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Protecting ICT Technologies Intellectual Property
Érik van der Vyver
Von Seidels
South Africa
July 2015
2
A WORLD WITHOUT IP “Open innovation”
Faster progression?
Immediate, unrestricted copying of new ideas/concepts/software
What will incentivise companies to conduct R&D?
Will there be research funding?
What about crowd funding?
Will the “big boys” go easier on you if you DON’T have any protection?
What about your exit strategy?
Will Big Brother want to buy you if you can’t offer them any exclusivity?
Perhaps, but what if there is no significant know-how or trade secrets and the technology is easily reproducible?
What about inventors who are not interested in starting a business but still need to make a living?
No licences, no sale of IP, no exclusivity
3
CASE STUDY #1
So you created a new way of conducting online payments
It’s simpler, better... you get the picture
It will change the world and put THEM ALL out of business unless they pay you a hefty ransom
Naturally the US is your biggest market
Oh yes, you did not file a patent application
You spend hundreds of thousands to set up shop in the US
You launch
... but so does MasterCard
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CASE STUDY #2
So you created a new way of conducting online payments
It’s simpler, better...
It will change the world and put THEM ALL out of business unless they pay you a hefty ransom
Naturally the US is your biggest market
Oh yes, you did not file a patent application
You spend hundreds of thousands to set up shop in the US
You launch
You receive a Letter of Demand for patent infringement
5
CASE STUDY #3
So you created a new way of conducting online payments
It’s simpler, better... blah blah blah ... HEFTY RANSOM
Naturally the US is your biggest market
Oh yes, you DID file a patent application, including a US application
You spend hundreds of thousands to set up shop in US
You launch
You receive a Letter of Demand for patent infringement
... The L.O.D. is from MasterCard
... The phone rings...
... It’s someone from VISA
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CASE STUDY #4
So you created a new way of conducting online payments
HEFTY RANSOM
Naturally the US is your biggest market
Oh yes, you DID file a patent application, including a US application
You don’t have the cash to start a business in US now
So you do nothing
You receive... nothing
But then MasterCard launches your idea
So you call them... They tell you to “go away”
So you call VISA
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CASE STUDY #5
So you’ve come up with an idea for conducting online payments
It’s very promising technology and will change the payment world as we know it
BUT you need investment to make it happen
You spent all your money on creating a fancy website and app that supports iOS, Android, Fire OS, webOS, Blackberry OS, Danger OS, Firefox OS, Symbian, MeeGo, Maemo, S40, Nokia X, Windows Phone ... AND buying a ticket to Silicon Valley to speak to the VCs
You have meetings with Andressen Horowitz, Khosla Ventures, SV Angel, Accel Partners, NEA, Sequoia, Venrock, First Round, Spark Capital and Triangle Peak
The first question all of them ask you is...
“So where is your IP ‘boet’?”
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SO WHAT IS IP?
To put it in patent language, “any one or more of the following:”
Patents
Trade Marks
Trade Dress
Industrial Design Rights
Copyright
Know-How
Trade Secrets
Plant varieties
The key message: Know which one applies, how to get it and what to do with it
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PATENTS
Are they still relevant?
You can’t patent software anyway...
So how many patents are still being filed/granted?
USPTO alone
They are more part of the game than ever
And they will probably not go away in a hurry
Year Appl. Grants
2000 295,926 175,979
2005 390,733 157,718
2010 490,226 244,341
2012 542,815 253,155
2013 571,612 277,835
2014 578,805 300,678
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THE CURRENT GAME
So who files them?
Again, in the USA alone (granted by the way) AND in 2014 alone!
1. International Business Machines (aka IBM) 7,481
2. Samsung Electronics Co. Ltd 4,936
3. Canon K.K 4,172
4. Sony Corp. 3,214
5. Microsoft Corp. 2,983
6. Google, Inc. 2,881
7. Toshiba Corp. 2,850
8. Qualcomm, Inc. 2,706
9. Panasonic Corp. 2,934
10. General Electric Co. 2,293
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THE CURRENT GAME
Some other interesting ones
11. LG Electronics Inc. 2,119
13. Apple, Inc. 2,003
14. Intel Corp. 1,965
21. Siemens AG 1,630
23. Ericsson 1,537
27. Blackberry Ltd. 1,328
81. Samsung SDI Co., Ltd 513
95 Adobe Systems, Inc. 427
114. Nvidia Corp. 334
115 Altera Corp. 333
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THE CURRENT GAME
Yes but how many of these are so-called “software patents”?
Patents are part of the game. The question is “are you going to play?”
Company % CIIs #
Google Inc. 58,56% 1,687
Microsoft 55,32% 1,650
IBM 38,67% 2,892
Apple Inc. 26,41% 528
Sony Corp. 14,95% 480
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WHAT ARE CIIs?
“Inventions whose implementation involves the use of a computer, computer network, or other
programmable apparatus, the invention having one or more features which are realised wholly or in
part by means of a computer program”
- EPO
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WHAT CAN I PATENT
Patent may be granted for
Any new invention which
Involves an inventive step
Capable of use/application in trade, industry of agriculture
Not inventions:
Program for a computer
Only to extent to which a patent or an application for a patent relates to a computer program “as such”
So what if I call it something else?
A method of conducting online payments?
SA Position?
