Electric Adventure Vehicles and Trade Secrets (Tesla v. Rivian)
Off-roading and overlanding (the fusion of camping and off-roading) is exploding. Even before the pandemic, off-road adventure was growing in popularity because people love the enormous satisfaction and thrill that comes with searching out and trekking to that remote, hard-to-get-to, sweet spot where few others can go.
The market for tough, off-road capable trucks and SUVs is enormous, and as a consequence, there is a big battle heating up among electric car companies--especially between Tesla and Rivian, which are now squaring off in court.
Electric Off-Roaders Will be Awesome
The electric off-roaders I am talking about, such as those that will soon be sold by Tesla, Rivian, and Bollinger, are not ordinary electric crossovers--these are true, adventure-ready rigs that will compete with (and surpass in most respects) the most-capable combustion-engine trucks and SUVs such as the Mercedes G-Class, Jeep Rubicons, Ford Raptors, and beefed-up Toyota Land Cruisers. Lordstown, Atlis, Ford, and General Motors promise their own electric versions in the not too far future.
In terms of performance, electric off-road trucks and SUVs promise more horsepower, more torque, outrageous towing capability, more clearance, and independent power to each wheel (without heavy, complicated dangling differentials that beg to be ripped apart by rocks). Electric trucks are also insanely fast--some move 0-60 in 3 seconds. Should one of the quad-motors fail, the remaining three can get you out of the boondocks.
Of course, there is a lot of really cool engineering going on to make these new adventure vehicles, but more generally, smart, experienced employees are needed to be competitive in this market.
Trade Secrets and Employee Poaching: Tesla v. Rivian
On July 17, 2020, Tesla Inc. sued Rivian Automotive Inc. along with four former Tesla employees alleging the misappropriation of its trade secrets in connection with employee departures. Both Tesla and Rivian take advantage of the talent-rich environment of California. But in California, non-compete agreements are not enforceable, so the problem of employees leaving with valuable information is especially palpable.
As the elder, more established entity, Tesla has more to lose by way of employee departures, and Tesla is clearly frustrated by Rivian’s poaching.
Rivian is Real
Rivian is a truly viable competitor and a threat to the market share of Tesla’s Cybertruck. In the lawsuit, Tesla paints Rivian as a “small startup,” but Rivian has 1,000 employees in California alone, and a total of 2,300 employees across the nation with a home base in Michigan.
So far, Rivian has realized close to $6 billion in investment funds from Ford and Amazon, among others. Rivian also has a deal with Amazon to produce over 100,000 electric delivery vans once consumer units complete their production cycle.
The lawsuit asserts that Tesla is the “number one target from which to acquire information” for Rivian. Tesla says that Rivian has hired over 178 of its former employees--although only about 70 were hired directly away from Tesla.
It’s a case that highlights the employee poaching culture and one that illustrates how the trade secrets of a tech giant can be obtained through the procurement of the human resources themselves, the employees.
Tesla’s Grievances
As exciting as electric vehicle technology is, the lawsuit is more about the trade secrets related to recruiting and business management. From compensation to bonus schemes, candidate lists, hiring practices, and manufacturing project management--all are being taken by Rivian through former employees according to the lawsuit. In particular, the details of Tesla's high-volume recruiting process are coming to light.
Tesla alleges that their forensics experts identified many instances of files being moved from their servers into the hands of their departing employees.
Elon Musk is none too thrilled and he hasn’t been quiet about it. In a 3-part interview on a podcast with Automotive News, he was asked about the lawsuit. Elon Musk said,
“... absolutely. Of course. I mean, it's not like it's a massive percentage, but they’ve definitely taken a bunch of Tesla’s intellectual property. It’s not cool to steal our IP, and for people to violate their confidentiality agreements… that kind of thing. They’re doing bad things, so we sued them.”
Rivian’s Response
Rivian’s response (or objection) to the allegations and was filed on August 10, 2020. Rivian objects categorically, saying,
“Tesla did not file this case to defend or protect any legitimate intellectual property rights. Tesla sued in an improper and malicious attempt to slow Rivian’s momentum and attempt to damage Rivian’s brand. And it sued in an abusive attempt to scare employees thinking about leaving Tesla.”
