IP Essentials: Q&A Series

IP ESSENTIALS A Toolkit for Entrepreneurs, Innovators, and Business Owners

Q&A SERIES

CONTENTS

4 PATENTS 10 TRADEMARKS 16 COPYRIGHTS 20 TRADE SECRETS 26 DESIGN PATENTS 32 INVENTORSHIP

38 LICENSING AGREEMENTS 44 INTER PARTES REVIEW 56 INTERNATIONAL FILING 62 PATENT COOPERATION TREATY (PCT) 68 SOFTWARE PATENTS

74 PATENT CLAIMS 80 DOMAIN NAMES 86 DATA PRIVACY

Q Does owning a patent give me the right to use/practice the invention? A A patent only gives you the right to exclude others from making, using, offering, and selling your invention protected by that patent within the United States, or importing the invention into the United States. Even owners of a patent may not have the right to actually “practice” their invention. Q Should I file a patent, or can I maintain my invention as a trade secret? A Maintaining your invention as a trade secret is a cost-effective alternative to patenting when the information is not easily reverse-engineered. However, you don’t have any rights to exclude anyone from practicing your invention if you maintain it as a trade secret. Consider patenting an invention if it can provide a real business advantage, such as limiting or excluding competitors from the market, or generating revenue through licensing . Q What makes an invention patentable? A To be patentable, an invention must be novel, useful and non- obvious. Novelty : The invention covered by the patent application must be substantially different from anything else that is known to the public. Public knowledge includes (1) anything that has been previously patented, (2) anything that has been written about in a publication, and/or (3) anything that has been sold in public.

PATENTS

A patent is an exclusive right granted for an inven- tion. In other words, a patent is an exclusive right to a product or a process that generally provides a new way of doing something or offers a new technical solution to a problem. However, you can’t patent laws of nature, physical phenomena, or abstract ideas.

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Q What is a provisional patent application? A A provisional patent application allows you

Usefulness : The invention covered by the patent application must have some practical utility such as providing some identifiable benefit or provide a solution to a problem. Non-obviousness : The invention protected by the patent must be sufficiently different from existing solutions such that a person having ordinary skills in the area related to subject of the patented invention would not find the invention as an obvious derivative of the existing art. Q Are there different types of patents? A Most patents are “utility” patents, protecting the functional aspects of inventions such as machines, manufactured articles, compositions of matter, and processes. You can also patent ornamental designs of something that has a practical utility. Finally, you can also patent certain new and distinct varieties of plants that can be asexually reproduced. Q What are “patent claims”? A The patent claims are particular to utility patents and they define the scope of the invention. The disclosure, including the written description and the figures do not define the patent right—the claims do! Q I contributed to a portion of an invention, should I be included on the patent application as an inventor? A You are an inventor if you contributed to the “conception” of the invention. That contribution requires more than routine engineering skill or supervision. An inventor needs to make a contribution to at least one claim of the patent.

I’ve been selling my product for more than a year, is it too late to file for a patent? In the United States, a patent application must be filed within the one-year grace period after your invention was first disclosed to the public, pub- licly used, sold, or offered for sale in the United States. The rest of the world does not of- fer a grace period.

to establish an early effective filing date

(priority) for a later filed application. Provisional patent applications cannot “mature” into a patent. Provisional applications are not publicly available and are automatically abandoned one year after filing. To preserve your rights to the provisional application filing date, you must file a non-provisional application within one year and claim priority to the provisional application. It is important to make sure that the disclosure of a provisional application can support the claims of any later- filed non-provisional applications.

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Q What does it mean if an invention has “absolute novelty”? A Most countries require “absolute novelty” of an invention before filing a patent application. Patent rights in these jurisdictions may be jeopardized if there is any disclosure or sale of the invention prior to filing a patent application. Q How can I market-test my product without triggering the “on-sale” bar? A Certain prior public uses may not trigger the one-year “on- sale” bar if it qualifies as an allowable experimental use. If, for example, a public use is performed solely for the purpose of perfecting the invention and remains confidential and under the control of the inventor. Q How long does a patent last? A As a general rule, utility patents filed now, have a life of twenty years from the date of filing of the earliest non- provisional application to which it claims priority. You may also get some additional time as patent term extension if the grant of the patent is delayed by the patent office’s examination process. Design patents filed now, generally have a term of fifteen years from issuance.

Q Does my U.S. patent protect me in foreign countries? A Your U.S. patent does not protect you in any foreign countries. In order to be protected in foreign countries you will have to file a separate patent application in each of the countries that you want patent protection in. Q If two people invent the same thing, who is awarded the patent and is keeping a record of my invention important? A In the United States, patents are awarded to the first inventor to file a patent application. Nevertheless, it is important to maintain accurate records of invention disclosures, such as lab notebooks or an equivalent record keeping, which may be important evidence for future patent disputes. Q How can I tell if my invention is patentable or is already patented? A You can perform a preliminary patent search online. The best way to determine if your invention is patent eligible or is already patented would be to consult a patent attorney.

