An Introduction to Intellectual Property

Presented to ECE 396

Lanny FederDirector, Engineering Intellectual Property

University of Illinois at ChicagoFebruary 20, 2004

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Scope of Presentation

PropertyInventionIntellectual PropertyPatentsInventorsCopyrightsTrademarks & Service Marks Trade SecretsValuation

What Is Property?

Legal definition:

A set of legal rules defining the rights of ownership of something having value (“property”), including the exclusive rights of the owner to use and dispose of the property.

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Attributes of Property

OwnershipDominion or possessionGood title

Control

Two types of property

Tangible property relates to a physical object.

Intangible property refers to a set of rights defined by the law that are not related to a physical object.

What is an Invention?

Webster’s Dictionary:

“a discovery or finding”

“a device, contrivance, or process originated after study and experiment”

An innovation, new or improved product or process of making a product, or new methods of doing things.

What Is an Invention?

An invention consists of a conception and a reduction to practice.

Conception: the mental act of making the invention including the ideas for carrying out the invention.

Reduction to practice: the actual making or carrying out of the invention

Example

Conception: a light bulb consisting of a vacuum tube housing a filament through which an electrical current is passed.

Reduction to practice: experimentation to determine the best material to use for this filament.

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What is Intellectual Property?

Intellectual Property is the product of our mindsDoes not physically exist (intangible)Intellectual Property can differentiate us and our companies from othersIntellectual Property can mean $$$

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Corporate Economics/Worth

Working Capital (Cash, Inventory, Accts. Receivable)+

Fixed Assets (Equipment, Real Estate ….)+

Intangibles Assets (networks, supply contracts, mfg. methods, trained workers…)

+Intellectual Property

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Types of Intellectual Property

IdeasInventions

PatentsTrade Secrets

Expressions/CopyrightsTrademarks

Protection of Inventions

Patent law provides protection for inventions that are new and useful processes, machines, manufacturing processes, compositions of matter, and any new and useful improvements of the same.

Patent law does not protect abstract ideas (NB –change in protecting mathematical formulas or algorithms, or methods of doing business)

Limited monopoly (20 years from date of filing)

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Rights a Patent Gives the Patent Holder

A patent is a grant from the Federal government given to inventorsU.S. awards rights to first to inventForeign countries award to first to applythe right to exclude others from making, using, offering for sale, or selling” the invention in the United States or “importing” the invention into the United States.

Limitations on rights:Regulatory restrictions and approvalsDominating patents -- Freedom to operate

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What are the Requirements to get a Patent?

The invention must fall into one of five "statutory classes":

processes machines manufactures (that is, objects made by humans or machines)compositions of matter new uses of any of the above.

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What are the Requirements to get a Patent? (cont’d)

The invention must be "unobvious" to "a person having ordinary skill in the art to which said subject matter pertains". This requirement is the one on which many patentability disputes hinge.

The invention must be "useful". One aspect of the "utility" test is that the invention cannot be a mere theoretical phenomenon.

The invention must be "novel", that is, it must be something that no one did before.

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What is not Patentable?

Laws of NatureGravity

Natural ThingsAlgorithms

Printed Matter

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Examples of Non-Patentable ItemsNon-useful

Perpetual motion machinesProduct of nature Contrary to public policy

Non-Obvious Publications, presentations, expired patents, etc.

Non-Novel Patented, published, known or used by others before invention was madeIn public use or on sale more than one year before filing date (in US)Invented by another

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Who is/is not an Inventor ?Contributed an obvious element to the invention (NOT)Contributed reagent, cell line or equipment used in the invention (NOT)Suggested an idea without a way to implement the idea (NOT)Followed instructions in working on the invention or in reducingit to practice (NOT)Participated in consultations about the invention before or after conception of the invention (NOT)Is the department head or supervisor of an inventor but did not actually contribute to the conception of the invention (NOT)Provided the funds or laboratory space necessary to develop the invention but did not actually contribute to the conception of the invention (NOT)

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Who is/is not an Inventor ? (cont’d)

One way to determine inventorship is to ask the question, "If the idea of this person had not been contributed, would the invention exist, as it is claimed?"

If an individual could not have been replaced by just any comparably qualified individual because the work on the invention required an original, non-obvious mental element, then the person is an inventor

Copyright Protects…..….Only the expression, not the ideas that are being

expressed.e.g., Idea: superhero with unusual powers and an

interest to save mankind.Idea: TV show about a family with children that encounter many problems.

What are some expressions of these ideas?What is copyrightable?Copyright term:

Life of author +70 years.95 years for published works made for hire.120 years for unpublished works (from date of creation).

Expressions

IP may also consist of the manner in which an idea is presented or expressed.

Federal copyright law protects all works of authorship: books, music, artistry, sculpture, movies, audiovisual works, drama, choreography, photography, sound recordings, architecture, and computer software.

Copyright Does Not Protect...

any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied in the original work of authorship.

Trademarks

A trademark is any word, name, symbol, or device, or any combination thereof, adopted and used by a manufacturer or merchant to identify his or her goods to distinguish them from those manufactured or sold by others.

e.g., Apple™, Nike™, Microsoft®

Trademarks

A trademark can include symbols, numbers, slogans, nicknames of products, the appearance of the product’s container, and the configuration of the product itself.

e.g., “Check mark” used by Nike™, formula 409™,“Don’t leave home without it™, Chevy™,

The shape of the coca Cola™ bottle.

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Trademark ExamplesArbitrary (Exxon®, Gatorade®)Suggestive (Coppertone®)Descriptive (Raisin Bran®)Generic (Joe’s Hamburgers)

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Rules of UseTM if in use or registration has been filed® if registration has been grantedMake them distinctive (font, color)Use as adjective not noun (Xerox® copier, CAVE® virtual reality system)Requires vigilant policing of use – both yours and othersExceptions exist

Fair use, parody, 1st Amendment

Service Marks

A word, name, symbol, or device, or any combination thereof…to identify and distinguish the services of one person…from the services of the others.

e.g., Golden arches symbol (restaurant services), UICSM(educational services), Marshall FieldsSM (department store services)

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Trade Secrets (Uniform Trade Secrets Protection Act)

Protects information that a company has tried to keep private such as:

Technical data Non-technical dataFormulas CompilationsPatterns DevicesMethods DrawingsProcesses Techniques

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Examples of Trade Secrets

Recipes (Coca-Cola)Financial InformationClient Lists

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Steps needed to comply

Formal policy to be read and signedRecord keeping and limited accessNeed to knowConfidentiality agreements with non-compete and destruction clauses with third parties

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ValuationFair MarketUseInvestmentLiquidationIntrinsic……

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Methods of DeterminationMarket (comparables)

Industry standardsHard to find true comparablesWe may not know all of the factors

Cost (cost to replace or reproduce)A Picasso vs. a carValue of oil shale researchUseful for embryonic technology

Income (net present value)Future salesHurdle rateInvestment neededProfit marginHow much to allocate to Intellectual Property

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Lanny Feder Director, Engineering Intellectual PropertyPhone: 312-413-5496Fax: 312-413-5846E-Mail: Lfeder@uic.edu

Forms and Educational Information are available at: http://otm.ovcr.uic.edu