Why Have Intellectual Property?

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1 Intellectual Property: Protecting Your Ideas James J. Pohl Timothy A. Doyle April 23, 2009

2 Why Have Intellectual Property? To protect ideas and expressions and to promote investments in these activities To encourage disclosure of new ideas To assist consumers in distinguishing among different products or services 2

3 Types of Intellectual Property Trade Secrets Trademarks (and Service Marks) Copyright Patents Utility Design Plant 3

4 Trade Secrets What is a trade secret? Knowledge that confers an advantage to an entity and that the entity keeps as a secret How is it obtained? Obtain the knowledge. Keep it a secret. Advantage Lasts as long as the knowledge is kept a secret Disadvantages Secrets can be hard to keep No right to exclude cannot stop another who independently figured out the secret To enforce in court, must show a loss of competitive advantage Matter of state law (can vary from state to state) Knowledge is not placed in the public domain (disadvantage to the public) 4

5 Trademarks What is a trademark? That which distinguishes the goods and services of one company from those of another What can be a trademark? Name of a product or service Stylized package or building (trade dress) (e.g., McDonald s golden arches) Sound (e.g., Intel) Color (e.g., UPS) Scent (e.g., scented yarn) 5

6 Trademarks Advantages Lasts as long as it is used Can prevent others from using similar marks or dress Reduces administrative costs (i.e., time) to the consumer (advantage to the public) Disadvantage use it or lose it 6

7 Trademarks Markings indicates that the company considers something to be a trademark indicates that the trademark has been registered by the United States Patent and Trademark Office (USPTO) 7

8 Trademarks So why register a trademark? USPTO examines proposed trademark against similar trademarks to ensure that the proposed trademark is sufficiently different from others In a legal action, a registered trademark has a presumption of validity The party contesting the trademark has the burden of proof ($$$) of showing that the trademark is not valid Can two products have the same brand name? Yes (e.g., Dove soap and Dove candy bar) Products must be sufficiently different that the use of the same name does not confuse the consumer as to the source of the product 8

9 Copyrights What is copyright? Legal protection for an expression Expression independently created, not unique Expression must be capable of being fixed in a tangible medium (writing, recording, etc.) 9

10 Copyrights What can be copyrighted? Literary works Musical works and sound recordings Dramatic works (including choreography) Pictorial, graphic, and sculptural works Motion pictures Architectural works For businesses outside these fields? Most common: software 10

11 Copyrights How does a creator show that a work is to be protected by copyright? Old way: or Copr. or Copyright and name and year (e.g., Doyle 2007) Now: automatically created when work completed Advantages Can prevent others from copying your work or from producing derivative works Right to exclude has a long duration (e.g., for some categories: 100 years after life of author) Encourages creators to disclose their works to the public (advantage to the public) 11

12 Copyrights Disadvantage Work is placed in public domain (easy to copy) Registration With the United States Copyright Office Must also deposit a copy of the work Must be done to obtain statutory money damages in a legal action Presumption of validity ($$$) 12

13 Patents Patent No. 1 issued on July 13, 1836 To inventor John Ruggles for traction wheels What is a patent? Right of limited duration to exclude others from making, using, selling, offering for sale, or importing that which is claimed; the right is granted by the Government in exchange for the patentee disclosing her invention or design to the public 13

14 Patents Patent No. 1 issued on July 13, 1836 To inventor John Ruggles for traction wheels Types of patents Utility Term of 20 years from filing of application (typically 17 years from issue of patent) Invention must be: (1) useful, (2) novel, and (3) not obvious in light of what has been done before Design Term of 14 years from issue of patent For decorative design for article of manufacture that is novel and not obvious in light of what has been done before Plant Term of 20 years from filing of application For novel, asexually reproduced plants 14

15 Patents What Can Be Protected With a Utility Patent? Process Machine Manufacture Chemical Software Method of Doing Business (that involves technology) Abstract idea Mathematical Equation 15

16 Patents Advantages Encourages disclosure of the workings of inventions to the public (advantage to the public) If I have seen further it is by standing on the shoulders of giants. Isaac Newton Encourages investment by providing a barrier to entry to those who would copy an innovation Can prevent others from using invention as a trade secret (if they were doing so) 16

