Intellectual Property Protection

Robert Traver

Question:

1. What is the best way to protect the design of a website?

a. trademark protection

b. patent protection

c. copyright protection

d. keep it a secret

Question:

2. Big Pharma buys your startup, which has developed

therapeutic antibodies. What is Big Pharma purchasing?

a. your patent portfolio

b. your trademark/tradename for the therapeutic

antibody

c. your employee contracts

d. your lab animals/animal models

Question:

3. You identify Italy as a large potential market for your

new therapeutic antibodies. How do you obtain patent

protection for your invention in Italy?

a. file a provisional application in Italy

b. file a PCT application in Italy

c. file a patent application in Italy claiming priority

to your US patent

d. file a European patent application

Question:

4. Company Z develops a new method of medical

treatment using your therapeutic antibodies. How do

you increase sales of your antibodies using this new

method of treatment?

a. do nothing

b. advertise the new use/treatment and/or inform

doctors of the new use for those antibodies

c. file a patent application for the new use

d. license patent rights from company Z

Intellectual Property

Intellectual Property: why?

Attracting investment/investors

Protecting your investment/employees/investors

Building value in your business

Patents in Biotech

Patents – a negative right that allows you to stop others from

practicing your invention

confidentiality, liability, export control, invoicing, financial

reporting, structure of collaboration, application submission,

peer review processes, working with non-profit, foundation and

industry awards, employment issues, materials transfer and

ownership, expectations and milestones, reporting to federal

agencies, institutional mission vs. corporate mission, parallel

work, fee for service work, follow-on research, FDA approval

Patents – why not sufficient?

2013 PhRMA White Sheet: Average cost to develop a drug (including cost of failures):

Early 2000s = $1.2 billion

Late 1990s = $800 million

Mid 1980s = $320 million

1970s = $140 million

2013: A new Forbes magazine analysis calculates that it now costs $5 billion to develop a new drug --

expenses that are borne by the private sector.

(http://www.forbes.com/sites/matthewherper/2013/08/11/how-the-staggering-cost-of-inventing-new-drugs-is-shaping-

the-future-of-medicine/print/)

AbbVie deal to buy Pharmacyclics and its Imbruvica medication (2015)

AbbVie Inc. paid $21 billion for part-ownership in Pharmacyclics, which has developed

Imbruvica (treatment for blood cancers) - hasn’t earned more than $1 billion in sales yet.

Economists predict that Imbruvica will eventually earn $6 billion per year.

Patents – why necessary?

Facebook filed at least 1 patent application today

Oracle filed about 3

Google filed about 5

Microsoft and Apple filed more than 8 each

IBM filed nearly 30 patent applications just today.

These are the recent averages per workday

Patents - what is patentable?

Utility Patents cover:

• Machines

• Articles of manufacture

• Methods (processes)

• Compositions of matter (chemicals, cell lines, isolated DNA)

• Improvements to any of the above.

Design Patents cover the appearance of useful objects.

They do not cover the function or construction of the

object.

Plant Patents cover certain plants.

Patents: what’s not patentable Purely mental processes

Mathematical algorithms or formulas (that is, just a formula without a real-

world effect - a formula or algorithm may be claimed as part of a method, so

long as there is an effect on the real world)

Arrangements of printed matter (Printed matter may be part of a patentable

invention, but if the "invention" is just words, use copyright)

Naturally occurring things (unaltered - these are not "inventions”=isolated

DNA)

Scientific principles (a device or method which operates based on a new

scientific principle can be patented, but the underlying principle cannot)

Inventions solely useful in making atomic weapons

Human beings

Abstract Ideas, and computer implementation of these ideas

1. disclosing invention to the public (publications, posters,

presentations)

2. public use

3. selling

4. offering for sale

Most foreign countries require that no public disclosure take

place before filing. It is possible to file a foreign application from a

U.S. application. However to do so, the U.S. application must be

filed before any public disclosure or sale.

