Tag Archives: Intellectual Property

Six Stubbs Alderton & Markiles’ Attorneys Listed as 2017 Southern California Super Lawyers

Stubbs Alderton & Markiles, LLP is pleased to announce that six lawyers have been named to the 2017 Southern California Super Lawyers. Super Lawyers is a rating service of outstanding lawyers from more than 70 practice areas who have attained a high-degree of peer recognition and professional achievement. The patented selection process includes independent research, peer nominations and peer evaluations.

Super Lawyers Magazine features the list and profiles of selected attorneys and is distributed to attorneys in the state or region and the ABA-accredited law school libraries. Super Lawyers is also published as a special section in leading city and regional magazines across the country. Lawyers are selected to a Super Lawyers list in all 50 states and Washington, D.C.

Stubbs Alderton & Markiles, LLP would like to congratulate the following attorneys named to the 2017 Super Lawyers list –

Scott Alderton - Super LawyersScott Alderton is a founding partner of the Firm, Managing Partner, and a member of the Firm’s Executive Committee.  Scott is co-chair of the Firm’s Venture Capital and Emerging Growth Practice Group and chair’s the Firm’s Interactive Entertainment and Video Games Group. Scott advises both public and private clients across a number of industries, including technology, manufacturing and distribution of goods in commerce, finance, the Internet, interactive video games, and new media industries.

Joe Stubbs - Super LawyersJoe Stubbs is a founding partner of the Firm, and a member of the Firm’s Executive Committee. He is co-chair of the Firm’s Venture Capital and Emerging Growth Practice Group, and of the Firm’s Mergers and Acquisitions Practice Group. Joe practices in the areas of corporate and securities law, emphasizing the corporate representation of both publicly-held and privately-held emerging growth and middle-market companies, venture capital and private equity firms, angel investment groups and investment banks.

Michael Sherman - Super LawyersMichael Sherman is an accomplished trial lawyer in high-stakes, “bet-the-company” litigation, and has represented both large and early-stage companies as well as entrepreneurs in all facets of business and complex commercial litigation. He has evenly split his litigation practice on both the plaintiff and defense side of cases, has first-chaired numerous trials in complex matters in industries as varied as energy, securities, healthcare, environmental, consumer products, technology, project development/finance, advertising, real estate and apparel, and is highly skilled in class actions and unfair competition law.

Jeffrey F. GershJeff Gersh - Super Lawyers is a Partner of the Firm. He has litigated, arbitrated, or mediated complex business and commercial matters, for both plaintiffs and defendants, whether individuals, public or private corporations, partnerships, limited liability companies and/or its members, shareholders and partners, involving various types of disputes, including contract matters, trade secrets, intellectual property (trademarks, copyrights and trade dress) negligence and fraud, employment, real estate, license agreements, the apparel and garment industry, and general business matters.

Kevin Debre - Super LawyersKevin D. DeBré is the chair of the Firm’s Intellectual Property & Technology Transactions Practice Group.  Kevin advises entrepreneurs and companies that use intellectual property to build their businesses.  Kevin has particular expertise in structuring and negotiating technology commercialization and patent licenses, strategic alliances, research and development collaborations, trademark licensing and brand merchandising agreements and manufacturing, distribution and marketing arrangements.  He also counsels clients on compliance with data security and privacy laws and regulations.

Tony Keats is a partner of the Firm and Co-chair of the Trademark and Copyright Practice Tony Keats - Super LawyersGroup. Tony’s almost three decade legal career has focused on both the legal and business protection of brands and creative content from consumer products to entertainment, from designer goods to the Internet. Since he commenced practice, he has provided counsel and has litigated cases on behalf of many of the world’s largest consumer product and entertainment companies, as well as individual entrepreneurs, actors, and musicians. Tony’s litigation background also includes related commercial matters involving unfair competition, contract disputes, rights of publicity violations, business torts, domain name infringement, and idea submission claims.

The official Super Lawyers 2017 publication can be read in its entirety here.

For more information about Stubbs Alderton & Markiles, contact Heidi Hubbeling at hhubbeling@stubbsalderton.com or (310) 746-9803.

