U-E: Chapter 16 - Patents and Intellectual Property

Which patent do you think takes longer to obtain and why (utility versus design patent)?

*Utility takes longer* than design because *Utility Protects function* while *design protects appearance* • 24.6 months average time to have a patent granted after initial filing • Utility patents last 20 years, design patents 14 years • Provisional and non-provisional utility patents - Provisional gives you a 1 year "grace" period to submit the application for a non provisional patent, test the market before investing in the cost of a regular patent - Only need a description of the invention

What is in a Patent Application?

A patent application is like a research paper - a set of figures and accompanying text • Field of the invention - Describe the problem addressed • Background of the invention - Describe the "prior art" - List advantages over existing methods • Summary of the invention • Detailed description - Best mode: the best way to implement the invention - Examples of use and modes of implementation • Claims - What exactly is the invention

Utility and Design Patents

Utility Patents - Granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new useful improvement thereof Design Patents - Granted to anyone who invents a new, original, and ornamental design for an article of manufacture

Obtaining a Patent: Application Process 1) Determining What to Patent

What to Patent • Determining What to Patent - Probably the most important step • Do NOT ask "What can I get a patent on?" • Ask instead "What do I want a patent on?" - What is of commercial value to my company? - How would my competitors use my technology? - Compare against the prior art!!!

Obtaining a Patent: Application Process 2) Determining When to File

Determining When to File - Before you lose US or Foreign rights *• Before a public disclosure* • Before an "on sale" bar -In time to have a patent to protect your products

Trade Secrets

• Confidential information that is used for competitive advantage • Prevents, but does not block, others from developing similar knowledge • Protection varies by state and country • Lasts as long as you can keep it secret • Must actively work to protect trade secrets - Nondisclosure agreements - Confidential markings - Employee education WD-40 never had a formal patent, considered a trade secret

Patents and Business Plans

• Freedom to Make, License and Sell your Product • What is your Business Strategy? - Patenting vs Disclosing to Prevent Others from Patenting

Value of Intellectual Property (IP) & Intellectual Capital

• Intellectual capital is recognized as the most important asset of many of the world's largest and most powerful companies; it is the foundation for the market dominance and continuing profitability of leading corporations • For Fortune 500 companies, the value of IP ranges between 45% - 75% of total assets

Patent

• Limited-time monopoly, granted by government, in exchange for teaching the public new and useful knowledge -US: 20 years from filing date (utility patent only) • Gives owner the right to exclude others from practicing their invention -Owner's right to practice may be limited by others patent rights • Real estate analogy: -Right to prevent trespassers -Ownership ≠ right to use - limited by access rights, zoning, etc. -Claims of patent ≈ fence around property WD-40 never had a formal patent, considered a trade secret

Criteria for Practicing a Patent

• The patent owner can prevent others from "making, using, selling, or importing" • No dominating patents - Another patent dominates yours if you practice at least one claim of theirs (Handle on Coffee Cup) • It is OK if you have permission to infringe from the owner of the dominating patent (e.g. a license)

Copyright

• The right to make copies - Arises from simply creating a work - *Protects the expression - not the idea* • great for music, poor for software • Default copyright ownership - Owned by author unless otherwise agreed (e.g. by employee or contractor agreement) • Open source - For sharing and building - Federal registration is a plus • Notice format is quite flexible - Copyright © 2010, Google, Inc., All Rights Reserved - © 2010 Google - Copyright Google

Patent Costs

• US Patent Applications - $5,000 to $15,000 for preparing the application - US Filing fee is about $400/$800 - Prosecution $5,000 to $15,000+ • Foreign Patent Applications - PCT filing fee is about $2,500 to $4,000 - PCT demand is about $1,000 to $2,500 - European Filing fee is about $6,000 to $8,000- - Japanese Filing/Trans. fee is ~ $7,000 to $10k - National Fees - it gets expensive. - Government Accounting Office study: - $300k to $500k in 10 countries over the life of the patent

Trademark

• Valuable for building and protecting a brand • A "mark" under which you sell goods and services - House mark - Product mark - Rights valuable for use in commerce (TM, SM) - Federal registration available in US ® • Strength of trademark depends on its nature - Generic - Descriptive - Suggestive - Arbitrary - Fanciful

Provisional Patent Applications

•Requires a meaningful description of the invention • Protects invention for one year • Fast and Cheap • Nothing happens at the USPTO • What you fail to disclose may not be protected • Consider "Rolling Provisionals"

Patent Costs Example

Example: Mechanical tool - Patent search with detailed patentability assessment = $1,600 - Provisional patent application prepared and filed = $2,000 - Filing fee to the USPTO = $130 - Nonprovisional patent application based off provisional filing = $6,500 - Filing fee to the USPTO for non-provisional patent application = $800 - Professional illustrations for non-provisional patent application = $400 • TOTAL COST through filing non-provisional patent application = $11,430 (if provisional patent application is skipped the cost would be $130 less)

Obtaining a Patent: Application Process Four Main Projects

Four main projects: 1. Determining What to Patent 2. Determining When to File 3. Preparing one or more Patent Applications 4. Prosecuting the Applications

What is Intellectual Property (IP)

Intellectual property (IP) is an intangible asset created by human intellectual or inspirational activity - specialized knowledge • Any interesting examples in the recent news about companies selling goods that are "knockoffs" and violate the IP of others?

Requirements to Obtain a Patent

Patentable subject matter: • Not previously sold or publicly described • Novel - prior art must be cited • Useful - for some demonstrable need or value • Not obvious - "to one of ordinary skill in the art" - prior art "teaches against" - initial commercial success may demonstrate

There are many types of IP:

Requires Formal Application - Patents (utility, design, plant) - processes, designs, software May Be Registered - trademarks, copyrights Not Registered - trade secrets