BizMorph

NDA vs Patent Application

(reprinted from BML January Newsletter)

Protecting your rights while promoting your invention

 

I recently attended a talk given by a serial entrepreneur with a great track record of success.  In the discussion surrounding the talk the issue of NDA's came up.  The speaker opined that NDA's were a thing of the past.  That many large companies today refuse to sign them.  That they are difficult to enforce and getting them wastes time better spent elsewhere.

 

The entrepreneur suggested that inventors forget about getting NDA's and concentrate on building up their business so that they could dominate the market and demonstrate the value of their invention with sales statistics.

I believe there is a lot of truth in what the speaker said but what he said is also limited because it omits a good deal of important information and also ignores other options open to the inventor.

Since I have been in business I have signed dozens of Non-Disclosure agreements.  Most of them are pretty standard.  The only major differences I have found between them are in the term of the agreement. I did find one client who wanted the term to be "in perpetuity".   I refused to sign that one.   But otherwise getting an NDA signed with small companies and individuals has been easy.

Getting a large company to sign an NDA is another matter.  For whatever reason staff attorneys are advising big companies not to sign NDA's.  I have also heard it said that VC's and Angels wont sign them either.  My guess is that they want to avoid potential lawsuits around breach  of these NDA's.  

 Sometimes a big company will want you to sign their NDA which may have  some unacceptable content.  And some attorneys will combine NDA's with non-compete agreements, arguing an NDA only protects you from the other party disclosing your information but not from them using it.

So how does an inventor protect themselves when they want to talk to a big firm about licensing their invention or an Angel or VC about funding their  idea.

The simple answer is to file a patent application.  A provisional patent application can be quite inexpensive if you do the work yourself and cost about half the price of a full  application if you have a professional write it 

You can inform the party you are talking with that you have filed a provisional application on the material you are disclosing to them.  If you later file a non-provisional application (which you must do in one year) you can enforce your patent ,should the company use your IP  without permission,  as soon as the patent application publishes.

 

This method is not as quick as an NDA but it is probably more effective and will allow you to talk with those large companies and investors who refuse to sign NDA's while still protecting your intellectual property

 

If you need more help or advice on this topic, contact us.   just send us an email to rblazey@businessmetamorphosis.com or  give us a call at   (585) 520-3539  

 

Brooklyn Bagel - Garage Sale:

One of my best clients is having a garage sale. Here's the notice:

 GARAGE SALE of 40 years of stuff (yard, garage & pool items, tools, housewares, jewelry, books, some antiques, toys, lamps, bagel knives and much, much more…..)

•  WHEN: Friday April 17 10-5, Saturday April 18 10-5, Sunday April 19 10-2
•  WHERE: Wendy & Dennis Moss, 4 Twining Court, Pittsford, NY 14534, (585)586-6581
•  (Twining Court is off of Charter Oaks which is off of Mendon Rd (RT 64) which is south of Pittsford Village – follow sale signs)

Come early, help as much as you can & have loads of fun!
Please feel free to forward this invite to your friends and relatives.

Letters and Comments - BML Newsletter

To Readers of the BML Newsletter:

 

Many of you have wished to comment on articles in the newsletter and up until now there has been no mechanism to do so.  Now if you wish to comment you can just reply to this article.  Please mention the issue of the Newsletter (Month, Yr) and the title of the article you are commenting on.  Add your name if you wish

 

Best Regards,

 

Dick Blazey

How to Implement the Patent Law Changes in Your Business

Guest Article by Tracy Jong, Patent Attorney

You have undoubtably read about how The America Invents Act changes patent law and practice in the U.S. Now you are left to figure out what your company should do to implement the changes. Do you need to do anything? Will it matter? 

Yes, it will. Let’s look at some real steps you can take to protect your technology. 

• Review your internal procedures for capturing potential inventions. How do you solicit and record new technologies from your employees, contractors, consultants and joint ventures? Do your policies encourage employees to report new ideas? Is there an incentive for doing so? Good written or electronic records will provide the necessary evidence in terms of both substance and timeline in order to put your company in the best position to take advantage of derivation proceedings and the prior user defense.  Use inventor journals to record and document research; regularly have them witnessed and dated. 

• Review or create an intellectual property protection program, including employee policies and agreements, to convey ownership of patents and copyrights to the employer confidentiality agreements and trade secret protection measures. Mark documents confidential, use computer passwords and other electronic security measures and educate your employees on the expectation and importance of confidentiality. 

