Patent-or-Trade-Secret_How-to-Protect-Your-IP_Spring-2018.pptx

Patent-or-Trade-Secret

1. PATENT OR TRADE SECRET? —HOW TO PROTECT YOUR IP PARESH KUMAR & YING CHEN

2. TODAY’S PRESENTATION Entrepreneurship & Intellectual Property Clinic 2 Utility Patent What is Patentable Subject Matter? Alice v. CLS Bank Examples of Acceptable Software, Blockchain Patent Claims Patent vs. Trade Secret What About Copyright? Considerations in Your IP Strategy

3. Patent Entrepreneurship & Intellectual Property Clinic 3

4. UTILITY PATENT Entrepreneurship & Intellectual Property Clinic 4 Right to exclude Life span Issuance - 20 years from filing date Claims Periphery Broad to narrow Clear title (assignment) P1. Method of delivering drug by using nanoparticle carrier. P2. Using a type of lipid nanoparticle C1. Method of delivering drug by using nanoparticle carrier. C2. lipid nanoparticle C3. diameter 50 nm

5. What are the basic requirements to obtain a patent? Entrepreneurship & Intellectual Property Clinic 5 First inventor to file Useful Disclosure New and non-obvious Beware of your own publications, presentations, and private/public sales Only the United States provides one-year grace period Patentable subject matter

6. What is Patentable Subject Matter? Entrepreneurship & Intellectual Property Clinic 6 Patentable: Processes, machines, article of manufacture, and compositions of matter Not patentable : Abstract ideas , e.g., the method of hedging, creating contractual relationship Laws of nature , e.g., E=MC 2 , a correlation with blood test results and patent health Natural phenomenon , e.g., the existence cell-free infant DNA in maternal plasma Humans (e.g., natural DNA, insulin), nuclear weapon

7. What is Patentable Subject Matter? Entrepreneurship & Intellectual Property Clinic 7 Alice Corp. v. CLS Bank, US Supreme Court, 2014 A software implementation of an escrow arrangement – abstract idea, not patentable Mayo two-step Test: Step 1. Determine whether the claim is directed to a law of nature, a natural phenomenon, or an abstract idea. Step 2. Determine whether any element, or combination of elements, in the claim is sufficient to ensure that the claim as a whole amounts to significantly more . If no If yes Patentable subject matter Significantly More: Improves the function of a computer Improvement to another technology/field Adding a specific and unconventional limitation

8. Example of Valid Software Claims Entrepreneurship & Intellectual Property Clinic 8 US Patent 5987696, BASCOM (Fed. Cir. 2016). Claim 1: A content filtering system for internet … comprising: (1) local client computer … (2) one filtering scheme … (3) logical filtering elements …, and (4) remote ISP server coupled to client computer…. Step 1. The claim is directed to an abstract idea of filtering content. Step 2. The combination of elements provides ”significantly more ” –unconventional, overcome disadvantage of existing filtering system. Patent eligible yes

9. Example of Allowed Blockchain Claims Entrepreneurship & ISofntellectual Property Clinic 9 Allowed by USPTO with Alice in mind, but not yet validated by the court. With unconventional elements/combination, software/ blockchain may be patentable. US Patent 9,882,918, User Behavior Profile in a Blockchain (Owner ATT) Claim 1: A computer-implementable method for generating a cyber behavior profile, comprising: (1) monitoring user interactions… (2) converting user interaction into electronic information… (3) generating cyber behavior profile … (4) storing information about the profile in blockchain …, and (5) append user behavior element (either good or suspect)….

10. Patent or Trade Secret? Entrepreneurship & Intellectual Property Clinic 10

11. How is a patent useful? Proof of invention Right to exclude others from practicing your invention Investors want assurance Technical credibility for inventors Prestige / status in discipline Source of personal income Entrepreneurship & Intellectual Property Clinic 11

12. Trade Secret Elements: Information is not generally known or readily ascertainable ( ie . a secret) The secret is the source of economic value. Owner must use reasonable efforts to protect the secret (use NDA, limit access, etc ) No Limitation in Time Protection Against: Misappropriation Improper means ( ie . theft, bribery, misrepresentation, breach of a duty to maintain secrecy, espionage, etc ) – covers inducement Disclosure without consent Not Against: Independent Invention, Reverse Engineering, Inadvertent disclosure. Entrepreneurship & Intellectual Property Clinic 12