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SAM Partner Kevin DeBré Featured as Speaker at California State Bar Event

Kevin DeBréStubbs Alderton & Markiles’ Partner Kevin DeBré will be featured as a speaker at “Tips and Tricks for IP Practitioners” presented by The State Bar of California. A fireside chat with startup technology attorney, Kevin DeBré, and Founder of Ring, Jamie Siminoff discussing innovation within a startup and considerations driving decisions about IP protection and enforcement. The event will be Tuesday, January 24, 2017 at the JW Marriott Santa Monica Le Merigot.

For more information about the event visit their website here. 

To find out more about Stubbs Alderton & Markiles’ Intellectual Property & Technology Transactions practice contact Kevin DeBré at kdebre@stubbsalderton.com

 

 

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Brexit and Intellectual Property Rights

brexitThe withdrawal of the United Kingdom from the European Union will have many consequences for businesses around the globe. However, it appears to be the consensus of expert commentators on the law of the UK and the EU that it is unlikely that there will be any immediate dramatic changes to how intellectual property rights will be treated in the UK.  To read the full publication in the Los Angeles Daily Journal, written by Tony Keats, click here.

Tony-Keats-v2Anthony Keats, co-chair of the Copyright & Trademark Practice. Tony’s almost three decade legal career has focused on both the business and the legal protection of brands and creative content from consumer products to entertainment, from designer goods to the Internet. Since he commenced practice, he has provided counsel and has litigated cases on behalf of many of the world’s largest consumer product and entertainment companies, as well as individual entrepreneurs, actors, and musicians.

 

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Taxation of Intellectual Property – By: Michael Shaff

 

IP TaxThis summary can only hit some of the more prominent aspects of the taxation of the development, purchase and sale of intellectual property.

 1.          What is intellectual property for purposes of this analysis?

            a.     Copyrights, literary, musical or artistic compositions or similar property are expressly identified under the Internal Revenue Code for special “non-favorable” treatment on sale by the creator.[1]   Video games, books, movies, television shows all fall into this category of asset in the hands of the developer.[2]

            b.    Another class of intellectual property, including trade secrets, formulas, know how and other methods, techniques or processes that are the subject of reasonable efforts to maintain secrecy fall within the general class of intangible assets that may be treated as a capital asset on sale but are subject to special rules on the useful life over which to amortize the cost of the intangible asset, as discussed below.[3]

 2.        How is the developer or owner of intellectual property treated?

         a.        In general, self-created copyrights, literary, musical or artistic compositions are not eligible for capital gain treatment on sale.[4]  As an example, the Tax Court has held that the concept for a television show was not eligible for capital gain treatment.[5]

              b.       Purchased intellectual property is generally eligible to be treated as a capital asset on sale unless the owner holds the intellectual primarily for sale to customers in the ordinary course of business, as in the case of a software or game developer selling individual, non-custom programs.  The sale of the copyright and the code to the program would not be treated as capital gain in the hands of the developer but could yield capital gain if the copyright and the software had been purchased.

             c.     The exclusion from capital asset treatment does not necessarily apply to a self-created invention that can be patented[6].  The treatment on disposition of such assets may depend on whether the cost of development was capitalized and amortized or whether the development costs were expensed and deducted in the course of development as well as whether the asset is held for sale to customers (not a capital asset) or is used in the taxpayer’s business (in which case it may be eligible for capital gain/ordinary loss treatment).

           d.     A transaction in which the developer is compensated has to be analyzed to distinguish a license arrangement from a sale.[7]  An agreement cast in the form of an exclusive license may be treated as a sale for tax purposes even if title remains with the grantor.  The key question is whether the transferor retained any rights which, in the aggregate, have substantial value.[8]