Not tested by our courts
Tend to follow UK and EP
Requires “technical effect”
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TECHNICAL EFFECT
UK View “one is tempted to say that [technical effect]… is like an elephant: You know it when you see it, but you can’t describe it in words”
- Jacob LJ
To be patentable, CII must still provide a technical solution to a technical problem to be viewed as inventive
Technical
Control of a brake in a car
Faster communications between mobile phones
Secure data transmission (encryption of data)
Resource allocation in an operating system
Not Technical
Calculation of a pension
New rules of an auction
Selling and booking sailing cruise packages
Aesthetic effects of music or of a video
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TECHNICAL EFFECT
Compare claim to the prior art & identify the novel
contribution
Does the contribution relate to controlling a process in
the natural world? (e.g. robot, aircraft, DVD recording
process)
Does the data processing represent a physical/
chemical/biological (or other natural) process or entity? (e.g. weather, DNA
profiles, telecom congestion)
Is the form of data processing accepted by the EPO as having
a technical effect? (e.g. security
(encryption), data reduction (compression), user interfacing, error
correction, authenticity (digital signatures), improved user interfaces (GUI)
Not technical Technical
yes
no
no no
yes yes
17
THE US POSITION Patents on CIIs not always allowed
Position changed 1980
“patents may be obtained on anything under the sun that is made by man” – Diamond v Chakrabarty
1998 – subject to same standard of patentability if software produces “…a useful, concrete and tangible effect”
Bilski v Kappos:
Four independent categories of inventions eligible for protection – processes, machines, manufactures and compositions of matter
Machine-or-transformation test:
Claim to a process qualifies for patentability if (1) implemented by a particular machine or (2) transforms an article from one thing or state to another
Laws of nature, physical phenomena and abstract ideas not patentable
Limiting an abstract idea to one field or adding token post-solution components does not make it patentable
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WHO IS ALICE?
June 25, 2014 following the Supreme Court decision in Alice Corp. Pty. Ltd. v. CLS Bank Int’l, et al.
First determine whether the claim falls within one of the four categories of eligible subject matter, i.e., process, machine, article of manufacture, composition of matter
If not, the claim is not patent eligible
If so, consider the judicial exceptions
Under Alice, considering the judicial exceptions is a two-pronged analysis
Prong 1 – Determine whether the claim is directed to a judicial exception/abstract idea
If not, the claim is eligible … otherwise proceed to Prong 2
Prong 2 – Determine whether any claim element, or combination of claim elements, is sufficient to ensure that the claim as a whole amounts to significantly more than the abstract idea itself
If so, the claim is eligible … otherwise ineligible
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SO WHAT DO YOU DO?
The premise behind the judicial exceptions to patentability of abstract ideas is pre-emption. If a claim does not pre-empt all uses of an abstract idea and the claim is within a statutory class, the claim is patentable
Considering the guidance of Alice itself, consider whether the claim provides:
Improvement to another technology or technology field;
Improvement to the functioning of a computer itself; or
Meaningful elements beyond generally linking the use of an abstract idea to a particular technological environment
Tailor the claim to focus on specific point(s) of technical intelligence and ensure the specification includes thorough description thereof
You cannot hide the REAL invention
20
WHY CONSIDER OTHER COUNTRIES
Requirements for patentability may be more relaxed
Huge potential markets
US - 313 million
China - 1,35 billion
India - 1,2 billion
Early adopters of technology
Large providers of venture capital
Examined, granted patents give credibility to your invention and patents
You may have to defend yourself
21
REMEMBER
Your SA provisional patent application can form the basis of an application in any country in the world
Even if it is not patentable in South Africa
Your SA Complete patent application WILL be granted
Our Courts are friendly towards patentees
Even a slight advance in technology could be a valuable asset and worth protecting if it gives you a competitive advantage
22
WHY HAVE SOME PROTECTION?
“I'm willing to go thermonuclear war on this. I will spend every penny of Apple's $40 billion in
the bank. I'm going to destroy Android, because it's a stolen product.”
- Steve Jobs
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PATENT STRATEGIES
OFFENSIVE
Actively enforce monopolies
DEFENSIVE
The Castle Wall
Patents can prevent your competition from implementing new technologies which you have developed / acquired
Bargaining Chip
AK-47 APPROACH
Point and spray
Weapons of Mass Destruction
FOCUSED APPROACH
Core technologies only
THE TOLLBOOTH
license new technologies to others and collect royalties
STAMP OF APPROVAL
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SO HOW DO I PROTECT SOFTWARE
Previously…
Protected by Copyright ©
Prevents ‘actual’ copying
Prove copying?
© Protects expression, not ideas
But you do have © so mark your software accordingly
© JOE BLOGS, 2015
Insert “fingerprints” where possible
TAKE WRITTEN ASSIGNMENT OF ALL COMMISSIONED DEVELOPMENT
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REGISTERED DESIGNS
For fixed on-screen layouts
For new/unique icons, markers etc.
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CONFIDENTIAL INFORMATION
Enter into Non-Disclosure Agreements with potential business partners AND employees
Ensure your Confidential Information remains confidential
Limit distribution / internal sharing
Screen publications
Know what information is on your website
Educate your employees
Document your confidential information and MARK IT ACCORDINGLY
Confidential Information is a business asses like any other
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KNOW-HOW
Enter into proper Employment Contracts with your employees
THAT INCLUDE INTELLECTUAL PROPERTY PROVISIONS
Understand and implement REASONABLE Restraints of Trade
Know what is reasonable in your industry in terms of
Geographical area
Time periods
Unreasonable Restraints of Trade are UNENFORCEABLE
Limit dissemination of valuable know-how within your organisation and ensure those privy to it are bound by confidentiality and KNOW they are bound
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CONCLUSION
Have a clear idea WHY you want to protect your IP
Know what you want to achieve with your IP
Know the different kinds of IP and how/where they apply to your business
Have a clear IP Strategy
Consult with an IP specialist early in the life of your product/business
Have a budget for protecting, evaluating, valuing, enforcing, licensing your IP
