Bruce Hamby and Owning Your Product

Welcome to the macro fab engineering podcast. I am your guest Bruce Hamby.

And we're your hosts Steven

Craig and Parker Dolman

and this is episode 112. Bruce Hamby is an attorney with the Hamby law firm. The Hemby law firm focuses on patents, intellectual property, trademarks, and business law. He has been an attorney in the Houston region for over 15 years. He is also a California Attorney.

So he first gave a talk last November at the hack, not the Hackaday meetup, the macro family meetup here in Houston, Texas, where he talked about intellectual property considerations when you're getting your product to market. So I guess we want to expand on that subject today.

Okay, gladly. Basically, there are three things that people need to be aware of whenever they're trying to get their products to market. And I know that law sounds like a very broad topic. But in terms of this narrow subject, there really only three things you have to know or that you have to be concerned with. First of all, you have to own your brand. Secondly, you have to own your technology. And third, you need to establish freedom to operate. And if you've done that, as a designer, as an inventor, that is going to take care of the vast majority of potential intellectual property issues that you can run across.

So owning your brand. So what does that entail? Okay,

well, first of all, understanding what a brand is, because a lot of times people who are designers and who are engineers are not usually focused on marketing, they're focused on the technology, and the brand, just just simply a name typically, that you do business under or that you are going to use to tell people that what the source is of their particular product or service, like for instance, the brand here, macro fab tells you that if you get services, here, they're their legitimate authentic macro fab services or if you buy Mouser electronics that you are in fact getting authentic product from that and not some other product that might be inferior from a different source. So it the trademark is important. Basically, the name is important because it denotes the source and you want products if you're a new product developer to be associated with you. An example for instance, in technology has been Xerox, if someone says go make a Xerox they really mean go make a photocopy right. But the name Xerox Xerox Corporation has become synonymous with photocopiers. When it comes to people's minds whenever they first think about that. And I think that that's really kind of the goal. If you're a designer and you develop something new, you want that idea that product to be associated with you and not with your competitors. And you don't want it to be generic where they think, Oh, I can just go and buy the same thing from any other outlet somewhere, but rather, they want you want them to come to you and purchase your product. And that's why your brand is so important. And it's something that engineers and developers need to think about. And typically, these are protected with trademarks by having federally registered trademarks or service marks. And this is something that is relatively inexpensive to do, and can be done fairly quickly. And when people are thinking about bringing your product to market, I think it's one of the first things they need to address is be aware that they need to have their own unique name something that's associated only with them and not with anyone else. Because, you know, that's key to their ability to market. What they've developed.

Yeah, yeah, yeah. And, you know, sort of comes to mind somebody who's done that flawlessly is Apple, because they have the iPhone and the iPhone is synonymous with like all phones right? But if you look at it, like somebody you can say, Oh, I have an iPhone, not a smartphone even though those are the same thing like they've created such a moat and a boundary around their category that you know, when somebody really is talking about a phone like on the news or something they will say the word iPhone to just mean everything right?

Well, that's like, you know, grandparents saying Nintendo when it's actually an Xbox. Oh, yeah, just to cover all gaming for Kleenex or something like that. Yeah. My biggest question though, so a trademark does not just cover your name or is it like a logo or is it your brand image, I guess

it can be all of the all of the above. Basically, it can be either block letters, which is the most broad protection like for instance, Apple, we look apple and in the class of computers that would be blocked letters. And then you could also have a logo protection, the Apple symbol, you know, which is a separate register ration of Apple, and they protect different things. One protects the name apple and the other protects a symbol of the Macintosh apple with a bite taken out of it or whatever, right? So. But even large companies sometimes fail to do this. I mean, there's a famous story specifically about Apple, that they failed to protect their trademark in China, the People's Republic of China. And they wound up getting into a legal battle in China, about whether they owned the right to Apple Computer, and ultimately, under Chinese law, they were held not to own it, and they paid a lot of money to an enterprising guy in China, who had gone out and registered Apple Computer. So, you know, people sometimes don't necessarily think about these. And also, they have to realize that even if you own the name here in the United States, that doesn't necessarily mean that you own it abroad. So if you're going to send your products abroad, if that's part of your marketing strategy, you probably want to also protect that trademark or that service mark in foreign countries where you intend to do business.

Oh, so like, so trademarks? But what's the difference? Because what I think that gets confused a lot is like, what's the difference between a trademark and copyright?

Okay, a copyright protects an unique expression that's in a fixed medium. So for instance, if you draw a stick figure on the paper, you would have a copyright in the stick figure, basically, or if you write down something that's novel, you or you write code, say, for instance, you write some computer code. And it's unique and you didn't take it from anybody else. It's not derived from anyone else's, that can be protected by copyright. So a copyright protects the actual expression in the fixed medium. In other words, if you write the great American novel, or you write the next great word processor program or something, it protects that from being copied, and from derivative works being made of that, in other words, people taking your code and deploying it somewhere else. Whereas the trademark is, shows what the source of the goods or services are. In other words, are these authentic? If it says macro fab? Is it really macro fab? Or is it some fake pirate out here operating as trademarks protect source and authenticity, and in the copyright protects the the idea that's fixed in the medium the expression, a lot of times, for instance, we see this in movies, movies are copyrighted, obviously, and books are copyrighted software is copyrighted, all sorts of things can be copyright, but that's basically the difference.

