Don’t Put It in Writing

No TextingDo you know that saying, “Don’t put it on facebook if you don’t want your Grandmother to see it”?  Of course you do.

We all should know by now that if you put something on the web, like that picture of you drinking at a frat party (underage!), it NEVER goes away and practically anyone who cares to look can see it whenever they feel like it.

As we over-share everything in our lives on social media and as a whole generation only communicates in 140 characters or less, one of the biggest legal headaches is keeping emails, texts, and other written communications out of the hands of opposing counsel.

I know this thing is nothing new.  I had some issues when I was working in-house.   I remember some employees sending emails to convey some less-than-favorable news to the department, rather than allowing me to speak with the head of the department about the sensitive matter.

Those things happened, and the company would deal with it.

So what’s changed?

I left corporate behind in 2006.  There was no social media to worry about.  We weren’t texting junkies.  We actually knew how to use the phone, and more often than not that phone was not mobile, and it was owned by the company.

Things are different today.

We put more in writing today, every day, than ever before in human history.  We do it from our mobile devices from anywhere in the world.

Seriously, can you imagine the legal headaches when the texting-only generation makes its way into the workforce?  These young people can’t stop texting long enough to drive a car.  Calling someone is an arcane ritual that their grandparents did.  Do we think they’ll think twice before sending out that smoking gun email or text that makes opposing counsel dance around his office?

I can just see this text from Engineer 1:

STOP ALL WORK!  I think we infringe XYZ Company’s patent.

And Engineer 2 responds:

Attorney Smith told me that there’s a 70% chance we infringe.  I think it’s OK to keep working on that project.

Why are these texts so scary for attorneys?

If XYZ Company sued for patent infringement, this sort of text exchange would be a great piece of evidence to prove that the Defendant willfully infringed the patent.  It shows that Defendant’s employees knew about the patent, knew they possibly infringed the patent, but decided to move forward with the infringing product anyway.  If the Court determined that Defendant willfully infringed, Defendant could be forced to pay triple damages to XYZ Company.  That’s a lot of money.

To avoid this situation, the attorney would normally convey the message without reducing it to writing, although a written communication from an attorney to the employee might get the benefit of Attorney-Client Privilege.

HR and legal departments should start thinking about training programs that teach one of the golden rules of business.  For those of you over 40, you might remember it…“If it’s bad news, don’t put it in writing.”

Too many people don’t know to pick up the phone to pass on the bad news.  We’re so used to communicating via email and text that we’ve forgotten the consequences of putting too much in writing.

In the corporate world, it’s not your grandmother or a future employer you have to think about.  It’s opposing counsel.  You need to be thinking, what would happen if our legal adversary saw this?

I guarantee opposing counsel will embarrass you more over that errant text regarding patent infringement than any drunken picture of you ever could.

7 Things American Companies Need to Know About the America Invents Act

patent-reformIt’s amazing how fast 18 months flies by.  It seems like just yesterday I was lamenting the passing of the America Invents Act, and now here we are mere days away from its final implementation.

If you haven’t heard, the United States will officially follow the herd and become a First-Inventor-to-File nation on Saturday, March 16.  In light of this new beginning, here are 5 things you should know about the AIA to ensure that your inventions are protected.

1.  First-Inventor-to-File Wins

Here’s the scenario.

Two competing companies are working to solve the same problem.  Both companies invent the same solution.  Each company files a patent application with the US Patent Office.  Who does the Patent Office award the patent to?

Under the First-to-Invent system, the patent would be awarded to the inventors who could show that they invented the invention first.

Under the First-to-File system, the patent would be awarded to the inventor who filed their application first.

To quote Tom Hanks’ character in Cast Away, “We live and die by the clock.”  You don’t have time to make everything perfect before you file a patent application.  Good enough will have to do.  (You might even have to settle for just OK.)

2.  You Will Spend More Money Earlier in the Process

Under the First-to-Invent rules, an inventor could tinker around with his invention, tweaking it until he turned his concept into a finished product.  At that point, he could file one patent application to cover the end result without fear that someone would step in and file their application before he was ready.

Those days are gone.

