f723000_class#17 發明與專利abc 陳志光 (tsmc公司律師)

NCKU CSIE 2015 SpringF723000@65105Startup and Innovation in IT Industry

Class #17發明與專利ABC陳志光 Matt

TSMC公司律師2015/06/17

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Intellectual Property Fundamental for Start Up

Patent and Trade Secret

陳志光June 17, 2015

IP Rights Overview

IP Right What It Protects

PATENT INVENTION

COPYRIGHT EXPRESSION

TRADEMARK BRAND REPUTATION

TRADE SECRET VALUABLE INFORMATION

IP Rights Overview

http://www.slideshare.net/ChrisNeumeyer/trade-secret-protection-in-taiwan

Patent v. Trade Secret

• Patent:– A limited monopoly (exclusive right to make, use, sell, offer for sale, and import) in exchange for publicly disclosing information

• Trade Secret:– Confidential information from which the owner derives an economic benefit by preventing it from being publicly known

• Patent v. Trade Secret:– Mutually exclusive

– Alternative protection

Patents• Theory • Subject Matter• Prosecution• Exclusive Rights• Infringement• Remedies

Patents: Theory

• Patent protects new and useful inventions

• Bargain between government and inventor – Government grants limited monopoly in exchange for disclosure of invention to the public

– Meant to encourage innovation

• Constitutional Basis: Article 1, Section 8– “The congress shall have power… To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.”

– To promote the progress of science and useful arts– exclusive right

– limited times

– discovery (new)

Patents: Subject Matter

• Utility Patents: any new and useful (35 U.S.C. §101)– Process;; Machine;; Manufacture;; Composition of matter

• Design Patents: non-functional aspects of a product design

– User Interface

– ICON

• New Models:

– Not in U.S.

Patent: Ownership

• Inventor / Assignor: who gets the idea• Patentee / Assignee: who owns the patent right• Invention made on-duty (職務發明)– Inventor: Declaration, Assignment– Ownership: Assignee

Patents: Subject Matter

• Ineligible Subject Matter:– Abstract Ideas

– Laws of nature

– Mathematical formulas

– Naturally occurring articles

• Examples:

– DNA/RNA (cDNA;; Myriad);; Cloned creatures (Harvard mice)

– Medical treatments (Mayo)

– Software algorithm (Alice)

– Business method (Bilski)

Patents: Prosecution

• First to Invent v. First to File


• U.S.: – Before March 16, 2013: First to invent– After March 16, 2013: First Inventor to File

• Rest of the World (ROW): – First to File


• U.S. Patent and Trademark Office (USPTO) requires

– Novelty (35 U.S.C. §102)• Prior Art: Prior to effective filing date

• Not already published or patented

• Not already publicly known by others

– Non-obviousness (35 U.S.C. §103) • People Ordinary Skilled in the Art (PHOSITA)

– Specification/Disclosure (35 U.S.C. §112)

• Written Description: Describe Inventor’s regard invention

• Enablement: Enable PHOSITA to practice the invention

• Best Mode: No longer required (America Invent Act, AIA)• Definiteness: Clearly defining what is being claimed

Patents: Exclusive Rights

• Rights to exclude others from– Make within the U.S.

– Use within the U.S.

– Sell within the U.S.– Offer for sale within the U.S.

– Import to U.S.

• Terms of exclusive right– Utility Patent: 20 years from filing– Design Patent: 14 years from

being issued

Patents: Infringement

• Types of Infringement (35 U.S.C. §271) – Direct Infringement: make, use, sell, offer for sale, import

– Indirect Infringement: (NOT in Taiwan)

• Induced Infringement: Inducing some to infringe• Contributory Infringement: making, selling, offering for sale, or importing a non-staple component that has no non-infringing use

– Divided/Joint Infringement (Akami): still not protected

• Activities outside the U.S. can be infringement– Making a product by a patented process and imported into U.S.

