HOW TO BUILD, MANAGE &
MAXIMIZE YOUR
INTELLECTUAL PROPERTY
Presented to ACCA South/Central Texas Chapter
March level
5, 2008
–Fourth
BY
»Fifth
level
William B. Nash
JACKSON WALKER, L.L.P
112 E. Pecan Street, Suite 2400
San Antonio, Texas
(210) 978-7700
© 2008 Jackson Walker LLP
All Rights Reserved
Austin  Dallas  Fort Worth  Houston
San Angelo  San Antonio
The Good News
• Your Company is developing new products and/or
services
level sales due to
• Your Company is –Fourth
increasing
innovative marketing »Fifth
programs,
level slogans, or ideas
• Your Company is growing by acquiring another
company
• Your Company may be bought by another
company
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
The Bad News
• It is your job to make sure:
– Nobody knocks off your product or service
– Competitors do not–Fourth
use your
levelsuccessful marketing
programs, slogans or ideas
»Fifth level
– Lenders are impressed with your IP assets – throwing
money at you to keep growing
– As Business people keep rolling out new programs they
do not give away IP
– Competitors do not hire away your key employees
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
The Ugly News
• There is no easy way!
• But, it is your job.
–Fourth level
• Need to:
–
–
–
–
–
Identify
Organize
Document
Educate
Monitor
»Fifth level
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
The Solution
1. Conduct an IP audit
1. To determine the origin of the company’s
–Fourth level
intangible assets
level
2. The scope of the »Fifth
company’s
rights in
technology and related intellectual property
law rights
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Purpose of an IP Audit
•
To detect defects in existing intellectual property assets and the mechanisms
and procedures for identifying, protecting, and perfecting the company’s
intellectual property.
•
To put in place systematic procedures
for identifying, protecting, and
–Fourth
level
perfecting intellectual property rights.
»Fifth level
•
To determine the scope of rights that third parties may have by license,
ownership, or otherwise in the intellectual property used by the company.
•
To determine, when considering IP litigation, whether all filings necessary for
jurisdictional requirements have been satisfied; what clouds, if any, on the
owner’s title may exist; and what defenses may be asserted against the owner.
•
To avoid liability for third-party claims of infringement resulting from the
development of new products or services.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Examples of When to Conduct an
IP Audit
• There is new responsibility for managing the company’s
intellectual property;
• There is a merger, acquisition, or significant stock
purchase;
–Fourth level
• There is a transfer or assignment of interest in intellectual
»Fifth level
property;
• There is a significant change in the law;
• There are financial transactions involving intellectual
property;
• The company is considering a significant license either as
licensor or licensee; and
• The company has a new program or policy.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
ABC Inc.
• Employees
Ordinary
• Contracts
soft assets
–Fourth level
• Common Law
»Fifth level
Trademarks and
Secrets
Hard
assets
• Building, Equipment,
Inventory
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
XYZ Inc.
•Registered Trademarks
•Registered Trade dress
•Registered Copyrights
•Business Method Patents
•Utility Patents
–Fourth level
•Design Patents
»Fifth
Ordinary
•IPlevel
assignments from
soft assets
employees and contractors
•Protected Trade Secrets
• Form contracts with suppliers
Hard
and customers
assets
•Noncompete contracts
Extra soft
assets
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
ABC Inc.
XYZ Inc.
Extra Assets
Soft Assets
ASSETS
• Employee, Customer and
Supplier Goodwill
• Common Law Trademark
and Trade Secret protection
Hard Assets
• Registered - Trademarks, Trade
Dress, Copyrights
ASSETS
• Patents – Business Method,
Utility, Design
• IP assignments and
noncompetes - employees and
contractors
–Fourth level
• Formal Trade Secret Protection
• Building, Equipment,
Inventory
• Form contracts - suppliers and
»Fifth
level
customers
Which would you rather be?