 3.      How is the purchaser of intellectual property treated?

             a.     The purchaser of the intellectual property may capitalize and amortize the cost of developing the intellectual property if the intellectual property is to be used in the creator’s business.[9]  Computer software is automatically accorded three year straight line amortization if the developer or purchaser opts to amortize the cost of the software.[10]  If the development of the software qualifies as research and development in the laboratory or experimental sense, the costs are deductible currently.[11]

           b.     The purchaser of the intangible assets used in the purchaser’s trade or business (other than computer software as provided above) is permitted to amortize the cost of purchase allocated to most forms of intellectual property over 15 years on a straight line basis.[12]   Section 197 assets include goodwill, going concern value, workforce in place, operating systems, information bases, customer based intangibles, vendor based intangibles, licenses, trade marks, trade names, and franchises.[13]

          c.     The purchaser of the stock of a company that owns intellectual property is subject to the treatment to which the company is already subject unless the purchaser and seller of the stock elect to treat the stock sale as an asset sale[14].

 4.     Sales and Use Tax.  Of the states that impose sales and use tax, most impose the tax on the sale of tangible personal property.  In California, the sale of a custom written computer program is not subject to sales tax.[15]  In the case of the sale of a prewritten program to customers, the sales tax is imposed if the software is sold on compact discs or on other media stored in tangible form.[16]  Software that the buyer downloads from a website and that is not otherwise delivered on tangible media is not a sale of tangible personal property subject to the California sales tax.[17]

 5.     Conclusion.  The tax treatment of intellectual property is determined by the nature of the intellectual property and how the taxpayer obtained the intellectual property.  The cost of developing self-created intellectual property may be eligible for immediate expensing or may have to be capitalized and carried on the taxpayer’s books, not eligible for either deduction or amortization depending on its purpose, the nature of the assets’ development and the assets’ useful life.  The cost of purchasing intangible assets used in a business is amortized on a straight line over 15 years except for acquired computer software, which is written off over three years.  The cost of other purchased intangible assets may be eligible for amortization using the income forecast method.  The sale of intellectual property generally results in capital gain or loss unless the property is a self-created copyright or an asset held primarily for sale in the taxpayer’s business.

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Michael ShaffMichael Shaff joined Stubbs Alderton & Markiles, LLP in 2011 as Of Counsel. He is chair person of the Tax Practice Group.  Michael specializes in all aspects of federal income taxation. Mr. Shaff has served as a trial attorney with the office of the Chief Counsel of the Internal Revenue Service for three years. Mr. Shaff is certified by the Board of Legal Specialization of the State Bar of California as a specialist in tax law. Mr. Shaff is the past chair of the Tax Section of the Orange County Bar Association.  He is co-author of the “Real Estate Investment Trusts Handbook” published by West Group. Michael’s practice includes all aspects of federal and state taxation, including mergers and acquisitions, executive compensation, corporate, limited liability company and partnership taxation, tax controversies and real estate investment trusts.

For more information regarding Intellectual Property Taxation, please contact Michael Shaff at mshaff@stubbsalderton.com or (818)444-4522.


[1]     Internal Revenue Code (“IRC”) §1221(a)(3) (This category of intellectual property is denied capital asset treatment on sale if created by the taxpayer’s personal efforts.).

[2]     See Rev. Proc. 2000-50, 2000-2 C.B. 601.

[3]     See, e.g., Graham v. United States (N.D. Tex. 1979) 43 AFTR 2d 79-1013, 79-1 USTC ¶9274 (dealing with the formula for Liquid Paper).

[4]    IRC §1221(a)(3).

[5]     See, e.g., Kennedy v. Commissioner T.C.M. 1965-228, 24 (CCH) 1155 (1965).

[6]     IRC §1235 (individual inventor or individual purchaser from the inventor will be able to treat the patent as a capital asset if held for more than a year.)

[7]     See, e.g., Weimer v. Commissioner TC Memo 1987-390, 54 (CCH) TCM 83 (1987).

[8]     E.I. DuPont de Nemours & Co. v. United States (3d Cir. 1970) 432 F2d 1052, 26 AFTR 2d 70-5636, 70-2 USTC ¶9645 (sale of right to use patents to manufacture nylon while retaining the right to manufacture Dacron with the same patents held a sale of substantially all of the value of the patent sold).

