With ever-increasing merger and acquisition activity among corporations large and small, it is becoming increasingly difficult for corporate counsel to track effectively the ever-expanding intellectual property portfolio of their companies.
The practical consequences can be significant.
Patent law is a time-sensitive practice. There are many deadlines for filing applications, converting provisional applications into utility applications, responding to inquiries from the U.S. Patent and Trademark Office, filing applications in foreign countries, and making regular tax and annuity payments on those patents.
Trademark law is replete with deadlines as well. U.S. registered trademarks must be renewed every 10 years and comparable deadlines also exist for those filed in foreign countries. Moreover, if the mark is neither used nor enforced, rights dissipate or disappear.
Corporate counsel can ensure the successful integration of a company’s intellectual property by launching a comprehensive intellectual property portfolio management program.
A comprehensive intellectual property program will yield a well-managed, more complete and more easily reviewable IP portfolio, which will protect a company’s position in the marketplace and prevent competitors from profiting from another’s ingenuity.
A checklist of the key components of such a program might include the following.
Undertake a complete, centralized review of the company’s patents, trademarks and copyrights.
Assess the value of each element and determine those patents and trademarks that are still worth keeping.
Review all employment contracts to ensure that appropriate language exists that grants ownership to the company of any work-related intellectual property developed by employees. It is critical that employment agreements include an obligation to assign patents to the company. Otherwise, ownership rests with the employee since in the United States patents issue to the inventors and not to the company.
In cases where there is more than one inventor on a patent each inventor has a 100 percent undivided interest in a patent. If unaddressed, ownership and licensing interests can get diluted and very complicated.
Assess the efficacy of the company’s confidentiality and non-disclosure agreements aimed at protecting intellectual property.
Similarly, evaluate the company’s trade secret policy and processes to ensure that valuable subject matter is not in the public domain and provides a competitive advantage protected under law. A trade secret is essentially information – including a formula, pattern, compilation, program, device, method, technique, or process – that derives independent economic value, actual or potential, from not being generally known, and not being readily ascertainable by proper means by other persons who can obtain economic value from its disclosure or use. However, to be a trade secret it must also be the subject of a series of efforts that are reasonable under the circumstances to maintain its secrecy. It is these steps that the trade secret policy should address.
Initiate an idea disclosure program – with set forms and procedures – for review by an in-house committee that will enable the organization to respond to patentable ideas in a timely manner. Idea disclosure programs are also important in contested matters because they provide corroboration in establishing the date of conception for an invention.
Institute company-wide intellectual property seminars that highlight the importance of the company’s intellectual property and encourage fresh ideas. Surprisingly, many valuable ideas by employees within companies are pursued but not patented because key company officials are ill-informed about the legal standards for patentability.
Publish IP policies to facilitate institutional action on patentable ideas.
Take advantage of the provisional patent application process. In the United States, public disclosure of an invention starts a one-year clock ticking and destroys the ability to obtain patent protection in most foreign countries. If a patent application is not filed within that time frame, the inventor(s) is foreclosed from obtaining a patent. For minimal expense, a provisional patent application enables an applicant to gain prompt patent pending status while assessing the business viability of the invention. The applicant then has up to a year to convert the provisional patent application into a “regular” patent application.
Survey recently issued U.S. and foreign patents to identify those that enhance and complement one’s existing patents. If possible, pursue licensing agreements with the most promising.
Renew efforts to monitor competitors’ products in catalogues and industry publications that appear to infringe on your company’s patents and take steps to remediate the situation.
Police your company’s trademarks.
Richard R. Michaud is the managing partner of the Michaud-Duffy Group LLP, an international intellectual property law firm based in the greater Hartford, Conn. area that serves corporate clients in New England, throughout the United States and around the world. He can be reached at (860) 632-7200 or at [email protected]. The Michaud-Duffy Group concentrates solely in patent law, trademark law, trade secret law, copyright law and related transactional issues.
New England Biz Law Update