So sort of along those lines, like, how different Does something have to be to be considered unique against a copyright?

unique enough? Well, like, okay, take

the Apple symbol as as an example. Right? You know, what if I wanted to make another company that was called Granny Smith, and it had an Apple as a logo, but the bite was on the left side of the apple? Would that be enough to be unique?

So basically, you're asking a trademark question, and how close can I be without causing undue confusion? That's how the that's how the USPTO would look at the United States Patent and Trademark Office. Is this causing undue confusion. And I don't think that there is a bright line test for that. But the person that will initially make that determination, if you go to register a trademark will be a trademark examiner who works with the USPTO, who will look at it and make a judgment call, and may very well come back and say that I find that this is too close. And then at that point, if you disagree, and you want to push it, you can attempt to appeal it. And ultimately, you can attempt to litigate it if it's that important to you. Typically, most cases don't result in that because people simply take the path of least resistance and say, Okay, I realize that Apple's probably going to win this war, and it's going to cost a lot of money. Or even if I do prevail, I'm not really interested in spending a ton of money on this because I have a new business. So I'm simply going to pick another name, which I think will do well in the marketplace, but I'm not going to wind up in a big battle with somebody over it. So that's usually how it works as a practical matter. So the USPTO What does that stand for United the United States Patent and Trademark Office. And it's the it's actually part of the US Commerce Department. And they're the people who are in charge of issuing patents and trademarks. And they examine those and they employ a corps of examiners who are people who simply do nothing all day but see if applications that come in comply with the applicable laws.

So They lurk on the internet looking for no they don't lurk, you have to

come to them and you have to pay them to review your your documents. But they will do searches And so you know, if you come out and say that I have, you know, something that I'm trying to patent or I'm trying to trademark and something comes up that they're aware of that is going to cause a problem statutorily, then they're going to raise that if they become aware of it. So I guess you could I wouldn't really say lurk, but they do. They do their job as examiner's. Okay. Yeah,

that's a nicer way of saying, okay,

so you go to the USPTO to get your trademark. But how do you do this internationally, do you have to go to 250 some odd different, you know, UK PTO, or

in terms of trademarks, you would ultimately have to get national registration in a country by country basis. So for instance, if you wanted to also register your trademark in Australia, you would have to actually go to Australia and and get a trademark from Australia the same way, if you want to go to Canada, you would have to get because it's all exists as a matter of national law. And there's no such thing as like a true international trademark. Now we do have things like the the Paris Convention and stuff that allow you to go into other countries with priority if you have a registered trademark in the United States. But the US trademark by itself isn't going to automatically cause a foreign trademark to spring into action, you have to basically these other countries have systems that are parallel to what the United States has, meaning that there is a filing process, there's an examination process. And then ultimately, if you survive that, then you're going to get a trademark granted in that National country, you know, whatever nation is you're trying to get it in.

Interesting. Sounds pretty involved, like, go have to go to each different country.

Yes, if you're getting into international filings, yes, you would wind up doing that, in terms of involved, not so much in terms of being difficult if you're talking about is it a difficult task to do? It's mainly a function of you have to search ahead of time to see what if anything is already registered, because a name that may be available in the United States may not be available in Australia, or may not be available in Britain or Germany or something, depending on what you're trying to register?

How much of the responsibility is on the person to find that information?

Technically, the legal answer would be there is no responsibility. And you can just simply file but it's not a good idea, it's a much better idea to actually search for yourself. Because otherwise, if you file something that's going to be objected to by the USPTO, then you lose your filing fee. And whatever time you you put into it. And I think there's a misconception among many people that it's as simple as I just go to LegalZoom I just simply fill out some paperwork, I put my credit card, information in, I hit Done, and then I will wind up with my trademark. And they they don't read, they don't realize that there is an examination process and that there's a human being is going to look at this. And it's going to compare it to databases at the USPTO and make a determination.

Yeah, that's actually interesting. The human element in that because like, even here in Texas for is slightly off topic, I guess, is beer labels in Texas are have to prove by one person. Right? So

I didn't know that. Yeah, was some guy out in Austin, who just sits and looks at beer labels all day long.

And he has to before they come to be sold in Texas, they have to be approved. Sounds like

bureaucracy at its best.

It's just interesting that that there's so much human like, as you said, there's it's subjective whether or not if Granny Smith with a left bite of an apple would be conflict enough? What little I've looked at it too, it's also like, if you if that was like a a brewery that you're doing what's called Granny Smith, it might actually be kind of more okay, then a if you were making a computer company that was called Granny Smith with this,

right? Because what they look at and there's a whole bunch of case law, don't get out in the weeds there. Yeah, individual court cases. But there's a whole bunch of case law establishing specific criteria that the Office of the USPTO is to look at, regarding you know, when making these decisions. And basically what it comes down to is likelihood of confusion as to source by a consumer. And in the case of the hypothetical brewery, the granny smith brewery that you had brought up there, there's very little likelihood that they're going to confuse that with Apple Computer from Cupertino. Okay, unless Apple goes into that business and then we'd be different, but it's only a matter of time. There may be an idea at some point, right now there's not so you probably would be able to get that hypothetical through the office if you wanted that trademark right now.

