New Product Launch Checklist

ACC NCR May 2016

Today’s Speakers

Kevin Minsky

Associate General Counsel

Booz Allen Hamilton

Burt Amernick Spencer Wood Colin Raufer

Intellectual Property Counsel

Boeing Shareholder

Polsinelli Shareholder

Polsinelli

Today’s Program

Intellectual Property Checklist

Transactional Considerations

Software Issues

International Product Launch: Compliance Checklist for In-House Counsel

INTELLECTUAL PROPERTY CHECKLIST

Burt Amernick

Agreements

Have Employees sign agreements that require assignment of inventions made in the course of employment. – Inventions made on company time or facilities or materials or

relate to business.

– State laws may limit the scope of pre-assignment obligations.

– Include a confidentially clause-non-disclosure of confidential information of company. Obligation continues after the employment and until information no longer trade secret.

– Non-complete clauses-reasonable time, geography and subject matter.

– Consulting agreements similar terms as employee agreements.

Agreements

Non-Disclosure Agreements with third parties typically include the following: 1. Purpose of the disclosure

2. Prohibit any use except for the stated purpose

3. Standard exceptions include the following: – Information already known

– Public information

– Information from third party

– Information independently developed

4. Time period

5. Return tangible material

Searching

BACKGROUND – Start of project- what has already been done. – Extent of activity, the important players, types of

approaches pursued, problems encountered, and attempted solutions.

FREEDOM TO OPERATE – Product refined to extent to be commercialized,

determine whether there are patents that may raise a question of infringement.

– If so, evaluate for its probable validity, possibility of designing around and/or negotiating for a license/purchase.

Clearance Procedures

Procedures to record and identify patentable inventions.

Clearance of publications, public disclosures and offers for sale. These events prior to having a patent application on file in a patent office can result in loss of potential patent rights.

Intellectual Property

Patents Trademarks Trade

Secrets Copyrights

Mask Works

Patents

Article 1, Section 8 of the Constitution provides the basis for patents as well as copyrights. It states the following: Congress shall have the power to promote progress of science and useful arts by securing for limited times, to authors and inventors, the exclusive rights to their respective writings and discoveries.

A patent is a contract between the applicant and the public.

The applicant receives the right to exclude others from practicing the invention for a limited period of time. In turn the public gets a written description and disclosure of the invention (35 U.S.C. § 112)

Requirements for Patentable subject matter, 35 USC §101, 35 USC §102, and 35 USC §103.

35 USC § 101 defines what general subject matter can be patented. 35 USC §102 concerned with novelty and loss of patent rights. 35 USC §103 is directed to “non-obvious” subject matter.

Patents

Patentable Subject Matter 35 USC §101 states the following “Whoever invents or

discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.”

Three judicially created exceptions subject matter capable of patenting- Abstract Ideas, Product of Nature or Natural Phenomenon and Laws of Nature.

The Abstract Ideas exception have made it difficult to obtain patent protection concerned with software and business methods inventions.

Patents

Patentable Subject Matter The Supreme Court addressed the issue of “abstract ideas” in

Bilski v. U.S., 561 US 593 (2010) and Alice Corporation Pty. Ltd. v. CIS Bank International et al., 134 S. Ct. 2347 (2014), discussed in the appendix. In Alice, the Court set forth a two-step test as follows: 1) Is invention directed to one of the judicial exceptions? 2) If so, does invention involve an “inventive concept”.

Federal Circuit in Enfish, LLC v. Microsoft Corp., Fed. Cir., No. 2015-1244, 5/12/2016 - Software creating an innovative logical model for a computer database is not directed to an abstract under step one of the Supreme Court’s test. Software not inherently abstract and not only analyzed at the second step in Alice.

Patents

Patentable Subject Matter This issue is not limited to software and business methods

inventions. See Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289, (2012) and Association for Molecular Pathology et al. v. Myriad Genetics., et al. discussed in the Appendix.

Patents

Design Patents

– If the overall appearance of the product is novel and non-obvious, eligible for obtaining a Design Patent. A Design Patent provides protection for the overall visual or ornamental appearance of the product.

