IP protection & commercialization strategies

Pierre MelocheNRC-IRAP

May 20, 2011

Types of Intellectual Property (IP)

• Patents

• Confidential information

• Copyright

• Trade secrets (know-how)

• Trade marks

• Integrated circuit topographies

• Industrial designs

• Plant breeders rights

Why protect IP?

• Protect ownership rights

• Control and manage technology transfer (IP) by means of a license, assignment or other contractual arrangement

• Establish means to pursue infringers

• Increase competitive advantage

• New source of revenue

• Maximize return on investment

• Foster industrial growth

Protecting the invention (patent)

• Patent: exclusive right to exclude others from using, manufacturing or selling the invention

• Targets new inventions (apparatus, process, product, composition of matter or improvements thereof) that have: – novelty (new, innovative)– utility (workable, practical, useful)– inventive (ingenuity, non-obviousness to one who is skilled in the art)

• Patent application must be filed (formal or provisional)• If published, 12 month grace period in USA, Canada and Australia to

file formal application• absolute novelty (no publication) required elsewhere Europe, Japan,

BRIC• Life of patent: 20 years from the filing date (territorial)• First to file (world) except US (first to invent)

Patent costs (2010)

• Prior art search ($1.5-3K)

• Provisional patent application ($2.5-5K)

• Draft and prosecute patent application (1: $10-25K; + $5-10K)

• Patent application filing fee

• Examination fees

• Issue fee

• Maintenance fees: escalates as patent ages

• Patent Cooperation Treaty (PCT): for multiple country filings; lower costs till the National Phase (30 months); add translation

Factors influencing patent strategy

• Prior art search may flush out prior publications• Need to publish (but file first!)• Type of invention: improvement or breakthrough?• Adding value to the Crown jewels or a vanity patent?• Is patent protection feasible and useful?• Are trade secrets a viable option?• Status of technology development?• Hot subject matter: are others in the race to patent?

Factors influencing patent strategy (cont’d)

• Partner / collaborator identified? • Can I afford not to protect?• Technology platform: can I license fields of use of lesser

interest and generate additional revenue?• what is the exit strategy?• Targeted countries for filing patent application?

– where: USA, Canada, world wide?– where are the markets?– who are your competitors (potential infringers)

• case by case

Trade secrets

• Confidential information (know-how) that provides a commercial advantage

• Prevents others from using it

• Can not be registered but is protected through non-disclosure agreement (NDA) and employee contracts

• Duration: unlimited, unless discovered by a third party

• Cost: nil, other than cost of internal secrecy measures

• Applicable to: processes, products, formulations (difficult to reverse engineer)

• E.g. Coca-cola, paints, resins, manufacturing processes

Trade secrets (disadvantages)

• Publication: can not publish, no peer recognition

• Need to implement internal policies and procedures to prevent unwanted disclosure

• Independent discovery by third party negates trade secret advantage

• At risk are commercial advantage, investment, markets

• Generally, commercial value is smaller

Trademarks

• Symbols, words, logos or shapes or a combination that are used to differentiate your wares and services from others in the marketplace

• Represents company reputation, experience and expertise (the brand) • Good product and memorable trade-mark generates goodwill with

customers• TM (adopted marks but not registered) vs registered trade marks (R-

circle) vs trade (company) name); recommend search & registration• Value increases with use, need 1rst sale• Duration: 15 years, renewable and territorial• Use: generate goodwill, strengthen the brand, counter technological

obsolescence, licensing, franchising• E.g. Coca-cola, Apple, IBM

Anatomy of a license: the exoskeleton

• Grant of IP Rights by the licensor• How the IP rights will be used by the licensee:

– types of rights– field of use– territory– sub-license– duration

• Fees and royalties• Improvements: who owns?• Protection costs: who pays?• Infringement: who chases?• Performance: what if ….!

Examples of IP/commercialization strategies

• Software: Microsoft

• Hardware: Dell

• Biological material: GSK

• Formulations: Coca-cola, Sherwin-Williams

• Devices: Champion Spark plugs, Med-Eng, NBC Team Ltd,

Patent and trade-mark searches

• www.delphion.com

• www.uspto.com

• www.cipo.ic.gc.ca

• www.espace.com