Intellectual PropertyLegal Bootcamp

December 2013

Presented by James Longwell, Partner

The information in this presentation is for general information purposes only. It does not constitute a legal opinion or other professional advice.

2

Level 1 -

INTELLECTUAL PROPERTY OVERVIEW

AND

NON-DISCLOSURE AGREEMENTS

3

Intellectual Property (IP):

• Rights (limited monopoly) over creations of the mind

• Intangible property, not like a car, real estate or a dog

• Territorial: register rights with each country where protection is desired

• Multiple types of IPwith different rules forownership, registration, etc.

Basics: Intellectual Property

4

Basics: Intellectual Property

Types of IP Coveredin this Presentation:

• Patents

• Trade-marks

• Copyrights

• Industrial Designs

• Trade Secrets

5

Patents

What is a Patent?

A patent protects an invention:• a new and useful product, composition,

apparatus, machine, process, or

• improvement thereto

6

Patents (Cont’d)

What is Patentable?• Can’t patent math or science in the abstract – must have a

practical application

• Business methods – Federal Court says not prohibited if you can fit into one of the groups – process, system, etc.

• Software – as a method/system/product in Canada and most other jurisdictions

• Methods of medical treatment and “higher” life forms are NOT patentable in Canada but may be in other jurisdictions

7

Patents (Cont’d)

Patentability Criteria• An invention is patentable if it is:

useful

new

not obvious

8

Patents (Cont’d)

Practical Tips:

• Keep invention confidential prior to filing a patent application

• Publication may bar filing, or restrict filing options

• Publication includes any non-confidential disclosure

• Publication includes any disclosure that is available to the public

• For the US, a sale or offer to sell, even if secret, triggers one year clock to file patent application in the US

9

Patents (Cont’d)

Patent Protection:

• Once granted, the patent owner obtains:• the right to exclude others from

making, using or selling the invention for a limited time in country of grant

• Not a right to practice but to exclude others

• May be subject to prior patent rights

10

What is a Trade-Mark?

• Slogan: I AM. CANADIAN

• Symbol: [CBC]

• Word(s): CANADIAN TIRE

• Word & Design: [Cuisipro]

• Shape: [Coca-Cola bottle]

• Distinguishes the products/services of one business from another to indicate the source and/or character/quality

Trade-Marks

11

Copyright

What is Copyright?• Protects the expression of an idea, not the idea itself

• It is the exclusive right to produce or reproduce an original work

• Literary – e.g. software

• Dramatic, Musical, Artistic

• Copyright is automatic once the work is fixed

• e.g. saved or recorded to media

•Author is first owner • Exception for works made by employees

12

What is an Industrial Design?• Visual features of shape, configuration, pattern or

ornament or any combination of those features applied to a manufactured article made by hand, tool or machine

• Apple v Samsung – largest ever US patent award

APPLE US COLOUR GUI

APPLE IPHONEDEVICE

MICROSOFT ICON GUI

Industrial Design

13

Industrial Design (Cont’d)

• Key steps to obtaining industrial design protection:• no or recent (within 1 year) public disclosure of the design prior

to filing

• filing of the application

• examination – originality

• Some copyright works may also qualify as industrial designs. Copyright may be lost if more than 50 articles are made, therefore register as an industrial design

14

Trade Secrets

What is a Trade Secret?

• Information which is secret and has value to the holder, for example:

• know how for technical or business processes: Cadbury Caramilk, formulae for COKE or KFC

• an invention before it is made public

• financial information (e.g. cost/pricing)

15

Trade Secrets (Cont’d)

• Impose a duty of confidence on receiving party before sharing, for example, through NDA or implied agreement/ circumstances

16

Five IP Pitfalls:• Patents – disclosing invention before filing as most

countries do NOT provide a grace period

• Trade-marks – using your mark improperly

• Copyrights – assuming protection extends to the idea expressed

• Industrial Designs – assuming copyright applies when more than 50 articles embodying work are made

• All IP – failing to deal with ownership of IP when hiring contractors to do development work

