As the legal landscape continues to evolve in terms of intellectual property law, the Los Angeles Business Journal once again turned to some of the leading IP attorneys and experts in the region to get their assessments regarding the current state of IP legislation, the new rules of copyright protection, licensing and technology, and the various trends that they have been observing, and in some cases, driving. Below is a series of questions the Business Journal posed to these experts and the unique responses they provided – offering a glimpse into the state of intellectual property law in 2014 – from the perspectives of those in the trenches of our region today.

1. October 13, 2014 • An Advertising Supplement to the Los Angeles Business Journal
INTELLECTUAL
PROPERTY LAW
ROUNDTABLE
What Businesses Need to Know
PATRICK A. FRAIOLI, JR.
Partner,
Ervin Cohen & Jessup LLP
AARON MOSS
Partner and Chair of the
Litigation Department,
Greenberg Glusker Fields
Claman & Machtinger LLP
ROLLIN RANSOM
Partner & Co-Chair of
Litigation Group,
Sidley Austin LLP
DAVID WEISS
Partner,
Knobbe Martens
As the legal landscape continues to evolve in terms of intellectual prop-erty
law, the Los Angeles Business Journal once again turned to some
of the leading IP attorneys and experts in the region to get their assess-ments
regarding the current state of IP legislation, the new rules of
copyright protection, licensing and technology, and the various trends that they
have been observing, and in some cases, driving. Below is a series of questions the
Business Journal posed to these experts and the unique responses they provided –
offering a glimpse into the state of intellectual property law in 2014 – from the per-spectives
of those in the trenches of our region today.
This special advertising supplement did not involve the reporting or editing staff of the Los Angeles Business Journal.
➼

2. 20 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL OCTOBER 13, 2014
◆ How has the intellectual property law land-scape
changed over the last five years?
Weiss: As intellectual property, and patents in partic-ular,
has become more critical to the economy, the
Supreme Court has sought to limit the breadth of
patent protection and Congress has made it easier to
challenge patents within the U.S. Patent Office. In
the past term, the Court limited the eligibility for
patent protection of certain software inventions,
which has made it more difficult to find a party libel
for indirect infringement, has made it easier to inval-idate
patents for indefiniteness, and has made it easi-er
for prevailing parties in patent litigation to be
awarded attorney fees. The Federal Circuit has made
it more difficult for patent plaintiffs to collect huge
awards. Under the new procedures for challenging
patents in the U.S. Patent Office, a high percentage
of patents that have undergone such procedures
have been invalidated.
Ransom: The digital revolution has led to great tech-nological
and economic advances; at times, however,
intellectual property law has struggled to keep up.
Each new advance in how information is stored,
communicated, or made available brings with it new
opportunities for infringement or other rights viola-tions.
Laws that were passed decades ago are not
always well suited to address these issues, and
Congress has had difficulty reaching agreement on
revisions that balance the need to protect innovation
with the need to facilitate advances in the arts and
sciences. The “solutions” often generate more dis-putes.
Perhaps as a result, the Supreme Court has
recently been more active in intellectual property
cases, a trend that is likely to continue. In areas not
exclusively governed by federal law (for example,
data breaches), state legislatures have been extremely
active (or more accurately, reactive) in passing new
legislation; that trend is also likely to continue.
◆ Why has the Supreme Court been so active
in IP cases in the past few terms, and what
does it portend for the future?
Ransom: There are a few things at work here. First,
with respect to patent law, it seems clear that the
Supreme Court has no confidence in the Federal
Circuit Court of Appeals. Of the six patent cases
heard in the most recent term, the Court unani-mously
reversed the Federal Circuit in five of them,
continuing a trend seen in recent years. Second, the
Court also seems intent on narrowing the scope of
patent protection – among other things, its decisions
tightened the requirements for patenting computer
software (Alice Corp.) and proving induced infringe-ment
(Limelight Networks) and relaxed the standard
for invalidating a patent based on indefiniteness
(Nautilus). And finally, the number of IP cases of all
varieties that have been taken in recent years sug-gests
that the Court recognizes the fundamental
importance of intellectual property issues to the
American economy, making it likely that the
Supreme Court’s interest in these matters will contin-ue
in coming years.
