IP Management and Strategies
Karl F. Jorda
David Rines Professor of Intellectual Property Law & Industrial Innovation
Director, Kenneth J. Germeshausen Center for the Law of Innovation & Entrepreneurship
Franklin Pierce Law Center
Two White Street, Concord, NH 03301 USA
Seminar
Siam Cement Group
Bangkok, Thailand
December 19-20, 2006
INTRODUCTION
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Live in “Golden Age” for IPRs
Patent filings and issuances are skyrocketing
Talk of patent “revolution,” “explosion,” “frenzy”
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“Anything under the sun that is made by man” is patentable
Courts, Congress, Justice Department — pro IPRs
Corporations built on patented technologies
Motto: Innovate or perish
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Value of IPRs for securing exclusivity — simply invaluable
Royalties for licensing IPRs in 2002: $150 billion
Over $1 billion for some companies
Universities jumped on bandwagon
Getting patents, concluding licenses, collecting royalties
THE AMERICAN PATENT
SYSTEM
• The Constitution gives Congress the power to promote the progress
of the useful arts by securing for inventors the exclusive right to their
discoveries for limited times. (U.S. Const. art. I, § 8, cl. 8.)
• “The issue of patents for new discoveries has given a spring to
invention beyond my conception.” (Thomas Jefferson)
• “The patent system added the fuel of interest to the fire of genius.”
(Abraham Lincoln)
• “The American patent system has promoted countless applications
of the arts and sciences to the needs and well-being of our people.”
(Franklin D. Roosevelt)
• “The advancement of the arts, from year to year, taxes our credulity
and seems to presage the arrival of that period when human
improvement must end.” (Henry L. Ellsworth, Commissioner, Patent
Office Annual Report for 1843)
The Global Landscape
A. Favorable Development & Trends Abroad
India– a sea change total about-face
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IP taught in schools
“Patent or Perish” (Chamber of Commerce)
“IP literacy,” “IP awareness”– buzzwords
“Bring IP down to the people”
Changes in philosophy:
Indonesia, Canada, “south of the border”
Substantial revisions of IP systems– pre- and postTRIPS
The Global Landscape
Sea change in India in Viewing IPRs
In 1992 at a WIPO IP Education Program at the Delhi University
•There was small attendance—academics
•I was crucified for my pro-patent views
In 2001 at a similar WIPO Program in New Delhi
•I experienced a complete about-face. Now that IP is available in
abundance in India.
•IP being taught in “all academic schools” under government
sponsorship
•New Chamber of Commerce slogan: “Patent or Perish”
•“IP literacy” and “IP awareness” have become buzzwords
•Efforts to “bring IP from a legalistic ivory tower down to the common
man”
•Initiatives for IP studies springing up all over
The Global Landscape
Seachange in India in Viewing IPRs
(con’t.)
• Only skeptical undertones
•Reservations about pressure coming from developed world and
•Deep seated believe that knowledge should be free and not monopolized
In 2002 I lectured at such an institute in Mumbai to a receptive audience for two
days on Patent Management, Patent Licensing, Trade Secrets, Patents/Trade
Secret Interface and Reverse Technology Transfer
For the past 5 years or so Indian students have been our biggest country group
of students
• India still pushes the “development agenda” of developing countries at WIPO
but no longer asserts that “IP is the common heritage of mankind and should
be free”
The Global Landscape
B. Antipathy, hostility still persists in many
countries
“Spreading the gospel” in developing
countries:
• Conveying my Credos-Insights-Truisms
• Fending off critical comments and test
questions
• Urging a six-phase course of action for
implementing effective IP systems
International Harmonization
Steady advance of harmonization of IP systems
Increasing discussion and growing literature on global, universal or
world patent
Stepping stones:
Extant and pending international regional treaties:
• Paris Convention
• PCT
• TRIPs
• Patent Law Treaties
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EPC
OAPI/ARIPO
EAPC
NAFTA
“World Patent”:
Ongoing initiatives: Kyoto Action Plan
Focus on Europe, Japan, USA 90% of patent activity
Major harmonized features
Other Possible vehicles: PCT, EPO
Mossinghoff: will come “sooner rather than later”
WORLD PATENT
A. Stepping (Miles) Stones
1. International Treaties
• Paris Convention (1882) – WIPO
• Patent Cooperation Treaty (PCT) (1970)– WIPO
• Trade-Related Aspects of IPRs (TRIPS) (1995)—
WTO/WIPO
• Patent Law Treaty Proposals (WIPO)
2. Regional Treaties
• European Patent Convention (EPC) (1973)
• European Community Patent Convention (CPC)
(when?)