Rivian is also saying that Tesla is referring to recruiting tactics and how they conduct group interviews and provide compensation, all of which (according to Rivian) is public information and is routinely disclosed.
Takeaways
It is impossible to prevent information from leaving with former employees, and employee poaching is an ongoing issue in the technology world where competition for innovation is fierce. You can't just scrub away information from someone’s noggin. Tesla’s employees are seasoned and invaluable, and the hiring of them by any company in competition with Tesla is of no surprise.
We’ve discussed this before. It's always better to be proactive when protecting your intellectual property on employment and operating agreements.
Treat your employees well. It is impossible to keep all employees happy, but reducing the number that are unhappy goes a long way to reduce the damage that disgruntled employees can cause. Tesla may treat employees well, but a lot of companies treat employees like a commodity — inviting departures.
Treat your information as confidential. You want a good paper trail to show that you’re actually treating your information as confidential. The first thing a court will look at if you want to enforce an NDA is whether you actually treated the information as confidential. If you, or your company, have loose rules about access to confidential information, a court may actually find that it isn’t confidential at all.
Respect trade secrets. Trade secrets generally include any information that provides value by virtue of being secret including compensation, bonus schemes, candidate lists, hiring practices, and manufacturing project management. As an employee, recognize that you agreed not to disclose this information.
Be aware that there are forensic investigators and technologists that can be hired to look at the history of file movement and emails going out. Know, as a departing employee, the movement of files from a company server to your own machine is a very bad idea and you are being watched.
We’ve hit on some of these points when asking if a trade secret is right for you. The employee culture, the market culture, and how you protect those variables are also part of the entire equation.
We’ll be following this case and let you know what developments come out of this one.
3 Famous IP Disputes You’ve Probably Never Heard Of (But Probably Should Have)
What's famous to an IP attorney might not be well-known to the general public. There are cases that we are familiar with because they serve as great examples or set wide-ranging precedents for the rights of IP holders.
Here are three famous cases we think you should know about.
It Takes More than Patents to Turn a Profit
The Wright Co. v. Herring-Curtiss Co
Everyone has heard about the Wright Brothers, but fewer have heard of Glen Curtiss.
The Wright brothers, of course, are famous for their invention of the flying machine. They ended up with several patents on it but were eventually left behind by Curtiss, who turned out to be a much better businessman.
One of the realities of the world today is that patents alone do not ensure success. This was true in the early 1900s as well. Business fundamentals haven't changed much.
Although the Wrights were the first to fly, earn fame, and ended up obtaining patents covering aspects of their early flying machines, they just weren't the best businessmen. Unfortunately for the Wrights, and for other patent holders, being first to patent often isn't enough.
Related: Should You Pass on a Patent?
The great inventors that they were, the Wright Brothers understood the idea of lateral stability. In other words, they were looking for a way to stabilize their aircraft from wingtip to wingtip. This would allow the plane to adjust to wind gusts and make banked turns. Their solution was to twist the wings of their airplane to warp them. To keep competitors at bay, the brothers successfully obtained a fairly broad patent that covered designs the Wright Brothers had not contemplated.
Undeterred by the patent, Curtiss took the concept of a flying machine and instead of using the awkward, and difficult to control, wing-warping approach developed by the Wrights, Curtiss came up with hinged “miniwings,” which were mounted between the biplane wings of his flying machine. The miniwings were the birth of the hinged ailerons that we see dropping down from the fixed wings of aircraft today. While he was at it, Curtiss also developed a better control system than the Wrights.
Litigate or Innovate?
The Wright brothers took Curtiss to court in a series of battles that only ended with World War I. Even then, Curtiss continued to innovate while the Wrights continued to litigate.
Although the Wright brothers were finally successful in the actual legal dispute against Curtiss, they were less successful in their business. Their obsession with patent protection and their penchant for secrecy, stifled production and invention. The Wrights also created a public relations disaster suing producers and promoters of popular flight exhibitions. In some instances they even sued individual aviators.