Marking

– Consider marking the product as Patent pending or with the Patent number upon grant. Marking with the Patent number acts as constructive notice to an infringer and can be helpful in maximizing damages.

Trade Secrets

Determine whether the technology related to the product to be commercialized would be protectable by patenting and/or by keeping as a trade secret.

One trade secret definition is a “Formula, pattern, device or compilation of information, used in one’s business and gives an opportunity to obtain advantage over competitors who do not know or use the secret.

Trade Secrets

Some states have enacted laws that define a trade secret as meaning information, including a formula, pattern, computation, program, device, method, technique, or process that:

1. Derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who might obtain economic value from its disclosure or use, and

2. Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.

Trade Secrets

The information must be secret and novel. However, the difference over the prior knowledge is not as stringent as those needed to obtain a patent.

Reasonable precautions must be taken to keep the information secret. Some internal procedures can include the following:

1. Give access to only those who needed to know the information.

2. Have employees sign confidentiality agreements.

3. Have consultants, vendors, customers, and joint venture and other partners sign confidentiality agreements prior to disclosing trade secrets.

4. Limit Physical Access to your facility.

5. Limit electronic access (password protected), both internal and remote.

6. Monitor emails and inform employees of your right to do so.

7. Utilize locks and alarm systems.

8. Mark Documents, e.g. “Confidential”

9. Pre-clear Papers/ Speeches

10. Conduct an Interview with Exiting Employees reminding them of continuing obligations.

Trade Secrets

When deciding between seeking protection by patenting or maintain as a trade secret, a few factors to consider are:

1. the apparent scope of patentability, 2. the probability of obtaining a valid patent, 3. the estimated life of an invention (e.g. if invention will probably

not be used by your company and/or competitors after X years from its application filing date, the worth of any patent based on the invention is very questionable),

4. the development expense of the invention, 5. the commercial importance of the invention, 6. the difficulty in circumventing a prospective patent, market

advantages which might reside in exclusivity, 7. difficulty in detecting infringement and 8. the advantages of keeping the invention a trade secret.

Trade Secrets

Advantages of a patent include: – a definite property right defined by the

patent claims – it can be enforced against an

independent developer – can act as a deterrent against others

entering the field

Disadvantages of a patent include: – the cost – patents are limited to the country in

which they are obtained – the requirements of disclosure in the

application – expires after a fixed period of time

Advantages of a trade secret include: – no additional costs – protection not limited geographically – no time limitation – no disclosure of the information to

competitors.

Disadvantages of a trade secret include: – it is not well defined – cannot be enforced against an

independent developer – might have a short life span before it is

copied – does not act as deterrent to

competitors – potentially loss due to former

employees

Trade Secrets

On May 11th, the Defend Trade Secrets Act (DTSA) of 2016 became law creating a nationwide trade secrets law. Prior to this law, trade secrets were handled at the state level, which varied from state to state, notwithstanding the Uniform Trade Secrets Act.

The new law means that suit can automatically be brought in federal court to remedy misappropriation for trade secrets “related to a product or service used in, or intended for use in, interstate or foreign commerce. The DTSA enables courts to order seizure of property involved in the misappropriation, including ex parte seizures. An objective is to have developed a unified national case law.

Trade Secrets

DTSA provides certain safeguards to “whistleblowers” and requires employers to inform employees of the safeguards. Failure-not able to claim enhanced damages or reasonable attorney fees. Motivate employment contracts, employee non-disclosure agreements and confidentiality.

Not liable if: 1. disclose trade secret in confidence to government official or

attorney “solely for purpose of reporting or investigating suspected violation of law or

2. in document under seal in lawsuit or other proceeding. Can disclose under seal in retaliation suit by employer against employee for reporting suspected violation of law.

Trade Secrets

In addition, the Economic Espionage Act (18 USC 90) criminalizes trade secret misappropriation wherein actual or potential economic value is established independent from the trade secret not being known. The Act provides for fines and/or imprisonment.

