IPEG Intellectual Property Expert Group is an IP consultancy based in Europe

Let’s face it, many IP risk registers are boring, one dimensional and often times contain poorly prioritised lists that lack context and often serve to satisfy a requirement rather than a purpose.
IP risk registers can be of course be useful in some contexts. However without IP risk visualisation, IP risk registers will more often than not fail to accomplish the aims of risk management and support better decision making.

IP risk visualisation can illustrate a rich array of information across multiple dimensions, including but not limited to IP risk source (where are IP related risks originating); IP risk proximity (how quickly IP related risks are likely to materialise); IP risk categorisation (against predefined risk categories or organisational objectives); IP risk control effectiveness (the effectiveness of mitigations currently in place); IP risk impact quantification (the actual numerical value of impacts measured, for example, in financial terms); and IP risk trajectory (risk exposure reduction over time).

In these circumstances, IP risk visualisation can be a powerful aid in getting a message across to decision makers, enabling them to prioritise and highlight appropriate IP related risks for immediate attention or identify opportunities for collaboration on risk mitigation efforts.

It is for this very reason that the Alder IP Risk Management Tool comes equipped with a range of reports, many graphical in nature. A few of the automatic reports generated by the Alder IP Risk Management Tool are highlighted here to illustrate some examples of IP risk visualisation and to possibly raise your appetite.

For more information on the Alder IP Risk Management Tool and its capabilities and pricing, contact us at info@ipeg.com.Alder showcase


Author: ipeg 4 days ago

Company ABCD has a portfolio of IP assets, included a number of trade secrets. These trade secrets assets may be found across different functions in the organisation and include:

  • Some algorithms within the R&D function
  • Customer data managed by Sales & Marketing functions
  • Some filtration process held by Operation in the factory
  • Some negative know-how about failed tests by the Test function
  • Some new business plans by the Business Development function

Like many organisations, these trade secrets are of tremendous value to the company and among the most valuable intangible assets it possesses.

Stop thief:

Let us imagine for a moment that one of Company ABCD’s trade secrets was stolen. It may have been stolen by a former executive of the company, a disgruntled employee, a supplier, a competitor or some hacker.

Let’s assume in this case that the trade secret stolen was Algorithm XYZ and that the accused is a former executive who has since joined a competitor.

The key dates:

Let’s also assume that the alleged theft took place on 15 November 2015, a randomly selected date.

A court case then takes place some months later on 27 February 2017 involving Company ABCD and the accused.

A two-step process:

At the court case Company ABCD has to prove two things, namely that Algorithm XYZ was a trade secret as of 15 November 2015 AND that the accused stole the trade secret. Of course the accused will try to prove that Algorithm XYZ was not a trade secret as of 15 November 2015 OR that no misappropriation took place.

Although the court case is taking place on 27 February 2017, Company ABCD must prove that Algorithm XYZ was being treated as a trade secret at the time of the alleged theft, i.e. back on 15 November 2015.

Whether Company ABCD treats Algorithm XYZ as a trade secret on 27 February 2017, the date of the court case, is irrelevant.

The 7 ‘musts’ of trade secrets:

To qualify as a trade secret, Algorithm XYZ …

  • Must be kept secret
  • Must be documented
  • Must have access limited
  • Must be protected using a combination of administrative, legal and technical means
  • Must have value to the company now or in the future
  • Must have the appropriate legal framework in place if shared with a 3rd party
  • Must not be in the public domain

Company ABCD will have to produce evidence that it was treating Algorithm XYZ as a trade secret back on 15 February 2015.

Now, I don’t know about you but I can barely remember what I did last weekend.

Trade secret processes, systems and metadata:

If Company ABCD has a trade secret process underpinned by a trade secret asset management solution with good quality trade secret metadata, then it has put itself is a strong position to be able to show the court that Algorithm XYZ was indeed being treated as a trade secret on 15 February 2015 and met the seven requirements outlined above.

For organizations of any size, it is vitally important to be able to manage and track who has access to the trade secrets of the company, how such trade secrets are protected and if they are been shared with any 3rd parties. It is also crucial to have an audit trail to capture such details back in time.

Without any such trade secret process, system and associated metadata, then proving that Algorithm XYZ was being treated as a trade secret back on 15 February 2015, never mind last weekend, becomes a major challenge.

Author: ipeg 3 weeks ago

The global tax policy landscape is changing dramatically, and the emphasis on intangible assets will shift the scope of service provided by IP professionals. The new international tax rules are closely watched by the tax professionals but the IP community has yet to really recognise the challenges and opportunities it offers to them.

The Organization for Economic Co-Operation and Development (OECD) is at the forefront of efforts to improve international tax co-operation between governments to counter international tax avoidance and evasion. “Base erosion and profit shifting (BEPS)”  refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the inclusive framework, over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS.

