Common Pitfalls Committed In Intellectual Property Due Diligence

1. TOO LATE TO START FILING US AND INTERNATIONAL PATENT APPLICATIONS.

Unfortunately, for many good technology companies, it may be too late to file for patent protection. The current U.S. rule generally provides applicants with a 1-year grace period during which a patent application must be filed after certain public or private disclosure of the invention. Such disclosure may arise, for example, from a mere "offer for sale" of the technology, even if the product has not yet been built or prototyped. In comparison, the foreign rule, which applies to many industrialized jurisdictions, such as Japan and various European countries, do not give applicants the benefit of any grace period after a public disclosure has occurred. Thus, it is legally compelling for applicants to consider filing for patent protection sooner than later. Although in some situations, there may be some special exception, which still allows for late filings; it is not advisable for applicants to count on those exceptions.

2. TOO NARROW LEGAL SCOPE OF CLAIMING PATENTABLE INVENTIONS.

Many issued patents are not commercially valuable because the scope of their submitted claims are particularly narrow, and can be relatively easily avoided by determined competitors. Thus when submitting new patent claim language, applicants should broadly define novel concepts that include potential design-around by other parties. Although this legal blocking strategy sounds easy enough to state as an objective, in fact, the serious exercise of analyzing future competitive and industry directions can be an extremely difficult task, particularly because the analysis often requires sophisticated market understanding, as well as technical and engineering vision.

3. INTERNALLY MISMANAGED PATENT INFRINGEMENT "WILLFULNESS" EXPOSURE.

Under U.S. patent law, one's awareness or willful state-of-mind about the existence and infringement of a competitor's issued patent may significantly affect subsequent legal liability. Thus if a party is proven to be a willful infringer of a known patent, then for punitive policy reasons, economic damages may be awarded to the patent owner up to three times normal recovery amount. This treble-damage exposure is so substantial, that company management should be careful to avoid creating evidence of internal communications such as emails that may be construed later to indicate such willfulness state-of-mind. Additionally in many cases, it may be appropriate for companies as a matter of policy to discourage looking at issued patents owned by other entities. And when a suspect patent is already known, management must take careful steps to refer the matter to competent patent counsel for appropriate analysis and opinion.

4. RELYING SOLELY ON COPYRIGHTS FOR SOFTWARE PROTECTION.

Copyright protection in the U.S. and many other countries arises instantly and at virtually no cost to protect software technologies, such as computer programs, electronic databases, and graphical display screens and related media. In fact, copyright protection is often quite a suitable means to secure much digital media such as video and audio creative works, often even without compliance with copyright registration and notice requirements. Copyright protection, however, is legally vulnerable to reverse engineering efforts by competitors, during which no copyright infringement may arise when the reverse engineering results does not result in literal copying of the original code, but merely an understanding of the underlying ideas and functions. In this vulnerable scenario, perhaps patent protection may be more appropriate to secure any novel algorithm, methods, and computing apparatus.

5. INADVERTENTLY TAINTING I.P.R. WITH 3RD-PARTY CO-OWNERSHIP RIGHTS.

During the course typically of joint-development engineering projects, ideas may originate from many sources, such as advisors, consultant, employees, and even customers. This collaborative scenario sets the stage for creating intellectual property rights that may be co-owned by multiple parties. And unless the rights of such joint owners are specified up-front, for example by contract terms, then there is a problematic possibility that certain parties later may assert not just their partial ownership interest, but actually endeavor to offer licensing rights to other 3rd parties or even competitors.

6. IGNORING THE IMPACT OF NEW "FESTO" U.S. SUPREME COURT RULING RE PATENT AMENDMENTS.

On May 28, 2002, the U.S. Supreme Court (Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd) substantially changed the legal effect of amending patent claims, particularly upon the effective scope of amended claims. This judicial change cannot be ignored without possibly impairing commercial value of many issued U.S. patents, especially where applicants introduce explicit argument that distinguish various prior-art cited by the Patent Examiner. Without getting into the subtle legal and policy complexities associated with the so-called "Doctrine of Equivalents," the Festo decision and related subsequent federal cases clearly narrow many patent claims scope whenever applicants propose routine amendments to distinguish the claimed invention against cited prior-art references.

7. UNDERESTIMATING THE IMPORTANCE OF TRADE SECRETS AND CONFIDENTIALITY.

Since patent protection may not arise for many years until after filing patent applications, and copyright protection may not be applicable to protect functional aspects of various technologies, trade secret protection may serve realistically as a solid backstop against competitive piracy or other misappropriation of company know-how. Thus the importance of diligent use of Non-Disclosure Agreements (NDA) and in-house policies and systems to secure confidential and proprietary information rises to a more significant level of management priority. Additionally early disclosures, for example through customer marketing presentations, may irreparably hurt company rights to file domestic or international patent applications.

