Should My Company Have a Privacy Shield Certification?

This post was originally published on this site

We are now two months into Europe’s new General Data Protection Regulation (“GDPR”), which extends the jurisdictional scope of European data protection law. As a result, GDPR applies extraterritorially to any organization that can be reached by an EU citizen. GDPR imposes harsher data protection requirements that give way to substantial penalties for non-compliance, which include administrative fines up to 4% of annual worldwide revenue. These steep fines have forced businesses across the U.S. (and the world) to reconsider their EU business strategy. Additionally, many companies are compelled by their clients or partners to comply with GDPR. Fortunately, and for the time being, there is an alternative regulatory mechanism that allows U.S. businesses to conform to EU data transfer laws.

The EU-U.S. and Swiss-U.S. Privacy Shield

In July 2016, the U.S. Department of Commerce and the European Commission approved the EU-U.S. Privacy Shield Framework while the Swiss Administration approved the Swiss-U.S. Privacy Shield in July 2017 (collectively, the “Privacy Shield”). The Privacy Shield, which serves as an adequacy decision under GDPR, is a data protection framework that allows companies on both sides of the Atlantic to transfer personal data from the EU to the U.S. The Privacy Shield replaced the U.S.-EU Safe Harbor Framework (the “Safe Harbor”) after the Safe Harbor was struck down by the Court of Justice of the European Union in October 2015. The Privacy Shield’s purpose is to bridge the different privacy protections afforded to U.S. and EU citizens. The Privacy Shield Principles include the data subject’s right to be informed; limitations on the use of the data subject’s data for different purposes; obligations to secure the data subject’s data; obligations to protect the data subject’s data if transferred to another company; the data subject’s right to access and correct their data; the data subject’s right to file a complaint and obtain a remedy; and redress in case of access by U.S. public authorities. Companies may undertake Self-Certification (often with the assistance of counsel) and the U.S. Department of Commerce is in charge of issuing Self-Certification determinations. U.S. Participants in the Privacy Shield are subject to the Federal Trade Commission’s broad jurisdiction.

Should I Get Self-Certified?

In light of the stricter regulation of European data transfers to the U.S., not complying with the necessary data protection laws may impact your ability to adequately cater to European customers, or to partner with or provide services to other US entities that are subject to GDPR. Accordingly, for many businesses, there are significant motivators to comply.

A company may be eligible to certify to the Privacy Shield if it transfers EU or Swiss personal data to the U.S., or receives or accesses EU or Swiss personal data. At the core, seeking Privacy Shield Self-Certification is a business decision requiring an understanding of how and at what frequency your business interacts with EU data.

While thousands of companies are enjoying the benefits of the Privacy Shield, it is worth noting that on July 5, 2018, the members of European Parliament called for a suspension of the Privacy Shield unless the U.S. fully complies with GDPR by September. All eyes will be on the European Commission as the September Privacy Shield annual review approaches.

Compliance is a moving target. The regulatory framework for privacy worldwide is evolving. Numerous government and consumer agencies, as well as public advocacy groups, have called for new regulation coupled with changes in industry practices. Further, new laws and regulations will be adopted in and around the United States, as most recently seen in California, and existing laws and regulations may be interpreted in new ways. Navigating the data privacy regulatory landscape is complex and requires continual monitoring.

Contact the Authors at [email protected] and [email protected] to discuss these and other issued related to data privacy, intellectual property, and technology law.

 

Should a New Company File Multiple Patents or One Big Patent?

This post was originally published on this site

A client recently asked: I have a few inventions and I’m wondering if I can save money by combining them into a single provisional patent application?

Your Patent Portfolio should always be developed with your business goals in mind. I passed the question back to the client and asked, what do you intend to do with these three innovations? If licensing is a potential goal, then combining all into one filing should be avoided.

In general, if you can afford to – file multiple applications. There are far more advantages that, depending on your financial situation, may outweigh the cost savings of filing a single provisional. The list of the advantages are referenced in Part 2/3 of my three part article about multiple patent applications.