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Q What is the difference between “®” and “™”? A In the United States, trademark rights are created through use of the mark. Registered trademarks use the familiar symbol “®” and adopted, but unregistered marks use the symbol “™” to notify the public. In text, trademarks should always be used as they are registered. Word marks must always be used as adjectives, never as nouns or verbs, and never in the possessive. A word mark should stand out from the text and not be coupled with the manufacturer’s name. Q What are service/certification marks? A A service mark identifies a service, such as accounting, engineering, education, consulting, retail/wholesale store services, and others. A certification mark is a trademark that is owned by a certifying organization that uses the mark to certify that goods meet pre-defined criteria, typically regarding quality, such as “Florida Oranges” or “Energy Star.” Q What is trademark strength? A The nature of a mark, particularly its relative strength or weakness, will have a direct bearing on its performance in the market and the scope of legal protection to which the mark is entitled. In general, the stronger a mark is, the easier it is for the mark to be registered and protected from unauthorized use by others.

A trademark is a source identifier that can be a word, name, symbol, design, combination of a word or design, a slogan, a catch phrase, or even a distinctive sound, color, or fragrance . It identifies and distinguishes the goods and ser- vices of one manufacturer from those of another. TRADEMARKS

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How long will my trademark registration last?

Q How are trademark strengths determined? A The strongest trademarks are made of words that are not descriptive of the goods or services being offered under that particular trademark. • Made up words (such as Google for search services, or Rolex for watches) provide the strongest trademark • Words that are taken out of context (such as Apple for computers). • Words that are not descriptive but are suggestive of the good or service can generally be registered, but they are not quite as strong (such as LinkedIn for networking community or Netflix for streaming services). • Words that are descriptive of a product or services that are being offered may receive trademark protection only if it acquires secondary meaning (Burger King for burgers, Coca Cola for a cola drink made from coca leaves). • Generic words are not registerable to trademark for those goods or services associated with that particular generic word (e.g. “Apple” for a business selling apples is too generic). Q Why should I register my trademark? A Under the common law, a trademark may be protectable, locally, as soon as it is adopted by the user (assuming there are no prior users). However, federal registration of a trademark gives the owner a nation-wide right of priority in the trademark, access to federal jurisdiction, and provides the owner a presumption of trademark validity. Registration requires an application and examination to confirm that there are no prior, confusingly similar uses of the trademark.

Q My business has one physical location— should I register my trademark federally? A Federal registration is only available for trademarks that have been used in interstate commerce (across state or national boundaries). However, an applicant who intends to use a trademark in interstate commerce may apply for registration. You may apply for a federal registration, if you are conducting your business online. The application is examined and may become registered once the mark has been used in interstate commerce. Q What is trademark infringement? A Trademark infringement occurs when another party uses the same or similar trademark

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A common law trademark will last as long as the trade- mark continues to serve as a source identifier to the relevant population. A trademark reg- istration is po- tentially per- petual as well, but it must be renewed every ten years.

in a manner that causes a “likelihood of consumer confusion.” Courts look at several factors to assess the

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Q What if I don’t do anything with my registered mark? A Trademarks may be abandoned through non-use or misuse. Trademark owners should be careful to continue use of their marks in a proper manner, and to police any and all unauthorized uses, to avoid any unintended consequences. If the mark will be temporarily discontinued (for example in connection with a business reorganization or relocation), efforts should be made to document the fact that the period of non-use is only temporary and that the trademark owner intends to begin use again on a certain date. Q What are the potential consequences of improper use of a trademark? A Improperly using a trademark (e.g. as a noun) may lead to the mark becoming generic for the goods and/or services associated with that mark. The following are a few examples of trademarks having become ‘genericized’: • Escalator • Kleenex • Xerox • Zipper • Dumpster • Taser

likelihood of consumer confusion, including: the similarity of the marks, the similarity of the goods and services, the relevant market and channels of trade, the sophistication of the relevant buyers, and any evidence of actual confusion. Q What is a “clearance search”? A Before adopting a new trademark, it may be prudent to perform a “clearance search.” This pre-adoption search and review allows for consideration of any potentially similar trademarks, as well as an evaluation of any potential likelihood of consumer confusion, to assist in the determination as to whether the proposed mark is suitable for use and/or registration. Q Do I need to consider international registration of my trademark? A Trademark rights in the United States are based on “first to use.” The trademark rights in the rest of the world are based on “first to file” an application. If you are planning to conduct business abroad and want to take advantage of your U.S. priority date, you need to register your mark internationally within six months of filing the trademark registration in the U.S. You can still register your mark internationally later, but you would lose the advantage of your earlier priority date.

