Competitive intelligence aims to provide as much insight as possible into the trends of an industry and into the strengths, weaknesses and current activities of direct competitors. Such programs can be as simple as monitoring the intellectual property (IP) filings within the U.S. of a single competitor, or as sophisticated as gathering and analyzing IP information for many competitors in different countries throughout the world. Either way, there is business value in establishing and maintaining a competitive intelligence program to understand how competitors are behaving through their IP habits.

Smart Business spoke with Matthew P. Dugan, a partner at Fay Sharpe LLP, about competitive intelligence programs.

What is competitive intelligence?

The term refers to a program to develop and maintain a body of data and information that can be organized and analyzed to provide a better understanding of one or more aspects of a company's business environment. The analysis can provide a broad, high-level view of an industry by identifying trends in a particular area of technology. It also can give a focused view of the activities of a particular competitor or group of competitors. Often, the strategy includes both.

What types of information are included?

Information described in patents and published patent applications often form the backbone of the program. While records from the U.S. Patent and Trademark Office are easily accessible and can provide valuable data for a competitive intelligence program, in some cases other sources may provide access to information on a shorter time frame. For example, companies with foreign competitors should consider searching for patent applications in the competitor’s home country, since patent filings are often made and published there before a corresponding U.S. application is available for review.

Is just the technical information of the patent documents evaluated?

No. Often, useful information can be ascertained from what patents and patent applications a competitor decides not to aggressively pursue. So, once a potentially relevant patent application is identified, the application’s progress can be monitored to try to determine whether the competitor is moving away from that technology. With such an assessment, it can be helpful to ask:

  • Has the competitor continued to pursue its initial patent applications for a new concept? Or, did the initial applications go abandoned without further activity?

  • Did the competitor file just a single application for this new concept? Or, did it file a whole family of applications that cover a variety of aspects and variations of the concept?

  • Did the competitor pursue patent protection in a very limited number of countries? Or, did it go to the expense of filing the application all over the world?

What other information can be included in a competitive intelligence program?

News and announcements, regulatory filings and even domain name registrations can add to the overall effectiveness of a program.

Useful insight can be gained from the trademark and service mark applications filed by a competitor. They are normally available within days or weeks of being filed, so a company can be alerted to the possibility of activity by a competitor much earlier than by monitoring patents alone.

Also, in cases of new products and product lines, trademark applications are often filed in the U.S. based on an intention to use the trademark or service mark with a particular list of goods or services. Such information can be useful in determining that a competitor is working toward offering an updated product or expanded product line.

Why should a company undertake this?

Insight gathered through a competitive intelligence program can help business leaders make more informed decisions about a company’s strategic direction and where to focus marketing and product development resources. It can help identify trends in the evolution of existing technologies, which can impact existing product lines; find developing technologies near core businesses, which could lead to new products and business opportunities; and identify new or emerging players in the industry, which can help in preparing for new competitive threats and eliminate surprises.

Matthew P. Dugan is a partner at Fay Sharpe LLP. Reach him at (216) 363-9167 or

Insights Legal Affairs is brought to you by Fay Sharpe LLP.

Published in Cleveland

With provisions of the America Invents Act beginning to roll out, it is a good time to review the overall patent process. Here we review the early stage from conception to filing the application.

An inventor’s idea should be matured to the point where it has been built or described in sufficient detail that it can be built in order to file a patent application. This early stage is also a useful time to perform a search to help determine how close the invention is to related techniques that already exist. It is also important for inventors to understand certain patent laws during this stage to secure a filing date for the patent application that avoids bars to potential patent rights .

“With the new laws, particularly the ‘first to file’ rule, it is important to keep track of your disclosures and to move forward with your filing sooner rather than later,” says Alan Brandt, an associate with Fay Sharpe LLP.

Smart Business spoke with Brandt and associates Namit Bhatt and DeMarcus Levy about considerations to be mindful of during the initial phase of the patent process up to the point of filing the application.

When is an idea 'ready for patenting'?