17 Patents Disadvantages Public disclosure of invention (easy to copy) Expensive to obtain and to litigate May need to seek patents in several countries May be of limited value if technology quickly evolves Markings Patent Pending when application filed U.S. Patent No. X,XXX,XXX when patent issues 17

18 Interrelations Many interrelations among different types of intellectual property Software can be protected by both patent and copyright Decorative package design can be protected both as a trademark and by a design patent 18

19 Interrelations Advantages can be created with combinations of patents/trademarks Computers: many consumers look for the Intel Inside logo when choosing a model Drugs: pharmaceutical companies strive to build their brands while their drugs are covered by patents to maintain consumer loyalty after the patent expires and generic versions of the drug are available (e.g., Prozac ) 19

20 Remember: the P in IP Stands for Property Increasingly, the business community is moving from viewing IP strictly as insurance toward viewing it as property Licenses Historically how IP has been monetized Bootstrap financing through licensing Collateral for loans Possibly reduce overall cost of capital through low cost debt versus high cost equity Leveraging opportunities Basis for a security Bowie bonds bond issued with return tied to royalties of licenses of David Bowie s songs Licensing companies and auctioneers Creating secondary markets 20

21 Understanding Utility Patents Timothy A. Doyle James J. Pohl April 23, 2009

22 Understanding Utility Patents Parts of a patent: Specification Figures Claims Purpose of the specification and the figures is to give meaning to the claims CLAIMS DEFINE THE LEGAL RIGHTS 22

23 About Claims The law: The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention. 23

24 About Claims The lore: Each claim is written as a single sentence The claim begins with a preamble, followed by a transitory phrase, followed by a body The body includes elements and states how these elements interact Elements are separated from each other by a semicolon The first time an element is referenced it is preceded by a (or an ) Thereafter, if the element is referenced, it is preceded by said (or the ) a (or an ) means at least one 24

25 About Claims Two types of claims: Independent stands alone Dependent incorporates elements of an independent claim and intervening (if any) dependent claims Why so many claims? Fallback positions Remember: Differentiation a patent has a presumption of validity 25

26 Example: Sitting Apparatus Claims 1. An apparatus for sitting, comprising: a first object having a substantially planar surface; and a second object connected to said first object and configured to support said first object at a height above a ground so that said substantially planar surface is substantially horizontal to said ground. 2. The apparatus of claim 1, wherein the second object comprises four second objects. 3. The apparatus of claim 2, further comprising: a third object having a substantially planar surface, wherein said third object is connected to said first object so that said substantially planar surface is substantially vertical to said ground. 26

27 Example: Sitting Apparatus Claims 1. An apparatus for sitting, comprising: a first object having a substantially planar surface; and a second object connected to said first object and configured to support said first object at a height above a ground so that said substantially planar surface is substantially horizontal to said ground. 2. The apparatus of claim 1, wherein the second object comprises four second objects. 3. The apparatus of claim 2, further comprising: a third object having a substantially planar surface, wherein said third object is connected to said first object so that said substantially planar surface is substantially vertical to said ground. 27

28 Example: Sitting Apparatus Claims 1. An apparatus for sitting, comprising: a first object; and a second object connected to said first object and configured to support said first object at a height above a ground so that a substantially planar surface of said first object is substantially horizontal to said ground. 2. The apparatus of claim 1, wherein the second object comprises four second objects. 3. The apparatus of claim 2, further comprising: a third object, wherein said third object is connected to said first object so that a substantially planar surface of said third object is substantially vertical to said ground. 28

29 Example: Sitting Apparatus Claims A competitor presents prior art: a three-legged stool Does a three-legged stool have: a first object; and a second object connected to said first object and configured to support said first object at a height above a ground so that a substantially planar surface of said first object is substantially horizontal to said ground? Yes. So, claim 1 is not novel. Does a three-legged stool have four legs? No. But this is obvious: buh-bye claim 2. Does a three-legged stool have: a third object, wherein said third object is connected to said first object so that a substantially planar surface of said third object is substantially vertical to said ground? No. So, claim 3 remains valid. 29

30 Example: Self-Propelled Vehicle Claims Which claim would you prefer? 1. A self-propelled vehicle, comprising: a sitting apparatus; four wheels; an engine coupled between said seating apparatus and said four wheels and configured to cause at least one of said four wheels to rotate; and a steering wheel configured to allow a user to change an orientation of a first set of two wheels of said four wheels with respect to a second set of two wheels of said four wheels. Or: 2. A self-propelled vehicle, comprising: a sitting apparatus; a wheel; an engine coupled between said seating apparatus and said wheel and configured to cause said wheel to rotate; and a steering device configured to allow a user to change an orientation of said wheel. 30