• The AIA enhances the importance of confidentiality agreements and supports trade secret protection. Take this opportunity to review and update your confidentiality and nondisclosure agreements. Educate your employees to put greater emphasis on Confidentiality Agreements. Emphasize to them that it’s not about distrust, but to protect patent rights. They tend not to use them when they “trust” the other person to whom disclosure is made. 

• When signing confidentiality agreements presented by others, read them carefully to understand all of the provisions, such as whether there are restrictions like non-use and non-competes. These seem like such common documents that people often do not always take the time to appreciate the promises and burdens they are undertaking. 

• Use this opportunity to review and update your consultant contracts and joint development agreements to clarify technology ownership issues in view of changes to patent law novelty/prior art/obviousness scope

• When doing prior art searches, expand your search to as many major global sources of prior art and relevant activities.
• Actively monitor applications and patents in your key technology areas
• You may want to use a patent watch service or monitor weekly USPTO publications (Tuesdays for issued patents and Thursdays for patent applications).
• Proactively evaluate your technology areas to determine if there are some areas where “defensive publication” or intentional disclosure is the best or most cost-effective strategy. For example, you should consider defensive publication when foreign filing is unnecessary or limited. You will want to publish to prevent competition if you are not able or do not want to invest in a patent.
•  For key technologies, file provisional patent applications early to establish prior art dates. Be conservative and file provisional patent applications before all public disclosures or any sales of the technology embodied in or used in the manufacturing of a product. When it is available, it is best to include experimental data that can demonstrate your knowledge of the metes and bounds of the invention. Remember, as tempting as it is might be to keep some portions secret, you must disclose ALL of the technology for the patent to be enforceable. 
• When you file nonprovisional patent applications, use the Fast Track option if you need a speedy process and can afford it the extra few thousand dollars.  

• Develop a website for virtual patent marking. This will enhance your ability to collect damages from potential infringes. It will also help manage against false marking claims. However, do NOT mark products as patented when they are not. 

 

• Proceed conservatively. Any prior art exception for inventor disclosure and derivation claim should be narrowly construed – precisely the same invention (even minor variations are likely to be problematic until the law is interpreted over time). Be sure that you file new provisional applications on even slight variations of the technology. Conservative practice will ensure that the company can benefit from derivation proceedings and will not be subject to prior art rejections, especially under Section 103 obviousness. The new 102 exception or grace period for inventor disclosures will likely be narrowly construed to cover the exact invention only and may not extend to non-disclosed variations, no matter how minor they may be. The same narrow construction is likely to apply in derivation proceedings. There is no concept in the new law of “derivation-in-part” for situations where the original invention is modified or improved on by someone else. Protection is likely to be accorded only for the exact version of the invention that was disclosed or shared with the other party.

 

• Lastly, organize your patent portfolio data. This will also help minimize the chance of missed maintenance fee payments.

 

Our firm can help you with these strategies to implement and benefit from the new patent laws. Call our office if you would like to discuss your situation in detail. We can help customize a technology protection strategy that helps your business profit from its most important and valuable assets.

 

 

Lessons from "The Social Network" [Jointly developed Intellectual Property]

Reprinted from the Business Metamorphosis Newsletter [www.bmllc.net]  December 2011

 

 

 

It's not often that an abstruse legal subject such as Jointly developed Intellectual property becomes the subject of a major motion picture, but that in fact is what happened with "The Social Network".  The movie about the founding ofFacebook, and who really invented it  is  rooted in the complex legalities of intellectual property law.

 

The movie is built around a court case between the Mark Zukerberg, the founder of Facebook  and the Winkelvoss twins who claim that he stole the idea for Facebook from them.   The story is very interesting to someone like myself who studies Intellectual Property ownership because it's an example of what happens when you don't follow the established procedures and then end up in a mess as a result.

 

As the story goes the "Winkelvii"  hire  Zukerberg to write the software that will drive their invention,  called the Harvard Connection.  At the time, social sharing sites were not unknown as MySpace was already in the market and doing quite well.   The Winkelvii supposedly had the idea to focus social sharing websites  on specific Universities rather than make it open to every one as MySpace did then [and Facebook eventually did also].

 

  When they hired Zukerberg they made their first mistake.   They did not execute and sign an intellectual property agreement with him.   It's a very common practice to draft such agreements.  Most large companies use them.  I signed one at Kodak.  They say very plainly that anything you invent on your boss's dime belongs to them, not to you.   Zukerberg could have declined to sign, but he never had to.