There is a difference between conceiving an idea and being ready to file a patent application. You are ready to file if you have built a prototype of model of the invention or when you have written a description with enough detail to practice the invention. The stage at which your idea is 'ready for patenting' is called reduction to practice (RTP).

RTP includes two forms: actual and constructive. Actual RTP means that the inventor has built and used the invention for its intended purpose. Constructive RTP occurs upon the filing of an application with a detailed description of the invention.

What is eligible for patent protection?

The patent statutes define four categories of subject matter eligible for patent protection -- process, machine, article of manufacture and composition of matter.

  • Process – an act or series of acts or steps.
  • Machine – a tangible thing with parts and/or a combination of components.
  • Article of manufacture – an article produced from raw materials or assembled from components.
  • Composition of matter – a chemical compound or mixture of ingredients.

The invention is defined by the claims of a patent application. A machine is defined by apparatus claims, while a process is defined by method claims, an article of manufacture by apparatus claims and a composition of matter by chemical claims.

There are some exceptions to the statutory categories, which are rooted in a premise that basic tools of science and technological work are not eligible for patent protection. These include laws of nature, physical or natural phenomenon, scientific principles and abstract ideas, which are disembodied concepts, or mental processes without specific applications or structural limitations.

How does the invention relate to the 'state-of-the-art'?

The common misconception among inventors is that the novelty of the invention must be a broad, game-changing advancement of technology. Such advancements are indeed patentable. However, incremental changes or minor improvements can also be patentable.

Novelty is one requirement for patentability of an invention. To satisfy the novelty requirement, an existing technique must not include every aspect of the invention; if it does, the existing technique is said to anticipate the invention. Another hurdle to patent protection is obviousness. In order to be non-obvious the invention must not have been obvious to a person who works in same field at the time of the invention.

A patent search can be performed prior to moving forward with a patent application to get a better understanding of how the invention relates to the 'state-of-the-art.' Performing a search is not required, but is useful in identifying, for example, related existing techniques that never made it to the storeroom shelf. The search can help avoid expenses for a patent application in which the invention is unexpectedly close to some search result. The search can also ensure that inventors are aware of features of the invention that currently exist and features that are more likely to be deemed novel.

What actions by a patentee can bar patent protection of the invention?

An invention can be barred from patent protection by a public disclosure. In the U.S., there is a one-year grace period in which to file a patent application after public disclosure of an invention. In some countries, there is no grace period and public disclosure is an immediate bar to patent protection. Public disclosures can include describing the invention in a printed publication; putting the invention on display or in public use; and offering to sell the invention or including it in a product release.

How should filing the application be coordinated with actions that can otherwise bar patent protection?

Ideally, a patent application is filed prior to the earliest planned public disclosure of the invention. This preserves potential patent protection in all countries. If the invention has already been publicly disclosed, the patent application must be filed before the expiration of the country’s grace period. For example, in the U.S., there is a one-year grace period after public disclosure. In some countries, there is no grace period. The American Invents Act implements a 'first-to-file' system which acts as an incentive for inventors to file patent applications as soon as possible in order to establish priority over another inventor filing a patent application for a similar invention.

Alan Brandt, DeMarcus Levy, and Namit Bhatt are associates with Fay Sharpe. Reach them at (216) 363-9000 or

Insights Legal Affairs is brought to you by Fay Sharpe LLP

Published in Cleveland

Companies everywhere are going over their budgets with a fine-toothed comb. So where does intellectual property fit in?

Your IP assets are one of the most valuable parts of your business and you should treat them as such, says Steven M. Haas, a partner with Fay Sharpe LLP.

“The overriding factor to keep in mind is that your intellectual property budget should not be considered overhead,” Haas says. “It should be considered part of your overall strategic plan, generating assets for the company.”

Smart Business spoke with Haas about how companies should evaluate the budget for their intellectual property.

What should companies keep in mind when developing an IP budget?