You no longer have the luxury of waiting.  An inventor will have to be on top of his patent game from the very beginning.  The new corporate patent process might look something like this: file at conception, file again, maybe multiple times, as the inventor works the concept into something that resembles a more complete product, and at the end when the final product finally reveals itself.

That’s a lot of money earlier in the process to ensure that you have won the race to the patent office.

3.  You Need a New Attitude

In order to make this adjustment successfully, your organization MUST adjust your thinking when it comes to patents.  You can’t file a patent as an afterthought in your New Product Development process.   You need a procedure to identify any and all patent issues as early in the process as possible.  If you don’t, you run the risk of losing your valuable business assets.

4.  The Strategic Use of Provisional Patent Applications

Make sure you and your patent attorney understand how to use provisional patent applications.  When money is tight and time is of the essence, these informal, non-examined patent applications may just be the answer.

5.  Amending Claims Can Change the Rules

It all seemed so simple.

Applications filed before March 16, 2013 will continue to be subject to the old First-to-Invent rules.  Applications filed on or after March 16, 2013 will be governed under the new First-to-File rules.

But nothing is ever as simple as it seems under the AIA.

What if you amend or add claims in your first-to-invent patent application after the March 16, 2013 date?

Even though you had filed your patent application prior to March 16, 2013, certain changes you make to the claims may pull your application into the First-to-File rules, and you may not get the full protection of the First-to-Invent rules you thought you had.

6.  Change to the Grace Period Rules

Like the First-to-Invent system itself, America had another somewhat unique feature in its patent system.  The United States offers what is known as a Grace Period.

In the United States, inventors were given 12 months to file a patent application after the date the invention was first disclosed to the public no matter who disclosed the invention.  That was a benefit of the first-to-invent system.

Now, the grace period only applies to disclosures made by the inventor.  Public disclosure by anyone else anywhere in the world prior to you having a patent application on file means you lose your patent rights.

(Think about how this could impact heavily competitive industries with multiple companies working to solve the same problems.)

7.  Prepare for the Unexpected

Just when you think you understand the AIA things are bound to change.  Like any new law, what the various provisions and terms of the AIA really mean will be decided by the Courts.  Over the next decade (or longer) IP practitioners will closely watch as cases wind their way through the Federal court system.  There is already talk that a Constitutional challenge will be waged against the America Invents Act itself.

Don’t be fooled.  The America Invents Act brings significant change to American business.  In 10 days, we enter into a brave new world, America.  Good luck and God speed.

Step Into the Arena and Be Prepared to Get Dirty

 

VS

 

 

 

Intellectual property is a full-contact sport.

Yes, you read that right.

I mean full-contact, complete with trash talking, gloves come off, smack-down contact.

Punches are thrown.  Combatants get bloodied and bruised.  There are winners and losers.

Don’t believe me?  Just check out the ruckus surrounding Samsung and Apple in their battle for smart phone supremacy.

Unfortunately, there are those in the media who don’t understand this simple concept.

An ill-informed media pretend that they understand the intricacies of patent law after an interview or 2 with a disgruntled company and a few hours of research.  They twist words, spew fiction as fact, and completely misrepresent the law.  Then these reporters refer to patent lawsuits as “WAR” as if U.S. lawmakers never intended for companies to sue over patent rights.

They would have you believe that IP is like golf.  That it’s a gentleman’s game where nobody gets hurt.  No one sues anybody.  Everyone gets a license with great terms if they want one, and companies that choose litigation over licensing aren’t playing by the rules.  They point to an increase in the number of patent contests as a sign that the system is broken.

But anyone who knows a thing or two about patent litigation knows that’s not true, and never has been true.

Patents first and foremost are offensive weapons.

Patents aren’t magic amulets that protect your product or your business from infringers.

They are the means by which companies assert their rights to their government-granted monopoly.  And guess what?  Lawsuits are, and have always been, the intended method of asserting those rights.

In fact, patent lawsuits have been around for a very long time.

So why is there so much criticism now?

What has changed (and brought a massive amount of exposure to patent litigation) is the number of prominent participants, especially Apple, as well as the huge amounts of money at stake.

A few high-profile technology giants decided to up the ante in patent litigation.  For the first time in decades, some of the biggest patent owners in the US turned to their patent portfolios to protect their market share.  And Apple’s involvement in serious patent litigation brought massive amounts of attention to something that no one in the mainstream media ever cared about before.

