Archive for the ‘Risks to IP rights’ Category

Who really owns that patent?

Posted on March 10, 2012 by

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Worried about employee assignment clauses? Maybe you should be. It’s time to take another look at the assignment language used in that template employee agreement you downloaded, since it could significantly affect your rights as an intellectual property holder years from now.

You need to own a patent before you can enforce it against others. In the US, inventors own the rights to their inventions until they explicitly assign the rights to someone else. If your employees don’t assign the rights over to your company, you don’t actually own that key patent. And if you intended to use it as a signal to investors or strategic partners, the first thing they’ll check is whether you own what you say you do. This is because the only way to enforce your patent is through a lawsuit where you request an injunction and/or damages from infringers – but, if not all of the inventors are listed as part of the suit, your case will be summarily dismissed. So, if you can’t gather all the inventors on a patent when you go to litigate, it is essentially unenforceable, and therefore useless. Between the nature of growing companies and the realities of a highly mobile workforce, it’s not uncommon for an employee or even a cofounder who invented key intellectual property to be long gone when a company decides to use that patent. This can be a real issue – especially when a company has invested a significant amount of time, effort, and money into its patents.

There are two ways to deal with this issue. One way is to have each inventor specifically assign the rights to the company after filing any patent applications, which may not be as easy as it sounds. The most common challenge arises when an employee was part of the inventive team but left before the company decided to file the patent application. In other cases, the employee may have (or suddenly develop!) a philosophical aversion to patents and/or start negotiating for additional compensation in exchange for their signature. You can avoid these issues by having employees assign their rights to the company in writing as part of your standard employment agreement. That way, any inventions arising during their employment will automatically be assigned to the company, alleviating any uncertainty.

However, the wording of that assignment needs to be precise – only a slight difference in the wording of an assignment clause in an employment agreement can render it void. The phrase “agrees to and does hereby grant and assign” is wording that will automatically assign an employee’s interest in later developed inventions to the employer. On the other hand, the phrase “agrees to execute any and all assignments or other transfer documents” is just an agreement that the employee will eventually sign the rights over but the phrase defers the actual transfer of rights to some point in the future. If this latter step is never taken, no assignment ever occurs. The distinction is slight, but the results can be disastrous – potentially resulting in an unenforceable patent.

This post co-written by Cynthia Gilbert and Hyperion Law’s Spring 2012 Intern, Kip Bodi. He is currently a third-year evening student at Suffolk University Law School with a concentration in Intellectual Property and Patent Law. He holds an M.S. in Bioinformatics from Boston University and a B.A. in Computer Science from Colgate University.

Timeline of Patent Filing Decisions

Thinking of filing a patent application? On top of having to make decisions about whether and what to file, you’ve also got a limited amount of time in which to file. If you’ve gone through the challenging process of deciding what is worth protecting, from both an innovation perspective and a business perspective, and decided you do indeed want to file, the last thing you want to hear is that you’ve waited too long and lost your right to file. Even once you’ve filed your first application (which is often a provisional), there are a number of decisions to make regarding whether to formalize provisionals and whether to file outside the country. This timeline provides an overview of the decisions you’ll need to make:

Timeline of patent-related decisions

Notice how the timeline changes if you don’t decide to file until after you’ve made a public disclosure:

You’ll have set a new, 12-month deadline for filing any US applications and may have lost the right to file internationally. Now, you may or may not need to file patent applications, but ideally that would be an informed decision – not because you didn’t know that doing that beta test would mean you couldn’t file later!

Notice that at the moment, most applicants for technology patents won’t hear from the US Patent Office for years from the filing date. This means it’s particularly important for you to consider what the benefits are to filing an application – you want to be really clear on those benefits before making that investment.

Whether or not you decide to file any applications, keep an eye out for these deadlines to give yourself enough time to make educated decisions.

Frequently Asked Patent Questions

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Here is a list of the most common questions clients ask me in our first meeting, with links to my posts with detailed responses:

1) Can I get a patent on software and/or business methods? Yes – but the real question is should you?

2) I’ve heard about provisional applications and non-provisional applications; what kind do I need? It depends – on how advanced development is, how soon you’ll be discussing the innovation in non-confidential settings, and how well funded your company is.

3) When do I need to file an application? Timing really does matter and the answer is often as soon as possible.

4) Is it expensive? Definitely. It also takes a number of years to get an issued patent. This means it’s extremely important to determine whether your company would benefit from investing in a patent application – before you file.


Is it really OK to continue?

Posted on May 18, 2011 by

How toNo one, not even an off-duty lawyer, enjoys wading through onerous, boring, never-ending fine print. Especially not when all that stands between them and sharing their favorite music, art, or other media with friends and fans is clicking on one little “ok” button!

