Patent Agents and Attorney Client Privilege

Patent agents (I'm one) sometimes wonder if the work they do for clients can have the benefit of attorney-client privilege to reduce the threat of discovery should there be subsequent litigation. Is there, in effect, a "patent agent-client privilege"?

Maybe, but maybe not, depending on the views of the court in questions. A good explanation is given by Michael Edward McCabe, Jr. in his article, "ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT IMMUNITY IN PATENT LITIGATION." Here is an excerpt, with references and footnotes omitted (see the original for some important quoted material):

[C] Communications With Patent Agents

Apart from the issue of whether the substance of a particular communication qualifies as privileged is whether the persons involved in the communication can create a privilege. The attorney-client privilege applies to communications between the attorney and client. The issue often arises in patent cases as to whether the privilege extends to communications with a U.S. patent agent. Is there a “U.S. patent agent-client” privilege? An even more complex privilege issue involves the privileged status of communications with foreign (i.e. non-U.S.) patent agents. The cases are not uniform in their treatment of whether communications with patent agents (either domestic or foreign) are privileged.

[1] U.S. Patent Agents
[a] Courts Not Recognizing Privilege

The greater weight of authority strictly, and literally, interpret the “attorney” prong of the attorney-client communication requirement. Those courts reason that because a U.S. patent agent is not a member of the bar of any court, communications between a patent agent and their client are not privileged. Although a patent agent may not be able to create or receive a privileged communications in his own right by virtue of his status, their communications could still be privileged if the agent is acting under the supervision and control of an attorney. In this respect, the U.S. patent agent is treated like any other non-attorney who advises and assists counsel and acts under their supervision and control.

[b]Courts Recognizing Privilege
In the other camp are those district courts that do recognize a form of attorney-client privilege for patent agents, notwithstanding the fact that the agent is not a member of the bar of any court. The rationale behind extending the attorney-client privilege to patent agents is that, as held by the United States Supreme Court, “[t]he preparation and prosecution of patent applications for others constitutes the practice of law.” . . .

In light of the Supreme Court’s recognition that patent agents are authorized to practice law, some courts have reasoned that the recognition of a “patent agent privilege” is simply a logical extension of the Sperry decision. . . . [The author cites a passage from In re Ampicillin Antitrust Litigation.]

Still, it is important to recognize that not all courts agree that the Sperry decision—which was not a case about whether a patent agent enjoys a form of attorney-client privilege—should be read so broadly as to imply a patent agent-client privilege. Thus, it remains an open issue as to whether a U.S. patent agent privilege exists, with cases going both ways on the question.

To the extent that privilege may exist for a patent agent, McCabe explains that it would be limited strictly to "encompass only those services that such agents are legally licensed to perform: i.e., representation in preparing and prosecuting patent applications before the PTO."

Whether you think privilege applies or not, it's wise to always be careful in written communications, email included, recognizing that every word you write may be scrutinized and used against you by a hostile opponent. Save the sensitive, heavy and unpleasant stuff for verbal conversations!

Flip Video Acquired by Cisco: Disruptive Innovation at Work

When I first saw and then purchased a Flip video camera in 2007, I knew I was experiencing a classic example of disruptive innovation. Instead of adding more bells and whistles to impress high-end users of video cameras, Flip took a minimalist approach by understanding what non-users of expensive video cameras really wanted to do, and then doing just that. Simple, easy video making for YouTube and for display on computers was the real goal. Make it easy, convenient, and inexpensive, and millions will benefit. Forget cables and complex interfaces. Just turn the camera on, record some video, and then snap it into the USB drive of your computer. Easily convert the video into a YouTube entry and you're good to go.

Pure Digital's experiment with disruptive innovation has paid off handsomely. This week it was announced that Cisco is purchasing the company, apparently to support its mission of expanding videoconferencing services. Interesting move - and great news for Pure Digital (well, for the owners of Pure Digital - not necessarily the employees). Can Cisco maintain the benefits of the Flip camera and maintain or strengthen the disruptive advantages? Remains to be seen.

Innovation to Help People in Emerging Nations

I love stories of innovation that are driven by a desire to lift others. An example we discuss in the forthcoming book, Conquering Innovation Fatigue, is Empower Playgrounds, the innovative non-profit organization of retired chemical engineer Ben Markham. They develop new ways to advance education in Africa by turning playground equipment into power generators that can charge LED lamps to allow students to study after dark. Marvelous!

Another recent example is Sustainable Health Enterprises (SHE), an organization working to develop market-based solutions to provide low-cost feminine care products to women in emerging nations. Wonderful concepts!

The work of Anil Gupta in India also inspired me. He's reaching out to find innovators in the villages of India who may have marketable products. It's bringing hope to many. See Sristi.org for details.

What are your favorite examples of innovation efforts to life those in emerging nations?

Tate & Lyle Lessons: Is Your Patent Enforceable? Are Your Methods Detectable?

Sarah Hill's "Patent Debate Rumbles on after Tate & Lyle Sucralose Ruling" reminds us of the many pitfalls that inventors and patent holders face. While sucralose the molecule has been around for a while, the methods for efficiently making commercial grade sucralose are much newer and are the subject of patents by British giant Tate and Lyle. The problem with process patents - such as Tate and Lyle's patents on the method of making sucralose - is that they are often difficult to enforce. Competitors may be tempted to infringe in secret and sell in public, claiming that a different process was used. That's what happened with Tate & Lyle. Chinese companies produced a similar product but claimed they were using a novel process they invented. Lacking any published IP to show that they had conducted their own R&D and invented their own techniques, the Chinese company, according to Tate & Lyle, more likely was simply copying T&L's patent. But the Chinese company prevailed by claiming it was a new process protected as a trade secret.