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
YOUR BUSINESS
Vendors
Customers
PRODUCTS
Competitors
SERVICES
–Fourth level
Independent
Contractors
RESOURCES
»Fifth level
Investors
PROCESSES
Employees
These are all constantly changing.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Steps to Conduct IP Audit of
Company’s
–Fourth level
»Fifth level
Intellectual
Capital
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Overview of Steps of IP Audit
• The Audit Plan
–
–
–
–
Define areas of inquiry
–Fourth level
Establish time schedules
»Fifth level
Outline responsibilities
Define (preliminarily) documents to review and
personnel to interview
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
• Objective of IP Audit
– Identify Trademarks, Patents, Copyrights, Trade
Secrets
– Identify where each
came
–Fourth
level from
– Determine current ownership
»Fifth level
– Identify duties, restrictions, and encumbrances
– Verify all requisite acts (use, registration,
maintenance, duties, etc.)
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Get Buy-in
– Have IP Capitalization briefing with
management
• Overview of IP
–Fourth level
• Summarize results of IP Audit
»Fifth level
• Identify key areas perceived as important to
company’s competitiveness
• Present research on what your competitors are doing
with patents, trademarks, copyrights
• Present recommendations
– Conduct audit
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Educate the People Doing the Work
– Have IP 101 presentation
• Explain basics of patent, trademark, copyright, trade
secret, and contract law
–Fourth level
»Fifth are
leveldoing
• Show what competitors
• Summarize what company has done
• Explain need to implement procedures to build and
maintain company’s intellectual capital
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
• Information Gathering
– Assign a coordinator of document requests
– Collect and review information concerning the nature of the property
and transaction to be investigated (see list of pertinent
documents/information below)
– Identify issues regarding the laws of particular states or countries
–Fourth level
• Written Report of Results
of Audit
»Fifth
level
– Memorialize results in a report (taking into consideration whether such
report will be privileged and not discoverable)
– Report should include:
•
•
•
•
List of assets,
Development history
Status of trademarks, copyrights, patents and other intellectual property
Intellectual property defects and remedial actions
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Procedure for IP Audit
• Give key people in each department an IP
Brainstorming Checklist
–Fourth level
»Fifth level
• Give a limited amount of time to complete
– Don’t make it too complex
• Provide incentive for completion
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Patent/Trade Secret Questions
•
Considering mission statements, core values and key result areas, list programs
or projects that Company has invested in, or spent significant resources on,
over the last year that:
– have produced or contributed, or we expect to produce or contribute, a beneficial
unique product or service.
–Fourth level
– add significant value to Company.
– have never been seen before.
»Fifth level
•
List programs or projects that:
– over the past 3 years have cost a considerable amount of time, effort or expense.
– have been initiated or implemented in the past 3 years to provide innovative,
quality products and services.
•
Name what Company has done over the last few years to make itself more
efficient, successful, or competitive.
•
Identify the most valuable or noteworthy improvement to Company’s
processes in the last 3 years.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Patent/Trade Secret Questions
• Predict the most valuable or noteworthy improvements to Company’s
processes, products or services in the next 3 years.
• Describe the most significant challenges from Company’s competitors.
–Fourth level
• List inventions, processes, or improvements
»Fifth level that you most fear
Company’s competitors implementing.
• List what Company should do to meet competitors’ challenges now or
within the next 5 years.
• List what Company does in your department that is different from
competitors.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Trademark Questions
• List Company’s most recognizable and important names, logos, or
images.
• Describe any instances of competitors copying Company’s names,
level
logos, images, products, or–Fourth
processes.
»Fifth level
• List competitors most effective trademarks, logos, and images
(describe why they are effective).
• List names, logos, or images that could help Company make more
money if adopted.
• Specify Company text, images or graphic art that competitors should
not copy.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Copyright Questions
• List important project(s) that Company has sent out a bid
or Request For Proposal.
• List any projects or programs
that Company has invested
–Fourth level
in or spent significant amount of resources on over the last
»Fifth level sent to an outside
year, which had design specifications
vendor.
• List projects or programs under development that have, or
will have, design specifications sent to an outside vendor.
• Specify any third party developed improvements currently
used by Company.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Copyright Questions
• Determine any computer code written by third
parties per Company’s direction (specify if
Company owns the code).