Weiss: Ten out of the 67 cases heard by the Supreme
Court in its last term were intellectual property
cases, including six patent cases. This reflects the
Supreme Courts understanding of the increasing
importance that intellectual property plays in
today’s economy. The Court appears to be sensitive
to complaints that rather than encouraging innova-tion,
patents, especially when asserted by non-prac-ticing
entities, often hinder innovation. In response,
the Court has sought to limit the breadth of patent
protection. The Court limited the eligibility for
patent protection of certain software inventions,
which has made it more difficult to find a party libel
for indirect infringement, has made it easier to
invalidate patents for indefiniteness, and has made
it easier for prevailing parties in patent litigation to
be awarded attorney fees. We can expect to see the
Supreme Court continue to weigh-in on intellectual
property matters for the foreseeable future.
◆ What was the most surprising IP decision
the Supreme Court issued last term?
Moss: Petrella v. MGM surprised me the most.
Essentially, the Court ruled that the equitable doc-trine
of laches could not be used to prevent a plain-tiff
from suing for monetary damages in a copyright
infringement suit – even if the defendant’s infringing
conduct first began decades earlier and the plaintiff
delayed filing a lawsuit during that time. Even more
surprising, the Court explicitly endorsed the practice
of plaintiffs watching and waiting to see whether the
alleged infringing motion picture or other product is
going to make money before filing a complaint. This
is going to make it more difficult for studios and
other content creators to get long-delayed claims dis-missed
early in litigation.
Ransom: I was surprised by the Court’s decision in
Petrella v. MGM, in which the Court held that the
defense of laches (a plaintiff’s unreasonable delay in
bringing suit, coupled with resulting prejudice to the
defendant) does not bar a claim for damages under
the Copyright Act, so long as the claim is brought
within the Copyright Act’s statute of limitations.
Because of the way the copyright statute of limita-tions
works, a claim is timely as long as any act of
infringement has occurred within the three years
preceding suit. The consequence of the Court’s ruling
is that copyright infringement that commenced
decades ago is still actionable today, so long as there
has also been some recent act of infringement, even if
the plaintiff has long known about the claim, unrea-sonably
waited decades to assert it, and the defen-dant
was prejudiced by the delay (e.g., by the inter-vening
death of a key witness). This raises the
prospect of a new wave of “old” infringement claims,
and reduces the ability of defendants to fight them.
◆ In light of recent Supreme Court decisions
in false advertising cases, do you see any
likely trends in false advertising litigation?
Ransom: Perhaps the most significant development
in this space was in POM Wonderful LLC v. The Coca-
Cola Company. The Supreme Court held that com-petitors
can challenge food and beverage labeling
claims as false or misleading, even where the label
meets the requirements of the federal Food, Drug,
and Cosmetic Act. This ruling has the potential to
expand false advertising litigation in this industry. At
a minimum, it should prompt food and beverage
companies to scrutinize their own product labeling,
as well as that of their competitors, even more close-ly
than they might have in the past. In certain
respects, the Court’s opinion appears to be limited in
scope – language in the opinion suggests that its
rationale would not apply to state-law based con-sumer
class actions, or to drug (rather than food and
beverage) labeling – but only time will tell.
◆ Is there pending new IP legislation coming
soon? If so, does this stand to help or hinder
existing businesses?
Moss: Among other things, there have been some
very preliminary discussions about amending the
Copyright Act to address the Supreme Court’s ruling
last year in Kirtsaeng v. John Wiley & Sons, Inc., which
held that the first sale doctrine applies to copyright-ed
goods manufactured abroad and imported into
the United States. The first sale doctrine is what
allows people to sell DVDs on eBay and for libraries
to lend books without needing permission from the
copyright owner. I litigated the foreign manufacture
issue in the landmark Costco v. Omega case. A change
in the law would allow manufacturers more control
over the distribution of their goods, but would give
retailers less control over the resale of those goods.
