Top IP Points to Consider on Patents, Trademarks, Copyrights, Trade Secret and Patent Licensing

PATENTS

1. Patent Protection. A patent only gives you the right to exclude others from making, using, offering, and selling your invention within the United States, or importing the invention into the United States. Even owners of a patent may not have the right to actually “practice” their invention.
2. Patents vs. Trade Secrets. Maintaining your invention as a “trade secret” is a cost-effective alternative to patenting when the information is not easily reverse-engineered. Consider patenting an invention if it can provide a real business advantage, such as limiting or excluding competitors from the market, or generating revenue through licensing.
3. Provisional Patents. Provisional patent applications cannot “mature” into a patent. They automatically become abandoned one year after filing. You may claim “priority” to a provisional patent application, but it is important to make sure that the disclosure of a provisional application can support the claims of any later-filed non-provisional applications.
4. Patentable Inventions. Most patents are “utility” patents, protecting the functional aspects of inventions such as machines, manufactured articles, compositions of matter, and processes. To be patentable, your invention must be new, useful, and nonobvious (to a person of “ordinary skill” in the inventor’s field).
5. First-to-File. In the United States, patents are awarded to the first inventor to file a patent application. Nevertheless, it is important to maintain accurate records of invention disclosures, such as lab notebooks or an equivalent record keeping, which may be important evidence for future patent disputes.
6. Pre-Filing Disclosures. Most countries require “absolute novelty” of an invention before filing a patent application. Patent rights in these jurisdictions maybe jeopardized if there is any disclosure or sale of the invention prior to filing a patent application.
7. The On-Sale Bar. In the United States, a patent application must be filed within one year after your invention was first disclosed to the public, publicly used, sold, or offered for sale in the United States.
8. Experimental Use. Certain prior public uses may not trigger the one-year “on-sale” bar if it qualifies as an allowable experimental use. If, for example, a public use is performed solely for the purpose of perfecting the invention.
9. Inventorship. You are an inventor if you contributed to the “conception” of the invention. That contribution requires more than routine engineering skill or supervision. An inventor needs to make a contribution to at least one claim of the patent.
10. Patent Claims. The patent claims define the patented invention. The disclosure, including the written description and the figures do not define the patent right – the claims do!

TRADEMARKS

1. A trademark is a source identifier that can be a word, name, symbol, design, combination or a word or design, a slogan, or even a distinctive sound, color, or fragrance. It identifies and distinguishes the goods and services of one manufacturer from those of another.
2. Use Requirement. In the United States, trademark rights are created through use of the mark. Registered trademarks use the familiar symbol “®” and adopted, but unregistered marks use the symbol “™” to notify the public.
3. In text, trademarks should always be used as they are registered. Word marks must always be used as adjectives, never as nouns, and never in the possessive. A word mark should stand out from the text and not be coupled with the manufacturer’s name.
4. Service/Certification Marks. A service mark identifies a service, such as accounting, engineering, education, consulting, retail/wholesale store services, and others. A certification mark is a trademark that is owned by a certifying organization that uses the mark to certify that goods meet pre-defined criteria, typically regarding quality, such as “Florida Oranges” or “Energy Star.”
5. Registration. Under the common law, a trademark may be protectable, locally, as soon as it is adopted by the user (assuming there are no prior users). However, federal registration of a trademark gives the owner a nation-wide right of priority in the trademark and gives the owner a presumption of trademark validity. Registration requires an application and examination to confirm that there are no prior, confusingly similar uses of the trademark.
6. “Intent to Use.” Federal registration is only available for trademarks that have been used in interstate commerce (across state or national boundaries). However, an applicant who intends to use a trademark in interstate commerce may apply for registration. The application is examined and may become registered once the mark has been used in interstate commerce.
7. Term. A common law trademark will last as long as the trademark continues to serve as a source identifier to the relevant population. A trademark registration is potentially perpetual as well, but it must be renewed every 10 years.
8. Likelihood of Confusion. Trademark infringement occurs when another party uses the same or similar trademark in a manner that causes a “likelihood of consumer confusion.” Courts look at several factors to assess the likelihood of consumer confusion, including: the similarity of the marks, the similarity of the goods, the relevant market and channels of trade, the sophistication of the relevant buyers, and any evidence of actual confusion.
9. Clearance Search. Before adopting a new trademark it may be prudent to perform a “clearance search.” This pre-adoption search and review allows for consideration of any potentially similar trademarks, as well as an evaluation of any potential likelihood of consumer confusion, to assist in the determination as to whether the proposed mark is suitable for use.
10. Abandonment/Dilution. Trademarks may be abandoned through non-use, or misuse. Trademark owners should be careful to continue use of their marks in a proper manner, and to police any and all unauthorized uses, to avoid any unintended consequences. If the mark will be temporarily discontinued (for example in connection with a business reorganization or relocation), efforts should be made to document the fact that the period of non-use is only temporary and that the trademark owner intends to begin use again on a date certain.

