Intellectual Property

In a nutshell

There are four different types of intellectual property: patents, trademarks, copyright and trade secrets. Patents are issued by the US Patent & Trademark Office (USPTO) to the creators of new inventions or processes. They're practically a monopoly on the manufacture and sale of the patented invention, but they only last for 15 years. Trademarks can potentially last forever, but only protect the words, symbols or phrases used to distinguish the brand or identity of a good or service.

Somewhere in between is copyright, which protects works of authorship such as books, movies, music and plays. Copyright is a complicated system of restrictions on copying, performing and otherwise profiting from protected works, and lasts for the life of the author plus seventy years. Finally, trade secret law protects the holders of proprietary information from having their information stolen or disclosed to the public in certain circumstances. Think Coke's secret formula.

Companies big and small rely on IP to give them an edge over their competitors, and In 2010 IP-intensive industries directly or indirectly accounted for 40 million US jobs, or 27.7% of the workforce. Clients can include a tech startup looking to patent the latest gizmo to a film distributor trying to stop its content from being pirated. As well as being financially rewarding, IP law also offers some fascinating ethical questions, including:

  • Do pharmaceutical patents give life-sciences companies an incentive to invest in creating life-saving drugs, or do they just keep their prices high?
  • Should people named 'McDonald' be able to name their restaurants after themselves?
  • And is your Happy Potter fanfiction copyright infringement, fair use, or just weird? 

 

What IP lawyers do

  • Engage in written correspondence to see if the alleged infringement can be resolved through a license and royalty agreement or other amicable resolution.
  • If not resolved, attorneys representing the rights-holder file an infringement claim. Defense attorneys then respond with a counterclaim stating that either their client has not infringed or that the IP is invalid and unenforceable.
  • Engage in discovery.  Examine public records held in the USPTO that document the correspondence between the patent holder and the USPTO. Prepare interrogatories, requests for admission, and document requests seeking more information about the other side’s positions. On average, discovery will take three years.
  • Engage in the summary judgment motion phase. Engage in a Markman hearing, during which the judge interprets the language of the claims, ruling on any disagreements between parties on their interpretation. Markman hearings can take place any time before the case goes to the jury, but usually occur before trial.
  • Go to trial, normally in front of a jury. This normally takes between four and ten days.
  • Perform IP due diligence – review a third party's IP portfolio prior to your client entering into a transaction with them. Assess the strengths and weaknesses of the portfolio so that the client can understand the risks of doing business with the rights-holder.
  • Draft commercial agreements between owners of IP rights and those who want to use the protected invention, design or artistic work. The most common agreements will either transfer ownership or grant a license.

Realities of the job

  • In order to become a member of the patent Bar, you must pass an exam administered by the USPTO, which requires you to have completed a minimum number of technical or scientific courses in college or university. You don't actually need to be a member of the patent Bar to appear in federal district court on a patent case. Membership of the patent Bar is only necessary for attorneys who want to do patent prosecution work.
  • Most patent attorneys have a scientific or technology background, either academic or work-related. That being said, it is possible for lawyers with non-scientific backgrounds to do patent litigation work. Non-scientists have to show some initiative, and a bit of hustle, in order to break in, but it's certainly doable. “Go to a general practice firm that has a patent litigation practice, and volunteer,” advises Professor Tim Holbrook of Emory University“Your first patent assignment won't be very patent law heavy, but if you do a good job, and make a good impression, you'll be invited back.”
  • Patent owners can file claims in any district court they want; some districts are considered more patent-friendly and are therefore more popular than others. The most notable of these is the Eastern District of Texas, based in Marshall, TX (population 24,000). Critics say its unorthodox rules and conservative jury pool favor patent-owners, while its supporters cite the court's efficiency.
  • An IP portfolio can be the most valuable of a business's assets, particularly in the pharmaceutical sector. This means that IP lawyers need to form part of the deal team from an early stage. 
  • Overseas companies and inventors view the USA as a prime venue for patent litigation.
  • As a result of globalization, the current manufacturing and importation process has become enormously complicated and creates considerable challenges for patent owners seeking royalties or compensation at all levels of the manufacturing and distribution chain.
  • Every patent infringement appeal is filed with the US Court of Appeals for the Federal Circuit. If parties don’t like the result there, the only option is to file a petition for certiorari with the Supreme Court, which has taken more patent cases in the last decade.
  • Patent cases bring great risk to Fortune 500 companies, which can incur enormous damages dating back up to six years from the filing of the complaint. This explains the rise of non-practicing entities or patent trolls, which buy up portfolios of patents and make their money threatening to sue other businesses for patent infringement. Faced with such stiff penalties, and without the resources to fight the case in court, smaller companies and inventors pay the patent trolls hefty license fees.
  • Greg Arovas, a partner at Kirkland & Ellis, tells us: "A truly unique and compelling aspect of IP is that it touches all aspects of a business. It goes to the heart of business – the products and what makes them unique. We find out about the marketing, engineering and financial elements of the product's story to build up a holistic picture." 
  • Different types of IP work means differing workloads, explains Professor Tim Holbrook. “Patent prosecutors tend to work more independently, as it's often just you and the PTO,” he explains. “Patent litigation often goes on for years, and requires long term thinking,” he adds, “while trademark litigation is all about speed. Cases are decided off a preliminary injunction, so if something's happening, it's happening now.”
  • “Patent prosecution and litigation offer different lifestyles," says Nick Groombridge of Paul, Weiss. "Patent prosecution provides orderly working hours and a lot of written work. It tends to be more overtly technical. It's attractive for someone who wants to use engineering or science skills – there's more immediate gratification on that side of things. As a litigator, getting into court is a real high. Especially in big cases, it's exciting to feel you're watching the action happen and playing a role in it.”
  • Groombridge adds: "The intellectual challenge is pretty great, and job satisfaction tends to be higher. It's a fast-evolving area of the law, so things change and there's scope for coming up with new ideas."
  • Good communication skills are a must, particularly in transactional IP and IP litigation. Lawyers need to be able to simplify and explain complex technical matters to lay judges, juries and clients.
  • Trent Webb of Shook, Hardy & Bacon tells us: “Being competitive and having a drive to win is very important, because every case involves trying to beat the other side. Creativity is also essential; we strive to find unique approaches to solving problems. You also need to be able to simplify and explain very complicated technical issues to lay juries. Communicating effectively to your audience is extremely important.”