• OAPI (1958), ARIPO (1976) in Africa
• Eurasian Patent Convention (EAPC) (1995)
• North American Free Trade Agreement (NAFTAChapter 17 (1994)
WORLD PATENT
(con’t)
B. World Patent System (as per Gerald Mossinghoff—38
IDEA 529 (1998) and J.C. Rasser, Procter & Gamble,
IPO Mtg, 4/1/98)
1. Essential Characteristics
• Unitary Patent Grants by Regional Patent Offices
• First-to-file Priority
• Provisional Applications
• One-year Grace Period
• English Language for Examination and
Enforcement
• Single Electronic Prior Art Database
• World Patent Court
WORLD PATENT
(con’t)
2. Additional Problem Areas
• Definition of Patentable Subject Matter
• Definition of Prior Art
• Claims Interpretation—Peripheral or Central
• Best Mode Requirement
• Rule 56 Practice
• Patent Term Extensions
• Nature of Post-grant Procedures (Opposition or
Re-examination)
• Doctrine of Equivalents
• Sanctions for Infringement (also criminal?)
• Governing Structure of the World Patent System
WORLD PATENT
(con’t)
C. Potential (intermediate) Alternatives)
1. Trilateral Initiatives—on-going- between Europe, Japan, USA– have
90% of world patent activities—”Kyoto Action Plan”: Trilateral Network,
Common Searches, Website (1998)
2. European Patent Convention
Ulrich Schatz, EPO: EPC is already existing mechanism for a Global
Patent as any country can join EPC.
3. Expanded PCT could be vehicle for Global Patent (Francois Curchod of
WIPO, Dieter Hoinkes of USPTO)
4. “Rapid Patent” Proposal (AIPPI) (for Third World): patent application is
filed, published and kept pending for 20 years when it goes abandoned,
unless someone had requested examination during pendency. (The
ultimate deferred examination system.) Premise: developing countries
can’t live up to TRIPS standards.
5. “Reference System” Proposal (Robert Sherwood) (for Third World) –
Comparable to former confirmation paten system (PCT taken a step
further.) Same premise as 4. above.
WORLD PATENT
(con’t)
D. Future of World, Global, Universal Patent
Fact we live in a knowledge-based “global village” will
require full harmonization—only matter of time– how
soon? With TRIPS in place, “sooner rather than later”,
per Mossinghoff
And Lios Boland of USPTO goes as far to predict:
“At some point in the future, we will have an
international patent system that will have
characteristics similar to those we find in the
copyright area. That is, the right of an inventor will
be universally recognized without having to seek
patent protection in each of the countries of the
world.”