COPYRIGHTS

1. A copyright is an original work of authorship that has been fixed in any tangible medium of expression. Examples include: literary works, software, dramatic works, music, lyrics, dances, pictures, sculptures, movies, sound recordings, and architectural works. In contrast to utility patents, copyright covers expression not functionality.
2. A copyright includes a bundle of rights: reproduction, derivative works, distribution, performance, and public display.
3. The copyright of an original work of authorship vests in the author immediately upon creation unless transferred in writing.
4. “Work for Hire.” If a work is commissioned as a work for hire under a written agreement or if the author produces the work in the normal scope of employment the copyright vests in the employer.
5. Independent contractors will retain ownership of copyrightable works unless there is an assignment in writing. Independent contractors are determined by a number of factors, including: the level of control in preparing the work, the degree of skill involved in creating the work, the duration of the relationship between the authors and employer, the amount of benefits and the tax treatment afforded to the author, and the possibility of additional projects.
6. Federal registration of copyright provides several benefits including the right to sue for infringement in a federal court, statutory damages, and, potentially, recovery of reasonable attorney’s fees.
7. Notice Requirement. Notice of copyright includes the familiar symbol “©” or the word “Copyright,” the year of first publication of the work, and the name of the copyright owner.
8. Fair Use. Under the fair use doctrine, a party can exercise the rights otherwise controlled by the copyright owner for the purpose of research (for limited purposes), comment, criticism, parody, or scholarship.
9. The Digital Millennium Copyright Act addresses copyright infringement on the internet. Among other things, it bans the creation and distribution of technology, devices, or services that are intended to bypass measures to control access to copyrights works, whether or not there is actual infringement of copyright. The DMCA also limits the liability of online service providers for copyright infringement by users, provided that they meet specific requirements.
10. Depending on the type of work, and whether, where, and when the work was first published, a copyright term may last up to 120 years from the date of creation.

TRADE SECRETS

1. Trade secrets include any and all technical or business proprietary information that gives the holder an advantage over competitors who do not possess the information. For example, trade secrets may include technical formulas, manufacturing techniques processes, programs, business methods, customer and supplier lists, and other business information.
2. Not Publically Known. The information has independent economic value, actual or potential, and it is not readily known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use.
3. Policing and Maintenance. Trade secrets may easily be lost if steps are not taken to maintain proprietary information as confidential. Trade secrets require the use of reasonable efforts under the circumstances to maintain its secrecy.
4. Trade Secret Protection Plan. Some considerations when developing a trade secret plan include: creating a written trade secret policy, informing employees about the plan, identifying and restrict access to trade secrets, maintaining computer secrecy, eliminating all disclosure of trade secret information to the public, using agreements when dealing with third parties, and appointing a custodian of trade secrets to monitor policy and communications.
5. Agreements and Procedures. Standard agreements and procedures include the use of confidentiality, non-competition, consultant and independent contractor agreements, which should always be in writing and include specific obligations. Other reasonable procedures to protect trade secrets include employee separation checklists, letters to former employees and new employers, labeling of documents accordingly, and creating an unsolicited idea policy.
6. Trade Secret Theft. Trade secret theft may include anything that gives a competitor an advantage or head start, including key personnel such as directors, officers, and key employees (engineers, scientists, managers, and sales professionals).
7. The owner of a trade secret may have a remedy for misappropriation if it is improperly obtained by another. These include: injunction, potential royalties, actual and punitive damages, and attorney fees.
8. If reasonable measures are consistently undertaken to maintain and protect trade secrets, they may be potentially limitless in term.
9. Trade secrets are generally protected under state law. Most states have adopted some form of the Uniform Trade Secrets Act as the basis of its trade secret laws.
10. Reverse Engineering. Trade secret law does not prevent discovery by fair and honest means in business competition. Reverse engineering must be well documented to defend against a future claim of trade secret misappropriation (likewise, for independent development). Owners of trade secrets should consider patent and/or copyright protection if the information may be reversed engineered from your product or service.

