Getting It Down on Paper
Developing new technology is only half the battle. The technology or any other intellectual asset must be protected if its potential value is to be fully realized.

Intellectual capital is a creation of the mind. Before it can be protected or even used, it must be disclosed by its creator(s). More specifically, it must be disclosed to those who will be responsible for its use and those who will undertake to secure and protect it.

Proper disclosure is particularly important with respect to inventions that may be susceptible of protection by patenting or as trade secrets. Obviously, no steps can be taken to protect an invention until its existence and nature are known. Unless suitably encouraged and directed, many inventors will not disclose their invention in such manner as to bring them to the prompt attention of those charged with securing and protecting them. Some inventors are too busy with other tasks, or simply too lazy, to prepare a proper disclosure of their work. Some inventions are excessively humble, refusing to recognize the significance (and value) of their work. Some do not understand intellectual property and the rules pertaining to its protection. Such lack of understanding can be overcome by periodic, brief talks or presentations.

Organizations are well advised to prepare standardized invention disclosure forms and to include invention disclosure and a performance review into research and development (R&D) staff job descriptions, as well as those of middle management (Note: business methods and processes can now also be patented).

The other hindrances to disclosure are best overcome by resorting to that most powerful of human motivators -- self-interest (there's no interest like self-interest).

Many organizations, especially larger organizations with long and depersonalizing channels of communications, institute what are known as inventor award or inventor incentive programs. Although these programs vary in detail, they generally provide a cash reward to the inventor or co-inventors when a patent application is filed. A second, generally larger, reward is paid to the inventor(s) upon the issue of a patent. The purpose of this second reward is to induce the inventor(s) to cooperate in the prosecution of the patent application. In many instances, these rewards are inadequate and fail to sufficiently motivate personnel.

It should be noted that these rewards are not in the nature of compensation for the invention. Rather, they are a token -- a form of acknowledgement or recognition of the contribution the inventor has made to the firm. Attempts to compensate inventors with a portion of the profits earned from their inventions have proven counterproductive. Although not common in this country, such programs are mandated by law in several European countries. To the extent that they were intended to encourage innovation, such programs have failed. The major results seem to be suspicion, on the part of inventors, that they are being cheated (management, after all, does the bookkeeping), anger on the part of those not named as co-inventors, corporate politicking to have one's invention commercialized, jealousy, and, in general, a balkanization of the workforce. Moreover, the ability to license or assign IP rights is compromised by the demands of the inventors, who, in effect, become parties to any negotiations. It may prove more productive to reward the inventors with a one-time monetary award of appreciable value.

In virtually all organizations, the creation of inventions is subject to the Parado 80/20 Rule: 80 percent of the inventions are created by 20 percent of the technical staff (note that the term engineers was not used -- many of the most prolific inventors are mere designers). Identify these people and keep them happy.

The Invention Disclosure Form
Invention disclosure forms are adapted to elicit from the inventor(s) the information that is required for the preparation of a patent application. Such forms typically request a brief description of the problem being solved by the invention and a description of the prior solutions or attempted solutions, and the reasons why they were not wholly satisfactory. Identification of known prior art is requested. A description of the invention is also requested, preferably to include drawings or sketches. Next, the inventor(s) is generally requested to highlight those aspects of the invention believed to be novel and to consider what modifications or alterations could be made to the invention. These questions are intended to elicit information of use in the preparation of the patent claims. Finally, questions are often presented as to possible applications of the invention, date of first sale, offer for sale, or disclosure of the invention in a written publication, its estimated value or significance, and where it is likely to be of use. These last questions are intended to elicit information of use in establishing priorities as to the filing of patent applications and in identifying those foreign countries where patent protection should be sought.

It is also worthwhile to ask the inventor(s) to identify possible uses of the invention in the industries other than those in which the organization competes. This may facilitate the future licensing of the invention to others.

It will be recalled that patent practitioners most commonly bill by the hour for time spent in drafting patent applications. It should be appreciated therefore that a well-prepared invention disclosure will not only improve the quality of a patent application based thereon but will also reduce the cost of such an application by reducing the amount of time the patent practitioners must devote to its preparation. In an ideal situation, the patent practitioner would merely be required to draft the patent claims -- in fact, such a method of preparing patent applications is widely utilized in Japan. The quality of patent disclosure becomes even more important in situations in which a patent practitioner has little or no contact with the inventor, and thus has only the invention disclosure to work with.