–Fourth level
»Fifth levelcomputer code
• List any Company developed
based in whole, or in part, on computer code
written by third parties.
• Describe instances where Company may use
images or textual material created by third parties.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Steps to Build and Maximize
Company’s
–Fourth level
»Fifth level
Intellectual
Capital
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Employee Agreements
• Prepare and have all knowledge employees
sign short agreements
–Fourth level
– assigning their IP
rights to company,
»Fifth level
– agreeing to keep company’s trade secrets secret
and agreeing to not use
– agreeing to not compete or raid company when
they move on, and
– to arbitrate all disputes with company
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Trademarks
• Select protectable mark
– Generic, Descriptive, Suggestive, Arbitrary, Fanciful
• Conduct TM search before
adopting and using mark
–Fourth level
– $1,500 to $2,000
– Or for free at www.uspto.gov»Fifth level
• Ensure proper trademark notice being used
– ®,™
• File trademark applications
– Federal – ITU or actual use
– State
– International – EU, Canada, Mexico
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
–Fourth level
»Fifth level
–Fourth level
»Fifth level
Trademarks
• Must have your trademark registrations
docketed
– Failure to renew–Fourth
or file
declarations results in
level
abandonment of registration
»Fifth level
• Between 5th and 6th year
• Every 10 years
• Hire trademark watch service to protect us
from others getting registrations in our
relevant jurisdictions
• Monthly Google searches – free!
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Trademark - Remedies
• Under the Lanham Act, remedies for trademark
infringement of a registered mark include:
–Fourth
– The defendant’s profits
– only level
have to prove defendant’s sales.
The defendant must prove »Fifth
all claimed
level elements of cost or
deduction.
– Damages sustained by plaintiff, up to treble damages when
appropriate.
– Court costs and Injunctive relief.
– Attorney’s fees in exceptional cases.
– Destruction of infringing articles bearing infringing trademarks.
• Prevent importation of infringing goods
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Copyrights
• Copyright rights exist upon the moment of
creation
–Fourth level
– Do not use another’s
or online material without
»Fifth level
verifying okay to use
• Ensure Copyright notices are used on all
company owned materials
– © 2008 Jackson Walker, All Rights Reserved
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Copyrights
• Register significant materials with US Copyright
Office to be able to recover
– Attorneys’ fees –Fourth level
– Statutory damages »Fifth level
– Prevent importation of infringing goods
• Copyright registration
– Life of author plus 70 years
– Company- 95 years after 1st publication or 120 years
after creation
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Copyright - Remedies
• ACTUAL DAMAGES
– Owner’s actual damages
– Any profits of the infringer attributable to the infringement that are not
taken into account in computing the copyrights owner’s actual damages.
In proving profits, owner only required to present evidence of infringer’s
gross revenue. Infringer required to prove deductible expenses and the
elements of revenue attributable
other than the copyrighted work.
–Fourthtolevel
• STATUTORY DAMAGES »Fifth level
– May elect an award of statutory damages for all infringements involved in
the action, with respect to one work, in the amount of not less than
$750.00 and not more than $30,000.00.
– If willful – Court may increase up to $150,000.00.
– If innocent – Court may reduce to not less than $200.00.
• INJUNCTIVE RELIEF
• IMPOUNDMENT OF ALL COPIES
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Trade Secrets
• Consider implementing inexpensive trade secret
program
– Put Everyone on Notice
–Fourth level
– New Employee Hiring Procedures
level
• Signed Confidentiality»Fifth
Agreements
• On notice to not bring in secrets of another company
–
–
–
–
Restrict Access
Confidentiality Legends
Exit Interviews
Periodic Audits
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Trade Secrets
• PROPER TRADE SECRET NOTICE
–Fourth level
COPYRIGHTED CONFIDENTIAL AND
»Fifth level OF _____________.