Current issues

  • Copyright protects the rights of creatives, but for copyright lawyers there's no escaping the reach of technology. This is because copyright infringers are often very technologically sophisticated and often based abroad, according to George P Wukoson of Davis Wight Tremaine. In addition to “keeping up to date with new technologies” copyright litigators need to think around corners and “craft equally robust enforcement measures.” 
  • The patent world continues to assess the effects of the America Invents Act, and in particular its inter-partes review proceedings. This allows anyone to challenge the validity of patents, and was designed to thwart non-practicing entities, or patent trolls. Inter-partes review has given the tech sector some relief, but has itself been abused by so-called reverse patent trolls; hedge funds which challenge strategic patents, causing the patent holder's share price to drop. They then make a profit shorting the rights-holder's stock.
  • The America Invents Act  fundamentally altered the position in US patent law from a 'first to invent' system to a 'first to file'. This brings the United States in line with most other countries and means that the first party to file an application will hold the patent over the technology.
  • Although they've calmed down a little from their 2012 heyday, the Apple-Samsung patent wars will continue to keep lawyers (and the 9th Circuit's Judge Lucy Koh) busy for some time to come. Her honor can look forward for a fourth retrial (on the subject of damages, natch) in March or April 2016.
  • Another issue that continues to vex the patent world is patentable subject matter or, in English, what can you patent? Back in the eighties, the Supreme Court held that “anything under the sun that is made by man,” could be patented. Since 2012, however, the circumstances under which business methods and software can be considered elligible for patents have been fiercely rightened yet largely unspecified following the Supreme Court's ruling in Alice Corpo v CLS Bank.
  • Between 1946 and 2015 a law called the Lantham Act prevented the federal registration of disparaging trademarks. Over the years, this has allowed the government to cancel or refuse to register a number of potentially inflammatory trademarks, including the Washington Redskins. Note that this does not prevent the trademark holder from using or enforcing their trademarks. It merely denies them a range of additional benefits, including the right to sue in federal court.
  • Even so, in December 2015 the Federal Court of Appeals ruled that this provision violated the First Amendment. This contradicted an earlier 2015 decision of the Fourth Circuit. With the circuits split, pundits are taking bets on whether this rule will last the year. And that's not all folks. The Federal Circuit has also speculated that the provisions of the Lantham Act allowing the refusal of scandalous or immoral trademarks may also be unconstitutional.
  • Trade secrets are traditionally the province of state law, but this may all change if the Defend Trade Secrets Act of 2016, currently in the Senate Judiciary Committee, is adopted into law. If enacted, the bill would create a federal court of action where someone steals a trade secret related to a product or service intended for use in interstate or foreign commerce. There is some debate on whether this is even necessary; all states already protect trade secrets under federal law, and the vast majority have based their laws on the Uniform Trade Secrets Act, which means that trade secrets laws are already fairly harmonized across the USA.