Intellectual Property Law

Chapter 24 Discussion Answers

1. A client’s executive team is meeting with the executive team of another company
to discuss a merger and to review the intellectual property that the client will be
transferring to the acquiring company.

a. What information may be disclosed by the client?
The client may disclose anything that is a matter of public
record (such as pending trademark applications, trademark
registrations, copyright registrations, published patent
applications, and issued patents, all of which are reflected in
the records of the USPTO or Copyright Office). It should not
disclose any trade secrets about its business unless proper
safeguards are in place, primarily, nondisclosure agreements.

b. What precautions should be taken by the client to protect its IP during
these preliminary discussions?
The client should ensure that the other party’s executive team
(and anyone else who may have access to valuable company
information) sign a nondisclosure agreement, agreeing that the
information disclosed will be protected and will not be
disclosed to others (and agreeing that the information is
disclosed only for the purposes of the preliminary discussions
between the parties with regard to a proposed business
transaction).

2. An annual IP audit performed for a client disclosed that the client changed its
corporate name from Energy Systems Inc. to Tech Systems Corp. What should be
done with respect to its registered trademarks, copyrights, and pending patent
applications and issued patents? Why?
The records of the USPTO and Copyright Office should be corrected
to reflect this name change. Otherwise, if the client files documents to
maintain/renew its trademarks or maintain its utility patents in force,
the documents will be rejected by the USPTO because there is no
clear chain of title showing that Tech Systems Corp. is the actual
owner of the trademarks and patents. Similarly, although there is no
necessity to renew or maintain copyright registrations, the Copyright
Office records should be corrected so that in the event of a sale of the
copyrights, the records reflect the actual owner of the copyrights.

3. An IP audit performed for a client disclosed that the client no longer uses the
technology covered by two patents, no longer uses two trademarks, and has
changed the presentation of one of its registered marks from SYNERGY NOW to
SYNERGY FLOW. What should the firm recommend to the client?
If the client is no longer using the patents, it should consider selling or
licensing these to produce revenue. A notice can be posted on the
client’s website announcing that the patents are available for license
or purchase. A notice can also be placed in the USPTO’s Official
Gazette. If this is not successful, the client should consider donating
the patents to an educational institution (or similar organization) in
order to obtain a tax deduction. Alternatively, the client could
consider donating the patents to the Patent Commons Project (which
may engender some goodwill for the client). As to the trademarks not
being used, assuming they have not been abandoned, they should also
be evaluated to determine if they can be licensed or sold to others or
donated as is the case for the patents described above.

If the client is not successful in selling or licensing these assets, it need
no longer incur expenses in maintaining them (and thus need not
incur renewal and Section 8 fees for trademarks and utility patent
maintenance fees).

As to the change in presentation of the trademark, this is a significant
change, and thus a new trademark application must be filed for
SYNERGY FLOW. The USPTO will not accept a Section 8 Affidavit
of Use or Renewal for this mark because it is not the same mark as
that originally registered.