Copyrights

The copyright statue, (17 USC) provides for protection of works of authorship that are fixed in any tangible medium of expression. Does not extend to the underlying idea, only the way in which expressed.

A “tangible medium of expression” is considered to be any medium from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.

Computer programs are included within this definition. “Computer program defined as a set of statements or instructions to be used directly or indirectly in a computer to bring about a certain result (17 USC § 101).

Copyrights

Since computer programs often include trade secret information, the Copyright Office has established a procedure for registering computer programs that contain trade secrets. In particular, the owner is permitted to deposit either:

1. the first and last 25 pages of the source code with some, but not most portions blocked out;

2. at least the first and last 10 pages of the source code with nothing blocked out; or

3. the first and last 25 pages of the object code plus any 10 pages of the source code with nothing blocked out; or

4. in the case of programs of 25 pages or less, up to a maximum of 50 percent of the program could be blocked out or withheld, provided the rest of the program shows sufficient copyrightable authorship.

Copyrights

Registration with the Copyright Office only required prior to filing a lawsuit, if the work originated in the United States. If it did not originate in the United States, Registration is not required. Certain litigation advantages if registered within 3 months of the first publication or prior to the infringement.

The copyright notice which consists of 1) the symbol © (the letter “C” in a circle), or the word “Copyright” or the abbreviation “Copr.”; 2) the year of first publication of the work and 3) the name of the owner, is not required. There are certain advantages by doing so.

For infringement to exist, it is necessary for the accused infringer to have had access to the copyrighted work.

Mask Works

The Semiconductor Chip Protection Act concerned with the protection of "mask works" and provides for the registration of mask works with the Copyright Office.

A mask work is defined in the law [17 USC § 901] as a series of related images with the following characteristics:

1. The images have or represent the predetermined three-dimensional pattern of metallic, insulating, or semiconductor material present or removed from the layers of a semiconductor-chip product.

2. The relation of the images in the series to one another is that each image has the pattern of the surface of one form of the semiconductor chip product.

3. A semiconductor-chip product is defined by the law [17 USC § 901] as the final or intermediate form of any product with the following characteristics:

4. It has two or more layers of metallic, insulating, or semiconductor material placed on (e.g., deposited) or removed from (e.g., etched) a piece of semiconductor material in accordance with a predetermined pattern.

5. It is intended to perform electronic circuitry functions.

Mask Works

It is not necessary for the copyright notice to appear on a mask work. If the owner desires, however, he can apply such a notice [17 USC § 909], which should consist of the following:

1. The words "mask work," the symbol "M," or the symbol for mask work (the letter M in a circle)

2. The name(s) of the owner(s)

3. Even though the notice is not required, it is desirable to include one so that those who obtain a chip product with registered mask work be made aware of the protection.

TRADEMARKS, SERVICE MARKS AND TRADE DRESS (Oh My!)

Have searching conducted to pre-clear a mark prior to using it.

A trademark is defined as a Word, Logo, Symbol, or Device, or any combination thereof, used by a manufacturer or vendor in connection with a product to identity and distinguish its goods from others. A service is similar to a trademark except that it is used to identity and distinguish the services performed by a particular business from those performed by others.

Rights in trademarks and service marks are created by use of the mark. Enhanced by registering the mark on the Federal Register and to a lesser extent by obtaining state registrations. After a mark is federally registered, such fact can be shown by placing the registration symbol ® or “Reg. U.S. Pat. and Trad. Off.” or “Registered U.S. Patent. and Trademark Office.”

TRADEMARKS, SERVICE MARKS AND TRADE DRESS (Oh My!)

The Federal Trademark Laws, (Title 15 USC) are founded upon Article 1, Section 8, Clause 3 of the Constitution which states:

“The Congress shall have power …to regulate commerce with foreign nations and among several states, and with the Indian tribes.”

Also, closely akin to trademarks is trade dress. Trade dress refers to the total image of a product and may include such features as size, shape, color, color combinations, texture, graphics, or sales techniques.

