A Little Bit of News…

hobbes_leviathanI am so happy to report that one of my blog posts, Step Into the Arena and Be Prepared to Get Dirty, has been named one of the 25 best things they read this year by Managing IP!   I’m listed under the “Innovative Thinking” category.  I’m not so sure how “innovative” it is.  I laugh every time I see the description of the post, calling it “the Hobbesian theory of patents”.

Who knew I could write something that memorable?

Thank you Managing IP!  I am honored to be included on this list.

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.

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.

Big News from IP made simple

I am so happy to announce that I am offering a short guide with 10 helpful tips to get the most out of your intellectual property portfolio to all IP made simple Subscribers.

The guide is called 10 Things Every Business Should Do With Their Intellectual Property: A Quick IP Owner’s Guide. It is designed to give the typical IP owner a roadmap for how to best manage their intellectual property, and covers everything from knowing what the different types of IP are to how to plan and manage your intellectual assets.

Managing your intellectual property is not rocket science.  It is actually pretty simple.  It only requires that you to have a process or system in place (just like the systems you already have that manage your sales accounts, your finances, your customer service, etc.)  This Guide lays out the simple steps that every IP owner needs to take to create a great portfolio.

To get access to this free guide just go to www.ipmadesimple.com and type your email address into the box that says ‘email’ located in the big blue box on the home page. You will receive a welcome email with a link to the Guide as soon as your confirm your subscription to IP made simple.

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Be on the lookout for 2 new product offerings from me in the coming months.  Before the end of 2012, there will be two new ways to learn about intellectual property.

1.  I am in the process of creating a library of short tutorials on various intellectual property topics.  These short 10 – 15 minute presentations will allow you to learn everything you ever wanted to know about IP at your own pace.

2.  I will be also be offering you a chance to work with me one-on-one.  I will be offering a consulting option.  Under this program, on top of the 6 hours of IP training, I will conduct an IP audit of your business, review your contracts, and provide you with a plan to address your intellectual property issues.

More information on both of these products will be available shortly.

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.

 

 

Ten Things You Need to Know About Trade Secrets

Trade secrets are what make your business unique.

They are your secret sauce, or ‘Grandma’s Secret Recipe’.

They make your product or service different from everyone else out there.

They are also the most ignored form of intellectual property today.

Here are 10 things you should know in order to start protecting your valuable intellectual property today.

1.  A trade secret is any formula, pattern, device or compilation of information which is used in one’s business to give him an advantage over competitors who do not know or use it.  Trade secrets include special manufacturing methods, processes, techniques, chemical formulas, computer software, data, and customer lists.

2.  Trade secrets are important.  I always like to ask my clients, how they would react if they found out that their #1 sales person just left to work for the biggest competitor and took their customer list and pricing information with them.  How would you react?  Would you get a pit deep down in your stomach?

If that thought scares you, then you know how important your trade secrets are to your business.  Those client lists and that pricing information could be trade secrets, and if you aren’t taking active steps to protect them, then that information could be walking out the door.

Now imagine if that person left with your test data, a prototype, the secret formula to your…I think you get the idea.

3.  Trade secrets are protected by law.  However, trade secret law is not uniform across the United States.  Contact an attorney in your state to understand the specific laws governing trade secrets where you do business.  If you are doing business overseas, contact an attorney in the foreign country to see what you need to do to protect your IP in that country.

4.  Unlike patents, trademarks or copyrights, there is no registration process for trade secrets.  They reside within your business and you must protect them.

5.  Trade secrets don’t expire.  They can potentially last forever if you can keep the secret that long.  There is always the risk that an independent third party may legitimately discover and use the secret.

