Deep in a dumpster lay two hundred years of patent lithographs that the US Patent Office discarded when they went digital. Out went the handwritten examiner notes and fine ink drawings on patents by Tesla, Edison, Bell, Goddard, Farnsworth and Carlson - masters of innovation who lived in far more challenging economic times.

Randy Rabin and I have shared with the world 140 of these original hand drawn lithographs in a book Drawing On Brilliance. Most have never been seen by the public before. Each holds the secret to innovation success – how to build products that will change the world.

Accelerating Innovation With Search

Think about this. There have been a mere 360 years between Galileo's discovery of the sun's turning on its axis and the first moon landing. Then less than 100 years between a time when the world's roads were made of dirt and the invention of the Internet. We are on a steep trajectory of success in solving global problems.

So drawing on the brilliance of the innovators who brought us this far, we can accelerate the rate at which we successfully build products that change the world.

For example, success at controlled flight eluded the likes of Galileo, DaVinci and hundreds who followed them. So what was it that two bicycle shop repairmen from Ohio named Wright did differently that would then serve to raise the standard of living around the globe? What approach did they take that centuries of geniuses before them did not?

Search! With no engineering degrees and limited financial resources they began a profoundly systematic search, (and without the benefit of the internet).

Dear Sirs (letter to The Smithsonian):

I am about to begin a systematic study of the subject in preparation for practical work which I expect to devote what time I can spare from regular business. I wish to obtain such papers as Smithsonian Institution has published on this subject, and if possible a list of other works in print in the English language. I am an enthusiast, but not a crank in the sense that I have some pet theories as to the proper construction of a flying machine.

I wish to avail myself of all that is already known and then if possible add my mite to help on the future worker who will attain success. I do not know the terms on which you send out your publications but if you will inform me of the cost I will remit the price.

Yours truly,

Wilbur Wright

Before building a single model they looked at centuries of prior art, dissecting the patterns of failure as carefully as the patterns of success as far back as Leonardo DaVinci. They used mapping, visualization, and had completed a painstaking analysis of as much available scientific information and technical intelligence as they could find.

How does starting with search ensure product success?

Right Product, Wrong Customer?

A state of the art search is critical before any company enters into a new technology area. Results can provide a basis for making critical market decisions based on competitive intelligence. They will become a powerful navigation framework for any innovative product or process design and will keep development focused on the right customer.

When Chester Carlton, the inventor of the photocopy machine, spent years trying to sell his invention to large companies, but to no avail. But two small companies, the Batelle Memorial Institute and the Haloid Corporation (later to become the Xerox Corporation) eventually agreed to license the technology and manufacture the copier.

It then took Xerox 15 years before the first viable, user friendly model hit the market. And their challenges continued when the Arthur D. Little Consulting company report done for IBM advised that the Model 914 “had no future in the office copy market”

Yet in its first six months the Model 914 exceeded sales projections for the entire lifetime of the machine. The A.D. Little Report consultants had only done their research on mailroom managers and not the secretaries who became the primary customers.

Optimize and Monetize

Visionaries are by definition too early and with each passing, great idea they seem to only get more visionary. Most of Nikola Tesla’s inventions were too early to be commercially successful in his lifetime. Yet many of them now form the basis of entire new industries and have helped create millions of jobs.

Is there a “Tesla” in your collection of innovations? Have you built a great product that is too early to be commercially viable? The true litmus test for commercial viability is when customers will actually buy the product and in some cases – even prepay for it

Effective archiving allows a company to monetize that product development risk by legally safeguarding the IP until the market is ready to buy.

Or is there a brilliant process your company has perfected for your current industry that has an even more world changing impact when applied to another industry?

Remember, Henry Ford repurposed a process from the meat-packing industry that allowed mass production of cars. And Yo-Yo Ma’s cello bow measurement technique is now used to design every child’s car seat in the world. Capturing this IP can foster even more of the cross-pollinating breakthroughs that have been the hallmark of product success.

Today’s sophisticated workflows and collaborative environments make it imperative that creative work be legally safeguarded yet remain accessible to as a private archive. This will also serve to optimize the value of your R&D budget, potentially increasing your company’s balance sheet and adding measurable asset value to any future M & A.

We are on the cusp of a third industrial revolution that will raise the global standard of living yet again. Today we have access to an unprecedented amount of resources and we’re collaborating like never before. And yet there is no shortage of global problems that need to be solved. So go build that product that will change the world, by drawing on brilliance.

About The Author:

Jackie Bassett is founder and CEO of BT Industrials Inc., a strategic management and technology consultancy where she helps CEOs of global 500 companies design and execute on their innovation strategies. She was one of the first 100 employees at Netscreen Technologies; which started in 1997, successfully IPO'd in 2001, then was acquired by Juniper Networks in 2004 for $4Billion. Her background is in investment banking having worked at State Street International. Her innovation strategy work has been in a variety of industries from Telecom, to HealthCare, to Clean Tech, to Digital Entertainment, to Biotech. She holds an MBA from Babson College and a private pilot's license.

You know how sometimes you hear a theme every once in a while, and you don’t make much of it? But then you hear it five times in a week, and suddenly you say whoah, something’s going on here!

That’s how it is for me with trust and innovation. I have now seen enough about their connection that I notice it.

Got problems with innovation? R&D not giving you much bang for the buck? Suffering from same-old service offerings? Product un-differentiation got you down? Read on.

Observation: Pessimists Don’t Innovate, Nor do they Trust

In Why Victims Can’t Invent Anything, Michael Maddock and Raphael Louis Viton suggest a simple test for the ability to innovate: the old glass is half full, half empty test. If you are optimistic, you are a creator. If you are pessimistic, you are a victim. Guess which one wildly out-innovates the other?

Now marry that up with the profile of trusting and non-trusting people from Eric Uslaner, arguably the world’s leading academic expert in trust. Paraphrasing, high-trusting people believe that life is good, and that they are in control of their lives. Non-trusting people believe life is fundamentally unfair, and that other powers are in control of their lives.

You want to increase innovation? Hire optimistic, high-energy people; shun conspiracy theorists. And why does this work? Because they trust each other.

Diagnosis: More Trust Yields More Innovation

Let’s follow this logic further. Trusting each other means people are open to each others’ ideas. Robert Porter Lynch explains the link.

Creativity happens, he says, very little by sitting around contemplating. Rather, it comes about from our interaction with others. In particular: people different from ourselves, who think in fundamentally opposite ways from the way we think.

If we’re not open to others—if our fundamental approach to others is fear-based, if we come from anger or ego or fight/flight responses—we shut ourselves off from the creative forces that come through sharing those different perspectives. We see them as threats.

The bridge is trust. If we can trust the other person, then we can hear and consider their perspectives, as they do ours. Net: communication, creativity, new ideas, innovation.

Trust and Innovation: Does It Work in the Real World?

Does it work for Ross? He’ll answer a resounding ‘yes.’

In the course of the next month, you’ll be hearing from several of these people: Eric Uslaner, Robert Porter Lynch and Ross Smith in particular, as well as others. I think you’ll enjoy reading what they have to say.

For now, let’s just notice what they all agree on: the road to innovation goes through trust.

About the Author

Charles H. Green is founder and CEO of Trusted Advisor Associates. The author of Trust-based Selling and co-author of The Trusted Advisor, he has spoken to, consulted for or done seminars about trusted relationships in business for a wide and global range of industries and functions.
Centering on the theme of trust in business relationships, Charles works with complex organizations to improve trust in sales, internal trust between organizations, and trusted advisor relationships with external clients and customers.

Charles started his career with the MAC Group and its successor, Gemini Consulting, where his roles included strategy consulting and VP strategic planning. He majored in philosophy (Columbia), and has an MBA (Harvard).