For years, most people, including journalists, never thought twice about patent litigation.  Suddenly, Steve Jobs says that Apple will go thermonuclear on Google, and people demand to know what’s going on.  A big verdict and a few billion dollar+ patent auctions later and the world as they understand it has been turned upside down.

However, the world of patent litigation, as most people understand it today, never existed.

IP has always been about how you use it to protect your market share.  It’s meant to stop anyone who would intrude on your property.  It’s is not passive or defensive.

So it’s time to stop pointing to the “Smart Phone Wars” as an example of what’s wrong with the system.

THERE’S NOTHING WRONG WITH THE PATENT SYSTEM.

In fact, this is exactly how the system was designed to operate.  You just didn’t know that.

I’m sorry if you don’t like it.  I’m sorry if this type of aggressive action somehow offends you.

Apple, Microsoft, Samsung, Google…they all know what they are doing.  It’s the risk they decided to take when they put their products out into the marketplace fully aware that there could be patents out there that could impact their business.

So to everyone who wants to be in business today…

  1. Ignore your intellectual property at your own peril.  If you’re the second inventor or you file your patent application late, you are probably out of luck.  That great thing you “invented”.  You may not own the rights to it.  Not everyone is guaranteed a trophy in this contest.
  2. Ignore another company’s intellectual property at your peril.  You aren’t guaranteed a license.  In fact, assume you won’t get one.
  3. If the only thing you’re willing to do is get a patent, you are wasting your money.   I know I said it before, but it needs to be repeated, patents aren’t magic amulets that protect you from patent infringement.   It’s a business tool that can help you achieve great success, but only if you use it!
  4. If you aren’t prepared to step into the arena, walk up to your opponent, and throw that patent around, what are you going to do with it?  And please don’t say frame it and hang it on the wall in the lobby.

If you want your intellectual property to work for you, you have to be prepared to fight for your rights.

Don’t Get Your Legal Advice on Twitter

What do you believe to be true about intellectual property?

Are your beliefs based on truth, myth or falsehoods?

You might be surprised to find out that a lot of the ‘truths’ about IP that you believe are actually falsehoods perpetuated by the ignorance and half-truths of the media, the internet, other well-meaning entrepreneurs, and even IP practitioners themselves.

In fact, the information you have learned somewhere along your journey could be hurting the quality, quantity, and value of your intellectual property.

How do I know this?

Let’s look at a twitter exchange that I had last weekend.

Tweet from a successful entrepreneur:

“Founders: when starting out, in most cases, don’t worry about getting patents because you probably don’t have the money to enforce them.”

To which I replied:

“Naive advice. It takes 3+ years to get patent, so can’t enforce for years. You may have $$ and need to enforce in 5 years.”

Our exchange was seen by an entrepreneur from Canada who inquired:

“I’ve also been thinking this way too.. It’s a toughy. Is it worth $3,000 to apply provisional with fee to start?”

To which I responded (because originator of the conversation surely did not know how to answer the question):

“My first question would be why are you spending $3000. The fee is only $125.”

(EXPLANATION: The filing fee for a provisional patent Application in the United States is $125.  With a little bit of information, and following the instructions on the form, you don’t need a lawyer to file a provisional application.)

The Canadian entrepreneur replied:

“Ah, I found it. But typical utility, sm entity + lawyer fee is usually $1500+ no?” (with a link the USPTO website.)

At this point, I had to wonder, where was he getting these numbers?   Utility patents typically cost about $6000 on the low end, and up to $15,000+ on the higher end.  Depending on the technology involved that price could be a lot higher.

This is what I mean by truths, myths, and falsehoods.  Obviously, what this entrepreneur believes to be true about the costs of patents is actually false, and his misinformation will influence the decisions that he will make about whether or not to file for patent protection.

What else when it comes to patents does he believe to be true?

As an IP practitioner, I know this whole twitter exchange is a microcosm of a larger problem.  I know entrepreneurs everywhere don’t understand all of the intricacies of intellectual property law, but it doesn’t prevent them from making blanket statements that circulate as truth.