Basics: Intellectual Property

17

DISCLOSING TRADE SECRETS AND CONFIDENTIAL INFORMATION

18

Practical Approaches:

• Using phased disclosure of confidential information

• Just saying no

• Implementing “need to know” policies (internally and externally)

• Educating and setting clear expectations for employees concerning confidential information

• Use non-disclosure agreements (NDAs)

Practical Approaches to Protecting Confidential Information

19

LEVEL 2 LEGAL BOOT CAMP

Common Challenges That An Early Stage Company FacesAs It Grows And Commercializes Its IP:

1. Funding and Financing

2. Licensing Basics

3. Patent And Trade Secret Strategies

20

Level 2 –

PATENTS - IP STRATEGY

21

Overview

Strategy: • To File or Not to File

• US Provisional vs. US Formal (Non-Provisional)

• Where to File?

22

Strategy

• What is your IP Strategy?

23

Strategy

• What, when, and where to file must be part of an overall IP strategy for your business and any particular invention

• Forms of IP:

- Copyright

- Patent

- Trade-mark

- Industrial Design

- Trade Secret

24

Strategy: To File or Not To File?

• Shield

• Sword

• Valuation

• Revenue

Cost of typical patent suit in US is $5M-$7M

25

Strategy: Where to File?

• What is your Business Plan?

• Short term:

- maximize valuation and opportunity

- establish US portfolio, keep other options open

• Long term:

- Market considerations:• offensive and defensive

• Where are you making/using/selling/licensing?• Where are your competitors doing the same?

• Prioritize inventions

26

Strategy: Where to File?

Options for protection in multiple countries:• Priority Application

• First application filed for the invention• Typically filed first in largest market (US)

• Convention Applications• Second filed application to the same invention• Filed within 12 months of the priority application • File directly with country and/or with PCT Office

• Patent Cooperation Treaty (PCT)• Holding mechanism to defer decision to file in specific

jurisdictions• File International Phase with PCT Office and then National

Phase with specific Patent Offices

27

Strategy: Where to File?

• Example scenarios:

(6 mths)

?

1Yr 1.5Yr(12 mths)

invent firstapplication

0Yr

updatecountry

applications

applicationspublish

1Yr 2.5Yr(12 mths) (12 mths)

invent firstapplication

updatePCT

application

country applications

?0Yr 1.5Yr

(6 mths)

applicationspublish

28

Strategy: US Provisional vs. US Formal

• What are the differences between US provisional and US formal (non-provisional) applications?

29

Strategy: US Provisional vs. US Formal

- complete application (full description, drawings, claims)

- formal papers signed by inv.

- full government fees

- publication

- examination

- potential 20+ year term

- may claim priority to earlier appln.

- requires full disclosure of invention

Formal Provisional

- relaxed application content (e.g. no claims, sketches permitted)

- few formal papers

- reduced government fees

- no publication

- no examination

- expires in one year

- cannot claim priority to earlier

- requires full disclosure of invention

30

• Only claims supported by the provisional application are entitled to the benefit of its priority date

• European Patent Office practice generally requires exact descriptive support in provisional application for claim language in formal application

• Self-disclosure of the new subject matter before the formal application filing date may jeopardize the available scope of the formal application particularly in jurisdictions where there is no grace period

Strategy: US Provisional vs. US Formal

31

Strategy: Costs

• What is your IP Budget?

32

Strategy: Costs

$$ $ $$$...(12 mths) (18 mths)

invent firstapplication

updatePCT

application

country applications

?

33

Strategy: Conclusion

• Establish an IP strategy

• There is value in uncertainty (e.g., a pending patent application)

• PCT keeps options open but at high cost• Why file PCT if you have no intent to go worldwide?

• Prioritize inventions:• business plan

• patentability

• budget

Thank You

montréal · ottawa · toronto · hamilton · waterloo region · calgary · vancouver · beijing · moscow · london

James Longwell

Partner

Toronto Office

416-862-4325

james.longwell@gowlings.com