– Within U.S. (e.g., “control and beneficial use”;; )

• A license is an agreement not to sue for infringement– But you may still be sued for infringing others patents

Patents: Remedies

• Injunction Relief: forbidding future infringement – Easy to get for competitors

– Not easy for “patent trolls”

• Damages: Monetary adequate to compensate patent owner– Lost profits: but … for …

– No less than a reasonable royalty

– Punitive damages: can be up to three times if infringement is willful

• Attorney’s fee: Only in “exceptional cases”

Trade Secrets

• Definition• Misappropriation• Remedies• Considerations

Trade Secrets: Definition

• TRIPS Agreement, Part II, Sect. 7: Protection of Undisclosed Information, Art. 39, Par. 2, 1994– Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent in a manner contrary to honest commercial practices so long as such information:

– Is secret in the sense that it is not, as a body or in the precise configuration and assembly of its components, generally known among or readily accessible to persons within the circles that normally deal with the kinds of information in question;;

– Has commercial value because it is secret;; and

– Has been subject to reasonable steps under the circumstances, but the person lawfully in control of the information, to keep it secret.


• Unif. Trade Secrets Act (UTSA) § l(4)– A trade secret is any information, including a formula, pattern, compilation, device, method, technique, or process, that:

– derives independent economic value, actual or potential,

– from not being generally known to, and not being readily ascertainable by proper means by, other persons who can obtain economic value from its disclosure or use, and

– is the subject of efforts that are reasonable under the circumstances to maintain its secrecy

• See also, – Restatement (Third) of Unfair Competition, § 39

– Restatement of Torts, § 757 comment b


• State law, NOT Federal law– Statute: Each state varies but similar

– Cases: May be very different (e.g., California)

• Example: Non-Competition Agreement– Restriction of time period, geographic range, position, etc.– Most states consider restrictions reasonable, so the agreement is enforceable

– But in California, generally unenforceable


• Examples: – Plans or designs of products

– Manufacturing process

– Customer lists– Employee lists

• No pre-determined limit on the length of protection– Cola-cola recipe


• Trade Secrets v. Know-how– Know-how: Information that enables one to accomplish a particular task or to operate a particular device or process. Not a legal term of art. (McCarthy’s Desk Encyclopedia of Intellectual Property, Second Edition, p.236)

– NOT synonyms. Secrecy is critical

• Trade Secrets v. Patent– Supreme Court (Kewanee Oil, 1974): perfectly viable alternatives.

– “Inextricably intertwined”: Most R&D data and collateral know-how cannot and need not be included in patent applications — grist for trade secrets.

– All patents are born as trade secrets. Trade secrets precede, accompany and follow patents

Trade Secrets: Misappropriation

• UTSA § l(2): Misappropriation " means: – (i) acquisition of a trade secret of another by a person who knows or has reason to know that the trade secret was acquired by improper means;; or

– (ii) disclosure or use of a trade secret of another without express or implied consent by a person who (A) used improper means to acquire knowledge of the trade

secret;; or (B) at the time of disclosure or use knew or had reason to know

that his knowledge of the trade secret was (I) derived from or through a person who has utilized improper means to acquire it;; (II) acquired under circumstances giving rise to a duty to maintain its secrecy or limit its use;; or (III) derived from or through a person who owed a duty to the person seeking relief to maintain its secrecy or limit its use;; or

(C) before a material change of his position, knew or had reason to know that it was a trade secret ad that knowledge of it had been acquired by accident or mistake.

Trade Secrets: Misappropriation

• Trade Secret arises from either one of both theories: – Tort Theory: Acquiring the trade secret by improper means;;– Contract Theory: Disclosing or Using the trade secret without consent when the trade secret was received under the circumstances where there was a duty to keep secrecy

• When learning a trade secret is NOT misappropriation:– Independent invention– Reverse engineering– Observation in public use– Observation in public literature

Trade Secrets: Remedies

• Injunction – irreparable injury and – inadequate remedy at law – Easier to meet the requirements

• Damages– Lost profits– Reasonable Royalty– Profits made by person misappropriating trade secret

• Criminal Prosecution:– Federal Crime (Economic Espionage Act)– State Law

http://s.hswstatic.com/gif/white-collar-crime-7.jpg

Trade Secrets: Considerations

• Reasonable efforts to protect secrecy– Security procedures:

