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NYC Lecture on “Engineering Inventions, New Technologies, and Intellectual Property”
Ivan Durbak

On March 15th, 2006, the Ukrainian Engineers’ Society of NYC presented a lecture by Walter Hanchuk, Patent Attorney for Chadbourne & Parke LLP on “Engineering Inventions, New Technologies, and Intellectual Property ", at the Ukrainian Institute, 2 East 79th Street, NYC. John Kheit, a senior associate in the intellectual property group at Chadbourne & Parke, assisted in the presentation Mr. Hanchuk began with a general overview of the Intellectual Property (IP) landscape of Patents, Copyrights, Trademarks, and Trade-Secrets: an exciting arena where, with substantial Private Equity funding available and where it has never been easier to market and expand a business, IP has never been more valued. Mr. Hanchuk also explained, however, legal minefields including Trademark Clearance problems, the birth of the Patent Troll, copyright cloudiness, and regulatory red-tape at an all-time high

Mr. Hanchuk then described a number of noteworthy IP litigation cases, including: A. Patents: in the recent Blackberry case the whole country was on the verge of a Blackberry stoppage, with $612 million paid to a patent troll. Other interesting lawsuits mentioned: Priceline.com v. Microsoft & Expedia.com, Amazon.com vs. Barnesandnoble.com, and Yahoo v. Google. B. Copyrights: the wildly popular peer-to-peer (p2p) phenomena causing music and videos to be copied at record levels, and the MGM v. Grokster lawsuit. C. Trademarks: Lexis v Lexus. D. Trade Secrets: theft of trade secrets by a former exec (GM v. Volkswagon). E. Mr. Hanchuk also discussed other significant and related issues, including Open-Source, Domain-Name, and Sarbanes-Oxley issues.

Mr. Hanchuk next reviewed the changing Patent Protection process, tracing the patentability evolution of Software in 1990 through E-commerce in 1995 and into Business Methods in the early 2000’s. He explained how the major Strategic Goal is to preserve rights:

To preserve worldwide rights, file for patent protection before any form of offer for sale or public disclosure; at a minimum, file within one year of offer for sale or public disclosure to preserve US rights (although foreign rights lost). A second goal is to defer costs: Foreign file within one year of US filing – the Patent Cooperation Treaty allows preservation of rights for 30 months from original filing date.

Mr. Hanchuk then detailed changing nature of computer systems and software that are “Patent-Eligible” today in the United States, illustrating cases now covered under patent law (a) New Accounting Techniques (b) New financial instruments (Traveler’s checks, Credit Cards) and (c) Internet Purchasing Techniques. Specific examples included Merrill Lynch’s Securities Brokerage-Cash Management System, CitiBank’s Trusted Agents For Open Electronic Commerce, Priceline.com’s Method and Apparatus for a Cryptographically Assisted Commercial Network System, and Amazon.com’s Internet-based Customer Referral System

Mr. Hanchuk next examined US Copyright Law and particularly how it affects the Internet technology industry. He explained how the law not only covers Direct Infringement (Copying) but also Indirect Infringement; the latter includes (a) Contributory infringement: Knowledge of infringing activity and material contribution, (b) Vicarious infringement: Profit off of the infringement and Ability to supervise the direct infringer, and (c) Inducing infringement: Intent to cause infringement and Purposeful act to encourage infringement

Mr. Hanchuk described the pivotal lawsuits against Napster and Grokster, described briefly new and developing technologies such as 1. Slingbox (Box that retransmits television broadcasts to any PC worldwide), 2. Darknets (private P2P networks) and 3. Traditional P2P – Illegal File Sharing (now with over 9 million P2P users and over one billion songs, often hosted outside the United States) and concluded that there was “No practical alternative to controlling massive copyright infringement”. Mr. Hanchuk moved on to examining Open Source Software (OSS) - Freely licensed software including source code, in the public domain, which the Licensee has the right to use, modify and distribute at no charge. He explained the interesting legal concept of Copyleft, which is a general method for making a program or other work free, and requiring all modified and extended versions of the program to be free as well. Another important legal concept is that if a program contains open source, then potentially that entire program must be redistributed for free with source code.

Mr. Hanchuk debunked many common myths regarding OSS, including (1) You can do whatever you want with it, (2) You cannot charge for OSS (in fact - under certain conditions you can), (3) OSS is always free, and (4) You are forced to give up all of your Intellectual Property rights. He then described how many prominent companies, such as IBM, Apple, Tivo, and SONY, are effectively utilizing OSS today.

Mr. Hanchuk then moved on to US Trademark Law and explained the key topics: Genericness, concept of “Merely Descriptive” and “Likelihood of Confusion” analysis, Primarily Merely a Surname, Authors’ Names, Res Judicata and Collateral Estoppel, and Dilution. Complexity enters when the connotations and commercial impressions must be balanced against and may outweigh the visual and phonetic similarity. He illustrated with an interesting case: DC Comics v. Pan American Grain Mfg. Co. where KRYPTONITE (for T-Shirts, toys, and sporting goods, etc.) was confused with KRIPTONITA (for prepared alcoholic fruit cocktail). Mr. Hanchuk concluded with general legal advice: in all intellectual property issues with consultants and business associates and dealings:

(1) insure that all employees & consultants sign confidentiality & ip ownership agreements, (2) include patent and copyright ownership clauses (3) have employees execute exit agreements (4) take note of open source issues, (5) maintain trade secrets: limit disclosure, (6) police the brand, and (7) clear new marks and consider clearing new products of ip issues.

Throughout the presentation Mr. Hanchuk used vivid imagery and slides to keep the audience engaged and involved with a balance of technical/legal material and practical real-world problems.

After the formal presentation, the audience participated in a spirited question-and-answer session and collegial debate. The evening finished with informal and convivial discussions over food and drinks.

Walter Hanchuk is a partner in the intellectual property group at Chadbourne & Parke, a 100 year old international firm with 450 lawyers. The Firm has a major presence in Eastern Europe and the former CIS, including substantial offices in Kyiv, Warsaw, Moscow, St Petersburg and Kazakhstan.

Walter Hanchuk received his Engineering degree from the Cooper Union and his law degree from the George Washington University. His career spans over 17 years in intellectual property law, and in developing new and emerging technologies, including employment at the US Patent & Trademark Office as a US Patent Examiner and as a partner of Morgan & Finnegan, a patent law firm in New York. He has served on Advisory Boards of various emerging technology companies, and Editorial Boards of various publications of the New York Law Journal and the E-Commerce Law Journal. He has prosecuted many pioneering patents for various internet, information technology and financial service companies, and has litigated patent, unfair competition and trade secret cases against companies such as Microsoft and Texas Instruments. He was recently named one of New York's "Super Lawyers", a rating given to a small percentage of lawyers in an upcoming supplement to the NY Times.

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