If you are a cash-strapped start-up, having a master single filing serves a considerable purpose. A single ‘master’ provisional may also be split up into multiple non-provisional filings down the road (and you would be required to do so by the USPTO). There is, however, a distinct risk in combining filings: the subject matter of all three inventions enters the public domain at the same time. First – consider that provisional applications do not become publicly available until you convert the filing to a non-provisional filing. If you never convert to a non-provisional and let the provisional expire (12 months after filing), it will always be kept in confidence by the USPTO. This leads us to the risk: If you combined three inventions in a single provisional filing, and only choose to pursue one or two of those three in a non-provisional conversion, the third invention will still enter the public domain without any claim to protection (since it was mixed in with the other inventions in the single provisional filing). Thus, you’ll be out of luck if you decide to keep the subject matter of any one of the three inventions a ‘trade secret’ at any point in time after the ‘master’ provisional filing.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Why Is a Provisional Patent Important for Your Invention?

A provisional patent application is a 12-month place-holder for a utility patent. The USPTO allows you to label your invention as Patent-Pending during this 12 month period. If a utility patent is not filed within the 12-month period, your spot in line is lost! Once the utility patent is filed, your utility patent filing claims the patent priority date as the provisional filing date. The patent priority date is the date from which you have a legal claim as the first inventor to have invented the subject matter of your patent application. As such, the patent priority date is an important factor for the examination process through which the utility patent undergoes.

The provisional patent application never gets examined for patentability, it only serves as a place holder for examination – however, the patent examiner will carefully scrutinize the content of the provisional patent application during the non-provisional patent application process. So it’s important to have your provisional patent application compliant with all applicable laws in order for it to preserve the patent-priority claim – otherwise, the Examiner can withdraw the patent priority claim and inventors are put in a bad spot, thinking they were patent-pending during the provisional patent process when in fact their patent pending status gets withdrawn upon the examination of the non-provisional utility patent application!

So, a provisional saves your spot in line for a utility patent. It is especially important in our first-to-file patent system. It is especially important as you market and as you share your invention/idea with engineers, developers, or those with deeper pockets than you! It always preserves your claim to the invention as those engineers/developers further improve on the invention.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, Georgia Institute of Technology, and Coca-Cola. 

yuri

 

Source: Smartup Legal

How Do I Add Details to My Invention After I Filed for a Patent?

I’ve added additional details to my invention/idea but I’ve already filed for patent. Can I modify my patent application after I’ve already filed it?

A very common question indeed. The break down is quite easy to understand when following this logic:

 

ADDING NEW SUBJECT MATTER

  1. Any Patent-Pending Application, whether it is Provisional or Non-Provisional, cannot be modified to include additional details (referred to as “New Subject Matter”) after its filing date.
  2. To add New Subject Matter to any pending application (referred to as the “priority application”), an additional patent application for the New Subject Matter must be filed before the priority application is granted or expires.  
  3. The additional patent application is known as a CIP Application.

CIP EXAMINATION

  1. The CIP Application, in its documentation, establishes a priority claim to the previously pending patent application to which the new subject matter relates.
  2. The CIP Application receives a separate patent examination from the priority application.
  3. During Examination, New Subject Matter receives a patent priority date even with the date of CIP filing while the Subject Matter Included in the Priority Application retains its earlier patent priority date.

CIP TIMING

  1. Therefore, the timing of the CIP filing is important.  It should occur as soon as the new subject matter is conceived and the value of the subject matter is confirmed for patent filing.
  2. The CIP Application can be filed as either provisional (informally) or non-provisional application. However, filing a CIP as a provisional is only recommended if its priority application is also a provisional AND the applicant is still not prepared to convert the provisional patent application to a non-provisional patent application.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal

What Does International Patent Protection Mean?

A question I get asked rather often – what does International Patent Protection mean? Then, after I recommend the filing of an international patent application (known as a PCT application, but will get to that later), my clients frequently ask: “wait, I have to file for an international patent application and it’s not even a patent recognized around the world?” Yep, that’s right.

