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Intellectual Property Basics
11-4-2005
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What is intellectual property?
Intellectual properties are intangible products of the mind. These include: inventions (devices, compositions, plants,
designs) publications videotapes computer programs works of art.
They must be reduced to a tangible form in order to be protected.
What is intellectual property?
Intellectual property (IP) refers to works of the mind such as ideas, art, music. It can also be products such as a chemical formula or computer software.
Intangible creative work—not necessarily the physical form on which it is stored or delivered.
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What is intellectual property?
IP is given legal protection in the form of copyright, patent, trademark, and trade secret laws.
This is becoming one of the hottest issues in international business
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Why do we want to protect and license IP?
IP is a marketable commodity that can be used to leverage additional research dollars and income to support the inventors and help in the formation of new companies and jobs.
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Why do we want to protect and license IP? It is very difficult to license
technology that is not protected.
Makes the technology available to the public and provides opportunities for further research and development.
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Protecting IP Paris Convention of the Protection
of Industrial Property, Madrid Agreement, and others have tried to make protection easier for international registration
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Protecting IP The main international trademark treaty is the
Paris Convention. It is an agreement between member nations
(of which there are over 110) to allow foreign nationals of member countries the same treatment in each of the member countries as that country makes available to its own citizens.
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Protecting IP Under the Paris Convention, six months
after a trademark application is filed in the US, the applicant can file an application in one of the foreign member nations and receive the filing date of the US application. If an application is filed more than six months after the US filing date then the claim to priority is lost.
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Innovation Since 1998, over 2200 new products
have been introduced in the market place.
In 2003 in the U.S. and Canada Over 15,500 Invention Disclosures, 4500
new Licenses 7921 patent applications were filed; 3933
new patents issued 374 new companies formed; 2279 start-ups
still operating. License revenue was over $1,310,000,000
Problems in intellectual property
In the U.S., ownership is established by prior use due to our common law system
Many code-law countries use a registration system, where the first company to register is the one who has rights
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Protection of IP Companies spend millions of
dollars establishing brand names or trademarks To symbolize quality and design To entice customers
Millions are spent on research To develop products, processes,
designs, and formulas
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Protection of IP Lost sales from the unauthorized
use of U.S. patents, trademarks, and copyrights Amount to more than $100 billion
annually The piracy industry has grown so
sophisticated Many counterfeit goods are
indistinguishable from original13
Protection of IP Piracy actually can serve come
companies HBO and Game of Thrones
Counterfeit pharmaceuticals 2% of the $327 billion worth of drugs
sold each year
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Figure 2.2: Regional Piracy Rates for Software
0 20 40 60 80
North America
Western Europe
Middle East and Africa
Latin America
Asia Pacific
Eastern Europe
Percentage of Software that is Pirated
International licensingagreements
Contracts by which the holder of intellectual property will grant certain rights in that property to a foreign firm to use for a period of time under certain conditions in return for a licensing fee
Technology transfer: exchange of technology and know how between firms in different countries through licensing
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How do we protect intellectual property?
Copyrights Trademark Trade Secret Plant Variety Certification Patents A major bone of contention especially in info-based economies.
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Bayh-Dole Act (1980) The Bayh-Dole Act was intended to
promote investment by the private sector in the commercialization of discoveries made using research funds provided by the federal government.
Prior to the Act, the government retained title to these inventions, and because it was cumbersome to get a license, few technologies were licensed and commercialized.
CopyrightsCopyrights are granted for a limited, but long, time. Fair-Use Doctrine
Permission to use the work is not required.
Allows uses of copyrighted material that contribute to the creation of new work and do not significantly affect sales of the material, thus depriving copyright holders of their income.
Allows some research and educational uses as well as news reporting and critiquing.
Guidelines for determining Fair Use are found in law. 19
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Copyrights
Legal rights to a work by authors, composers, playwrights, artists or publishers.
Lasts the life of the author plus 70 years
Or lasts 95 years from publication or 120 years from creation, if it was a work for hire
Copyrights Documents, art, music, motion pictures,
software, etc. are automatically copyrighted when the document is created.