Alright, so let's move on to I guess owning your own technology then.

Yes, owning your technology is typically Something that I think a lot of people don't really think about, because the engineers and designers are so focused on the design and advancing the science and everything that they don't really think about it. And it's not really I think, typically taught in engineering curriculum. So if it is, it's just sort of glossed over about, yeah, there are these things called patents out there. But actually, you should think of a patent almost as important as a title to your car. I mean, if you're going to go out and spend a lot of money at a dealership for a nice, beautiful car, you're going to insist that when this transaction closes, that in exchange for you handing over a very large sum of money, that you're going to get a title. And the purpose of that title is really to show that you have the right to exclude everyone else in the entire world from ownership and use of that vehicle. So that way, if someone gets in your vehicle and starts driving away, you can call the police and, and they're going to say, Hey, why have you taken Parker's car, you know, and they're gonna give it back to Parker and leave the other guy away off in handcuffs, right. And because and the reason as you can understand is because Parker spent a lot of money buying the car. And so it's only fair that Parker has the use of the car. And this is very analogous to the development of technology. Because when you develop technology, you're expending a lot of resources and time and effort. And you need to have clear title to that. So that if other people want to use that technology, that they have to pay you for it, sort of like if I wanted to use Parker's car, Parker might say, you can use my car, but you got to pay me money, okay. And if you pay me a certain amount of money, I'll let you drive my car for a day or something. It's the same way with technology. But instead of having title like a deed to a car, the way that we do that is through the patent process, and that establishes ownership of technology and makes it clear who owns what. So that that way, people who are interested in using that technology, know who to go to, to talk to about I'm interested in either licensing or buying your technology. So that's the really the purpose of owning your technology.

In terms of the patent system. One of the issues I think that comes up sometimes is what about open source. And a lot of times you hear people that are tremendous proponents of open source, like for instance, we have Linux, which is open source software. And certainly the patent system has its critics, probably Elon Musk being one of the most prominent current critics of the system, saying I want to have all of my stuff open source. But does open source really, ultimately work? It really depends upon the nature of what it is that you have. And if you're and what industry you're competing in. In general, you want the title to your car, now I can find you things where people don't have title, I mean, you can go to Texas a&m, and they have a share program where you can get on the bicycle and ride it and then you drop it off and somebody else can get on the bicycle ride it, none of us really own the bicycle, we just ride the bicycle, right? And that works within that limited context. But it doesn't work. If somebody all of a sudden says I'm going to take the bicycle off of the a&m campus and sell it right. And then all of a sudden people like, whoa, whoa, wait a minute, that doesn't work. And and basically, if you look at like, say, for instance, Elon Musk's situation of developing the electric, car, and stuff, all of his competitors are nailing down patents, okay? Mercedes is nailing down patents, and all and GM and all these other companies. And ultimately, if you have a situation where somebody doesn't protect their rights, and they're giving them all away, the people who are protecting their rights will ultimately win because at some point, they are going to come up with some sort of a breakthrough, because no one is ever the technological leader always in forever 100% of the time, and then all of a sudden, if Mercedes comes up with something, and this is the key breakthrough, you know, then you have a better battery than Tesla. And then Tesla's like, Oh, we're gonna build a better battery. No, no, no, not without paying us licensing fees you're not going to. And so ultimately, those who have title are going to wind up collecting licensing fees in one way or another from those who don't have title to technology. So I mean, open source can exe can work in certain contexts. Like I think Linux has been incredibly successful. I think it's going to continue to be successful. But the reason why it's being successful is it's relatively old technology. In terms of being an operating system, it's been around for a long time, and you have many people voluntarily contributing to it and improving the environment on a constant basis. And yeah, that's sustainable, and that can work. But in many other contexts, particularly if we're talking about somebody who's doing an electronic startup, that's just That model isn't really feasible because most inventors and people who are developing new electronics, they're trying to develop something that will benefit them personally, and which will be a significant advance. I mean, I don't think the average person who's out there developing electronics today says I'm going to develop. I'm going to develop shareware. You know, I mean, some people do. And there's nothing wrong with that, if that's what they want. But people when they are going to develop shareware, they should do it consciously knowing that they are intending to benefit everyone except themselves, as opposed to finding out after the fact Oh, what have I done? What have I failed to do rather, in terms of I didn't patent my I didn't patent my device. And now I'm not able to benefit from it.

It's a lot like Arduino, where Arduino was designed in Italy and all that stuff. But there's a lot of clones out there. And this the key thing with it comes back to the trademark is their hardware is open source, but their trademark is not. Right. So you can't buy an Arduino that was made in China, you can buy an L No, I think it's one of the branches on Amazon for like $3 or $5. It's like E L. No, yeah, yeah. Right. So it's the same board, but with someone else's trademark on it now,

right? Yeah. And that can happen if if there's no patent protection, and then the problem becomes, it becomes a commodity, and you may not necessarily be the low cost, source for that, in which case, the low cost source wins in the marketplace. And the problem is that causes technology to stall. Because if there's no incentive economically for people to benefit, by virtue of their own research and their own effort, and putting forth capital to develop things, then all of a sudden, what's the incentive to develop? Right, other than just sheer intellectual curiosity, I mean, somebody has to ultimately pay the bills, and enter the system that we have the patent system, ultimately, those, that capital is raised by the end user who winds up having patent licensing built into the product. So when they show up and they buy something at some place, then they are in effect, ultimately, indirectly paying the person who developed it, and thereby encouraging them to continue their development efforts and to improve the product to create other products, etc.

