News

Christina E. Brule

Non-disclosure agreements (NDAs) are legally enforceable contracts that bind parties to maintain specified information as confidential. Despite the intended benefit of protection, NDAs can fall short of their intended effect or be misused. They are often broadly worded to prevent employees from speaking negatively about a company and its executives.

Businesses often use NDAs to protect proprietary information, such as business information (e.g. finances, operations, customer lists), trade information, and technology, that give it a commercial advantage. It is crucial for a business to protect its technology, especially when seeking patent protection or maintaining a trade secret. Trade secret protection works if the information being protected is kept a secret, has value, and steps are taken to maintain secrecy. To protect against misappropriation of a trade secret, one must employ measures to keep the information secret. However, sometimes it is necessary to disclose part of the trade secret to others. Thus, NDAs are commonly employed to reinforce protection of the trade secret when some information must be disclosed, for example, to potential investors or employees.

An NDA may be used with the intent to preserve a trade secret, though it can sometimes backfire (See Keeping Your Trade Secrets Safe: When NDAs can Backfire). There are at least two potential issues to consider when relying on an NDA to protect a trade secret. The first issue is the term or duration for which the NDA is in effect. An indefinite term presents challenges because having to keep a secret forever is a daunting task. If accused, one has the difficult task of proving that the information was not disclosed. On the other hand, a definite term may lead to the loss of a trade secret.

The second issue is how “confidential information” is defined and specifications for how such information is to be marked. Courts treat trade secrets differently than typical confidential information. Thus, in an NDA, it is necessary to explicitly define both “trade secret” and “confidential information” (See Trade Secret Agreements v. NDAs). Having defined what constitutes a trade secret, the term of the NDA for the trade secret could be indefinite whereas the term of the NDA for confidential information could be definite. However, the best way to protect a trade secret is to not disclose the secret!

A business seeking to use an NDA to protect proprietary information must carefully consider the terms of the NDA and the preferences of the courts in which it will seek enforcement of the NDA. Some courts clearly do not support NDAs with an indefinite duration whereas other courts are okay with enforcing secrecy forever. Although an NDA might provide adequate protection, it is by no means a full-proof solution and the best practice is to not disclose a trade secret.

How much is information about you worth? Companies that collect data about individuals as part of their model—such as Google, Facebook, Instagram, and Twitter—have found there is value enough in data to provide users free access and still realize a profit. Selling personal data, for instance, allows Internet-based companies to sell targeted advertising or promotional space, which is more likely to drive purchases. Thus, while it is well-known that these companies generate billions in digital advertising revenue, a significant portion of their value comes from selling information about its users.

Such is the ubiquity of personal data being used as an asset, that in order to help Internet users determine the worth of their data, the Financial Times has developed a calculator to help assess their value.

The FT calculator was created in 2013, but in the past five years, social media companies have brought the potential to exploit personal data to new levels. In June 2017, Facebook obtained US Patent 9,681,166 (Techniques for Emotion Detection and Content Delivery), which claims a method of detecting an individual’s emotions and curating content, such as advertisements, based on a person’s machine-observed reaction to content. While Facebook does not currently practice this patented technology, it shows the depth to which certain companies might go to maximize profit.

Users, to some extent, have created their own monster. Many social media applications, video games, software, and web services offer a “free” component, and billions of users take advantage of this “free use” business model. However, applications that at face value appear to be free, nevertheless have an underlying, hidden cost to the user. They gather and sell access to user data. As the old adage—popularized by economist Milton Friedman among others—goes, “There’s no such thing as a free lunch.” The digital data and advertising economy is based on implicitly co-opting an understanding with users that in exchange for a free service or product, users themselves agree to be the payment, their information bought, traded, and sold to the highest bidder.

As an understanding about the amount of profit companies are realizing from user data enters the mainstream, policy questions arise about the implications of these implied agreements: Are there alternatives that are more transparent? Are most users aware of the value of the information about them that is being sold? and Are users comfortable with the utility they obtain in the exchange? Perhaps most important is the question: Is regulation of the personal, digital, and financial information necessary?

In recent months, the relationship between Facebook and data-mining firm Cambridge Analytica intensified many people’s fears about how their information can be exploited. As part of its work during the 2016 US presidential election, Cambridge Analytica accessed millions of individuals’ data from their Facebook profiles. This data included personal information, such as birth dates, and user information, such as page likes, as well as, in certain circumstances, access to a user’s location, news feed, timeline, and messages. This data was used to create “psychographic profiles” that enabled political campaigns to persuade voters through targeted advertising.