Make Sure You Own It
Probably few things are as frustrating, or embarrassing, or potentially career-threatening as creating, or having created for you, a valuable piece of intellectual property, only to find that you lost it or, perhaps worse, don't own it -- it is owned by someone else.

It is well settled in the law that inventions made in the course of their employment, by individuals whose duties encompass such inventive efforts, belong to the employer. Notwithstanding, it has been common practice (which one should follow) to have those employers involved in tasks likely to result in the creation of inventions, that is, engineers, product designers, and more recently, software designers, execute written agreements, known as invention assignment agreements, acknowledging that any invention that they may make in the course of their employment belongs to their employer and obligating them to disclose such inventions and to cooperate in securing patent or other protection therefore.

Today, however, the advent of business method patents has opened the Patent Office doors to a host of professionals, such as accountants, salespeople, and marketing specialists, who were not formerly considered potential inventors and therefore were not traditionally required to execute invention assignment agreements. These days, all employees should be required to execute invention assignment agreements. (Caution: this matter should be reviewed with a labor lawyer. Ask about the need for additional consideration.)

Not all inventions are patentable. Some inventions that are patentable should be left unpatented. Many such inventions, however, can still be protected as trade secrets if they are maintained in confidence. Thus, after disclosure (our old friend, the invention disclosure form), they must be maintained in confidence. For this reason (and others) it is important that all personnel with access to confidential information (practically everyone) give a vow of silence. Such vows, when made in a business setting, are generally known as confidentiality agreements. 

Plan Ahead for Protection
Many business corporations (and individual investors) consider patents only when an invention is completed and ready to bring to market. Indeed, many prospective patentees wait until literally the last day before filing a patent application (occasionally, they wait until the day after the last day, creating ulcers for patent attorneys' malpractice insurance carriers). This approach, known as retrospective patenting, is primarily defensive in nature -- it is intended to defend the market for the new product. Moreover, such corporations typically limit, or narrowly focus, their inventive efforts to what is considered core business areas and, as a result, develop correspondingly limited or narrow patent portfolios. They view patents as valuable only with regard to technology that falls within the scope of their current business.

Increasingly, however, inventions are being patented before the invention has been demonstrated physically. Instead of awaiting the building, testing, and refining of prototypes before seeking patent protection, many inventors are now filing patent applications in respect of the results of thought experiments. This approach is known as prospective patenting.  There seems to be a strong probability that retrospective patents will be defensive or core patents, while prospective patents are rather likely to be offensive or noncore patents.

In addition to the traditional function of protecting the market for a newly developed product, prospective patents are also being used as bargaining chips for cross-licensing negotiations with other organizations, allowing a patentee to trade away patent protection for an invention it chooses not to commercialize, in exchange for the right to proceed with respect to a product otherwise blocked by a competitor's patent(s). Prospective patents, comprises bases for potential counterclients, may also serve to discourage competitors from crossing litigation swords with the patentees. They may add revenue through licensing or sale and, in today's economy, they may facilitate (or even enable) the patentee to raise capital.

Tips and Techniques

• Laboratory notebooks are necessary for every R&D project. Each step of the inventive process should be carefully documented in a lab notebook on a daily basis and every page must be dated and witnessed by two people, other than the inventor(s).
• To establish the conception date of an invention one may utilize such Internet-based "digital notary" services as http://www.e-timestamp.com/ and http://www.surety.com/.
• The invention disclosure form may be submitted to the U.S. Patent Office Under the Invention Disclosure Program, where it will be kept for two years, and may be referenced in a subsequent patent application filed within this time.

Summary
An invention can be protected only after it has been disclosed to those responsible for its protection. The invention disclosure form is a vehicle for securing such disclosure. Various inventor award or inventor incentive programs may be organized to encourage disclosure of inventions and cooperation in securing protection for those inventions.

An organization should ensure that it will own the inventions and other intellectual assets created by its employees. This may be accomplished through use of invention assignment agreements.

ALEXANDER I. POLTORAK, Ph.D., is a founder and CEO of General Patent Corporation. PAUL J. LERNER is senior vice president and general counsel of General Patent Corporation. They are the authors of Essentials of Intellectual Property (Wiley, 2002).