TECHNOLOGY PRODUCT RELEASE: TRANSACTIONAL CONSIDERATIONS

Spencer Wood

Overview

Supply Chain

Branding and Marketing

Sales and Distribution

Support

Supply Chain

Securing consistent, timely supply of component parts

Sole sourcing or multiple vendors?

Rolling forecasts w/ obligation to maintain adequate inventory

Right to engage alternate supplier

• Define triggers (price, quality, delivery schedule, scalability)

• Ability to sublicense third-party provider

• Vendor’s obligation to assist / right to resume

Supply Chain

Securing consistent, timely supply of component parts

Non-assertion clause (preventing vendor from disrupting your supply chain)

Priority fulfillment of purchase orders

Sunset restrictions

Supply Chain

Protecting competitive advantage

Exclusive inbound license (field of use / territory)

MFN clause

Non-compete / non-collaboration

Supply Chain

Other considerations

Product recalls

No gaps in indemnity / liability limits

Change of control issues (if competitor buys vendor)

Coordination on modifications / upgrades

Obligations to maintain compatibility / support past versions

Branding and Marketing

Trademark clearance

Secure domain name(s)

Agreements with ad / digital marketing agencies – Secure media buys

– Retain spokesperson

– Obtain licenses to music, photos, videos

– Develop graphics and logos

– Substantiate claims

Prepare social media campaign – FTC Endorsement Guidelines

– Considerations for user-generated content

– Moderation of online communities

Branding and Marketing

Contests and giveaways

Retail demonstrations

Co-branding

Warnings and labels

Third-party certifications

Sales and Distribution

How will your product be provided? – Sales terms and conditions

– License terms and conditions (trial license?)

How will your product reach your customers? – E-commerce

Fulfillment obligations

Terms and conditions for website

Privacy and data security obligations

– Distributors / Resellers

Support

Product manuals

Online or telephone tech support

Warranties and returns

Extended warranties

Service and support agreements

TECHNOLOGY PRODUCT RELEASE SOFTWARE ISSUES

Colin Raufer, Intellectual Property Counsel

Taxonomy of Software Your company’s source code/object code? Third Party Commercial Software? Software inside hardware coming up the supply chain? Open Source Software? Firmware, Software on a chip? Does the Product contain Industry Standards software? Interface software may be created

Technology Product Release

From Laboratory and Development Environment to a commercial sale

Software as a Service (SaaS)

Software in the Cloud

Public Betas

Apps often have onerous terms

Where exactly does data reside?

Servers, Networks, Cyber issues

Privacy Issues with “personally identifiable information” (PII)

Export issues

Classification of Data by Government

Technology Product Release

Technology Product Release

Are the applicable licenses properly custom tailored to reflect the contemplated transaction?

DEVELOPMENT LICENSE (GOOD LANGUAGE)

3.1.1 to use the SDK and other component of the Software solely for Customer’s internal design, development and testing of the Integrated Product so that they operate on executable “run-time” versions of the Software; and

3.1.2 to combine, incorporate, embed and/or bundle the Software (in object code only) with Customer Product in order to create the Integrated Product

Technology Product Release

Technology Product Release

DISTRIBUTION LICENSE (MORE GOOD LANGUAGE) Subject to the terms and conditions of this Agreement, Supplier

hereby grants to Customer a non-exclusive, non-sub-licenseable perpetual right and license to distribute the Software to End Users solely as part of the Integrated Product and so long as such license and distribution fall within the terms of this Agreement

Subject to all the terms and conditions in this Agreement, including, without limitation, the licenses granted to Customer in clause 4.1 Customer will be permitted to grant to each End User a non-exclusive non-transferable irrevocable (except in the case of an End-User Material Breach) right and license, without the right to sublicense, to install and operate the Software solely as part of the Integrated Product, and solely in machine-readable, executable, object-code and/or bytecode format, as applicable; provided however, that any such sublicense shall comply with the licence restrictions set out in this Agreement

Technology Product Release

Rights Granted (More Difficult Language)