How to lose your patent rights

conception prov. Filing non-Prov

(priority document) (US, foreign,

both, multiples)

Patent Timeline

Reduction to practice

Less than or = 12 months

Moving, Selling, Renting Rights

MTA (material transfer agreement)

NDA/CDA (nondisclosure/confidentiality agreement)

License – exclusive or nonexclusive

Sublicense

Assignment

Sale of entire right, title and interest

transfer of ownership is permanent and irrevocable

lump sum payment vs. royalty stream

Transfers risks of reduced royalties in the event of technical

failure, market failure, regulatory failure, and competing products,

to the assignee.

Tax consequences

Standing: Right to Sue for Infringement

Right to Sue for Past Infringement

Joint Ownership: each party has an equal and undivided

interest in the invention

Assignment

Grants exploitation rights over a patent

Contract not to sue for otherwise prohibited activities

Joint ownership

Exclusive or Nonexclusive

Performance obligations that parties must comply with

Revocable=Failure to comply with those obligations

may lead to the termination of the license

Patent License

Scope of patent rights: Grant clause

Field licenses

Sublicensing rights

Reservations

Best Efforts

Definitions

Royalties

Cross Licenses

Subsidiaries, Affiliates

Territory

Improvements

Reporting and Accounting

Inflation and Deflation

Regulatory Requirements

Infringement

More favorable licensees

Indemnification

Liability

Prosecution of applications

Choice of Law

Marking

Term and Termination

Settlement/Arbitration

Attorney and Government Fees

License Terms

Antitrust

Patent Misuse

Bruelle rule

Aircraft, Laptops, Biotechnology

Patent Pooling

Generally: a term of 20 years from the date of filing

PTO delays: 14 months for the first office action,

4 months for a subsequent action, and

4 months between payment of an issuance fee and

the grant of a patent.

The original patent application process must be

completed within 3 years of actual filing If these time

constraints are not met, the patent receives a day-for-

day extension of the patent term

Patent term extension – PTO delays

A patent does not provide the owner with an affirmative right to

market or sell the invention

Biotech products are subject to marketing approval by the FDA

The Drug Price Competition and Patent Term Restoration Act of

1984 (the “Hatch-Waxman” Act) gives term extensions of

pharmaceutical patents to reflect regulatory delays encountered

in obtaining FDA permission to market the drug.

The term extension is equal to the time between the effective

date of the investigational new drug application (NDA) and its

submission, plus the entire time lost during FDA approval of the

NDA. However, the entire patent term extension may not exceed

5 years.

Patent term extension – FDA delays

Patent Infringement-Direct

Anyone who makes, uses, or sells the patented invention is a direct infringer.

1st: the claims are analyzed by studying all of the

relevant patent documents.

2nd: the claims must "read on" the accused device or

process.

Patent Infringement-Indirect

If a person actively encourages another to make, use, or sell the invention, the person may be liable for indirect infringement.

Patents and secrets

How to patent an invention but keep the important parts secret:

Don’t! The price of the so-called "patent monopoly" is that you must

tell the world how to practice your invention = how to make and use

If you are manufacturing your invention yourself, and its operation

depends on something difficult to reverse engineer, you might want

to protect it by a trade secret rather than a patent.

Trade Secret: what

business information that is:

Valuable

Secret

Subject of reasonable efforts to maintain secrecy

Trade Secret

The disadvantage of Trade Secret protection: once

your trade secret is no longer a secret, you have no

protection.

You also run the risk that someone else may later get

a patent on your secret process, and will file suit to

stop you from practicing the method.

Patent Protection (vs. Trade Secret)• Advantages

• easier to enforce

• can’t be lost inadvertently

• greater recognized value

• can protect disclosed inventions

• can protect more than what is reduced to practice

• Disadvantages

• limited term

• cost

• must disclose invention

Example: IFNAN

2014: positions 39,739,154/5 of chromosome 19:

wt: GGGGGG-CCTT-CTG

HCV-clearer: GGGGGG-CC G-CTG

Example: IFNANMolecular Diagnostics Are in a Rut. The Industry Needs the FDA

Luke Timmerman 2/17/14:

Some of the more exciting ideas in biotech are coming up in molecular diagnostics. A

number of tests have potential to cut down on overtreatment, reduce waste in

healthcare, and give physicians clever new ideas on how to help patients. But this

industry, which accounts for less than 2 percent of healthcare spending, is stuck in

neutral. If it’s ever going to grow into a bigger business that delivers lots of valuable

information about health, the molecular diagnostics industry needs a tough, science-

minded, credible regulator to say with confidence what’s real, what’s clinically

meaningful, and what’s BS.