Many countries have adopted regulations to ensure individuals using computer applications do not have their data used in a manner they would not consent to. The European Union (“EU”) enhanced its data protection rules with its General Data Protection Regulation (“GDPR”). Unfortunately, while positive regulation reform occurred, the effect will likely remain the same. The regulation added new fine print in every company’s “term[s] of use/privacy” agreement, which people tend to click through to without reading. While many people are now more aware of their digital footprint, most are likely to remain unaware of the risks.

So, what should a US data privacy policy be? Sen. Mark Warner presented a policy paper with 20 different ways to address the “Big Tech platforms.” Warner focuses on three goals: (1) combating disinformation; (2) protecting user privacy; and (3) promoting competition in the tech space. Warner emphasizes not only access to data but also educating the public on its importance, as data is useless without efficient analysis. In addition, he proposes ideas similar to the regulations enacted by the EU. He stresses the need for transparency in data and usage by companies, and he recommends “free” platform companies be required to provide users with an annual estimate of what their data is worth to the platform, thereby providing significant “price” transparency. Access to quantifiable data showing the value of their data might better enable a user to determine whether a service they access is worth using. In addition, it may force companies to offer additional services to balance out the hidden costs of a free-at-the-point-of-access model to the user.

There are additional models. Not all web services and computer applications exploit data without a user’s explicit consent. Companies such as Epic Games—owners of the battle royale-style game Fortnite—web content management system WordPress, and web and graphic services giant Adobe use the “freemium” business model. The freemium model offers a basic service for free, with the opportunity to purchase enhanced premium services for a cost. Another Internet revenue model adopted by companies such as Netflix, Apple Music, and LexisNexis is to offer subscription services. While Facebook exploits users’ data for third parties’ benefit, companies that use freemium or subscription models can shelter user data. This system gives companies a market advantage because they can keep the data in-house and use it to tailor their products and services to retain and gain users.

Only time will tell whether a long-term balance between data-use transparency and privacy can be struck between data-users and corporations. In the meantime, users should be vigilant and educated, especially when interacting with companies offering “free” (but with hidden costs) products and services.  Ultimately, companies able to successfully address the Internet’s ongoing data and revenue issues with savvy privacy and business savvy platforms and transparency may find their loyal and grateful consumer base growing, at the expense of companies that are losing trust.

When inventors are granted a patent, they may believe they have taken all of the crucial steps to protect themselves and their inventions. However, this is not necessarily the case. In order to provide maximum protection for their patent, paten owners must provide notice of patent protection in order to maximize the potential damages the owner can seek if the patent is infringed. Notice is provided by properly marking their patented products, packaging, or labels.

Governed by 35 U.S. Code § 287, the statute states, “Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public.” There are two different methods that allow patent owners and licensees to comply with the law: (1) traditional patent marking; and (2) virtual patent marking.

Traditional Patent Marking

Traditional patent marking requires that the patent number is clearly identified on the product or its packaging if marking the product is not feasible (e.g. the product is too small). This method of patent marking may present an issue when patent portfolios grow, and patents expire over time. When changes occur, the patent marks on the products will need to be updated, which can be quite burdensome, due to the effect of the product’s manufacturing process. However, if a company’s product is covered by only one patent, it may be more feasible to use this traditional patent marking method since the marking would not need to change in the future.

In order to comply with the statute, patent owners must use the term “Patent” or “Pat.” followed by the patent number. For example, the mark might read, “Pat. 9999999.” If a company’s patent expires and it continues selling products with the expired patent listed on them, it risks facing legal fees due to false patent marking.

One way to avoid false patent marking is by marking items on their labels rather than on the products themselves. That way, when a patent expires, companies can reproduce updated labels rather than having to waste products with false marks and manufacture new ones with updated patent numbers.

Additionally, if a list of patents covers a family of products, patent owners can mark the products by stating, “Covered by one or more of Patents: US9999999, US8888888, US7777777.” Every listed patent does not have to cover every member of the product family. Below is an example of a of toner cartridge by Brother which utilized this method.

Virtual Patent Marking

In 2013, the America Invents Act enacted virtual patent marking, offering a presumably more practical way to patent mark products in today’s society. Patent holders can place a webpage address on the packaging or label that leads to a site of associated patent numbers when putting the patent number on the product itself is not feasible. This method requires that the product or its packaging clearly identifies a web address that would indicate where one could find the patents for the product. For example, the product can be marked, “Pat.: https://www.camelbak.com/en/legal/patents.”