I know that when cash-strapped entrepreneurs see what looks like free, credible advice, they take it.  In fact, they seek out advice like this.  First, it’s free.  Second, it comes from a successful entrepreneur.   When they see a successful entrepreneur who seems to have some experience in this area say that they can ignore something, they tend to listen.  Why?  They are looking for an excuse NOT to spend their scarce money, time, or effort on it.

So, here is what you can take away from this exchange.

1.  Be careful who you take legal advice from.  If you get your legal advice in 140 character sound bites to save a few bucks, please don’t.  You know better than that, so please, before you act on someone’s free advice (a.k.a. his opinion), think twice.

2.  Be careful who you take legal advice from (Part 2.)  Even tweets from attorneys should be taken with caution.  The successful entrepreneur was not entirely wrong in his original tweet.  Not everyone needs expensive patents for their business.  However, some companies do.  So my tweet was not necessarily meant to cover every situation either.  It was merely to point out that the advice is limited, and for some people, it is absolutely the wrong advice.

3.  Get an informed opinion.  When you have a question about intellectual property (or business formation or partnerships or licensing or any of the 100s of other issues that you are facing), call an attorney and get a couple of hours of his/her time.  It’s worth the money to get the right advice for your unique situation.  Short money up front could save your business.

4.  There is a lot more to protecting your innovation than just getting patents.  Many start-ups and entrepreneurs believe that getting the patent is their only IP concern.  So if they don’t have to get patents, they falsely believe there is nothing else for them to worry about.

Oh, contraire.

The real patent issue may not be what you need to get, but what others have received.  Competitive intelligence, prior art searches, freedom-to-operate opinions, etc. may be even more important to your business than getting patents.

JUST BE CAREFUL WHOSE ADVICE YOU DECIDE TO FOLLOW.  IT COULD MAKE OR BREAK YOUR BUSINESS IN WAYS THAT YOU WON’T KNOW ABOUT UNTIL IT IS TOO LATE.

If you believe that you might be under the spell of some IP myths or falsehoods that you’ve learned over the years, I can help you identify fact from fiction.  Call me at 508-878-3590 or email me at kelli@ipinfocus.com to set-up an appointment to discuss your intellectual property issues and how I can help you solve them.

Be Prepared (It Applies to Your Intellectual Property Too!)

“By failing to prepare, you are preparing to fail.”
― Benjamin Franklin

Disaster preparedness seems to be on everyone’s mind this week.

With the effects of Hurricane Sandy lingering up and down the East Coast, the news media has been speaking out about the importance of being prepared when a disaster strikes.  I know that my family, along with millions of others, spent much of last weekend putting away lawn furniture, checking flashlights, and shopping for batteries, water, and non-perishable food.

Employees and business owners alike have spent countless hours trying to ensure that their companies can still operate in the wake of flooding and power outages.

One such story in particular struck me.  It’s the story of a data center, Peer 1, based in NYC.  The power went out, the flood waters came, and they’re keeping their servers running with the help of a generator.  A generator located on the roof of the building.

To keep that generator going, the employees (and their customers!) are carrying 5 gallon buckets of diesel fuel up 17 flights of stairs.

If that generator goes down, it will impact hundreds of customers, as thousands of websites will go down with it.  (As a lawyer, I hope they have a really good Force Majeure clause in their customer agreements.)

That’s a lot of pressure, but it seems like they were prepared.  They had the generator in place and made sure they had fuel on hand.  They even found help when they needed it.

Peer 1 had one more thing on their side, warning.  Hurricanes don’t show up unexpectedly, so they had time to plan and mitigate any damage.

But often times catastrophe strikes without warning.  If that happened, would you be able to make a “bucket brigade”, or its equivalent, to save your business?  Would your customers come to your rescue?

All of this got me thinking about intellectual property.

Companies are faced with intellectual property disasters every day.  Disasters they never anticipated and are ill prepared to handle.

What is an IP disaster you might ask?  Well, here are a few examples:

-  You receive a cease & desist letter (or worse, you get sued outright for patent infringement.)

-  You discover that a competitor is about to launch a product that looks an awful lot like yours.

-  You find counterfeit goods are being sold in the marketplace.