[9]     IRC §167(g) (allowing the income forecast method of amortization for many types of intellectual property other than computer software).

[10]    IRC §167(f).

[11]    Treas. Reg. §1.174-2(a).

[12]    IRC §197(a).

[13]    IRC §197(d)(1).

[14]    IRC §338(h)(10).

[15]    Cal. Rev. & Tax. Code §6010.9; Nortel Networks, Inc. v. State Board of Equalization (Cal. App. 2011) 119 Cal. Rptr.3d 905.

[16]    Sales and Use Tax Annotation 120.0531 (Apr. 10, 1997).

[17]    Sales and Use Tax Annotation 120.0518 (March 11, 1994).

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Kevin DeBré’s Article “Let Your Business Strategy Drive IP Protection” Featured in the WSJ’s The Accelerators Column

 

WSJ

SAM Partner Kevin DeBré‘s article “Let Your Business Strategy Drive IP Protection” has been featured in today’s edition of the online WSJ column, The Accelerators.

Kevin discusses how a startup company can protect their innovation while furthering their business objectives.

To read the full article, click here.

Kevin DeBré advises entrepreneurs and companies engaged in building businesses based upon technology or intellectual property assets and he has particular expertise in structuring and negotiating intellectual property-driven deals. A business lawyer, a registered patent lawyer and a former engineer, Kevin handles a wide range of transactions, develops IP protection strategies and advises management teams on compliance with privacy and data security laws and regulations.

For more information about our Intellectual Property Practice, contact Kevin at (818) 444-4521 or kdebre@stubbsalderton.com

 

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SAM Attorney Stephen McArthur Featured on Gamasutra.com – “Responding to Intellectual Property Theft: How to Protect Your Game Without Damaging Your Company’s Reputation”

Stephen McArthurSAM intellectual property attorney, Stephen McArthur’s article, “Responding to Intellectual Property Theft: How to Protect Your Game Without Damaging Your Company’s Reputation” is featured on the front page of Gamastra.com

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Over one billion people worldwide will spend a total of $65 billion this year playing video games.[1]  That makes the video game industry bigger than the Hollywood film industry and twice the size of the music industry.  These lucrative numbers are highly attractive to copycatters looking to grab even a tiny slice of that market share.  We’ve seen it with mobile apps copying Tetris[2], the countless League of Legends clones that seem to pop up every week, such as 300 Heroes[3], and more worryingly, even the boutique studios often have their work ripped off, such as Spry Fox’s Triple Town[4].

In this article I’ll provide guidance to game developers who need to protect their brands, creative work, and other intellectual property (“IP”).  I will explain six options a video game company should consider whenever its IP is at risk: an open letter to the media, a polite cease and desist letter, an aggressive cease and desist letter, a DMCA takedown notice, mediation, and, finally, litigation.  For each of those options, I will provide real life examples of how a company handled the exact situation and what the result was.

To read the full article on Gamasutra.com, click here.

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For further information on intellectual property law pertaining to video games, please contact Stephen McArthur at (310) 746-9823 or smcarthur@stubbsalderton.com

 

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Trade Dress for Websites

Konrad GatienKonrad Gatien, Partner and co-chair of Stubbs Alderton & Markiles’ Brand Development & Content Protection Practice,  discusses the importance of establishing a distinctive website to create trade dress, and therefore protect your unique brand. Konrad is involved in all aspects of brand creation, promotion and protection, assisting clients in the selection and adoption of brand names, securing copyrights and trademarks worldwide, and running specialized global enforcement programs.

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What is Trade Dress in the Electronic Age?

The digital age has seen the migration of store fronts from brick-and-mortar locations to the Internet.  Currently, Amazon is the largest online retailer in the world, with over 48 billion in sales.  Given the importance of e-commerce, it comes as no surprise that making an online “storefront” distinctive has become a key element in a company’s branding strategy.  Not only must the website be eye-catching and interesting, it must stand out from among the over 600 million active websites online.