There is no single “Patent” that is recognized around the world.  Rather, 148 countries (listed here: http://www.wipo.int/export/sites/www/pct/en/list_states.pdf) have entered into a Patent Cooperation Treaty (known as the PCT).  Under the PCT, each country must recognize a single international patent application (known the PCT application) and its patent priority date.

A PCT application may be filed up to 12 months after a national application has been filed in any one of the 148 countries that are members to the PCT.  This means within 12 months of filing either a US provisional patent application or non-provisional utility patent application, you may decide to step up and take your patent protection to the international level.

Prior to the PCT, if you were interested in international protection, you would have to file a patent application in each country all within 12 months of your national patent filing date under the Paris Convention for the Protection of Industrial Property (established back in 1883)!  This would be rather difficult and expensive experience.

With the PCT, a patent applicant need only file a single PCT application within that same 12 month period.  This single application is examined by a recognized international authority which issues a ‘patentability opinion’.  This patentability opinion, however, does not serve as a granted patent or a patent right. The Applicant has the opportunity to persuade the international authority of the patentability opinion if the opinion is not favorable.

In order to convert the patentability opinion to an actual patent, the PCT applicant may take the opinion and present it to any of the patent offices of the 148 countries that recognize the PCT applicant.  This must be done within 30 months of the applicant’s patent priority date (the date of the earliest national filing, if there was one).

If the patentability opinion issued by the international authority is favorable, the national patent office frequently adopts the opinion (subject to some local, national laws and exceptions) and grants a patent within its jurisdiction.  Even if the patentability opinion issued by the international authority wasn’t favorable, the applicant may still submit it to the national patent office and attempt to persuade the national patent examiner of the application’s patentability on the national level.

If you’ve understood my explanation correctly – you’ll see that there is no such thing as an international patent.  Rather, there is an internationally recognized patent examination process used to streamline the prosecution of patent rights when the patent applicant is seeking patent protection in many countries.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Source: Smartup Legal

Why Is a Provisional Patent Important for Your Invention?

This post was originally published on this site

A provisional patent application is a 12-month place-holder for a utility patent. The USPTO allows you to label your invention as Patent-Pending during this 12 month period. If a utility patent is not filed within the 12-month period, your spot in line is lost! Once the utility patent is filed, your utility patent filing claims the patent priority date as the provisional filing date. The patent priority date is the date from which you have a legal claim as the first inventor to have invented the subject matter of your patent application. As such, the patent priority date is an important factor for the examination process through which the utility patent undergoes.

The provisional patent application never gets examined for patentability, it only serves as a place holder for examination – however, the patent examiner will carefully scrutinize the content of the provisional patent application during the non-provisional patent application process. So it’s important to have your provisional patent application compliant with all applicable laws in order for it to preserve the patent-priority claim – otherwise, the Examiner can withdraw the patent priority claim and inventors are put in a bad spot, thinking they were patent-pending during the provisional patent process when in fact their patent pending status gets withdrawn upon the examination of the non-provisional utility patent application!

So, a provisional saves your spot in line for a utility patent. It is especially important in our first-to-file patent system. It is especially important as you market and as you share your invention/idea with engineers, developers, or those with deeper pockets than you! It always preserves your claim to the invention as those engineers/developers further improve on the invention.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, Georgia Institute of Technology, and Coca-Cola. 

yuri

 

How Do I Add Details to My Invention After I Filed for a Patent?

This post was originally published on this site

I’ve added additional details to my invention/idea but I’ve already filed for patent. Can I modify my patent application after I’ve already filed it?

A very common question indeed. The break down is quite easy to understand when following this logic:

 

ADDING NEW SUBJECT MATTER

  1. Any Patent-Pending Application, whether it is Provisional or Non-Provisional, cannot be modified to include additional details (referred to as “New Subject Matter”) after its filing date.
  2. To add New Subject Matter to any pending application (referred to as the “priority application”), an additional patent application for the New Subject Matter must be filed before the priority application is granted or expires.  
  3. The additional patent application is known as a CIP Application.

CIP EXAMINATION

  1. The CIP Application, in its documentation, establishes a priority claim to the previously pending patent application to which the new subject matter relates.
  2. The CIP Application receives a separate patent examination from the priority application.
  3. During Examination, New Subject Matter receives a patent priority date even with the date of CIP filing while the Subject Matter Included in the Priority Application retains its earlier patent priority date.

