“Fun” with IP Clauses in Agreements as Part of Global Strategy to Enable Your Business Model, Financing, and Deal-Making TTS-Australia Brisbane April 17-18, 2018 Dmitriy Vinarov, Ph.D., MBA Partner, MBHB LLP IP Cannot be an Afterthought Global Good + $$$ IP Assets Internal forces: External forces: • Resources • Patent Offices Idea • Science • Competitors • Politics • Partners • Timing IP Assets: What, Who, When, and Where • What – what are all the IP assets? • Who – who owns each asset? • When – when do these assets expire? • Where – where are they protected and where are they not? IP Assets – “What” Copyright • Protects original works of authorship (software, books, movies, songs, photos). Trademark • Protects a word, name, logo, symbol, or design used to distinguish its goods and services from those of another. Trade Dress • Protects the non-functional look and appearance of a product or its packaging. Trade Secret • Protects information that provides a competitive advantage. Patent • Protects new, non-obvious, and useful inventions. Start With Competitive Intelligence Strengths Weaknesses Capability of producing commercially We cannot prevent others from developing viable quantities of X the production process - there are other “Toll booth in the desert” - IP protection for elements out there key elements of the production process We cannot prevent others from filing Regulatory / customer awareness applications on these elements and We are way ahead of the competition combination of elements Opportunities Threats Identify more/better elements to create Market overreaction to misleading press additional “speed bumps” for competition releases by our competitors Bolster our IP portfolio by filing additional Published applications and granted patents application covering core technologies and by our competitors improvements at the margins Monitor competitor IP portfolios Consider “opposing” competitor’s IP Consider “enforcing” our IP How to Get an IP Asset? Inventorship Assignments and Employment Contracts Ownership Inventorship • Inventorship is a legal, not a collegial or team-building, matter. • Although a mistake in not naming true inventors may not be fatal and may be corrected, we need to get it right. • Incorrect inventorship is a cloud over your head in litigation. • When there is deceptive intent in naming inventors, the patent is invalid and unenforceable. • Inventorship determination focuses on the invention claimed and not merely described in a patent. A pharmaceutical composition A method to inhibit tumor growth comprising a monoclonal antibody using combination antibody therapy Determination of Inventorship Two-step process: • Conception of the idea that is sufficiently definite and permanent to allow one with ordinary skill in the field to reduce it to practice without undue experimentation • Reduction of the idea to practice, or making a working example of the claimed invention An Inventor is: • A person who conceives the subject matter of at least one claim of the patent • Two or more persons who collaborate to produce the invention through aggregate efforts An Inventor is Not: • A technician who simply performs experiments or assembles the invention • A supervisor or department manager of the person who conceived the invention • Someone whose only contribution is an obvious element to the invention • A person who only discovers the problem (unless he contributes to the solution) • A person who merely provides a suggestion or improvement but who does not work to fit the suggestion or improvement into the invention • A second inventor of the subject matter of the invention who did not collaborate with a first inventor of the subject matter of the invention Joint Inventors • Joint inventorship occurs when two or more people collaborate on an invention, with each person contributing to the subject matter of the patent claims. • A significant contribution to even one claim in the patent is enough to make someone a joint inventor. • There is no limit to the amount that each individual is required to contribute to qualify as a joint inventor only that the contribution made be significant and inventive. •Acontribution is considered significant when it helped make the invention patentable, such as making the invention novel or nonobvious. • A person does not qualify as an inventor simply because his or her contributions appear in the claims of the patent because many claim elements may not be novel or may be obvious. Ownership: Employment Agreement Ownership of Inventions Employee X shall promptly communicate to the Company all ideas, inventions, modifications, improvements, processes, formulae, materials, know-how, designs, models, prototypes, trademarks, sketches, drawings, plans and other matters (intellectual property) (whether or not capable of protection by any contractual, statutory or other form of protection of intellectual property) which at any time during the term of the X’s employment X alone or jointly with others may devise or discover in the course of X’s performance for the Company of his/her duties. Such intellectual property rights including all rights deriving therefrom shall belong to the Company. Company shall not retain, nor seek to retain, ownership of any Work Results that are not of relevance to the business of Company. However it shall be the sole judgment of Company as to whether any particular Work Results are of relevance to the business of Company, and Company shall be entitled to consider potential future business areas that Company may look to enter in the future in making such judgement. Should Company judge the Work Results not to be of interest to its business, it shall, at the request of X, and without charge to X, take such steps as are needed to enact and document the transfer of ownership of the Work Results to X. In the absence of any such documents, ownership of the Work Results shall always rest with Company. X shall, upon first request by Company, promptly perform all measures and acts and to execute and deliver all written instruments and declarations required or useful in order to confirm or give full effect to the assignment and transfer of all its rights provided in this Clause. This obligation shall continue to be in force after the termination of the employment relationship between X and Company, whatever the reason for termination. Ownership: Assignment IP and “Business” What is being “routinely” done: Due diligence and valuation by acquiring party Pending and potential lawsuits or infringement claims What needs to be addressed more often (and more diligently): Who owns what (IP assets) and proper documentation? o Signed agreements, licenses, contracts, websites, domains What is actually recorded at the Patent Offices world-wide? Ownership: Review Assignments Carefully! Ownership: The Horror Stories…. U.S. Provisional (or AU national) Application names A and B as inventors • Both A and B assigned to Company X 12 months International Application (PCT) names A, B, and C as inventors 18 months U.S. National Stage Application names A, B, and C as inventors • A assigned to Company X What does Company X actually own? Ownership: The Horror Stories…. Change of ownership: • Company X assigned to Company B M&A: • Company X merged with Company B • Assignment in foreign jurisdictions Name changes: •Inc. Co. • Certificate of incorporation Address changes Is it Necessary? Loss of rights or inability to enforce rights due to: • Inaccurate or incorrect assignments or title update • Not prompt change of ownership results in misconception of actual owner If change is not recorded, the new owner may not be able to: • Defend patents • Enforce patents • File Oppositions • Conduct renewals or annuity payments Ownership: The Horror Stories…. 1998 • VW purchased Rolls Royce / Bentley. • After deal closed, VW realized that they did not have rights to the Rolls Royce mark. Developing Global IP Strategy - Why Do We Care? • Prevent others from copying our products / services • Improve our position when negotiating with other companies in mergers, sales, and cross licensing agreements • Prevent patent infringement from yourself • Competitive Intelligence - know your competition! • Increase licensing revenues Why Global IP Strategy - IP Laws Vary from Country to Country • Search and Examination • Continuing patent application options • Appeal options • Acceleration prosecution options • Patentable Subject Matter •Priority • Novelty • Obviousness/Inventive Step • Enablement/Sufficiency • Divisional practice • Double patenting • Only one independent claim per category permitted • In certain jurisdictions claims can only be narrowed, not broadened, once examination is requested • Filing Fees! Tips for Developing a Cost-Effective Global IP Strategy Determine whether foreign patent protection is necessary • Cannot afford to ignore and need to carefully consider whether global patent protection is necessary and appropriate • How long is a product cycle? • Is the invention even patentable subject matter in the relevant countries? Consider a PCT application to defer costs and foreign filing decisions A carefully drafted patent application can help to control prosecution costs and the final outcome • Filing in AU but coming to U.S. – have the U.S. attorney look the application over prior to filing Evaluate portfolio on a continuous basis Patent Prosecution Highway can provide significant cost savings • Be careful in countries where PPH is possible but not binding. Developing Global