Upon Licensor’s acceptance of your order, you have the non-exclusive, non-assignable, royalty free, perpetual (unless otherwise specified in the ordering document), limited right to use the programs and receive any services you ordered solely for your internal business operations and subject to the terms of this agreement, including the definitions and rules set forth in the order and the program documentation. You may allow your agents and contractors (including, without limitation, outsourcers) to use the programs for this purpose and you are responsible for their compliance with this agreement in such use

Technology Product Release

Technology Product Release

Do not be lulled to sleep by the no-cost software license

While no royalties are due or payable, the other terms of the license may create significant risk and exposure for your Company

Conclusion

NEED TO SPOT ISSUES AND RAISE ISSUES:

“This particular matter was easily resolved, but you may not be so lucky in the future!”

INTERNATIONAL PRODUCT LAUNCH: COMPLIANCE CHECKLIST FOR IN-HOUSE COUNSEL

Kevin Minsky, Associate General Counsel

Where to begin?

What are you selling, to whom, how, and where? – Understand and plan for well in advance of the product

launch: • What are your company’s internal clients planning to sell

or offer internationally? • Who are they planning to sell to? • How are they planning to sell in-country: use of employees or

by local partners?

• Where (what countries) will the product/service be sold in? – Also, where will you have employees, facilities, and

customer.

– Legal must partner across teams and often outside of the company.

What: Protection of Intellectual Property of Product

IP laws are different across countries as well as the EU.

No worldwide patents.

Understand what is critical and consider IP protection strategy before entering international markets.

This can take significant time, so plan ahead and use of outside counsel will be critical.

What: Sector-Specific Regulation

Research and develop compliance strategy for product if regulated in countries (1-2 years in advance of launch): – This can be complex as laws may widely vary across countries.

– Examples of sectors with potentially problematic compliance regimes: • Critical infrastructure: energy, water, gas, telecom

• Important: telecom regulation may include “internet delivered” services, apps, and software.

• Health Care

• National defense/military

• Media

– Also, generally applicable laws – such as privacy/data protection – may pose significant compliance challenges.

– Plan ahead!

Who: do your clients plan to sell to?

The type of customer may impact the regulations, discussed below, that apply to your product or service.

For example, some countries have more extensive protections applicable to sales to consumers than enterprise customers.

How: Hiring Locally - Employment Law Considerations

If you plan to hire employees in-country to sell products and support sales:

– Understand how and who you can hire in each country

– Limitations may apply to foreign nationals

– Corporate and tax considerations may impact analysis

How: Selling Through Use of Partners/Vendors

Care and due diligence must occur where local partners are used to sell, market, or support products

Do your due diligence

Develop a compliance and monitoring program for partners/vendors to ensure they meet your company’s compliance regime

***Big risk of anti-corruption and kickback enforcement from US and UK regulators worldwide.

Where: Local Country Considerations

Will you need a new company, subsidiary, or branch office to sell services in the target countries? – Some form of local entity required

• E.g., branch office or wholly-owned sub?

Considerations: – Tax impact (critical)

– Corporate structure

– Applicable sector-specific regulations (e.g., telecom)

– Expense of creating/managing

Keys: It takes a village

In-house product counsel cannot address all of the above issue alone

Many companies have a stable of stakeholders that will be involved in international launch: tax, HR, corporate lawyers, IP lawyers, product team leadership, outside counsel/other outside advisors, and c-suite

Keys: – Need a working group of key stakeholders with a single POC –

typically a senior leader in the business – to keep the workstreams on track.

– Need to create a new mindset of international compliance – with internal guidance and monitoring – to ensure compliance.

– Don’t rush to every country on the global launch list at once: start with target countries and grow from there.