CIP TIMING

  1. Therefore, the timing of the CIP filing is important.  It should occur as soon as the new subject matter is conceived and the value of the subject matter is confirmed for patent filing.
  2. The CIP Application can be filed as either provisional (informally) or non-provisional application. However, filing a CIP as a provisional is only recommended if its priority application is also a provisional AND the applicant is still not prepared to convert the provisional patent application to a non-provisional patent application.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

What Does International Patent Protection Mean?

This post was originally published on this site

A question I get asked rather often – what does International Patent Protection mean? Then, after I recommend the filing of an international patent application (known as a PCT application, but will get to that later), my clients frequently ask: “wait, I have to file for an international patent application and it’s not even a patent recognized around the world?” Yep, that’s right.

There is no single “Patent” that is recognized around the world.  Rather, 148 countries (listed here: http://www.wipo.int/export/sites/www/pct/en/list_states.pdf) have entered into a Patent Cooperation Treaty (known as the PCT).  Under the PCT, each country must recognize a single international patent application (known the PCT application) and its patent priority date.

A PCT application may be filed up to 12 months after a national application has been filed in any one of the 148 countries that are members to the PCT.  This means within 12 months of filing either a US provisional patent application or non-provisional utility patent application, you may decide to step up and take your patent protection to the international level.

Prior to the PCT, if you were interested in international protection, you would have to file a patent application in each country all within 12 months of your national patent filing date under the Paris Convention for the Protection of Industrial Property (established back in 1883)!  This would be rather difficult and expensive experience.

With the PCT, a patent applicant need only file a single PCT application within that same 12 month period.  This single application is examined by a recognized international authority which issues a ‘patentability opinion’.  This patentability opinion, however, does not serve as a granted patent or a patent right. The Applicant has the opportunity to persuade the international authority of the patentability opinion if the opinion is not favorable.

In order to convert the patentability opinion to an actual patent, the PCT applicant may take the opinion and present it to any of the patent offices of the 148 countries that recognize the PCT applicant.  This must be done within 30 months of the applicant’s patent priority date (the date of the earliest national filing, if there was one).

If the patentability opinion issued by the international authority is favorable, the national patent office frequently adopts the opinion (subject to some local, national laws and exceptions) and grants a patent within its jurisdiction.  Even if the patentability opinion issued by the international authority wasn’t favorable, the applicant may still submit it to the national patent office and attempt to persuade the national patent examiner of the application’s patentability on the national level.

If you’ve understood my explanation correctly – you’ll see that there is no such thing as an international patent.  Rather, there is an internationally recognized patent examination process used to streamline the prosecution of patent rights when the patent applicant is seeking patent protection in many countries.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Yuri Eliezer heads the intellectual property practice group at Founders Legal. As an entrepreneur who saw the importance of early-stage patent protection, Yuri founded SmartUp®. Clients he has served include Microsoft, Cisco, Cox, AT&T, General Electric, the Georgia Institute of Technology, and Coca-Cola.

yuri

 

Co-Founder Divorce: Why It’s a Good Idea to Create a Prenup for Your Young Company

Founder disputes are one of the most common risks to a young company, but it doesn’t have to be that way. Whether it is a disagreement over a core issue or the waning interest some experience along the startup road, most companies face turnover in their early days, with key players rotating in and out.

While we know, considering the examples of Facebook and Snapchat, that companies can still go on to greatness despite an early founder breakup, that doesn’t detract from the problems that arise when founders leave while holding onto an equity stake.