The last two years of Wilbur Wright’s life, until his death in 1912, was almost exclusively focused on fighting Curtiss on patent matters. And Orville did not care enough about the business side of their work to keep it going, so he sold the company in 1915.
Unlike the Wrights, Curtiss commercialized his interest in aviation and quickly demonstrated its uses in the war effort. He provided the first demonstration of aerial bombing to the army and navy. The naval seaplane, flying boat, and aircraft carrier operations all owe their existence to his influence. In 1917, the U.S. Army offered him a large and lucrative contract to build aircraft for them. In 1919, his flying boat became the first aircraft to cross the Atlantic Ocean successfully.
Unfortunately for the Wrights, they rested too much on their patents, did little to continue to innovate, and failed in marketing. Although important, then as today, patents are no substitute for continued innovation and solid business practices.
Can You Use Color as a Trademark?
Qualitative Corporation v. Jacobson Products Corporation
Press pads for dry cleaning operations are not the sexy subject matter that captures headlines, but sometimes it's the simple stuff that makes it to the Supreme Court. Qualitative Corporation used a shade of green gold in the press pads it sold to dry cleaners. When Jacobson began to use a similar color for their press pad, Qualitative sued. What makes this case interesting is that it established precedent at the Supreme Court, which held that color actually can serve as a trademark.
On the surface, it may seem ridiculous. You can use color as a trademark? Really?
Related: What Tom Brady, LeBron James & Ohio State University Can Teach You About Advanced Trademark Laws
Yes, indeed. The Supreme Court held that color can serve to distinguish the source and origin of a product or service from others. And that is the intended purpose of a trademark: to serve to protect an association created in the minds of consumers. Color is one of the more unusual devices along with product shapes, sounds, and scents can serve as trademarks.
Boise State has one of the few football stadiums with a blue football field. Some know it as the Smurf Turf. But Boise asserts trademark protection over their blue football field.
Owens Corning has created a similar association with its pink insulation. You won't find anyone else daring to sell pink insulation. Tiffany's robin's egg blue is also a trademark, as is John Deere's green and yellow.
The Caveat on Color
For a trademark to work, it must be distinctive. Color by itself is not distinctive. So, the law requires that an association, in the minds of consumers, must be built over time between the color and the goods or services before the color can be registered as a trademark.
It took Owens Corning a while to acquire that distinctiveness. It took Boise State a while before their football field was distinctive. It also took Qualitative time to create a distinction with their green-gold press pads.
The Issue of Too Little, Too Late on Copyright
Fourth Estate Public Benefit Corp. v. Wall-Street.com
Many, including numerous federal courts, believed that filing for copyright registration offered immediate procedural protections.
This is what content provider, Fourth Estate, believed as well. They had filed for copyright registration but had not yet received approval. When one of their clients, Wall-Street.com, stopped using their services but refused to take down their content, Fourth Estate took them to court.
The issue was whether copyright protections exist upon application or registration. To complicate matters, the courts had also been at odds on the issue. The Ninth Circuit allowed suits upon application, while the Second Circuit held that claimants must wait for registration. This made for some interesting court-shopping as lawyers sought out the venues that would favor their side.
The Supreme Court finally settled the issue by ruling that lawsuits can only be brought after registration. This was bad news for Fourth Estate and for others who waited too long to file for copyright registration.
Lesson Learned? Register Early.
There is a lot at stake. Aside from being the ticket into court, copyright registration also opens the door to statutory damages. Courts can award statutory damages between $750 and $150,000 to the copyright holder without the copyright holder showing any damages. But you have to register with the Copyright Office before the infringing activity occurs or within three months of publication. So, the bottom line is, register early and as often as you create content you want to protect.
These cases might not be making the attention-grabbing headlines, but they are “famous” for holding some insightful lessons for anyone seeking patent, trademark and copyright protections.
Can You Own A Meme?
In what has been dubbed the "ultimate boomer power move," Fox has filed a trademark application for the phrase, OK, Boomer. Their filing lays out Fox's intent to use the phrase with a reality, comedy, or game show.