 

The Winkelvii apparently knew  little about writing software.  That's why they hired Zukerberg.  He eventually decided that  their concept was "lame"  and  went  off  on his own to design a "better mousetrap"  which eventually becomesFacebook.   Since the inventions Zukerberg makes after parting from the Winkelvii make no use of their original concepts,  as Zukerberg concludes, when he is brought to court over the matter, he feels they contributed nothing and are owed nothing.

 

Strictly speaking both the Winkelvii and Zukerberg are co-inventors as they both contributed elements of the final invention.  The rule in patent law is that anyone who is responsible for at least one patent claim is a co-inventor and thus is named on the patent. The fairest way to handle such situations is with a Joint Development Agreement. 

 

 A properly constructed Joint Development agreement (and I've seen many) has 2 basic rules. 

1) Each side specifies what they owned in advance.  The agreements  usually allow them to keep that material.  

2) Anything that is developed after the project starts, no matter by whom, is considered Jointly Developed Intellectual Property and its ownership is the subject of, and is determined by, the agreement.  

 

If the Winkelvii and Zukerberg had executed a JDIP agreement, both would have owned a piece of Facebook as specified by the agreement and there would have been no need for a court battle. 

 

The Winkelvii eventually earned $67M from their court case.   But, given the current value of Facebook, ($24-$32 Billion ) that was chump change.  Their lawyers also probably took at least a third of their $67M.   I understand they are now suing for more. They are not expected to get it. To bad they didn't think things through at the beginning.

 

 What is not said in the movie is that the Winkelvii founded the Harvard Connection well before connecting with Zukerberg.  If they had patented their  invention, and never even  connected with Zukerberg,  his inventions would have been viewed as improvements to their patent, and while he could have patented the improvements he would have needed a license from the Winkelvii to practice them.  All together the Winkelvii were the ones who made the biggest mistakes and lost the most as a result.

 

 If you are considering Joint Development of an invention, find out how to  do to right.  Just  check us out at www.alacartepatents.com , write us at rblazey@businessmetamorphosis.com or  give us a call at  (585) 520-3539  

 

 

Should you File a Provisional Patent Application?

 Provisional patent applications have value but its not always what the people who write them think it is.   A provisional patent gives the applicant one additional year to file a non-provisional patent application but its no substitute for a real patent application.  If you don't file a non-provisional within one year the provisional expires and you loose the one year extension that it brought you. 

The most important value of a provisional application is to protect your patent rights from being lost due  to public disclosure or offering for sale.  If you do either of those things without filing a patent application, you start a one year period during which you MUST file the patent application or loose all rights to your invention which becomes part of the public domain.  You loose all European rights on offering for sale or public disclosure , immediately.   There is no grace period for European applications. 

A provisional patent is filed but not examined.  That means no one will look at your provisional application. It will simply sit on the shelf until such time as a non-provisional claiming it is filed.    Then it is removed from the shelf and compared to the non-provisional.   Any material which is in both applications gets the priority date of the provisional. 

So what should be included in a Provisional application?   Many attorneys don't include claims in a provisional or include just 1.  The body of the provisional should contain everything you want included in the non-provisional patent. If you do this correctly, most of the information you want included in the non-provisional will get the "priority date"  of the provisional.

Another useful property of the provisional patent is that it is not published.  That means its not disclosed so if  you so choose you can resubmit the provisional after it expires.  What you have lost by doing this is the priority date, so anyone who happened to file on something similar to your invention during the year your provisional was in force, is now prior art which can be used against you.

For this reason we recommend anyone contemplating this strategy do a patent search for patents filed in the patent classes into which your invention falls , for the year that has just been lost due to the provisional's expiration.

 

 

 

Kicking the Tires : Checking out Potential Joint Venture Partners

It's important to know who it is you are  doing business with.  Many small businesspeople have found to their dismay that the company they had invested time and money getting to joint venture with was not who they thought they were.  We had such an experience recently when someone contacted one of our companies with an exciting proposal.  They claimed to be part of a well respected firm which could have credibly stood behind the promises they were making ,   but it later turned out they were working on their own and using the firm to establish a false credibility.  One one company buys another, its common practice to do a complete analysis of the other firm,  and a "due diligence"  report is often prepared.   However the time and cost associated with these reports makes them impractical for many purposes.  For example, if a company wants to consider several possible merger partners the cost of doing a full due diligence on all of them may be prohibitive.  Also the searching company may not need all the information in a due diligence report to make a decision.  This is the reason that Penguin introduced our First Look product line.  First  Look gives the purchaser a chance to buy only the information that they need and get it faster.  Also,  Penguin has partnered with C3 Business Information , vendor of Skyminder reports to provide top flight credit information on target companies.   Whiile you can often find much of what you want on the web,  a web search may also give you tons of irrelevant material to sort through.  Also some very useful  data sources are only available by paid subscription.   Penguin has those subscriptions and a skilled professional researcher who knows how to use them.  Contact us when you need to find out WHO that other party with the exciting offer really is.

