Transcript DELVACCA, in conjunction with its Intellectual Property Committee

DELVACCA, in conjunction with its Intellectual Property Committee,
presents
What Every GC/Transactional/Corporate
In-House Counsel Should Know About IP
DELVACCA thanks Flaster/Greenberg P.C. for their generous sponsorship of
this event.
On the Web at www.flastergreenberg.com
What Every GC/Transactional/Corporate In-House
Counsel Should Know About IP
By: Lynda L. Calderone
PANELISTS: Alex H. Plache, John C. Gregory, Jr., Lynda L.
Calderone
On the Web at www.flastergreenberg.com
1. Identification of IP For Protection of
Products/Services
 Recognizing company IP is not always
straightforward – There is a need to have good
processes:
 Patents/Patent Applications – Need invention disclosure
process; Centralized communication; Status
 Trademarks – Coordinate with business development;
Marketing; Monitor Products
 Copyrights – Marketing/Ads; Software; Corporate
documents; Website materials
 Trade Secrets – Process/Formulation forms and lists;
Standardization; Confidentiality procedures; Employment
agreements; Security
On the Web at www.flastergreenberg.com
Tracking
 Reliance on outside counsel – good for patents,
trademarks – perhaps not for copyrights/trade
secrets
 Review frequently – Keep up with tracking/lists
 Internal status; Docketing software
 Routine IP Review
 Benefits: Financing; Valuation; Avoiding lapse
of properties; Streamlining portfolio (cost cutting)
 Disadvantage: Organization requires resources
– personnel, software, attorneys, time
On the Web at www.flastergreenberg.com
2. When Do You Need IP Counsel - How to Select
Counsel
 Identify specific tasks you need IP counsel to do:
 Litigation; Prosecution; Opinion work; Searching;
Licensing/contracts
 Do you have in-house IP counsel? What are they busy with
and how can outside IP counsel help them?
 How much do you have budgeted for counsel?
Determine if in-house and/or outside IP counsel
fits that budget and how to allocate budget
 How big is the portfolio?
 How large is the litigation? Make or break v.
Less significant –is there insurance or
indemnification?
On the Web at www.flastergreenberg.com
Selecting Counsel
 Is patent work involved?





What is the technical nature? Is counsel familiar?
Tracking/docketing software? Annuities?
Foreign experience?
Who will do the work?
How is searching handled?
 Is trademark/copyright work involved?