The OK, Boomer phrase has graced a multitude of memes, created mostly by millennials, making fun of attitudes commonly ascribed to baby boomers. The phrase reached the height of its fame when a twenty-five-year-old New Zealand lawmaker used it as a quick flex in response to heckling from a much older colleague.
Publicity over Fox's filing has led to speculation about everything from the wisdom of Fox's move to the probability of their trademark application success. It even blew open an entire debate about copyright in the age of memes.
Can You Protect a Meme under Copyright Law?
That depends. Memes are typically a combination of photos, videos, or other images combined with some descriptive text or caption. They're usually designed to be witty or to ridicule some aspect of human behavior. If they catch on, they can go viral as the OK, Boomer memes did.
While images and text can be copyright protected, short phrases cannot. Meaning, the OK, Boomer phrase is not by itself copyrightable. Copyright law requires at least a modicum of creativity, and it's pretty well settled that short phrases, names, and words are not something that you can protect under copyright law.
Related: Yes, You Need a Registered Copyright
But the images, videos, and photographs that are integral to a meme are copyrightable, and owners have the sole right to reproduce them. So then, how is there such a proliferation of memes out there without an equal number of lawsuits? The answer lies in the doctrine of fair use.
Fair Use
Although memes certainly can be owned in the sense that there is copyright protection for the content in a meme, many times it's fair use to repost it. Fair use is a doctrine of copyright law that allows someone to use copyrighted materials without the owner’s permission under certain conditions. Whether the use of a copyrighted work is “fair use” requires a case-by-case analysis, but parody, criticism, and commentary are very important factors.
If you comment on some content, as many memes will do with either biting criticism or sarcasm added to an existing photo or video, it is more likely fair use. If you don't profit from it, you also boost the odds that it is fair use. Most memes posted freely on the internet fall into the latter category.
Changing Attitudes
It is impossible to know if something is fair use until a court confirms that it is. The process purposely functions on a case-by-case basis and is mostly subjective. This means there is a bit of chaos, but it also allows courts to adjust to the changing times. For the most part, laws lag considerably behind the technology. The case-by-case approach allows for consideration to be given to new norms.
As reposting and curation of memes and other content becomes more prevalent and acceptable, the courts will likely follow these cultural trends. These laws are often interpreted in the context of the culture in which they exist, especially for more subjective things such as fair use.
Trademark
While Fox cannot claim copyright protection over the phrase, OK, Boomer, trademark law may be a different story. Unlike copyright law, under trademark law, you can get protection for the use of a word or phrase that identifies and distinguishes the source of the goods of one party from those of others, which is exactly what Fox is attempting to do.
An important aspect of trademark law is that the words or phrases need not be created by the trademark holder. Trademark rights may be obtained by simply using a word or phrase first. There's nothing intellectual about trademark use. Fox didn't come up with, OK, Boomer. It's not their intellectual creation, but they want to associate it with their new TV show. It's more like rights by appropriation. And that how trademark rights accrue--appropriation by use.
Unfortunately for Fox, it will likely face a few hurdles in its attempt to trademark OK, Boomer.
Related: Beyoncé, Blue Ivy, and the Kardashians: The (Big) Business of Trademarks
The Trouble with Trademarks
First, Fox faces some stiff competition in its trademark attempt. At least five other trademark applications are pending for the phrase OK, Boomer, including one for a comedy show already in production. The University of Oklahoma, nicknamed the Boomers, has been vigilant in defending its Boomer related trademarks, which include Boomer Sooner. There is also a chain of theme parks called Boomer that owns an existing mark for video games under that name. Yet, Fox has also applied to trademark OK, Boomer video games.
There is also the question of whether or not the U.S. Patent and Trademark Office will issue a trademark for a phrase that is now so commonly used. For a trademark association to be secured, there has to be an established association with a company, product, or service. The more frequent a term or phrase is used in everyday speech or an associational or affinitive manner by various sources, the less likely consumers will perceive the matter as a trademark or service mark for any goods and services. And others who have tried, namely Cardi B. with Okurr and Lebron James with Taco Tuesday, failed to secure trademarks for this reason.