-  You stumble upon your artwork or photos on Pinterest, someone’s website, or printed onto t-shirts without your permission.

Any and all of these events happen to unsuspecting businesses everyday in the United States, and most small or medium-sized companies are not prepared for them, especially when it comes to patent litigation.

One patent lawsuit could wipe out your business more completely than any hurricane.

The number of IP related lawsuits in general, and patent suits in particular, are increasing.  Companies are doing everything they can to ensure they protect their market share. If that means, suing somebody for patent infringement, then so be it.  Are you prepared to weather a patent litigation or protracted licensing negotiations?

Very few companies ever think they will sue someone, and they falsely believe they will never be sued, because they are small.

The idea that patents are the weapons for big business only is a myth.

Patent litigation doesn’t just happen to the likes of Apple, Google, or Microsoft, and if you aren’t prepared, one litigation could put you out of business.

I also anticipate that the number of IP disasters will rise sharply with the implementation of the First-Inventor-to-File Rules in March, 2013.

If you aren’t ready to file early and file smart before March 16, 2013, then you could lose valuable patent rights.

Many companies will not fully understand all of the implications of this change and how it impacts their business.  Unfortunately, they will be the first victims of the new system.

How your business handles unexpected intellectual property events will depend on how well prepared you are.

The best way to prepare for a possible IP disaster is to identify the intellectual property in your business early, protect it when appropriate, and monitor the marketplace for signs of impending doom.

Over the next several weeks, and in this month’s IP made simple Newsletter, I will be talking a lot about being prepared.  If you haven’t signed up for the monthly newsletter, you sign up here.

I hope you join me for the discussion.

If there are any issues that I don’t address and that interest you, please let me know so that we can talk about them in future posts.

Are You Making a Bad Investment?

Do you know what you are going to do with your patent?

 

Yesterday morning I sent the following tweet.

“All I hear is how expensive IP is.  Maybe you don’t understand its value; its purpose.  If you knew how to use it, you might spend more.”

This sparked a short twitter conversation with @ManagingIP about what aspect of IP is seen as expensive: protection, enforcement, or defense,  and whether IP spend is seen as a tax or an investment.

I think most companies see IP spend as a tax, and that the grumbles about IP being expensive are around protection, especially patent protection.  Maybe it’s because I’m listening to a lot of start-ups lately, and they’re short on money.

Or, maybe it’s because I’ve been doing this long enough to know that, even though IP enforcement and defense are expensive, the average company doesn’t really think about that aspect of IP protection.  The main event is protecting the invention or the brand, with little thought given to what they’re actually going to do with it once they get the patent.  (If I had a dollar for every time I heard, “You mean I have to enforce my patent?”)

The way I see it, many organizations in general view IP as a necessary evil.

Based on my 12+ years as an intellectual property attorney, I am under the firm belief that most companies protect their intellectual property out of habit.  They really don’t know why they want that patent.  They just do it.  And if these same companies just knew why they were protecting their IP and plan for its future use, they’d see a greater return-on-investment sparking more, and dare I say better, investment.  (Hence yesterday’s tweet.)

All of this got me wondering…

Why is the ‘getting’ so important?  I can’t think of any other business asset that people stockpile like patents.  Of course, I do understand that to use patents, organizations typically have to wait for a future event to happen, like an infringer comes along, counterfeit goods are being sold into your market, or someone wants to license your technology.  So, the stockpiling does make sense because you have to get it early for use later.

But what if you know that you will NEVER sue anybody for patent infringement?   Why do those companies still spend lots of money protecting their IP?

Is the amount of money companies spend on intellectual property worth it?

At what point is intellectual property protection a good (or bad) investment?  (And how do you know?)

If intellectual property is a business asset, that asset should bring the company value.  How do you measure the value IP brings to any given company?

Is it the amount of money the asset brings to the bottom-line?  If so, we’re most-likely talking about companies that engage in expensive licensing and litigation practices.  I would argue (based on the low number of patents that ever go to litigation) that’s not the average IP owner.

Or is the value in the portfolio size?  That strategy works for Japanese companies.

There is also value that is intangible, just like the asset itself.

There are a lot of factors that enter into answering these questions, like industry, type of technology involved, size of company, country of origin, risk tolerance, and 100 other factors I haven’t even thought about.