So I'm a bit curious, in this owning your technology section, how do you protect your technology, because especially in the kind of the environment that Parker and I work in every day, we're talking about electronic circuits that sometimes are just very easy to reverse engineer, change a couple things, and then someone else can call it there's two, what do we have at our disposal to protect

ourselves? Well, typically, you would use a utility patent, if a particular circuit is novel and meets the requirements of the patent statute, then you would have a utility patent. And what a utility patent does is it protects the utility. So for instance, if you develop a new type of circuit that does something that no other circuit has done before, you now have created a new utility, my circuit does this or that, whatever it is, and if it's, in fact, novel, and non obvious over the prior art, then you would wind up ultimately getting a utility patent, which would issue and at the end of it would have some claims, and the claims define the scope of the patent. And in this case, you know, whatever it is that the circuit does it does this that or the other thing with nobody's ever done that before, then it doesn't. And it doesn't matter. Even if something is relatively close, the issue is does it fall within those claims. So let's say for instance, in your hypothetical, you develop the next great circuit and for the mission to Mars that's coming up, right. And it's beautiful, it's wonderful. And some pirate out here looks at it and says, Ah, now that I see what Stephen has done, I can do the same thing. And I'm going to use cheaper inferior parts. And I'm going to, I'm going to reorganize it a little differently, but it's still going to do the same thing. In that particular case, that would be infringement of your patent. Why? Because the patent claims protect what your circuit is doing. So it doesn't matter that somebody else use the different method to come to the same result. If it falls within the claims of your patent, you have a case against that person for infringement. So that I think that's the answer in terms of how you would enforce your rights in that type of situation.

Sure, sure. And, you know, it's interesting, I kind of come from a little bit of a background in the audio electronics industry, where it's, it's almost legendary that you could you could visit 10 days. manufacturers and they all manufacture identical products. And when I say identical, I mean down to the same components, right? And all 10 of them have taken that same design from another one that's out there. And and, you know, sort of when I got into the electronics industry, I was actually advised to just make your product unique, someone on the outside because someone is likely to steal the guts, you know, right. And there's not a lot you can do about that in that industry. And and I've always been curious about what can I do to protect that

a lot of that is a function of how much capital you have available to do enforcement, if you have capital available to do enforcement, much as possible. If you have little capital to put forward and enforcement very little as possible. One of the newer techniques that you're seeing a lot in various different industries, is people going to the People's Republic of China, which is where a lot of this occurs, and actually prosecuting their patents there, as well as in the United States. And there's a very specific reason why they do that. And now, this wouldn't have been true 10 years ago, but China's changing very, very rapidly. And it is now beginning to take intellectual property seriously. And one of the features of PRC law, People's Republic of China is that they will actually use their internal customs enforcement to enforce Chinese patents. So if you say, for instance, you come up with a new circuit, you patent it in the People's Republic of China, you can actually use their own custom service to bottle up pirated versions that would violate your Chinese patent inside China, which is oftentimes a more cost efficient enforcement strategy than attempting to, to suppress imports into the United States that may come from anywhere. I mean, it might come from the People's Republic of China that may be trans shipped through other countries. And then all of a sudden, you're either looking at US District Court proceedings or international trade commission proceedings to get judgments to keep those products out. And then really, it goes to an issue of initially, where do you prosecute your patents, which is a big deal, I mean, essentially, you want to prosecute patents in a couple of places, first of all, you want to prosecute them, wherever your primary markets going to be. So if the primary market, for instance, for things being built a macro fab was in the United States, then you would want a patent in the United States. And also, you would want to use it as an area denial, vehicle to prevent where these things from being produced wherever your primary competitors are, if that's in the People's Republic of China, then you want to be in the People's Republic of China, if you were in a different industry and your primary competitors factories were in Germany, then you would want to patent it in Germany, with the idea being that if you can get a patent that's in where someone's productive facilities are, you make it an order of magnitude more difficult for them to pirate your product. Because if you can shut them down in their home jurisdiction, then all of a sudden, it becomes very difficult. I mean, you know, for instance, in China, if you had a patent, could they in fact, move to Vietnam, and set up a new plant there where maybe you don't have a patent and produce? Yeah, but that costs a lot of money. And pirates also look at the economics of situations too. And they might say, Well, yeah, I mean, I could knock off Stephen Parker's patent, but I gotta move my factory to to Vietnam, that costs a lot of money. And if the Chinese authorities aren't elite, export the stuff the United States, then I'll just look for a different target, because this isn't cost effective. From a standpoint of trying to do this. And in many countries, piracy is almost an accepted profession. Right, in terms of that's what they do. It's an industry in and of itself is they attempt to circumvent intellectual property rights. And that's one of the big, ongoing international disputes. Right now, the administration's having with other countries is basically saying you need to respect intellectual property rights of within the United States and not allow yourself to be a haven for piracy, basically.