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Q Do I have to file/register for copyright protection? A No. The copyright of an original work of authorship vests in the author immediately upon creation unless transferred in writing. However, a registration might be beneficial if you plan to file a lawsuit for copyright infringement. Federal registration of copyright provides several benefits including the right to sue for infringement in a federal court, statutory damages, and, potentially, recovery of reasonable attorneys’ fees. Q What does the “©” signify? A Notice of copyright includes the familiar symbol “©” or the word “copyright,” the year of first publication of the work, and the name of the copyright owner. One does not need to register the copyright to use the symbol. Q What is a “work for hire”? A A “work for hire” is a work commissioned under a written agreement or one produced by an employee in the normal scope of employment (where the copyright vests in the employer). Independent contractors will retain ownership of copyrightable works unless there is an assignment in writing. Independent contractors are determined by a number of factors, including: the level of control in preparing the work, the degree of skill involved in creating the work, the duration of the relationship between the authors and employer, the amount of benefits and the tax treatment afforded to the author, and the possibility of additional projects.

A copyright is an original work of authorship that has been fixed in any tangible medium of expres- sion. Examples include: literary works, software, dra- matic works, music, lyrics, dances, pictures, sculptures, movies, sound recordings, and architectural works. A copyright includes a bundle of rights: reproduction, derivative works, distribution, performance, and public display. COPYRIGHTS

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Q What is a work “in the public domain”? A When a work is said to be in the public domain (also referred to as “commons”), generally the copyright

Q How long does a federal copyright protection last? A Depending on the type of work, and whether, where, and when the work was first published, a copyright term may last up to 120 years from the date of creation. Q Can I transfer my copyrights to another person or entity? A Yes. Like any other property, all or part of the copyrights in a work may be transferred by the owner to another. Any copyright assignment must be in writing. Q Do I lose my copyright if I post my original work on social media? A No, but you generally give a non-exclusive right to use the work to the social media platform where you uploaded your work. It would be prudent to read the terms and conditions of these platforms before posting your work. Q Is my copyright good in other countries? A Most of the world including the United States are signatories to international treaties that recognize copyrights in works of authorship.

“The copyright of an original

work of author- ship vests in the author imme- diately upon creation unless transferred in writing.”

term has expired or the authors voluntarily included their works in the public domain through a procedure known as “voluntary relinquishment”.

Q What is the “fair use doctrine”? A Under the fair use doctrine, a party may exercise the rights otherwise

controlled by the copyright owner for the purpose of research (for limited purposes), comment, criticism, parody, or scholarship.

Q What is the Digital Millennium Copyright Act (DMCA)? A The DMCA addresses copyright infringement on the internet. Among other things, it bans the creation and distribution of technology, devices, or services that are intended to bypass measures to control access to copyrighted works, whether or not there is actual infringement of copyright. The DMCA also limits the liability of online service providers for copyright infringement by users, provided that they meet specific requirements.

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Q What makes something a trade secret? A The information has independent economic value, actual or potential, and it is not readily known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use. Q In which cases may trade secret protection be beneficial? A This varies on a case-by case basis, but trade secrets may generally be beneficial in the following circumstances: • the subject matter of the trade secret cannot be protected by patents , copyrights , and/or trademarks ; • the time frame that the secrets may have value is either shorter than the time required to obtain a patent or longer than the 20 years of protection available under patent law; • the likelihood is high that the information can be kept secret; • the subject matter is not readily ascertainable; • the secret is related to a manufacturing process. Q Can a trade secret lose its value? A Yes. The protectability of a trade secret may easily be lost if steps are not taken to maintain proprietary information as confidential. Trade secrets require the use of “reasonable efforts” under their unique circumstances to maintain secrecy.

TRADE SECRETS Trade secrets include any and all technical or business proprietary information that gives the holder an advantage over competitors who do not possess the information. For exam- ple, trade secrets may include technical formulas, manufacturing techniques, processes, programs, business methods, customer and supplier lists, and other business information.

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Q What are some reasonable procedures for protecting a trade secret? A Standard agreements and procedures include the use of confidentiality, non-competition, and non-disclosure clauses in employee, and consultant and independent contractor agreements. Exit policies should be in writing and remind departing employees of their specific confidentiality obligations. Other reasonable procedures to protect trade secrets include letters to the new employer of a departing employee, labeling documents accordingly, providing access only on a need-to-know basis, and creating an unsolicited idea policy. Q How do I formulate a trade secret protection plan? A Some considerations when developing a trade secret plan include • creating a written trade secret policy; • informing and educating employees about the plan; • identifying and restricting access to trade secrets; • maintaining computer secrecy; • eliminating all disclosure of trade secret information to the public; • using confidentiality and non-disclosure agreements when dealing with employees and third parties; and • appointing a custodian of trade secrets to monitor policy and communications.