Can register the copyright with the government for $30.00. Must be registered before filing any infringement lawsuits.®
US Copyright Website http://www.loc.gov/copyright/
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Plant Variety Certification
Used for plants that reproduce sexually making it illegal to sell and propagate them commercially.
Certification protection is for 5 years and costs ~$2500.
Trademarks
Exclusive rights to a new product or process for an inventor assuring them of the legal right to produce, use and sell their invention for a period of years.
Used to protect a symbol or phrase that’s identified with a product (e.g. Coca-Cola, Gatorade, Xerox). ™
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Trademarks
Registration costs $325 but is not required except for federal court proceedings and for foreign protection; last for 10 years and is renewable indefinitely®.
Becomes effective when begin selling commercially.
http://www.uspto.gov/main/trademarks.htm
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Trade Secrets
Specialized knowledge that can include data, formulas, compilations, programs, etc. which are maintained as a secret
Can be used where patents may not have a long enough term or be possible.
Trade secrets are kept under lock and key, with restricted access and publications.
Example - Coca-cola formula
Patents Exclusive rights to a new product
or process which assures an inventor the legal right to produce, use and sell their invention for a period of years
Used for inventions, processes, machines, improvements, and composition of matter.
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Patents Not possible to patent scientific
principles, methods of doing business or most naturally occurring articles.
Software algorithms can often be patented, but typically software is protected under copyright.
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Three Patent Requirements Novel - new to the patent
literature, not published or described in an enabling manner. Time limit of one year from public disclosure to file a U.S. patent. Foreign patents must be filed BEFORE any public disclosure.
Utility - must be useful Non-obvious to one skilled in the
art.
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Types of Patents Utility – how something works or is
used; multiple claims Design – how something looks; only one
claim Provisional – establishes a filing date
and provide 1 year to file a full patent application with claims
Plant – for asexually reproducing a new plant; one claim
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Differences between International & US Patents
US – First to Invent Most International – First to File
Very important to file protection before publicly disclosing to preserve foreign patent rights
Foreign protection very important to most companies
Provisional Patents have great use here
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What does Patent Protection Provide? The right to EXCLUDE others from
making, using, selling of offering to sell the claimed invention during the patent term.
Must be marked as ‘patented’, or can’t recover from anyone who infringes on it.
Patent term typically = 20 years from date of filingDesign patent = 14 years
Why patents are important to start-up businesses
Patents are key to solidifying product protection
Patent portfolio a significant asset when company needs funding (from investors, venture capitol, etc.)
Patent filing/protection needs to be part of initial company formation/planning
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Industry Patent Policies Who owns IP – inventors or
employer? Employee Agreement as condition
of employment Does the inventor get royalties?
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Employment Agreements Typically are a condition at hiring &
include salary, benefit details. Often include trade secret &
confidentiality language for a term that exceeds termination from the company.
Includes IP ownership information. May include non-compete language to
prevent you from working for a competitor for a period of time.
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Why Patents are Important to Start-up Businesses
Patents are key to solidifying product protection
Patent portfolio a significant asset when company needs funding (from investors, venture capitol, etc.)
Patent filing/protection needs to be part of initial company formation/planning
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Typical Clauses in Company Agreement You cannot disclose or profit (monetarily
or otherwise) from company confidential information, trade secrets or customer lists. [disclosing trade secrets is a federal offense]
Anything you invent, discover or improve belongs to the company if it's related to the existing or planned scope of the company's business in any way.
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Determining Inventorship Must include all who contributed
intellectually and creatively to the invention.
Best determined by the IP attorney. Need to have contributed to at
least one of the claims. If needed, royalty split can reflect
the relative efforts.
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What you should have for an invention, besides a great idea Bound lab notebooks which
document the conception of the idea and the research
Periodic witness and dated signature by someone able to understand the invention, but who will not profit from it
Completed ID form noting any sponsors, publications and all inventors.
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