One means of achieving distinction is for a company to create a website that has a unique “look and feel” that sets it apart from the rest.  In legal terms, this overall visual appearance is known as “trade dress.”  Trade dress traditionally has consisted of the specific characteristics or visual appearance of a product or its packaging.  The scope of trade dress protection has expanded from these traditional notions to include magazine covers,[1] store interiors,[2] and websites.[3]

The elements of trade dress with respect to websites include such elements as the images, frames, colors, highlights, orientation, layout, graphics, animation, borders and sounds, as well as the selection and arrangement of all of these elements.[4]

The purpose of trade dress protection is prevent marketplace confusion by ensuring that a consumer’s reliance upon the distinctive features associated with a single source are not copied and associated with another business and its products.

 Trade dress is protectable once it has achieved secondary meaning, a status achieved when a substantial number of purchasers associate a particular appearance only with a single source.  Once secondary meaning is established, the trade dress owner may prevent others from copying it under the Lanham Act, which prohibits unfair competition.

Articulation and Distinctiveness

To establish trade dress, a person or business seeking protection must be able to sufficiently articulate which elements of its website are distinctive.  These elements cannot be “functional,” meaning they cannot be merely essential to the product’s use.  For example, a shopping cart or check out feature in and of itself would be functional; however, a unique logo or graphic for this feature may be a protectable element of the site’s trade dress.  The purpose of the requirement that trade dress consist of specific, articulable, non-functional elements is to give competitors sufficient notice of what the protected trade dress is, and to protect legitimate competition by prohibiting the monopolization of useful product features.[5]

Preemption by Copyright

It is worth noting that where online trade dress is at issue, a trade dress owner’s claims may still be dismissed if the appearance of the website falls under the protections of the Copyright Act.[6]  Given the preemption rule, a brand owner cannot seek to protect the look of its website as both a copyrighted work and trade dress.  Therefore, a website owner should be careful in selecting the elements of its trade dress in a manner that clearly distinguishes them from elements protected by copyright law.  For example, common geometric shapes are not protectable through copyright law, so the owner should consider including those in its trade dress articulation.  In addition, the format and layout of a website should be included in the trade dress articulation because they are not proper subjects of a copyright claim (though text and photographs would be proper subjects).[7]

Closing Thoughts

Your website’s appearance is the first impression consumers have of your business.  A well-designed website that is distinctive and pleasing to the eye builds consumer confidence in your brand, and helps define your brand’s commercial integrity.    To ensure that you maximize the impression of your brand, you should take care to populate your website with elements that are not only distinctive, but also that are legally protectable.  From a trade dress standpoint, this will include the layout of the site, certain graphic elements, and its overall appearance, as opposed to its content.  When articulating your trade dress, you should be careful to distinguish those elements from the text, original graphic elements and photographs protectable under copyright law to ensure that your trade dress claims are not preempted by the Copyright Act.

[1] Reader’s Digest Ass’n v. Conservative Digest, 821 F.2d 800 (D.C. Cir. 1987).

[2] Apple was issued a service mark registration for the design and layout of its Apple retail stores on January 22, 2013  (see Reg. No. 4,277,914).

[3] See, e.g., Sleep Science Partners v. Avery Lieberman, 2010 U.S. Dist. LEXIS 45385 (N.D. Cal. 2010).

[4] See id.

[5] Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995).

[6] Sleep Science Partners, 2010 U.S. Dist. LEXIS 45385, at *13.

[7] See Copyright Office Circular 66.

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For more information about Trade Dress  and other intellectual property related questions, please contact Konrad Gatien at (310)746-9810 or kgatien@stubbsalderton.com.

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Trade Dress for Websites

Konrad GatienKonrad Gatien, Partner and co-chair of Stubbs Alderton & Markiles’ Brand Development & Content Protection Practice,  discusses the importance of establishing a distinctive website to create trade dress, and therefore protect your unique brand. Konrad is involved in all aspects of brand creation, promotion and protection, assisting clients in the selection and adoption of brand names, securing copyrights and trademarks worldwide, and running specialized global enforcement programs.

 ____________________________________________

What is Trade Dress in the Electronic Age?

