. Confidential information + trade secrets are valuable business assets
- 17. Not all confidential information merits trade secret protection
- 18. Confidential Information Stuff we call “confidential” but isn’t Trade Secrets
- 19. Types of Information Companies Keep CONFIDENTIAL
- 23. How do trade secrets differ from other confidential information? Enjoy greater legal protections Must meet specific criteria Capable of lasting indefinitely Lose protection if disclosed intentionally or accidentally
- 24. Copyrights Original works of authorship Protect the “expression” of an idea WHAT ARE THEY?
- 26. Copyright REQUIREMENTS The expression must be original No protection for “functional articles”
- 29. Unless… There is an employee-employer relationship There is a written assignment Who is the Owner? THE AUTHOR
- 30. Copyright REGISTRATION Provides substantial benefits Must register before suing for infringement Availability of statutory damages Evidence of copyright validity + ownership
- 31. Assume all works are copyright protected Read “click-wrap” agreements or “read me” files Obtain permission to use any work in the public domain Use any work in the public domain Consult your legal team Recognize “fair use” is a defense, not a right Be aware that rights holders vary in their protectiveness Remember companies aggressively monitor for infringement
- 32. Use works found on the internet without permission Assume crediting the author absolves you of infringement Think CC license means you can use work any way you like Believe receiving cease + desist is the worst that can happen Assume “fair use” because intend to derive no profit Think because someone else is doing something, you can too Remove copyright notices or symbols from others’ works Think your unauthorized copying is harmless
- 36. GENERICDESCRIPTIVESUGGESTIVEARBITRARY/ FANCIFUL Strongest trademark rights Inherent distinctiveness Strong trademark rights Inherent distinctiveness Weak trademark rights Acquired distinctiveness No trademark rights No distinctiveness CLOCK ESCALATOR TRAMPOLINE ASPIRIN BAND-AID TISSUE
- 37. A specimen is needed to show the mark as actually used in connection with each class of goods or services Tags Labels Photographs Advertisements Correspondence
- 39. U.S. Common Law
- 41. Benefits of REGISTRATION Evidence of validity + ownership Constructive nationwide use Right to use ® symbol Access to federal courts Potential for increased recovery Reveals points of infringement exposure Provides basis for registering the trademark in some foreign countries
- 42. How to Use a Trademark Following REGISTRATION Adopt + enforce guidelines Use consistently Use proper notice symbols Use in connection with registered goods/services Comply with renewal requirements
- 43. How to ENFORCE Keep Records Monitor Train Engage Legal
- 44. 7 BEST PRACTICES
- 45. 1 Create a Process for indentifying IP assets
- 48. 4 Address When Employees Join + Leave
- 50. 6 Train Employees on What Matters + the Process
- 52. POP QUIZ! George Jetson owns a flying car business. To run his flying cars, he needs a developer to write a special software program. He hires Elroy to write the program that runs the cars. He pays Elroy $50,000 to write the software program, which Elroy accepts. Who owns the program?
- 53. POP QUIZ! Duff Beer comes up with a great recipe for a new brew. Duff plans to file for a copyright to protect the recipe. Is that the right decision?
- 54. POP QUIZ! Egon Spengler and Ray Stantz develop a great idea for a new proton pack. Being the academics they are, they write a scholarly article about the proton pack that details how it works. 18 months later, they meet with Peter Venkman and they agree that they should seek patent protection for the proton pack so they can start a ghost-busting business. Any issues?
- 55. POP QUIZ! Bayside High School’s fight song has the same tune as “On Wisconsin!” which was written in 1909. Mr. Belding gets a letter from the University of Wisconsin demanding that Bayside cease and desist from using the tune as its fight song. Zach and Kelly are distraught. What should Mr. Belding do?
- 56. Eric D. Duffee Kegler Brown Hill + Ritter eduffee@keglerbrown.com keglerbrown.com/duffee 614-462-5433 Steve Barsotti Kegler Brown Hill + Ritter sbarsotti@keglerbrown.com keglerbrown.com/Barsotti 614-462-5458
Notas do Editor
- What do you have? Do you use it? Do you still like it?
