Innovation happens fast. As newly-minted in-house counsel, it’s your job to facilitate leverage of your company’s intellectual property portfolio by putting processes in place to capture, protect, and monetize it. If you’re newly in-house or a seasoned but new to intellectual property (IP), this one is for you.
You play a crucial role in protecting and managing your company’s IP. IP rights are essential for businesses to maintain a competitive edge and monetize innovation. We’ll cover some basics of IP, including patents, trademarks, copyrights, trade secrets, and some strategies for managing your company’s IP.
Innovation → Patents
A patent grants an inventor the exclusive right to make, use, sell, or import an invention for a limited term, usually from the patent grant until 20 years from the filing date. A patent provides a nationwide right to exclude others from making, using, selling, offering for sale, or importing the invention. In other words, it gives the patent holder a temporary monopoly on the invention, enforceable against others. Patents can protect inventions like processes, machines, and even certain types of plants. To obtain a patent, an invention must be novel, non-obvious, and useful.
You’ll need to be familiar with the patent application process, including the drafting of patent applications, working with outside patent counsel, and navigating the U.S. Patent & Trademark Office (USPTO) procedures at a high level (your outside patent counsel should provide the necessary guidance). It’s essential to ensure the timely filing of patent applications to prevent loss of rights and assess the patentability of innovations to avoid wasting resources.
Brand Elements → Trademarks
Trademarks are distinctive signs, logos, or names that identify a product or service’s origin and distinguish it from others. Trademarks strengthen a brand by excluding others from providing goods or services under a confusingly similar brand. A trademark can protect various parts of a brand, including names, logos, emblems, symbols, colors, sounds, or designs identifying you as the source or origin of goods or services.
Trademarks come into being by using the trademark to market or sell products or services. Registering a trademark provides enhances its owner’s exclusive right to use the mark and prevents others from using a confusingly similar mark.
You’ll ensure the proper selection, prioritization, and registration of trademarks, both domestically and internationally. This process involves searching existing trademarks, preparing and filing trademark applications, and maintaining and enforcing trademark rights. Part of your responsibilities further include policing your company’s marks to avoid loss or dilution of the company’s rights in the trademark.
Creative Works → Copyrights
Copyright protects original works of authorship, including literary, artistic, musical, and dramatic works. A copyright is understood as a bundle of rights—its owner has exclusive rights to reproduce, distribute, perform, display, and create derivative works of the protected work.
You’ll need to be mindful of copyright law, including registration, licensing, and enforcement, but due to the volume of copyrighted material most companies create or have access to, major value you can add is in the prioritization and selection of copyrights to protect and enforce. While copyright registration is not required to establish rights, it is necessary to enforce them in the United States. You’ll want to be familiar with the fair use doctrine, which permits limited use of copyrighted material without the owner’s permission in certain circumstances.
Confidential Business Information → Trade Secrets
Trade secrets protect what isn’t to be made public. Trade secret law can protect inventions, processes, business procedures, secret recipes, and more. Trade secrets encompass any valuable, confidential business information that provides a competitive advantage, such as formulas, processes, or customer lists. Trade secrets are protected as long as they remain confidential, though the requirements for protecting them vary significantly depending on the type of thing trade secret protection is sought for.
You’ll play a vital role in identifying, protecting, and enforcing trade secrets. It’s crucial to implement policies and procedures to maintain confidentiality, including non-disclosure agreements (NDAs), employee training, and physical and electronic security measures. You’ll also need to be prepared to take legal action in the event of trade secret misappropriation.
Particularly when you’re getting ready to start discussions of business deals, it can be important to ensure that your non-public intellectual property can be discussed—and that it’s kept private. This can be particularly relevant for Trade Secrets, but can become relevant with other classes of IP as well. Nondisclosure Agreements (NDAs) are a way to accomplish this using contract law. The basic arrangement is that a party promises to not disclose confidential information shared by the other party. This promise is enforced by the prospect of civil penalties for breach of contract if the receiving party discloses it in such a way that breaches the NDA.
IP Due Diligence and How It Relates to Business Deals
IP due diligence is the process of evaluating IP assets during business deals such as mergers, acquisitions, or other transactions. At a very high-level, IP due diligence includes identifying potential risks, ensuring proper ownership and licensing, and assessing the value of IP assets.
Key components of IP due diligence include:
- Reviewing IP portfolios, including patents, trademarks, and copyrights;
- Assessing the validity, enforceability, and scope of IP rights;
- Identifying potential IP infringement or licensing issues; and
- Evaluating IP-related agreements, such as licenses, NDAs, and employee contracts.
How Licensing and Technology Transfer Can be Used to Monetize IP
Licensing of IP involves granting another party the right to use, manufacture, or sell a patented invention, copyrighted work, or trademark. Licensing can generate revenue, expand market reach, and foster collaboration.
In-house counsel plays a pivotal role in facilitating licensing and technology transfer, enabling companies to maximize their intellectual property (IP) assets. A well-crafted licensing agreement can generate revenue, expand market reach, and foster collaboration. To protect your company’s interests, be proficient in negotiating and drafting licenses, addressing key terms like scope, exclusivity, royalties, and indemnification. For technology transfer, work closely with universities and research institutions to manage IP rights, ensuring smooth collaboration and commercialization. Ultimately, strategic licensing and technology transfer can bolster your company’s competitive edge and spur innovation.
But what about Antitrust?
When considering licensing deals, however, you’ll always want to be mindful of Antitrust laws. Antitrust law, in the broadest sense, is the government’s enforcement mechanism to maintain competition in the marketplace by preventing things like conspiracies, monopolies, price fixing, tying, etc.
Intellectual property necessarily suppress competition (for example, a patent provides a limited monopoly on the patented invention). Thus, it’s often considered to be like an exception—though not a complete exception—to Antitrust law. It’s absolutely critical when considering monetization strategies to be mindful of the guardrails of Antitrust law, which we’ll help you navigate while creating and executing your monetization strategy.
What about IP Litigation as In-House Counsel?
Enforcement of intellectual property is one of the most-overlooked forms of monetizing intellectual property by startups and small businesses. This may primarily be due to the expense often involved (though Stake does offer contingency litigation options on a case-by-case basis). Enforcement can be accomplished through litigation, whether in court or in the Patent Trial and Appeal Board (PTAB), though most cases can be resolved in pre-litigation following a cease-and-desist letter, a demand letter, or negotiations.
IP litigation is the process of enforcement of IP, defense against enforcement of IP, invalidation of IP, or defense against invalidation of IP. This can take various forms, and can occur in federal courts or at the USPTO, or even be negotiated and settled before reaching either.
IP litigation can be a very long process if seen through all of the way to a final disposition after trial. For the purposes of strategizing, its often divided into some high-level stages used to define milestones in the overall litigation process. As in-house counsel, it’ll be your job to coordinate outside counsel in litigation your company pursues.
Intellectual property is one of the many responsibilities you’re taking on as your startup’s newly-minted in-house counsel. Patents, trademarks, copyrights, and trade secrets can be leveraged by your company, and it’s long-established that top startups get started with IP early.
If you do need assistance, get in touch!