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UTAH: An Introduction to Intellectual Property

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Intellectual Property Strategy in Utah: Protection & Enforcement

I. Protecting Innovation in a Booming Tech Economy

The COVID-19 pandemic had devastating impacts on American business, with tens of thousands of small businesses permanently closing, massive furloughs and layoffs, and huge cuts in R&D and intellectual property (IP). However, social distancing and quarantine conditions in 2020 also inspired a sharp rise in entrepreneurship, often in the form of new digital business models. This digital transformation built around e-commerce was wide-spread and fast; Satya Nadell, CEO of Microsoft, observed that two months of the pandemic produced two years of digital transformation.

Nowhere has this been better illustrated than in Utah’s economy. Because of its relatively young and well-educated workforce, the state has weathered the effects of the pandemic better than most. In March 2021, U.S. News and World Report ranked Utah’s economy number one among all 50 states, growing at an annual rate of 4.3%, the best in the country.

A recent report by the University of Utah’s Kem C. Gardner Policy Institute notes that “Utah’s tech sector has built an enormous and still-growing footprint when it comes to what’s driving the state’s economy.” Even before the pandemic, the technology sector was responsible for more than 210,000 jobs in the state in 2018, contributing nearly $30 billion to the state’s GDP, and tech employment rising to 4.9% per year (compared to a national rate of 1.4%).

The impact of the digital transformation of industry combined with the rapid growth of the technology sector in Utah has brought significant benefits to the state’s economy, as well as new challenges. Innovators no longer have the luxury of the long lead times once the norm for developing IP protection. In fact, some innovators have decided to simply forgo IP protection and focus on a rush to the global marketplace. This approach can shortchange a start-up’s value by failing to protect its innovation for the longer term. A thoughtful IP strategy, on the other hand, can add value that significantly enhances a start-up’s value and investment in capital and labor. It can also mitigate the risk of larger enterprises with plentiful capital from acquiring or emulating innovations without appropriate compensation or licensing.

Carefully strategized IP protection—taking full advantage of both foreign and domestic protection and enforcement strategies—helps position a start-up for acquisition at improved valuations. It can also provide a strong incentive for investors, and prevent unwarranted dilution of founders’ equity.

An effective IP strategy requires thoughtful understanding and use of utility patent filings to cover essential aspects of how an innovation works, when design patent protection is appropriate, and early trademark and service mark registrations to protect branding. Today’s accelerated digital transformation has also spawned an increase in hacking and data breaches, which underscores the need for robust trade secret protection as well.

II: Effective IP Enforcement in the Digital Marketplace

The growth and dominance of online marketplaces such as Amazon, eBay, Alibaba, and Shopify has intensified the need to protect, defend, and enforce intellectual property in the e-commerce setting.

Utah has seen an explosion of new and successful online businesses; however, rapid success encourages copying and IP infringement. Many businesses are facing the challenge of online counterfeiting by sellers who take advantage of the anonymity of the online marketplace.

Moreover, the global nature of ecommerce means that IP enforcement can be a global affair; a business should be prepared for challenges from all corners of the world with regard to any new and popular product. Enforcement and monitoring must remain a necessary part of any effective IP strategy.

Companies facing this global, digital competition require quick moving, custom solutions to protect their IP from online infringement. They need experienced IP counsel who understand domain name disputes, online retailer agreements, online infringement notices and counter-notices, copyright and trademark infringement issues, and privacy policies. A company and its counsel should anticipate the possibility of infringement and be ready to move quickly to stop it—especially since enforcement can be further challenged by fraudulent operations moving swiftly between activities.

Fortunately, online marketplaces such as Amazon and Alibaba provide their own enforcement procedures for infringement of copyrights, trademarks, design patents, and utility patents. Both provide streamlined processes for brand owners that are quick, inexpensive, and effective, especially in straightforward claims of infringement—such as obvious counterfeiting or copyright infringement. Although these systems can be prone to abuse, they generally allow brand owners to enforce their rights without costly court proceedings.

Amazon also offers “Neutral Patent Evaluation” proceedings for utility patents. For a modest fee, a patent owner may enforce their rights following an evaluation by a neutral arbitrator appointed by Amazon. The benefit of these proceedings is their speed (weeks rather than years) and their extremely low cost (when compared to patent litigation in U.S. District Courts.) Moreover, because of Amazon’s incredible market power, these proceedings are almost governmental in their effectiveness: infringers are stopped quickly and inexpensively, without the burden of traditional litigation.

Amazon and Alibaba are breaking new ground with these enforcement proceedings and other marketplaces are developing similar processes. By working with a law firm that is experienced in these procedures, a company can protect its online business, and save both millions of dollars in legal fees and years of delay.

About Us: 

Our team of legal and technology experts can handle any intellectual property challenges our clients may face, whether they are a small start-up or a Fortune 500 company. We take a creative approach to our work. Many of us did not set out to be attorneys — we were engineers, developers and scientists, who recognized the value of protecting innovation. We know that intellectual property is among our clients’ most valuable assets, and we strive to understand each client’s needs and objectives in order to help protect and enforce their rights. Our backgrounds enable us to speak our clients’ language and understand the nuances of a competitive and dynamic landscape. We are committed to helping clients achieve their goals while staying within their budgets — whether they are a large corporation, an individual inventor, or a client in need of a pull-out-all-the-stops litigation team.