Questions

Q&A

Checklist

Intellectual Property Checklist Employee Agreement Third Party Non-Disclosure Agreement Background Searching Freedom to Operate Evaluation Internal Procedures to Identify Inventions Internal Procedures to Preclear Publications, Outside Disclosures & Offers for

Sale Patent Applications on File Product Marked with Patent Pending/Patent Number Patent or Trade Secret Assessment Notice to Employees per Defend Trade Secrets Act (DTSA) Copyright Protection Assessment e.g. Computer Programs Marked with Notice Mask Work Protection Assessment Marked with Notice Trademark Clearance Marked with Notice

Checklist

Transactional Considerations If you rely on third-party component suppliers:

Ensure you have protections in place to maintain adequate / timely supply

Obligate supply chain to coordinate on modifications / discontinuation

Secure terms that facilitate competitive advantage

Account for returns, recalls, warranties and liability issues

When preparing your marketing / launch campaign: Identify and clear branding and secure domain name(s)

Substantiate any marketing claims and ensure regulatory compliance

Coordinate your social media strategy

Finalize logistics for sales, distribution and support: Prepare license and/or sales terms and conditions

Establish e-commerce platform and fulfillment vendor for online sales

Review product manuals and packaging for claims and warnings

Prepare model for any extended warranty or support agreement / service level agreements; establish call centers; create system for product returns

Appendix

In 2014, Kevin joined Booz Allen Hamilton Inc. (Booz Allen) as Associate General Counsel to the company’s cyber and technology businesses and advises the company on product development, global regulatory, and commercial matters. As part of his role, Kevin negotiates a variety of cloud, software, hardware, and strategic alliance/partnership agreements with Fortune 500 tech companies. In addition, Kevin Co-Chairs the Professional Services Council’s (PSC) Cyber Legislative Working Group and the Association of Corporate Counsel’s Technology and Intellectual Property Forum in the National Capital Region. Prior to Booz Allen, Kevin served as a Senior Attorney at Microsoft where he advised the Windows Server, Azure, Office 365, Xbox, and Skype businesses on global regulatory (telecom, privacy, national security, and electronic surveillance) and transactional matters. Kevin also co-led several of Microsoft’s major telecom policy initiatives before Congress, Federal regulators, state governments, and the European Union. While at Microsoft, Kevin also served as a Vice President of the VON Coalition, a DC-based trade association, where he helped the tech industry advocate before the Federal Communications Commission, Federal Trade Commission, and Congress.

Appendix

As a former patent examiner for the U.S. Patent and Trademark Office, Burt Amernick uses his extensive knowledge and experience to adeptly guide clients through every phase of the patent process, including:

Patent counseling Patent opinions Due diligence Licensing and transactions Prosecution Reissue and reexamination

He has a background in chemical engineering and specializes in providing business managers, engineers and scientists with an understanding of patents and trademarks. He is the author of Patent Law for the Non-Lawyer: A Guide for the Engineer, Technologist and Manager.

Appendix

Spencer Wood began his career litigating disputes involving trade secrets, patents, and commercial contracts. Now, he applies that experience as he brings value to clients seeking to exploit and protect intellectual property rights. Spencer focuses on intellectual property asset management, information technology, digital media, and privacy rights. He regularly counsels clients engaged in structured acquisitions of technology assets, as well as the licensing and transfer of trademarks, patents, and copyrights. Spencer also provides advice on matters in advertising, branded entertainment and mobile marketing, and assists companies seeking to monetize their intellectual property assets. He represents companies in connection with mergers and acquisitions, joint ventures and strategic alliances, and regularly negotiates patent licenses, transition services agreements, outsourcing agreements, media distribution and production agreements, and software development and license agreements.

Appendix

Colin M. Raufer is an Intellectual Property Attorney with The Boeing Company’s Defense, Space & Security, Network & Space Systems Group (BDS-N&SS). Based in Arlington, Virginia, he currently provides support on a wide range of intellectual property issues across numerous Boeing programs, specializing in the IP issues associated with Government Contracts. Prior to joining Boeing in 2005, Colin worked for 6 years at Raytheon Company where he supported their Intelligence and Information Systems Division in Reston, Virginia and their Space and Airborne Systems Division in El Segundo, California. Prior to that, Colin worked as a Patent Attorney for the Motorola Company where he drafted patents related to digital cellular telephone technology. Colin holds an Engineering degree from Rutgers University, a Law degree from the University of Colorado, and an MBA from UCLA. He is a member of the Patent Bar, the Virginia Bar, and the New Mexico Bar.