The Food and Drug Administration will take new steps to enforce regulations against

certain kinds of diagnostic tests, including some used for personalized medicine, to

which it previously took a laissez-faire attitude.

The announcement was made in a speech by Margaret Hamburg, the FDA

Commissioner, at the annual meeting of the American Society of Clinical Oncology

(ASCO), 2013.

Example: IFNAN• Supreme Court's rulings in:

• Mayo Collaborative Services v. Prometheus Labs (2012)

• Ass'n for Molecular Pathology v. Myriad Genetic (2013)

• In Prometheus, the Court held that claims directed to a method of administering a

drug weren't patent-eligible because they covered products or laws of nature

• In Myriad the Court found that claims for isolated DNA aren't patent-eligible but claims

for complementary DNA (cDNA) were because they weren't naturally occurring

• March 4, 2014, PTO issues patent examination guidelines prompted by these

decisions, indicating that examiners will now be asked to consider whether the claim

recites or involves a judicial exception to patent eligibility—laws of nature/natural

principles, natural phenomena and/or natural products—and, if it does, whether the

claim as a whole recites something “significantly different” than the judicial exceptions.

• The PTO said that the effects of the Myriad ruling will not be limited to clams for

isolated DNA and will extend to bacteria, peptides, proteins, primers and organic

compounds.

Example: IFNAN

2015: the double mutation produces a novel mRNA transcript

-> a novel protein with frame shift starting at aa22

- related to IFNλ3

Example: IFNAN

2016: now named IFNλ4 and shown to have unique interferon

activity and useful in the treatment of cancer, infection and

autoimmunity

A new Forbes magazine analysis calculates that it now costs $5 billion to

develop a new drug -- expenses that are borne by the private sector.

(http://www.forbes.com/sites/matthewherper/2013/08/11/how-the-staggering-cost-

of-inventing-new-drugs-is-shaping-the-future-of-medicine/print/)

Example: iTriage

A phone app that provides health information and

links to health care providers and health plans:

consumers get information about:

Symptoms, conditions, medications, medical

procedures, providers, facilities, links or phone

numbers for additional information

Example: iTriageComputer-Aided Selection Method Fails Patent-Eligibility

In SmartGene v. Advanced Biological Labs (Jan. 24, 2014)

at stake: two patents directed to methods, systems and computer programs that

guide the selection of a treatment regimen for a patient with a known disease or

medical condition.

the Federal Circuit held that a patent claiming the use of a computer to

implement routine mental information-comparison and rule-application

processes to select a treatment for a patient fails patent-eligibility because the

claims are directed to an abstract idea.

Those seeking to patent computer-aided diagnostic and therapeutic methods,

useful in personalized medicine, must identify and claim “something more” than

the use of conventional technologies

Alice Corp. v. CLS Bank International, June 2014- Supreme Court decides

computer-implemented inventions are not patentable subject matter.

Example: iTriageGo without patent protection?

Marketing a new product (introducing it to the consumer and

getting it adopted = “creating a market”) costs time and money.

But as soon as you are successful, knock-offs and counterfeits

will instantaneously pop up:

copyrights

trademarks

design patents

trade secrets

data privacy and security

work for hire

employment contracts

HIPPA compliance

QUESTIONS?

Copyright: what?• Literary works (books, magazine articles, instruction manuals, etc.)

• Computer programs and other software (including Web Pages). This

includes graphics and icons and the like, which may also be "graphic works".

• Musical works (including lyrics, if any)

• Dramatic works (stage plays, screenplays, speeches)

• Pantomime and Choreographic works

• Works of Art: Pictorial works (paintings, photographs, murals), graphic works

(maps, architectural plans, advertisements, posters, etchings), sculptures,

etc.

• Motion pictures, TV shows, and other audiovisual works

• Sound recordings (including the recording itself and the music being

performed)

• Computer Code

• Architectural Works (buildings)

Copyright – what not?