The OECD/ G20 BEPS package of measures has been agreed upon and over 100 countries and jurisdictions are collaborating and have confirmed their commitment to the consistent implementation of this comprehensive package. The package provides fifteen actions that range from new minimum standards to revision of existing standards, common approaches which will facilitate the convergence of national practices and guidance drawing on best practices.

Described by the OECD as “the most significant re-write of international tax rules in a century,” the BEPS package provides countries with the powerful tools to standardize compliance requirements and force firms to be transparent about where they generate income.

Essential new feature of the Transfer Pricing regulations is an emphasis on intangible assets. The importance of intangibles for businesses has a dramatic increase in the recent years. It is now recognized that intangible assets account for an increasing part of the business value. However, until now there is no single definition of Intangible Assets in use by the OECD or tax authorities or proper guidance on how such assets should be reported.

The accurate and complete taxation and valuation of intellectual property and other intangible assets is now recognized as one of the most important areas of transfer pricing.

OECD BEPS guidelines from an IP management perspective

In the OECD guidelines, it defines intangible assets as including the following categories

  • Patents
  • Know-how and trade secrets
  • Trademarks, trade names and brands
  • Rights under contracts and government licenses
  • Licenses
  • Goodwill

As a result of these OECD guidelines, multi-national enterprises (MNEs) will now or in in the near future need to be able to recognize the value of intangible assets for their businesses and be ready to identify intangibles and their place in the value chain. Businesses should consider reviewing their value chains to ensure that intangible assets have been correctly identified, including existing contracts and arrangements for the development, enhancement, maintenance, protection and exploitation of intangibles in light of the proposed guidance. These functional and economic analyses will require a depth of knowledge of definitional aspects of intangibles, ownership issues, identification and characterization of transactions involving intangibles and valuation that identifies arm’s length prices for transactions involving intangibles.

MNEs will need to conduct an exercise rather sooner than later to determine if they are OECD BEPS compliant or not, and if not, to then take the necessary actions to ensure compliance. This part of the conformity assessment checks if the MNE has the skills and competencies, knowledge and experience, process and systems in place to enable the MNE to complete these IP data management related tasks, and if not, what actions need to be taken to remedy the situation.

Challenge and opportunity

This provides a unique opportunity for IP professionals to extend their service offering and aggressively occupy this no man’s land – the area of Intangible Assets and OECD BEPS compliance.

The market research shows that until recently Transfer Pricing and Intangibles have been mostly in focus of the Big Four accounting firms and Transfer Pricing professionals. However, there are examples of some Intellectual Property Firms turning their interests towards the new area.

OECD BEPS Compliance offers a great opportunity to IP professionals, but to win it requires a cross discipline team with knowledge and understanding of the different forms of intangible assets, with experience of the different IP activities as listed by the OECD, with insights into how MNE organize and operate their IP activities, and with an appreciation of the goals and objectives of the OECD BEPS guidelines.

This is the first blog in a series, exploring OECD BEPS guidelines from an IP perspective. The next blog will explore these guidelines in more detail.

Donal O’Connell, IPEG consultant, managing director Chawton Innovation Services Limited

A special thanks to Alla Sakharova for her contribution to this blog.

Author: ipeg 3 weeks ago

Creativity and innovation starts with thinking differently. It is a process of questioning, experimenting, learning and adapting. It requires an appetite for risk, a willingness to question, an open mind to look at things without preconception and perhaps most importantly, patience and perseverance. It can take many forms and the process itself involves ambiguity, controversy and non-linearity.

Creativity and innovation within sales & marketing:

Many mistakenly assume that creativity and innovation is the preserve of the R&D function or the manufacturing or production facilities within a company, and may only be found in those parts of the organisation. The sales and marketing functions within a company are often times overlooked.

This is a major mistake as sales and marketing can be a hotbed of creativity and innovation. Let us examine some of the different activities of sales and marketing in order to illustrate this.

  • Competitive analysis
  • Customer understanding
  • Market intelligence
  • Product analysis
  • Sales techniques

Competitive analysis

This is about identifying competitors and evaluating their strategies to determine their strengths and weaknesses relative to those of the company’s own product or service. Competitive intelligence is the action of defining, gathering, analysing, and distributing intelligence about products, customers, competitors, and any aspect of the environment needed to support executives and managers making strategic decisions for an organization.

Competitive intelligence is the gathering of publicly-available information about an enterprise’s competitors and the use of that information to gain a business advantage. The goals of competitive intelligence include discerning potential business risks and opportunities and enabling faster reaction to competitors’ actions and events.

Customer understanding

Customer intelligence is the process of gathering and analysing information regarding customers; their details and their activities, in order to build deeper and more effective customer relationships and improve strategic decision making.