Lessons from the Doge
The internet can be very protective of its memes. Even if Fox is successful, it could face blowback for its attempt to appropriate OK, Boomer. This is precisely what happened with Ultra Pro when they trademarked the infamous Doge, a viral meme featuring a Shiba Inu dog surrounded by internal monologue written in colorful Comic Sans font.
The company was eventually pushed to declare that they would not enforce their trademarks on anything other than products similar to their own.
However, the Fox case turns out, the future of copyright and trademark law in the age of the internet and viral memes should prove to be ever-evolving and very interesting.
OK, Boomer, the times are changing.
Machines Are Inventing. What Does It Mean for the Future of IP?
I grew up thinking about how awesome it would be to hang out on the holodeck aboard the Starship Enterprise and how terrifying it would be to be relentlessly chased by a stone-cold Terminator. But back in the day, artificial intelligence (AI) was just the faraway stuff of dreams.
Today, AI is a reality that promises amazing, super-accelerated advancements in technology (while also creating the potential for nightmares that no one wants floating around in their head late at night!).
Isaac Asimov brilliantly contemplated his Three Laws of Robotics for keeping robotic artificial intelligence in check more than a half-century ago – that a robot shall not injure humans, shall obey its master, and shall protect its own existence as long as it doesn’t violate the first two laws.
But real-world laws surrounding artificial intelligence are way behind the times. In January 2019, the director of the USPTO finally acknowledged that policy makers need to consider:
- Will the legal concepts of ‘inventor’ or ‘author’ fundamentally change due to AI?
- Who retains title to an improvement developed by a machine — the original programmer, machine owner or even the machine itself?
- Should using copyrighted works to “train” AI systems constitute fair use or some other exception?
- How do we assess patentability as well as the risk of bias when there is little transparency regarding how algorithms are trained and function?
- How will firms, both large and small, protect AI-related inventions?
The USPTO is also currently requesting comments on artificial intelligence AI inventions.
Non-Human Ownership Issues Are Nothing New
The question of assigning ownership to non-humans has been making headlines for years.
For example, do you remember the monkey selfie that went around a few years ago? The photo became famous, primarily because of the disputes surrounding it. The travel photographer that was present when the monkey took the photo said that he has a valid copyright claim to the photo because he “engineered the situation that resulted in the pictures.” Meanwhile, PETA said the monkey should be assigned the copyright and Wikimedia Commons said the photo is in the public domain, as a non-human creator cannot hold a copyright. The photographer claimed that the dispute cost him considerable money. In the end, PETA and the photographer reached a settlement. The courts decided that animals don’t have standing and can’t bring a lawsuit.
Similar to how animals are neither inventors nor copyright holders, at least under the U.S. law, currently machines are not inventors or copyright holders. But could that be changing quickly?
As widely reported, a team led by the University of Surrey is pushing the definition of “inventor” by pursuing patent applications that cover ideas autonomously developed by AI (without a human named as inventor). The named AI “inventor” instead is referred to as DABUS, short for Device for the Autonomous Bootstrapping of Unified Sentience. According to reports, one patent application is directed to a beverage container and another is directed to a device to help attract attention that may be used in the context of search and rescue.
It’s All in the “Who”
The USPTO (and any U.S. court taking up the issue) is likely to continue finding that presently only humans are entitled to be the inventors of a patent. There is no statute that says machines are not entitled to patents, but 35 U.S.C. § 102 explicitly states a “person shall be entitled to a patent” if statutory requirements are met, and Congress has not conveyed any intent to allow machines to be inventors. Additionally, there are current requirements for inventors to sign declarations saying that they were the ones who conceived their idea and that they didn’t take their idea from someone else, under penalty of jail time (for making a false statement).
Substantial changes to existing laws would be required to accommodate machines being innovators or inventors.
Related: Pitfalls to Avoid When Collaborating on Intellectual Property
Potential Benefits of AI-Created Patents
Incentivizing AI innovation by granting a patent for a limited time could come with some potential benefits.
Those in favor argue that patent protection is necessary, otherwise there will be insufficient incentive to realize ideas that may solve the world’s biggest health or environmental issues. For example, a pharmaceutical derived from AI is an enormously expensive pursuit that may not ever occur without patent protection.