On the webpage, patent owners should make the patented article easy to find by utilizing pictures, product identification numbers, product numbers or any other tactics so that visitors can find the information quickly. For example, one way to display the information is by creating a table with products defined by their names in one column and a correlating patent number beside it as demonstrated on Keurig’s site below.

(See http://www.keuriggreenmountain.com/en/Patents.aspx) As mandated by the statute, those who decide to utilize the virtual method must make the webpage accessible to the public and cannot require a click-through agreement, nor a fee or payment, and must make the process as straightforward as possible.

Similar to the traditional marking method, patent holders can virtual mark a family of products by stating, “Covered by one or more of Patents:” followed by a web address where the patents can be found.

The advantage of virtual patent marking is that regardless of what happens with the patent portfolio in the future, the products’ packaging will remain the same.

Patent License Marking Requirements

Not only does patent marking apply to patent owners, it also applies to those who license the patented products. If a licensee fails to mark the products, a patent owner may be unable to collect past damages for infringement prior to actual notice of the infringement. Because of this, it is essential that patent owners ensure its licensees are complying with the patent marking statute by establishing the need to patent mark the items in the licensing agreement. This is an essential term to place in a licensing agreement.

Recently, in Rembrandt Wireless v. Samsung Elecs. (Fed. Cir. 2017), the court found that Samsung infringed upon two of Rembrandt’s patents, awarding Rembrandt $15.7 million in damages. However, Samsung appealed, arguing that Rembrandt’s patent was licensed to a third party, and it did not require the licensee to mark the products. The Federal Circuit remanded the case, deciding that damages would only be awarded to Rembrandt for post-notice damages, and that pre-notice damages would now be excluded.

Overall, patent owners should make reasonable efforts to guarantee compliance with the statutory marking requirements. Companies should work with a transactional attorney when drafting their license agreement, as the language and terms of the agreement could dictate who, how, and if the company can defend a licensed patent.

False Patent Marking & its Consequences

Companies should be aware that wrongly associating a patent number on a product will result in consequences governed by 35 U.S. Code § 292. Those falsely marking a product with a wrong patent number or marking “patent pending” when no patent application has been made will risk being fined up to $500 for each offense.

Marking a product with “patent pending” does not provide any benefits, such as the right to sue others for damages, but rather it simply notifies the public that you have filed a patent application with the U.S. Patent & Trademark Office. By notifying the public of the patent application, a competitor may be deterred from copying the idea.

Benefits to Patent Marking

By properly marking their products, whether utilizing the traditional or virtual method, patent owners give actual notice of the existence of their patents to the world. Regardless of whether an infringer possessed actual knowledge of the patent, patent marking allows patent owners the ability to collect damages from an infringer. Therefore, infringers cannot claim ignorance about the patent and will be liable to the patent owner for damages. Following the statute allows patent owners to immediately seek damages or redress after an infringement is discovered.

If the patent owner has not yet marked its products and the patent has been allegedly infringed upon, the owner will not be able to recover damages unless the infringer was notified and continued to infringe. (An action for infringement would constitute putting the infringer on notice or sending a letter, for example.) Damages would be recoverable, but only after the notice of infringement. Damages incurred before the lawsuit was filed would not be recoverable.

When patent owners fail to mark their products correctly, they have failed to put the public on actual notice and have given up their rights to collect damages. The law assumes that because no indication was provided on the patented product, the alleged infringer could not have known about the patent. Therefore, infringers will not be liable for patent infringement until they have actual knowledge of the patent. The law is structured this way in order to encourage patent owners to comply with the law so that upon infringement, patent owners will be eligible to collect damages.

Although placing patent numbers on brochures or websites, for example, may notify the public in general about your patent and may assist a patent owner in marketing its products, those types of measures will not satisfy the requirements to receive benefits after infringement under the statute. The patent mark must be on the product or its packaging.

As detailed above, complying with the patent marking statute, including taking reasonable measures to ensure that licensees are also complying, is essential to providing actual notice to the public and to secure the ability to seek infringement damages from not only the beginning of the lawsuit, but more importantly, damages from the time the infringement began. It is essential to seek legal counsel to determine the best way to mark your product.