Your IP assets can slow down your competitors and increase their cost and uncertainty, and hopefully provide you with a proprietary market position. Another thing to consider is that banks and financial institutions love to see IP assets for financing, and for mergers and acquisitions. Patents, trademarks and copyrights are all critical assets. Also, by being proactive with your IP you can prevent problems down the road.

Your IP assets can be not only a sword but a shield for you, relative to your competitors.

How should companies determine how much should be allotted to their IP budget?

As your company develops new products and as you work with an outside counsel, it’s important to develop a plan to protect those innovations within whatever budget you can afford. Your outside counsel can certainly help you prioritize. There is no rule of thumb for how much you should be spending on your IP, like a certain percentage of total sales or something similar.

Businesses should keep in mind that these costs are often cyclical. For small and medium-size companies, it’s common for IP costs to ramp up when new products come out. But over time, things even out. There will be a cycle with fewer fees. The costs follow your product innovation cycle.

There are trends in industries where technological advances and customer-driven improvements contribute to a cycle with more fees. The budget for patents in particular is very cyclical for small and medium-size businesses.

What are some tips for controlling your IP budget?

There are several strategies companies can use. First, it's important to have a patent committee or person at your company responsible for interfacing with outside counsel to make sure that you are protecting what you need to protect and not wasting money on things that are no longer important. Depending on the size of the company, most companies have a person or committee that will interface between inventors, engineers and the business units on one hand and outside counsel on the other. That way you have a single point of contact with the firm, preventing mistakes, duplication of effort, and funds being spent where they shouldn't be.

With high turnover at today's companies, it's not uncommon for the patent lawyer/outside counsel to have been there longer than many others at the company, as a constant presence over many years and stages of the company. Rely on that experience.

Another tip: maintaining old patents is very costly. Once you receive a patent you have to pay maintenance fees four, eight, and 12 years after the patent is granted. The fees increase each time, so if a patent is no longer relevant to your product mix, you should cull your portfolio and make sure you are not spending your budget on these items.

Small companies — defined as companies with fewer than 500 employees — can receive a small entity discount from the U.S. Patent and Trademark Office.

What should companies do about international patents?

Foreign patent costs are very expensive. You have to be rigorous in terms of deciding to pursue patents and other intellectual property in other countries. The decision has to be justified by your sales or distribution in that country. You also must have a realistic ability to enforce the patent in that country, because the maintenance costs are so huge.

Most foreign patents require yearly fees, known as annuities, to keep them in effect. Many companies spend too much on foreign protection and ignore new projects, a decision that rarely makes the most business sense.

What are some other tips for patent budgeting?

Try to eliminate layers. Work with the lawyer at your outside counsel who is directly responsible for your matters. If you eliminate layers, you eliminate cost.

For some companies, using the provisional patent application can reduce costs. It is a less formal patent application, with a lower expense, but it can preserve patent rights — temporarily at least.

It's important to be proactive and avoid litigation, which can be extremely expensive from a direct cost aspect and because of the time involved. Work with patent counsel to avoid IP conflicts with your competitors. It can save you tons of money and headaches down the road. The earlier we see these issues, the more we can do to help you design around someone else's patent, invalidate the patent or come up with an alternative way forward.

All companies are very focused on budget right now. Outside firms are very willing to work within a set budget and to provide and build target billing estimates or fixed fees. We are very flexible about working with company's budgets, because that is what companies demand now. So don't be afraid to discuss budget issues with your outside counsel. There is always a plan that works for both the client and the lawyers.

Steven M. Haas is a partner with Fay Sharpe LLP. Reach him at (216) 363-9149 or

Published in Cleveland

With an estimated 80 percent of the value of S&P companies in their intellectual property holdings, businesses cannot ignore the impact of IP on their bottom lines, their equity value and their day-to-day operations.

Intellectual property law is among the most complex and misunderstood fields of law and represents a veritable mine field for businesses, says David G. Henry, Sr., a member of the Intellectual Property Group at Dykema Gossett PLLC.

“Failing to recognize intellectual property issues as they arise, asking the wrong questions, or acting upon the many myths surrounding the proper handling of IP issues can lead to substantial losses and/or liability for a business, its shareholders and its officers,” he says.