LICENSING

1. Non-Exclusive vs. Exclusive Licenses. A non-exclusive license may not allow the patent owner to sub-license the patent to others, whereas, an exclusive license may require a single licensee to take on the obligation of policing the patent rights and, potentially, managing sub-licensees. But be careful! Although titled “Exclusive License,” a license that fails to convey “all substantial rights” in a patent may require the participation of the licensor in any infringement disputes.
2. Right to Sue for Damages. License agreements should always clarify who has the right to sue for infringement of the rights being licensed. The right to sue for damages is typically granted under an “exclusive” license agreement. When the licensee is given the right to sue for infringement, it is also important to make sure that the licensor is obligated to assist in such lawsuits, which usually require the participation of inventors and original owners of the patent(s).
3. Assignment. Licensors should carefully consider the conditions under which a licensee may assign their rights in the agreement. In the absence of any expressed provisions, license agreements are typically freely assignable by either party. But this default rule may be superseded by a properly worded assignment clause. Assignment clauses should cover such eventualities as a sale, a merger, or insolvency, as well as a deliberate assignment of the licensed rights.
4. Licensing Patents vs. Licensing Products. Another key consideration in any license agreement is the decision whether to license “patents” or specific products. Where specific patents are licensed, the licensee may still be vulnerable to other patents owned by the licensor. Where specific products are licensed, any relevant patents owned by the licensee are deemed to be included in the license. However, new or modified products may not fall under the scope of the license.
5. Implied Licenses. Not all licenses require a written agreement. Some will be implied by law. For example, under the “first sale” doctrine, a patent license will be implied when a patent owner sells a product covered by the patent under circumstances that “plainly indicate that the grant of a license should be inferred.” This protects customers from unfair infringement lawsuits.
6. License as a Defense. It is important to control the transfer or sub-licensing of any rights granted under a patent license agreement. The existence of a valid license agreement may be a complete defense to a claim of infringement and unwitting patent owners may sometimes grant rights to parent companies, subsidiaries, or affiliated companies unintentionally by failing to scrutinize assignment and sub-licensing clauses in their license agreements.
7. Licensee Estoppel. Sometimes licensors seek to preclude licensees from challenging the validity of the patent rights as a condition of licensing. In some circumstances this practice may no longer be permitted.
8. Marking. Licensors should pay particular attention to patent “marking” requirements in patent license agreements. Under the law, patent owners are required to mark any products covered by the licensed patent(s) with the patent number(s). These marking requirements apply equally when a licensee makes a covered product pursuant to a license agreement; this often presents challenges when crafting a license agreement in the context of litigation settlement.
9. License Termination. Always be mindful of termination clauses in patent license agreements. Sometimes patent families can last longer than expected due to patent term adjustment, foreign rights, or continuation applications. Clear termination clauses can resolve any potential disputes at the outset of the agreement.
10. Dispute Resolution. Patent disputes can be expensive, and when a patent license agreement breaks down, the resulting litigation may look a lot like a patent infringement dispute. Take the opportunity in your license agreements to find ways to reduce costs and fees for dispute resolution ahead of time. If possible, agree in advance to a forum. Consider including an attorneys’ fees provision. Finally, consider alternative dispute resolution options, such as binding arbitration.