Functional elements: You could register a copyright for the description of a machine – use

patent protection.

Titles, names, short phrases and slogans: cannot be protected by copyright. These might be

protected by trademark.

Blank Printed forms: are not protectable by copyright. The arrangement of written matter,

instructions, graphics, etc., might be, however.

Designs of useful objects: Design patent is the proper form of protection.

Ideas, themes, subjects: are not protectable - only the expression of ideas.

Scenes a faire: Elements of a story which are dictated by the requirements of a setting.

Facts

Recipes: But collections of recipes with notes and descriptions (i.e. a cookbook) are protectable

US Government Publications: so you can copy them

Copyright: how• Register the copyright:

• Send the registration form with the fee and appropriate sample of the work to the Copyright Office in

Washington, D.C.

E-filing: In 2008, the Copyright Office implemented a new e-filing system called eCO (Electronic Copyright

Office). This system allows on-line registration of claims to copyright, and there is a discount in the filing

fee for filing through eCO rather than on paper. For more information, and access to eCo, see:

www.copyright.gov/eco.index.html

• Give the proper notice: The copyright notice consists of the "c-in-a-circle" symbol (©) or the word

"copyright" (or both), the year (normally, the year of creation or publication), and the name of the copyright

owner. If the work has been revised over a period of time, you can list more than one year. For example:

© Copyright 2002-2014 Sheridan Ross, PC

• Put the copyright notice someplace noticeable:

• Computer programs, put it on the opening screen and on any physical media (CDROM, packaging, etc.).

• Graphic and pictorial works, the lower right-hand corner is traditional.

• Audiovisual works usually have the copyright notice in the opening and closing credits.

• Web pages: put a copyright notice on index page and, if you want to be extra careful, at the bottom of

each subsidiary page.

Copyright: what right?

Copying or reproducing your work directly

Making new works based on your work ("derivative

works")

Selling or distributing copies of your work

Performing or displaying your work publicly

Building based on copyrighted plans (e.g.

architectural drawings)

Using (running), copying, selling the same computer

code

Copyrights – who?

The "author" of a work owns the copyright initially. The "author" may

be the actual person who created the work.

The owner may be the author’s employer if the work is "made for

hire." Under some circumstances, the person who contracts with

another to create a work is the "author" under the "made for hire"

doctrine.

Copyright: how long?

The copyright will last for the author's life, plus

70 years.

For works made for hire, the term is 95 years

from publication, or 120 years from creation,

whichever expires first.

Copyrights: someone else’s

If the work was created after 1977, assume it is covered by copyright.

Fair Use:

1) The purpose and character of the use (is the use commercial or nonprofit

educational? Is it one of the listed uses? How much have you changed or

adapted the work?)

2) The nature of the copyrighted work (is the work worth protecting?)

3) The amount and substantiality of the portion used in relation to the copyrighted

work as a whole (use only so much of the copyrighted work as is necessary and

reasonable to accomplish your purpose); and

4) The effect of the use on the potential market for, or value of, the copyrighted

work (i.e. will your use replace the copyrighted work in the marketplace? Will it

reduce the market for derivative works?)

See: fairuse.stanford.edu/Copyright_and_Fair_Use_Overview/chapter9/9-a.html

Copyright: Penalties Injunction, preventing you from selling your work.

Impounding and destruction of infringing articles

Money Damages: the copyright owner may be awarded either:

• the owner's actual damages (her lost profits) plus your profits; or

• statutory damages of not less than $750 or more than $30,000 for all infringements involved

in the action, with respect to any one work. This may be increased up to $150,000 per work, if

the court finds that the infringement was "willful.” Statutory damages may be awarded

whether or not the copyright owner has sustained any monetary loss at all, and whether or not

you have made any profits or sold any copies. Statutory damages are what the recording

industry relies on in lawsuits against those who illegally share music files over the internet.

Court Costs and Attorney's Fees

Criminal Penalties

• Imprisonment for up to 5 years (10 years for a second offense)

• Fines as set forth in Title 18 of the US code

• Fines of up to $2,500 are also available under for Fraudulent Copyright Notices, Fraudulent

Removal or Alteration of a Copyright Notice and False Representations in applying for a

copyright registration.