Smart Business spoke with Henry about recognizing intellectual property issues when they present themselves and what to ask IP experts before acting in any material way.

What are patents and some of the myths regarding them?

Patents are legal monopolies that allow owners to prevent all others from making, selling, using or importing patented subject matter, which can include machines, chemical compositions, manufacturing processes and business methods.

There is a common perception that you can protect an invention by mailing yourself a letter describing your invention. However, that does little, if anything, to protect an invention, and relying only on that will destroy any patent rights for failing to file a real patent application. Applications must be filed within one year of the first public use of the invention, its sale or offer of sale, or a description of the invention in a printed publication, among other things.

Another fallacy is that you cannot patent something that is just a new combination of old parts. In fact, most new inventions are merely new combinations of old parts. Assuming that it is impossible to patent your invention, or that patents are easily circumvented and not worth the time and expense (another common misconception), you may miss the opportunity to secure your most valuable asset, perhaps costing you millions of dollars in value.

Finally, many people believe they can get around an existing patent simply by changing or adding something to the patented item. However, patent claims often cover much more than the item shown in a patent, and, if you infringe, it could cost you your business.

What are some misperceptions regarding copyrights?

There is often confusion about what a copyright covers. Copyrights protect the expression of ideas and information, not the underlying ideas or information. Items such as books, software, photos, paintings and recorded music may be protected, while mere information like recipes, mathematical theorems and phone listings may not.

There is a common misperception that if you change someone’s work enough, you can get around the copyright. However, copyright covers much more than just literal, verbatim copying, including the making of derivative works. And admitting that you changed someone’s work to get around the copyright may be an admission of infringement.

There is also the perception that if you pay for a copyrighted article that you own it, especially if you paid to have it made. However, ownership most often results from creating the work yourself or having your employee create it as part of his or her job (a true ‘work for hire’ under copyright law). Companies often make the mistake of thinking that because they paid an independent contractor that they own the end product, but they often do not, absent a contractual assignment of the copyright.

There is also the myth that you only have copyright protection if paperwork is filed with the government, but copyright exists the moment a protectable work is reduced to tangible form. You can be liable for infringing on a copyrighted work for which no filing has occurred.

However, before you can sue for infringement, you must register the work in a timely manner. Registering too long after publication and after an act of infringement can cost you the right to statutory damages and attorney fees.

How do trademarks work?

Trademark protection is for words and symbols that distinguish the goods or services of one vendor from those of all others. Trademark rules protect the public from confusion and makes commerce work. Properly selecting and protecting trademarks will help you protect your reputation and market power, and avoid considerable trouble and expense.

Businesses must know what they do and do not own as a trademark. If the Secretary of State’s office merely says a name is available as a corporate name, for example, that doesn’t necessarily means it’s OK to do business under that name. Too often, companies make the mistake of incorporating under a name that, if used as a brand, may infringe trademark rights of a third party. Some also believe that merely filing an assume name certificate (DBA) creates exclusive rights, but such is not the case.

Concerning infringement: Just changing a spelling or adding a word to an existing trademark often does not protect you. Trademark infringement typically exists if your trademark (however spelled or configured) creates merely the likelihood of confusion as to source, sponsorship, approval or affiliation. Trademark infringement is easier to commit than most think, can be very difficult to spot, is expensive to litigate and is potentially ruinous in terms of wasted reputation investment.

Intellectual property is often a company’s most valuable asset and is easily overlooked, lost or destroyed, or infringed upon. By understanding the value of IP and consulting with experts in the field, you can avoid the potential land mines that abound.

David G. Henry, Sr. is a member of the Intellectual Property Group at Dykema Gossett PLLC. Reach him at (214) 462-6439 or

Published in Dallas
Wednesday, 06 July 2011 11:51

How to secure a patent for green technology

Green technology is an economic growth area for Ohio, while other areas of the economy are contracting or staying static. Many companies are looking to take advantage of this trend by developing technologies that reduce the use of nonrenewable resources and improve the quality of the environment, both globally and locally.

