From Invention To Patent: Protecting New and Innovative Business Ideas: The Importance of Proper Management of Trade Secrets and Patents Guriqbal Singh Jaiya Director, SMEs Division WIPO (www.wipo.int/sme)

Short Guides on IP for Business Published Making a Mark (Trademarks) Looking Good (Designs) Inventing the Future (Patents) Creative Expression (copyright) In the pipeline Trade Secrets Flash Version

Useful Book Intellectual Property Management: A Guide for Scientists, Engineers, Financiers, and Managers By Claas Junghans and Adam Levy © 2006 WILEY-VCH Verlag GmbH & Co. KGaA, Weinheim, Germany ISBN-13: 978-3-527-3186-3 ISBN-10: 3-527-31286-2 170 pages

Key Message By establishing a culture of identifying, cultivating and strategically using its IP assets, an enterprise can increase its revenue, have an edge over its competitors and position itself well in the market. Ignoring IP altogether is in itself an IP strategy that may prove costly to the enterprise in the long- term.

Dr. Horst Fischer, Corporate Vice President, Siemens AG “Any company wishing to prosper in the next millennium will also have to efficiently manage its IP portfolio”. “For this reason it has become essential that every manager in the enterprise - not just those working in the corporate legal department - appreciates and understands not only what IP is, but how it can be more effectively exploited."

What are IP Rights? Industrial Property Rights Patents and Utility Models (or “short-term patents”) Trademarks Industrial Designs Geographical Indications Trade secrets Topographies of integrated circuits Copyright and Related Rights New Varieties of Plants Non-original databases

Trade Secrets Definition Examples Protection Strategies Using; sharing (CA/NDA/NCA) Licensing; strategic alliances; partnerships Audit Competitive intelligence; espionage Re-assess risk & value: Internal/external

Actual Vs Legal Trade Secrets Actual secrets: Trespass or theft Legal trade secrecy is not actual or absolute secrecy.

Definition: Identify Trade Secrets Considerations in determining whether information is a trade secret: Whether known outside the company Whether widely known by employees and others involved with the company Have measures been taken to guard its secrecy/confidentiality

Identify Trade Secrets Contd... What is the value of the Information to your company? What is the potential value to your competitors? How much effort and/or money spent in collecting/developing it? How difficult would it be for others to acquire, collect or duplicate it?

Definition Formula, pattern, device or compilation of information, unknown to others, that gives competitive advantage Common law or statute Unlimited Duration / No registration Cost (of maintaining secrecy, security, ; surveillance, litigation) Reverse engineering; independent development

Examples Unpatented inventions Future product designs/models Valuable nonpublic company documents: Drawings, blueprints, laboratory notebooks, test data and training manuals Marketing, purchasing, planning and customer information Financial, accounting, recruiting and legal information

Examples Contd... Strategic plans Product concepts Financial reports Customer lists Employee files Engineering plans Production manuals

You may get a lot! In a single misappropriation act a biotechnological trade secret may be obtained which represents: (1) the blueprint (DNA); (2) the machinery (expression system used) (3) the factory itself (host cell contining the recombinant DNA under control of the expression system)

Stealing may be Easy! Micro-organisms: vast numbers, microscopic size and self replicating! Italian subsidiary of a US pharmaceutical house dipped handkerchief into fermentation vat at his own retirement party!

Integrated Security Environment Identify key corporate assets/ “crown jewels” Integrate and Balance security components in interlocking layers to protect against perceived risk profile Communicate, train, and educate employees to distribute ownership of the security process throughout the employee (weakest Link) Monitor and Reassess to adapt to changing risk profile

Protection Strategies Identify Trade Secrets Develop Protection Policy; Document it Educate Employees; Monitor Compliance Restrict Access Mark Documents Physically Isolate and Protect Maintain Computer Secrecy