6.  To protect your trade secrets, you should:

  • Identify them!  (You have to be specific.  Not everything in your business is protected under trade secret law.)
  • Limit employee access.  Disclose your trade secrets on a need-to-know basis.
  • Limit visitor’s access. Have all visitors sign-in.  Provide badges to indicate they are visitors in the building. Don’t let them wander around.  Accompany them around the building.  Avoid showing them sensitive areas.
  • Provide an education.  Make sure your employees understand their obligations when it comes to all of your intellectual property, including trade secrets.
  • Have confidentiality agreements, written policies, and internal procedures for employees.

7.  If you need to disclose your trade secret to a third party, you should take certain precautions before you disclose your trade secret.  Any trade secret disclosure to third parties, i.e., customers, suppliers, consultants, etc., should be limited to only those people who NEED TO KNOW under a written agreement of confidentiality of indefinite length.  (Again, check with an attorney in your state to find out the exact steps you need to take to protect your trade secrets.)

8.  It is a crime to steal a company’s trade secrets.  In the United States, perpetrators of trade secret theft are prosecuted under the Economic Espionage Act of 1996.

9.  With the rise of the internet and technology, it is easier than ever for your employees to steal trade secrets.  What used to be a labor intensive type of theft, think photocopying documents after everyone else goes home, is now easier than ever with the help of technology we use every day.  An employee can simply download files to a thumb drive and walk out the door.

10.  As we discussed last week, trade secret theft is on the rise.  Protect your valuable intellectual property by learning what you need to be doing today to stop trade secret theft in your organization.

Bonus Question.  Can you name the most well-known trade secret in the world?  Let me know your guess in the comments below!

Next week, I’ll talk about some recent high-profile trade secret theft cases.

Did You See this Billboard Recently?

FBI Billboard

If you did, it means you live or work in a city with industries and companies at high risk for trade secret theft.

Last month, the FBI put up these billboards in 9 communities across the nation, including Boston, New York, Washington, D.C., and San Francisco, in an effort to raise awareness about a growing problem: industrial espionage.

What exactly is ‘industrial espionage’?

It’s when foreign governments, corporations, and citizens spy on US companies in an effort to steal information that can provide them with some sort of economic benefit or advantage.  They are often looking for technology, pricing information, test data, or customer lists, a.k.a. the company’s trade secrets.

Why does the US Government care about trade secret theft?

Because it is a big problem for US companies.  The FBI estimates over $13 billion has been lost since October, 2011 due to trade secret theft.  That’s $13 billion in only 7 months!

In fact, state-sponsored espionage targeting the intellectual property of U.S. companies is growing so fast that the FBI considers trade secret theft a national security issue.

To be honest, the Government should be concerned about the rise in industrial espionage, and if you are an innovative company, you should too.  I’m just not sure a billboard campaign is the right approach.

How many people are going to really understand the message behind the billboards?  Seriously, I wish I had seen one in person, but RI didn’t make the cut.  Would the average person driving around in their car, stop and think about whether or not their trade secrets are at risk?  Would they even know what a trade secret is?

I’m not sure they would.

Trade secrets are often afterthoughts in corporate America, and companies with really good trade secret awareness tend to be large.  Most everyone could identify a trade secret when asked (the formula for Coca-Cola usually springs to mind), but most companies can’t identify their own trade secrets, especially small technology firms.

Why?  They don’t understand trade secrets.  They don’t quite know what they are or what they can and should do to protect them.  Which leads to the problem…if companies don’t understand trade secrets, then they can’t identify them and take the necessary steps to protect them.

I’ll continue this conversation next week with a short primer on trade secrets.

Here are a some great resources to get your trade secret education started.

- The FBI Website has some good information on trade secrets and the problem of industrial espionage.

- The National Intellectual Property Rights Coordination Center (IPR Center) is a multi-agency taskforce designed to share information, develop initiatives, coordinate enforcement actions, and conduct investigations related to IP theft.  Check out their website here.

In the meantime, if you think your company could use some help identifying and protecting your trade secrets, call me at (508) 878-3590 or email me at kelli@ipinfocus.com to set up an appointment.

I first wrote about this issue back in 2010 after I attended a workshop on economic espionage.   Click here to check out that post.