Trust Matters is his blog and he is also the founder of the monthly business blog review on the worldwide web known as the Carnival of Trust. We follow him on Twitter, as well, @CharlesHGreen

If you look at the books of large companies these days you will discover that their intellectual property (IP) adds a enormous amount of money to the balance sheet. In fact most companies fixed assets are small in comparison to the brand and IP value. This tells us something very interesting – yes – how much more would your company be worth if you invested more in intellectual property recognition and registration?

When a company strategically identifies, maintains and secures its IP rights then this can plainly have a major affect on the business in terms of its overall operation, including its ability to appeal to investors, enter into specific business partnership, and in the end increase its value when it comes to sale or company merger.

Large businesses who have mega-brands like McDonalds and Pepsi are often quoted when it comes to their brand value as out-valuing their fixed assets hundreds of times, yet it is easy to forget how these companies also became so big.

We live in an information world now. Information companies like Google can be valued at a few billion dollars a few years after creation only because information is now so valuable. Information is a tradable asset only when it is protected by IP laws and other laws. Every company, big or small should consider intellectual property seriously. It is one of the best investments literally you can make with a company if the intellectual property (IP) value is capitalized within the business and added to the balance sheet.

It is highly recommended for companies of all sizes to be aware of intellectual property topics and produce special strategies that will proactively ensure that their IP will at all times be properly legally protected.

Here are a few areas to help you start concentrating on by first identifying the areas that you are creating intellectual property (IP) in:

1. Trademarks – these protect parts of your overall brand such as slogans, images, names.

2. Copyrights – these cover the protection of expressive items such as documents, books, images, videos, sound recordings etc.

3. Trade secrets – these protect proprietary information, internal know-how, systems and operations that are deemed to give you a business competitive edge

4. Patents and industrial designs which protect specific types of ideas and inventions and processes

Considering the above items the first step that you need to do is identifying current intellectual property within your company. You may be amazed by how much you may have. Once all sources of a company’s intellectual property (IP) have been identified, processes should be put in place that enable the company to easily keep track of all existing IP and all new IP . Then someone needs to be given the responsibility to manage the intellectual property.

Learn more about Trademark Registration Singapore and uncover how does a trademark lawyer and IP protection increase the net worth of your business overnight.

Article kindly provided by UberArticles.com

Although he is generally reluctant to criticise individual IP rights owners for seeking to protect their market position, and equally reluctant to criticise those members of the IP professions who represent them, there are times when the temptation to do so becomes very great.

One such occasion when the temptation became fairly strong was today, however, when on reviewing the recent crop of appeals to the Court of First Instance of the European Communities regarding Community trade mark law he came across Case T‑162/08, Frag Comercio Internacional, SL v Office for Harmonisation in the Internal Market, Tinkerbell Modas LTDA.

Tinkerbell applied to register as a Community trade mark the sign on the right. Frag opposed, citing a likelihood of confusion with the mark on the left, on account of their similarity and the identity or similarity of its goods to the goods and services for which Tinkerbell had applied to register its mark. If you look very carefully you can just about see the words "by missako" in a scribbly sort of script at the bottom of Tinkerbell's sign.

The Opposition Division, the Board of Appeal and the Court of First Instance were all united in considering that the respective sign and mark were not hugely similar. The miracle is that it took the Court some 22 paragraphs of patient, formulaic judgment to explain that the marks were dissimilar.

The IPKat has seen some dissimilar marks touted as being similar over the years, but he doesn't think he has ever seen so egregious a case of dissimilarity as this. In case he was mistaken, he took the trouble of showing the pair of them to some friends and colleagues, each of whom was totally puzzled as to how anyone could have thought them similar. Merpel adds, what's also annoying is that Frag applied to the court to reject the application for registration, even though this plea has been ruled inadmissible in a string of cases going back many years. She feels that this exercise was a waste of someone's time, effort and money and hopes that futher appeals to the Court of Justice, the United Nations and the Celestial Tribunal will not be forthcoming.

Want to know more about our distinguished Guest Blogger?

I graduated from the University of Cambridge (Clare College) with a BA (Law) in 1973 and earned my PhD from the University of Kent at Canterbury in 1977 for my thesis on the allocation of intellectual property rights between employers and employees. From 1975-1976, while I was writing up my thesis, I was a Special Fellow at the University of California at Los Angeles (UCLA).

I have taught law full-time at Trinity College Dublin (1976-1980), University of Durham (1980-1984) and Queen Mary (1984-1987), returning to Queen Mary in 1991-1992 as Herchel Smith Senior Research Fellow. More recently, from 2003 to 2006, I was Professorial Fellow at the Queen Mary Intellectual Property Research Institute.

In addition, I spent two years as Managing Director of the publishing house that founded Trademark World, Patent World and Copyright World. I also launched Managing Intellectual Property magazine, which I sold to Euromoney Publications in 1991. Between 1992 and 1996 I was Registrar of the Court of the Chief Rabbi.

This caused a bit of a stir at the CIP Forum. Do you agree?

Perhaps none of the speakers in the IP and IA management track in last week's brilliant CIP Forum in Goteborg, Sweden were qualified to speak about what appears to be the most pressing issue for the future of IP management. You see, none of the speakers in this track were from small to medium enterprises (SMEs).

Let's back track a minute and then I'll explain.

Each of the speakers on the IP Management panel on the second afternoon were asked to spend a few minutes speaking about what they see as the major issue defining the future of intellectual property management as we head to a knowledge economy.

Here's what I had to say, please do come and join the conversation and let us know what you think.

We consistently hear (and at the conference, from the likes of Eli Lilly, Microsoft and Philips) that most innovation is occuring at the SME level.

Clearly most IP management is occuring there as well.

We have all heard about and constantly deal with IP silos within companies, managing IP as a profit centre (and not a cost centre) and communicating value to the Board.

Well, the vast majority of IP management has no silos, no profit centre, no cost centre, indeed no centre at all.

The vast majority of IP management is done where there is no IP function.

The challenge then, is to develop a set of principles and practices that are transportable across SMEs to large corporations. Accounting principles apply this way, as do marketing, sales, product development, indeed every other function.

Large entities have a great interest in helping SMEs to acheive this. They themselves often say that this is where they look for innovation. If they are to acquire IP from SMEs, then they would much rather that it had been carefully nurtured prior to acquisition.

Those of us charged with working in or with large and well resourced entities have an opportunity to make a substantial impact by leading the development of these tools.

[Photo credit: Clint M Chilcott and inventor of 'Light Emitting Diode Persistence of Vision Helmet']

About the author

Duncan Bucknell is an IP Strategist, lawyer, patent attorney and a veterinarian. He is a Fellow of the Institute of Patent & Trade Marks Attorneys and a Principal Fellow at the Melbourne Business School where he co-teaches ‘Strategic Management of Intellectual Property.’

Duncan is also an Associate of the Australian Institute of Company Directors and an Associate Fellow of the Australian Institute of Management.

Duncan is also one of three co-founders of Remarqueble, a provider of outsourced online trademark registration services.

L.L.B. (Hons), B.V.Sc. (Hons), B.Anim. Sc. (Hons)
FIPTA, AAICD, AFAIM
Phone: +61 (0) 427 003 423
Fax: +61 (0) 3 8640 0843
Email: duncan [at] duncanbucknell [dot] com

Dave Donoghue is one of a cadre of leading intellectual property law bloggers that have signed on recently to guest blog on the top patent blog, Patently-O. Also guest blogging this month, on Dennis Crouch's Patently-O, are many of the other top patent bloggers: Kevin Noonan of Patent Docs, Brett Trout of BlawgIT, Stephen Albainy-Jenei of Patent Baristas, and Joff Wild, Editor of IAM Magazine and the IAM Blog. Dennis has even got intellectual property blogger emeritus Jeremy Phillips grinning like a Cheshire cat at the prospect of writing an article for the top patent blog.

