Intellectual Property
Professor David Robertson
The Wharton School
March 22, 2011
© 2011 David C. Robertson. Not be used or reproduced without permission.
What is strategy?
“the essence of strategy is choosing to
perform activities differently than rivals
do….. [but] a company can out perform
rivals only if it can establish a difference
that it can preserve”
Michael Porter
Harvard Business Review, 12/1996
© 2011 David C. Robertson. Not be used or reproduced without permission.
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How can we preserve this “difference”?
One way: by establishing and maintaining a monopoly on an
important tool to promote sales---intellectual property. Such rights
are government sanctioned monopolies… which help add “the fuel of
interest to the fire of genius, in the discovery and production of new and
useful things." Abraham Lincoln, Second Lecture on Discoveries and
Inventions (Feb. 11, 1859).
© 2011 David C. Robertson. Not be used or reproduced without permission.
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What are the intellectual properties?
Origin of Rights
Prerequisites to
Protection
Scope of
Protection
Life
Test for
Infringement
Trademark,
Trade Dress, or
Service Mark,
passing off
Adoption & Use,
consumer
protection laws
Use to identify and
distinguish business,
goods or services
Words, names,
symbols, or other
devices
As long as property
used
Likelihood of
confusion, mistake
or deception
Trade Secret
Investment of time
and money
Recognition of value
and utility
Confidential
subject matter
Life of confidentiality
Derivation
Copyright
Creation of “works
of authorship”
OriginalityRegistration and
Copyright Notice
required if publicly
distributed
Works of
authorship
Variable-on the order of
100 years or longer; life
of author plus 70 years
Copying
Design Patent
Grant by Federal
Gov’t. on
application by
Inventor
New, original and
ornamental subject
matter
Ornamental
design for article
of manufacture
14 years from date of
grant
Designs look alike to
eye of ordinary
observer
Utility Patent
Grant by
Government on
application by
Inventor
New, useful, and
non-obvious subject
matter
Useful process,
machine, article of
manufacture, or
composition of
matter
17 years from date of
grant or 20 years from
date of application
Manufacture, use or
sale in U.S. of
claimed invention
Source and ©: James G. Conley, Kellogg School of Management, Northwestern University. Used with permission.
© 2011 David C. Robertson. Not be used or reproduced without permission.
Functionality of protection
Life of property protection
DIFFERENCES BETWEEN TRADE SECRETS,
PATENTS, TRADENAMES, TRADEMARKS, AND COPYRIGHTS
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Trademarks—the right to clearly identify source
1. What are trademarks?
Word
Name
Symbol
Device
Color
Smell
Gesture
or any combination
Used by a manufacturer or merchant to:
IDENTIFY GOODS & DISTINGUISH THEM from competitive products.
Can last indefinitely and as a complement to technology (e.g., DOLBY).
Law can be summarized as "Likelihood of Confusion by Consumers"
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Trademarks
How should they be used?
Always use capitals/upper case for the whole trademark
(e.g., “KLEENEX”, not “Kleenex”) when referring to
competitor’s trademarks (leading caps or logo if your own)
Always use as an adjective (make sure there is a noun)
when referring to your mark (e.g., “a JEEP car” not “a
JEEP”).
Do not mis-use your mark on labels (® has a legal meaning
– check each country). If in doubt use ™ sign.
USE IT (RIGHT) OR LOSE IT
This applies to external & internal correspondence
© 2011 David C. Robertson. Not be used or reproduced without permission.
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A gift from what store?
Source: James G. Conley, Kellogg School of Management, Northwestern University. Used with permission.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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“The mark consists of a shade of blue often referred to as robin’s-egg blue…”
Serial Number
Filing Date
75544375
August 24, 1998
Registration
Number
2359351
Owner
(REGISTRANT) Tiffany and Company CORPORATION NEW YORK 727 Fifth Avenue New
York NEW YORK 10022
Description of
Mark
The mark consists of a shade of blue often referred to as robin's-egg blue which is
used on boxes. The matter shown in broken lines represents boxes of various sizes
and serves to show positioning of the mark. No claim is made to shape of the boxes. The
drawing is lined for the color blue, and color is a feature of the mark.
Type of Mark
Register
TRADEMARK. SERVICE MARK
PRINCIPAL
Source: James G. Conley, Kellogg School of Management, Northwestern University. Used with permission.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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What company?
“The mark consists of the color chocolate brown, which is the approximate
equivalent of PANTONE® Matching System 462C, as applied to the entire surface of
vehicles and uniforms. The mark consists of the color brown alone.”
IC 039, US 100 105. G & S: delivery of personal property by air, rail, boat and motor vehicle
IC 039, US 100 105. G & S: motor vehicle transportation and delivery of personal property.
Source: James G. Conley, Kellogg School of Management, Northwestern University. Used with permission.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Who owns the color pink in mobile telecom?