13. Patent vs. Trade Secret CAUTION when double dipping in trade secret and then trying to acquire a patent on the same technology once the secret is discovered. Entrepreneurship & Intellectual Property Clinic 13 Patent Trade Secret Right to Exclude Yes No Require disclosure Yes No Limited Protection in Time 20 year No Cost to obtain, maintain, and enforce High Lower (varies) Protect Against Reverse Engineering, Independent Invention Yes No Protections against design around No No

14. IP Strategy Entrepreneurship & Intellectual Property Clinic 14

15. IP Strategy Considerations Checkpoint: Will a patent be valuable to your business? 12 months to file patent from to the public disclosure (publications, user testing, sale) Best to file before public disclosure (rest of the world is much more strict) Can file a provisional patent or full patent Provisional patent Have no real legal rights other than preserving your ”priority” date for future patent filings. Provisional patent disclosure needs to support future claims to maintain priority date. Does not count towards 20-year patent term Application itself is $70 - $280 + lawyer’s fees (may be a few thousand dollars) Full (non-provisional) patent: Takes 2-3 years from filing to grant Applications publically publish 18 months after filing (notice to competition) Application costs $430 – $1720 + lawyer’s fees (may be tens of thousands of dollars) Entrepreneurship & Intellectual Property Clinic 15

16. IP Strategy Considerations Industry Matters Different industries have different cultures around patenting and trade secrets For life science and physical science markets, patents are very important For fast evolving tech markets, your technology might be obsolete within a few years patent exclusivity may not be as important. Patenting software may not be critical to the business Smart to patent any initial hardware devices and subsequent versions to develop your “brand” (ex. wearables or drones) reverse engineering? Be Aware of Potential Infringement Use google patents (18 months to publish) Trade literature News Entrepreneurship & Intellectual Property Clinic 16

17. Entrepreneurship & Intellectual Property Clinic 17 [] has developed artificial intelligence software to identify a drug for Parkinson’s disease. Patentable? At what point? Pursue a trade secret? What else should you consider?

18. Hypo: Artificial Intelligence Software [ ] is a developing an artificial intelligence software to identify suitable drug candidates for Parkinson’s disease Patentable? At what point? Should you patent? Or pursue a trade secret? Do you want to disclose your algorithm to the public? Then you have to police it. Barrier to entry? How easily can someone reverse engineer this? How lucrative is the application? Even if there are other players, will it impede your ability to do business? Infringement considerations – are other players pursuing patent strategy? What else should you consider? Copyright? Entrepreneurship & Intellectual Property Clinic 18

19. Copyright for software Entrepreneurship & Intellectual Property Clinic 19

20. What About Copyright? Copyright is designed to prevent others from copying creative expression art, photographs, music, websites, etc no protection for genuine independent creation right to reproduce, distribute, display/perform publically, make derivative works, etc (1) Life of the author plus an additional 70 years; (2) 95 years from publication in work for hire Copyright law does not protect the functional aspects of a computer program Ex. program’s algorithms, formatting, functions, logic, or system design. Expression embodied in a computer program is copyrightable Source code deposit strongly preferred by the Copyright Office. Object codes does not have the same presumption of validity). Each version of a computer program requires a new copyright. Registering a copyright provides notice, makes it easier to prove infringement, and recover damages (1) a completed application form, (2) a nonrefundable filing fee, and (3) a nonreturnable deposit—that is, a copy or copies of the work being registered and “deposited” with the Copyright Office. Entrepreneurship & Intellectual Property Clinic 20

21. Hypo: Artificial Intelligence Software Legal insights thus far: AI IP issues typically stem from two business objectives: maintaining a freedom to operate (“FTO”), without violating third-party IP rights; and protecting investments in AI research and development. The USPTO has seen a 500% increase in the past five years in the number of patents issuing to class 706, a classification exclusively designated for AI data processing systems. Challenge: An inventor must disclose to the public enough information about the invention to enable one of ordinary skill in the art to practice what is claimed. Strong patents need strong disclosures. Rule sets, network topology, which can include the number and types of layers, the number of neurons per layer, neuron properties, training algorithms and training data sets.  Entrepreneurship & Intellectual Property Clinic 21