Does counsel have experience?
Tracking mechanisms?
Post-registration work?
How is searching handled?
On the Web at www.flastergreenberg.com
Selecting Counsel
Is IP Litigation involved?
 Learn firm’s philosophy on litigation/settlement
 Ask for best practices
 Ask what steps will be done before filing
complaint
 Ask about defense strategy
 Inquire as to who is on the team and meet them
 How does firm bill litigation (costs).
 Request a realistic budget through trial and ask
to revisit it regularly
On the Web at www.flastergreenberg.com
Other Considerations in Selecting Counsel
 Rates – Highest, lowest, paralegal use
 Communication Style
 Do you want informative or barely
communicative
 Knowledgeable/Experience
 Second opinions
 Flexibility
 Terms of engagement
 Budgeting/reporting
On the Web at www.flastergreenberg.com
3. What to Look for When Evaluating Ownership/
Property Rights in Agreements
Types of Agreements That Can Transfer IP Rights:
 Assignment
 License
 Joint Development/Research
 Non-Disclosure
 Supply/Material Transfer
 Non-Analysis
 Employment
 Collaboration
On the Web at www.flastergreenberg.com
What to Look for in Agreements
Any IP-related terms
 Have reviewed by IP counsel
 Should IP terms even be in the Agreement?
 If so, what do you want to do with the IP rights?
 Sketch out the ownership/rights in advance
 Know what you want from financial and other
terms
 Exclusivity v. nonexclusivity – how much and
where
 License the IP or a specific product/use
On the Web at www.flastergreenberg.com
Special Considerations
Patents
 In U.S. ownership starts with inventorship;
outside U.S. can apply in name of company
 If licensing patents from overseas, confirm
inventorship/ownership issues – patent may have issues
 Chain of title; get ownership records/copies of agreements
 Rights – make, use, sell, offer for sale, import
 Fields of Use/Product-Based/Geographic Territory
 Royalties v. fully paid license
 Assignment – are all rights transferred; right to
enforce, right to transfer, all patent rights – look
for reversionary rights
On the Web at www.flastergreenberg.com
Special Considerations
Licensing – Watch “future” transfers
 Board of Trustees of Stanford v. Roche
(10/1/2009 CAFC)
 “will assign and do[es] hereby assign to CETUS, my right,
title, and interest in each of the ideas, inventions and
improvements” (present assignment) v.
 “We have held that the contract language ‘agree to assign’
reflects a mere promise to assign rights in the future, not an
immediate transfer of expectant interests.” (future rights)
 While courts differ on this – safest to use present
transfer language and be very clear on terms –
get analysis/second opinions
On the Web at www.flastergreenberg.com
4. Obligations/Suggestions for Policing IP
Rights
 Trademarks – important to police rights
and defend against confusing use of
similar marks on similar goods
 Copyrights – not required, but good to do
to avoid implied rights or loss of materials
 Patents – not an obligation, but failure to
enforce can lead to loss of value and
exclusivity and can give rise
laches/equitable estoppel defenses in
some cases
On the Web at www.flastergreenberg.com
Policing
 TMs/Copyrights - Regular review of web,
various search site reviews of use of
marks; competitor products/packaging;
market analysis; trade shows; OG/TM
publication alerts
 Patents – internet search; regular patent
reviews/alerts; new products similar to
your technology; trade shows – work with
R&D; patent counsel
On the Web at www.flastergreenberg.com
5. Handling Issues Involving Third Party
Infringement of Company Rights
When you find an infringer…
 Determine if actual infringement – for patent
there is obligation to evaluate issue (actual
product).
 Evaluate the company rights strong/valid/maintained – weaknesses? Properly
assigned?
 How/When can you notify infringer:
 Avoid declaratory judgment; case or controversy jurisdiction
comes from avoiding “threatening” infringer
 Offer of license, notice letter, C&D request, affecting sales
 Get things ready before taking action; Have a settlement
strategy – What do you want to happen? What will you
accept?
On the Web at www.flastergreenberg.com
6. Handling Notices of Infringement from Third
Party Rights
 First steps – Discuss with counsel (in-house
and/or outside); Open lines of communication
with holder of rights
 Determine seriousness/impact of potential
infringement
 Evaluate actual infringement, validity of property
in question, other defense issues
 Have a settlement strategy:




Is it better to take a license than get shut down?
Can you afford to lose the product, its packaging, your TM?
Can you afford the litigation?
Do you have properties of your own to enforce/crosslicense?
On the Web at www.flastergreenberg.com
Responding to Third Parties
 Avoid knee-jerk responses – You could be
infringing; Your response can impact the tenor of
and other issues in litigation
 Handle timely – If a response sits too long, you
may leave IP owner few options other than to
sue
 Keep the ball in the owner’s court in terms of
communications
 They have already investigated before noticing
you, so you are behind in terms of
time/evaluation
 Consider whether there are willful or exceptional
case issues that can cause the company
significant damages – if so, and absent a very
strong On
defense,
settlement is indicated
the Web at www.flastergreenberg.com
Responding to Third Parties
 Options – when you do infringe a patent:
 Design around, license, stop selling, reexam, strong invalidity
 Options – when you do infringe a trademark:
 Change mark, use agreement, license, examine TM defenses
(first use, theft, etc.), TM proceedings
 Options – when you do infringe a copyright:
 Evaluate settlement amount (statutory damages?), check
authorship, change what you are publishing
 Options – when you do infringe a trade secret:
 How did it happen – tighten policy; find settlement
arrangement; agree to destroy/return; evaluate defenses – was
it really a secret; was it really third party’s secret; did you get it
from them
On the Web at www.flastergreenberg.com
7. When and How Can Patent Rights Be Enforced
 To sue you need a valid, maintained issued
patent.
 To sue you need a thorough infringement
evaluation (process may be slightly different)
 You need to know what defenses will be raised
and be ready
 You need to confirm inventorship
 You need to know what products are impacted
 You should check whether the infringer has its
own patents (can give rise to issues or new
allegations)
On the Web at www.flastergreenberg.com
Enforcing Patents
 Enforcement Style:
 File/Serve Complaint; C&D Letter; C&D Letter with
Complaint filed not served; offer license or other business
deal
 What if patent not yet issued and someone is
infringing?
 If published, you can still give notice
 May need republication
 Still a declaratory judgment concern
On the Web at www.flastergreenberg.com
8. Protecting Against False Marking
Litigation/Securing Patent Damages by Marking
 Marking is offense and now more and
more a defense
 Patent damages – absent pure process
claims, you must “mark” a product to
collect damages running from issue date.
 U.S. Patent No. 1,234,567 or U.S. Pat. No. 1,234,567
 Mark on physical product if practical
On the Web at www.flastergreenberg.com
False Marking
 What is false marking?
 Wrong patents on product; expired patents on
products
 Falsely marking a product to stifle competition is
against the law and subject to fines and now – not
just defenses in patent suits – consumer litigation
 “patent pending” when not appropriate
 Entitles qui tam action – can be brought by private
citizens on behalf of government (marked wrong
with intent to deceive public – not a mistake)
 Statutory damages: "not more than $500 for every
… offense." 35 U.S.C. 292(a).
On the Web at www.flastergreenberg.com
False Marking
 Forest Group, Inc. v. Bon Tool Co., Appeal No.
2009-1044 (CAFC 12/28/09), - single $500 fine not
deterrent; Fines imposed on a per-article basis; judges
given discretion to fine (fraction of a penny up to $500 –
balance public policy v. charging too much for
inexpensive, mass-produced items). Gave rise to
numerous lawsuits – see,
http://www.grayonclaims.com/false-marking-caseinformation/
 Patent reform – argue on both sides – make it easier
to prove intent with burden on patentee v. make it
tougher -must have suffered competitive injury
 What to do – Vet marking initially for new products;
update on two events – patent issuance; patent
expiration
On the Web at www.flastergreenberg.com
9. How to "Clear" New Products Of IP Issues
Before Commercialization
 Search during R&D design phase for prior
art;
 Search again prior to commercialization if
feasible
 Review TMs on-line (Jordan will discuss in
depth)
 Consider competitive products/IP
 If you find a patent that is very close –
need patent counsel evaluation
 Consider integrating IP function with R&D
project/portfolio management software
On the Web at www.flastergreenberg.com
10. How to Review/Rely on an IP Opinion of
Counsel
 Willful Patent Infringement– if you knew of
a patent and that you infringed, could be
liable for willful infringement (enhanced
damages/attorneys’ fees)
 No negative inference of infringement at
trial if you did not get an opinion and it is
not “required,” but not many ways to show
non-willful if you infringe with knowledge
 Opinion of Patent Counsel – patent not
infringed, invalid and/or unenforceable
On the Web at www.flastergreenberg.com
Opinions of Counsel
 Need to meet CAFC requirements:




Well-reasoned;
Considers patent, file history, prior art of record;
Based on current CAFC patent law;
Addresses all claims
 Non-infringement – literal/equivalents;
 Invalidity – claim-by-claim (for 103(a) – addresses
secondary considerations);
 Unenforceability – needs to address basis; provide facts if
necessary/intent to deceive
On the Web at www.flastergreenberg.com
Opinions of Counsel
 Are not always “correct” – reasonable minds
may differ so not a guarantee a defense will
work at trial
 Need to be well reasoned
 Need to be “competent” – ethical; patent
attorney; include above criteria
 Need to be “reasonably relied upon” by
company




someone read it and understands it (can be deposed/witness)
May need a technical person to assist in review
May need attorney/patent counsel to assist in review
Keep records that it was read and understood in case people
leave
 If uncertain or uncomfortable, seek a second opinion.
On the Web at www.flastergreenberg.com
Thank You!
On the Web at www.flastergreenberg.com