• Mark “confidential information” or “Do Not Copy” on documents• Don’t cc’d to broad email list (“need to know” basis)• Security guards, badges, cameras• Camera and storage device prohibited• Locked room with limited authority to access• Recorded access to sensitive information• ID and/or password for photocopiers and/or computers• Routine shredding procedure

– Contracts • non-disclosure agreement• non-competition agreement• non-solicitation agreement


• Non-Disclosure Agreement (NDA):– To protect trade secret and other confidential information– Easier to enforce than non-competition agreement and non-solicitation agreement

– Often include “Assignment of Inventions” clause to ensure the company (not employee) owns trade secret and other confidential information

• Non-Competition Agreement– An agreement to not engage in activities compete with those that delineated in the agreement

– Often, employees agree not to work for a direct competitor for a certain amount of time after leaving the company

– Must be reasonable in duration, territory, and the scope of prohibited activities

– Not enforceable in all jurisdictions


• Non-Solicitation Agreement:– Not to solicit customers of the company– Not to solicit other employees of the company– After the employee stop working for the company– Usually directed to managers of the company– Some terms may be construed as a “non-competition agreement”– Not enforceable in all jurisdictions

http://blog.ericgoldman.org/archives/shutterstock_128228135.jpg

Patents or Trade Secrets : Considerations

http://blogs.orrick.com/trade-secrets-watch/2014/10/15/on-obtaining-and-asserting-both-trade-secret-and-patent-protection-the-itc-and-federal-circuit-weigh-in/

Patents or Trade Secrets : Considerations

• Consider:– Value of information – Cost of patent filing & maintain– Easy of reverse engineering or not– Easy of detection or not– Easy to prove infringement or not– Easy to maintain secrecy or not– Life span of its economic value

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Case Study: Apple v. Samsung

http://www.vanityfair.com/business/2014/06/apple-samsung-smartphone-patent-war

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Apple v. Samsungv.

• Apple’s patent claimsSample Design Patents Patented Design

U.S. Pat. No. D593,087, Electronic Device

U.S. Pat. No. D504,889, Electronic Device

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Apple v. Samsungv.

http://blog.thomsonreuters.com/index.php/tag/ip/

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Apple v. Samsungv.

• Samsung’s patent claims

Sample Patents Asserted

U.S. Pat. No. 6,928,604, Turbo Encoding/Decoding Device and Method for Processing Frame Data According to QOS

U.S. Pat. No. 7,050,410, Apparatus and Method for Controlling a Demultiplexer and a Multiplexer Used for Rate Matching in a Mobile Communication System

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Apple v. Samsungv.

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Apple v. Samsungv.

http://blog.thomsonreuters.com/index.php/tag/lawsuit/

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Apple v. Samsungv.

• On remand, the district court granted Apple’s request for preliminary injunction without a hearing on 6/26/2012, imposing a temporary ban on the sale of Samsung Galaxy Tab 10.1. – Samsung has appealed the order to the Federal Circuit.

D’889 Patent

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Apple v. Samsungv.

http://appleinsider.com/articles/11/09/16/samsung_files_patent_case_against_apple_in_australia_over_iphone_ipad

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Apple v. Samsungv.

http://www.fosspatents.com/2013/09/german-court-dismisses-apple-lawsuit.html

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Intellectual Property from the Start-up’s Perspective

Intellectual Property = High Cost Services requiring considerable input and time from company

personnel

Start up = Limited Resources and Time

Just how does the start-up or early stage project address intellectual property concerns…..

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Outline

• Tip #1 - Develop an IP Strategy Early and Review Regularly

• Tip #2 – Allocate IP budget wisely• Tip #3 - Conduct Trademark and domain name searches early

• Tip #4 - Establish proof of invention/ownership• Tip #5 – Be aware of what you tell others

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Set IP Benchmarks and Goals

• Goal: Create an IP Portfolio that is relevant1. Relevant to technology in development2. Relevant to the product and business3. Relevant to the market place and competitors

• Result: An IP portfolio that:1. Directly contributes to the valuation of the business2. Supports the commercialization of the technology and product

3. Posses barriers of entry for competitors

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Consider all forms of IP

• Patent – protects new and useful products and processes

• Design Patent – protects ornamental features (including GUIs)get t

• Copyright – protects expression• Trademark – protects brand and logo• Domain Name – establishes identity on the Web• Trade Secret – what you don’t want the word knowing

• Know-how – what you’ve learned along the way

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Form a plan

• At a minimum, the plan should include:– Plans for a patent committee that meets regularly

• At least once a quarter– A realistic budget – Filing schedules and goals– Identification of technologies to be protected and the type of IP (e.g., patents, trademarks, copyrights, or trade secrets) that will best protect the products and other IP assets.

