Protecting Innovations Using Patents and Trade Secrets October

Protecting Innovations Using Patents and Trade Secrets October 18, 2005 Presented By: Davy E. Zoneraich Norris Mc. Laughlin & Marcus, P. A. 721 Route 202 -206 Bridgewater, NJ 08807 908 -722 -0700 dezoneraich@nmmlaw. com

Davy E. Zoneraich, Esq. n Specializing in: q q preparation and prosecution of patent, trademark and copyright applications opinion preparation patent infringement litigation counseling on domestic and international transactions

Program n n Recognizing an Invention Protecting an Invention q Patent n Overview and Economic Benefits n Formal Definition and Requirements n Types n Enforcement and Exploitation n Overview of Patent Application q Trade Secret n Definition and Examples n Keeping a Secret a “Secret”

What Is an Invention? n A solution to a technical problem q q Improvement to an existing device or process n A new device – better mousetrap n A new process – improved cookie recipe Combination of old elements n q Light in Dental Handpiece q Old: Light Bulb on the floor connected via fiber cable to handpiece § Long fibers easily broken § Very powerful bulb required q New: Light bulb included in handpiece with shorter fiber optic piece New use for an old composition or process

What Is an Invention? Types of Technology n Traditional Industrial Applications q n n Automotive, Farming, etc. Computer Software Biotechnology Chemistry E-Commerce/Business Methods

Invention is Confidential Information n Confidential Information –not publicly known q Technical Information – n n n Known – certain types of equipment used to make pipes Not known – specific arrangement, settings of equipment Value of Confidential Information q q Cost savings Improved Products and Process n Provides Competitive Advantage q q Patents – exclude others License fees

n n Protecting an Invention √ Recognize the invention Determine how best to maximize its value $$$$$ q Patent n n q Tell the world what you discovered Stop others from making, using and selling your invention for about 17 years Trade Secret n n Don’t tell anyone Not easily discovered (i. e. , cannot be reverse engineered) § n Processes are not easily reverse engineered Coke® – formula secret for more than 100 years Short Product Lifetime - Software n n Use Trademark/Goodwill to exploit value Toughest job – keeping a secret

Patents

Invention: What is a. Process Patent? n Apparatus Improvement to a Process or Apparatus q New – not described, sold, offered for sale, publicly displayed more than one year before filing date n q q foreign patent protection – absolute novelty requirement Useful – must identify intended use Non-obvious – mythical “person of ordinary skill in the art” would not have developed invention based on what was known in the art n Products, publications including other patents

Types of Patents n n Utility q Product, Process, Machine, Composition, Improvement q Term: 20 years from filing date Design q New, Original, Ornamental Design for article of manufacture n Protects only appearance, not concept q Term: 14 years from issue date Plant q New variety that is distinct and asexually reproduced q n Sneaker design, handles

Cannot Be Patented n Law of Nature q Gravity n Physical Phenomenon q Lightning

Exploitation of Patent Rights n Exchange with government q Patent rights n n Exclude others from making, using and selling No right to make, use or sell subject matter of the patent q n q Patent Clearance Territorially limited Value of patent rights n n n Protect against imitations Block competitor’s progress Defensive/Build a Portfolio q q n Horse-trading with competitors who have their own patents Add to Intangible Value of Company § More Attractive for raising funding Sale or License

The Patent Application n n Tells a “story” Background of the Invention – q “In the beginning …” n n n Summary of the Invention q n Tells of existing problems, disadvantages Tells what is desired or needed Eureka!!! –problem solved; provides broad description Detailed Description of the Invention q q q Examples of how to make, use Often includes and references drawings Describes advantages

The Patent Application (cont’d) n CLAIMS q Fence around your property (invention) n Biggest - most desirable, but easier to attack q If Technology is New – easy to obtain big fence n Smaller - gives less protection, harder to attack q Crowded Technology Field – smaller fence likely

MAINTAINING PROPRIETARY INFORMATION AS A TRADE SECRET

What Is A Trade Secret? n n n Formula, pattern, device or compilation of information Used in company's business Use provides a competitive advantage q q Not known by competitors Not used by competitors

Examples Of Trade Secrets n Methods q Techniques for testing a formula q Formulas n Proper order of mixing of various ingredients

Examples Of Trade Secrets (cont’d) n Apparatuses q Identity of, and specifications for, components q Means of production q Process of manufacturing n n n q Specific equipment used Specific arrangement relative to other equipment Specific settings on equipment Equipment modification n Minor changes result in q A better product q Cheaper, more efficient manufacturing process

Examples Of Trade Secrets (cont’d) n Marketing/Sales Information q q q Software used to predict and fill customer orders Product roll‑out schedules Expansion or contraction plans New marketing plans Specialized customer lists Supplier/vendor lists

How To Protect Trade Secrets? General “DOs” First , properly identify the trade secret n Plant tours - restrict or avoid q n n n if required, shield unique equipment from view Non‑disclosure agreements - vendors, consultants must sign Markings q On all plans and specifications that identify the information as confidential and proprietary Speeches or published articles q Obtain prior clearance from counsel Confidential documents access q Require sign‑in and sign‑out procedures Confidential information on computers -use passwords to protect Print confidential information on distinctive paper

How To Protect Trade Secrets? n n GENERALLY – question whether an activity, e. g. , LICENSE NEGOTIATION, JOINT VENTURE, ENGINEERING PURCHASE ORDER, DISTRIBUTION AGREEMENT, ETC. , relates to the disclosure or receipt of trade secrets Then take actions discussed above

How To Protect Trade Secrets? GENERAL “DON’Ts” n DO NOT allow audio or video recording equipment on premises n DO NOT leave a vendor or customer unattended n DO NOT leave a confidential document unattended (desk/copier) n DO NOT mark everything as “confidential” Overuse leads to dilution of protection q DO NOT enter into secrecy agreement with others (customers/suppliers) without approval First determine if there is a need to know such confidential information of a third party

How To Protect Trade Secrets? “DO’s” as to EMPLOYEES n n n n Sign confidentiality agreement acknowledging duty to uphold trade secrets Trade secrets only disclosed on a "need to know" basis - disclosure only to a minimum number of people When trade secrets are disclosed, remind employee that information is confidential Employees must place "confidential" legends when creating documents disclosing confidential information If confidential information is highly sensitive, restrictive covenants should be used Remind employees of continuing obligation of upholding trade secrets during course of employment and upon departure Safeguard third party confidential information in the same way as you treat your own trade secrets

How Trade Secret Status Is Lost n Product with “secret” components disclosed n n n Public display (trade show, non-restricted customer sales pitch) Advertising, marketing Sale of product including trade secret ingredients, materials or processes for manufacture n “Secret” becomes or can become known by simple inspection of product n Reverse engineering

Recognize Invention Patent Begin Drafting Patent Application File Patent Application Patent Issues, Enforcement Possible Determine Type of Protection Desired Trade Secret Keep It Secret

Ensure that Protection for Innovation is in Place before Taking Business Actions n Due Diligence - Investigate all IP (Patent, Trademark, Trade Secret) q q Before entering any arrangement : License, Business Acquisition, joint venture Before new product release– n n Do not want to infringe 3 rd party patent rights Can patent protection be obtained?

Resources n n Chisum on Patents USPTO website http: //www. uspto. gov q q q MPEP – Manual of Patent Examining Procedure Searching – Published Applications and Patents Status – n n Ownership Patent Application Prosecution