It includes

  • Customer Development Cycle
  • Customer Information
  • Customer Needs & Buying Habits
  • Customer Service Procedures
  • Proprietary Customer Lists
  • Proprietary Information Concerning Customers

Market intelligence

Market intelligence is the information relevant to a company’s markets, gathered and analysed specifically for the purpose of accurate and confident decision-making in determining strategy in areas such as market opportunity, market penetration strategy, and market development.

Such information may include market survey data; marketing and sales promotion plans; marketing plans; marketing techniques; focus group data; internal analysis of current economic factors; and methods for obtaining greater market share.

Product analysis

Product analysis can take different forms but in general it means asking questions about a product and forming answers. It can mean experts analysing a product or members of the general public or potential customers/groups of people. Product analysis can take place at almost any stage of the design process. It may include product life cycle analysis; product pricing formulas and methods; product roadmaps plus more.

Sales techniques

Some describe sales as art rather than a science. That said there are processes, systems and associated data linking to sales. These may include sales calls reports; sales forecasting techniques; sales techniques; strategic alliance information; supply and demand models plus much more.

There are specific practices that sales people can utilise to engage more leads and to close more deals. The art versus science debate has gone on for many years. However there is a definite science, an intellectual, systematic method that can help sales people transform prospects into customers.

Protecting all of this creativity and innovation

Intellectual property is a means to protect different forms of creativity and innovation. It is most important to realize that there are multiple regimes of intellectual property rights, such as patents, trademarks, designs, domain names, copyright and trade-secrets. These are valuable assets for any business, possibly among the most important that it possesses.

But what form of IP is best suited to protected the creativity and innovation highlighted within sales and marketing?

I would argue that trade secrets should be the first form of IP protection considered.

Trade secrets

A trade secret is a formula, practice, process, design, instrument, pattern, commercial method, or compilation of information which is not generally known or reasonably ascertainable by others, and by which a business can obtain an economic advantage over competitors or customers. The scope of trade secrets is virtually unlimited.

A trade secret is therefore any information that is:

  • Not generally known or readily accessible to the relevant business circles or to the public.
  • Confers some sort of economic benefit on its owner. This benefit must derive specifically from the fact that it is not generally known, and not just from the value of the information itself. It must have commercial value because it is a secret. Commercial value encompasses potential as well as actual value.
  • The trade secret must be subject to reasonable steps by its owner to keep it secret. What is reasonable can vary depending on the specific circumstances.

A trade secret continues for as long as the information is maintained as a trade secret. However, information may no longer be considered to be a trade secret once it becomes easily accessible, is no longer properly protected or has no commercial value.

Trade secrets involve no registration costs. Of course, there may be costs associated with the administrative, technical and/or legal barriers the company puts in place to protect its trade secrets. Trade secret protection does not require disclosure or registration, unlike for example a patent which becomes public information. Trade secret protection is not limited in time, unlike for example a patent which only lasts for twenty years. Trade secrets have immediate effect, unlike for example a patent which may take a few years to be granted.

Trade secret asset management

Trade secrets are an important, but an invisible component of a company’s intellectual property portfolio of assets. They can add tremendous business value, so they need to be properly and professionally managed, and looked after. Trade secrets may be found throughout an organization. A significant number of trade secrets will be found within the sales and marketing activities of a company.

Trade secrets should be on the agenda of any in-house intellectual property function as well as on the agenda of any Legal or IP Firm advising organizations. Trade secret legislation has strengthened in key jurisdictions, interestingly at a time when other forms of IP seem to be weakening in some locations.

Trade secrets can be the crown jewels in an organization’s intellectual property portfolio. They possess some clear advantages over other forms of intellectual property. However, trade secrets only work if managed properly and they are well looked after. Proper and professional trade secret management requires a thorough understanding of this particular form of intellectual properly, a fit for purpose trade secret management process underpinned by a robust trade secret management system, plus a good governance process together with regular trade secret audits.

Trade secrets are fragile and therefore require some TLC. The in-house Legal / IP Function and/or the external Legal / IP Firm advisors to an organization should not overlook the creativity and innovation within sales and marketing and give some serious thought to trade secret asset management there.

Donal O’Connell, IPEG consultant, managing director Chawton Innovation Services Limited

Author: ipeg 3 weeks ago

Although not limited to software, open source is dominated by this particular technology and by the open source software community. Open source software does not just mean access to the source code. The distribution terms of open-source software must comply with the following criteria:

  • There must be free redistribution.
  • The program must include source code, and must allow distribution of the source code along with the compiled form.
  • The license must allow modifications and derived works, and must allow them to be distributed under the same terms as the license of the original software.
  • The license may restrict source-code from being distributed in modified form only if the license allows the distribution of “patch files” with the source code for the purpose of modifying the program at build time.
  • The license must not discriminate against any person or group of persons.
  • The license must not restrict anyone from making use of the program in a specific field of endeavour.
  • The rights attached to the program must apply to all to whom the program is redistributed without the need for execution of an additional license by those parties.
  • The license must not be specific to a product.
  • The license must not place restrictions on other software that is distributed along with the licensed software.
  • The license must be technology-neutral.

