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Quarterbacks are the leaders of the team, but without the offensive line, they may get a better view of the great Texas sky than the intended receiver. Similarly, if the general counsel’s legal team does not include an inside or outside intellectual property lawyer, adverse consequences can ensue. Specialized counseling contributed to the team by the IP lawyer may set up defenses for the business in advance of problems. Many executives — and some in-house lawyers — believe that, if the company is not in the high-tech business and does not itself have research and development activities, then there are no IP concerns. However, all businesses likely own some form of IP in the form of trademarks, service marks, copyrights, trade secrets and/or patents, and they also must avoid infringing the IP rights of others. The prospect of being slapped with an injunction against an important aspect of the business because of IP infringement should give in-house counsel pause. Few companies relish the cost of litigation and the prospect of paying damages and/or attorneys’ fees to the other side. Companies typically use a service mark or trademark in conjunction with marketing products or services. General counsel need to know that merely reserving a corporate or trade name or acquiring a domain name does not clear the trademark for use. The Internet and the globalization of commerce have made it imperative to seek registration of important marks before third-party pirates do so. It is much easier to file a trademark application than to try to purchase the mark from a third party intent on making money. Sophisticated pirates take action when they learn that a major company has reserved a domain name or names, beating a path to trademark offices around the world in advance. Finally, it makes sense to determine if the selected mark could infringe the rights of others. Even in ongoing businesses, the failure to set up a protocol for the marketing department to use to clear new product names can lead to litigation and/or the loss of substantial financial investment in advertising and packaging. KEY MEMBER An outside IP lawyer can block for the GC on the labor and employment front, as well. Before an employee or a contractor even begins work, IP concerns crop up. The GC’s team can address these with appropriate agreements and procedures approved by IP counsel. The business needs to immediately have a plan to protect trade secrets and to ensure the ownership of copyrights and patents developed by these employees and contractors. Trade secrets do not have to be high-tech knowledge or secret chemical formulas but may be any matter that is secret and proprietary that provides an advantage to the company that its competitors do not have. The GC needs to consider including nondisclosure obligations in its employment contracts and possibly even drafting noncompete clauses that courts are likely to enforce. The GC should confer with execs to decide who should own any intellectual property the employee or contractor invents or creates and contract appropriately. For example, copyright issues immediately come into play when companies hire a contractor to write specialized software or to create a Web site, since the creator of copyrightable work, in the absence of an agreement, is the copyright owner. Mergers, acquisitions, contracts and licenses are other normal business activities in which the value of many companies — their intellectual property — is at stake. Early in the due-diligence process, the GC should ensure that IP counsel has reviewed the status of the IP to be transferred and the chain of title of the ownership. Even if a desired widget is the driver of the deal, not the IP, IP considerations may come into play. A decision to produce a widget in-house rather than to enter a contract or make an acquisition may seem less expensive until the IP exposure is considered. Software is a huge part of the operation of nearly all businesses and also filled with IP concerns. Due to confusion over copyrights and the need to maintain proper licenses, even upstanding corporations and businesses may be caught without the appropriate procedures and documentation. Trade groups have been actively seeking out unlicensed software. Again, the IP lawyer on the GC’s team can develop protocols and procedures to guard against copyright infringement, which poses the risk of substantial damages and a public relations disaster if the company is branded as an “infringer of software.” Even a noninventing company should consider whether it can carry out its business plan without infringing the patent rights of others. The number and variety of patents on the books is astounding, and with the advent of business-method patents, there are more potential pitfalls. Procedures that seem nontechnical in nature may have been shared freely in business classes in the past but now may be the subject of another’s patent rights. While it is impossible to check every possible IP pitfall in advance, a major investment in a new product or method of doing business should not skip an IP review. If it is necessary to acquire a license, the royalty rate may be a bit friendlier if the business has not already made such a significant investment that the need for the license is evident to the licensor. Corporate inside counsel needs an IP lawyer to be a key member of the corporate legal team, just as the offensive lineman is a key member of the offense of any football team. It is better to have the defense in place than to wait until the quarterback is in trouble and scrambling. Eugenia S. Genie Hansen is of counsel at Conley Rose in Dallas. She is a graduate of the University of Houston Law Center and Texas A&M University, where she studied biochemistry and watched football. She chaired the State Bar of Texas Intellectual Property Law Section during 2004-2005 and is a former member of the American Intellectual Property Law Association board of directors.

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