Q Do I need to register or file my trade secret with the government for protection? A No. Unlike patents, trademarks, and copyrights, trade secrets need not, and indeed cannot, be filed or registered with any government body or agency for protection. A trade secret is protectable based on the fact that

"Unlike patents, trademarks, and copyrights, trade secrets need not, and indeed cannot, be filed or registered with any government body or agency for protection. "

it is not known to anyone who is not required to maintain it in confidence. And a trade secret remains protected as long as it remains unknown to others. Q What kind of laws protect trade secrets?

A Forty-eight states, including Massachusetts, have enacted the Uniform Trade Secrets Act (UTSA), as has the District of Columbia and Puerto Rico. North Carolina has its own trade secret statute that is similar to the UTSA, while New York still applies common law. The Defend Trade Secrets Act enacted in 2016 allows an owner of a trade secret to sue in federal court when its trade secrets have been misappropriated.

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How long does a trade secret last?

Q Should I worry about trade secret misappropriation?

Q Can I license/sell my trade secret? A Yes. You can freely transfer your trade secret to others in any way you choose. This is because a trade secret is viewed as a piece of property in the eyes of the law – just like patents, trademarks, and copyrights. In other words, a trade secret owner owns the rights to sell, license, lease, or otherwise transfer

A Yes. Trade secrets may give a competitor an unfair advantage or head start if the competitor improperly accesses the secret information. In most instances, this information comes from former employees including key personnel such as directors, officers, and key employees (engineers, scientists, managers, and sales professionals). Q What if my trade secret can be reverse engineered? A Trade secret law does not prevent discovery by fair and honest means in business competition. Reverse engineering must be well documented to defend against a future claim of trade secret misappropriation (likewise, for independent development). Owners of trade secrets should consider patent and/or copyright protection, or contractual prohibitions on reverse-engineering, if the information may be reversed engineered from your product or service.

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Trade secrets can last as long as the information is properly maintained and protect – potentially forever.

the asset to others for commercial reasons.

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Q What types of ornamental features are protectable by a design patent? A Design patents can be used to protect consumer-facing ornamental features of various items, such as consumer products, sporting goods, apparel, medical devices, automobiles and replacement parts, architecture, to name just a few. Two-dimensional designs, such as graphical user interfaces (both static and dynamic), game boards, and icons, are also protectible with design patents. Q What are the requirements for patentability for design patents? A To obtain design patent protection, a design must be novel, non-obvious and ornamental. In the United States a design patent application can be filed up to twelve months after the first disclosure of the design, but some other jurisdictions around the world are not as lenient. Q Can more than one embodiment of a design be included in a single application? A Yes. However, a patent examiner is likely to limit the number of designs that are examined. In such instances, the applicant should be prepared to file divisional applications to the remaining designs.

Design patents protect the ornamental aspects of products such as medical devices, board games, graphical user interfaces, vehicles, consumer products, and other things. DESIGN PATENTS

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Q How many views of the design are required for each embodiment? A Many design patent applications are filed with what are commonly referred to as the seven standard views (front, rear, top, bottom, left, right, and perspective views) for each embodiment. However, in some instances, it is possible to include more or fewer views in the application, as long as they clearly show the appearance of the embodiment. Q How should I prepare the figures for a design patent application? A It is best to work with an experienced illustrator when preparing the figures for a design patent application. An illustrator can prepare formal line drawings based on prototypes, computer-aided design (CAD) files, photographs, or other images. Line drawings are most commonly used, but are not required in a design patent application. For example, a design patent application can be filed with photographs or shaded images rendered from a CAD file. This is not recommended, however, because the original filed drawings limit the scope of the patent. Q What amount of written description of the design is required? A Design patent applications include a single claim and are much shorter in length than utility applications. A design patent application generally includes a title, a very short description of the figures, and any additional description of the ornamental design to add clarity to the appearance in the drawings. A short statement may be included to describe lines that depict surface shading, color, texture, or patterns.

The title is important and may determine the scope of products that are covered by the design patent. Q How broadly can I claim the design? A In the U.S., design patents can claim a design in its entirety or a portion thereof. In addition, in line drawings, solid lines are used to represent the claimed portion of the design, and dashed lines (or broken lines) are used to represent unclaimed portions of the design. Q Is international protection available? A Design patent applications may be filed abroad and claim priority to an earlier filed design patent application if filed within six months of the U.S. filing date. An international design patent filing regime (the Hague Convention) allows for a single international application (a Hague application) to enter designated member countries.

What is the term of a design patent?

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In the U.S., design patents have a term of fifteen years from the date of issue. There is no requirement to pay periodic maintenance fees during the fifteen-year term.