Source: James G. Conley, Kellogg School of Management, Northwestern University. Used with permission.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Who owns the color pink in mobile telecom?
Source: James G. Conley, Kellogg School of Management, Northwestern University. Used with permission.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Other types of trademarks
The Yamaha “WAVE RUNNER”® “rooster tail”
The Garmin GPS spinning globe logo
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Other types of trademarks
The Yamaha Wave Runner “rooster tail”
The Garmin GPS spinning globe logo
“The THX logo theme consists of 30 voices over seven measures,
starting in a narrow range, 200 to 400 Hz, and slowly diverting to
preselected pitches encompassing three octaves. The 30 voices
begin at pitches between 200 Hz and 400 Hz and arrive at preselected pitches spanning three octaves by the fourth measure. The
highest pitch is slightly detuned while there are double the number of
voices of the lowest two pitches.“
Source: James G. Conley, Kellogg School of Management, Northwestern University. Used with permission.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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“THE MARK CONSISTS OF THE EXHAUST SOUND OF APPLICANT'S
MOTORCYCLES, PRODUCED BY V-TWIN, COMMON CRANKPIN
MOTORCYCLE ENGINES WHEN THE GOODS ARE IN USE.”
To the Assistant Secretary and Commissioner of Patents and Trademarks
Washington, D.C. 20231
Harley-Davidson, Inc., a Wisconsin corporation
Milwaukee, WI 53208
Sir:
The above-identified applicant has adopted and is using the trademark described in the accompanying drawing for
motorcycles in International Class 12. Applicant requests that said mark be registered in the United States Patent
and Trademark Office on the Principal Register established by the Act of July 5, 1946.
The trademark was first used in connection with the goods in International Class 12 by applicant's predecessor at
least as early as 1930; was first used in connection with the goods in International Class 12 in interstate commerce
at least as early as 1930; and is now in use in such commerce. The mark consists of the exhaust sound of a HarleyDavidson motorcycle.
The sound mark is emitted when the goods are in use, and three specimen recordings which incorporate the sound
mark as actually used are presented herewith.
….
HARLEY-DAVIDSON, INC. Dated: 17 January, 1994 By: /s/Timothy K. Hoelter Vice President and General Counsel
Docket No. 43210/9695
APPLICANT: Harley-Davidson, Inc.
ADDRESS: 3700 West Juneau Avenue Milwaukee, WI 53208
FIRST USE: At least as early as 1930
FIRST USE IN INTERSTATE COMMERCE: At least as early as 1930
GOODS: Motorcycles in Int. Class 12 The mark consists of the exhaust sound of a Harley-Davidson motorcycle.
THE MARK CONSISTS OF THE EXHAUST SOUND OF APPLICANT'S MOTORCYCLES, PRODUCED BY V-TWIN,
COMMON CRANKPIN MOTORCYCLE ENGINES WHEN THE GOODS ARE IN USE.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Trade secrets
1. What are trade secrets?
•  Confidential information or knowledge (“Know-how”)
of a technical or commercial nature that is not known
or easily accessible, so that part of its value consists
in the lead time that is gained by the person who has
access to it.
•  Examples: recipes, formulae, technical processes,
customer lists, or field test results
Must be secret, identifiable, and substantial
2. How are they obtained?
•  No registration – but must be kept secret and owner
must take clear steps to ensure this is so.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Trade secrets (cont’d)
3. How should they be used?
Label and treat them clearly as secrets (“CONFIDENTIAL”)
Use warning notices stating that it is not legal to use or disseminate
the information
Avoid their coming into public domain
Restrict access within the company
Maintain information separate and secure from everyday
documents or working papers
Written confidentiality and non-compete agreements with
employees or third parties are crucial, including “need-to-know” only
basis and duty to maintain documents separately and securely
4. How are they enforced?
Breach of duty of confidentiality must be proven (often difficult!)
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Trade secrets (cont’d)
Example: Jose Ignacio Lopez de Arriortua leaves GM for VW
•  In 1993, Lopez leaves GM for VW, taking with him a 3,350 page
printout listing 60,000 parts, their suppliers, prices, and delivery
schedules for GM Europe
•  GM files lawsuit in March 1996, charging both copyright and trade
secret infringement
•  In 1997, VW and GM settle out of court. VW agrees to pay GM
$100 million, to sever all ties with Lopez, and to purchase $1
Billion in GM parts over the next 7 years
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Copyrights
1. What are copyrights?
Original works including art, literature, music, computer
programs
Give exclusive rights to prohibit copying and derivation for
70 to 120 years or longer.
2. How are they obtained?
Automatic -- arise on creation by author
Registration -- useful for proving copying, for claiming
attorneys' fees (USA) & ticket to Federal Court
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Copyrights (cont’d)
3. How should they be used?
For Co. ABC Ltd., use a © mark and add year of creation (e.g., "© ABC
Ltd., 2000”) and years in which work was modified.
