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. Paul Parker, firmwide co-chair of Perkins Coie's intellectual property practice, affirms that science qualifications are not a prerequisite for trademark and trade secrets work.
  • 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.
  • Different types of IP work means differing workloads, explains Professor Tim Holbrook of Emory University. “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.”
  • IP candidates who can demonstrate that they have business expertise will fare well: "I think it's very helpful to hire people who have been in industry for a couple of years or more" says Paul Parker. He also notes: "Unlike in a lot of areas where law is a cost center, in patent prosecution, as opposed to litigation, you are an asset creator – you create value for companies." Dale Cendali, a partner of Kirkland & Ellis, remarks that lawyers "must stay nimble because what we think the world is today is likely to not be the case in ten years."
  • 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.
  • What do our expert lawyers enjoy most about their profession? Dale Cendali says "I like the theater of trials and depositions and court hearings," adding: "I really like working with my team." Paul Parker enthuses: "Being in IP law is a continual learning process about science and the world around us."
  • Trent Webb of Shook, Hardy & Bacon 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."
  • What challenges might an associate face? Paul Parker affirms: "For mid-level associates there is a period of time when there seems to be a lot of basic preparation and prosecution. It's a threshold you have to get through before operating at a much more strategic level with clients."
  • Dale Cendali advises budding IP lawyers "to dig a little deeper to figure out the nature of the IP practice at different firms. What is it they do? How many associates are working in that group? What are the potential opportunities to make partner?"

Current issues

  • In 2011, the America Invents Act was passed, which replaced the first-to-invent patent system with  a first-to-file patent system. The act enables anyone to challenge the validity of patents through inter-partes review proceedings. The aim of the act is to impede non-practicing entities or patent trolls from initiating costly litigation: "Non-practicing entities have been restricted by the changes in the law and are in the process of adapting to the new limitations" reports Paul Parker, noting: "There are fewer cases being filed in the technology area." However, Inter-partes review 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 House Judiciary Committee announced its first policy proposal in December 2016, following a lengthy assessment of US copyright law. The Committee aims to establish advisory committees to facilitate communication with federal agencies about marketplace developments and new policies.
  • The Apple-Samsung patent wars have yet to reach their final conclusion, as the matter of how much Samsung owes Apple in damages is still being debated in the Supreme Court; a decision is expected in mid-2017.
  • There is an ongoing debate about 'patent-eligible subject matter'. The 1980s days of patents for 'anything under the sun that is made by man' are long gone, with patents becoming increasingly difficult to obtain. The Alice Corp. v. CLS Bank was a landmark case in the software industry (notwithstanding the fact that software was not explicitly discussed in the case), as the Supreme Court ruled in 2014 that Alice Corp.'s patents were based on an abstract idea and were, therefore, invalid. Software giants including Microsoft and Google announced their respective stances in the legal wrangle, filing amicus curiae briefs.
  • The Lanham Act has been the subject of fierce debate in the past few years. The Washington Redskins case went from court to court with the Supreme Court finally refusing, in October 2016, to validate the club's trademarks.
  • However, in 2016, the Federal Circuit ruled that the provision of the Lanham Act that allows the refusal of scandalous or immoral trademarks is unconstitutional, as it breaches the Free Speech Clause of the First Amendment. The Supreme Court is now set to review this ruling; it has accepted the US Patent and Trademark Office’s petition for writ of certiorari in Lee v. Tam. The contentious Tam case involves the band, The Slants, which considers that it has culturally re-appropriated its name. A ruling in the Slants favor could reopen the Redskins case.
  • In May 2016, The Defend Trade Secrets Act became law. According to Dale Cendali, "it's certainly true that trade secrets theft is becoming a growing issue relating to intellectual property." This act means that trade secrets are now governed by federal rather than state law. Some have questioned whether the act is even necessary: "Almost all the states have their own type of trade secret law," says Dale Cendali. She does, however, add: "At least now there is a federal overlay that is intended to be uniform." The act notably allows employers to claim damages in trade secret cases. It also stops whistleblowers from falling victim to retaliatory accusations of trade secret misappropriation.