© Mirick, OConnell, DeMallie & Lougee, LLP, M ARLBOROUGH B USINESS I NNOVATION S UMMIT Showcasing Marlborough as a Center for Key Industry Clusters and Innovation Capacity Co-sponsored by:

Presented by: Roger P. Zimmerman U NDERSTANDING THE IP C YCLE : M AXIMIZING R ETURN W HILE M INIMIZING C OST W ORCESTER | W ESTBOROUGH | B OSTON M IRICK, OC ONNELL, D E M ALLIE & L OUGEE, LLP M ARLBOROUGH B USINESS I NNOVATION S UMMIT

© Mirick, OConnell, DeMallie & Lougee, LLP, P URPOSE OF AN IP S TRATEGY Identify, develop and protect IP that adds value to your business Identify and avoid infringing IP owned by third-parties that may obstruct your business Leverage Your IP through collaboration, which may include joint development projects, manufacturing, distribution or other strategies to commercialize IP Enforce IP strategically, when necessary, to achieve your business purposes

© Mirick, OConnell, DeMallie & Lougee, LLP, K EYS F OR I MPLEMENTING A N IP S TRATEGY The IP strategy must reflect and implement your Business Strategy Develop an IP strategy: define your goals and know the level of patent, trademark and copyright protection you need at each step Obtain information: get your attorney to give you a clear overview of the filing process, waiting periods and costs involved in obtaining and maintaining IP protection

© Mirick, OConnell, DeMallie & Lougee, LLP, F ORMS OF I NTELLECTUAL P ROPERTY P ROTECTION Patents Trademarks Copyrights Trade Secrets

© Mirick, OConnell, DeMallie & Lougee, LLP, Patent: Keep Secret Until Filing; Term Limited to 14 (Design), 17 or 20 Years Trademark: Use In Trade (Or ITU); Renew Indefinitely Unless Unused Copyright: Author Has It When Fixed; Notice, Registration; Terms: Various Trade Secret: Lost If Disclosed or Discovered Independently, Indefinite Term

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, F OUNDATIONS OF IP: I NTERNAL S ECURITY Create appropriate internal policies and procedures Secure signed agreements from key employees and vendors including confidentiality, ownership of inventions and covenants not to compete Maintain appropriate security in the workplace, including in company computers Identify IP as it is created, and then designate and secure it Conduct periodic audits to assure compliance

© Mirick, OConnell, DeMallie & Lougee, LLP, IP AND C OLLABORATIONS Determine the scope of access to the other partys IP needed for the joint project Identify the parties respective relevant IP at the start of the joint project Agree on the disposition of the IP developed jointly during the project Who owns it? Who pays for getting IP protection? Who can or must be involved in enforcement? Who is the inventor (patents) or author (copyright)?

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, T HE P ATENT D EAL : A limited period of exclusive rights as defined by the claims In Exchange For An enabling description of comparable scope of any new & useful [& non-obvious] process, machine, manufacture, or composition of matter, or any new & useful [& non-obvious] improvement thereof

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, B ASIC P ATENT I SSUES Is It Patentable & Useful? 35 U.S.C. §101 Is It New? 35 U.S.C. §102 Is It Non-Obvious? 35 U.S.C. §103 As Of When? Priority Date Is It Described & Enabled? 35 U.S.C. §112 Who Invented It? Who Owns It?

© Mirick, OConnell, DeMallie & Lougee, LLP, H OW L ONG D OES I T T AKE T O G ET A U.S. U TILITY P ATENT ? Source: D. Crouch, Patently-O, 15 February 2007

© Mirick, OConnell, DeMallie & Lougee, LLP, P ROS & C ONS OF P ATENTS Patents prevent others from using the patented invention or design for the duration of the patent Patents have a limited duration of 17 to 20 years for a device or method, and 14 years for a design Patents often have substantial value and may increase the value of the owners business and help attract investment The application process is slow and expensive, and the application may be narrowed or rejected Patents may provide a valuable bargaining chip to negotiate licenses or cross-licenses with other parties Other patents may block the right to practice the patent, or may limit the scope of use Notice of a patents will usually deter other parties from infringing the patented technology Other parties may seek to design around the patent, or may attack it by applying for reexamination Federal Courts enforce patent rights Patent litigation is complex and expensive Patent applications, when published, disclose the invention