Appendix

35 U.S.C. § 112 states the following: “The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as enable any person skilled in the art to which it pertains, or with which it is most nearly connected to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.”

Appendix

Patentable Subject Matter The case of Bilski v. U.S., 561 US 593 (2010)

addressed the issue of “abstract ideas”. The invention in Bilski was concerned with a method directed to protecting or “hedging” against the risk of changes in pricing, which the court found to be a known fundamental economic practice. Some of the claims related to hedging in commodities and energy markets. These limitations did not add enough to the “abstract idea” to render the claims patentable. The court stated that a test is whether the process requires the use of a specific machine or involves a transformation.

Appendix

Patentable Subject Matter In Alice Corporation Pty. Ltd. V. ClS Bank International et al., 134

S. Ct. 2347 (2014), invention was directed to a computerized trading platform for exchanging obligations in which a trusted third party settles obligations between a first and second party so as to eliminate settlement risks. The Court invoked a two-step analysis. First the court assess whether the invention is directed to one of the judicial exception to patent-eligibility. Second, if the invention does fall within an exception, courts consider whether the invention involves an “inventive concept”, which is an element or combination of elements “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the ineligible concept itself”.

Appendix

In Mayo Collaborative Services v. Prometheus Laboratories, Inc., 132 S. Ct. 1289, (2012), the invention was directed to a method of optimizing the therapeutic efficacy for the treatment of an immune-mediated gastrointestinal disorder. The method comprised the steps of (a) administering a drug providing 6-thioguanine; (b) determining the level of the metabolites of the drug, and (c) comparing the metabolite levels to certain values disclosed, wherein the comparison indicates a need to increase or decrease the drug dosage.

Appendix

The Court held that the additional steps purporting to apply the recited law of nature (correlation of metabolite level and drug dosage) failed to transform unpatentable subject matter into patent elgible subject matter. The additional steps involve well-understood, routine conventional activity previously engaged in by researchers in the field. The Court concluded that the method claims merely recited a law of nature and therefore were unpatentable.

The case of Association for Molecular Pathology et al. v. Myriad Genetics., et al. deals with the question as to whether isolated DNA is unpatentable as being directed to the “natural phenomenon” or “product of nature” exception to patentable subject matter. The Supreme Court held that genes and the information that they encode are not patent eligible under 35 USC § 101 simply because they have been isolated from surrounding genetic material.

Confidential Nondisclosure Agreement ABC Corporation (hereinafter referred to as ABC), a Maryland corporation, and XYZ Corporation (hereinafter referred to as INVESTOR), a corporation of have discussed the possibility of IN-VESTOR investing in the manufacture and commercialization of the in-ventions pertaining to ABC possesses information pertaining to these which ABC considers proprietary and has maintained in confidence. ABC will provide to INVESTOR certain of its proprietary information concerning. All such information provided to IN- VESTOR hereunder in writing and identified as confidential and all such information made orally to INVESTOR which is identified at the time of disclosure as being confidential and which is confirmed in a written resume within twenty (20) days following such disclosure is hereinafter referred to as INFORMATION and subject to the following conditions. 1. For a period of five (5) years from the date of disclosure of such INFORMATION, INVESTOR (a) will not use

INFORMATION except for the purposes of preparing a proposal to ABC for investing in, and (b) will not disclose, without ABC's prior written consent, such INFORMATION to anyone other than INVESTOR's employees who need such INFORMATION for the aforesaid purposes, and (c) INVESTOR necessarily disclosing any such INFORMATION to its employees, will, in so doing, notify them that such INFORMATION is confidential and not to be disclosed to others, and (d) INVESTOR will take such precautions and discre-tion to avoid dissemination of ABC's INFORMATION, as INVESTOR does with respect to similar INFORMATION of its own which it does not desire to have disclosed, published, or disseminated.

