Protecting Intellectual Property - AZ Business Magazine November/December 2011

Planning And Patience: Keys To Protecting Intellectual Property

Planning and patience are they keys to protecting intellectual property

The seed for one of Tim Crawley’s inventions was planted in a teenage promise.

“When I was 16, I was (gold) prospecting with my uncle, who had rheumatoid arthritis,” says Crawley, president of the Inventors Association of Arizona. “It tore my heart out to watch him struggle to carry those five-gallon buckets. I told him, ‘Someday, I will fix that.’”

Crawley’s “someday” came more than 20 years later when he invented Snappy Grip, a replacement handle for five-gallon buckets that alleviates hand fatigue and makes it infinitely easier to carry them, particularly when they are filled. The product has been embraced by Arizona’s mining industry.

One problem: Crawley’s idea was also embraced by a competitor.

“Even though I filed my patent application first,” Crawley says, “he got his bucket handle into Home Depot first.”

The mistake Crawley made, he admits, was that the claims listed in his patent application were too wordy and allowed his competitor to make a slight adjustment to the design and beat Crawley into the marketplace. Experts say Crawley’s error is just one of many common mistakes individuals and businesses make when it comes time to protect their intellectual property.

”Intellectual Property refers to creations of the mind,” says Robert J. Itri, a shareholder at the Phoenix law office of Gallagher & Kennedy. “Intellectual property includes inventions such as computer chips or new methods of manufacture; literary and artistic works such as novels, films and songs; symbols, names and images used to identify goods and services such as Xerox and Kodak.”

When it comes to protecting those superhuman ideas, experts agree that it’s a decidedly human trait that gets most innovators into trouble.

“They let the genie out of the bottle,” says Ari Bai, whose practice at the Phoenix law firm of Polsinelli Shughart involves the preparation and filing of foreign and domestic patent applications in the mechanical, electrical and computer disciplines. “People disclose their ideas to others. Professors rush to publish findings before their colleagues. It happens all the time. What people don’t understand is that once that occurs, they are giving up all their foreign patent rights.”

According to Itri, these are the most common mistakes innovators make:

  • Failing to establish an intellectual property protection policy.
  • Failing to identify and record intellectual property as it is created.
  • Failing to ensure that all employees who contributed to the intellectual property have executed invention assignments.
  • Failing to use non-disclosure agreements and document trade secret policy for employees and business partners.
  • Waiting too long to file for patent protection. U.S. law provides that a patent application must be filed within 1 year of publication or first offer of sale.
  • Failing to police the unauthorized use of intellectual property. The failure to do so can, and often does, result in the loss of intellectual property rights.

 

“There’s a big problem in the private sector because companies are pushed to constantly get new products on the market to remain competitive,” says A.J. Moss, an intellectual property attorney with Squire, Sanders & Dempsey in Phoenix. “But if these companies wait too long to protect themselves and their ideas, it wipes out all rights they have to their own ideas and inventions.”

There are four categories of intellectual property rights — patents, trademarks, copyrights and trade secrets. Gallagher & Kennedy’s Itri explains the rights that protect those intellectual properties like this: They are a form of property right that allow creators of intellectual property to benefit from their work or investment in a creation. These rights, which can belong to individuals or organizations, are recognized by governments and courts. The intellectual property rights system helps to strike a balance between the interests of the innovator and the public interest to establish an environment in which creativity and invention can flourish for all to benefit.

But what U.S. intellectual property rights don’t do, experts said, is protect the creator in the global economy.

“Just because you have a U.S. patent, that doesn’t protect you overseas,” Moss says. “You have to file for patent protection in every jurisdiction you plan to do business. If you don’t, you leave yourself vulnerable.”

And as the Internet has changed the way we do business, it has presented businesses with both opportunities and obstacles.

“Geographical borders present no impediment to distributing products worldwide,” Itri says. “These opportunities also present enormous challenges to businesses seeking to protect their intellectual property rights and to consumers as the proliferation of counterfeit and pirated products grows.”

It also presents a challenge when companies develop websites to boost revenue.
“Just as a wedding photographer owns the copyrights to the photos taken at your wedding, the website developer who designs your website owns the rights to that design,” says John E. Cummerford, co-managing shareholder at Greenberg Traurig in Phoenix. “So if the developer suddenly thinks he wasn’t paid enough to do the job, you could have a problem if you didn’t protect yourself.”

To avoid those problem, experts agree, a business is best served by consulting a legal professional who has experience in obtaining and enforcing intellectual property rights in the jurisdiction in which protection is sought.

“I tell other inventors to research the patent attorney they hire,” says Crawley, who has faced costly patent infringement issues on at least three of his inventions. “Make sure they have experience writing patent claims for ideas or inventions that are similar the one you have.”