Sure, sure. So let's say I've done my homework, and I've got a patent issued to me for my widget in the US. Okay. And I want to also issue that in China. Is that something that can be translated over? Or do I have to start the whole process over again, in Chinese law,

there are two different ways to do it. First of all, we have what's known as the Paris Convention, which will allow you to file in other countries within one year of filing in the United States and get the same priority date as if you filed here, or Secondly, we have what's known as the Patent Cooperation Treaty, which gives you basically a 30 month window to file anywhere in any treaty country in the world frequent. Frequently, the Patent Cooperation Treaty route is the most cost effective If you're dealing with more than one additional country besides the United States to, to do that with and particularly for, but to answer your question about, do you have to actually undergo proceedings in another country? Ultimately? Yes. Okay. You will. So there would be sort of a two track prosecution of prosecution in the United States and then a prosecution, for instance, in the People's Republic of China, if that's where you're going in that particular case. Now, the advantage of the Patent Cooperation Treaty over the Paris Convention, is the fact that quite a while ago, many companies that operate internationally had gotten together and said, Look, we don't want to be dealing with 27 Different patent offices, because the cost is too high, we don't want to hire all these law firms. And so what happened was, all these countries got together created this treaty, which basically said, we're going to have an international search authority, instead of having 27 different searches on a patent, you can have one search, okay, and this, that search authority will do the patent search, and then all the other countries can look at those results, and that they don't have to, you know, take it, they can do their own research if they want. But oftentimes, many of them simply look at it and say, if you've got an international search opinion, and this is what it shows, we're going to assume that's correct. And we're just going to examine it based on that. And this is very helpful, because all of a sudden, now, you've you've undergone one examination, instead of 27 examinations. Now, you still do have to prosecute in the various different national offices, but your costs have gone way, way down. That versus a few had used a Paris Convention, filing and every separate office. So that's why a lot faster and a lot less of a headache, it's less of a headache. It's also very useful for people who are inventors who are actively marketing their product, because a lot of times inventors are or shopping their product to other people and other companies that might be interested in buying it or licensing it. And those companies, while they might look at the product, say Oh, that's very interesting, I think we can sell that they're very concerned about exclusivity to and they want to know, because they may operate more than just the United States and may be operating in Canada or operating Western Europe, operating in Japan, they want to know that if they pick up this device, and they say, Yes, we're gonna sign a license agreement with you that they can protect their rights in these other countries. And that's really the power of a PCT application, as the inventor can say, I've got a PCT on file. If you decide to license my product, you can protect your rights in any of the PCT countries in the world at your expense, of course, not mine. But But basically, it gives you an option of where do you want to protect it, pick the countries that you like, in order to protect this. And that's very powerful. Because now if somebody is thinking about licensing a product, they don't have to worry about, Well, are there going to be grey market imports? You know, am I just going to get rights in the United States under US patent law, and then I've got to try to suppress people bringing in stuff from China or bringing in stuff from wherever, right? Because then they can go to all these different countries, where other people have factories, and they can patent it at their expense. And they can basically take enforcement into account in terms of where they decide to, to do it. So it's a very useful sales tool, from the standpoint of an inventor having a Patent Cooperation Treaty. Filing on file.

Hmm. Cool, I guess we'll just move on to establishing freedom to operate. So what is that

freedom to operate is a function of the patent system that requires me to sort of backtrack for a minute and tell you what a patent is. And then what it is not. First of all, a patent is the right to exclude others from manufacturing, importing or making into a jurisdiction where you have a patent, the patented item, okay. But what it is not Is it is it first of all, it's a negative, right, it's the right to exclude others, it's not a positive, right, meaning it's not saying the government hereby gives you the right to manufacture this in this jurisdiction. Because you can wind up with situations that frequently do where we have things called blocking patents. And a blocking patent is where someone prior to you has a patent on some technology that perhaps you have built on you have used and you've incorporated this technology, taking it to the next level in your device. So now you're you've taken a technology and you've made it infinitely better because you've done something and but you still can't practice your technology without a license for the underlying technology. Okay. And so therefore, freedom to operate means that someone has gone out and actually done a search law firm typically goes out and does a search and says these are the closest patents that we have found. And these are things which could potentially result in litigation if you move forward with it. out either licensing these buying them, or you know, making some sort of deal with the owner of this patent so that you don't get sued. Because one of the worst possible outcomes is to spend a lot of money, you get everything ready to go to market, you go to market, and then all of a sudden you get a cease and desist letter saying, Hi, we're from the ABC Corporation. And by the way, we own this blocking patent which you use in your particular device, or your system or process, whatever it is, you're you're marketing, and either you need to enter into a licensing agreement with us or we will be seeing you in federal court. And that may be a battle that you might actually lose. I mean, if they really do have a blocking patent, they're going to succeed in getting an injunction against you getting forced royalties, and things like that. So freedom to operate is very, very important and is a step that should never be overlooked by any company when they're getting ready to bring a new product to market. And one of the advantages to have getting a freedom to operate opinion is that it can in certain cases, in most cases, eliminate the possibility of getting hit for intentional infringement, because one of the defenses is reliance on on the opinion of counsel. And if you happen to be the accused of fringer infringer, and you have a freedom to operate opinion, in your hand, you can and then people typically take the position of look, I'm not a patent lawyer. That's why I hired patent firm, they said wasn't infringing. I had no reason to believe that that was inaccurate. And I relied on the the opinion of counsel and so therefore, if I'm an infringer, I'm a good faith infringer, I'm not a bad faith infringer, because I did my homework, I asked about this, I was told it was okay. And you know, if that opinion turns out to be wrong, so be it, but it wasn't intentional. And so therefore, you've now cut, infringement damages way, way down as a result of that. So as a practical matter, almost all companies that of any size that bring new products to market, do freedom to operate analysis before they are relatively early in the process, before they start gearing up to actually mass produce things. Yet, as