But if you care about what other people can do with what you upload, you really need to understand those terms of service. This is especially important if you are a professional with a business interest in your data – a photographer posting photos to Twitter where his followers can give real-time feedback, or a musician sharing a new music video with her Facebook fans. An example of why reading the terms is so important came up on May 10 when Twitpic changed their terms of service, helping themselves to a lot more of your rights.

The new terms require that users let Twitpic give “affiliates” the rights to use, distribute, make derivative works, and reproduce an uploaded item, for free, forever, without asking the users. Now, a musician might be okay with letting Twitpic use her song in an ad for the service without paying her – could be great PR and a fair exchange for the benefit the musician gets from the service. But what’s this affiliate business? There’s no definition of affiliate so it could be anybody. Is it Twitpic’s employees, vendors, favorite news organizations? A company they do business with – perhaps a big search engine, social network, or computer company? A competitor of mine who also uses the service? Is it anyone I think ought to be paying me for the right to play that song? Doesn’t matter – by uploading the song, I’ve given Twitpic the right to decide for me who else gets free access to my song. Of course, I’m still the copyright holder, and I can still offer a license to the song to other people I approve of – but why should they pay me when they could just ask Twitpic for a free license?

These terms are not unusual – and courts have held that these kinds of click-ok-to-agree contracts are actually binding. If you create media and consider yourself a professional with any level of business interest in what you create, it’s really important to evaluate what media you share on-line and what the terms of service mean for you professionally. Decide what you’re ok with *before* continuing!


Why Timing Matters in Patent Law

Posted on March 6, 2011 by

Chess pieces The two biggest, non-financial questions to ask yourself in deciding when you want to file your patent are 1) could you have competitors working on a similar invention and 2) when did you first tell anyone about your invention?

Every day you put off filing your patent application is another day someone else has to complicate your efforts to get a patent by filing for a patent on the same or a similar invention. That’s because the date on which you file that application plays a big role in defining what kinds of documents the Patent Office can use in rejecting your application, which ultimately impacts how broad or narrow your patent rights will be and how tough a fight you’ll have to get those rights allowed.

Even if you are convinced that no one else on the planet is working on this invention and that you won’t have to worry about prior art, you may still want to file that application sooner rather than later. As we’ve discussed before, if you make a public disclosure of your invention, you’ll have limited the amount of time you have in which to file that application.

While it’s all well and good to say that you ought to file sooner rather than later, you’ll need to balance these factors against your particular resource constraints. In some scenarios, you may be better off deferring detailed disclosures until you can raise the funds to file an application – or getting coaching from your attorney as to what not to say in your disclosures to others. Alternatively, you may need to make the business decision to gamble that what you’ve got is so innovative that no one else is going to come up with a similar invention before you can file your application. Regardless of your company’s particular situation, keeping these timing factors in mind will help you make sound decisions about your patent strategy.


How to Address Patent Skeptics’ Concerns

How to If your company’s growth strategy includes patent acquisition, the execution of your IP strategy will depend upon cooperation from the whole team. One challenge that you may face is addressing the concerns of anti-patent employees. For example, it’s quite common for software engineers to be skeptical of the value and propriety of patents. If your company makes the decision that it will develop an IP portfolio, clearly explaining the rationale behind the decision goes a long way to helping even skeptics understand why cooperating with the strategy makes sense.

Schedule regular meetings to address questions and concerns and to discuss topics such as how and why the company plans to use patents, what kinds of innovation the company will and won’t file on, and why it’s in the company’s best interest to pursue its patents strategy. Additionally, make someone available to employees who can do patent myth busting, answer questions, and explain the company’s perspective on IP.

When they understand how the company arrived at the conclusion to implement a patent strategy and why the company believes the strategy is important, employees tend to become much more willing to put aside their philosophical concerns for the good of the company.


3 Pitfalls of DIY Patent Provisionals

Caution signTechnically, you don’t need a lawyer to write a provisional patent application. It’s true! But you’ll miss out on having a trained eye helping you avoid all the mistakes that await the novice drafter. And, unfortunately, an improperly written provisional can really be just as bad as no application at all. Let’s look at three of the big pitfalls to watch out for.

When Creating a Buzz Impacts Patentability

Caution signAs an inventor, it’s not surprising that you want to tell others about your invention, especially if your company is releasing new products or functionality based upon it. For example, you may display a poster and an abstract at a conference, send a marketing team off to a trade show, or give a talk at a networking event. However, in doing so, you may have just unintentionally and permanently voided your right to a patent!

One of the most critical things to understand about patents is how disclosures can impact your patent rights, regardless of whether you are an inventor, an engineer, or the CEO of the next hot startup. Mishandling your IP in the early stages of a product launch can create a long-term risk that could complicate your efforts to win a patent, and potentially even kills financing or licensing deals for many years to come.

This article gets into some of the risks around the issue of disclosure. After we discuss what can go wrong, I’ll cover the best approaches for prevention in Part II.