The digital age has seen the migration of store fronts from brick-and-mortar locations to the Internet.  Currently, Amazon is the largest online retailer in the world, with over 48 billion in sales.  Given the importance of e-commerce, it comes as no surprise that making an online “storefront” distinctive has become a key element in a company’s branding strategy.  Not only must the website be eye-catching and interesting, it must stand out from among the over 600 million active websites online.

One means of achieving distinction is for a company to create a website that has a unique “look and feel” that sets it apart from the rest.  In legal terms, this overall visual appearance is known as “trade dress.”  Trade dress traditionally has consisted of the specific characteristics or visual appearance of a product or its packaging.  The scope of trade dress protection has expanded from these traditional notions to include magazine covers,[1] store interiors,[2] and websites.[3]

The elements of trade dress with respect to websites include such elements as the images, frames, colors, highlights, orientation, layout, graphics, animation, borders and sounds, as well as the selection and arrangement of all of these elements.[4]

The purpose of trade dress protection is prevent marketplace confusion by ensuring that a consumer’s reliance upon the distinctive features associated with a single source are not copied and associated with another business and its products.

 Trade dress is protectable once it has achieved secondary meaning, a status achieved when a substantial number of purchasers associate a particular appearance only with a single source.  Once secondary meaning is established, the trade dress owner may prevent others from copying it under the Lanham Act, which prohibits unfair competition.

Articulation and Distinctiveness

To establish trade dress, a person or business seeking protection must be able to sufficiently articulate which elements of its website are distinctive.  These elements cannot be “functional,” meaning they cannot be merely essential to the product’s use.  For example, a shopping cart or check out feature in and of itself would be functional; however, a unique logo or graphic for this feature may be a protectable element of the site’s trade dress.  The purpose of the requirement that trade dress consist of specific, articulable, non-functional elements is to give competitors sufficient notice of what the protected trade dress is, and to protect legitimate competition by prohibiting the monopolization of useful product features.[5]

Preemption by Copyright

It is worth noting that where online trade dress is at issue, a trade dress owner’s claims may still be dismissed if the appearance of the website falls under the protections of the Copyright Act.[6]  Given the preemption rule, a brand owner cannot seek to protect the look of its website as both a copyrighted work and trade dress.  Therefore, a website owner should be careful in selecting the elements of its trade dress in a manner that clearly distinguishes them from elements protected by copyright law.  For example, common geometric shapes are not protectable through copyright law, so the owner should consider including those in its trade dress articulation.  In addition, the format and layout of a website should be included in the trade dress articulation because they are not proper subjects of a copyright claim (though text and photographs would be proper subjects).[7]

Closing Thoughts

Your website’s appearance is the first impression consumers have of your business.  A well-designed website that is distinctive and pleasing to the eye builds consumer confidence in your brand, and helps define your brand’s commercial integrity.    To ensure that you maximize the impression of your brand, you should take care to populate your website with elements that are not only distinctive, but also that are legally protectable.  From a trade dress standpoint, this will include the layout of the site, certain graphic elements, and its overall appearance, as opposed to its content.  When articulating your trade dress, you should be careful to distinguish those elements from the text, original graphic elements and photographs protectable under copyright law to ensure that your trade dress claims are not preempted by the Copyright Act.

[1] Reader’s Digest Ass’n v. Conservative Digest, 821 F.2d 800 (D.C. Cir. 1987).

[2] Apple was issued a service mark registration for the design and layout of its Apple retail stores on January 22, 2013  (see Reg. No. 4,277,914).

[3] See, e.g., Sleep Science Partners v. Avery Lieberman, 2010 U.S. Dist. LEXIS 45385 (N.D. Cal. 2010).

[4] See id.

[5] Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995).

[6] Sleep Science Partners, 2010 U.S. Dist. LEXIS 45385, at *13.

[7] See Copyright Office Circular 66.

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For more information about Trade Dress  and other intellectual property related questions, please contact Konrad Gatien at (310)746-9810 or kgatien@stubbsalderton.com.