I Have a New Role Model

It’s Spanx Founder Sara Blakely.

What do I love about her?  Her passion for her “crazy idea”.  She lets nothing get in the way of building her business.   She learns what she needs to know to move her business forward.  She rolls with the punches.  She thinks outside the box.  She’s an amazing problem solver.  (Heck, that’s how she came up with a product that’s made her a billionaire!)  Her energy and spunk amaze me.   (If only I had half her gumption.)  She just has the right attitude to be a successful entrepreneur.  She is a great combination of a great idea, passion, and a willingness to just go for it.

Check out her story in these videos on Inc. Magazine’s website.  For those who are unfamiliar with her and her product, Ms. Blakely is a self-made billionaire (yes, that’s with a ‘b’).  She made her fortune selling her unique line of women’s shape wear.  I first read her story in an article in Forbes Magazine last month.  Then, I found the videos.

To top it off, she tells 2 great intellectual property stories on video 1.  First, she talks about how she wrote her own patent(!) and second, how she came up with the name Spanx.  She actually did IP research.  I just about fell of my chair when she talks about her experience on the US Patent Office website.  If only all entrepreneurs could be this IP-focused.

She inspires me to be a better business woman.

I hope you enjoy these videos as much as I do.

The First Step is Admitting You Have a Problem

I sometimes joke that my IP in Focus Program is a “12 step program for IP Recovery”.   The 12 parts all work together to turn an ailing IP portfolio around.   In the end, the organization has healthy IP and a custom-made management system ready to be leveraged when the time is right.

In any ‘recovery’ program, the first step is usually admitting that you have a problem.  Let’s look at some red flags that indicate that you might have an IP problem.

1.  You don’t have any (or not enough) intellectual property assets.  You know you should have filed that trademark registration, but you just haven’t gotten around to it.  You’ll worry about applying for that patent later.  Next time you update the website, you’ll tell the developer to add a copyright notice. If you are putting your IP off today, so you can deal with it tomorrow, you have a problem.

2.  No one is minding the store.  Someone in your organization will deal with an IP issue when it comes up, but there is no one person designated as the go-to IP guy or gal.  This can lead to red flag #3.

3.  You put an assistant in charge of your IP.  You put someone (an administrative assistant, engineer, property manager) in charge of tracking serial numbers and dates and other administrative tasks, but s/he has no authority to make decisions.  This often leads to red flag #4.

4.  You have trouble making IP decisions.  Your patent attorney calls and sends letters to remind you about upcoming deadlines, but you don’t answer them.  This usually happens because the person in charge of IP has no authority to make a decision and can’t get the real decision maker’s attention.  Unfortunately, you’ll probably be paying more money to the patent office to file that response because of it.  If you are guilty of #2 or #3, then you aren’t making quick decisions and it’s probably costing you.

5.  You haven’t thought about your IP in a long time.  If you only think about your IP when your attorney comes around, then you aren’t thinking about it enough.  And if you’re saying, ‘if my attorney’s not around, why should I think about it?’, then you definitely have a problem.

6.  You don’t actively monitor for infringers or search for opportunities.  You received your patent and your trademark, and you filed them away.  You think to yourself, ‘OK we’ve got our IP in order’, and go on your merry way without a second thought.  Stop wasting your money!  IP management doesn’t end when your patent is granted.  Some people might say that’s when the real work begins.  No one wants to go looking for trouble, but there are times that it’s better to find out that you have a problem, or an opportunity, sooner rather than later.

7.  You don’t have an IP policy.  If you don’t have an IP policy establishing your organization’s rules for controlling the intellectual property, then you are leaving your IP vulnerable to mishandling, misappropriation, and outright theft.  Just like other corporate policies, your organization needs to spell out the expectations it has for its employees when it comes to IP.  And the only thing worse than not having any rules is having rules and not enforcing them.

So, do you have an IP problem?