THREE STAGES OF A
CORPORATE PATENT
MANAGEMENT PROCESS
A.Harvesting Inventions
Extracting and Processing
Invention Disclosures
B.Patent Solicitation
Preparing, Filing and Prosecuting
Patent Applications
C.Patent Exploitation
Employing, Licensing and Enforcing
Patents
Harvesting Inventions
(Discovering Discoveries)
1. Have a simple, easy Invention Disclosure system (policy, procedure
and forms)
2. Establish rapport with inventors—”hand-holding”
3. Practice MBW– “Management by Wandering Around”
4. Make periodic trips to R&D sites
5. Make presentations to R&D personnel to foster IP awareness
6. Distribute IP bulletins to R&F personnel
7. Read R&D’s technical reports regularly
8. Attend R&D meetings
9. Have written procedures for cooperation between R&D and IP
Departments
10.Have patent liaison people at R&D sites
11.Review the invention disclosure in patent committee meetings
12.Have a reasonable standard employment/invention agreement with
all R&D personnel
13.Conduct IP Audits
14.Institute an inventor award of incentive system
Invention Review
Invention
Disclosure
Group GM
Survey
Results
Evaluation Guidelines
Publish
Disclosure
Technical
Publication
Process
Entity
Patent Coordinator
Meeting
Hold as
Trade Secret
Recommendations by
Engineering Management
Recommendations by
IP Managing Counsel
and Staff Attorneys
File
Patent
Application
In- House
Legal Staff
Liaison
Engineers
Outside
Counsel
Standards
RFQ
COOPERATION BETWEEN R&D & IP
DEPARTMENTS
1) Correct laboratory notebook keeping
2) Inform the IP Department of projects, developments,
discoveries, etc.
3) Submission to the IP Department of Invention
Disclosures
4) Informing the IP Department of every change and
modification in existing patented or unpatented products
or processes.
5) Submission to the IP Department for clearance of every
form of release or divulgation of technical information
6) Consultation with the IP Department as to any other
problems relating to IPRs, i.e. patents, trade secrets,
trademarks, copyright, etc.
JOINT INVENTORSHIP
The Problem- Who Is The Inventor?
The exact parameters of what constitutes
joint inventorship are quite difficult to define.
It is one of the muddiest concepts in the
muddy metaphysics of the patent law.”
--District Judge Newcomer, Mueller Brass
Co. v. Reading Industries, 176 USPQ at 372
(ED Pa. 1972)
INVENTORSHIP
•Joint Inventorship
•prevalent
•Determination of Joint Inventorship
•critical issues of non-joinder or misjoinder
•Conception is Key
•Joint Conception
•Joint Invention
•Sole Conception
•Joint Invention
•Joint Conception
•Sole Invention
•Superior/Subordinate Relationship
•sensitive issues
•Resolution of Doubt
•in favor of joinder
INVENTORSHIP
DETERMINATION
An inventor is:
•A person who conceives the subject matter of at least one claim of the
patent.
•Two or more persons who collaborate to produce the invention through
aggregate efforts.
An inventor is not:
•Someone whose only contribution is reducing an invention to practice by
exercising ordinary skill in the art.
•A technician who simply performs experiments or assembles the
invention.
•The supervisor or department manager of the person who conceived the
invention.
•Someone whose only contribution is an obvious element to the invention.
INVENTORSHIP
DETERMINATION
(cont’d)
•Someone whose only contribution is participating in consultations about
the invention before or after conception of the inventions
•A person who only conceives of the result to be obtained but not the idea
of how to achieve it.
•A person who only discovers the problem (unless he contributes to the
solution).
•A person who merely provides a suggestion or improvement but who does
not work to fix the suggestion or improvement into the invention
•A second inventor of the subject mater of the invention who did not
collaborate with a first inventor of the subject matter of the invention.
INVENTORSHIP
Common Misconceptions
•Authorship is equivalent to inventorship.
•Someone who works hard on an invention deserves to
be an inventor
•The head of the company, lab, institute, (etc.) should
be named as an inventor.
•Knowledge derived in the course of proving an
invention entitles one to be an inventor.
INVENTORSHIP
Criteria for Inventorship
•Conception is the touchstone of the invention.
•Conception is complete only when the idea is so clearly
defined in the inventor’s mind that only ordinary skill
would be necessary to reduce to invention to practice,
without extensive research or experimentation
•But an inventor need not know that his invention will
work for conception to be complete; he need only have
the ability to describe his invention with particularity.
