Process 6: Making IPM the Job of Everyone: The IP Program

This process involves three main steps designed to raise IP awareness across the organization and foster a culture that is both protective of the organization's IP and preventive of infringing the IP of others. These steps include preparing an IP Literacy Guide to be distributed to various departments in each business unit. The focus of the Guide should be on the primary form of IP, with general guidelines in relation to branding and trade secret protection in all cases. The sec­ond step involves establishing a detection program wherein every department and employee par­ticipates in detecting infringement of the organization's IP. Finally, the Clearance program is designed for the various functional departments to prevent against infringing the IP of others, particularly when investing in areas that may be covered by the IP of others. The IP or legal department is the best equipped to design and implement the IP program, which should include at least the following:

Step 1: The IP Literacy Guide.
The IP Literacy Guide should provide general information about what IP is and its various forms. Appendix B can be used as a guide. At the same time the Guide should include specific directions to the functional departments, each in regard to their area of practice, to educate them on the proper use of IP. This is essential to protect against jeop­ardizing IP rights by improperly handling IP in the course of operation or business in general. The following are the precautions that should be taken by the various functional departments:

• To all departments - trade secret protection guidelines

•   Draft a trade secret policy and distribute to all employees to inform what trade secrets are and their importance to business.

•   Restrict public access to sensitive areas where trade-secreted information is kept or handled.

•   Lock gates and cabinets, and use passwords to restrict access to sensitive information in databases.

•   Label trade secret documents, discs, and digital information as such by the use of a "confidential information" stamp or digital notice.

•   Enter into confidentiality agreements with any third party that may come across the trade secrets of the organization.

•   Screen speeches, publications, and presentations by employees to check for any inad­vertent disclosure of trade secrets.

•   Undertake any other security measures that are deemed reasonable under the circum­stances, based on the value of a certain trade secret to the business.

• Research and development (R&D) departments

•   Alert as to the grace period of one year within which a patent application should be filed following any publication or disclosure of the invention. Such grace period does not exist under patent laws of other countries.

•   Maintain clear and corroborated lab notes to establish the dates of conception and reduction to practice of each invention.

•   Maintain "clean" procedures for copyrights by denying access by the development team to competing software programs, to defend against copyright infringement. This is based on copyright law allowance of independent creation.

• Manufacturing departments

•   Control access to products under production to protect ideas and concepts that are not the subject of patent application or protection. Such ideas and concepts are protectable as trade secrets, and hence should be identified and marketed accordingly, as well as protected by reasonable security measures.

•   Identify production processes along the same lines and inform the human resources department of key personnel that are in possession of such trade-secreted processes.

• Marketing departments

•   Do not tie the sales of a patented product to unpatented products except if it is a mate­rial component of the product. This should be examined in cases in which the business has market power in the relevant market.

•   Do not use any of the trademarks as generic words to describe the product or service in advertising and marketing campaigns, to guard against losing the trademark to the pub­lic domain.

•   Do not use the photo or likeness of a celebrity without his or her own permission to endorse a product.

•   Test statements made about competitors' products in comparative advertising to guard against false statements or harmful misrepresentations (see Appendix B for more details).

• Human resources departments

•   Have employees sign confidentiality agreements as part of their employment agree­ments.

•   Conduct entry interviews with incoming employees to guard against the inadvertent use of trade secrets of competition's former employees, if any.

•   Provide incoming employees with a copy, as well as other details, of the trade secret policy.

•   Conduct exit interviews with departing employees to ensure that they have not taken any trade secrets with them, and prepare statements to be signed by them to that effect.

•   Dispatch a letter to the new prospective employer with notice that the departing employee possesses trade secrets. This is of particular importance when key former employees are joining the competition.

• Licensing units or teams

•   Do not tie the licensing of any patented products to the purchase of nonpatented ones unless the conditions specified under 4 (Marketing) are satisfied.

•   Establish actual supervisory procedures whenever the trademark is licensed as part of a franchise or a merchandise agreement.

• Customer service departments

•   Communicate the brand promise and values to all personnel in customer service. This enables the building of brand equity and hence strengthening of the trademark.

•   Align all contact points with customers with the brand promise. These include, but are not limited to, delivery, maintenance, and customer loyally programs.

•   Report and document customer complaints to reveal incidents of infringement of the trademark or attempts to pass off other goods as those of the organization.

•   Place customers' complaints on an emergency list until the problem is addressed and resolved, to guard against damage to the brand's reputation. This is particularly important when the corporate name is used as the predominant brand, in connection with products and services.

• Information technology (IT) departments

•   Ensure that procedures are taken to install firewalls for cyber security purposes.

•   Monitor the Web, or install programs for cyber surveillance, to collect information on the use of the organization's trademarks. This should include spotting the use of the trade­mark, or confusingly similar marks, as domain names and cyber squatting incidents.

•   Install programs for digital management to indicate infringement of the organization's copyrights, and collect evidence of such infringements.

•   Monitor the Web site records to spot any attempts to deep link or divert Internet traffic from the organization's Web site, which may constitute anticompetitive practices.

Step 2: The Detection Program.
The detection program can be entrusted in large part to the legal department. However, cooperation from all departments - in fact, from all employees - is required for the organization to detect infringements to its IP. The decision to take an enforce­ment action, and the nature of such action, is something that management must decide later on in accordance with Process 4. The detection program should institute procedures to cover the fol­lowing practices:

•   Create a unit to reverse engineer products of players in the market to spot patent infringe­ments.

•   Monitor similar products in the market to spot counterfeit or knock-off products, as well as attempts to pass off goods as those of the organization.

•   Monitor the advertisements and marketing campaigns of competition for representations on the organization's products or reveal the use of anticompetitive practices by the com­petition.

•   Analyze works in the market for protectable elements covered by the organization's copyrights.

•   Monitor movement of key former employees.

Step 3: The Clearance Program.
The Clearance program is designed to create a culture that is preventive of infringing the IP of others, and keeping the organization aware of the competitor's activity as early as possible. Besides keeping the organization from incurring the high costs of lit­igation, it also guards against loss of investment funds when a project has to be terminated for infringing on the rights of others. As illustrated in Exhibit 13.9, the Clearance program includes the following procedures (applying to different forms of IP):

1.       Undertake a search to get preliminary clearance for the proj ect to proceed.

2.       Evaluate the strength, scope, and validity of any blocking IP owned by the competition or another third party.

3.       Seek a license to use the blocking IP to proceed with the project. The expected returns of the project should be weighed against the cost of the licensing transaction.

4.       If the cost of the transaction is prohibitive or a license is not available, then consider ways to design around the blocking IP. Consult Chapter 8 for the various competitive strategies relating to designing around each form of IP.

5.       If designing around the blocking IP is not possible, then terminate the project. Under no circumstances should the project proceed; otherwise, a finding ofwillful infringement, where damages can be multiplied by the courts, may be deemed. Exhibit 13.10 provides specific guides as to the clearance procedures involved for each form of IP.

EXHIBIT 13.9    The Clearance Process