8. OVERLOOKING LEGITIMATE OPPORTUNITY TO SET-UP OFFSHORE LICENSING TAX SHELTERS.

Often neglected by early-stage startup companies and entrepreneurs are offshore strategies for mitigating federal tax exposure. Such international tax strategies are especially relevant when foreign licensees of intellectual property rights are contemplated possibly in the company business plan. In many cases in fact, it is particularly beneficial to deploy one or more corporate entities offshore much sooner, rather than after licensees are identified, in order to minimize certain taxable valuation exposure associated with transferring such licensed rights.

9. RESPONDING SLOWLY TO U.S.P.T.O. OFFICE ACTIONS.

Because the U.S. patent rules now provide 20 years of enforcement patent protection, after the U.S. filing date, it is important to expedite the claim amendment and application prosecution process; otherwise applicant's enforcement period is effectively eroded by unnecessary delays in the process. Accordingly, applicants should endeavor to respond in timely fashion, expediting all office action responses and facilitating, communications with patent counsel whenever possible. Additionally, the new patent rules actually apply a time penalty to deduct enforcement period against issued U.S. patents in certain situations where applicants contribute to delays during patent prosecution.

10. OVER/UNDER-SPENDING ON LEGAL FEES TO PROSECUTE PATENT APPLICATIONS.

In the realistic context of the current economic recession especially in Silicon Valley, startup companies and entrepreneurs who are strapped for cash may negotiate for substantial fee discounts from patent counsel to prepare and file patent applications. However, patent applicants should be careful to ensure that most qualified legal counsel in terms of technical and business experience are selected and engaged to work on critical company inventions, perhaps with bottom-line pricing being just one of a number of significant factors to consider.

Dennis has over twenty-years experience in Silicon Valley and High-Tech Industry, as a patent prosecutor and intellectual property litigator, a venture capitalist, and an engineering manager. He specializes in developing offensive and defensive patent strategies for start-up electronics, software and biotech companies and their investors.

Dennis serves as strategic advisor to leading venture capital firms. He is also on the Editorial Board of the Nanotechnology Law & Business Journal, the Board of Directors of the Association of Patent Law Firms, and the Science and Technology Advisory Council. Previously Dennis served on a consultancy with the United Nations Development Program on Asian economic development.

Dennis is also an inventor of several U.S. and international patents in the areas of digital television, sensor networks, and bioinformatics. He has an Electrical Engineering degree from Northwestern University, a law degree from Suffolk University Law School , and is a Registered U.S. Patent Attorney.

Article Source: http://EzineArticles.com/?expert=Dennis_Fernandez

Home Information Pack (HIP) Solution

The Government has announced a delay to the introduction of Home Information Packs and now rather than requiring a Pack to market your home for sale from 1st June, as was originally planned, you will not need a Pack unless marketing from 1st August and only then if your property has four, or more bedrooms. Those with fewer bedrooms will require a Pack in the future, but no clear timescale has yet emerged.

The U-turn has come about through a shortage of accredited Domestic Energy Assessors, the people who will prepare the Energy Performance Certificates to be included in each Pack and also a legal challenge from the RICS who felt that insufficient consultation had been undertaken by the Government when it announced the Regulations governing the introduction of Packs.

There are further expected concessions relaxing the strict requirements intended before allowing a property to be put on the market, at least for a transitional period, but further amended Regulations clarifying this are awaited

What’s in a HIP?The contents of a Pack will not change through this latest development and those that must be included are

An Index
An Energy Performance Certificate
Sale Statement
Evidence of title
Local Search
Drainage Search

If your property is leasehold further documentation is Required; a copy of the Lease, Service Charge Statements, demands for Ground Rent, Service Charges and Insurance contributions, Management Company Rules, the names and addresses of Landlords and Management Companies and any Notices served in respect of works to the property

In addition to the above a HIP can contain certain Authorised documents, which are not compulsory and include a Home Condition Report, further searches, for example a Mining Search, warranties, photographs, maps, plans, or drawings.

An Energy Performance Certificate, which will grade your home in the same way as you might see when considering purchasing a domestic appliance can only be prepared by a qualified Home Inspector, or Domestic Energy Assessor, who will look at such things as whether the property is double-glazed, has loft, or cavity wall insulation and the efficiency of the boiler.

A Home Information pack will be portable, which means that you are not tied to one Estate Agent, you can still instruct multiple Agents, or change Agents.

At mfg we are ready to guide you through the whole process of selling your home, from preparing a Home Information Pack for you, through to completion. For more information or to discuss the latest developments please ask to speak to a member of our Residential Property Division. Visit our website http://www.mfgsolicitors.com

mfg Solicitors Kidderminster

Article Source: http://EzineArticles.com/?expert=Iain_Morrison