I was gonna, that was gonna be a question later, I was going to ask, you know, how early should you start getting into this process,

I think the earlier the better. I mean, it can be premature if you don't have a working prototype. But once you have a working prototype, and you have a baseline of your technology, where you're pretty sure that this is how it's going to look in real term work. And then it's time to start moving forward with all of these different things. I mean, like, for instance, the branding should always be moved forward first, because you're gonna need a brand no matter what the the patenting is necessarily second, before trying to protect your patent. Because once you, you have to, first of all develop your technology. But then I think once the patent becomes clear that the patent is going to issue and it has become clear that you are going to move forward to market, that's the time to look at whether there are any other patents that you need to license, because that may impact upon your pricing, it may impact on your ability to even move forward. But a lot of times if you know in advance what the obstacles are, you can plan to overcome them. And just because there's a patent out there that is blocking doesn't necessarily mean that you're going to be stopped cold in your tracks. I mean, most of these blocking patent holders are thrilled, if you call them up and say I want to license you may be the only guy who's called them up saying they want to license you know,

I actually have a funny story, just a little bit of a tangent on that. Because I had something similar to that actually happened to me. So So a few years ago, I was I was designing kind of like a whole amplifier system, and and strange story, but I was actually babysitting my sister's kids one night, they were, they were outside watching a movie and the kids were already asleep, I'm sitting at the kitchen table, I just a light bulb goes off. And this circuit comes to mind, I draw the entire thing out, I write it out. I write my name and a date on that because I was like this is this is my circuit. I have it all drawn out perfectly. And and I go to do a patent search just to see if anyone has done it. And it was uncanny how identical everything I had written was already done a year before me by a gentleman up in the north us. And even the picture that I had drawn, this schematic was almost identical. Now it wasn't like super complex or anything like that. But it was still unique. And it was just like, well, I don't have much options here. I went to a patent lawyer. And you know, I got some counsel on that. And they basically told me, sorry, this guy did it a year before you and the thing was I hadn't even at that time that actually even built the circuit proven it like everything was under my name and I didn't have much options. I actually emailed the guy, I just got his email address emailed him. I was like, Look, I told him the story. I was like, I invented the circuit that you did. I just did it after you and you got a patent on it, what can we do? And the funny thing was, he got back to me, and he's like, I shopped my circuit around all over and nobody wanted it. He's like, you're the only person I've talked to that actually wants it. So he and I actually went into kind of like an agreement together. And he started actually building that as a sub system for me, and just selling it to me directly. And it worked out really well, in the end, but you know, it was one of those things where it's just like, well, I'm, I'm screwed, not really, you know, it just, it was just an email and figure it out.

Yeah, you should never be afraid to talk to people who are existing patent holders, usually, they're thrilled to hear from people who are interested in their technology, because, you know, just like in that case, they have may have been attempting to market this unsuccessfully for a period of time, or even if they have been successful, they're always happy to have new license ors, and you may be able to license technology for less than you think that you're going to be able to license it. And you know, that can, knowing that you have clear title and in a situation like that is very, very useful. You know,

that reminds me of it's another weird tangent on on licensing technology, like I think it was the PlayStation three, I can't remember, I think it was PlayStation three, or Playstation four. But when you wouldn't play can't play a DVD off the box out of the box, it has to download the stuff to do it the firmware or software to do it. Because the how their licensing was set up. It wasn't per ps4 Sold. It was by how many copies of this DVD software was downloaded? No. Okay. You never, you know, if Stephen had a ps4 and never put a DVD in it, Sony would never have to pay the couple bucks. And Sony would love that. Yeah. This is another interesting way how, you know, Sony got around paying? I guess not, they didn't have to pay it they didn't pay,

right. And what people need to know about licensing is that there are no hard and fast rules out there about licensing licensing is pretty much the Wild West, anything that you can, the two parties can agree to, as long as it's not illegal or against public policy is okay. And that means that sometimes people may have to pay very large licensing fees, sometimes they may not have to pay much at all, just depends upon the nature of the party's relative bargaining strength that's out there. I mean, one of the the things that's relatively modern, that is used a lot is like the Qi wireless charging, they have now for like phones and stuff really cool technology that actually is owned by a whole consortium of different companies, none of which owns all the rights by itself, meaning this is a case where you have overlapping patents and blocking patents and things that people have improved upon technology. So you wind up with a whole bunch of companies that collectively own all the technology that's necessary to implement this, but no one of them does. So they created a consortium, in this particular case, they're thrilled to have you license it, and they made it very easy, you can just simply join the consortium, you have to pay a fee to do it. And then they have a standard contract, you know, for every so many devices you make, you have to render so much money to it to the Consortium, and then the consortium splits it up among the different patent holders according to whatever internal agreements that they have. But that's an example of a way that you can adopt technology, basically, instantaneously by simply calling up somebody and joining a particular technology group. And, and that's, I think, a pretty successful licensing model that they have going on in that case.