© Mirick, OConnell, DeMallie & Lougee, LLP, P ROS & C ONS OF T RADEMARKS Trademarks can become protectable without registration by use that is sufficient to establish secondary meaning (i.e., consumer recognition demonstrated by consumer surveys, etc.) Proof of secondary meaning for common law trademarks is difficult and expensive Trademark registration creates presumptions that the registrant owns the mark and that the mark has secondary meaning The registration process, although generally quite efficient, still involves time and expense Trademarks can protect a variety of distinctive features including names, logos, distinctive packaging and decorative features on the product The strength of the mark can vary depending on the degree of distinctiveness within a particular field

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, K EYS F OR I MPLEMENTING A N IP S TRATEGY Adapt your filing strategy to your real business needs: do not patent everything and everywhere. Be selective and determine which ideas and markets are worth protection Revise your patent portfolio continuously: filter out patents with no business perspective, either for your own exploitation or for licensing

© Mirick, OConnell, DeMallie & Lougee, LLP, P ROTECTING IP IN THE G LOBAL E CONOMY IP rights are usually limited to the country where they are obtained Treaties make it possible to obtain IP rights in other countries on a reasonably efficient basis, but at some expense The IP strategy should include identifying other countries where appropriate protection will promote the business plan

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, H OT T OPICS I N IP E NFORCEMENT When to sue: A demand letter may give the other party the right to seek declaratory judgment in an inconvenient forum Where to sue: In addition to the factor of geographic convenience, some federal courts have special rules to manage patent cases How to respond to a patent that blocks your business plan: Reexamination is an increasingly attractive alternative

© Mirick, OConnell, DeMallie & Lougee, LLP, R EMEDIES FOR P ATENT I NFRINGEMENT Actual damages, which may include either the patent owners lost profits, disgorgement of the infringers profits, or a reasonable royalty based on a hypothetical negotiation Injunctions upon proof of irreparable harm Treble damages and attorneys fees in case of willful infringement.

© Mirick, OConnell, DeMallie & Lougee, LLP, R EMEDIES FOR T RADEMARK I NFRINGEMENT Actual damages, which may include trademark owners lost profits or disgorgement of infringers profits Injunctions upon proof of irreparable harm, Treble damages and attorneys fees in exceptional cases Statutory damages and/or criminal penalties in case of counterfeiting a registered trademark

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, IP L ICENSING Licensor agrees to permit activities by licensee that would otherwise be infringing May be limited to a geographic area and/or a field of use of the IP Who can or must be involved in enforcement? Revenue stream Upfront and milestone payments Royalties Audit & police the licensing agreement

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, K EYS F OR I MPLEMENTING A N IP S TRATEGY Start a technology and competitor watch process: use cost-free patent information and other sources (e.g. scientific publications, trade journals) both to inspire yourself and to identify potential infringers as soon as possible Identify and cultivate potential partners and licensees who may collaborate to realize the value of your IP

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, K EYS F OR I MPLEMENTING A N IP S TRATEGY Communicate pro-actively: communicating the protection of your IP is a cost-efficient mean to reduce the potential risk of loss of trademark rights or infringement Keep in touch with your licensee: regular contact and meetings provide you with information on your licensees activities and thus can prevent potential problems

© Mirick, OConnell, DeMallie & Lougee, LLP, IP C YCLE

© Mirick, OConnell, DeMallie & Lougee, LLP, B RIAN M. D INGMAN MIRICKOCONNELL. COM R OGER P. Z IMMERMAN MIRICKOCONNELL. COM MIRICKOCONNELL. COM MIRICKOCONNELL. COM