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 medical device industry sector, 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 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 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."
• 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

May 2023

• From June 1st 2023 the Unified Patent Court will be implemented into the EU court system to ensure patent litigation is uniform across the member states. It will hear infringement and revocation matters through a Court of First Instance and a Court of Appeal, and will have exclusive jurisdiction over EU patents registered under the respective regulations. This is expected to make the process for approving and checking patents more efficient across the EU.
• Digital assets will continue to grow in importance through 2023. AI in particular has grown exponentially in the public eye raising the question of its use of existing patented works in learning models and how this fits into existing IP frameworks. According to Osborne Clarke, the US Copyright Office reportedly granted registration for a comic that used art generated through AI. Seeing as the text, selection and arrangement of images were human-led, the Office revoked the registration as only human beings could be considered authors.
• Disputes regarding standard essential patents will continue to increase in frequency, particularly between patent owners and technology implementers. The requirement for SEPs to be licensed fairly, reasonably and without discrimination leaves wriggle room for dispute because these terms have no formal definition.
• With increased economic turbulence IP litigation is expected to increase in demand. Patent litigation tends to rise during recessions – as businesses look to sell assets to generate cash, patents can be brought to the chopping block to recoup revenue.
• 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. In Google vs. Oracle America, concerns centered on whether Google use of Oracle's application programming interface (API) came under ‘fair use.’ In April 2021, the Supreme Court ruled in Google’s favor.
• In March 2022, the Senate passed the United States Innovation and Competition Act, which could be set to bring huge changes to the patent system. Part of the act is designed to combat the threat of Chinese competition and according to the Center for Strategic & International Studies ‘would authorize a welcome boost of $250 billion of investment in a range of emerging technologies.’
• In an unusual 2018 case, Hasbro trademarked the smell of their famous play putty Play-Doh. To be filed with the USPTO, government officials had to conduct smell tests in order to accurately describe the smell. There are only a handful of smell patents as you can’t patent something if its main purpose is to smell (e.g. you can’t patent the smell of Chanel No.5, only its chemical makeup). It’s likely Hasbro has trademarked the smell as a publicity stunt – it’s unlikely any challenges to the smell would make it to court as aromas are so subjective and hard to measure that it’d be not worth the company’s time to prove infringement. No smells have been trademarked in the US since.
• Until very recently, various courts had differing views on whether a copyright claimant must already have registered the copyright before claiming infringement. Some held that the claimant needs only file the paperwork and pay the fees before claiming infringement, while others made claimants wait until the copyright was fully registered before claiming infringement. Justice Ginsburg helped clear this whole thing up in 2019: the Supreme Court has decreed that all copyright infringement claimants must have a fully registered copyright before filing for infringement. (Though don’t worry, they can still litigate on infringements that happened before the filing.)
• Digital-related innovation has grown 172% faster than all patents in the past five years
• 'Prior art' is the term used to describe an invention or patented item that's already known to the public in any form. This is often used as evidence of the date of originality. In 2019, the Supreme Court decided that if an inventor sells an invention to only one person, and that person is contractually bound to secrecy of the intention, that still counts as prior art.
• There's no getting away from blockchain as it gathers speed with the rise of cryptocurrencies. Experts speculate that the technology could provide a means for content creators to ensure they're compensated for their intellectual property, relevant to industries ranging from music to pharmaceuticals. Non-fungible Tokens (NFTs) could shake this up even further, bridging the gap between blockchain and art and copyright law.
• During the pandemic, the USPTO closed its doors, leaving many IP cases tabled until further notice. As of May 2022, there were an estimated backlog of 544,000 patent applications.

 Learn about the latest developments from the lawyers who face them...