And I'm on this licensing thing. Because you were talking about patents, but you can also license other people's trademarks. Yes, because the USB group, or water or whatever that who knows USB standard. You can just use the standard, that's fine. It's if when you put on your packaging of your box that it's USB enabled, like that logo, you have to register with the USB group and pay them money and all that stuff to have that logo,

right. Yes, licensing applies not only to patents, but also to trademarks. In fact, there's a huge show in Las Vegas every year called licensing week, and all it's about is about licensing trademarks, and all the big studios are out there and the people who own all kinds of different properties and they're actively looking for people who want to pay them money to use their their trademarks. And thanks.

Can we move on to questions that I've had some people in our Slack channel give us some questions. I said we have a lawyer on today. Before like, Huh? But um, so yeah, um, how about, is there any tips for reading and devaluing? I guess I'm going to add on finding patents, right? Like Stephen did a search, how'd you do that search?

Google, Google was enough to find the one that looked just like mine.

Yeah, Google patents can be a good starting point. But typically, they would not be sufficient for a professional search. I mean, there are a number of different software packages that are out there that professional searchers use, they're also professional search firms that that's all they do. For instance, you can call them up and say, I have this technology, you explain it to them, they you send them money, and then they will go out and find it all for you. And that's all they do all day, every day. And so for the average person, either hiring a law firm or hiring one of the search firms is the most efficient way to do it. In terms of how would you do it, if you actually wanted to do it a good starting place would be go to Google patents, and you want to try to find out what international class that are classes with this technology implicate, because the way that everything is set up, not only in the United States, but in other countries is they have what they call international classes. And you can analogize this to going to the library. If you go to your local library, they're going to have some sort of indexing system, basically, for all human knowledge. And let's say you go to the local library here in Houston, and you want to find a book about George Washington, okay. And so you go there, and you find out okay, in the Dewey Decimal System, if I go to, you know, such such such dot 1239. That's where all the books about George Washington are. And so the key is to know to find is you have to know what is that Dewey decimal number that I'm looking for that because that's where all the Washington stuff is, your circuit, if you've just developed one is some equivalent to Washington, okay? Meaning there is some specific class and subclass that it falls within. And the key to accurately searching is to determine what that class and subclass is, that's not always easy. I mean, one way you can do it is by looking at Google patents and finding similar patterns. And looking at the classifications sub classifications. If you find a lot of overlapping ones, then you probably say, Okay, it's it's one of these two or three, and then to actually search it, you would need to search all those classes. Now Google patents ability to do that is, you know, not purely great. I mean, it's basically set up kind of as a word searching type operation, as opposed to a classification. Searching. The problem with that is that a lot of times patent attorneys name devices, something that ordinary people wouldn't name them. And so you would look at it and like, I'm not coming up with anything, I know, this exists out here. And you got to have that classification. The way that would be done in the patent office, whenever examiner's look at it is they have a system called East and one called West, that's proprietary to the USPTO. And they can look at things by classes and subclasses. And they can bring up all the patents instantly, you can actually gain access to the same system, either at Rice University, Texas a&m, they have terminals that are basically extensions of these USPTO systems. So if you're going to do it yourself, that's how you would do it, you would find out What class do I think it's in you would search this classes using east or west, one of the USPTO terminals, and that's how you would go about doing it.

Okay. So there are options for you to do it before actually seeking legal help. Yes, or affirm.

Right, you can do it yourself. But I think for the average person, if they've never done it before, it would be kind of challenging and frustrating, because it's so it's so in depth.

It's It's enormous. Yeah, right. So a little bit of a of a tangent, we I'm sure this could be an entire podcast on its own, just maybe maybe a little bit quickly. I'm actually personally aware of some patents that seem to be unbelievably overreaching, or just, they cover They cover everything. In fact, I know of a patent right now that covers a certain type of circuitry, where the patent is for the power switch, and not and we're not talking about like a certain like idea, or a you know, circuit for the Switch literally being able to turn something on or off. And that patent seems unfair, because that would just cover anything with a switch. And and I'm not sure how this particular gentleman received that patent. But if you run into a case like that, what what can you do?

Well, there are options for challenging patents that are believed to be overbroad, or which shouldn't have been issued and the America Invents Act provides some new remedies for people who want to challenge these and particularly with regards to a process known as patent re examination where you can go to the office and say I want you to look reexamine Patent and I want you to look at the following evidence and you can submit evidence like, for instance, you might find something on the internet where this was for sale before this guy ever even applied for it. Or you might find prior art somewhere else, like maybe it was patented in France before the guy who submitted his patent application. In other words, your argument to to the patent office is had you been aware of this evidence which I'm presenting to you, you would never have granted this patent because there was prior art was anticipated. And for whatever reason, the examiner didn't see it, he did. He didn't catch it, it was never brought to his attention or whatever. And this patent should be invalidated. And this procedure has been used quite successfully in recent times to deal with patents. Another way you can do it and which traditionally has been used, but which is more expensive is to go to federal court and sue to invalidate patents. I mean, once a patent is issued, it's not like set in stone, and it's forever there. And the government has said you may never challenge it, you can always challenge patents during the enforcement process, on the grounds that the patent should never been issued in the first place. And that would be typically when that occurs, usually have a firm that goes and does what they call a patent invalidity search and what an invalidity searches is typically undertaken when somebody gets sued for patent infringement. And they're looking okay, what sort of defenses do we have? Because, you know, we want to assert that the patent is invalid. So all of a sudden, now, they're trying to uncover every rock and look in every nook and cranny for anything anywhere, which had been known to the patent office would have resulted in this patent application being denied or being narrowed considerably. And so that's basically how you would do it in terms of challenging overbroad patents?

