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Intellectual Property: Assets and Liabilities Francisco Castro, Ph.D. – Counsel, Arent Fox LLP Alec Rosenberg – Partner, Arent Fox LLP David Gryce – Partner.

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Presentation on theme: "Intellectual Property: Assets and Liabilities Francisco Castro, Ph.D. – Counsel, Arent Fox LLP Alec Rosenberg – Partner, Arent Fox LLP David Gryce – Partner."— Presentation transcript:

1 Intellectual Property: Assets and Liabilities Francisco Castro, Ph.D. – Counsel, Arent Fox LLP Alec Rosenberg – Partner, Arent Fox LLP David Gryce – Partner and Privacy Officer, Arent Fox, LLP Entrepreneur Education Session - July 31, 2014

2 Bios Francisco Castro, Ph.D.: Francisco has over 10 years in patent prosecution and counseling and is counsel in the Arent Fox Intellectual Property Group. Prior to practicing law, Francisco was a senior research engineer at Lucent Technologies and Motorola. Angel Venture Forum Arent Fox LLP

3 Bios Alec Rosenberg: Alec’s practice encompasses the full range of intellectual property (IP) scenarios, from identifying and acquiring IP assets, to ownership, misappropriation, and infringement disputes, to strategic counseling and transactions. A significant part of his practice involves counseling tech entrepreneurs in connection with such matters. Angel Venture Forum Arent Fox LLP

4 Bios David Gryce: Dave is a 30-year veteran intellectual property practitioner, a partner in the Arent Fox Intellectual Property Group, group leader of the Emerging Companies Practice, and Privacy Officer for the firm. Dave focuses his practice on what he calls “business integrity” - both the security of the data upon which a client’s business depends and the business’ branded character. Angel Venture Forum Arent Fox LLP

5 Arent Fox LLP Arent Fox LLP is a national commercial practice law firm, with offices in DC, NY, LA, and San Francisco. Local Office: 1717 K Street N.W. Washington, DC Angel Venture Forum Arent Fox LLP

6 Agenda U.S. Intellectual Property Patents Trademarks Copyrights Trade Secrets Data Security Angel Venture Forum Arent Fox LLP

7 Topical Format Definition and Rights Acquisition of Rights Measurement of Value Enforcement Cost/Benefit Angel Venture Forum Arent Fox LLP

8 Patents

9 Patent: Definition and Rights A novel and non-obvious invention The right to exclude others from making, using, selling, or importing the invention claimed in the patent Utility patents protect functional aspects and have a duration of 20 years Design patents protect ornamental aspects Geographically restricted – Red Flag: 1-year grace period in U.S. Angel Venture Forum Arent Fox LLP

10 Patent: Acquisition of Rights Priority – First inventor to file Patent Application – Specification – Drawings – Claims: Define scope of rights Claim Types – Method, device, system, … Provisional and Non-Provisional applications Pre-Filing Search –worth doing, but dependent on technology Angel Venture Forum Arent Fox LLP

11 Patent: Measurement of Value Claim scope identifies the exclusive rights (i.e., exclude others from making, using, selling, or importing) – Broad claims generally preferred – Targeted claims (e.g., standards) Licensing Cross-licensing Force competitors to not enter/exit market or use less effective, more costly solutions Angel Venture Forum Arent Fox LLP

12 Patent: Enforcement Patent Infringement – Enforcing rights through patent litigation – Infringing product or process needs to “read” on at least one claim in the patent All elements of the claim met – Remedies: Injunction, damages Federal Courts International Trade Commission – Remedy: Order stopping infringing imports Angel Venture Forum Arent Fox LLP

13 Patent: Cost/Benefit Provisional applications – lower cost, expires in one year, earlier priority Non-Provisional applications – higher cost, can mature into an issued patent Prosecution of application – can take several years; issuance of a patent or scope of claims not guaranteed Protection – preventing others from providing products or services covered by the patent Angel Venture Forum Arent Fox LLP

14 Questions?

15 Trademark: Definition and Rights A designation of the source or origin (i.e., “brand”) Traditional view – consumer protection Modern view – property; a promise to customers; a communication device The right to prevent others from a mark that is likely to cause confusion Potentially unlimited in duration, but geographically restricted Angel Venture Forum Arent Fox LLP

16 Trademark: Acquisition of Rights Priority – First to use, not merely to “adopt” Common law – geographically restricted Federal registration system – important advantages – “Intent to use” applications Social Media: Domain names, Facebook, Twitter, etc. – registration not enough Clearance – yes, it’s worth doing it Angel Venture Forum Arent Fox LLP

