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Protect Your Company from Intellectual Property Risks

In intellectual property management, mistakes can be extremely costly, and are, unfortunately, easy for an IP manager to make. The stakes are high: these could cause your company to lose its intellectual property (IP) rights, or worse, may result in competitors obtaining those rights.

Here are the Top 10 IP management slip-ups that can increase these threats to your company:

  • Failure to capture an invention  With the “America Invents Act,” the United States converted to “first to file” from “first to invent.” Unlike the olden days, the first one toCopyright file a new invention—not the first to invent it—gets the rights to the patent. If one of your inventors has a patentable idea and you don’t find out about it, you risk having a competitor file ahead of you. Your company can also be excluded from using the invention, which may be a major setback.
  • Failure to meet statutory deadlines  Once you begin the patent filing process, you must meet strict statutory deadlines to file abroad and respond to communications from the patent offices. These include conversion to non-provisional status, application filing deadlines and national filing deadlines. Miss these dates and your patent rights disappear.
  • Failure to Stay in the Loop  Are there IP related conversations and actions happening in your company that you are not aware of? While you may be diligently tracking your activities, your inventors, attorneys or outside counsel could be taking actions (or not taking actions) that you need to know about. Things can easily fall through the cracks if you are not tracking them or in the loop. This may result in expensive mistakes and potential loss of patent rights.
  • Failure to Accurately Project Costs  There are costs associated with building an IP portfolio, including outside counsel fees, filing fees and maintenance fees. Your IP program can be adversely affected if you cannot accurately project what these fees will be and budget accordingly.
  • Failure to respond to patent trademark office actions on time  During prosecution, your patent applications will receive communications from patent offices. Either you or your outside counsel must respond to these on time. Failure to take timely actions, can lead to expensive penalties and/or loss of rights.
  • Failure to properly disclose material information  In many countries, including the U.S., you are required to file information disclosure statements that include all relevant prior art. These statements need to be consistent across all of your related patent applications. Failure to make proper disclosures can result in the loss of your patent rights.
  • Failure to maintain your patent  In most countries, you must pay regular maintenance fees for issued patents or annuities for pending applications. If you miss making a payment, are delinquent, or if a payment is not properly processed, you can lose your patent rights or may have to pay significant penalties to restore your rights.
  • Failure to enforce license obligations  If you have licensed patents to others, you need to monitor the agreement and track the royalty payments. Failure to do so can result in significant loss of royalty revenue, and unlicensed use of your IP.
  • Failure to align patent portfolio to business needs  Over time, your patent portfolio will grow. At the same time, your company’s business strategy may change. You need to monitor your portfolio to make sure it is aligned with your business needs. Maintaining a portfolio of low-value patents that doesn’t support your business strategy is a bad investment.
  • Failure to account for your IP portfolio  For companies with SEC reporting obligations, it is mandatory to accurately disclose your patent assets. If you don’t have an accurate picture of your actual portfolio, you will encounter costly and embarrassing legal problems.

As the IP manager, you are responsible for seeing that these failures don’t happen. While this is a challenge, it is one that you can meet by working closely with your inventors and outside counsel. You must also be very careful to track events in an IP calendar.

The Apple/Samsung Smartphone Patent War Continues

 Last December in Risk Management, we reported about the ongoing smartphone patent war being waged between Apple and Samsung that has seen each side seek injunctions throughout the world in an effort to stop their rival from selling products that they believe infringe on their patents. It’s a battle made all the more interesting by the fact that throughout all the legal manuevering, Apple remains Samsung’s biggest customer for smartphone parts.

Today the fight continues as many observers are anticipating that Apple will file for a restraining order banning Samsung from selling its hotly-anticipated Galaxy S III phone, which is expected to make its U.S. debut on June 21. The phone went on sale in Europe last month and in a CNET UK review it was dubbed the “Ferrari of Android phones” and was expected “to give the iPhone a good run for its money.” However, Apple claims that the Galaxy S III violates two of its software patents and wants to prevent its domestic launch from happening (especially since it would give Samsung the chance to gain some market share ahead of a new iPhone release). Samsung disagrees of course, and says that it will “demonstrate to the court that the Galaxy S III is innovative and distinctive.”

The decision to ban the Galaxy S III will need to be made by U.S. District Judge Lucy Koh, who is already set to preside over another Apple vs. Samsung patent trial involving other Samsung phones and tablets expected to begin next month. Koh has said that if Apple seeks the new injunction, it will likely force her to push back the other trail date as she will be forced to reshuffle the other cases on her docket.

“I cannot be an Apple v. Samsung judge,” she said.

So it would seem that Apple’s next move will be based on what case it considers to be of higher priority–the longer-standing issue or the new threat? Either way, the smartphone wars show no sign of a cease-fire.

Toyota Settles Hybrid Patent Case

As we reported a few weeks ago, Toyota has been embroiled in a patent dispute with Paice LLC concerning its hybrid vehicle technology that threatened to halt hybrid imports in the United States.  As it turns out, after six years of litigation, Toyota has finally reached a settlement in the case. Terms of the settlement were not disclosed.

Paice founder Alex Severinsky, who had claimed that Toyota infringed on his 1994 patent, was pleased with the result.

“Finally people understand the merits of what I invented and give it the proper value,” Severinsky said. “Toyota is the leading technology company and finally appreciates the value of the invention.”

Toyota had insisted that, while its technology was similar to Paice patent, its hyrib vehicles were the result of its own independent research. Evidently, both parties were in agreement.

“The parties agree that, although certain Toyota vehicles have been found to be equivalent to a Paice patent, Toyota invented, designed and developed the Prius and Toyota’s hybrid technology independent of any inventions of Dr. Severinsky and Paice as part of Toyota’s long history of innovation,” both companies said in separate statements.

With this issue out of the way, Toyota can now concentrate on its latest round of subpeonas. This time, a federal grand jury in New York is investigating whether or not Toyota notified the NHTSA in a timely fashion about faulty steering rods.

For Toyota, a bad year just keeps getting worse.