I have to admit that I’m not really sure how to answer these questions right now.

If you have thoughts, dear Readers, on what makes IP a good or bad investment, please let me know in the comments.

Websites, Webinars and Workshops. Oh My!

The Summer of 2012 has been the busiest on record for me and my business.  The new website is up-and-running, my first Workshop is scheduled for the end of September, and a FREE 4 part webinar series on IP basics will kick-off next Wednesday with a primer on trademarks.

I encourage you to explore the new website.  If you like what you see, sign up for the free webinar.  If you like what you hear, and want to learn more, please come to the IP made simple Workshop.

All the details are below:

My FREE 4 Part Webinar Series, Intellectual Property Essentials for Every Business, starts next Wednesday, August 29, 2012 at 11am EST with Trademarks 101: Protecting Your Reputation.  You can sign up for this free event at  http://www.anymeeting.com/PIID=E056DC85844F .

The rest of the series will take place as follows:

  • Wednesday, Sept. 5, 2012 at 11am EST, Copyrights 101: Protecting your Creative Works
  • Wednesday, Sept. 12, 2012 at 11am EST, Patents 101: Protecting your Innovation
  • Wednesday, Sept. 19, 2012 at 11am EST, Trade Secrets 101: Protecting your Know-How

 

The first IP made simple Workshop will be held on Thursday, September 27, 2012.

Time: 5 – 8pm

Location: The Accidental Gallery

300 Summer Street, #14

Boston, MA  02210

Cost: $297

You can check out details about the Workshop at my new website www.ipmadesimple.com.

Sign-ups for the Workshop are at www.ipmadesimple.eventbrite.com.

Working with Your Patent Attorney

As I was reading the Patently-O blog this morning, my mind started to wander.  Dennis Crouch was critiquing an essay on why patents fail as property rights vis-à-vis the trespass doctrine in real estate.  (I know, such a stimulating topic for 8:30AM.)  This got me thinking about the similarities and difference between patents and real property, and how people (and companies) treat and care for their patents differently than their real estate.

People (and companies) typically put a lot of thought into purchasing a piece of property or a house.  Would you ever simply call up a real estate agent, give them a list of wants and needs, then ask them to buy you the perfect 4 bedroom, 2.5 bath house?  Probably not.

So why do companies, hand their outside patent attorneys an invention disclosure then tell them to get a patent to cover it for a bargain price?

Like houses, all patents are not created equal.  Patent attorneys know it, but try telling that to the average patent owner.

Companies assume that a patent is a commodity product that any patent attorney can provide them.  The patent attorney will simply read the disclosure, draft great claims, and get the right patent for the right price.  In fact, a lot of patent attorneys I talk to complain that some of their biggest clients want the attorney to do all the work with no input from them.

Unfortunately, the odds of the company ending up with the right patents are as good as you ending up with the right house in my example above.

When my husband and I bought our house in 2009, we identified the town we wanted to live in, the type of houses we liked and didn’t like, what we wanted in a house, and what we wanted to spend.  Then we looked on-line at what was available.  We looked at one house.  We liked it.  We bought it.

We bought a 40 year old house in need of some work in a well-established, family-friendly neighborhood.   For everything it lacks, like a new kitchen, the house works for our family.

Not even half a mile away, a brand new house was also for sale.  On the inside, this house had everything on our wish list.  It was even on the market for less money than our house.  But we never even looked at it.

This brand new house had been on the market for 2+ years in one of the most desirable towns in our area.  Why?  Location.  It sat on the corner of a very busy intersection.  The main road was about 20 feet from the front door.  There was another house in the backyard.

If I had simply given my real estate agent my list of wants in a house, then told her to go buy me a house within my budget, I would own a brand new house right now.  I would have saved the money we’ve invested in new windows and new siding.  However, it wouldn’t meet my family’s needs and it would be impossible to sell.  But honestly what could I expect?   How could the realtor know that having a safe backyard, a quiet street, large bedrooms and closets, and a dedicated playroom and office space would trump a new kitchen?  The realtor isn’t a mind-reader.