◆ What are some common copyright issues
that small businesses face? How can they
best be addressed?
Ransom: The biggest issue is a lack of understanding
of the fundamentals of copyright law. A common
misconception is that if a photograph is available
online, then it is free for the business to use. Or
that music or video may be used in a website with-out
permission if credit is given to the copyright
owner. Or that third party works can be used and
copied so long as they are not sold or profit gener-ating.
A related problem is a relative lack of internal
controls over the conduct of employees (who may
INTELLECTUAL PROPERTY LAW ROUNDTABLE
‘The failure to encrypt
covered data on
mobile devices, and
the widespread,
careless use of one
password across
all of a user’s devices,
are common, ticking
time bombs.’
PATRICK A. FRAIOLI, JR.
‘The digital revolution has led to
great technological and economic
advances; at times, however, intellec-tual
property law has struggled to
keep up. Each new advance in how
information is stored, communicat-ed,
or made available brings with it
new opportunities for infringement
or other rights violations.’
ROLLIN RANSOM
22➼

3. OCTOBER 13, 2014 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 21
GreenbergGlusker.com
The Nexus of
Entertainment
and Tech
We counsel emerging
companies and industry
leaders in intellectual
property-driven industries
on strategies to protect,
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intellectual property.
Charles Shephard
310.201.7494
CShephard@greenbergglusker.com
Aaron Moss
310.785.6814
AMoss@greenbergglusker.com
Jesse Saivar
310.201.7549
JSaivar@greenbergglusker.com

4. 22 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL OCTOBER 13, 2014
INTELLECTUAL PROPERTY LAW ROUNDTABLE
‘One common issue is
that businesses will often
hire photographers or
marketing agencies
without negotiating or
fully understanding the
copyright ownership of
the resulting photos
and materials.’
AARON MOSS
‘A startup’s most important intellectu-al
property is often created at the out-set.
Indeed, startups are often founded
to commercialize an innovative idea.
Therefore it is critical that a startup
allocate a portion of its limited
resources to protect its most important
inventions via the patent process.’
DAVID WEISS
labor under some or all of these misconceptions) –
no in-house lawyer, risk manager, or other mecha-nism
in place to ensure compliance with copyright
law. Education is key – for example, a “copyright
basics” presentation by an experienced attorney –
coupled with regular review of business-generated
materials to ensure compliance.
Moss: One common issue is that businesses will often
hire photographers or marketing agencies without
negotiating or fully understanding the copyright
ownership of the resulting photos and materials.
Without a written agreement, the photographer or
other commissioned party will usually own the copy-right,
so it’s important to spell out in advance the
precise scope of the hiring company’s license to use
the materials. The commissioning business will be
better off obtaining full rights if this can be negotiat-ed,
but the parties should at the very least come to
an agreement in advance on the type, extent and
duration of the company’s use – before disputes arise
later on.
◆ How real is the threat of injunctive relief in
copyright and trademark actions? Is an
injunction likely to follow if there is a find-ing
of liability?
Ransom: It used to be that injunctive relief was fairly
automatic (or at least easier to obtain), because a
finding of liability typically carried with it a pre-sumption
of irreparable harm. However, in eBay v.
MercExchange, the Supreme Court rejected a similar
presumption in the patent context, requiring a show-ing
of irreparable harm to obtain an injunction.
Since the eBay decision in 2006, several courts,
including the Ninth Circuit, have extended its hold-ing
to copyright and trademark infringement claims
as well. The impact of these rulings is that it will be
harder for plaintiffs to obtain injunctions, even
where they have prevailed on the merits of their
claims, as they will need to demonstrate that they
will suffer irreparable harm from the violation, rather
than relying on a presumption of such harm.
◆ How “safe” is the safe harbor under the
Digital Millennium Copyright Act?
