1. 1 Intellectual Property Basics 11-4-2005

2. 2 What is intellectual property? Intellectual properties are intangible products of the mind. These include: inventions (devices, compositions, plants, designs) publications videotapes computer programs works of art. They must be reduced to a tangible form in order to be protected.

3. What is intellectual property? Intellectual property (IP) refers to works of the mind such as ideas, art, music. It can also be products such as a chemical formula or computer software. Intangible creative work—not necessarily the physical form on which it is stored or delivered. 3

4. What is intellectual property? IP is given legal protection in the form of copyright, patent, trademark, and trade secret laws. This is becoming one of the hottest issues in international business 4

5. Why do we want to protect and license IP? IP is a marketable commodity that can be used to leverage additional research dollars and income to support the inventors and help in the formation of new companies and jobs. 5

6. Why do we want to protect and license IP? It is very difficult to license technology that is not protected. Makes the technology available to the public and provides opportunities for further research and development. 6

7. Protecting IP Paris Convention of the Protection of Industrial Property, Madrid Agreement, and others have tried to make protection easier for international registration 7

8. Protecting IP The main international trademark treaty is the Paris Convention. It is an agreement between member nations (of which there are over 110) to allow foreign nationals of member countries the same treatment in each of the member countries as that country makes available to its own citizens. 8

9. Protecting IP Under the Paris Convention, six months after a trademark application is filed in the US, the applicant can file an application in one of the foreign member nations and receive the filing date of the US application. If an application is filed more than six months after the US filing date then the claim to priority is lost. 9

10. 10 Innovation Since 1998, over 2200 new products have been introduced in the market place. In 2003 in the U.S. and Canada Over 15,500 Invention Disclosures, 4500 new Licenses 7921 patent applications were filed; 3933 new patents issued 374 new companies formed; 2279 start-ups still operating. License revenue was over $1,310,000,000

11. Problems in intellectual property In the U.S., ownership is established by prior use due to our common law system Many code-law countries use a registration system, where the first company to register is the one who has rights 11

12. Protection of IP Companies spend millions of dollars establishing brand names or trademarks To symbolize quality and design To entice customers Millions are spent on research To develop products, processes, designs, and formulas 12

13. Protection of IP Lost sales from the unauthorized use of U.S. patents, trademarks, and copyrights Amount to more than $100 billion annually The piracy industry has grown so sophisticated Many counterfeit goods are indistinguishable from original 13

14. Protection of IP Piracy actually can serve come companies HBO and Game of Thrones Counterfeit pharmaceuticals 2% of the $327 billion worth of drugs sold each year 14

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16. International licensing agreements Contracts by which the holder of intellectual property will grant certain rights in that property to a foreign firm to use for a period of time under certain conditions in return for a licensing fee Technology transfer: exchange of technology and know how between firms in different countries through licensing 16

17. 17 How do we protect intellectual property? Copyrights Trademark Trade Secret Plant Variety Certification Patents A major bone of contention especially in info-based economies.

18. 18 Bayh-Dole Act (1980) The Bayh-Dole Act was intended to promote investment by the private sector in the commercialization of discoveries made using research funds provided by the federal government. Prior to the Act, the government retained title to these inventions, and because it was cumbersome to get a license, few technologies were licensed and commercialized.

19. Copyrights Copyrights are granted for a limited, but long, time. Fair-Use Doctrine Permission to use the work is not required. Allows uses of copyrighted material that contribute to the creation of new work and do not significantly affect sales of the material, thus depriving copyright holders of their income. Allows some research and educational uses as well as news reporting and critiquing. Guidelines for determining Fair Use are found in law. 19

20. 20 Copyrights Legal rights to a work by authors, composers, playwrights, artists or publishers. Lasts the life of the author plus 70 years Or lasts 95 years from publication or 120 years from creation, if it was a work for hire

21. Copyrights Documents, art, music, motion pictures, software, etc. are automatically copyrighted when the document is created. Can register the copyright with the government for $30.00. Must be registered before filing any infringement lawsuits.® US Copyright Website http://www.loc.gov/copyright/ http://www.loc.gov/copyright/ 21

22. 22 Plant Variety Certification Used for plants that reproduce sexually making it illegal to sell and propagate them commercially. Certification protection is for 5 years and costs ~$2500.

