Protecting intellectual property in the technologically-driven, global marketplace can be a formidable challenge. While it may be impossible to eliminate risk entirely, patent attorneys acknowledge there are steps companies can take – along the spectrum from the creation of a product, service or process to its deployment and beyond – that will help them safeguard their rights.
Indeed, some highly specialized patent attorneys with technical backgrounds consult closely with their clients from the moment a patent is first proposed. Their advice may be that the invention is unlikely to receive a patent, or to help them redesign it so it is patentable and able to withstand litigation.
But intellectual property (IP) attorneys say it is important to first understand the nature of the property being protected, register it with the proper federal agency if applicable, and then make sure that company practices – including employee agreements and contracts with third parties – are as secure as possible.
Patents and trademarks are registered, for example, with separate divisions of the United States Patent and Trademark Office.
“If you take, say, a bottle of Coke, and the manner in which the bottle is made is new and non-obvious, then a company could get a patent for the bottle that would last for 17 years,” explains Marc Haefner, a law partner at Roseland-based Connell Foley who specializes in commercial and intellectual property litigation, including copyright infringement. “The Coke label is protected by trademark law, and this includes the name, the logo and everything that is associated with branding.
“The blurb or article the company writes about the product would be protected by copyright law. In order to sue another party for infringement, it needs to be registered with the Library of Congress,” he adds. “The fourth area of intellectual property, which is most valuable to the company, is the formula for Coke itself, which is a trade secret. But the company wouldn’t want to file for a patent, because it would expire in 17 years. The only legal protections for a trade secret are laws against theft of trade secrets which are now typically statutes that differ, to some degree, from state to state. But this doesn’t bar someone from reverse engineering the product.”
Patent, trademark and copyright law protect a wide spectrum of inventions, from computer code to architecture to clothing. Haefner notes that a wedding dress with bead work on it that is considered sculpture is protected by copyright law, for example.
“Architecture is an area we work in as well. One of the last big amendments to copyright law was to include architecture,” he notes, adding, “Software can be protected in two ways and it is very difficult and complex. You might seek copyright protection for the code, but keep the ‘magic algorithm’ as a trade secret.”
Philip Hirschhorn, a shareholder with law firm Buchanan Ingersoll & Rooney PC, who works with inventors and companies to obtain and litigate patents on a range of IP, from products, to utility, to design patents, notes that patent law also covers these areas, including clothing design, depending on the nature of the invention.
He adds that patent law also can protect a process, as distinct from a product, giving the example of a biotech company that patents both the technology and the process used to create a drug, such as the steps of introducing a genetic sequence into a virus, infecting a cell with the virus, causing the cell to produce a desired protein, and harvesting the protein for use in a drug product.
More broadly, the expansion of the global marketplace has also made IP protection much more difficult.
“International protection of intellectual property rights is significantly more complex and costly than in the US. While there are some international treaties that provide coverage of IP rights in multiple countries, for the most part IP rights and registration requirements vary from country to country,” says Robert Schoenberg, a partner at Morristown-based Riker Danzig Scherer Hyland & Perretti, who heads up the firm’s intellectual property group.
However, there are some updates to law that at least allow disputes to be settled more quickly and at less cost, attorneys say, such as the adoption in 2011 of the America Invents Act. The law allows trial proceedings to take place at the US Patent Office itself and sets up proceedings for inter partes review (IPR) for patent disputes and post grant review (PGR) for parties seeking to attack another’s (existing) claim of validity.
Hirschhorn notes that his role as an attorney in the Patent Office proceedings is to support a person seeking to obtain or defend a patent in much the same way he would if litigating in court, but “without the tremendous amount of discovery.”
He adds, “This doesn’t necessarily kill litigation, however, a party can appeal the decision to the Federal Circuit Court of Appeals. The likelihood of moving the case to the Supreme Court is historically slim, however.”