It's great to see this worldwide collaboration among the top patent blogs; bloggers who have learned the art of guest blogging and are showing others how it's done.

Here on Securing Innovation, IP.com is committed to a collaborative IP blog that is an integral part of the community of intellectual property professionals, attorneys, patent agents, examiners, strategists, and advisors. It's with a spirit of collaboration and mutual support that we've designed our corporate blog to feature a Guest Blogger with a prominent placement, rather than following the standard practice of including the guest blogger among the regular posts. This design gives the Guest Blogger a higher profile for a longer period than is usually the case on other blogs that publish guest authors. Contributed articles on Securing Innovation are also included in the permanent Guest Blogger Archives with a distinctive RSS feed for these featured articles. Looking at the lineup of featured guest bloggers, it makes a lot of sense to subscribe to this Guest Blog and add it to your favorite feed reader.

So far, we've featured the following Guest Blogger articles on Securing Innovation:

Remember Mr. Murphy When it Comes to Protecting Intellectual Property by Jason Shinn

Saving Your Intellectual Property by John Avellanet

Are Patents A Driver of Innovation or Just a Tax? by Stephen Albainy-Jenei

Should Management Be Involved In Patenting Decisions? by Clifford D. Hyra

Vote for the Top Patent Blogs by Gene Quinn

Technology Transfer Office Uses Workflow Software to Boost IP Management, Marketing by the Editor of Technology Transfer Tactics

August Carnival of Trust by R. David Donoghue

We're open to suggestions from bloggers who would like to be featured as a Guest Blogger here on Securing Innovation, the corporate blog of IP.com Inc. While we're not Patently-O and can't boast the traffic of, say, Patent Baristas, we are always keen to collaborate with IP Bloggers who have something interesting they'd like to share with readers of Securing Innovation and clients of IP.com who follow our corporate blog. We expect that several of the executives of our clients and customers, some of whom don't even have blogs, will want to publish an article in this forum of intellectual property professionals.

Got an idea for a post that you'd like us to publish or cross-post on Securing Innovation? Send an email to blog@ip.com and we'll be happy to discuss it with you. Nice people, we love cats and dogs.

Welcome to the August 2009 Carnival of Trust. The Carnival of Trust is a monthly, traveling review of the last month's best posts related to various aspects of trust in the business world. It is much like the weekly Blawg Review that I post links to and have hosted (click here and here), but those generally contain far more than ten links. My job this month was to pick those ten posts for you and provide an introduction to each post that makes you want to click through and read more. For my regular Chicago IP Litigation blog readers, this will be a slight departure from the case analysis format you have come to expect, but very similar to my earlier stints hosting the Carnival of Trust and Blawg Review.

It is the trust that matters, not the title.

At IP Think Tank, Duncan Bucknell added to the recent debate in the patent community about whether the IP function should move into the corporate C-level suite, adding a Chief Intellectual Property Office to the ranks of CEO, COO, CTO, CIO, CLO and CMO – click here and here to read Bucknell's posts. Following up on comments by Microsoft's Marshall Phelps and Rockwell Collins' Bill Elkington, Bucknell explained that the issue is not the name, but in a company having an IP champion that earns the organization's trust and respect, whatever title that person is given:

You have to build your own credibility within your organisation as someone who reliably gets the job done. As you build trust with those senior to you, then your (ongoing?) commitment to communicating the value that can be added using intellectual property will become more prominent.

Make some (achievable) promises and then deliver. The more that you do this, the more credibility will be given to the IP function, and the greater awareness those senior to you will have. Some would call such a person an ‘IP Evangelist’ – I would say that they are just doing their job. People executing on difficult tasks bit by bit has always been what success is about.

As usual, Bucknell's analysis is excellent. A person's respect within an organization is at least as important as their title.

Running an organization is all about building trust.

The patent community focused much of its attention this week on the confirmation hearings for David J. Kappos, nominee for Director of the US Patent & Trademark Office. Click here for Patentability's summary of the hearing highlights and here for a copy of Kappos's statement at Patently-O. The hearings were relatively short, likely because there appears to be widespread trust in Kappos's background and abilities. And although much of the hearing focused on procedural patent office issues, Kappos showed he deserved that trust by focusing his statement on his plans to earn trust with all of the stakeholders in the patent world. He specifically addressed concerns that his corporate background could disadvantage individual inventors or academics:

I am mindful that the USPTO serves the interests of ALL innovators in this country, small and large, corporate and independent, academic and applied, and – most importantly -- the public interest. While I have spent my career to date at a large corporate enterprise, I am familiar with the concerns and issues of all USPTO constituents - including small and independent inventors, the venture and start-up community, public interest groups, the patent bar and many others - and will reach out to all of them.

Kappos addressed his plans to build trust with his employees at the USPTO:

I am mindful of the incredible dedication of the thousands of USPTO employees, and the essential role they play to the success of the US innovation system. I will work every day with the USPTO employees and the unions that represent them to establish strong, positive relationships grounded in professional treatment for these workers producing work product based on professional judgment.

He addressed the need to build global trust and relationships:

I am acutely mindful that innovation today is global and that IP policy is of paramount importance, not only in our country, but also in the EU and Japan, in China, India, Brazil and many other developing countries. I will use my international experience and my understanding of global IP trends to help this Administration represent, advance, and protect the interests of American innovators in the global arena and to lead the world in developing strong, balanced, inclusive intellectual property systems that advance the well-being of all participants.

And he addressed the need to build trust with the Administration he seeks to join and the American people the Administration serves:

Finally, I am mindful that the office for which I am being considered, working as part of Secretary Locke's team and within the Administration's agenda, must be intensely focused on how to serve the American people at this time of economic uncertainty.

Gene Quinn provides proof that Kappos's trust-building efforts worked in his IPWatchdog post about the hearings (click here to read the post):

In all, what Kappos said was certainly reassuring, and he should have absolutely no problem getting confirmed. If he does stay mindful of the needs of all those who use the USPTO, small, large and in between, and the interests of the diverse industries who sometimes need contradictory things in order to thrive, he will not only be a good leader, but he will be an exceptional leader and might really reform the Patent Office into the entity it can and should be in order to foster economic development and job creation in the US.

Walter Cronkite personified trust.

The passing of Walter Cronkite last month does not have much to do with intellectual property, but I could not do this month's Carnival of Trust without mentioning Cronkite. To me and so many others, Walter Cronkite embodied trust. Cronkite was the person so many turned to in times of national tragedy, like war, and in times of national triumph, like the Apollo XI moon landing. Naturally, Cronkite's passing caused numerous reviews of present-day news personalities and almost as many questions about whether times have changed so much that we cannot have another Cronkite. In the Chicago Reader blog, Whet Moser decries a poll that found the Daily Show's Jon Stewart to be the most trusted newsperson on the air today – click here to read the post. Frankly, the poll does not appear to be scientific and, therefore, not very trustworthy. But I have trouble arguing with the results. I love news. Three newspapers are delivered to my door every morning, and I read each one. Okay, I at least skim each one. I grew up watching the nightly news, but I now finding myself turning to Stewart for news programming more frequently than I turn to Couric, Gibson or Williams. I like and even trust all three. But Stewart has built a more powerful trust with me by calling out the problems with the 24-hour news cycle and by making me laugh. Stewart has some obvious biases, but he makes sure they are obvious and he creates even more trust by poking fun at both sides of most issues. Truth and laughter are powerful trust builders.

Cronkite deserves more than one entry in this Carnival, and the second comes from the Carnival of Trust's own Charles Green at his Trust Matters blog – click here to read the post. Green breaks down the components of The Most Trusted Man in America: 1) honesty; 2) selflessness; and 3) integrity. Green also explains that Cronkite's calm, baritone voice reinforced each of the three characteristics. I could not agree more. Hearing Cronkite's voice is an instant dose of trust.