17 Trademark: Acquisition of Rights Distinctiveness – Inherently distinctive marks: protectable at first use – Descriptive marks: need “secondary meaning” Generic terms are not entitled to protection Abandonment – Cessation of use – Failure to police or maintain quality control – Genericide Angel Venture Forum Arent Fox LLP

18 Trademark: Measurement of Value How well does it identify your company and distinguish it from your competitors? How “strong” (or distinctive) is it? – Inherent – Commercial Licensing In many cases, a powerful trademark / brand is the single most valuable asset of a company Angel Venture Forum Arent Fox LLP

19 Trademark: Enforcement Prior rights plus “likelihood of confusion” – Strength of the plaintiff’s mark – Similarity of marks – Similarity of goods / services Dilution – Famous marks receive special protection Domain names (Lawsuit vs. UDRP) – Key is “Bad Faith,” but beware: new gTLDS are the new “wild west” Defense: Fair Use Angel Venture Forum Arent Fox LLP

20 Trademark: Cost/Benefit Common law – coextensive with costs to build your brand and market your company Federal registration – worth the modest cost, given the benefits Minimum benefit – let your customers find you; avoid confusion Maximum benefit – strong trademark is the most effective commercial communication device ever Angel Venture Forum Arent Fox LLP

21 Questions?

22 Copyright: Definition and Rights Copyright protects “original works of authorship fixed in any tangible medium of expression” Protects expression of ideas (not the ideas themselves) Prevents others from copying, publicly performing, publicly displaying, and preparing derivative works based on your work Angel Venture Forum Arent Fox LLP

23 Copyright: Acquisition of Rights Copyright exists at the moment of “fixation” But, federal copyright registration is necessary for enforcement Copyright usually vests in the author, except if the “work made for hire” rules apply – Employee acting within scope of employment – RED FLAG: Independent contractors / vendors – Language of your contract is critical Angel Venture Forum Arent Fox LLP

24 Copyright: Measurement of Value Value – depends on your business Licensing opportunities? Website “look and feel” Data and data compilations Software – Google v. Oracle: APIs are copyrightable, even when they ensure interoperability Angel Venture Forum Arent Fox LLP

25 Copyright: Enforcement Copyright infringement – Ownership – Improper copying of protected expression Access Substantial similarity DMCA for some Internet-based infringements – “Notice and takedown” regime Fair use – Is the use for criticism? Is it “transformative”? Angel Venture Forum Arent Fox LLP

26 Copyright: Cost/Benefit Again, depends on your business Copyright registration – cheap and easy High value if – Your business is content Possibly significant value if – Big data – Software Lower value if – Widget sellers Angel Venture Forum Arent Fox LLP

27 Questions?

28 Trade Secret: Definition and Rights State: UTSA – Information that derives independent economic value from not being known and is the subject of reasonable efforts to keep it secret. Common Law (NY): – Information that is used in one’s business and gives an opportunity for advantage over competitors who do not know or use it. Federal: Economic Espionage Act – Essentially same definition as UTSA Angel Venture Forum Arent Fox LLP

29 Trade Secret: Acquisition of Rights Look to definition – Information not generally known – Information has economic value arising from not being generally known – must be the subject of reasonable efforts to keep the information secret Must be able to clearly define what information is trade secret Angel Venture Forum Arent Fox LLP

30 Trade Secret: Measurement of Value The value of trade secrets derives from – The extent of competitive advantage the information affords the owner – How well identified the trade secrets are – The quality of precautions implemented to protect the trade secrets: Physical safeguards, e.g., locks and access Administrative safeguards, e.g., employment policies and procedures Technical safeguards, e.g., encryption, authentication Angel Venture Forum Arent Fox LLP

31 Trade Secret: Enforcement Civil litigation – state law claims – Establish trade secret definition met – “Reasonable” precautions were taken – Information was misappropriated Criminal – state or federal, but must be brought by the authorities Relative ease in defending against a claim Expensive litigation Angel Venture Forum Arent Fox LLP

32 Trade Secret: Cost/Benefit Most businesses have some “secret sauce” Acquisition of rights requires affirmative action to protect the information Red Flag: Easiest way to lose rights is to share information without an NDA Enforcement is difficult, usually arises in the employment/consultant context Low cost, substantial benefit if proper steps taken Angel Venture Forum Arent Fox LLP

33 Data Security Why worry: trade secret misappropriation, privacy law violation, theft (exfiltration) Three types of data security: – Physical safeguards – Administrative safeguards – Technical safeguards What data, whose data, and what law? Privacy (US/international) – opt in/opt out - policy Angel Venture Forum Arent Fox LLP

34 Questions?

35 Thank you!


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