2. INVESTOR's obligations, as stated in (1) above, do not apply to any INFORMATION which (a) is or becomes available to the public from a source other than INVESTOR and through no fault of INVESTOR, (b) is known to INVESTOR prior to receipt thereof from ABC as can be shown by INVESTOR's written records, or (c) is disclosed to INVESTOR by a third party who is not in default of an obligation to ABC in making such a disclosure.

3. This Agreement shall inure to the benefits of, and be binding upon the successors and assigns of, the parties.

Employee Confidentiality Agreement In consideration of employment with the XYZ Company (hereinafter referred to as THE COMPANY) in a capacity in which I may receive or contribute to the production of CONFIDENTIAL INFORMATION, in consideration of the salary or wages paid to me in connection with such employment, and for other good and valuable considerations, I agree as follows: 1. Any and all inventions, ideas, discoveries, or original works of authorship, whether patentable or not, or whether copyrightable or

not, conceived and/or made and/or first reduced to practice jointly or solely by me during the period of employment or after the term of my employment or relationship with THE COMPANY which are made through the use of any of the CONFIDENTIAL INFORMATION or any of THE COMPANY's equipment, facilities, supplies, trade secrets, or time, or which relate to THE COM-PANY's business or THE COMPANY's actual or demonstrably anticipated research and development, or which result from any work performed by the undersigned for THE COMPANY shall become the property of THE COMPANY without additional compensation or consideration. Without limiting the foregoing, the undersigned agrees that any such original works of authorship shall be deemed to be "works made for hire" and THE COMPANY shall be deemed the author thereof under the United States Copyright Act, provided that in the event and to the extent such works are determined not to constitute "works made for hire" as a matter of law, the undersigned hereby irrevocably assigns and transfers to THE COMPANY all right, title, and interest in such works including, but not limited to, copyrights.

2. I shall promptly disclose to THE COMPANY all such inventions, ideas.,oriPjnal.works,4.-Inthartilhp,-airtilliscovettes anti time to time, as requested by THE COMPANY or its authorized representative and at THE COMPANY's expense, make application through THE COMPANY's attorneys for Letters Patent for such discoveries and inventions in such country or countries as THE COMPANY may designate and shall assign any and all of the undersigned's rights therein to THE COMPANY. I shall assist THE COMPANY in the preparation and prosecution of any such patent application filed by THE COMPANY.

3. In as much as I may, during the course of my employment, acquire from THE COMPANY certain secret or confidential informationnot previously known to me and not known or used by the trade generally, I shall, during employment with THE COMPANY and thereafter, not disclose to others or use contrary to the interest of THE COMPANY any s-_:ch and shall not. during or after n e::-.Dlcyrner.: with THE COMPANY, remove from THE COMPANVs premises any written, graphic, or other tangible material relating to such information.

4. Upon termination of my employment and at such other times as THE COMPANY may request, I shall deliver to THE COMPANY all notebooks, reports, letters, manuals, drawings, blueprints, notes, data, sketches, materials, references, memoranda, documentation, and all other materials, including all copies of such material belonging to THE COMPANY which are in my possession or control.

5. I represent that the inventions, discoveries, ideas, and original works of authorship listed on the attachment to this agreement by title and brief description thereof, were conceived by me prior to the date of my employment with THE COMPANY. Such inventions, discoveries, ideas, or original works of authorship are specifically excluded from this agreement.

6. In the event that any provision hereof or any obligation or grant of rights by me hereunder is found invalid or unenforceable pursuant to judicial decree or decision, any such provision, obligation, or grant of rights shall be deemed to construe to extend only to the maximum permitted by law and the remainder of this agreement shall remain valid and enforceable according to its terms.

7. This agreement shall be binding on my heirs, legal representatives, and assigns and shall inure to the benefit of any successors and assigns of THE COMPANY.

8. This Agreement supersedes all previous agreements, written or oral, relating to the above subject matter and shall not be changed orally.

9. This Agreement shall be construed according to the laws of the State of Maryland.

Employee's Signature (including full first name) Witness: Date: Accepted and agreed to: THE COMPANY By: Date:

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