For those not fortunate enough to develop their own "personal," trust relationship with Cronkite through his news programming, check out this NPR obituary to get some measure of the man and his history.

Credentials can generate and regulate trust.

At the Mediation Channel, Diane Levin makes a strong argument that legal mediators need to develop an accreditation system – click here to read the post. And IP mediator Victoria Pynchon responds at her Settle It Now blog with her own arguments for credentialing mediators for the good of mediators, the mediating parties and society's trust in the mediation system as a whole – click here to read the post.

How can companies build trust?

Building trust can be a slow and sometimes uncertain process. At his Touch Points blog, Steve Finikiotis cites a study suggesting that trust in corporation in the United States and other developed countries is at its lowest point ever – click here to read the post. In order to remedy the decreased trust, Finikiotis provides four trust building steps: 1)Focus on understanding and meeting customers’ preferences; 2) Under-promise and over-deliver; 3) Transparency; and 4) Encourage and foster feedback.

And although Finikiotis did not focus on this example, last month Amazon showed just how those steps do build trust. Amazon was accused of copyright infringement when a digital book seller used a self-service program to sell unauthorized copies of several books, including George Orwell's 1984, to Amazon Kindle users. When Amazon learned of the alleged infringement, it erased the books from its customers Kindle accounts. As you might expect, there was a public outcry. Kindle users were upset to learn that books they purchased and felt they owned could be removed from their devices and accounts. And Amazon sprang into action following Finikiotis's four steps:

1. Amazon listened to its customers' frustration at having the books removed and the possibility of future removals;

2. Amazon replaced the books;

3. Amazon's founder and CEO, Jeff Bezos, issued the following very direct and honest apology:

This is an apology for the way we previously handled illegally sold copies of 1984 and other novels on Kindle. Our “solution” to the problem was stupid, thoughtless, and painfully out of line with our principles. It is wholly self-inflicted, and we deserve the criticism we’ve received. We will use the scar tissue from this painful mistake to help make better decisions going forward, ones that match our mission.

With deep apology to our customers,

Jeff Bezos
Founder & CEO
Amazon.com

4. Through its response and apology, Amazon fostered feedback.

Amazon turned a negative situation into a very positive one. As a Kindle owner (and lover), I was very happy with the response and it has made me an even more loyal Kindle customer. And others agree. For example, Amazon's response helped convince PublicOrgTheory blog to go ahead with a Kindle purchase – click here to read the post. And In Propria Persona has qualms with copyright law, but saw the apology as good customer service and said it improves the likelihood of him purchasing a Kindle – click here to read the post. Finally, the Below the Line marketing blog says that "Amazon shows how to apologize," and notes that customer comments on the Amazon site have been largely positive since the apology; proof that Finikiotis's steps work. Nice job to both Finikiotis and Amazon.

And with that story of trust done well, thank you for reading, whether you are a regular reader of this blog or a Carnival of Trust groupie.

About the Author

R. David Donoghue is the creator and author of the Chicago IP Litigation Blog. But blogging is only one facet of Mr. Donoghue's legal practice. Mr. Donoghue is a litigator focusing on intellectual property disputes, with a particular focus on patent litigation. He practices in Chicago as partner with Holland & Knight. More specifically, Mr. Donoghue is actively involved in both asserting and protecting his client's intellectual property assets. His practice spans diverse technology areas including cellular telephony, computer software, automotive technologies, satellite radios, electrical and electronic products, television production equipment, nutritional supplements and numerous medical devices. He also has extensive intellectual property licensing experience.

Mr. Donoghue was previously with Delphi, the world's largest automotive supplier, where he was a founding member of Delphi's Technology Licensing and Litigation group and handled substantial international intellectual property litigation and licensing matters.

Mr. Donoghue served as an Adjunct Professor at the Loyola University Chicago School of Law, teaching Legal Research and Writing and Introduction to Intellectual Property. And at the beginning of his legal career, Mr. Donoghue served as a law clerk to the Honorable Gordon J. Quist, Federal District Judge for the Western District of Michigan.

Mr. Donoghue earned his B.S.E. in Aerospace Engineering magna cum laude from the University of Michigan and earned his J.D. cum laude from the Georgetown University Law Center. While at Georgetown, Mr. Donoghue served as the Current Developments Editor for the Georgetown Journal of Legal Ethics.

The Intellectual Property Management Office (IPMO) at the University of Oklahoma is taking a unique technical approach to secure, manage, and market its portfolio of intellectual property, with a goal of boosting the number of licensing deals. If the high-tech strategy works, the TTO will be better equipped to navigate through the current economic crisis and beyond, says Cameron J. McCoy, director of technology marketing.

InnovationQ, a web-based, on-site software platform that automates and streamlines common IP management functions, is one of the primary tools the office is using to operate more like a business while improving its transparency with inventors and administration, says McCoy. “The ability to customize InnovationQ was a major selling point,” he points out. “We are able to adapt the base system and create new scalable functions that fulfill the specific needs of a TTO. The team at IP.com [the software vendor] has worked with us to co-develop a technology that will support the tech transfer process.” For example, InnovationQ can work with the IPMO’s existing IP management software, Inteum C/S by Kirkland, WA-based Inteum Co., LLC. “We wanted something that would complement Inteum, so we wouldn’t have to change the way we interact with our patent portfolio as it exists now,” says McCoy.

The university is conducting a five-stage implementation:

• Stage one is organizing the foundation of InnovationQ and setting up a secure repository. This essentially involves the InnovationQ team “looking at the types of data you have and what data you are seeking to collect,” says Didas. On the security front, InnovationQ locks down files to maintain integrity and provide a defensible background, says McCoy. The IPMO chose to store data on its own secure servers, but InnovationQ also generates a digital fingerprint (date stamp) for
every version of a document within the system. And the system allows TTOs to give certain departments or individual users either full or limited access to specific documents, says Didas. “For example, some might have ‘read only’ access, where they can preview MTAs or licensing agreements.”

Increased transparency

• Stage two is one of two workflows currently in development, says McCoy. InnovationQ uses a web-based portal to achieve a completely automated invention disclosure filing workflow that allows inventors to collaborate online.

The current disclosure process at Oklahoma works like this: Inventors download the invention disclosure form from the IPMO website. They fill out the form, print it, sign it, and then send it to
IPMO. Tech transfer staff must scan the disclosure form to enter it into their system. “In doing so, the document becomes a picture, and none of the data is available to us for searching,” McCoy points out.

With InnovationQ, “an inventor will be able to log in and complete the entire disclosure process online,” says McCoy. “This not only offers convenience to our inventors, but it gives us a produced
document that is searchable. We are then able to pull search terms out of that document to use in our process of marketing the technology.”

An electronic submission process should ensure that “a TTO is getting consistent disclosures: disclosures that have the same format and that are capturing the same type of data,” adds Didas.
Researchers also can stay in the loop, he points out. “The researcher or the person who authors the disclosure can elect to receive a notification every time their disclosure passes a key milestone in the invention disclosure workflow.”

One of IPMO’s basic goals is “to become more transparent,” says McCoy. “The online functionality of InnovationQ should provide a significant step toward achieving that goal. We will be able to open
the doors and let our researchers see what we are doing and when we are doing it. In turn, they will be able to have more input into the process -- and we can have better communication with them.”

• Stage three sets up another workflow designed to work in sync with the invention disclosure workflow. Specifically, InnovationQ automates the disclosure analysis, “allowing a technology manager and all appropriate resources to together move a technology through the decision processes after the disclosure form is completed via the online process,” says McCoy.

InnovationQ is well established in corporate settings, but only entered the university TTO market about a year ago. As an early adopter, the Oklahoma TTO has worked with IP.com to define standardized “best practices” in disclosure analysis that will meet the needs of most TTOs, says McCoy. “At the same time, the workflow is flexible enough that it can be customized to the processes of individual TTOs.”