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Q Can a design patent application claim priority to a pending utility patent application? A Yes, depending on the drawings that were filed in a pending utility patent application, a design patent application can be filed based on those drawings and claim priority to the pending utility patent application. Such a design patent application would be entitled to the benefit of the filing date of the utility patent application. Any subsequently issued design patent would still have a term of fifteen years from its issue date. Design patents cannot claim priority to a provisional utility patent application. Q How does a design patent differ from a utility patent? A Generally, a design patent protects the ornamental appearance of a product. In a patent portfolio, design patents can be used to complement utility patents, which generally protect the structure, function, method of manufacture, or use of the product. Design patents generally issue sooner than utility patents, taking an average of about fifteen months from filing to issue.

Q Can an ornamental design be protected simultaneously by design patent, trade dress, and copyright? A Generally, yes, though each route has its own requirements and might be suitable for different aspects of a given ornamental design. Design patents may serve as precursors towards trade dress rights where the ornamental design is non-functional. Q If someone infringes my design patent, what damages are available? A In addition to conventional remedies such as obtaining injunctive relief, and as an alternative to collecting a reasonable royalty, a design patent owner may collect the total profits of the sales by the infringer. However, depending on the scope of the design patent, the damages may be limited to a component of a product rather than the entire product.

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Q What is an invention? A An invention is any new and useful process (way of doing or making things), machine, manufacture, design, or composition of matter, or any new and useful improvement thereof, or any variety of plant, which is or may be patentable under the patent laws of the United States. It is important to remember that one must first identify the “invention” in order to be able to identify the “inventors.” Q Who is considered an inventor? A An inventor is defined as someone who has substantially contributed to the conception of an invention, or the mental part of invention. Conception of an invention requires two steps: it must exist, and it must be complete. Persons involved in both steps are inventors. Note that conception may exist and be complete even though experimentation continues, for example when a concept is proven yet modifications are still being made, e.g. for optimization.

Inventorship has a strict legal definition under U.S. Patent Law. The law stipulates that only those who have made contributions to the conception of an invention are inventors. This notion of conception is the touchstone of inventorship. INVENTORSHIP

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Q I helped design the prototype of an invention. Am I an inventor? A Under U.S. patent law, someone doing routine experimentation or making passive contribution, such as maintaining lab notebooks or confirming data, is generally not considered an inventor. Complications often arise when defining the combined efforts of a team to reduce an invention to practice. There is a distinct difference between contributing to the actual conception of an invention, and merely acting under the supervision or at the direction of another. Q What is reduction to practice? A After conception, an invention is deemed to have occurred when the inventor(s) have reduced it to practice. Reduction to practice occurs in one of two ways: actual or constructive reduction to practice. 1. Actual – sufficiently developing and testing the invention to show that it will work for its intended purpose. 2. Constructive – filing of a patent application describing and claiming the invention sufficiently to teach one of skill in the art of how to practice the invention. It should be noted that participation in the reduction to practice the invention, without more, does not make an individual an inventor. On the other hand, if a technician conceives of a breakthrough solution during the reduction to practice, and if the breakthrough becomes part of the invention as reflected in the claims, then the technician is a properly named inventor. In other words, someone participating in the reduction to practice must also contribute to the final, complete conception to be an inventor.

Q Can an invention have more than one inventor? A Yes. Joint Inventorship occurs where more than one inventor contributes to the conception of at least one of the claims in the patent. However, each coinventor does not have to contribute to the conception of every claim, nor do they have to work in the same physical place or at the same time.

" Joint Inventorship occurs where more than one inventor contributes to the conception of at least one of the claims in the patent."

Q Can the named inventors change during the patent process? A Inventorship can be changed in a provisional application at any time during its pendency, or even after expiration. The same process is followed to add or remove an inventor, to update the name of an existing inventor, or to change the order of the named inventors. A provisional patent application should identify all persons who may reasonably be named as inventors, even if their contribution may later be excluded in prosecution. Q Why is due diligence in the invention process so important? A Inventorship determines ownership of a patent. Thus, it is important to keep good notes and accurate records, not only of individuals’ contributions during the development process, but also of efforts and diligence to reduce the invention to practice. Each situation is unique and must be evaluated on facts, so maintaining precise documentation for later reference is key in determining the proper inventorship.

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Q How do I ensure that my company retains ownership of an invention? A In order to obtain the ownership of an invention, a company should have some form of written agreement, typically a employment agreement, contract and/or assignment, that makes clear that the intellectual property created is the property of the company. In some circumstances, local law can ensure an obligation to assign the intellectual property rights to a company, but this obligation may not be enforceable worldwide. Q Is “authorship” the same as “inventorship”? A No. Unlike in academia, where it is common for all members of a team to be named as an author, inventorship (or joint inventorship) may not be granted simply as a reward for contribution to a project. Inventors must make an intellectual contribution, solely or jointly, to at least one element of a claim in the patent. In contrast, authors may have contributions that were done solely at the direction of others or made to the reported research, rather than contributions to the conception. Q What happens to my patent if I omit or misidentify one of the inventors in the patent application? A Patents, by law, must contain the names of all inventors, and all inventors named in the patent must have contributed to the conception of the invention. A patent that incorrectly identifies an inventor or inventors is rendered invalid, unless corrected. A mistake can be fixed if it was made through error and without intent to deceive.