There is a three-year statute of limitations for civil copyright infringement actions, and a five-year

statute of limitations for criminal copyright infringement.

Trademark – what?A word or name: "Exxon" for petroleum products, "Century 21" for real estate services.

A phrase or slogan: "I'm lovin' it" for fast food (McDonalds), "Where do you want to go today?" for

software (Microsoft).

A way of presenting a word: the "stripey" IBM logo, or Walt Disney's signature on films.

A symbol or drawing ("logo"): The Rock of Gibraltar for Prudential Insurance, or the alligator on

Izod shirts.

A character: Mr. Peanut (Kraft)

A shape: the famous Coca-Cola bottle.

A distinctive building design: KFC's striped roof, McDonald's Golden Arches

Details of packaging ("Trade Dress"): The L'eggs egg for pantyhose; the red-and-white label on

Campbell's Soup cans.

In rare instances, other things, such as:

A sound: Tarzan’s yell

A spoken phrase: the Jolly Green Giant's “Ho Ho Ho"

A sequence of notes: the NBC chimes

A piece of music: the Lone Ranger “William Tell Overture” theme

A color: pink for Fiberglas® insulation; or a combination of colors: Green body and yellow

wheels, for John Deere tractors.

A fragrance: a floral scent

Trademark: how?1) choose a mark: a distinctive mark that sets your product or service apart from others.

The "strength" of a mark – is judged on a scale:

Very Strong: coined terms (Xerox)

Strong: arbitrary (Apple)

Less Strong: suggestive (TopGolf)

Weak: descriptive (Best Pie)

Not a Mark generic (Escalator)

2) Do a search yourself

3) Have a search performed – the standard is "likelihood of confusion" = "is the

proposed mark so close to an existing mark that it is likely to confuse the intended

consumer as to the source of the goods?”

You may have registered your company with the Secretary of State, but that does not mean that you are clear to

use the name as a trademark. The state only reviews your proposed company name to make sure that it is

not identical with any other company name in the state, to be sure there is some small difference which would

allow them to distinguish your name from others for purposes of billing you for your corporate tax, or allowing

someone suing you to serve papers on the proper company.

Trademark: how to protect

1) use it in commerce

2) police the mark – looking for dilution

3) register your mark – then use the ® (otherwise use TM)

The registration becomes "constructive notice" of your ownership of the mark = once your mark is

registered on the Principal Register, anyone anywhere in the United States who starts to use

the mark is presumed to know about your previous use.

You may use the ® notice.

You may sue in Federal Court.

Your registration can be used in disputes over internet domain names to defeat a domain name

owner who does not have a registration.

Statutory damages and treble damages are available (in cases of "counterfeit" goods).

After five years of registration on the Principal Register, you can have the mark declared

"incontestable", which means that no one can later stop you from using it, even if you adopted

after they did.

Once on the Principal Register, you can file it with the US Customs and Border Protection

Agency, which can help in stopping importation of infringing goods.

4) enforce the mark - if you become aware that someone else is using your mark you must inform

them of your rights and demand that they stop

Trademarks: how long

As long as you use them

As long as you pay the renewal fees (and prove

continual use with filings every 8 years)

Trademarks: how to register

Take this to a trademark attorney:

The mark you want registered.

Sharp image of the mark (if it involves drawings)

Appropriate colors, if that’s intended

Translation of the mark into English if it is in a foreign language

Recording of sounds, scent samples of chemicals

Registration numbers of similar marks

The name and entity of the trademark owner.

A detailed list of the goods or services on which the mark is (or will be) used.

The date the mark was first used in connection with the goods/services, and the date the mark was

first used in interstate or international commerce ("intent to use" basis).

If the application is based upon actual use, you will need to supply a "specimen" of the mark as

actually used on the goods or services.

For goods, this means either actual labels, or photographs of the goods showing the mark

physically applied to the product - advertising material is not acceptable, unless it contains a

photograph of the goods showing the mark.

For services, advertising material is acceptable, or business cards, program brochures, etc.