Protection Strategies Contd... Restrict Public Access to Facilities Deal Cautiously with Third Parties; Confidentiality Agreements and Nondisclosure Agreements Be Careful and Consistent with Unsolicited Submissions Security/Trade Secret Audit; internal / external Coordination of integrated security enterprise-wide

Protection Policy Advantages of a Written Policy Transparency Clarity (how to identify and protect) How to reveal (in house or to outsiders) Demonstrates commitment to protection; important in litigation

Educate Employees Prevents inadvertent disclosure; employment contract Unscrupulous employees (personal gain) Terminated employees (revenge) Former employee (inadvertent loss, hired by competitor, or becomes competitor) Educate and train (on hiring give copy of policy, periodic training and audit, exit interview, retirement); proactive role

Educate Employees Contd... Make known that disclosure of trade secret may result in termination and/or legal action Confidentiality agreements/non disclosure agreements/ Non compete agreements Transform every employee into a potential security officer; every employee must contribute to maintain the security environment Human and procedural security must be proactive; clear communication and repetition

Restrict Access On a “Need to know basis”

Mark Documents Uniform system of marking documents Paper Based Electronic

Physically Isolate and Protect Separate locked depository; authorization Access control (third parties; unauthorized ) Log of access; document reviewed or taken Surveillance of depository/company premises Shredding Oversight; audit trail Labs, green houses, test plots, etc

Maintain Computer Secrecy Authorization; access control Mark confidential or secret; legend pop, or before and after sensitive information Physically isolate and lock: Computer tapes, discs, other storage media Remote access E-mail; SMS messages Oversight; audit rail

Restrict Public Access to Facilities Log and visitor’s pass to be worn all times Accompany visitor; sometimes CA/NDA Visible to anyone walking through a company’s premises (type of machinery; layout; physical handing of work in progress or finished products) Overheard conversations Documents left in plain view Unattended waste baskets

Third Parties Sharing for exploitation Consultants, financial advisors, computer programmers/professionals, web site host, other independent professional, subcontractors, designers, partners, joint ventures Confidentiality agreement, Nondisclosure agreements

Unsolicited Submissions (US) Formulate procedures to handle US Notify (in writing) all persons submitting US disclosures that your company will not enter into a confidential relationship Requesting the submitter to sign an acknowledgement that your company is not obligated to use the US Information and owes no duty of confidentiality

IP Rights: Patents Definition: A patent is an exclusive legal right granted for an invention that is: New (Novelty) Involves an inventive step (Non obvious) Capable of industrial application Duration: 20 years from filing/priority date Territorial right Requires disclosure/deposit of the invention/material Can be licensed to third parties Utility Models (or short-term patent): up to 10 years

IP Rights: Patents Patentable subject matter Exclusions Prior art/secret prior art Utility/best mode/trade secrets Depository institution Employee inventions Joint applicants/joint inventors/independent contractors/joint owners

Patents Why apply for patent protection? Market exclusivity To recover R&D investments Facilitates licensing Advantageous negotiating tool Financing opportunities (venture capitalists, etc) Favorable image and credibility Freedom to operate Higher market value and publicity International expansion

Patents contd... First to file/first to invent: Laboratory books/Drawing Accelerated examination Dependence and multi-patent products Front page, description and drawings Claims; technological density and claim breadth/Route of filing/amendment of claims

Problem-Solution Approach Definition of closet prior art Objective identification of technical problem Examination, whether solution obvious from prior art Patent Office may contrast closest prior art with technical effect of invention; definition of “objective problem to be solved” is different from problem defined in original application Choice of prior art affects whether obvious or not

Case study on patent protection Case study on the commercialization of a patented product Croatian pharmaceutical company (Pliva) discovers new antibiotic (azythromicin) Pliva applies for patent protection in Croatia and in various potential export markets Large pharmaceutical multinational Pfizer searches patent databases and discovers the Pliva patent Pliva licenses Pfizer to produce the antibiotic in the US as well as in some other countries in Western Europe while Pliva maintains the exclusive right to commercialize the antibiotic in Eastern Europe