Q For inventions that are developed utilizing an AI system, who, if anyone, is the inventor? A The answer to this question is complex. For example, where a person conceives of an inventive solution to a problem and then instructs an AI system to optimize certain features of the inventive solution, the answer is clearer. The performance of routine optimization by the AI system will not call into question whether the AI system is an inventor. However, if a person presents a problem to be solved by an AI system, and the system develops an otherwise inventive solution that the person had not conceived of the answer may not be straightforward. The person did not conceive of the solution, so in accordance with current patent laws, the person is not the inventor, even if the person programmed the algorithm that the AI system utilized to arrive at the solution. According to U.S. patent law, if the person did not conceive of the particular solution arrived at by the AI system, he/she is not the inventor. The question of who may properly be named as the inventor of an otherwise inventive solution developed by an AI system is not just for academics, since in order to apply for a patent on an invention, one must list the inventor(s).

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Q What is the difference between non-exclusive and exclusive licenses? A A non-exclusive license may not allow the patent owner to sub-license the patent to others, whereas, an exclusive license may require a single licensee to take on the obligation of policing the patent rights and, potentially, managing sub-licensees. But be careful! Although titled “exclusive license,” a license that fails to convey “all substantial rights” in a patent may require the participation of the licensor in any infringement disputes. All patent owners must agree to an exclusive license whereas only one patent owner needs to agree to grant a non-exclusive license. Q Which parties are liable to litigation under a license agreement? A License agreements should always clarify who has the right to sue for infringement of the rights being licensed. The right to sue for damages is typically granted under an exclusive license agreement. When the licensee is given the right to sue for infringement, it is also important to make sure that the licensor is obligated to assist in such lawsuits, which usually require the participation of inventors and original owners of the patent(s).

A patent license is an agreement between a first party who has rights in a patent (licensor) and another party (licensee), e.g. a person or a company that wants to use or benefit from the patent rights. A license provides some interest in the patent(s) from the licensor to the licensee. LICENSING AGREEMENTS

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Q Who can assign rights under a license agreement? A Licensors should carefully consider the conditions under which a licensee may assign their rights in the agreement. In the absence of any expressed provisions, license agreements are typically freely assignable by either party. But this default rule may be superseded by a properly worded assignment clause. Assignment clauses should cover such eventualities as a sale, a merger, or insolvency, as well as a deliberate assignment of the licensed rights. Q Do I want to license the patent or the product? A Another key consideration in any license agreement is the decision whether to license “patents” or specific products. Where specific patents are licensed, the licensee may still be vulnerable to other patents owned by the licensor. Where specific products are licensed, any relevant patents owned by the licensee are deemed to be included in the license. However, new or modified products may not fall under the scope of the license. Q Do I need to have a written license agreement? A Not all licenses require a written agreement. Some will be implied by law. For example, under the “first sale” doctrine, a patent license will be implied when a patent owner sells a product covered by the patent under circumstances that “plainly indicate that the grant of a license should be inferred.” This protects customers from unfair infringement lawsuits.

Q What should be included in a licensing agreement? A The rights given by the agreement generally need to be such that the licensees

You can define the license scope by defining the following: • the possible use of the licensed in- vention (such as non-commercial use only), • the term (such as for a period of one year), • rights to modify the licensed invention, • limitations on licen- sor’s liability, support services, non-disclo- sure of confidential information, indem- nity for infringement, enforcement of rem- edies, or contract ter- mination rights.

are interested in the deal, but you do not give away permanent unrestricted

control over your asset. There are some terms and factors to consider when drafting your agreement. Q Can a license agreement be used as a defense? A It is important to control the transfer or sub-licensing of any rights granted under a patent license agreement. The existence of a valid license agreement may be

a complete defense to a claim of infringement and unwitting patent owners may sometimes grant rights to parent companies, subsidiaries, or affiliated companies unintentionally by failing to scrutinize

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Q How is a license agreement terminated? A Always be mindful of termination clauses in patent license agreements. Sometimes patent families can last longer than expected due to patent term adjustment, foreign rights, or continuation applications. Clear termination clauses (such as defining the termination date, termination conditions, territory, and exact rights to be terminated) can resolve any potential disputes at the outset of the agreement. Q Are there alternatives to litigation? A Patent disputes can be expensive, and when a patent license agreement breaks down, the resulting litigation may look a lot like a patent infringement dispute. Take the opportunity in your license agreements to find ways to reduce costs and fees for dispute resolution ahead of time. If possible, agree in advance to a forum. Consider including an attorneys’ fees provision. Finally, consider alternative dispute resolution options, such as binding arbitration, minitrial, or mediation.