1984 All Over Again?
But do the potential benefits outweigh the potential costs? Could losing the human aspect of invention lead to a scenario straight out of a science fiction novel?
It’s just a given that large companies have more access to AI technology than small companies. Giving patents to AI, then, gives unfettered, larger companies an innovation edge.
Imagine this nightmarish scenario: AI mines through virtually all existing patents, “watches” for new published patent applications, and on an ongoing basis creates new patent claims (i.e., potential inventions) to fill in holes not covered by existing patents. AI maybe (or maybe not) models the new claims to assess whether the claims are, in fact, useful and then AI automatically drafts patent applications that are ready for filing.
Already, AI helps draft patent applications via basic information that a human user feeds into a program. A little fine tuning and suddenly you have autonomous machines coming up with new ideas without even a seed of anything human, just overwhelming the patent office with new inventions, all being funded by large companies. And, unlike a human inventor, AI never gets tired, never burns out, and never runs out of steam.
Related: What Lawyers and Clients Need to Know About the Use of Artificial Intelligence
In this scenario, it’s easy to imagine well-funded companies quickly covering entire technological patent landscapes in a way an army of engineers and patent attorneys cannot do. It is also possible an entire country may unleash a race to the bottom by being the first to deregulate patent laws and allow non-human inventors.
Striking the Right Balance
Special laws and rules might need to be put in place to throttle AI-related patent filings. For example, requiring that AI-developed innovation actually be put into commercial practice before patent rights are granted may strike an appropriate balance. Other measures to address the potential for an overwhelming number of AI-as-an-inventor patent filings may include compulsory licensing and per-company limits on the number of AI-as-an-inventor patent filings.
AI promises enormous potential benefits, but requires amendments to laws and rules that will protect innovators and inventors — especially those with limited resources — while still taking advantage of all that AI offers.
Should You Pass on a Patent?
When is an idea really worth patenting and when is it better left alone?
Sometimes a patent does not make business sense. It’s a conversation I have frequently with potential and existing clients, and after a brief discussion, drawing attention to important issues they should consider, they often arrive at the conclusion that it’s not worth it.
At the outset, it is important to note that, many times for many different reasons, patents are difference-makers for companies. And until a decision is made not to pursue a patent, it is important to keep the invention a secret. If disclosing the idea to a third party is necessary, then a best practice is to file a provisional patent application before discussing the invention with others. At the very least, make sure the party you are talking to has signed a non-disclosure agreement (NDA).
But when launching a business, patents are not a substitute for hard work, and patents may not accomplish the goals you expect them to. So, if you are faced with limited time and resources, and you are considering if a patent is right for you, consider these issues before investing your time and money.
When Is the Cost of a Patent Worth It?
Obtaining a patent can be an expensive, time-consuming pursuit. It is not unusual for the cost to file a patent application to exceed $10,000, and then it may cost another $10,000 to have the typical dialogue with the patent office that can go on over a period of years before a patent is issued. That is a lot of money.
So foremost, it is important to consider the total market potential for the product or service. Then, it is important to drill down, in a realistic way, to the attainable portion of that total market that is likely with and without a patent. This is an important consideration for both those that want to pursue licensing revenue and those that want to enhance sales in a typical business.
So ... To Patent or Not?
If the desired return on investing in a patent is a shortcut to licensing revenue without sweat-investment, then it is unlikely a patent is worth the pursuit. There are certainly people and businesses that have made a lot of money licensing patents, but the difficulty to do so should not be underestimated. The likelihood of being able to license a patent without putting in the effort to get proven, prior revenue going is very small. In general, there is no replacement for hard work. So, if the goal is easy money, pursuing a patent might not be a good course of action.
In the context of organically growing a company, the decision to pursue a patent is a very subjective one, but there are several important factors to consider when deciding whether to file a patent application or not.
Factors that weigh in favor of pursuing a patent include:
- Infringement is easy to detect (i.e., it is easy to determine if someone is using the invention);
- You want to promote the inventive aspects to distinguish your product/service from competitors;
- The invention will be practiced by competitors (as opposed to customers);
- Potential investors may place a high value on patents;
- The invention is a technological, innovative advancement over the prior art; and
- It is difficult to make a competitive product without use of the invention.
