IP – Peter McDermott & Andrew Torrance

mcdermott_peter.jpgDay 7, Tuesday 29th Jan: Our first seminar in week 2 was on IP. Peter McDermott a patent attorney with Banner & Witcoff Ltd in Boston led a seminar titled “Gathering, Protecting & Avoiding Intellectual Property”. Peter works with technology-based businesses to obtain and enforce patents and other intellectual property rights, both domestically and internationally. Mr. McDermott’s practice focuses on corporate management’s coordinated procurement, licensing and litigation of intellectual property rights, in support of competitive market position, including strategic re-examination and reissue of patents before the United States Patent and Trademark Office. Peter initially emphasised that an integrated approach to IP was key. His talk was in two parts – getting IP protection, preventing infringement of other peoples’ IP protection.

Getting IP protection
Gathering evaluating and protecting company’s IP
Primarily a competition tool
Should follow, not lead (in most cases), the company’s business plan
Develop an IP protection strategy
IP is 2 edge sword, offense/defense

Patents – some key points
Doesn’t give you the right to practise the invention
20 years duration in US
Can back-date claim if someone is infringing, back to first date of publication
To stop competitor you need issued patent
To threaten competitor only need published application (assumption of issuance!)
Patenting system extremely slow & inefficient – up to 5 years for issuance – potentially the product-life of software!
Idea must not have been available to public before application (Use NDA – This means the idea was not available to the public)
Prior Art – all previous related material e.g. earlier patents, published articles/media etc… that describe the same thing, or something that’s similar. Or offered it for sale
Most patents based on improvements on previous patents, truly pioneering ideas very rare; tweaks
Filed, 18 month pass then publication
Defensively – can the patent claims stop me from what im doing
      – No – too broad – invalid
      – No – Too narrow – not describing what im doing
Offensively – im seeking patent protection
      – Forget about the claims of a patent
      – Look at disclosure of their patent – does it describe what I want to do – to the point where my invention is obvious because of that disclosure

Trade Secrets
– No government registration
– Very difficult to protect in a digital world
– Policies & agreements in place to prevent employees leaking trade secrets

Copyright© (incl code, novel, structure)
– In US you have to register it if you want to sue based on it
– For s/w only first & last 25pages of source code (ummm, I’m thinking ALOT of ‘Hello world’ statements!!!)

Trademark image, sound, perfume, colour
– Can use REHEAT™ without registering, REHEAT® otherwise
– Goal: develop IP strategy that identifies, captures IP and evaluates if worth protecting, or required & protect if so
– Create a IP protection program
Employee policies & procedures
Employee record keeping
      – Management review & decision making about invention records
Secure IP if makes sense
What to seek patent protection on:
  1 – Is it technically feasibly?
  2 – Assuming 1 is true – is it marketable/commercially interesting?
  3 – Assuming 1&2 are true – is it patentable?
Only file patents where you intend to do business!

 Pitching ideas to companies
– I don’t have a patent, but will they agree not to use it if I pitch it to them…?!
– They will require you sign a CDW – confidential disclosure weaver
– The CDW will honour your patents/copyright, and beyond that they’ll use your idea for free => gambling!
– Solution with big companies:
      – Disclose results
      – Tease them with potential
      – They’ll proceed with NDA if they’re intrigued and want more details

Preventing infringement of other peoples’ IP protection
      – In US no obligation to determine whether you’re infringing
      – Wilful infringement – knowingly ignore patent => triple damages
Set aside portion of budget to ensure not infringing?
– Does the patent keep competition sufficiently at bay – little bit different but does the same job – hardly worth patenting
– Some companies deliberately ignore other patents/prior art – because they think that statistically they’ll get sufficient boost from presumption of validity that comes with getting an issued of patent. Prefer to face prior art with patent than before they’ve got one. Very risky strategy.
– Idea must be “different enough”.  Once issued, bad guys must prove that its not “different enough” by ‘clear and convincing’ evidence.

– Not patentability now?? – make your product the cheapest, fastest, prettiest, some unique feature that may possibly be patentable eventually
– What if a component infringes a patent resulting in claim
– Some components will infringe eventually. Put clause in contracts – sue supplier in scenario. If you can get the terms in the supply contract!
– Don’t just rely on IP for protection – use contracts to fill holes between IP => indemnification
– Maybe get infringement insurance to cover potential costs – expsensive

– Must read boiler plate on RFQ (request for quote) of potential big clients that we wish to supply to – any IP embodied in our proposals becomes free for them to use – licensing for free!! Only got the right to make a pitch -> bad day!!
– If you’re totally ignorant to infringement you’ve some chance, avoid the following:
      – Inducement to infringe
      – Contributory infringement
– International patent apps – ‘intend to use’ application – before you show your hand to the world – if registerable have short period of time that you’ve begun use
– IP treaties & international law – use base country to expand patent into other countries
– Rights accrue through use with a trademark, e.g. if claiming a domain name back as celebrity through ICANN. If have federal trademark (R), then better chance of getting domain back.
– Find a good IP lawyer to give advice over long periods of time – difference between getting patent, trademark, domain, saving millions by making right decisions beforehand, before walking into infringement

atorrance.jpgIn the afternoon Andrew Torrance led a seminar on patenting and its role in business strategy. The seminar focused around a project called ‘The Patent Game’ which Andrew is working on at the University of Kansas. The Patent Game is a multi-player game which emulates the role that patents and manufacturing has on businesses. Basically the game allows players to control certain products and either produce those products or patent them. Other players are simultaneously making these same decisions so in this way the game emulates a commercial environment.

Basically what I gained from this session is that Patenting is not a fix-it-all approach which should be adapted by default within a business strategy. There are obviously times when its would be stupid NOT to patent an idea but the point was that its not a pre-requisite for making a project profitable. If one rushes to market and produces/manufactures first rather than spending time waiting for patents to be issued this can prove to be a more successful strategy. In addition time spent executing IP defence and prosecuting on infringements is time spent not developing your project and company.


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