assignment and sub-licensing clauses in their license agreements. Q What is licensee estoppel? A Sometimes licensors seek to preclude licensees from challenging the validity of the patent rights as a condition of licensing. In some circumstances this practice may no longer be permitted. Q What is “marking”? A Licensors should pay particular attention to patent “marking” requirements in patent license agreements. Under the law, patent owners are required to mark any products covered by the licensed patent(s) with the patent number(s). These marking requirements apply equally when a licensee makes a covered product pursuant to a license agreement; this often presents challenges when crafting a license agreement in the context of litigation settlement.

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IP ESSENTIALS: LICENSING AGREEMENTS

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Q How does someone challenge a patent in IPR? A A party (including an entity such as a corporation) challenges a patent in IPR by filing a petition for inter partes review with the Patent Trial and Appeal Board (PTAB), a board of administrative law judges within the U.S. Patent & Trademark Office (USPTO). The petition must identify every claim the petitioner is challenging, every ground of patent invalidity the petitioner wants to raise for every claim, and all of the evidence the petitioner has to support each ground. Filing a petition also requires the payment of a fee set by the USPTO. Q Who can challenge a patent in IPR? A Any person, including corporations but not the U.S. government, can petition for IPR of a U.S. patent. Except, anyone who has been sued for patent infringement can only petition for IPR within one year after they have been served with a complaint. It is important for people who have recently been sued for patent infringement to consider whether or not IPR is right for them as early as possible after they have been sued. Q Does a person have to be sued before they can petition for IPR? A No. A person can petition for IPR if they have not yet been sued, or even if they are at no risk of ever being sued for patent infringement.

Inter partes review, also known as IPR, is an administrative procedure in the United States Patent and Trademark Office for challenging the validity of a patent . IPR was created as part of the 2011 Leahy-Smith America Invents Act as an alternative to raising some patent validity challenges in U.S. district courts. INTER PARTES REVIEW

Q&A SERIES

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Q Why would a person consider IPR if they can make the same arguments in court? A The burden of proof for invalidating a patent is lower in IPR relative to district

the prior art. And PTAB will only consider prior art evidence in the form of patents and printed publications. In district courts, an accused infringer can challenge the patent under any ground recognized by law, including grounds that attack the sufficiency of the specification, or that allege that the patent claims things that could never be entitled to patent protection. Q Are there any advantages to IPR for petitioners? A Yes. The lower burden of proof can make it easier to invalidate a patent in IPR compared to litigation. The PTAB may also have a better understanding of patent law and many types of technology than some district court judges, which can be advantageous to challengers of weak patents. IPR can also cost significantly less than litigation in court. And, because IPR is solely focused on the validity of the challenged patent, whether or not the petitioner infringes the patent is not something the PTAB can consider. Where a petitioner has good reason to believe that a patent is invalid, it is usually in their interest to petition for IPR. Q Are there any advantages to IPR for patent owners? A IPR provides some advantages to patent owners. The patent owner can try to amend their claims once in IPR, which cannot be done at all in litigation. The PTAB may also have a better understanding of patent law and many types of technology than some district court judges, which can be advantageous to the owners of strong patents. A final written decision in favor of the patent owner in IPR will also prevent

“The lower burden of proof can make

courts. A claim in IPR will be invalidated if the challenger proves it is unpatentable by a preponderance of the evidence . Preponderance of the evidence means the patent is more likely invalid than not. The burden of proof is higher in district courts because courts presume that the USPTO did its job correctly when it issued a patent. A patent challenged in district court will only be invalidated based on clear and convincing evidence . Clear and convincing evidence means proof that the patent is substantially more likely to be invalid than not. Q Are there limitations to filing for IPR compared to challenging validity of a patent in court? A IPR is more limited than the courts in terms of the evidence that can be presented. A petitioner can only challenge a claim in IPR by arguing that it is anticipated or obvious over it easier to inval- idate a patent in IPR compared to litigation...Where a petitioner has good reason to believe that a patent is invalid, it is usually in their interest to petition for IPR.”