“Judges like the post grant proceedings because it puts the issue of validity in the hands of the experts at the US Patent and Trademark Office. Clients like it for this reason as well, but also because it’s less expensive,” notes Keith Gilman, an intellectual property counselor for Westfield-based Lerner, David, Littenberg, Krumholz & Mentlik, LLP.
Gilman comes to IP practice with a technical background and works extensively with clients before they even file for a patent. Almost all of Lerner David’s 80 attorneys, with expertise in areas ranging from biotechnology, to electronics, to computer software, to business methods, have passed the Federal Patent Bar and are registered to practice before the US Patent and Trademark Office, including the Patent Trial and Appeal Board, which presides over post grant proceedings. Gilman, who has a bachelor’s degree in mechanical engineering, heads the firm’s due diligence practice.
“We conduct due diligence to ensure that our clients are putting out a product or a process that won’t infringe on another party’s existing and valid rights. Some of our cases involve medical devices, for example, and we’ll begin by investigating at the US Patent Office in Alexandria, Va. We then evaluate what risks might exist in terms of infringement,” Gilman says. “Sometimes we can assist a client in redesigning a product to avoid infringement. The process works very well in some instances in which the redesigned product is not only clear of infringement, it is commercially better and also patentable.”
A redesign, he notes, may be focused on certain limitations in a patent claim, as construed in light of the statements made by the patent owner to distinguish its invention over prior inventions so that they can obtain a patent.
“By such an approach, we might help a client find the most effective approach to the clearance of the product. There is no guarantee, but the more ammunition you can garner from the patent owner’s own positions, the more effective your opinion of non-infringement,” Gilman says, adding that at other times, he provides an opinion that the client’s product does not infringe a third-party patent, or that a third-party patent is invalid.
“The idea is to have the business make well-informed and responsible decisions,” he says, noting, “Clearing products is a difficult arena, because we’re trying to predict the future. We’re trying to provide our clients with guidance that will allow them to go out into the marketplace with a product that doesn’t infringe. Patent litigation can cost millions of dollars and my role is to keep them out of litigation.”
Schoenberg says he counsels clients to protect their IP rights through a number of means: by registering with the appropriate federal authority to obtain nationwide protection; by entering into a non-disclosure agreement with a business partner or vendor aimed at restricting misuse of those rights; or by maintaining proprietary processes, formulas or software as a trade secret known only to the company, which can include a business’s customer lists, pricing structures and marketing techniques.
“The type of protection depends on the nature of the rights to be protected and the potential commercial value that might be achieved by selling or licensing the IP rights,” he says.
“A good IP lawyer will also counsel clients to put restrictions in the employee handbook and contract. This should be done as a matter of course. And when dealing with third-party business partners – companies involved in fabrication, advertising or design, for example – the company should require those parties to sign non-disclosure agreements that give selective access to what is necessary to carry out the business relationship, but prohibit disclosure of the secrets to anyone else,” Schoenberg says, adding, “Will all of these measures absolutely prevent unfair access or disclosure? Not necessarily. But they will minimize that chance by clearly spelling out each party’s respective obligations and providing for remedies if agreements are violated. And as an added prudent step, I also counsel clients that protecting IP rights includes choosing reliable business partners. Dealing with honest brokers lowers the risk.”
IP and Marketing
“For example, a company that prepares its own original marketing and advertising materials should consider registering the copyright in those materials with the Copyright Office. However, if those same materials are created by an independent contractor, the client should require that the contractor assign to them all copyright interests in those materials. Failing to do so may make the contractor the owner of the copyright in the materials,” he says.
Identifying and protecting a company’s valuable IP rights as they are created, rather than when they are challenged or threatened, is a cost effective way of minimizing the risk of litigation over unauthorized use of those rights, he says, and can be done through regular “checkups” with an experienced IP attorney to identify what rights and trade secrets they have and discuss methods to protect those interests, whether through federal registration, license or contract.
“From a financial perspective, if a company is acquiring your business, they will want to know that you have protected the intellectual property on which the business is based,” Schoenberg notes. “Sloppy or negligent maintenance of those rights can affect the bidder’s price or cause them to walk away from the deal.”