The InnovationQ workflow includes collaborative tools. For example, during the disclosure analysis process, a number of questions typically go back and forth between TTO staff, the inventor, and a patent law firm. “These conversations usually take place via Microsoft Word or e-mail systems,” says McCoy. “Currently, TTO staff can leave a note in Inteum referencing the conversation, but really none of these conversations gets tracked.” InnovationQ fills that gap, allowing staff “to have fully tracked and recorded conversations within a secure environment,” he explains. “This is really useful from both a defensibility standpoint and a functional standpoint.”

In addition, the system includes delegation and consultative features. A technology manager who is responsible for approving a document can delegate his responsibility for that record only to a colleague with greater expertise on the specific technology,
explains Didas. Or the technology manager can ask one or more subject matter experts to provide feedback on the technology before he makes a decision. “So InnovationQ can break the traditional workflow and send the record to another person to make an approval or a recommendation. Then the record will proceed on the normal workflow path,” he says. In addition, any changes to the documents are made while also preserving the original or previous version, so “TTO staff can see a full history of the document,” McCoy notes.

A TTO dashboard

• Stages four and five “are both new developments on the InnovationQ core system resulting from collaboration between [the university] and IP.com,” says McCoy.

Stage four sets up a dashboard system that manages the daily workflow of IPMO’s technology managers as they progress in the patent process. Didas offers this example of how the dashboard works for a licensing manager who is responsible for 20 disclosures
or patents: Once logged into InnovationQ, the user has a starting point called a technology manager view. From here, the licensing manager can see all of his 20 disclosures (and the status of each) as a starting point. “The manager would be able to answer such
questions as: Do we have a nonconfidential summary? Is this technology exposed on our marketing portal? Do we have a patentability study?” says Didas.

Then the manager can drill down on each technology and get a detailed picture, he says. “For example, if a disclosure or nonconfidential summary for a technology is being publicly exposed on the marketing portal, the manager can see the metrics (e.g., how many times it has been previewed). So from a marketing perspective, they can make some general assumptions about marketability based on the eyeballs that the technology is attracting.”

The dashboard is a technology overview, providing TTO managers with access to a complete information trail or history for each technology they manage, explains Didas. “In addition, the system will send personal e-mails to the technology manager when key events occur related to these technologies, and the manager can align related technologies within their system.”

The next release of InnovationQ -- slated for this summer -- will incorporate market due diligence into the dashboard, he says. “It will permit a technology manager to take the patent or technical
disclosure, as well as perhaps enter in key words related to that technology, and the system will return a list of companies patenting in that space, almost like an infringement alert.”

This function also helps with marketability analysis, giving TTOs a ready-made list of targeted marketing prospects, Didas comments. “For example, if you have a patent on a technology that prevents corrosion in titanium tanks and you do a search of related key words, you will find other companies that have patents on titanium or something to do with corrosion.”

Dashboards eventually will also be developed “for all levels of a TTO, inventors, and even university administration,” adds McCoy. “This is important from a transparency standpoint.”

Stage five is a technology marketing portal. “The marketing portal should provide typical business web functionality,” says McCoy. “For example, it will have different types of search capabilities, whether that is a tag search, a browse through, or a word search. The portal also will give us RSS feeds on specific technologies or groups of technologies, and people will be able to bookmark or take action on different technologies.”

These interactive features tie directly into the online disclosure system, notes McCoy. Technology managers can create nonconfidential summaries from the searchable disclosures and then publicly expose the summaries on the marketing portal, Didas explains.

Progress so far

The IPMO has installed the InnovationQ core system and staff are current testing it. His ultimate goal for the system is to generate more licenses. “We should have some hard data on whether this is working sometime in the late fall or in early spring 2010,” says McCoy.

The return on investment generated by a secure portfolio, better communication, and efficient automated workflow processes can be difficult to quantify, acknowledges Didas. “However, the system is designed for TTOs to be able to defer unnecessary costs by vetting technology earlier in the development cycle. The goal is for universities to be able to save resources downstream in, for example, legal costs for opinions, comprehensive patentability searches, and filing fees when they don’t pursue technologies that they decide are not patentable.” Factors influencing the cost of InnovationQ include “the number of modules, the amount of customization, the level of integration with other systems, and the number of workflows,” says Didas. “Typically, these modules are staggered to disburse costs while easing users into the new functions.” Considering the cost of one patent filing, many TTOs could cover the price tag by simply deferring two or three patents, he notes.

Contact McCoy at cmccoy@ou.edu or 405-325-3800; contact Didas at mdidas@ip.com or 716-362-4562, ext. 109.

About Technology Transfer Tactics

Technology Transfer Tactics monthly newsletter was launched in early 2007 by BizWorld, Inc, a privately held national science and business publishing company headquartered in Naples, FL. The founder, President and Publisher is Dr. Leslie C. Norins. The audience for this periodical is, broadly, anyone who has an important role in discovering, encouraging, funding or promulgating the transfer or translation of research into useful, practical products which can yield wide benefits. The readership includes institutional directors and managers of technology transfer or translational research, laboratory chiefs, venture capitalists, corporate development officers, intellectual property attorneys, and licensing experts. Subscribers come from the nonprofit, for-profit, and government sectors, worldwide.

Click here to subscribe to the Technology Transfer Tactics monthly newsletter.

As promised, we are moving forward to attempt to determine the Top Patent Blogs. With the objective component making up Phase 1 of the Top Patent Blog selection process complete, it is now time to move forward into Phase 2, which is the voting phase.

Below are 50 patent blogs for you to choose from. Question 1 asks which patent blog is your favorite, and question 2 asks which patent blogs you regularly read. Only one selection is permitted for question 1, but multiple selections are permitted for question 2. For each question 1 vote a total of 2 points will be awarded. For each question 2 vote a total of 1 point will be awarded. Each computer will be allowed only one opportunity to vote, so that we do not run into an American Idol situation where die hard fans can vote hundreds of times and skew results.

Voting will continue through the end of June 2009. Once voting is complete I will tabulate the results, combine those results with phase 1 totals and announce the Top Patent Blogs, sometime at the beginning of July 2009.

Click this link and vote for the best Patent Blogs.

I always recommend that businesses not isolate management from the patenting process. Sometimes companies leave the patenting to the R&D department, figuring that they know their inventions better than anyone in management would.

The problem is that R&D may not know or always be cognizant of the overall goals and strategy of the business the way management is. And what sometimes happens when the R&D department takes over the patenting process is that they lose sight of the truly important aspects of the inventions, leading to patents that cover products, and not innovations.

Rather, it should capture the full scope of your innovation- what is it about your lamp that is new and better than other lamps? Your patent should ideally cover any new product including your innovation, not just the particular one you want to sell or have in mind.

Jackie Hutter has written a good article emphasizing the importance of properly defining the scope of your innovation- and of getting management involved in the patenting process to make sure that happens.

A SVP at a large consumer products company recently expressed frustration that he cannot bring a patent infringement lawsuit even when his company holds 18 US patents (and many other foreign patents) on a product that closely resembles a competitor’s product… The competitor’s knock-off product has been successful because they have removed much of the cost from the product by using less expensive ingredients, while still being able to maintain its desirable performance aspects…

So why can’t the SVP go after the competitor by suing on one or more of the 18 US patents for which his company paid so dearly? Quite simply, the patents cover the INVENTION not the INNOVATION. The difference is subtle, but critical. The invention centered on the plastic composition of the product, that is, how much of each ingredient was present and how that composition manifested in the finished product. In contrast, the innovation centered on the performance of the product, irrespective of the plastic composition…

The reason for this situation is clear: the 18 US patents were prepared in a R & D/patent attorney “silo” where the “cool factor” was considered to be the attributes of the plastic composition, not the attributes of the final product…

After hearing my explanation for his frustration, the SVP wondered aloud how to learn from this costly patent lesson. I told him that the answer was easy: he must dismantle the patenting silo where his patent attorneys work only with his R & D team. Instead, his business team must drive the patenting process at his company by holding primary decision rights on what patent applications his company files and what those applications cover.