 

Storming the Castle: How to get your ideas in front of the Right people

One of the most difficult problems in patent licensing is making contact with the people who  have the authority to make a decision on licensing your invention.  In many companies today the decision makers are so well insulated from the outside world that Michal Boylan in his book "Accelerants"  likened reaching them to storming a castle. 

Not that these folks have ever been easy to reach, but in the past the "gatekeepers"  were often human beings who could be reasoned with.  Those individuals have long since disappeared and been replaced by voice-mail trees that operate like Escher's endless staircase leading nowhere.. 

However, all is not lost because there are new media available that offer different routes to the decision makers.  Among these are the social media , particularly Link edIn. You can use these media to find out who works at the companies that you are targeting and more importantly who you know who can introduce you to them.

 

The first problem for the invenor or their agent is to identify who the decision-maker is.  Unless you have access to an internal corporate phone book (or its on line equivalent) this is extremely difficult,.

In some large companies there are persons whose job it is to "protect" the company from outside inventors.   The reason that such an unlikely job exists is that those companies are constantly creating new ideas internally.  They don't want find later on that their new product can be blocked in the marketplace by lawsuit from an inventor claiming he told them about it.   Hence the "Outside Ideas Office"  whose job is to be the only one in the corporation who talks to outside inventors,  and more importantly never to other members of the corporation.

To bypass this office you need to talk to someone else, for which you need an introduction.  And you need to be sure this person never sends your idea to the "Outside Ideas Officer"  as that is the kiss of death.

Again the Internet is one of your best resources to help find decision makers because they are often well represented at trade association conferences and other public documents.  For publicly held companies you can also find information on the officers and directors but this information is unavailable for many privately held companies.

If you need help in getting to the right people, its helpful to deal with a company that has been through this process and may even have contacts in the companies you are targeting.   Give us a call at ITTr and see if we can help 

 

 

 

 

Making the Most of Your Intellectual Property

Companies don't monetize their inventions well.  Sometimes they never collect the ideas their employees develop and the ideas walk out the door when the employees leave.  Sometimes companies unknowingly infringe the patents of others leaving themselves open to costly lawsuits.  Sometimes they lose revenue by not licensing their portfolios.

In a recent talk Patent Attorney Tracy Jong and I identified 5 common mistakes that companies make regarding their inventions that will cost them time and money.

1.     Not establishing Freedom to Use

Most people are surprised to learn that a patent does not give you the right to make or use an invention. It just means you can prevent others from doing so.  If you unknowingly use someone else’s patent  you open yourself to costly lawsuits.

2:    Ignoring Licensing Opportunities

Not seeking  licensing revenues from non-core uses of your patents. The extra revenue your earn from  patent license is “sleep money”.  Its earned for doing nothing extra (excluding any legal costs associated with drafting a license).   If you ignore licensing opportunities its like throwing away cash.

3.    Not Getting Intellectual Property Agreements with Staff

Bill Gates once said that the main assets of Microsoft walked out the front door at 5PM.   Valuable inventions can go right out the door with those workers.  The ideas in their heads that are never patented   and those projects that they worked on while at your company may later be patented by competitors.  

4.   Letting Competitors Patent your Inventions

While you don’t have to patent your inventions, you do have to protect them.  If you don’t you face another challenge, someone can patent something you invented and keep you from practicing it.  

5.   Not Protecting Valuable Inventions

Once you have invested the dollars to create something you need to be able to sell enough of those objects to recoup your investment or you have lost money. If someone else is able to copy your invention with impunity, that may never happen.