If the worst case scenario happens and unauthorized use of intellectual property is detected, Itri said the property owner should consult an attorney to determine his or her legal rights. In the U.S., patent, trademark and copyrights are typically enforced through federal civil court actions. Claims for trade secret misappropriation are generally pursued through state court proceedings. Generally, an intellectual property owner may obtain both injunctive relief prohibiting and money damages for the infringing activity. In certain circumstances, the law permits enhanced or punitive damages for willful infringement.  If unauthorized use is detected abroad, the property owner should consult with a legal professional in the jurisdiction in which the unauthorized use is being made to determine its rights and the process to enforce those rights.

“The best way you can protect yourself and your ideas is to plan up front,” Cummerford says. “You can have the best ideas, the best business plan, the best website, the best marketing strategy, and the best product in the world, but it will all be for naught if you fail to protect your intellectual property.”

Four categories of intellectual property rights

Patents

An exclusive right granted by the United States Government through the Unites States Patent and Trademark Office for a new, useful and non-obvious invention or process. The grant of patent rights excludes others from making, using, selling, offering to sell or importing the invention in the United States. U.S. patent rights do not extend beyond the United States and its territories.

How get a patent

An inventor seeking a patent must submit a patent application to the USPTO within one year of the first publication or offer for sale of the invention. A patent application consists of a written specification, a drawing — if necessary — to understand the invention or process, an oath or declaration of the inventor, and the appropriate filing fees. A patent may, and often does, take several years to issue.  Patents are valid for 20 years from the date of application.

Trademarks

Trademarks are what businesses use to identify themselves and distinguish their goods and services from those of other businesses.  Any distinctive word, name, symbol, or device or combination thereof may be used as a trademark.

Protecting a trademark

Under the common law, the rights to a trademark are established when the business adopts a particular mark and uses it in connection with the sale of goods or services.  The date of first use is important in establishing trademark rights. Although enforceable trademark rights can be obtained at common law, there are certain advantages to obtaining a federal registration for the mark, including nationwide notice of a claim of right to the mark, the right to use the ® symbol, and — most importantly — the exclusive right to use the mark nationwide in connection with the listed goods and services. A trademark owner seeking a federal registration must file an application with the USPTO.

Generally, provided that the trademark owner makes continuous use of the mark and does not permit unauthorized use of the mark by others, trademark rights can be indefinite.

Copyrights

Copyrights give authors, artists and creators of original works, which are “fixed” in any tangible medium of expression, such as in print, audio or digital recording, the exclusive right to reproduce, adapt, distribute, perform, make derivative works and display their work.

Getting a copyright

Registering a copyright is a simple and inexpensive process.  An application form together with one or two copies of the work (depending on the character of the work) are filed either in paper or online with the United States Copyright Office together with the applicable filing fee. The filing fee for online registration is $35.

Trade Secrets

Trade secrets may generally be described as proprietary, non-public business information which enables the owner of the information through its use to achieve competitive advantage in the marketplace.  One of the most famous trade secrets is the formula for manufacturing Coca-Cola.

Protecting trade secrets

The most important factor in determining whether something is protectable as a trade secret is whether it is actually a secret and the business has taken reasonable measures to maintain its secrecy. Arizona law, like all other states’ laws governing “trade secrets,” permits the trade secret owner to obtain both injunctive relief and monetary damages for any actual or threatened misappropriation of trade secret. Trade secret law does not prevent the use of trade secrets acquired through proper means. Nor does trade secret law prevent discovery of the trade secret through reverse engineering.

Protecting intellectual property

To best protect its intellectual property rights, Robert J. Itri, a shareholder at the Phoenix law officer of Gallagher & Kennedy, says it is essential for the business to understand the various pieces that make up its intellectual property portfolio and which set of intellectual property rights — patent, trademark, copyright or trade secret — apply. Once identified, the intellectual property should be recorded and, with the exception of trade secrets (which should be closely guarded), registered with the appropriate governmental agency.

  • In the case of patents and trademarks, registration is with the United States Patent and Trademark Office.
  • In the case of copyrights, registration is with the U.S. Copyright office.
  • Trademark owners who have registered their marks with the USPTO and copyright holders who have registered with the Copyright Office may record these rights with the U.S. Customs and Border Protection (“CBP”). The CBP actively monitors imports to prevent the importation of counterfeited and pirated goods.
  • Any business which anticipates that its products or services will be distributed outside the U.S., should register its intellectual property in the country or countries it anticipates the product or services will be distributed.
  • In addition to registration, businesses also need to implement an intellectual property policy. Components of such a policy should include, at a minimum, employee invention and nondisclosure agreements. Intellectual Property protection language should also be developed for the various vendors and distributors with which the business deals.

 

 

 

 


Arizona Business Magazine November/December 2011

 

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Michael Gossie

About Michael Gossie

Michael Gossie is a competitive marathon runner, Ironman triathlete and award-winning journalist who has earned more than 50 awards for writing, editing and design. He studied economics at Elmira College in Elmira, N.Y., and put his entrepreneurial spirit to work in 2007, using a 200-year-old family recipe to launch an Italian sauce company. He is most proud of being the founding president of the Steuben Arc Foundation in Upstate New York, which serves individuals with developmental disabilities, including his sister.