Management is sometimes better at keeping their eyes on the ball. The goal is to grow your business and make more money, not to accumulate patents. Jackie also endorses something I always recommend to my clients- a brainstorming session where you try to think of ways your competitors could knock off your product. The results of such an exercise can be a great help to a patent attorney in preparing your application with sufficient breadth to encompass the design-around attempts of your competitors.

By the way, this is another great illustration of the importance of relying on a good patent attorney. Claim/application scope is an art. If a large company with a big patent firm can make a mistake like this, just imagine what can happen when an inventor tries to put together an application on his or her own.

About the Author

Clifford D. Hyra, founder of Hyra IP, PLC based in Reston, VA, is a registered patent attorney with extensive experience in the intellectual property field. Located not far from the United States Patent and Trademark Office in Alexandria, Virginia, the firm specializes in intellectual property law, including patent prosecution in the mechanical, chemical, electrical, medical, computer software, biotech, and business method arts. Hyra IP is a national and international practice with a geographically and philosophically diverse portfolio of clients. Clifford has prosecuted hundreds of patent and trademark applications in the United States Patent and Trademark Office, negotiated the settlement of patent and trademark disputes, conducted trademark cancellation and opposition proceedings, appealed to the Court of Appeals for the Federal Circuit.

Just in case you didn’t know how I feel: patent trolls are a tax on innovation and are evil of the highest order. ~ A VC

In a post entitled “How Patent Trolls Are A Tax On Innovation,” venture capitalist Fred Wilson states that “after 22 years in the venture capital business and countless hours discussing this issue, I come out on the side of less patent protection in information technology, no patent protection for software and business methods, and first and foremost the elimination of patent trolls.”

Like the troll of lore who lived under a bridge and extorted money from travelers, the so-called “patent trolls” are patent holders that do not make products but only threaten other companies with patent infringement lawsuits in order to extract money. (Ironically, Peter Detkin, former assistant general counsel at Intel is credited with coining this term and he now works for Intellectual Ventures LLC, a company that has been spending millions to buy up patents for licensing.)

While Wilson makes the case for trying to protect the small inventor, he shows disdain for the solo inventor who does not commercialize a given technology because he/she “does not bring nearly as much economic value (and jobs) to our society as the entrepreneur who actually takes the risk, starts the company, hires people, commercializes the technology, raises the necessary capital, and builds lasting sustainable value.” Thus, small inventors are not trolls if they are successful in commercializing the technology, raising capital, and building a lasting ACME company. This leaves an awful lot of grey area full of companies that try but fail at commercialization.

In a convoluted bit of logic, Wilson concludes that the small inventor “can still get economic value from his/her patent, but it must be sold to an operating company that will use the patent to defend an operating business, not a financial investor who is just going to run around suing companies with impunity.” Therefore, patent trollism is OK as long as it is performed by the inventor and not an intermediary.

Such an approach has some merit but what of companies and research institutes that exist primarily for research purposes? Commercialization is not their mission. Often, people do not realize that many of the important scientific advances came out of research institutions with no intentions of making commercial products. Mosaic, the web browser credited with popularizing the World Wide Web, was created at the National Center for Supercomputing Applications (NCSA) is a state-federal partnership to develop and deploy national-scale cyberinfrastructure that advances science and engineering. NCSA operates as a unit of the University of Illinois at Urbana-Champaign. Are universities then patent trolls?

Mark Lemley, Professor of Law at Stanford Law School, seems to distinguish universities from trolls on the premise that universities (generally) do not lie in wait until an industry has developed around a technology and then demanding a disproportionate share of royalties based on irreversible investments. Having run a university technology transfer office, I can assure you that these offices generally are not even aware of how a technology is developing. This is not to slight universities, it’s just that universities can have inventions form a thousand different technology areas. No one could keep track of every industry.

Lemley also points to the fact that most university licenses give the licensee not just protection from lawsuits but also provide valuable know-how. He sums this up as “University patent owners aren’t trolls in my view when they contribute previously unknown technology to society, rather than just imposing costs on others by obtaining and asserting legal rights over inventions independently developed by others.”

Ultimately, Lemley makes the point that it doesn’t matter what the entity is but, instead, we should focus on the bad acts and the laws that make them possible. Universities should use licensing for good instead of evil. Note, however, that university patents are generally for very early stage technology. While universities account for 1% of patents on average across all fields, they account for 12% of all patents in nanotechnology and 18% of all patents in biotechnology. This means that the early creators are critical to the development of new technologies even though they themselves do not make products.

Apart from creating what seems to be a two-tiered system of worthy and unworthy companies, Wilson makes the his legislative reform proposal as follows:

1. Make the plaintiff pay the defendant’s legal fees if a patent infringement case is lost. This is similar to the English law system where the loser pays. The problem with this approach is that an individual with a valid claim against a large corporation can not afford to run the risk of losing despite any perceived validity to the claim.

2. Patents and copyright should have a “use it or lose it” clause like trademarks. This would presumably stop trolls by insisting that the patent holder make a product. Wilson does not say how much “use” would be needed to prevent loss.

The fundamental error in most arguments against patents is the belief that anyone can sue anyone else for patent infringement based solely on a meritless patent and immediately get an injunction. The plaintiff is thus able to immediately hold up the accused infringer for ransom. This argument neglects the fact a preliminary injunction is proper if the plaintiff can demonstrate that it is likely to succeed on the merits at trial and that a combination of equitable factors favors granting the injunction.

It’s no question that patents (and so-called trolls) can be a problem in certain technology areas like high-tech where a single product might have thousands of individual parts covered by multiple and often overlapping patent claims. In such a market, it can seem like a product can never escape litigation. But we don’t want to throw out a system that has propelled the technological economy to amazing heights for the last 200 years. We need to remember that in 20 years — a mere blink in human history — everything that is patented today will be freely available for everyone to use. Forever.

It is likely that Wilson’s proposals are unworkable. Perhaps a better solution then is to provide even stricter controls over the grant of preliminary injunctions. A preliminary injunction is a remarkable power that can stop a competitor dead. But, like weapons of mass destruction, should only be used in extreme cases.

The Su­preme Court’s decision in eBay Inc. v. MercExchange has already changed the standard for granting injunctions in patent infringement cases, increasing the bar and making it tougher for trolls to get them. Let’s ensure it gets applied.

In addition, the best scenario would also ensure that patents are (mostly) valid to begin with. This could be accomplished through a two-pronged approach at the level of the patent office.

First, raise the level of quality of examination at the patent office. Despite the fact that the PTO claims it cannot hire its way out of a backlog, I’ve never seen an organization where hiring an appropriate number of high quality employees didn’t matter. Just ask Circuit City.

Second, provide for better post-allowance review and challenge at the PTO level. Currently, the validity of patents is handled primarily at the district court level. While one can challenge patents through re-examination, the fear that the limited process will still allow the patent to issue keeps many companies from using this approach. Allowing more third-party participation along with more complete elements of discovery could prevent many lawsuits. Preferably, this would be coupled with a system that would stay any preliminary injunctions where the PTO finds a substantial question of patentability.

Many commentators have recommended that certain classes of inventions, like software and business methods, should be given a separate type of protection. Suggestions range from a shorter patent period, e.g., 3-5 years, to a different class of protection like Creative Commons — perhaps with compulsory licensing. Part of the problem with this approach is that it can be difficult to tell one type of technology from another. Also, we are currently witnessing a convergence of biotechnology, nanotechnology and computer technology where neatly dissecting one technology from another will be quite impossible. The inventions coming out of these new fields will give rise to patent claims dealing with blended and overlapping technologies.