There are many different variants of open source licenses (Apache, GPL, Lesser GPL, Eclipse, etc.) with some subtle and not so subtle differences between all of these variants.

It’s free:

Open source software is software that is freely licensed to use, copy, study, and change the software in any way, and the source code is openly shared so that people are encouraged to voluntarily improve the design of the software.

This is in contrast to proprietary software, where the software is under restrictive copyright and the source code is usually hidden.

This has made open source software very attractive to many companies.

Open source software is free, which is good. But is it really free?

Total cost ownership:

Total cost of ownership is a financial estimate intended to help buyers and owners determine the direct and indirect costs of a product or system. It is a management accounting concept that can be used in full cost accounting.

The average price of a new car in the USA tops $33,000, according to car-buying site Kelley Blue Book, so buying a vehicle is a major financial move. While many consumers may focus on the sticker price or the monthly payments, that overlooks many other costs. You have license fees, registration fees and taxes. You need to buy insurance, fill the gas /petrol tank, have regular maintenance, etc. And your car loses value from depreciation every day you own it. The total cost of ownership of a new car is not the same as the sticker price.

The same applies for a software product. The total cost of ownership is the purchase price of the software product plus all of the additional direct and indirect costs associated with taking the software product into use.

When choosing among alternatives in a purchasing decision, one should look not just at the software product’s short-term price, which is its purchase price, but also at its long-term price, which is its total cost of ownership.

The software product with the lower total cost of ownership is the better value in the long run.

The purchase price of the open source software product is zero, but what is its long-term price or total cost of ownership?

The components:

In order to calculate the long-term price or total cost of ownership of a software product, one needs to identify all of the different components associated with taking a software product into use.

I suggest that these include at least the following:

  • The initial license fee for the software product (zero in the case of an open source software product).
  • Any costs associated with hardware or software tools to develop or test the software product.
  • Any costs involved with customising or configuring the product.
  • Any associated hardware costs to deploy the software product.
  • Any hosting costs.
  • Any maintenance costs.
  • Any support costs.
  • Any additional software license costs.
  • Any costs associated with feature or functionality updates.
  • Any license costs to access other 3rd party software.
  • Any insurance costs.
  • Any direct or indirect costs associated with future updates / upgrades.
  • Any training costs.
  • Any warranty costs.
  • Any direct/indirect liability costs.

This list is not exhaustive and there may be other components to consider.

Costs associated with open source software risks:

Of course, total cost of ownership is an issue for both proprietary software products as well as open source software products.

However, some additional components may need to be consider when trying to calculate the total cost of ownership of an open source software product, namely the costs associated with managing the risks involved, which divide out into the following categories

  • Legal issues
  • IP issues
  • Operational issues
  • Security issues
  • Business issues

(These additional components are explored in more detail in another paper already published).

The bottom line:

When you are comparing cars you like, you should go beyond sticker price. You should research the ongoing costs of driving and maintaining each model, so that you get a true understanding of affordability. A realistic estimate of a vehicle’s total cost of ownership is crucial in helping you choose a car that fits your budget. The same applies to purchasing a software product, regardless of whether it is an open source software product or a proprietary one.

Donal O’Connell

Author: ipeg 5 months ago

The formal definition of the word “Innovative” as taken from the Collins English Dictionary is to invent or begin to apply new methods or ideas, to renew or make new.  Also, it is worthwhile taking a look at some other words of similar meaning. “Creative” means having the ability to create, characterized by originality of thought, having or showing imagination, designed to or tending to stimulate the imagination, showing by sophisticated bending of the rules or conventions.  “Inventive” means to be skilled or quick at contriving, ingenious, resourceful, characterized by inventive skill and related to an invention.  Although there are some similarities between these words, they are not identical.

Innovation can take many forms.  It can be disruptive, transformative, radical, breakthrough, incremental or step improvement in nature.  It is most important to recognise and appreciate all these different forms as often the simple step or incremental form has a tendency to get overlooked.

Innovation inside a Factory

A factory or manufacturing plant is an industrial site, usually consisting of buildings and machinery, or more commonly a complex having several buildings, where workers manufacture goods or operate machines processing one product into another. Most modern factories have large warehouses or warehouse-like facilities that contain heavy equipment used for assembly line production. Factories may either make discrete products or some type of material continuously produced such as chemicals, pulp and paper, or refined oil products.

Innovation and creativity is not the sole preserve of the R&D function within an organization. The ability to mass produce products within a factory environment takes tremendous skills, competence, knowledge and experience.

