Chapter 6 Patents and trade secrets Patents o

Chapter 6 Patents and trade secrets

Patents o Grant of property rights to inventors o Issued by the U. S. Patent and Trademark Office (USPTO) o Permits an owner to exclude the public from making, using, or selling the protected invention o Allows legal action against violators o Prevents independent creation o Extends only to the United States and its territories and possessions

Patents … o o Applicant must file with the USPTO n USPTO searches prior art n Takes an average of 25 months Prior art n Existing body of knowledge n Available to a person of ordinary skill in the art

Patents … o An invention must pass four tests n Must be in one of the five statutory classes of items n Must be useful n Must be novel n Must not be obvious to a person having ordinary skill in the same field o Items cannot be patented if they are n Abstract ideas n Laws of nature n Natural phenomena

Patents … o Patent infringement n Someone makes unauthorized use of a patent n No specified limit to the monetary penalty o Software patent n Feature, function, or process embodied in instructions executed on a computer o 20, 000 software-related patents per year have been issued since the early 1980 s

Patents … o Before obtaining a software patent, do a patent search o Software Patent Institute is building a database of information o Cross-licensing agreements n Large software companies agree not to sue others over patent infringements n Small businesses have no choice but to license patents

Patents … o Defensive publishing n Alternative to filing for patents n Company publishes a description of the innovation n Establishes the idea’s legal existence as prior art n Costs mere hundreds of dollars n No lawyers n Fast

Patents … o o Standard is a definition or format n Approved by recognized standards organization n Or accepted as a de facto standard by the industry n Enables hardware and software from different manufacturers to work together Submarine patent n Hidden within a standard n Does not surface until the standard is broadly adopted

Patents … o Patent farming involves n Influencing a standards organization to make use of a patented item n Demanding royalties from all parties that use the standard

Trade Secret Laws o Uniform Trade Secrets Act (UTSA) established uniformity in trade secret law o Trade secret n Business information n Represents something of economic value n Requires an effort or cost to develop n Some degree of uniqueness or novelty n Generally unknown to the public n Kept confidential o Computer hardware and software can qualify for trade secret protection

Trade Secret Laws … o Information is only considered a trade secret if the company takes steps to protect it o Greatest threat to loss of company trade secrets is employees o Nondisclosure clauses in employee’s contract n Enforcement can be difficult n Confidentiality issues are reviewed at the exit interview

Trade Secret Laws … o o Noncompeting agreements n Protect intellectual property from being used by competitors when key employees leave n Require employees not to work for competitors for a period of time Safeguards n Limit outside access to corporate computers n Guard use of remote computers by employees