Under these circumstances, ex-founders can create problems in one of two ways – either they can insist on maintaining influence in a company when they are no longer wanted or they can surface years down the road and claim a right to a company’s success that they had no part in creating. Either scenario is obviously problematic. But there are a few things companies can do to protect against the type of consequences that can arise due to a founder split:

  1. Don’t Rely On A Handshake: Step one may seem obvious, but it is surprising how often founders ignore the paperwork and barrel down the road in their haste to create the next big thing. The cost of engaging a lawyer to prepare an Operating Agreement for your LLC (or Shareholder Agreement for your corporation) is easily justified considering that you will have a mechanism in place to address issues like key voting decisions, how new members are admitted, or how distributions are divided. Even the task of sitting down with your team members and talking through some of these issues can be critically revealing and bring conflicts to the surface that are better to get out of the way sooner than later.
  2. Company Buy-Back: Especially for early-stage companies, consider a provision in your governing document that allows the company to buy out a member/shareholder upon majority or super-majority vote. This way, if one of the early members is not working out, there is an agreed upon mechanism to facilitate the breakup, with important issues such as the purchase price owed to the exiting member established by a pre-existing formula.
  3. Vesting And Reverse Vesting: Another protection for co-founders is to agree to a vesting schedule pursuant to which founder equity will be granted over time or upon the completion of certain milestones. For example, a founder is granted 16,000 units but she only receives them on quarterly intervals over 4 years, meaning she gets 1,000 shares a quarter. In that way, founders will not fully “own” their equity stake until they stay involved with the company over a certain period of time. A similar concept is known as “reverse vesting,” where a founder is granted his or her total equity allotment upfront, but the company is entitled to repurchase shares if the founder leaves.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Megan K. Johnson is a business lawyer with over 7 years of experience. She helped champion securities crowdfunding at the local level and worked with the first company to successfully close an equity crowdfunding involving everyday investors. She is a partner at Founders Legal and can be reached at [email protected]

megan

Source: Smartup Legal

Co-Founder Divorce: Why It’s a Good Idea to Create a Prenup for Your Young Company

This post was originally published on this site

Founder disputes are one of the most common risks to a young company, but it doesn’t have to be that way. Whether it is a disagreement over a core issue or the waning interest some experience along the startup road, most companies face turnover in their early days, with key players rotating in and out.

While we know, considering the examples of Facebook and Snapchat, that companies can still go on to greatness despite an early founder breakup, that doesn’t detract from the problems that arise when founders leave while holding onto an equity stake.

Under these circumstances, ex-founders can create problems in one of two ways – either they can insist on maintaining influence in a company when they are no longer wanted or they can surface years down the road and claim a right to a company’s success that they had no part in creating. Either scenario is obviously problematic. But there are a few things companies can do to protect against the type of consequences that can arise due to a founder split:

  1. Don’t Rely On A Handshake: Step one may seem obvious, but it is surprising how often founders ignore the paperwork and barrel down the road in their haste to create the next big thing. The cost of engaging a lawyer to prepare an Operating Agreement for your LLC (or Shareholder Agreement for your corporation) is easily justified considering that you will have a mechanism in place to address issues like key voting decisions, how new members are admitted, or how distributions are divided. Even the task of sitting down with your team members and talking through some of these issues can be critically revealing and bring conflicts to the surface that are better to get out of the way sooner than later.
  2. Company Buy-Back: Especially for early-stage companies, consider a provision in your governing document that allows the company to buy out a member/shareholder upon majority or super-majority vote. This way, if one of the early members is not working out, there is an agreed upon mechanism to facilitate the breakup, with important issues such as the purchase price owed to the exiting member established by a pre-existing formula.
  3. Vesting And Reverse Vesting: Another protection for co-founders is to agree to a vesting schedule pursuant to which founder equity will be granted over time or upon the completion of certain milestones. For example, a founder is granted 16,000 units but she only receives them on quarterly intervals over 4 years, meaning she gets 1,000 shares a quarter. In that way, founders will not fully “own” their equity stake until they stay involved with the company over a certain period of time. A similar concept is known as “reverse vesting,” where a founder is granted his or her total equity allotment upfront, but the company is entitled to repurchase shares if the founder leaves.

If you are interested in more detail related to your situation it is best to speak with an attorney.

Megan K. Johnson is a business lawyer with over 7 years of experience. She helped champion securities crowdfunding at the local level and worked with the first company to successfully close an equity crowdfunding involving everyday investors. She is a partner at Founders Legal and can be reached at [email protected]

megan