Yes. And we kind of covered this already. But like, so caught, a guy in chat said, should you even look at other patents because liability hurts even more. But that's like, you just, it's kind of like, you're just going to, if there is a patent, you're just going to ignore it anyways, what's this guy sounds like,

well, but but but isn't isn't in ignorance is not a defense, right?

Well, basically, what he's talking about is willful ignorance, you know, can we shouldn't we just remain willfully ignorant? And the answer is no, because you don't want to be on the receiving end of an enforcement action from someone who's a legitimate patent holder. And and it's very important to know what is coming down the pike, because usually, if you know what is coming down the pike, you can wire around it one way or another. Either you can redesign your product. So it's not infringing, you can call them up and license the product. Or you can take action ahead of time, usually at far less cost than whenever somebody is asserting a federal lawsuit against you, then your your options are more limited. And they're dealing more from a position of strength because you now have to respond to this litigation. So I would say, No, I would not. I would never willfully. You know, say, I'm not going to search a patent to see if there's infringement going on. And as I brought up previously, that's part of freedom to operate is going out and looking because if you look, and your attorney comes back and says, I think you have freedom to operate, I don't think you're infringing, then you now have established pretty much a good faith defense and the chances of getting hit. Even if it turns out that opinion was wrong. Your chances of getting hit for willful infringement is I wouldn't say totally eliminated but vastly reduced.

And then another question is, Is it illegal to try to patent something that, you know, is not original? I guess? Well,

I guess it depends on

already prior art, basically. Right?

If there's prior art, generally, you shouldn't submit if you know, there's prior art, you shouldn't submit an application now, is it technically illegal? Or you know, is anyone going to show up and and haul you away to jail? No, but you would have a duty if you knew that there was prior art to disclose that to the patent office. And there's a process for doing that an information disclosure statement, and you would have an ethical obligation to submit that to the office and to the examiner. Now, when the examiner miss it and issue your patent anyway, I'm not saying it never happens, it could potentially happen. But in general, whenever people are prosecuting patents, they always try to put the closest art on the information disclosure sheet. And there's a very important reason for that is because whatever the examiner looks at and says this is patentable over this, it winds up on the front of the patent and this is like gold in terms of defense later on if someone tries to invalidate your patent so let's say for instance, there's a Smith patent and a Jones patent and Smith and Jones you're looking at and saying Ah boy doesn't really close. I don't know if I can patent over Smith and Jones. But no, you disclose that. And the examiner looks at it says I see no problem. He issues your patent. Okay. And it's Smith and Jones. He puts it on there, Smith and Jones. It's Patent over Smith and Jones, the federal courts will generally refer to the patent office as this being something in their area of expertise. Not always they don't have to, but typically they will. And so therefore, even though Smith and Jones might have been a great defense that then invalidity from an infringer standpoint, essentially those have gone away is usable issues if it's listed on the front of the patent. So you always want to disclose the closest known art to the patent examiner so that that way, no, they can make a correct decision. Because if your if your patent turns out to be valuable, it's going to be challenged at some point by someone, either, you're gonna have to enforce it, or somebody is going to try to invalidate it. And so you want to make sure that you have a quality patent issuance. And that means that you want the examiner to really truly look at the closest analogous art and make a determination does he or she think it's patentable over the closest art?

Cool. Is there anything else you want to add to this discussion? Or do you have any other questions, Stephen?

Um, no, I mean, this was a really meaty topic here. Lots of lots of really good information. I'm actually I'm fairly impressed.

Thank you, Bruce, for driving all the way down here. Oh, no problem. And again, for having me appreciate all the advice.

I mean, that's a lot of times it's difficult, or not difficult. It's costly to get even this like introduction here, so we appreciate you coming out and sharing it with you. Oh, I'm

happy to do so.

Oh, yeah. Yo,

that was the macro fab engineering podcast. I was your guest Bruce Hamby.

And we're your hosts, Parker, Dolman.

And Steven Craig. Also to mention Bruce is going to be here on next week, the 20 March 28 to share at our next March meetup.

Cool. See you next week. Take it easy Thank you. Yes, you our listener for downloading our show. If you have a cool idea, project or topic or views that you want to be plugged, text us at Or no, not Texas, tweet us at podcasts or McWrap. That's when you go off script and doesn't work does it? Yep. Ah, if you have a cool idea, project or topic that you want Steven and I to discuss, tweet us at Matt kraebel. Email us at podcast at macro calm. Also check out our Slack channel which we'll be talking about vias and stuff like that

blog and stuff. Sure.

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