IP ESSENTIALS: INTER PARTES REVIEW

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Q Is there any risk to patent owners in IPR? A Yes. A final written decision against the patent owner in IPR can invalidate a challenged patent claim, or even all the

the petitioner from making the same arguments to a district court. However, it is usually in the patent owner’s interest to not find itself in IPR under most circumstances. Q What can a patent owner do to avoid IPR? A The best way for a patent owner to avoid IPR is to have a strong patent that is not invalid over the prior art. If a petition for IPR has been filed against a patent, a patent owner may be able to avoid having the PTAB institute review by filing a strong preliminary response to the petition. Because the PTAB has discretion to refuse even meritorious IPR petitions, a patent owner should carefully weigh the factors the PTAB relies on in exercising that discretion. In general, the more advanced district court litigation is by the time a petition is filed, the less likely a judge is to stay , or pause, litigation in court in favor of IPR, and the weaker the arguments in the petition are for invalidating the patent, the less likely it will be for the PTAB to institute IPR. Q Is there any risk to a defendant in district court litigation if the defendant petitions for IPR? A There is some risk. Congress did not want IPR to simply be a second opportunity for defendants who have challenged the validity of a patent in district court. If the PTAB issues a final written decision that does not invalidate a patent claim, then the petitioner is barred from challenging that same claim in district court litigation on any ground that reasonably could have been raised in IPR. A party can mitigate their risk by arguing grounds of invalidity in the litigation that could not have been raised in IPR.

“Neither party can appeal the PTAB’s institution decision, or any decision that is closely related to the institution decision.”

claims of a patent. Subject to any right to appeal, a patent that is invalidated by the PTAB will be invalid for all purposes. It cannot be asserted against any alleged infringer again.

Q How expensive is IPR

compared to district court litigation? A IPR was designed to be a less expensive alternative to district court litigation. Under normal circumstances, IPR may only cost a small fraction of what it would cost to litigate a patent infringement case through trial. However, the costs of IPR are front-loaded for petitioners. The petition must contain complete arguments, with full evidentiary support, which requires a large investment of time and energy that might otherwise be developed over a longer period in litigation. The fee for filing a petition also costs many thousands of dollars. Although, a portion of the filing fee can be refunded if the petition is denied.

IP ESSENTIALS: INTER PARTES REVIEW

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Q What happens to a district court case if the defendant petitions for IPR? A IPR and district court litigation are allowed to proceed in parallel. District courts are not required to stop or pause a litigation just because a petition has been filed, or because the PTAB has decided to institute review. However, some courts are willing to stay , or pause, litigation if it seems likely that the IPR has the possibility of narrowing the issues being litigated, or resolving the dispute entirely. Q Are there limits to the number of patents or claims that can be challenged in IPR? A A single petition for IPR can only challenge the validity of a single patent. There is no statutory limit to the number of claims of a patent that can be challenged in a single petition. However, because the PTAB limits the length of petitions, and requires the petitioner to make fully supported arguments, there may be a practical limit to the number of claims that can be effectively challenged in a single petition. A petitioner may file multiple petitions against multiple patents. Or it can file multiple petitions against a single patent.

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Q Under what circumstances will the PTAB institute IPR? A The PTAB is allowed to institute IPR if it determines that there is a reasonable likelihood that the petitioner would show

Q How can a patent owner amend its claims in IPR? A A patent owner can attempt to amend its claims by filing a motion at the time it files its patent owner’s response to the petition. Any proposed amendment must be narrower in scope than the unamended claims. Amended claims also cannot introduce new matter , meaning any amended claim must be fully supported by the written description of the originally-filed patent. The amendment must also be related to the challenges raised against the patent in the petition for review. And the patent owner must prove that the amended claims would be patentable over the prior art. Q Can a patent owner get damages or an injunction if they win an IPR? A No. IPR is solely focused on adjudicating the validity of the challenged patent. A petitioner cannot be found liable for infringement through IPR, and the patent owner cannot receive money damages or an injunction. In certain circumstances, if the patent owner goes on to win any related district court litigation, and the judge of that case decides to award the patent owner its attorneys’ fees, the court may consider the fees spent by the patent owner in IPR as part of that award. The award of attorneys’ fees in patent litigation is reserved only for exceptional cases, and should never be presumed.

"The PTAB’s au- thority to in- stitute IPR is discretionary, meaning it is never required to institute IPR even for peti- tions that meet the legal criteria for institution."

that at least one of the claims it has challenged would be unpatentable. A reasonable likelihood is a lower standard than preponderance of the evidence , but still requires a significant amount of proof.

Q Under what circumstances will the PTAB refuse to institute IPR? A The PTAB’s authority to institute IPR is discretionary, meaning it is never required to institute IPR even for petitions that meet the legal criteria for institution. The PTAB will exercise its discretionary authority to deny petitions for several reasons. If related district court litigation is very advanced, and concerns the same parties and the same issues, or if the petition meets the bare legal threshold for institution but is not very strong, then the PTAB may deny the petition. The PTAB will always deny a petition for IPR if it fails to meet the reasonable likelihood burden of proving that at least one challenged claim is unpatentable.

IP ESSENTIALS: INTER PARTES REVIEW

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