4. How are they enforced?
Litigation --Actual copying or derivation must be proved (often difficult !)
5. Dangers !
Diagrams/drawings/artwork/photos/software from sub-contractors/
Advertisements/brochures: make sure you are free to change and reuse. Get written contracts and waivers of rights
© 2011 David C. Robertson. Not be used or reproduced without permission.
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Utility patents
1 – What are utility patents ?
2 – Creating a patent – what is management’s role?
3 – The eight deadly sins
© 2011 David C. Robertson. Not be used or reproduced without permission.
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1. What are utility patents?
Basic principles of every national patent system:
National grants of exclusive rights to make, use, sell, import or offer for sale.
Patents do not guarantee a right to practice the invention freely but
only to exclude others from practicing it without a license.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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1. What are utility patents?
Form: 3 Parts:
!  Specification
!  Drawings
!  Claims = the most important part!
5 substantive requirements:
i.  INDUSTRIAL APPLICABILITY ("utility")
ii.  NOVELTY (usually absolute world-wide)
iii.  INVENTIVE STEP ("non-obviousness")
iv.  SUFFICIENT DISCLOSURE ("enablement")
v.  BY THE "INVENTOR" (i.e., the true inventor?)
© 2011 David C. Robertson. Not be used or reproduced without permission.
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(i) Industrial Applicability (“utility”)
Naturally occurring products are not patentable. Their methods
of extraction may be.
Purely mathematical algorithms or natural discoveries are not
patentable. Utility or intervention by man is needed.
E=mc2
DNA sequences? Methods of doing business? Law is in
transition.
In most European countries methods for therapeutic treatment
of the human or animal body are not patentable (not so in the
U.S.).
Software patents are now increasingly accepted
© 2011 David C. Robertson. Not be used or reproduced without permission.
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(ii) Novelty (worldwide and absolute*)
The invention must not have been made available to the
public in any form, in any country, before the application was
filed (e.g., printed or oral publications; trade shows; on-sale
bar/offers for sale).
“Prior art” is the state of the art before the invention. Prior art
is global and eternal – 6th century BC Chinese woodcut
pictures can (and have been) considered prior art!
SEARCH PRIOR ART DATABASES (e.g., www.uspto.gov) CAREFULLY
© 2011 David C. Robertson. Not be used or reproduced without permission.
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(iii) Inventive Step (“non-obviousness”)
In order to be validly patented, the invention must not have been
obvious to a person of ordinary skill in the relevant art at the date
of filing.
What is “obvious” once the patent application is published?
What is the skill level of one skilled in the relevant art ?
Obviousness is one of the most difficult issues in patent law.
Secondary indicators of non-obviousness: unexpected results,
failed attempts by others, commercial success etc.
© 2011 David C. Robertson. Not be used or reproduced without permission.
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(iv) Sufficient Disclosure (“enablement”)
Enabling disclosure (e.g., recipe in a cook book)
Best mode (USA)
Duty of Candor--U.S. law requires the inventor and attorney to
disclose all material prior art known to them (patents, articles,
sales materials, etc.) to the U.S. patent office. This is a
subjective test!
Last week’s legislation weakened the ability to challenge a
patent based on insufficient disclosure
© 2011 David C. Robertson. Not be used or reproduced without permission.
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(v) Application by the “Inventor” or Sponsor
Who gets the patent?
First to invent (law changed last week to harmonize US with the rest of
the world)
Who is the "inventor ?
Who is the sponsor/applicant?
Who owns the invention?
In the US, the inventor, who must assign his/her rights
FAILURE TO LIST AN INVENTOR CAN BE DAMAGING
© 2011 David C. Robertson. Not be used or reproduced without permission.
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2. Creating a patent
What is the inventor’s role?
CLAIMS are most important part of the patent, as they define the monopoly
rights granted.
!  The independent claims are the basis for the patent application. They are
modified by the dependent claims
!  The independent claims should be as broad as possible. The patent office has
the duty to grant the widest possible patent permitted by the prior art AND
requested by Applicant. If the independent claims are judged to be obvious or not
novel, the patent may still be rewritten around one or more dependent claims
!  While the final language should be worked out together with a lawyer, the initial
draft can be done by the innovation team
The inventor’s responsibility is to:
!  Make sure that they are getting the best advice from counsel
!  Ensure the claims as broad and general as possible
!  Attempt to create inventions that do not infringe on the draft claim, then rewrite the
claim so that the hypothetical invention would infringe
!  Make an investment decision about where and how to protect the invention
© 2011 David C. Robertson. Not be used or reproduced without permission.
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3. The Eight Deadly Sins of Inventors
8. Believing that just because he has a patent, he is free to make, use & sell his invention.
Source and © European Patent Office
© 2011 David C. Robertson. Not be used or reproduced without permission.
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