Patent Strategy deals with these and other issues.  Contact us and we will help you with them. Here’s some links that will also  help you find resources to  deal with these issues-   www.ideas-to-assets.com,  www.alacartepatents.com ,  www.ittrifecta.com

Rejuvinating Rochester : The Aquaduct Cafe District

 Neal Rudin's Vision:

 A Cafe District at the  Broad Street Aqueduct

       Our extraordinary Broad Street Aqueduct is one of only three similar structures of its type in the world. One of these three, the “Ponte Veccio” bridge.(Fig 1)  is in Florence, Italy  where Leonardo DiVinci, Michelangelo, and the Medici’s walked.  Now it is our turn to create a new renaissance,  dynamic engine of change.  Both of our cities have pioneered advances in the human experience by changing the direction and flow of history though the arts, social activism, and the sciences. However, our Broad Street Aqueduct is nearly twice as wide as the Ponte Vecchio and is fully enclosed.  It is essential that we create our own Ponte Veccio, our own heart and center where the whole community can converge. The “BSA” must be developed into a place where a critical mass of humanity, surrounded by all the tools of civilization will be able to advance.  This marvelous catalyst will be the foundation of our self-actualization. This will be the place where we will discover our future by exploring and pursuing inspiration and self reflection, a place that reveals our greater vision, a place where history tells us its own story. The “BSA” will become the vital hub, heart, and focal point of our city and its economy. A place that reveals to us the world that we have helped make visible. All great tourist cities of the world have café districts at their centers where their people gather and exchanges ideas and bargains for exotic things, a place of music and laughter, smells and tastes, A celebration of the senses and surprises is around every turn.

The “BSA” will reflect our vast contributions and our integral and ubiquitous connections with rest of the world and the universe. It is a place that will draw unceasing crowds and a place of continuous expectation. We need a World Cultural Center, an international café district that hosts the wonders of our sister cities, a mixture of Disney’s’ Epcot Center and Atlanta’s Underground, and yet with 42 huge arched windows overlooking a fast and north flowing river.

Rochester has sister cities in Japan, Ireland, France, Italy, Hungry and Mali, Russia, Israel, and Puerto Rico, etc. There is enough room for 14 large cafés with its huge windows on the upper deck, to view the Genesee River and room for more than 30 shops like; bakeries, spice and herbal shops, world music, clothes, a public market and much more below. Our contributions include our New York State Wine Cellar and “Focal Point” our personal essence where we find the wonders of Rochester and the fantastic Finger Lakes.

Paralleling the War Memorial will be an enclosed Summer Sports Park. It’s place to play all year round. It will be a place to work out, play summer games and take Golf lessons, or practice batting, kicking a soccer ball, throwing a Frisbee, and even bicycling. Laughing children run around on rolling hills in this enormous space

Under the library side will be a Corporate Networking Center where business is cultivated and promoted. Next to it will be a Science Enlightenment Center particularly dedicated to the nature and nurture of light and optic and its applications. It would be a place filled with lenses, lasers, imaging technologies, and all the things they are used for.

A wonderful working canal museum will be proudly displayed within a large conservatorium on the Eastern end. It will exhibit the magic of our historic nurseries and parks. We were the “Johnny Apple Seed” of the world. It’s a place that helped to settle and beautify America and the world.

Next, there is a right-of-way from the western side all the way to the airport where a trolley can run passengers directly downtown. This would add another artery to our now beating heart, another opportunity for us to demonstrate to the world our creative potential, another reason for people to move here.

Rochester needs a place that is open all year long that is not influenced by the weather outside or the time of day. If we want to bring the world here we have to show them the things that make us so extra-ordinary.                                    

---Neal Rudin ZagoZana@Yahoo.com 585-442-5656

 

Ponte Vecco

 

 

 
Broad Street Aqueduct - Exterior View

 

 
 
Broad Street Aqueduct - Interior View

 

 
What it could be like-

introduction to Visions

 Welcome to the new VISIONS series on Bizmorph-  Its time our readers heard from someone besides me.  In my work I talk to many people with ideas for new products, services and systems sometimes their ideas go beyond business to the community as a whole.  This is your chance to hear some of the voices that I hear and have found interesting. Our first guest author is Neal Rudin. 

Neal Rudin is a visionary.  That is the way he described himself to me when I first met him 8 years ago.  Neal is many things.  An inventor, an artist a photographer a gardener.  He was the very first customer that BML had as we helped him draft his first patent application.   For years Neal has been sharing with his many friends his Visions for how Rochester could be a more attractive city and a magnet to tourists from all over the world. 

 However other than writing letters to the editor he has not put these materials out where more people could see them.  As the first guest author of our VISIONS series we take pride in being able to share his visions of a future Rochester with the online community.   Enjoy-

 

Dick Blazey