Clearly, one person’s patent troll is another person’s champion of patent rights.

About the Author

Stephen Albainy-Jenei is the founder and Editor of Patent Baristas. He is also a patent attorney and Member of Frost Brown Todd LLC. When not serving up patent chat over a steaming cup of java, he’s handling a diverse intellectual property practice in the biotechnology, pharmaceutical and chemical fields.

The views expressed herein are solely those of the author and should not be attributed to any other person or corporation. These materials do not constitute legal advice and do not create an attorney-client relationship between you and us, and are subject to the terms and disclaimers here and here.

If you'd like to comment on this article, we encourage you to join the spirited discussion with the author and other readers following the posting on Patent Baristas in the comments thread.

Patents, trade secrets and confidentiality agreements are mere words on paper to the scientist, engineer or executive intent on deception and theft.

And if you have outsourced your research and development efforts overseas to countries with unenforced intellectual property laws and cultural norms that ignore individual property rights, then the intent to deceive and thieve isn’t even present—in their eyes, your intellectual property may already be their intellectual property.

Every other week seems to bring out a story of industrial espionage—in aerospace, technology or biopharmaceuticals. A Kiplinger news story in January of last year noted that cyber-thieves are increasingly working behind the scenes to sell and deliver American and European company secrets to overseas competitors.

In the meantime, there has been a rise in overseas outsourcing from pharmaceutical, medical device and biotechnology companies looking to reduce expenses. While some of this is in manufacturing, the majority of outsourcing so far has been in research and development, and in clinical trials, providing non-company personnel direct access to a firm’s developing intellectual property.

At the end of 2007, the Department of Commerce’s International Trade Administration released its summary of countries with whom it is struggling to advance US intellectual property protections. While China may come as no surprise, few executives are aware of the second-class status of their intellectual property in India, Israel, the Philippines, Thailand and Mexico.

While these reports set the stage on the international scene, what is also on the rise is trade secret theft inside a company. Recent lawsuits involving former executives of medical device firm Kinetic Concepts, aerospace giant Boeing and tech firms Quantum3D and SAP should give you pause for thought.

Joel Brenner, national counterintelligence executive in the Office of the Director of US National Intelligence, discussed a great shift toward increasing espionage reliance on private sector employees during a recent speech. His main point: employees of US and European companies can make quick cash by selling electronically-stored documents to overseas organizations simply through a few email clicks and web-based payments.

In my November 2008 webinar, Preventing Intellectual Property Theft by Contractors and Partners, I gave attendees current estimated marketplace value of different components of confidential information – from private contact information all the way through prototype blueprints and promising new drug or biologic formulations.

Gone are the days of dark street corners and cash-laden briefcases; today, IP theft occurs with the click of an email and an online bank deposit—it’s far safer, far faster and far more difficult to detect.

So what to do?

Decide What to Protect

One of the first items I ask my clients for is a list of the types of information they consider critical to business operations. After more than 16 years, not a single client has shown me even a simple list typed on a single sheet of paper. If you do not know what you need to keep safe, how do you expect to protect it?

The first step is to identify the information you need to protect. Consider prioritizing your efforts on truly proprietary information such as unique processes, formulations, home-grown software, customer details, and so on.

The simplest way is to ask your colleagues, “What do we have that gives us a competitive advantage (or will allow us to have a competitive advantage, in the case of new products) that no one outside of our company knows about?” I also encourage you to ask your outside counsel and patent attorneys; they will also be able to give you specific insights, especially if you have not put all of the details in your patent applications.

When you’ve identified this information, it is time to explore where that information exists. Sadly, you may be in for a surprise.

Segregate Standard Operating Procedure (SOP) Information

In an ideal world, no one individual would be able to put together the puzzle pieces of your intellectual property by themselves. Unfortunately, in their zeal to detail out procedures, companies inadvertently place step-by-step instructions to recreating intellectual property in their standard operating procedures (SOPs). In my consulting engagements, I have seen this most often in SOPs that tackle formulations, mixing, assembly (for medical devices), and even in-process or post-assembly quality testing.

Conduct a review of your SOPs that relate in some way to your intellectual property. Look for any detailed Step 1, Step 2, etc. processes that would give a knowledgeable person enough to duplicate your product … or get 90% there. Revise your SOPs to eliminate any trade secret-revealing step-by-step details, making sure to still capture the process and its regulatory and quality requirements. This is a fine line to walk, but a necessary one.

If you are using a contract manufacturer (CMO)—especially for new product pilot production or clinicals—this review (and revisions to SOPs) is absolutely essential. You may also want to take this review one step further and look at the CMO’s internal SOPs related to production of your product. Their SOPs may very well spell out your IP in step-by-step fashion.

Scattershot Storage

In a forthcoming article for BioProcess International, I point out that a 2002 University of California-Berkeley’s School of Information study calculated an interesting ratio: for every piece of information available in front of you, there are an estimated ten pieces of directly related information (rough drafts, notes, raw data, copies, various iterations, etc.) stored elsewhere.

Think about this in the context of a blueprint of a new product yet to be launched. Do you know where in your company – or in your development partner’s company – all the various iterations of that blueprint are stored? What about those left accidentally lying about? If I were to tell you the number of times over the past three years I’ve found some of my clients’ confidential documents lying in open, shared areas near copiers and printers either in their company or in the facility of a contract partner, you would have a good idea of how many intellectual property theft assessments I’ve conducted.

I recommend to my clients that they work with their legal counsel, records management groups, information technology (IT/ICT) teams, and development project personnel to put together a matrix of their stored intellectual property to ensure they’ve accounted for it all – and have published policies and contractual terms and conditions that govern its control. This can be a lengthy process, but if you know exactly what to do and how to do it, then it can be easy. In workshops and consulting engagements, I caution that while perfection is ideal, a capture rate in the 90th percentile is usually “good enough.”

Communicate to Personnel

If your personnel – particularly those that deal with outside vendors and suppliers – do not know that particular information is confidential, they may not know not to share it (or at least to ask permission before sharing it).

This does not mean you spell out the particulars of your trade secrets or intellectual property, but rather you note that (in the case of a drug, for instance) the formulation is considered highly confidential and will only be shared with certain individuals. I recommend you also clarify that information supporting the creation and testing of the product “may be confidential as well” and provide a point of contact (such as your patent counsel) to seek further clarification. While stating that something “may be confidential as well” is not akin to marking it “confidential” or “trade secret,” I’ve found that this ambiguity ironically can give people pause and serve as another check on critical knowledge leakage.

Work with your computer department to ensure that access to the information is restricted and monitored. In the stories I tell in my workshops, I make it clear that simply restricting access is like expecting a locked door to prevent burglaries. Some level of monitoring is necessary to deter a would-be thief, stop them in the act, or catch them afterward. While there are many tactics to take advantage of French philosopher Michel Foucault’s Panoptikon theory when it comes to preventing intellectual property theft, one of the first is informing all personnel that the company has monitoring in place, just as a burglar alarm company places a “protected by” sign out in front of a building.

Final Thoughts

Deciding what to protect, finding it, communicating its importance to personnel, and then ensuring your SOPs are not inadvertently providing step-by-step trade secrets recipes are only a few of the tactics to master when it comes to saving your intellectual property.

Fundamental to all of this is recognizing that the greatest threat is not without, but within. Ignoring the realities of internal risks ignores reality: employees do not work for you for their lifetime; contractors come and go; and outsourced partners grow stale. In the end, money is always more tempting than any corporate mission statement.

Are you ready?