Factors that weigh against pursuing a patent include:
- It is very difficult to detect infringement (e.g., an algorithm implemented in protected firmware and there is more than one way to arrive at measurable outputs);
- Inventive aspects may be obfuscated (i.e., measures can be taken to prevent the invention from being reverse engineered)
- Performance attributes can be promoted to customers without disclosing details of how the performance is obtained;
- The invention relates more to a business approach than an improvement in technology; and
- It is unlikely that competitors will independently develop the same solution.
Trade Secret Protection May Be Better
Most of the factors that weigh against pursuing a patent also weigh in favor of maintaining the invention as a trade secret. Advantages of maintaining an invention as a trade secret include avoiding the costs and distraction of obtaining a patent, while at the same time, not teaching others your invention (which a patent will do).
Related: Protecting IP in the Food and Beverage Industry
If you can easily keep your idea a secret, you can avoid spending the money on a patent, avoid publishing your secret, and just take reasonable efforts to keep it a secret. For example, a SaaS-related invention that relates to an algorithm executed in the cloud may be best left a trade secret.
An additional aspect that may push you to keep your invention a secret is “prior user rights,” which may be available as defensive protection against patent infringement for those who can demonstrate they were commercially using the invention for at least one year prior to the filing date of another’s patent.
Some other important considerations:
- Obtaining a patent does not give the owner the right to practice the invention. It’s a huge misconception that a lot of people have — that by virtue of having a patent, they’ll be able to sell their invention. That is just not true at all.
- A defensive publication may be just as effective as a patent if the goal is simply to prevent others from obtaining a patent.
Other Areas to Focus Your Resources
If you’re leaning away from patenting your innovation, then where can you focus efforts with limited resources?
Competitor and industry analysis
Keeping tabs on the development work (patented and unpatented) of your competitors or other companies of interest can help avoid conflict down the road. Regular monitoring of these portfolios is relatively easy to do and may also provide insight into where others are focusing their development efforts.
Clearance and freedom to operate research
Because patents are not a shield against patent infringement, it is important to be aware of other’s patents. A freedom to operate search can help understand whether there are risks to practicing an invention. A prior art search will also help when deciding whether to pursue a patent and help to constructively frame the scope of any filed patent application.
Branding and trademark protection
A focus on branding is almost always worth the invested time. And pursuing trademark registration may be a better business decision for some businesses because trademarks are relatively inexpensive to pursue. Instead of obtaining a patent right away, it may be better to obtain trademark registration on a solid, distinctive brand, focus on being the first to market, and claim some market share first.
And before investing time and money in building up your business under a particular name, brand, or logo, a clearance search, even a simple one, can go a long way to ensure that your chosen name/logo does not conflict with pre-existing rights of others. These include searching for your company name and products as well as domain name availability. Assuming these searches report back positively, consider filing trademark applications for your main company name and key product names or logos.
Copyright registration and notices
Although a copyright is an unregistered right, it can be particularly useful to file for a copyright registration if the work is something that may be tempting for someone else to copy. Copyright registration is very easy, and enforcing your copyrights is much easier if your work is registered. In addition, the potential to recover statutory damages for any copyright infringement is contingent upon a federal registration before infringement occurs.
Related: Yes, You Need a Registered Copyright
Employee and confidentiality issues
In order to ensure that any individuals or contractors you hire will transfer their intellectual property (IP) rights to your company, adequate employment contracts, contractor agreements, or assignments are necessary.
As a rule, confidential information can no longer be protected once it is in the public domain so ensuring that your employees, contractors, and anyone you disclose confidential information to is under a written confidentiality or non-disclosure obligation is important.
Passing on a Patent
Patents may be an important piece to protecting IP, but patents are not a shortcut to success; hard work is required before any business succeeds. Virtually every business has limited resources to protect its assets, and many times patents simply do not make business sense when other IP efforts present a better return on time and money. If you feel stuck on which way to go, keep your invention a secret and set up a consult with your IP attorney to clear the air.