Innovation is becoming a highly collaborative effort. In recognition of this phenomenon, the U.S. Food and Drug Administration (FDA) is reorganizing the way it works.

Earlier this year, Professor Dacheng Ren from the College of Engineering at Syracuse University pointed out that most research conducted today is a result of multidisciplinary work. He saw the emergence of new fields of science, more accurately speaking, the collaboration of different sciences, like biotechnology or biochemistry. This shift also lead to changes in the way we regulate invention. Professor Ren and his team hold numerous patents and patent applications on inventions, including an innovative antimicrobial hydrogel to treat nosocomial infections. He has also worked closely with the FDA to promote antimicrobial research. After hearing his thoughts, I have been looking out for how changes in innovation has influenced the FDA. On June 4^th, 2018, the FDA released a statement specifically addressing this matter.

The FDA has been approving many “first-of-its kind” drugs and medical devices for the past two years, such as the First-in-Class approval of a drug to treat relapsing forms of multiple sclerosis (Ocrevus), first gene therapy (Luxturna), and the first artificial iris (CustomFlex). Although new to the FDA, inventions of this nature have not been unfamiliar to the scientific community.

Changes in the innovative atmosphere are giving rise to entirely new categories of products that have never been contemplated before. There has been a shift from discovery-based invention to collaboration-based invention. This shift has been rapidly growing for the past decade, however only now has it become so evident. To accommodate this shift, the FDA is also innovating its approval process. To accommodate not only the advancement of the nature of innovation, but also the rate of development, the FDA needed to reorganize in order to create a more effective and efficient system.

What used to be an independent working environment is now changing into a collaborative one. There are currently groups of individuals with different backgrounds that are assigned to accessing a single FDA submission because there are few novel inventions today that can be categorized into just one category of study.

The statement released on June 4^th was the Proposal of Process Modernization to Support New Drug Development. In this release, the Director of the FDA’s Center for Drug Evaluation and Research, Dr. Janet Woodcock wrote: “[b]oth science and technology are changing at a blistering pace and we need to keep up.” For example, the FDA approved a record high of 46 novel drugs last year. The key pillar for this drug approval modernization process is collaboration. The FDA already works with numerous organizations in the scientific, medical, and regulatory communities in its efforts to provide patients with safe and effective drugs. However, by promoting further collaboration within the FDA itself, the speed at which safe drugs can go from bench-side to bed-side can be greatly accelerated.

The proposal highlights six key focus areas: talent diversity, multidisciplinary teams, efficient operational structure, enhanced IT capabilities, emphasis on safety, and patient voice. The FDA already employs multidisciplinary teams of experts in various fields to tackle new applications, and the proposal suggests that there should be an enhancement and focus on these proven effective multidisciplinary teams to review applications from the get-go. She also recommends that the FDA integrate the various review processes employed by 19 separate review divisions into a single process as to better distribute the work between technical experts and regulatory experts. The proposal also emphasizes future recruitment efforts to attract talent with different backgrounds and experiences. The FDA would train the new talent so they become leaders who can promote the development of safe and effective drugs.

The key in the FDA’s modernization strategy is to promote efficiency while maintaining high safety standards. To emphasize this point, the proposal notes that there should be a unified post-market safety surveillance framework to facilitate drug safety throughout and beyond the drug approval process. Input from direct stakeholders is vital in promoting safety. By allowing patients to have more of a voice in the FDA process, the FDA can have a better idea on the key issues and the effectiveness of the process reorganization. At the end of the day, all effort is made to allow patients to have access to safe and effective drugs at a faster pace.

Not only is the FDA revamping the drug approval process, but Dr. Jeffrey Shuren is also leading a reorganization of the medical device approval process to conform to the rapid pace of innovation seen today. Advancements in technology have been solving problems which have been thought too risky to tackle such as the BrainPortV100 which helps blind individuals navigate through their surroundings by translating visual signals to sensations on the user’s tongue. However, there still requires a process to evaluate the safety and efficacy of these new devices. In recognition of this issue, Dr. Shuren identified 5 key areas of focus: establish a medical device and patient safety net, modernize post-market mitigations, promote the development of safe medical devices, enhance cybersecurity, and promote the collaboration of premarket and post-market offices as mentioned above. The ultimate goal is to promote patient access while protecting patient safety and security.