The ability of one factory in China to mass produce half a million iPhones per day takes some innovation and creativity. Over 60 million cars passenger cars were produced last year by all of the car companies, some achievement given the complexity of the modern car. Over 225 million TVs were mass produced by various companies last year at a time when there is great turmoil in that industry sector with technology changing rapidly.

Although I have spent most of my career inside R&D or IP functions, I was most fortunate to spend time working inside factories in Brazil, China and Texas. I must admit that I was in awe of the skills and competencies of the great people I met there, and I learned much from my experiences there.


Know-how is defined as practical knowledge or skill or expertise. Know-how is a term for practical knowledge on how to accomplish something. Know-how is also an intangible asset and a form of intellectual property.

Some examples of the know-how that exists within a factory environment include:

  • Chemical processes
  • Thermodynamic processes
  • Physical processes
  • Control diagrams
  • Manufacturing systems
  • Internal components of manufacturing systems
  • Mean time between failure analysis
  • Problem resolution procedures
  • Quality assurance information
  • Special product machinery
  • Test plans
  • Test records

I should stress that this list above is not exhaustive by any means.

Protecting know-how

Some factory Manager’s however fail to consider how best to protect these valuable intangible assets. Having a security guard at the gates of the factory or an IT person with a firewall around the IT network in use across the factory will simply not suffice.

Legal and IP protection mechanisms should also be seriously considered.

However, registered forms of IP like patents are oftentimes not suitable. The subject matter may not qualify for patenting. Even if patenting is an option, detection of infringement by 3rd parties may be extremely difficult.

The inherent proprietary value of know-how lies embedded in the legal protection afforded to trade secrets in law. As know-how qualifies as a trade secret in many cases, I strongly suggest that trade secrets, trade secret protection and trade secret asset management should be of the agenda of the Factory Manager.

Trade Secrets

A trade secret is defined as any information that is:

  • Not generally known to the relevant business circles or to the public. The information should also not be readily accessible.
  • Confers some sort of economic benefit on its owner. This benefit must derive specifically from the fact that it is not generally known, and not just from the value of the information itself. It must have commercial value because it is a secret. Commercial value encompasses potential as well as actual value.
  • It must have been subject to reasonable steps by the rightful holder of the information to keep it secret. What is reasonable can vary depending on the specific circumstances.

Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret.

The Defend Trade Secrets Act passed earlier in 2016 greatly enhances US federal protections to curb trade secret theft and secure the value of trade secrets. The EU also recently pass the Directive on Trade Secrets to harmonize the existing diverging national laws on the protection against the misappropriation of trade secrets.

What should a Factory Manager do?

I recommend that the following steps be taken:

  • A trade secret policy should be created
  • A top level trade secret process should be defined – identification; analysis; review; protection; and on-going monitoring.
  • A trade secret asset management system should be taken into use as technology can greatly help underpin the process
  • A section on trade secrets should be added to the existing training for all employees within the factory
  • A governance structure should be put in place

An exercise should be conducted to attempt to gather information on the various trade secrets existing within the factory. A phased approach should be adopted:

  • identifying trade secrets within the factory and owned by the company itself
  • identifying any trade secrets belonging to others but entrusted to the factory (e.g. belonging to key suppliers or partners)

The goal of the Factory Manager should be to

  • Install a confidentiality culture across the entire factory with respect the trade secrets it possesses
  • Ensure key functions within the factory work together to manage these assets going forward
  • Have comprehensive metadata available on the trade secrets within the factory

All factory managers like having data at their finger-tips. Good quality data enables a Factory Manager to run an efficient and effective factory, and to make informed decisions if and when needed. Such data may include  – cycle time; time to make change-overs; throughput; yields; pass fail rates at different test stages in the production process; utilisation of staff within the factory; overall equipment effectiveness; incoming supplier quality; inventory; etc. etc.

Proper trade secret asset management provides the Factory Manager with data about the know-how within his/her factory.

Of course, the Factory Manager and his/her management team will need help and support from Legal & IP professionals (either in-house or external) in order to achieve all of the above.

Final thoughts

Trade secret asset management is an area I believe has been somewhat neglected in the past by many Factory Managers. However, it is an area which cannot be ignored going forward. Trade secrets are a very important form of IP, and most likely will increase in importance going forward given the legislative changes taking place in key jurisdictions. Most factories are awash with know-how and trade secrets.

Donal O’Connell

Author: ipeg 5 months ago

In general terms, a case study is an account of an activity, event or problem that contains a real or hypothetical situation and includes the complexities one would encounter in the workplace. The IP Firm in this particular case study is an established and reputable IP Firm with offices in a number of jurisdictions. It employs almost one hundred attorneys and paralegals, and it has clients spread across a diverse range of industry sectors. This IP Firm has received a number of awards and accolades over the years. The IP Firm was anxious to deploy a range of new service offerings to its clients, and trade secret asset management was one selected, as it saw some new business opportunities here.