- Rebranding the business A new slogan on your website A photograph in advertising materials (even twitter) A song played in a presentation
- Rebranding the business A new slogan on your website A photograph in advertising materials (even twitter) A song played in a presentation
- What does a trademark look like? Anything that is capable of distinguishing one source of goods and services from another - Word - Logo - Tagline - Acronym - Shape - Color - Sound - Scent
- The Patent “Trade-Off” Public Disclosure of invention in exchange for a limited monopoly (in the US, typically 20 years)
- Invention Must be Novel U.S. v. Foreign Relative v. Absolute Novelty “Public” Disclosure Obviousness What is the Inventive Step? Must Not be Obvious in Light of General Knowledge of One Skilled in the Art at the Time This is a real battleground. Full and True Inventorship Disclosure of Known Prior Art Teaching Sufficient to Practice without “Undue Experimentation” Disclosure of Best Mode
- How long does a patent last? 20 years from the date of filing
- What are the rights of a patent owner? The right to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States Does not actually give you the right to make the invention—just gives you the right to exclude others from doing so Does not require you to actually use or sell the invention Beware of patent trolls!
- Be careful about what you do before submitting a patent application! If you use or sell the invention publicly for more than a year before you file the application, you may lose the right to get a patent! If you disclose the invention publicly more than a year before you file the application, you may lose the right to get a patent! If you get a foreign patent more than a year before you file the U.S. patent application, you may lose the right to get a U.S. patent!
- Although, all trade secrets must be kept confidential…
- Companies keep certain types of business information confidential because it provides us with a competitive edge over competitors and other companies as long as it is kept secret. Information includes: Trade Secrets Business and marketing plans, strategies, and programs. Financial budgets, projections, and results. Employee and contractor lists and records. Business Methods and operating procedures. Technical, engineering, and scientific research and development. Formulas, recipes, and chemical compositions. Blueprints, designs, and drawings. Software development documentation. Pricing and sales data. Prospects and customer lists. Supplier and vendor lists. Terms of commercial contracts. Etc. etc.
- What is a Trade Secret? Business, scientific, technical, economic or engineering information that is… Economically valuable because the information is not generally known to or readily accessible by the public and is… Kept secret through reasonable measures.
- How Trade Secrets Differ from Other Confidential Information: Enjoy greater legal protections Must meet specific criteria established by: The Economic Espionage Act of 1996, as amended by the Defend Trade Secrets Act of 2016 (DTSA) State statutory law; or Common law. Capable of lasting indefinitely as long: Kept confidential and Commercially valuable. Lose protection if disclosed intentionally or accidentally
- Original works of authorship fixed in a tangible medium of expression Copyright protects the “expression” of an idea - Contrast with patent, which protects the idea itself…
- Subjects of Copyright Protection: (1) literary works; (2) musical works, including any accompanying words; (3) dramatic works, including any accompanying music; (4) pantomimes and choreographic works; (5) pictorial, graphic, and sculptural works; (6) motion pictures and other audiovisual works; (7) sound recordings; and (8) architectural works.
- Copyright protection may be obtained only in original works of authorship fixed in a tangible medium of expression. - The expression must be ORIGINAL (i.e. not copied from someone else) - Does not need to be “Novel” as with patents. - Must have some minimal level of creativity. No protection for “functional articles” (can’t turn a copyright into a de facto patent) EX: engineering drawings - You can protect the drawings themselves through copyright but cannot protect the subject matter contained in the drawings - Can only protect the subject matter through patent or trade secret
- Ideas Processes Facts Names Titles Slogans Public domain material… …but you need to confirm it is actually IN the public domain.
- Rights of Ownership Automatic protection from moment of fixation
- Who is the Owner? The author of the work
- Provides substantial benefits Must register before suing for infringement Availability of statutory damages ($750-$30,000 per work) and attorneys’ fees* *only if the work was registered before infringement or w/in 3 months after publication Increased damages for willful infringement ($150,000 per work) Evidence of the copyright’s validity and ownership May eliminate innocent infringement defense
- DOS Assume all works are copyright protected Read “click-wrap” agreements or “read me” files and do what they say Obtain permission to use any work not in the public domain Use any work in the public domain Consult your legal team to utilize any work not company owned/licensed Recognize “fair use” is a defense, not a right Be aware that rights holders vary in their protectiveness Remember companies aggressively monitor for infringement
- DONTS Use works found on the internet without permission Assume crediting the author absolves you of infringement Think a creative commons license means you can use a work any way you like Believe receiving a cease + desist is the worst that can happen Assume “fair use” because intend to derive no profit Think because someone else is doing something, you can too Remove copyright notices or symbols from others’ works Think your unauthorized copying is harmless
- What does a trademark look like? Anything that is capable of distinguishing one source of goods and services from another - Word - Logo - Tagline - Acronym - Shape - Color - Sound - Scent
- Source-indicators - They identify single source of goods and services - Consumers can look at the trademark and immediately be aware that one source offers the goods and services, the type of goods and services, and the quality of the goods and services. Prevent Consumer Confusion - Exclusive right to use – so consumers know what they are getting when they buy and can’t be fooled or confused. - Consumer can purchase a desirable service again or avoid an undesirable one.