PROPRIETARY PROPERTY
DUPLICATION, USE OR DISCLOSURE WITHOUT
EXPRESS WRITTEN CONSENT IS PROHIBITED.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Trade Secrets
• Confidential Disclosure Agreements -- in Texas,
nothing is “confidential” by law
–Fourth level
• Example: if you tell or
show
an idea to another, there is no
»Fifth
level
obligation for the other person to keep the information secret,
unless a confidential or fiduciary relationship exists prior to the
disclosure.
• So, before disclosing any “confidential” information it is best
to obtain patent, trademark, or copyright protection.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Trade Secret - Remedies
• As US economy on trend downward, IP
attorneys are gearing up in anticipation of
–Fourth
level way
more work heading
their
»Fifth level
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Contracts
• Put all technology agreements in writing
– Need to be specific
–Fourth level
– Define deliverables through a detailed
statement of work »Fifth level
– When new features are requested be certain to
document the changes and results of the
changes
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Remedial Action Summary
• Undertake any necessary federal, state and
international filings/recordations
–Fourth
level
• Execute ownership
documents
(i.e.,
assignments)
»Fifth level
• Pursue infringers/correct infringements
• Define prospective legal, marketing and
research strategy
• Clarify employee/consultant ownership rights
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Recent Developments
In
–Fourth level
»Fifth level
Patent
Law
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Seagate and Willful Infringement
• In re Seagate Technology LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en
banc), cert denied, (Feb. 25, 2008) -- intertwining issues of willful
infringement, advice of counsel defense, and attorney client privilege.
– Seagate was charged with
willful infringement
and asserted an advice of
–Fourth
level
counsel defense. During discovery, plaintiffs requested work product
relating to the opinion letter, including
the trial counsel's work
»Fifth level
product. The district court determined that Seagate had completely
waived the attorney client privilege by asserting the advice of counsel
defense and issued an order to compel discovery.
– In past, following an accusation of patent infringement companies would
typically obtain an opinion letter regarding the potential infringement
from "opinion counsel." During trial, company could waive privilege and
rely on the opinion letter in court to defend against the claim of willful
infringement.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
In re Seagate Technology LLC
• CAFC overrules Underwater Devices, Inc. v. MorrisonKnudsen Co., 717 F.2d 1380 (Fed. Cir. 1983), and sets out
three points of law.
–Fourth level
– First, the court set an "objective recklessness" standard for willful
»Fifth
level
infringement where a patentee
must
show by clear and convincing
evidence that the infringer acted despite an objectively high
likelihood that its actions comprised infringement.
– Second, the court held that a potential infringer does not have an
affirmative duty to acquire an opinion letter.
– Third, the court established that when an alleged infringer waives
its attorney client privilege with respect to opinion counsel, waiver
does not extend to trial counsel.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
In re Seagate Technology LLC
• Thus, court held the state of mind of the
accused infringer is not relevant to the
–Fourth level
objective inquiry.
»Fifth level
• It also held there is no affirmative
obligation to obtain opinions of counsel.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
MedImmune and DJ Jurisdiction
• MedImmune v. Genentech et al., 764 (2007) (8-1 decision).
– Licensee can file DJ to invalidate patent even without being in
breach
– Following MedImmune,
Fed. Cir.
found jurisdiction over a DJ
–Fourth
level
claim in Sony Electronics Inc. v. Guardian Media Technologies,
»Fifth
level
Ltd., 497 F.3d 1271 (Fed. Cir.
2007),where
the parties, after failed
licensing negotiations, had not even entered a license agreement.
• CAFC may abolish or change the reasonable apprehension of
immediate suit test
– Be careful sending letters to potential infringers
• “Thought you should know …”
• “If interested please call to discuss …”
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
KSR and Obviousness
• KSR Int'l Co. v. Teleflex Inc., 127 S. Ct. 1727 (2007) (8-0)
(adjustable pedal assembly obvious where the patentee had
combined elements in prior art to create new pedal
assembly)
–Fourth level
– Rejected rigid application of CAFC’s teaching-suggestionmotivation ("TSM") test in»Fifth
favor level
of the more flexible framework
laid out in Graham v. John Deere Co., 383 U.S. 1 (1966).