The FDA recognizes that “safety and innovation goes hand-in-hand.” Through the FDA’s modernization, patients will be able gain access to safe and effective drugs and medical devices at a faster pace, particularly those that address unmet needs. Today, innovation occurs through meeting of the minds. In tune, the regulation of innovation occurs through the collaboration. Innovation is stimulating a change in regulation, and in turn, a modernization of the regulatory process is promoting the speed of innovation.

Dineen Hall incorporates many natural light-filled spaces throughout its design, places where faculty and students can sit together and collaborate, and that is certainly true for the Innovation Law Center’s (ILC) suite in the southeast corner of the College of Law’s third floor. This is where a team of six students—supervised by adjunct professors—has been working diligently throughout the summer on IP, patent, and market landscape projects for the Law Center’s numerous emerging technology clients.

In fact, over the summer months the students—Senior Research Associates 3Ls Cody Andrushko, Parker Mincy, Amanda Wang, and Xiaotong Wang, and Research Associates 2Ls Christina Brule and Kristian Stefanides—have been assisting more than 20 start-ups. Referred to the Law Center via relationships with GENIUS NY, NEXUS-NY, the CNY Biotech Accelerator, and other statewide research centers and innovation economy partners, these clients are seeking help commercializing inventions that range from eye-tracking technology and weather drones to anti-microbial coatings and a carboxylate fermentation process.

In addition to assisting these clients, the students also have presented on IP protection for computer applications to the Syracuse-based StartFast Venture Accelerator and have updated guidebooks on FDA regulations and computer apps for Empire State Development’s Division of Science, Technology, and Innovation (NYSTAR).

Normally, the summer ILC projects are tackled by rising third-year students, so the rising 2Ls Brule and Stefanides are somewhat unusual recruits, explains ILC Associate Director Molly Zimmermann. “We had a number of openings this year and found room for two first-year applicants who had already impressive résumés,” says Zimmermann. “The advantage for these two students is that they will go into the ILC Research Center course in the fall with good experience in the process of helping clients, and they will be able to guide their peers.”

On a hot Friday morning in July, Brule and Stefanides were joined by rising third-year law student Amanda Wang around one of the conference tables in the sunny Law Center suite. Working as a kind of study group, the students were in the midst of researching and writing reports for ILC clients with various technology commercialization challenges.

One of Brule’s clients, for instance, is water remediation company RemWell. This company was referred to ILC via clean energy accelerator NEXUS-NY. RemWell’s new technology addresses drinking water contaminated with an emerging class of chemical contaminants, called per- and polyfluoroalkyl substances. “RemWell proposes groundwater remediation using a specialized reactor that can destroy harmful chemicals,” explains Brule, who is writing a patent landscape for the company, as well as a technical language section that has emerged from her own understanding of the technology. “The technical language section will help these highly specialized engineers explain their concept to other audiences using less technical terms,” notes Brule.

As Brule immerses herself in the green and clean economy, for one of her clients Stefanides is mastering a relatively new market that combines real estate, interior design, and furniture making. “My client—called essem|BLÉ—is exploring a line of lightweight furniture for the real estate market,” says Stefanides, who is preparing essem|BLÉ’s IP and market landscape report. Stefanides explains that her client “stages” (in other words, decorates and customizes) homes so that prospective buyers to get a feel for a room, whether visiting in person or viewing the property online. “Currently, my client requires a warehouse full of furniture in order to stage homes, but her lightweight furniture idea means her job could be done more effectively and easily.”

While Stefanides gets to grips with the real estate and interior design industries, across the conference table Amanda Wang is becoming something of an expert in mechanical engineering, having worked with numerous inventors in this field. Wang is currently working with Xallent, a company in the extremely specialized area of nanoelectromechnical characterization, measurement, and probing. “Xallent is a repeat customer,” explains Wang. “They liked the job we did with a previous project so much, they asked ILC to work with them again. Their new technology uses ‘nano-probes’ to image or test the hardness of compounds at an atomic scale.” Wang says that the company has been researching this technology for more than a decade and has a lot invested in it, “so I’m performing a comprehensive IP landscape, as well as researching other competitors in this niche market.”

All three students agree that this summer work experience is not just leveraging what they have learned in the classroom, it’s synthesizing their book knowledge—and even their undergraduate experiences and specialties—into highly marketable curricula vitae, for when it’s their turn to enter the job market.

Observes Stefanides, “Working at the Law Center gives you the ability to use what you have learned through the College of Law’s technology commercialization curriculum, including IP law, business law, and even writing skills. It helps you develop a very large skill set to utilize not only in law school but also after graduation.”