Trade secrets

A trade secret is defined as any information that is:

  • Not generally known
  • Confers some sort of economic benefit on its owner.
  • It must have been subject to reasonable steps to keep it secret.

Broadly speaking, any confidential business information which provides an enterprise a competitive edge may be considered a trade secret.

Trade secret asset management

Trade secret asset management is about the policies and procedure, processes and systems, education and governance defined and taken into use to help manage such assets. Trade secrets are fragile so they require some TLC. Simply deciding to keep something secret is not sufficient!

Trade secret asset management includes:

  • Awareness & education
  • Trade secret policy
  • Trade secret management process
  • Trade secret asset management system
  • Metadata
  • Access & access controls
  • Protection mechanisms
  • A culture of confidentiality with respect to trade secrets
  • Governance

Forces at play

The IP Firm recognized that there are a number of forces which together mean that trade secret asset management is now becoming a business critical issue, and one which companies must address.

These forces include – legislative developments; finance & tax developments; increased network security & cyber-crime concerns; IP reform in key jurisdictions; the growing importance of corporate governance; more and more companies embracing openness; and the changing nature of employment.

This IP Firm also recognized that almost all of their clients possess trade secrets but many are failing to properly manage such assets.

Trade secret asset management assessment

The IP Firm’s service offering begins with an audit or assessment of their operating company client.

Such an exercise is conducted in order to provide independent assurance that an organisation’s trade secret asset management, governance and internal control processes are robust, fit for purpose and operating effectively.

It is an evidence gathering process. The criteria include policies, procedures and requirements. Evidence includes records, factual statements, and other verifiable information. Findings evaluates evidence and compares and contrasts it against the criteria. Findings show those criteria that are being met (conformity) or those that are not being met (nonconformity). The exercise can also identify best practices or improvement opportunities.

The assessment criteria

The IP Firm developed a comprehensive assessment checklist. At a very top level, it consists of the following:

  • Awareness & education
  • Definition of trade secret in use
  • Qualification
  • Classification of trade secrets
  • Ownership of trade secret policy and procedures
  • Trade secret asset management process
  • Access & access controls
  • Protection mechanisms
  • Sharing trade secrets with 3rd parties
  • Entrusted with trade secrets belonging to 3rd parties
  • Valuation of trade secrets
  • Trade secret asset management system
  • Other metadata associated with trade secrets
  • Audits / audit trails
  • Governance

Much more details sit behind each of the items listed above.

Steps or phases in such an assessment

The IP Firm typically follows a six step process when conducting such an audit or assessment. They recognise that there is not one size fits all, so they are flexible and can adjust to suit the specific needs of the client.

  • Scoping of the audit / assessment
  • Request for information
  • Open meeting(s)
  • Field work
  • Drafting the report (findings & recommendations)
  • Closed meeting

Current status

The IP Firm reached out to a limited number of its operating company clients to inform them about this new service offering at the beginning of the summer of 2016, just after the Defend Trade Secrets Act was passed in the US and the EU Directive on Trade Secrets was passed in Europe.

A number of pilot projects were started with a handful of their clients in order for the IP Firm to stress test the service offering in a small-scale implementation. The IP Firm wished to prove the viability of this new service offering and to gather insights on various things such as their assessment methodology, the project phases, the skills and competencies of their team, the time taken to complete such assessments, the costs involved, their fees and fee structures, etc. etc. plus of course client reactions.

As this particular case study is still in its infancy and only recently been deployed by this particular IP Firm, I do not yet have much real data to share. However, it is a very interesting business development case study in my opinion, at a time when there is tremendous pressures on many IP Firms to be more creative and innovative and bring new service offerings to market.

Donal O’Connell, Intellectual Property Expert Group (Donal is the author of a special software program for managing trade secrets, please send inquiries to info@ipeg.com)

Author: ipeg 5 months ago

In May 2015, IAM Magazine wrote: ”In the last couple of years there have been several attempts to stymie privateering – the model by which operating companies sell patents to an NPE which then seeks to monetize them, usually through an assertion campaign.”

This model will now face its most severe test when the Hon. Mr. Justice Birss takes up the question – remanded to him by the UK Court of Appeals – of whether or not Ericsson violated its FRAND obligations by transferring SEPs to Unwired Planet.

When Unwired Planet annonced its transaction with Ericsson on January 10, 2013 investors were promised a ”conscientious and sustainable long-term IP licensing program” from the 2,815 patent assets acquired from Ericsson covering ”fundamental communications technology” so-called ”telco DNA”.