About the Author

John Avellanet is the founder of the regulatory intelligence, quality systems and intellectual property protection advisory program for executives and business owners, SmarterCompliance. He is the author of more than 30 articles on intellectual property theft and modern quality systems, a contributing author to the book Best Practices in Biotechnology Business Development, a syndicated columnist, and a frequent speaker on preventing intellectual property theft and cost-effective life sciences regulatory compliance in research and development environs. He can be directly reached through his independent advisory firm, Cerulean Associates LLC, on the web.

Our special thanks to Stephen Albainy-Jenei for encouraging us to republish this article by John Avellanet, which appeared recently as a guest post on Patent Baristas.

One of my favorite instructors, Barry Boardman of The Fighting Fit, invariably gave this instruction following the introduction and explanation of a self-defense technique, “Remember Mr. Murphy!"

Barry’s maxim was shorthand for Murphy’s law, i.e., if anything can go wrong, it will. The point of remembering Mr. Murphy was that in a physical confrontation, you must be prepared for a “worst case scenario” regardless of how perfectly a technique is executed.  

But what the Business Leader can take away - without fear of being charged with a battery - from Barry’s maxims, is that Mr. Murphy should be factored into business critical operations.

In this regard, there is no serious dispute that innovation, “business know-how,” or intellectual property (”IP”) qualifies as a business critical operation. In fact, this past presidential election saw both candidates pinning economic growth to innovation: John McCain proposed a $300 million prize for the creator of a better car battery. Barack Obama called for spending $150 billion over the next 10 years on clean energy technologies. Following these campaign promises and in the context of an economy in free fall, BusinessWeek asked in a piece by Michael Mandel, Can America Invent Its Way Back? Regardless of the answer or your politics, the bottom line is IP will be a cornerstone of a successful company’s bottom line and provides a significant competitive and financial edge over competitors in a key market (one may recall Amazon.com’s suit against rival Barnes and Noble over Amazon’s patented 1-Click online checkout shopping patent, which prevented Barnes and Noble from using its comparable checkout feature for two Christmas seasons. Talk about the legal equivalent of a knee strike to the groin!).

So returning to Mr. Murphy, if anything can go wrong with your intellectual property, it will and probably already has. In this regard, the FBI estimates that billions of U.S. dollars are lost to theft by foreign competitors on a yearly basis. Domestically, there has been an increase in trade secret and noncompetition litigation as Business Leaders are trying to protect their companies during the economic downturn.

What is a Business Leader to do? There are number of legal strategies for protecting IP, generally falling into the category of patents, trademarks, copyright, and trade secrets. And selecting the strategy or strategies that makes the most sense for your situation should be done in consultation with a competent attorney. But regardless of the particular innovation or idea that will be protected and the strategy that is ultimately chosen for this protection, the first goal of an IP protection strategy is taking steps to protect the seeds of innovation until the conditions are suitable for exploiting that innovation. Or in a less long winded explanation, until you are prepared to take your idea or innovation to market, keep it a secret. Accordingly, the fundamental element of all IP protection strategies is that the information to be protected should start out as a business secret so it does not become known in the market place before you can exploit it. So with this in mind, the following are points are taken from repeat story lines in IP/trade secret theft claims and, therefore, are worth considering:

Remember Mr. Murphy: The Business Leader needs to plan for the worst, while hoping for the best when it comes to protecting IP. In this regard, assume that the equivalent of your Coca-Cola formula will be stolen or inadvertently end up in the public domain.

• Prior to this worst case scenario happening, do you know — and, more importantly, do your employees know — what IP should be protected?
• Have you documented and followed an IP protection plan with respect to that information?
• Are employees (especially new hires) educated about the importance of protecting the company’s IP?
• Are new hires confirming in writing that they have not brought any such information from their former employer (nothing like hiring a blue-chip employee that lands you in federal court)?
• Are there enforceable agreements in place providing a level of IP protection, e.g., non-compete agreements, non-disclosure agreements, licensing agreements, agreements for the assignment of inventions to the company?
• Are exit interviews being conducted to remind departing employees of their obligations as to protecting the confidentiality of IP they may have accessed to?
• Are Business Leaders safeguarding their organization’s information by securing physical files or computer files with passwords?
• Is access to IP limited or does anyone in the business organization have access to it (and does everyone need access)?

These are just some of the more important points that a Business Leader should consider in protecting the business organization’s IP.

Moving From Plan A to B: It is my experience that most companies could significantly improve upon the protection of their IP. Don’t feel bad, it happens to the best of companies. For example, it was recently reported that secret information belonging to NASA, Boeing, and Lockheed Martin had been compromised for years. See The Taking of Nasa’s Secrets, BusinessWeek. Dec. 2008 (noting in one instance, the equivalent of 30 million pages were routed from Houston’s Johnson Space Center, a/k/a Mission Control, to Taiwan. Apparently in this instance no one at Houston realized they had a problem).So the moral of that story is that even if you have an IP protection plan, it doesn’t take a rocket scientist to tell you that need to enforce it and have a Plan B if it is compromised.

The cornerstone of Plan B should be “preserving the crime scene.” In today’s technology dependent business world, this means maintaining the digital status quo. So instead of putting a departing/discharged employee’s laptop or PC back into circulation (either before or after wiping it), first confirm that business sensitive information was not downloaded, the hard drive was not already forensically wiped (a tell-tale sign that someone was trying to hide their digital tracks), or that no external storage devices were used by the departing employee to remove digital information. The same goes for confirming nothing was sent outside of the company through e-mail. Such digital evidence may tip you off that the equivalent of your Coca-Cola formula has not walked out the door into the hands of your competitor. See Lessons from Intel’s Trade-Secret Case (A low-level engineer at Intel, recently made off with information, valued by Intel at more than $1 billion, on his way to Intel’s competitor, AMD).

Failing to preserve this evidence may also undercut your company’s misappropriation claim against a competitor. For example, in a misappropriation claim filed against a former client and its newly hired manager, we argued in a summary judgment motion that the plaintiff’s lack of digital evidence spoke volumes as to the merits of Plaintiff’s claims. That is to say, if my client and its new employee had improperly accessed, downloaded, or e-mailed the plaintiff’s trade secrets, direct evidence of such acts would likely exist. No such evidence was provided and shortly after filing the summary judgment motion on this issue, the case settled on very favorable terms. Also, certain claims that may be available to employers - the federal Computer Fraud and Abuse Act - will almost always rely upon preserving digital information and computer hardware. See Adding to the Playbook.

There is much more that the Business Leader should consider in implementing a plan for protecting the business organization’s IP. But the points discussed in this post offer a good conversation starter for guiding the business organization in navigating the laws (Mr. Murphy’s or otherwise) that converge on protecting its intellectual assets.

The author of this article, Jason M. Shinn, is a senior associate with Lipson, Neilson, Cole, Seltzer & Garin, P.C. He is licensed to practice law in Michigan and is also admitted to the Federal District Courts for the Eastern and Western District of Michigan, Northern District of Ohio, and the Bankruptcy Court for the Eastern and Western Districts of Michigan.

Mr. Shinn has also studied and practiced various martial arts and combat systems since 2002. This practice includes Kenpo, Krav Maga, and currently Kung Fu at the Chinese School of Martial Arts. Additionally, he has supplemented his practice with classes in jiu jitsu, Muy Thai, and boxing. Mr. Shinn’s training and practice has yielded invaluable insight for addressing the legal challenges facing Business Leaders and their organizations.

Mr. Shinn incorporates the lessons learned in the dojo into his legal practice, and into the interesting articles he posts on his weblog, Defending The Digital Workplace: Martial Art Insight for Responding to Technology & Employment Law Challenges, where the above article was published on December 1, 2008, subject to the important legal notices and disclaimers on that blog, which apply to this article here, as well.

The above article is cross-posted with the permission of the author, as a guest blogger, whose opinions are his own and do not necessarily reflect the opinions of IP.com in any or all respects.

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