31 Example: Self-Propelled Vehicle Claims A competitor later develops a motorcycle Does a motorcycle have: a sitting apparatus; four wheels; an engine coupled between said seating apparatus and said four wheels and configured to cause at least one of said four wheels to rotate; and a steering wheel configured to allow a user to change an orientation of a first set of two wheels of said four wheels with respect to a second set of two wheels of said four wheels? No. So, a motorcycle does not infringe claim 1. Does a motorcycle have: a sitting apparatus; a wheel; an engine coupled between said seating apparatus and said wheel and configured to cause said wheel to rotate; and a steering device configured to allow a user to change an orientation of said wheel? Yes. So, a motorcycle does infringe claim 2. 31

32 Example: Self-Propelled Vehicle Claims Claim 1 is a classic example of claiming the product and not the invention Claim differentiation: 2. A self-propelled vehicle, comprising: a sitting apparatus; a wheel; an engine coupled between said seating apparatus and said wheel and configured to cause said wheel to rotate; and a steering device configured to allow a user to change an orientation of said wheel. 3. The self-propelled vehicle of claim 2, wherein said wheel is four wheels and said orientation of said wheel is an orientation of a first set of two wheels of said four wheels with respect to a second set of two wheels of said four wheels. 4. The self-propelled vehicle of claim 3, wherein said steering device is a steering wheel. 32

33 Example: Word Processor Are there any problems with this claim? 1. A system for composing text files, comprising: a keyboard that receives a text entry from a user; a monitor that displays said text entry; and a processor coupled between said keyboard and said monitor and configured to process said text entry received at said keyboard so that said text entry is displayed at said monitor. 33

34 Example: Word Processor 1. A system for composing text files, comprising: a keyboard that receives a text entry from a user; a monitor that displays said text entry; and a processor coupled between said keyboard and said monitor and configured to process said text entry received at said keyboard so that said text entry is displayed at said monitor. Patent right allows holder to prevent someone from making, using, selling, offering for sale, or importing the invention Usually, the right to prevent a sale is most important The claims define the invention Products tend not to be sold with a user included Products that run on electricity (gasoline, etc.) tend not to be sold in an operating state 34

35 Example: Word Processor A better way: 1. A system for composing text files, comprising: a keyboard configured to allow a user to input a text entry; a monitor configured to display said text entry; and a processor coupled between said keyboard and said monitor and configured to process said text entry inputted at said keyboard so that said text entry is displayed at said monitor. 35

36 Example: Music File Download Are there any problems with this claim? 1. A system for downloading a music file, comprising: a first computer configured to transmit a request for the music file and to receive the music file; a second computer configured to store the music file, to process the request for the music file, and to transmit the music file; and a network coupled between the first computer and the second computer and configured to convey the request for the music file and the music file. 36

37 Example: Word Processor A better way: 1. A system for downloading a music file, comprising: a memory configured to store the music file; a processor coupled to the memory and configured to process a request for the music file; and an interface configured to interact with a network and configured to transmit the request for the music file and to receive the music file. 2. A system for transmitting a music file, comprising: a memory configured to store the music file; a processor coupled to the memory and configured to process a request for the music file; and an interface configured to interact with a network and configured to receive the request for the music file and to transmit the music file. 37

38 Sample Situation Your company has figured out how to add color information to TV signals Another company has developed a color TV monitor Your company plans to dominate the emerging market for color TV and has acquired the patent rights for the color TV monitor from the other company Your team has been tasked with reviewing other patents to see if your company needs rights in any of them in order to dominate color TV 38

39 Sample Situation One of your team members has just reviewed the specification of a patent and has determined that it teaches the workings of black and white TV and therefore is not important to your company However, the first independent claim reads: 1. A system for transmitting moving pictures through the air, comprising: a camera configured to convert image data into an electromagnetic energy signal; a modulator configured to modulate said electromagnetic energy signal onto a signal at a transmission frequency; and a transmitter configured to transmit said signal at said transmission frequency. Do you think that you can stand on the shoulders of giants without paying? 39

40 Points of Contact Timothy A. Doyle (202) James J. Pohl (202)

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