The basic theory is straightforward: Ericsson has too many patents – and in particular standard-essential patents (SEPs) – and these assets are undervalued in Ericsson’s portfolio licensing agreements, especially by Ericsson’s need to negotiate reciprocal rights for its infrastrucre business. By carving out some of these patents and selling them to a non-practicing entity for some up front cash and retaining a back-end interest in royalty revenues, Ericsson can realize full value from these assets.

There is nothing wrong with this theory. From a finance point of view; it makes perfect sense. As Samsung explained ”the aggregate of the licence fees they can now demand is higher than the fees that Ericsson could have demanded before it entered into the MSA agreements.

The problem arises when Ericsson’s FRAND commitment is taken into consideration. As Samsung explained ”Ericsson’s object in entering into the MSA arrangements was and remains to allow it to maintain a continuing involvement in UP’s licensing strategy and to benefit on an ongoing basis from the increased royalty rates that UP, a PAE, is able to charge for the SEPs now they have been stripped from the rest of Ericsson’s patent portfolio.”

Hon. Mr. Judge Birss is now handed the unenviable task of deciding whether or not the division by Ericsson of its patent portfolio in this way was precluded by Article 101.

This is an interesting question and one which will have a massive influence on the value of SEPs divested by Ericsson, Nokia, and many others.

Eric Stasik (Avvika AB)

see also on FRAND: http://bit.ly/2bHf8BD

Author: ipeg 8 months ago

After Britain’s public vote to leave the EU, the question comes up – in as far as intellectual property is concerned – what effect the Brexit has for the Unitary Patent (also referred to as “UPC”) project that finally seemed to have picked up steam.

It is likely that the UK leaving the European Union will have material effects on the UPC, either for the Unitary Patent as such or for the time the UPC will come into effect. Firstly it is important to make a distinction between the EU Regulation  whereby the Unitary Patent was established and the Agreement (an international Treaty) establishing a UPC Court.

A Brexit means that the UK will no longer be bound by,  nor party to Regulation (EU) No 1257/2012 of 17 December 2012 implementing enhanced cooperation in the area of the creation of unitary patent protection. However, the UK is also signatory to the UPC Agreement (“UPCA“) , an international  treaty to establish the Unitary Patent Court(system), so not the patent itself, but the judicial part of it( deciding on infringement and validity for example). Although the UK has not yet ratified the Agreement, the question arises whether a Brexit means that Britain can no longer be part of the UPC court system either. For sure, Brexit will have the consequence that the Unitary Patent, once into effect, will not cover Great Britain anymore. So a judiciary system establishing 3 Central Courts  -among which London – would make no sense if a London based Court would have jurisdiction over an EU unitary patent to which the UK is no party. A non-EU Member State cannot take part in the UPC. That is true for Switzerland, Norway and as a result of Brexit, also for the United Kingdom.

In addition, according to article 89 UPCA  the Agreement can only come into force if at least “three member states in which the highest number of European patents had effect in the year preceding the year in which the signature of the Agreement takes place” ratify the Agreement/Treaty. The UK is one of those “three member states”.

A further complication would be for patentees to decide which route to choose after their patent application has been granted after a European examination process.  According to the Unitary Patent Regulation a patentee has one month after grant to file a request for unitary effect at the EPO. After a Brexit however even a choice for a Unitary Patent would mean that this would not cover an important market like the UK anymore. In this case the UP route may become a lot less interesting for the patentee and force him to choose the European Patent route[1]. In that case the patent would also cover the UK (once validated).  An alternative is to still choose the Unitary effect after grant an file for a UK national patent on top of that.

The UK is a major contributor to the UPC system, both in the preparatory stage as well as in the current stage where Judges apply to become member of the “poule” of EU Judges who ultimately will decide the cases being brought before them once the UP becomes a fact of life (which was planned to happen around spring 2017). Experienced UK Judges have applied to become members of the UPC court.  They would have brought a vast load of expertise and experience into the new Court. I

It is likely that this must be reviewed as it is hard to understand how UK Judges can be part of a court deciding on a EU Unitary Patent to which their country is not part and which patent will not cover the UK.

The UPC Agreement makes no provision for what would happen to the London Central Division of the Court in this event. Some have speculated that it might be moved to the Netherlands, others that it might even stay in London, although English judges would presumably be unable to apply as only nationals of the UPC Member States can act as judges (see Allen & Overy Memorandum).

An interesting overview on the current state of play of European IP rights, including EU Trademarks (for which the Brexit may also have a profound impact) and how to deal with a Brexit e.g. for existing licenses and enforcement of other IP rights is given by the law firm Freshfields Bruckhaus Deringer. With their consent we publish this overview below:

Current state of play

  • EU member states benefit from a range of pan-EU intellectual property regimes. These include pan-EU IP rights, like EU Trade Marks and Registered Community Designs, and central administration schemes, like the European Patent Office (which also extends beyond the EU). These systems create economies of scale for owners of multinational IP portfolios.
  • A new EU unitary patent system is due to be introduced in the next few years.
  • Many domestic UK IP rights stem from EU law. UK courts must interpret those rights in line with decisions of the EU Court of Justice.
  • National courts in the EU can, in some cases, issue pan-EU injunctions against IP infringers.