Chemists knows that a different process can mean different trace amounts of byproducts, but the chemical fingerprint of products made within the scope of the claimed invention is often overlooked when patents are filed, and perhaps even when litigated. It can be quite expensive to do chemical forensics to link a process to a particular method when there may be many possibilities to consider. I suspect that the most cost-effective time to consider chemical fingerprints as indicators of infringement is when the experimental work is being conducted that leads to the patent.

The inventors and the R&D team should be concerned with enforceability and detection, and the issues should be covered as part of their training in your company or university, so they can consider ways to build in additional enforceability in the patent. For example, if the method to be claimed will generally result in trace amounts of zinc in the product, then mention that and include some product-by-process claims (e.g., a sweetener solution made according to Claim 1, having at least 5 ppm zinc). Such information and claims could strengthen the position of the patent holder. Whether that helps or not depends on the details of the process and the uniqueness of the chemical composition, but it's something the inventors should be thinking about as they do experimental work and especially as they begin preparing for a ptent. Is the patent enforceable? Is there anything unique about the process that will show up in the properties of the final product? Any tell-tale signs of potential infringement that we can build into the patent? Put it in the patent itself. With opportunities for detection of infringement built into the patent, it can help deter deliberate infringers and increase your odds of success.

Maybe just signaling that you've considered chemical forensics in creating your process will help deter copyists.

The Cosmic Org Chart Is Broken: Dark Energy, Dark Matter, and the Analogy to Intangibles in Business Ecosystems

In the past decade or so, scientists have been astounded to discover that the universe that we can see represents only a tiny fraction of the matter and energy that governs the cosmos. Based on the motion of stars and galaxies, strange "dark matter" must be present, increasing the gravitational tug on celestial bodies more than can be accounted for by visible matter. Further, based on the surprising discovered that the universe is expanding, not contracting under its own gravitational pull as expected, scientists have proposed that a strange, repulsive "dark energy" fills the cosmos countering gravity. The combined effect of these unseen entities, dark energy and dark matter, are so great, that they account for 96% of the matter and energy of the universe. In other words, the visible universe that we used to think is all there is actually is only a tiny fraction of what is there. What we see in the "cosmic org chart" accounts for only 4% of what really influences the cosmos.

It's that way in the business world. too. Companies can create tidy org charts and draft neat process maps to describe how they work, but the unseen reality outside the visible systems may be what really dominates operations. Increasingly, experts in knowledge management are learning that easily overlooked and often invisible intangibles can dominate corporate value and performance. Numerous intangible transactions may be essential to the success of a company, including casual information sharing between trusted friends, helpful exchanges of tips and best practices between employees or between external partners and internal employees, or loyalty that is gained when people are included in decision making. The invisible linkages and hard-to-observe exchanges in a company's internal an external ecosystems may be the real engines of value creation, regardless of what is on a process map or workstream. By not understanding the value of such intangibles, corporations can easily break key linkages and crush subtle engines of value creation.

Many companies focus on their "value chains" - a term popularized by Michael Porter in his seminal 1985 work, Competitive Advantage. The value chain describes the linear chain of events as materials and products move from sourcing through manufacturing and out to the market. It is a highly useful paradigm for manufacturing and was highly applicable to much of the economy in the era when Porter was doing his research. But since that time, the explosion of the knowledge economy has changed the way we work and create value. One of my favorite authors, Verna Allee, a revolutionary expert in knowledge management, has detailed the move from the value chain to modern ecosystems and Value Networks in her book, The Future of Knowledge: Increasing Prosperity through Value Networks (Burlington, MA: Elsevier Science, 2003). Verna Allee and Associates have introduced a clever, methodical tool called Value Network Analysis for analyzing and visualizing the transactions of intangibles and tangibles that affect a business.

After my training in Value Network Analysis by Verna and her associate, Oliver Schwabe, an exciting new perspective on business and human behavior opened up. I have been highly impressed with the power of Value Network Analysis and the insights that it can rapidly deliver for a company. The Value Network Analysis work that Innovationedge has done as part of larger projects for some of our clients has been a very exciting part of my work since joining Cheryl Perkins' exciting company. We value the tool enough that we had Verna Allee speak at the 2008 CoDev conference to introduce other business leaders to the basic concepts behind Value Network Analysis. I'm very pleased to see a community emerging of people using Value Network Analysis and developing exciting tools for it.

Here are some resources that you may find helpful in further exploring this area:

• Value-Networks.com


• Hosted Value Network Tools


• A Value Network Approach (PDF) - 2002 Whitepaper by Verna Allee


• ValueNet Works™ Analysis for the Discovery of Viagra (PDF)

Part of the initial output in Value Network Analysis are maps, called "holomaps," showing human entities as nodes and transactions of tangible or intangible items between them. There is much that can be learned from such holomaps - a topic for later discussion. For now I'll show you two sample holomaps I created to illustrate simple ecosystems. One shows several external nodes around a manufacturer and the other shows some structure within part of a corporation. For simplicity, the maps lack all the labels explaining the transactions. (Click to enlarge.)





One interesting approach is to use the "holomaps" you get in Value Network Analysis as tools for "what if" scenarios to explore what new partners might do for your business model, or what new business models might do for your ecosystem. Using holomaps to explore innovation ecosystems is a particularly fruitful approach for those doing open innovation and wondering who should be in their external ecosystem.

We have further information on this topic that we'd be happy to share with you. It's certainly something you should look at to understand how business really works.