• A company can waste time and money by randomly trying to protect IP that does not conform to a clear strategy

• IP strategies must be tailored to the company

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Know your business

• Knowing how to build your portfolio depends on your business, the marketplace and how the technology is used in you business and the larger market.

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Know your potential investors

• Investor interest– Will numbers matter?– Will quality matter?– Will jurisdictional breadth matter?– Will timing matter?

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Understand how the IP will be used

• What will the technology and IP do?– Support a proprietary device, compound, process, or method

– Support a licensing model– Discourage knock-offs and counterfeits– Attract investment, partners– Monetize fields of use not aligned with business– Defensive war chest– Offensive war chest– Provide value if start-up is not successful– All of the above

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Outline




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Generating a Budget

• IP can be core value of start-up or early stage endeavor

• Budget should be realistic – Make all IP related decisions with IP budget in mind– Consider budgeting for initial IP protection (foundational IP) separately from the quarterly or yearly budget

• Consider IP budgeting separately from other legal costs– This can help focus your IP efforts and show commitment to protecting your company’s intellectual property

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Avoid narrow focus of patents

• Building a portfolio is a process not a check list• Avoid focusing solely on your technology, product or market

• Work toward broad but detailed disclosure• Include multiple embodiments and ways to commercialize

• Continuation practice• Re-alignment with technology, market, business strategy

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Avoid short cuts and detours

• Beware of perfunctory provisional patent applications– Provisional applications have a purpose– Risk in filing a narrow or incomplete disclosure

• Beware of IP filings that are not part of an overall strategy

• Beware of unnecessary or premature product clearance and prior-art studies

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Avoid overspending on protection in non-relevant jurisdictions

• Plan for international filings, avoid last minute decisions regarding international portfolio development– Provide a method for deciding the countries in which the invention will be protected based on its importance, cost and the availability of protection under local law.

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Outline




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Trademark and domain name searches

• Trademark and Domain Name searches are relatively cheap

• Secure product and company names and logos early

• Risks:– Added expense– Wasted effort– Rebuilding brand identification and goodwill– Litigation

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Outline




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Who owns the IP?

• Make sure that the company, not the employees or principals, own the IP.

• Protect your company’s IP with proper agreements– Require employees to assign IP to the company in employment agreements

– Applications should be explicitly assigned to the company.

– Confidentiality agreements to protect company trade secrets

– Non-compete agreements to prevent employees from leaving company and taking valuable know-how to a competitor

– Consider IP ownership in agreements with partners

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Outline




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Disclosure is a double-edged sword

• To promote your idea and company, you have to share your ideas with others

• But, beware of Statutory Bars– Your own activities can prevent you from obtaining a patent

– Beware of publication (paper, speech, presentation) of invention

– Beware of commercial use (offer for sale) of invention– In U.S., a patent application must be filed within one year

– “absolute novelty” system: any publication or offer for sale prior to filing = complete bar

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What to do?

• Consider early filing of patent application(s)• If early filing is impossible for time/financial reasons– Consider whether/what you really need to disclose– Consider whether an non-disclosure agreement (NDA) is possible

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Benefits from a well thought through intellectual property plan

• Control Costs• IP aligned with business and technology• Flexible IP• Validation• Tangible expression of complex ideas/technology for evaluation in diligence

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Final Thoughts

• IP is a critical aspect in the growth cycle of an early stage endeavor.

• IP plan should be done early and relied upon when developing IP

Questions?

f723000_class#17 發明與專利abc 陳志光 (tsmc公司律師)

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