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SAM Partner Konrad Gatien to be a Panelist at Maverick Angels AIM Program at USC

Konrad GatienSAM Partner Konrad Gatien will be a featured panelist at the Maverick Angels‘ AIM (Accelerating, Incubating, Mentoring) Summer program at University of Southern California on June 12th, 2013.  The panel will focus on legal issues that surround the startup process.  Konrad will be discussing the ins and outs of intellectual property and trademarks.  Other panelists include Rick Citron of Citron & Deutsch, and Nick Zargarpour of the Zargarpour Law Firm.

Konrad’s practice includes all aspects of brand creation, promotion and protection, assisting clients in the selection and adoption of brand names, securing copyrights and trademarks worldwide, and running specialized global enforcement programs.  For more information about our Brand Development & Content Protection Practice, please contact Konrad at kgatien@stubbsalderton.com or 310.746.9810.

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Patent Law News Flash from Stubbs Alderton & Markiles, LLP

Important Business News

from

Stubbs Alderton & Markiles, LLP

New U.S. Patent Law Awarding Patents on a First-to-File Basis Goes into Effect

What Every Entrepreneur Needs to Know to Turn the
New Law into a Business Advantage

On March 15, 2013, U.S. patent law will change favoring inventors who first file a patent application over earlier inventors of the same invention who file a patent application later.  This is a part of the patent law reform enacted in 2011.  With this change, entrepreneurs will need to change the way they think about obtaining patent protection for their inventions.  Here are some suggested business practices for adapting to the new law:

  • Make faster decisions about filing patent applications.  Inventors can no longer rely upon being the first to invent and take a wait and see approach in deciding whether to file a patent application.  Companies in the business of continuous innovation should adopt procedures for identifying patentable inventions and quickly assessing the value of obtaining patent protection.  Filing a patent application establishes an inventor’s priority over other patent applications for the same invention with a later filing date.
  • Decide whether or not to pursue patent protection before publicly disclosing the invention.  The new patent law does not change the 1-year grace period for filing a patent application after first selling, publicly using or publishing a description of an invention.  But, this grace period applies only to U.S. patents.  To qualify for patent protection outside the U.S., inventors must file a patent application before disclosing, using or selling products or services incorporating their inventions.  Companies need to make patent filing decisions before taking actions that render their inventions ineligible for patent protection abroad.
  • Ensure employees and developers do not use other peoples’ ideas.  A patent, even if the application from which it issued was filed first, can be invalidated if the invention was stolen or derived from someone else.  Employees and contractors tasked with innovating should be advised not to use inventions developed by anyone outside the company without written authorization of the invention’s owner.  Deriving inventions from others is common in joint development projects, but doing so puts at risk a company’s investment in obtaining patent protection for these inventions.
  • Keep careful records of commercial use of technology.  Commercial use of patented technology at least one year prior to the date the patent was filed is a defense to infringement of that patent.  This defense, although not new, may now be applied to a broader array of patented technologies.  Companies should collect evidence of research activities and of the conception, design, development, testing and commercialization of technology it uses.  Photographs, technical specifications, documentation, emails, operating procedures, invoices, receipts, order forms, canceled checks, samples and test results may be valuable evidence in establishing a company’s prior use of patented technology to defend a future patent infringement lawsuit.

Companies should consult experienced intellectual property counsel to ensure their patent protection policies are up to date with the recent changes in U.S. patent laws.

How Stubbs Alderton & Markiles, LLP can help.  We are a business law firm with particular expertise in intellectual property law.  Our attorneys have extensive experience in developing intellectual property protection strategies to enable businesses to maximize the value of their inventions. We inform our clients how to best update their IP strategies, patent filing procedures and invention assignment agreements and how to use today’s U.S. patent laws to their competitive advantage.

Kevin D. DeBré leads the firm’s Intellectual Property and Technology Transactions Practice Group advising entrepreneurs and companies on how to use technology and intellectual property in building successful businesses.  Kevin is a registered patent attorney and has over 20 years of experience in structuring and negotiating intellectual property-driven deals.

For more information, contact Kevin at (818) 444-4521 or kdebre@stubbsalderton.com.

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