Because there is so much interest in this field, it’s important to draft a patent application that protects your invention against infringement by others. Particular attention should be paid to the claims of the application.

"As with any patent, it is up to you to find out who is infringing your claims and keep an eye on your potential competitors," says Ann Skerry, a partner with Fay Sharpe LLP.

Smart Business spoke with Skerry about how to obtain patents for green technology, and how the process works.

What sort of green technology patents are being sought?

Patents could fall into three main areas: energy generation, reduction in energy consumption, and improvements in environment quality.

In the energy generation field, there has been a lot of work done in Northeast Ohio in connection with wind turbines. There have been advances  relating to everything from the motors and blades for the turbines to the towers which carry them.

In Ohio, there are projects for large turbines as well as small-scale devices that can be used for an industrial site, or, perhaps in the future, people’s homes.

Other areas of energy generation include biomass (converting waste materials to energy),  solar cell technology, batteries, and fuel cells.

In the energy consumption category, companies are developing more efficient lighting products, and designing other devices that use less energy.

To improve environmental quality, companies are developing new products that are safer for the environment, like paints and hybrid vehicles, and ways for using recycled materials in their products.

What are the keys to developing patent claims for green technology?

As with other technologies, the goal is to draft claims for a patent that will cover not only your current idea of the product, but also  the potential designs that you may end up making when the product comes to market.

The claims should also provide enough of a barrier to prevent competitors from easily designing around your claims by making simple changes that take their product out of the claim scope.

The approach to achieving that sort of claim: know the market, see where it is going, and understand where your product is going to fit into the developing market. That, of course, is where you need your patent attorney.

When drafting a claim, how broad should it be?

Basically, the idea is to have the claims of the patent application be as broad as they can be without facing the possibility that there is something already known that will prevent you from getting those claims.

The Patent Office examiner who reviews the application typically raises rejections, based on a set of references, such as publications and patents, arguing that your claims are not patentable based on those references. Therefore, knowing the market and references that could be raised before you draft the claims is a great help when trying to determine how broadly you can claim an invention without facing a rejection.

How difficult is the process of proving your technology is, in fact, green?

It is not necessary to prove your invention is green, but the Patent Office currently provides an expedited examination process for patent applications in this area if you do.  Initially, the application had to fall into a particular one of a small number of Patent Office classes to be accepted into the program. Now, it has been made much easier because the applicant only has to show, either in the specification of the application or via a brief statement, that the invention materially enhances the quality of environment or materially contributes to the discovery or development of renewable energy sources, the more efficient utilization and conservation of energy resources, or greenhouse gas emission reduction.

Why might companies want to expedite their green technology patent application?

If you have an invention in the early stages of development, and you are not ready to go to market with it, you may decide not  to  expedite your patent application.

On the other hand, if you are ready to go to market, have someone who is ready to license the technology, or you think that other people are likely to enter this area, it could be advantageous. Small businesses working in the wind turbine field, for example, may be looking to larger companies to take over and develop their inventions. Having a patent in hand can help with that.

An expedited patent application can issue in about a year — a sizable time savings. The Patent Office is generally quite slow, and it has a large backlog of unexamined applications. It takes two years, on average, for the Patent Office to provide an initial review of your application. Then, it can take another year or more after that for the patent to issue. In these rapidly developing fields, three years is a long time.

The Patent Office does have several routes for expediting patent applications. The one that is most applicable to green technology is the Green Technology Pilot Program, which is quite liberal in its approach. Other methods for expediting applications can make the applicant jump through quite a few hoops and pay high fees for expediting. The Patent Office has worked hard to make it easier for inventors to file an application via the Green Technology Pilot Program, and the additional fee can be waived entirely.

It is only a pilot program, so it will run out at the end of 2011, but based on the positive feedback it has received, it may be continued.

Ann M. Skerry, Ph.D., is a partner with Fay Sharpe LLP in Cleveland, a law firm focused on intellectual property. Reach her at (216) 363-9000 or

Published in Cleveland