New technologies emerging at ever increasing rates mean our policies and laws are changing to keep pace at breakneck speeds.
Over recent years, Congress has passed over a dozen new and modified laws fundamentally affecting the protection of trade secrets, trademarks and copyrightable creative works. Even at the state level, the current session of the Texas Legislature will address changes in the laws affecting telecommunications, trade secrets and other matters affecting Austin's technology companies.
These and other changes are helping to produce a legal system that facilitates international high-technology commerce. Three new areas having issues of vital importance for Austin's technology companies are (1) the Internet, (2) the role of the intellectual property attorney, and (3) the ever-faster, ever-smaller world of international technology business.
The New Law of the Internet
The laws affecting the Internet are evolving rapidly to effectively deal with new types of business transactions and disputes relating to this entirely new field of commerce. Technologists are working feverishly to develop tools that easily share data, making it possible to write automated routines, programming rules and software objects that make the emerging hardware infrastructure of genuine commercial value. The commercial essence of using these new software tools and the resulting software application programs, however, depend on the desirability and enforceability of the laws of this commerce, such as the laws affecting the enforceability of software distribution contracts.
The legal problems affecting shrinkwrap software licenses are evolving into a new area of law on the Internet Web-wrap license agreements. With a Web-wrap agreement, standard license terms can be displayed, and the user can be required to give explicit assent to them as part of the purchase transaction. Acceptance can be made a prerequisite to either downloading the software or otherwise making the software available to the license.
Adding to these developments to help on-line contracting are technological identification and verification mechanisms called "digital signatures." Digital signatures do two things to verify that there has been an acceptance of a specific contract's terms and conditions. First, a digital signature makes it possible for the recipient to verify the identity of the "signer." Second, the digital signature verifies that the signature has not been tampered with en route from the signer to the receiver.
Not only are contracts for the licensing and distribution of software important in commerce over the Internet, but also the laws regarding the protection of value technology and intellectual property rights are very important. These include the laws affecting trademark, trade secrets and encryption of data.
The nature of the Internet heightens the need to diligently protect your trademark rights in cyberspace. With on-line commerce, trademark infringement can happen with amazing speed and on an international basis. Regularly checking the Internet to assure others have not been using your mark is almost a must in today's world of on-line commerce. Of special interest is an on-line search to verify that someone else has not registered something like your mark as an Internet domain name.
Protecting trade secrets from inadvertent disclosure and misappropriation over the Internet requires a trade secret understanding by company employees and contractors, together with a policy that acknowledges the special dangers associated with the Internet. Taking actions to strengthen your company's ability to say that the information is a trade secret improves protection of the valuable information against inadvertent disclosure.
Still another area of concern in on-line commerce is the encryption of data. Cryptography is playing a growing role in software technology as an important element in the advancement of secure and legally binding transactions over public networks like the Internet. For companies who develop, market and use cryptographic products, the legal issues affecting encryption are important to consider and are likely to be joined by other legal issues that will arise or grow in significance as cryptography evolves.
Intellectual Property is the Engine of Today's Growing Commerce
As any chief executive of a growing technology company will tell you, intellectual capital is the currency of today's and tomorrow's fast growing international high-technology marketplace. In addition, because of the complexity of many issues relating to intellectual property, the intellectual property attorney is becoming more than ever before a true business counselor for technology companies. The intellectual property attorney's role encompasses not only protection, licensing and enforcement of intellectual property rights. In addition, the intellectual property attorney's input can and should be an integral part of strategic business decisions that affect the development and use of technology for the company. These strategies include ones for avoiding litigation for intellectual property rights infringement, generating creative solutions for licensing technology, and devising imaginative ways for capturing innovations and commercialize them to the company's economic advantage.
One particularly important job of the intellectual property attorney is in assisting the client company to effectively protect its intellectual property assets. This assistance includes, as a first step, aiding in the development of a comprehensive strategy that takes advantage of existing laws and imminent future changes.
Whatever the form or combination of forms of protection the company chooses, protection can only be maximized when the intellectual property owner considers it up-front rather than after something has gone wrong. Early in the development process, the owner should identify what the intellectual property is or will be and how that intellectual property should be protected.
By following an intellectual property strategy during each development project, the technology company can determine and take steps to procure the appropriate type, degree and geographical scope of protection for the company's intellectual property.
Our Immediately International Legal Landscape
In the not so distant past, patent, trademark and copyright law in the United States was only affected by events and decisions within the jurisdiction of the United States. Those days are, for the most part, permanently gone. As a result of the General Agreement on Tariffs and Trade (GATT), intellectual property rights have become subject to formal international trade negotiation. The world of today, however, is smaller and the laws that protect technology, to a very meaningful degree, are international laws. These international laws include, at a sampling, The Berne Convention for Copyright Law, The Madrid Protocol on Trademark Rights and The Patent Cooperation Treaty.
The curve of annual PCT filings in the U.S. PTO has been increasing by about 20% annually, and those filings represent more than 40% of all PCT filings worldwide. Expansion of PCT filing opportunities continues in other ways as well.
The timely filing of an international application affords applicants an international filing date in each country which is designated in the international application. The PCT also provides for a search of the invention and makes possible a later time period within which one or more national applications for patent must be filed.
For these reasons, when deciding whether to obtain patent protection for new inventions, an assessment of whether the protection should include countries other than the U.S. can be important. This decision can, in many cases, also determine the time and manner of filing for protection in the U.S.
Conclusion
The above issues provide only a taste of today's new legal landscape for the technology industry. As technology companies and the applications and services they provide become more numerous and pervasive, clearly our laws are evolving to address issues not previously considered. As with many matters affecting technology companies' addressing of legal issues, vigilance in understanding the changes in this law is required.
Bill Hulsey is a partner in Austin, Texas office of Gray Cary Ware & Freidenrich. A seasoned Intellectual Property and Technology attorney, Hulsey serves as IPT Section Leader in the Austin office. His clients include numerous Fortune 100 companies, many emerging growth high-technology companies in Central Texas and the Dallas-Fort Worth Metroplex, and approximately half of the companies in the Austin Technology Incubator.
Mr. Hulsey is highly experienced in strategic generation use, and protection of all forms of intellectual and industrial property rights in the areas of electronics, computer software, and Internet-related technologies. In addition, Mr. Hulsey has technical expertise with fiber-optic and cellular telecommunications systems, computer software and hardware, semiconductor device design and fabrication processes, image processing systems and special purpose composite materials.
Mr. Hulsey teaches as adjunct professor of strategic use and management of intellectual property in the University of Texas' M.S. Degree Program in Science and Technology Commercialization.