And neither is your patent attorney.  Stop assuming your patent attorney knows what you want and need out of your intellectual property.  It’s your responsibility to tell her what you need.   You need to work with her to get the best patent you can, the patent that’s right for your business.

As the patent owner, you need to:

1.  Get involved.

2.  Set expectations.

3.  Outline your business strategy.

It’s not hard to do, and you raise the odds that you will get a patent you can use rather than one that will quickly lose its luster after the newness wears off.

Houston, We are Go for Launch!

INTRODUCING

On a mission to end IP ignorance forever.

 

 

Trade Secret Theft is a Real Crime

And those found guilty go to a real jail cell.

Now you know that Trade Secret theft is on the rise and costing US companies billions of dollars in revenues.  You’ve also learned 10 important things about trade secrets and how to protect them.  Now, let’s look at three recent examples of trade secret theft that have made the news.

1.  Sanofi Aventis – Research Scientist.

Who stole what?  A former Sanofi research chemist stole thousands of chemical compounds (a company trade secret) from Sanofi.  The research scientist, a 30 year old Chinese national named Yuan Li, had worked for Sanofi for 5 years developing compounds for use in future drugs.

How did she do it?  Yuan Li downloaded the trade secret information and used personal e-mail or a USB thumb drive to transfer it to her home computer.

What did she do with the trade secrets? She tried to sell the compounds through, Abby Pharmaceuticals, the U.S. unit of a Chinese company.  Yuan Li was a 50% owner in Abby.

What happened to her?  Last month, Yuan Li was sentenced to 18 months in prison by a New Jersey Court.  She must also pay $131,000 in restitution.

2.  Akamai – Finance

Who stole what?  Elliot Doxer, who worked in Akamai’s finance department, contacted the Israeli consulate in Boston in 2006, offering to spy on Akamai and pass secret information to them.  The Israeli government informed the US government, which set up a sting operation.

What did he do with the trade secrets?  Mr. Doxer delivered numerous secret files to an undercover federal agent posing as an Israeli intelligence officer over a period of 18 months.  (No information ever made it into foreign hands.)

What happened to him?  Mr. Doxer pled guilty to foreign economic espionage and was sentenced to six months in prison, six months home confinement, and a $25,000 fine in December, 2011.

3.  Intel – Design Engineer.

Who stole what? A former Intel computer hardware engineer stole 13 secret documents from Intel’s facility in Hudson, Massachusetts. The documents are worth over $1 billion in research and development costs that described Intel’s new microprocessors.  Biswamohan Pani, an Indian national, worked for Intel from May 2003 to June 11, 2008.

How did he do it?  Mr. Pani resigned from Intel in late May, 2008, saying he was going to work for a hedge fund, and took his accrued vacation time until his last official day on June 11.   However, he started working at Advanced Micro Devices, Inc. (AMD), an Intel competitor, on June 2, 2008.  That’s right…he worked for both companies for more than a week.  From June 3 to June 11, 2008, he remotely accessed an encrypted system at Intel, and downloaded the documents to his hard drive.

What did he do with the trade secrets?  Nothing.  Intel discovered the breach very quickly, contacted the FBI who acted fast to stop any information from being used.  It is thought Pani intended to use the information to advance his career at AMD.  It is important to note that AMD denied knowledge of Pani’s wrongdoing, did not ask him to steal the information, and has cooperated fully with federal investigators.

What happened to him?  Mr. Pani pled guilty to 5 counts of wire fraud in US District Court in Massachusetts.  Each count has a possible sentence of 20 years, as well as a $250,000 fine.  The prosecutors are recommending that the judge sentence Pani to six years in jail. Sentencing is scheduled for August 8.

When I see these stories, part of me says “Really, you thought you would get away with this?”, but then I remember that trade secret theft is a real crime.  These are the people who were caught.   How many more are out there have been successful?

Obviously, the examples here involve big name companies with thousands of employees, but don’t think that trade secret theft is merely a problem for big business.  The risk exists for big and small companies, as well as universities, research facilities and non-profits alike.

If you want to protect your organization’s trade secrets, you must be proactive.  Identify them early.  Have a plan to keep them secret.  Educate your employees about intellectual property and what it means to you.  Don’t assume everyone who works for you has your best interests at heart.