 What should I be thinking about now?

  • Portfolio management – Do I need to make any changes to my filing and management strategy to ensure my unitary EU IP rights (including any new unitary patents) would be protected in both the EU and UK post-Brexit?
  • Enforcement – Would I still be able to rely on any existing injunctions to protect my rights – in the UK or in the rest of the EU – post-Brexit? Which courts should I be applying to in any litigation I am currently planning in order to get the most effective remedies?
  • Licensing – Are my existing licensing arrangements ready for a Brexit? If the UK leaves unitary schemes, will my existing licences cover transitional or successor national rights in the UK? Should I be thinking about including special provisions in any new licences to cover transitional or successor national rights?
  • IP diligence – If I am buying or selling a business, what would be the potential impact of a Brexit on the target’s IP licences and on security over the target’s IP rights?

What could the position be following a Brexit?

The answers to many of the above questions would depend on the nature of a post-Brexit UK/EU relationship.

To give an idea of the range of possible outcomes, we have considered what the position would be under the ‘Norwegian option’ and the ‘World Trade Organisation (WTO) option’ – on the basis that these are at opposite ends of the spectrum of existing models for an alternative relationship with the EU.

What if the UK left the EU, joined the European Free Trade Association and remained a member of the European Economic Area (EEA)? (the Norwegian option)

  • The UK would continue to participate in the European Patent Office.
  • Unitary EU IP rights, eg EU Trade Marks and Community Designs, would not continue in the UK. Parliament might introduce new ‘successor’ IP rights. However, this could cause issues with existing IP licences, security over IP rights, and judgments and injunctions in IP proceedings.
  • National rights based on or influenced by EU directives, eg copyright, supplementary protection certificates, national trade marks and national designs, would continue. It is likely that they would remain aligned with EU law as most relevant directives apply to the EEA.
  • Exhaustion rules prevent trade mark and design right owners from using their IP rights to restrict the sale of goods that have been put on the market in the EEA with their consent. These rules apply EEA-wide, and so would be unchanged from the present position.
  • The new unitary patent system would be vulnerable to a Brexit. Not only is the new system limited to EU member states, but the UK must also ratify the agreement for the new system to come into effect. A Brexit would require the existing agreement to be re-written, and the new unitary patent rights to be extended to the UK as a non-EU jurisdiction.

What if the UK left the EU without any form of free trade agreement? (the WTO option)

  • The UK would continue to participate in the European Patent Office.
  • Unitary EU IP rights, eg EU Trade Marks and Community Designs, would not continue in the UK. Parliament might introduce new ‘successor’ IP rights. However, this could cause issues with existing IP licences, security over IP rights, and judgments and injunctions in IP proceedings.
  • National rights based on or influenced by EU directives, eg copyright, supplementary protection certificates, national trade marks and national designs, would continue. The UK would be unlikely to diverge quickly from existing EU law without repealing existing domestic legislation.
  • Current exhaustion rules would mean that trade marks and design rights could be used to restrict imports from the UK into the EU. New rules would need to be agreed with the EU to maintain the present position and avoid price differentials arising between the UK and the EU.
  • The new unitary patent system would be vulnerable to a Brexit. Not only is the new system limited to EU member states, but the UK must also ratify the agreement for the new system to come into effect. A Brexit would require the existing agreement to be re-written, and the new unitary patent rights to be extended to the UK as a non-EU jurisdiction.
  • UK courts would no longer be required to interpret UK IP law in light of EU rules. This could result in a gradual divergence of UK and EU IP law.

With thanks to: Walter Hart, EP&C Patent Attorneys,  Eelco van der Stok, Freshfield Bruckhaus Deringer

[1] P.S. please note the difference between a European Patent and a EU Unitary Patent. A European Patent is a patent granted according to the existing system whereby an examination process is undertaken by the European Patent Offices (Munich/The Hague) which can lead to a grant of the patent right, which then results in a bundle of national patents for all countries member of the EPO.
Author: ipeg 10 months ago

Today as well as on June 23, patent attorney’s firm EP&C together with Bas Berghuis van Woortman of Simmons & Simmons organize a seminar on the European Unitary Patent and the Unified Patent Court (UPC).

Topics include:

  • What is the unitary patent and how does it work?
  • What is the Unified Patent Court and how does it work?
  • What are the strategic options?
  • What do I have to do?
Author: ipeg 11 months ago