23. Trademarks Exclusive rights to a new product or process for an inventor assuring them of the legal right to produce, use and sell their invention for a period of years. Used to protect a symbol or phrase that’s identified with a product (e.g. Coca-Cola, Gatorade, Xerox). ™ 23

24. 24 Trademarks Registration costs $325 but is not required except for federal court proceedings and for foreign protection; last for 10 years and is renewable indefinitely®. Becomes effective when begin selling commercially. http://www.uspto.gov/main/trademarks.htm

25. 25 Trade Secrets Specialized knowledge that can include data, formulas, compilations, programs, etc. which are maintained as a secret Can be used where patents may not have a long enough term or be possible. Trade secrets are kept under lock and key, with restricted access and publications. Example - Coca-cola formula

26. Patents Exclusive rights to a new product or process which assures an inventor the legal right to produce, use and sell their invention for a period of years Used for inventions, processes, machines, improvements, and composition of matter. 26

27. Patents Not possible to patent scientific principles, methods of doing business or most naturally occurring articles. Software algorithms can often be patented, but typically software is protected under copyright. 27

28. 28 Three Patent Requirements Novel - new to the patent literature, not published or described in an enabling manner. Time limit of one year from public disclosure to file a U.S. patent. Foreign patents must be filed BEFORE any public disclosure. Utility - must be useful Non-obvious to one skilled in the art.

29. 29 Types of Patents Utility – how something works or is used; multiple claims Design – how something looks; only one claim Provisional – establishes a filing date and provide 1 year to file a full patent application with claims Plant – for asexually reproducing a new plant; one claim

30. 30 Differences between International & US Patents US – First to Invent Most International – First to File Very important to file protection before publicly disclosing to preserve foreign patent rights Foreign protection very important to most companies Provisional Patents have great use here

31. 31 What does Patent Protection Provide? The right to EXCLUDE others from making, using, selling of offering to sell the claimed invention during the patent term. Must be marked as ‘patented’, or can’t recover from anyone who infringes on it. Patent term typically = 20 years from date of filing Design patent = 14 years

32. Why patents are important to start-up businesses Patents are key to solidifying product protection Patent portfolio a significant asset when company needs funding (from investors, venture capitol, etc.) Patent filing/protection needs to be part of initial company formation/planning 32

33. 33 Industry Patent Policies Who owns IP – inventors or employer? Employee Agreement as condition of employment Does the inventor get royalties?

34. 34 Employment Agreements Typically are a condition at hiring & include salary, benefit details. Often include trade secret & confidentiality language for a term that exceeds termination from the company. Includes IP ownership information. May include non-compete language to prevent you from working for a competitor for a period of time.

35. 35 Why Patents are Important to Start-up Businesses Patents are key to solidifying product protection Patent portfolio a significant asset when company needs funding (from investors, venture capitol, etc.) Patent filing/protection needs to be part of initial company formation/planning

36. 36 Typical Clauses in Company Agreement You cannot disclose or profit (monetarily or otherwise) from company confidential information, trade secrets or customer lists. [disclosing trade secrets is a federal offense] Anything you invent, discover or improve belongs to the company if it's related to the existing or planned scope of the company's business in any way.

37. 37 Determining Inventorship Must include all who contributed intellectually and creatively to the invention. Best determined by the IP attorney. Need to have contributed to at least one of the claims. If needed, royalty split can reflect the relative efforts.

38. 38 What you should have for an invention, besides a great idea Bound lab notebooks which document the conception of the idea and the research Periodic witness and dated signature by someone able to understand the invention, but who will not profit from it Completed ID form noting any sponsors, publications and all inventors.