Conception
The conception of the invention consists in the complete
performance of the mental part of the inventive act. All that
remains to be accomplished, in order to perfect the act or
instrument, belongs to the department of construction, not
invention. It is therefore the formation in the mind of the
inventor, of a definite and permanent idea of the complete
and operative invention, as it is thereafter to be applied in
practice, that constitutes and available conception within
the meaning of the patent law. Mergenthaler v. Scudder, 11
App. D.C. 264, 276, 1897 C.D. 724, 731 (1897)
INVENTORSHIP
Standards for determining inventorship in the U.S.
1. 35 USC § 101, 116
2. Case law:
a. Standard often difficult to apply
b. Standard different from authorship
c. Cannot be determined by contract
d. Co-inventors need not have worked together or
contemporaneously
e. True inventors must be named
f. Incorrect inventorship does not invalidate patent so long as no
intent to defraud
g. Inventors can be changed at any time
h. If inventorship dispute of patent application, resolution
properly by interference
i. If inventorship dispute of issue patent, resolved by federal
district court
COINVENTORS
No exact rules
for determination of joint inventorship
some negative and positive
guideposts
Requirement:
parties worked in concert and
contributed to unitary result
mutual counsel, mutual effort
contributions do not have to be equal
Conception is key: formation in the mind of the inventor(s)
of a definite and permanent idea of the
compete and operative invention as it
is thereafter to be applied in practice.
COINVENTORS (con’t.)
Different possibilities:
Sole conception – joint invention
Joint conception – joint invention
Joint conception – sole invention
Superior – Subordinate Relationship
Resolution of Doubt
Inventorship Discrepancies
•Corresponding foreign and US applications may reveal discrepancies due to
differences in the laws on (co)inventorship.
•3 actual or possible practices exist
Foreign applications file US applications with identical inventorship
Possible result: invalidity
Correct designation of true inventor is critical– abroad often irrelevant
to right to patent– standards unrelated related to US standards
e.g. 10 Japanese on one compound patent
e.g. 21 Russians on a magnesium salt powder patent
Foreign applicants file foreign application with inventors who are true
inventors under US law- foreign and US application have same inventors – can
cause problems with inventor compensation laws and morale problems
Foreign applications file with discrepant inventorship—possible complications
in PTO during prosecution– can be overcome: there is no requirement of
identity of inventorship—identity of invention counts (sec. 119)-- so discrepancy
is no obstacle
INVENTION OWNERSHIP
General Rule: employee owns invention
(Ownership follows inventorship)
But if the employee:
1. has a fiduciary position,
2. was hired to invent,
3. was specially assigned to work on a project or
4. Signed an invention or employment agreement,
Then employer owns invention
N.B. even if none of these apply and employee owns
invention, employer may have shoprights (implied nonexclusive non-transferable license), if employee used
company time, resources, know-how.
OWNERSHIP FACTORS
1) The previous assignments of inventions by the employee inventors.
2) The standard practice that applies to other employees of similar status and
responsibility.
3) Whether the idea for the invention occurred before or after the employment
relationship began.
4) Which party posed the original problem to be solved by the invention.
5) The employee’s authority within the company.
6) The previous acts by the employer that imply an assumption that patent
rights are owned by employees.
7) A promise to make specific compensation, over and above standard wages,
to use or buy the patent.
8) Whether the employer paid for the cost of developing the invention
9) Whether the employer paid for the cost of obtaining the patent
10)Whether the coworkers aided in the development of the invention
Courts look to the totality of the circumstances to reach a fair an equitable
solution.
Patent Department Guidelines
on
Whether or Not to File Patent Applications
1) Where invention clearly patentable and commercially important—file
promptly
2) Where invention unpatentable and not important
-- preserve record only, keep as trade secret
Difficult and vast area in-between
3) Where invention patentable but not important
--file in due course, especially if original piece of work or new class of
chemicals
(Other legitimate reasons for filing: defensive position, licensing potential,
inventor recognition)
4) Where invention important but of doubtful patentability
--file as long as it is novel – rationale for commercialization may provide
basis for patentability arguments – fall-out data