- Acceptable specimens for goods: tags, labels, or photographs of the goods displaying the mark. Acceptable specimens for services: advertisements (e.g., website, newspaper, tv), correspondence or photographs of items displaying the mark in connection with the services.
- U.S. Common Law - Developed as soon as you use the trademark. But… - Trademark rights are limited to the territory within which the trademark is used. - Think state by state
- Still have to use the trademark. But… - Not necessarily right away and - Nationwide rights
- Evidence of validity and ownership - Constructive nationwide use - Right to use ® symbol - Access to federal courts - Potential for increased recovery (treble damages, attorneys’ fees, costs) - Provides basis for registering the trademark in some foreign countries - Registration process generally reveals points of infringement exposure -
- Adopt + enforce trademark use guidelines: Trademark use guidelines should include clear rules on how the brand must be used throughout the business. For example, with appropriate trademark symbols, as an adjective, or in certain fonts or colors. Enforcing trademark use guidelines helps build up the recognition of the brand, its market presence, and therefore its value. Use the trademark consistently: Even minor changes in the way the trademark is used, for example, design-tweaks (font, shape, color), can create a new right that will then need to be protected. Costs of protection (i.e., registration fees) can quickly rise if there are multiple variations of the trademark. Also, use of new variations may dilute the brand or jeopardize rights in prior versions. Use proper notices: Use proper trademark symbols where appropriate. These symbols act as an early warning system to would-be infringers and will help when seeking to prove that a defendant knew about your rights. Ensure trademarks are used: Nonuse of a mark can result in loss of protection. Comply with renewal requirements: Failure to timely meet renewal requirements may result in the loss of registration protection. Maintaining trademarks requires you to document your use and maintain those records.
- Keep Records. Maintain accurate records of your use of the trademark. Monitor. Monitor the market for use of the same or similar trademarks. Train. Train your team to ensure everyone understands the importance of spotting + reporting infringement or misuse of trademarks. Engage Legal. Involve your legal team early + often for support to engage third party infringers and stop infringement.
- Best Practices: protecting confidential information and trade secrets
- Limit disclosure to those who need to know (internally and externally).
- non-competes, non-solicits, etc.
- Mark documents as “CONFIDENTIAL” or “TRADE SECRET” Monitor employee use of company systems Investigate suspected breaches (employees, competitors, hackers, etc.) Utilize physical/digital protections: surveillance cameras, security guards, locked offices + cabinets, password-protected mechanisms, ID badges/cards, etc.
- For new employees: require signature on agreements, advise on policies, educate. For departing employees: require exit interview, collect company property, remind of continuing confidentiality obligations, post-employment agreements.
- Require all employees and independent contractors to comply with an internal confidentiality policy (helpful to set expectations and remind employees of obligations).
- Require all employees and independent contractors to comply with an internal confidentiality policy (helpful to set expectations and remind employees of obligations).
- Create process and immediate next steps Involve your legal team to assist with communication
- George Jetson owns a flying car business. To run his flying cars, he needs a developer to write a special software program. He hires Elroy to write the program that runs the cars. He pays Elroy $50,000 to write the software program, which Elroy accepts. Who owns the program?
- Duff Beer comes up with a great recipe for a new brew. Duff plans to file for a copyright to protect the recipe. Is that the right decision?
- Egon Spengler and Ray Stantz develop a great idea for a new proton pack. Being the academics they are, they write a scholarly article about the proton pack that details how it works. 18 months later, they meet with Peter Venkman and they agree that they should seek patent protection for the proton pack so they can start a ghost-busting business. Any issues?
- Bayside High School’s fight song has the same tune as “On Wisconsin!” which was written in 1909. Mr. Belding gets a letter from the University of Wisconsin demanding that Bayside cease and desist from using the tune as its fight song. Zach and Kelly are distraught. What should Mr. Belding do?