• 1) the scope and content of the prior art, 2) the level of ordinary skill
in the art, 3) the differences between the prior art, and 4) other factors
including commercial success and long felt commercial need for the
invention.
– Raised the bar for overcoming an allegation of obviousness. Faced
with an obviousness challenge, a patentee must prove there is no
"apparent reason" to combine references or modify prior art to
create the allegedly obvious invention
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
US Patent Office Enjoined !!!
• On Aug. 21, 2007, the USPTO issued final administrative
rule changes affecting the patent application process,
which were set to take effect on Nov. 1, 2007.
–Fourth level
• The proposed rule changes
would
»Fifth
levelhave limited the number
of claims permitted within each patent application as well
as capped the total number of related patent applications
that can be filed. The USPTO referred to this as the “5/25”
rule, allowing five independent claims and 25 total claims
in each application.
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
• On October 31, 2007, Eastern District of Virginia enjoined
the USPTO from implementing the revised Final Patent
Rules ("Final Rules").
• The Court noted at the outset that the Patent Office does
not possess any substantive rule-making power and that
Glaxo Smith Kline raised a "colorable question" as to
–Fourth
level substantive."
whether the Final Rules
are "truly
»Fifth level
• The Court also found that GSK raised "serious concerns"
as to whether the Final Rules comport with the Patent Act.
– In particular, the Court considered GSK’s concerns over the
limitations on the number of continuing applications,
– requests for continued examinations (RCEs), and
– number of claims
– as well as retroactivity of the Rules and the requirements for
examination support documents (ESDs).
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
International Trade Commission
Investigations
–Fourth level of Patent
»Fifth level
Infringement Claims
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
What is a 337 ITC action?
• International Trade Commission
– Not a court of law
–Fourth level
• Do imports injure a US
industry?
»Fifth level
– IP protection
– Anti-dumping
– Surging imports
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Why a 337 ITC action?
• Section 337
– “Unfair methods of competition and unfair acts
–Fourth
level
in the importation
of articles
. . . into the United
»Fifth level
States”
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Recovery in 337 ITC action
• Order prohibiting entry
–Fourth level
• Cease and desist order
»Fifth level
• No monetary damages
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Recent Section 337 Investigations
35
30
25
20
15
–Fourth level
10
»Fifth level
5
0
'90
‘95
'00
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
‘05 '06
Section 337 Geographic Distribution
Taiwan
27%
18%
EUROPE
–Fourth level
»Fifth level
China
25%
63%
ASIA
3%
MIDDLE
EAST
1999-2005
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Japan
16%
Korea
9%
Hong
Kong
9%
Other
14%
Dispositions
1999 – 2006
Complaint
Withdrawn
12%
No
Violation
18%
–Fourth level
»Fifth level
Violation
23%
Settled
47%
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Timeline for 337 ITC action
15-MONTH
Complaint Filed
December 2007
Notice of Investigation
January 4, 2008
Response date for
January 28, 2008
Response date for
–Fourth level
Discovery Committee Meeting
Target Date Set
February 4, 2008
Week of January 14th
»Fifth level
April 6, 2009
Discovery Ends
TBD
Exchange Testimony and Exhibit Summaries
TBD
Trial
August 4, 2008
Briefs
Within 14 days
Judge Decision
NLT January 6, 2009
Briefs
Within 14 days
ITC Order
TBD
Presidential Review
Within 60 days
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Hearing
•
•
•
•
•
No jury
Liberal evidence
–Fourth level
Short time limits »Fifth level
Often more than 10 hours a day
Enormous pressure to limit issues
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
Issues
• Jurisdiction
• Patent infringement
level at issue
– No infringement–Fourth
of claims
• Patent defenses
»Fifth level
– Invalidity
– Unenforceable
• Domestic industry
– Significant US activity (production, licensing,
R&D, etc)
William Nash – March 5, 2008 presentation to ACCA South/Central Texas Chapter
QUESTIONS?
• William B. Nash
• Partner
Registered Patent Attorney
–Fourth level
(210) 978-7764
»Fifth level
bnash@jw.com
Jackson Walker L.L.P.
www.jw.com
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