Moss: The DMCA safe harbor completely immunizes
a service provider from liability for copyright
infringement claims if it implements particular
notice and takedown procedures. But uncertainty
arises from the requirement that the service provider
must not have actual knowledge that the material in
question is infringing or be aware of facts or circum-stances
that make it apparent that there is infringing
activity. The question is how to define “knowledge.”
There have been a number of circuit-level cases dis-cussing
the issue, but no guidance from the Supreme
Court. In the Ninth Circuit, there is no safe harbor
when the provider is subjectively aware of facts that
would have made the specific infringement “objec-tively”
obvious to a reasonable person. I suppose
that’s pretty safe, if you can figure out what it means.
Ransom: This is an ongoing battle between content
owners and online service providers. In the absence
of either actual or so-called “red flag” knowledge of
specific acts infringement, and assuming compliance
with the other requirements of the statute, courts
have generally concluded that online service
providers are insulated from claims of copyright
infringement occurring on their sites. However, the
level of awareness necessary to satisfy actual or “red
flag” knowledge – among other things – remains
actively in dispute. In the future, courts will be look-ing
at that question from various angles, including
whether viewing material online that contains all or
virtually all of another’s well-known copyrighted
work constitutes actual or “red flag” knowledge of
infringement of that work, and whether an online
service provider’s “willful blindness” to infringement
prevents it from taking advantage of the safe harbor.
◆ The Trademark Trial and Appeal Board
recently cancelled several Washington
Redskins trademark registrations, conclud-ing
they were disparaging of Native
Americans. How significant is the threat of a
“disparaging mark” challenge to trademark
owners?
Moss: There’s a misconception that if a trademark is
cancelled (or refused for registration) because it con-sists
of “immoral, deceptive, or scandalous matter,”
this means that the owner does not have the right to
use or enforce the mark. The owner may still have
common law rights that would prevent third parties
from infringing the mark. This being said, there are a
number of benefits offered by federal registration,
including presumptions of ownership and nation-wide
rights. Until the Redskins’ case is resolved on
appeal, the mark continues to be registered and the
owner retains the benefits of the federal registration.
Ransom: Although the TTAB decision received a great
deal of news coverage, the practical impact for trade-mark
owners is fairly modest. The standard for find-ing
a registered mark disparaging was, and remains,
whether the mark was disparaging when registered. So
even if the meaning of mark changes over time, a
trademark registration is not in jeopardy unless the
mark was disparaging at the time of the original reg-istration.
Moreover, cancellation of a registration of a
disparaging mark does not prevent enforcement of
common law rights in the mark, though there may,
of course, be public relations consequences associat-ed
with using and enforcing a disparaging mark.
◆ The news is full of stories about massive cor-porate
data breaches; what exposure do busi-nesses
in California face from data breaches?
Fraioli: Well, there is a large company like Target,
with approximately $150 million specifically result-ing
from this breach, to date. Some analysts esti-mate
that the total, future loss may reach $1 bil-lion.
On the other hand, as Stan Stahl, President of
ISSA-LA always reminds audiences, every year
approximately 30% of all small to medium sized
businesses (250 employees are less) get hit with a
cyberattack; of that group, 60% are out of business
in less than 6 months. In IP litigation, we often
speak of “Bet the Company Lawsuits.” If you are a
Small to Medium Sized Business in California, there
is a good chance that a data breach will be a Bet
Your Company event.
Ransom: It is often said that it’s not whether your
business will suffer a data breach, but when. Every
business in California faces potential harm from data
breaches and should take measures to minimize both
the risks of a breach and the level of harm. Data
breaches have both direct and indirect effects on
business. Not only does the business have to spend
money –the reported average is over $5 million – to
resolve a data breach and address the underlying
cause, but it must also deal with reputational harm,
loss of customer loyalty, negative press, and, increas-ingly,
litigation. The California legislature has also
been active in this area. Most recently, the legislature
amended the state’s data breach notification law to
expand the scope of businesses covered by data secu-rity
requirements, among other measures.
◆ What advice would you give to an early
stage technology company with respect to
protecting its intellectual property assets?
Weiss: A startup’s most important intellectual proper-ty
is often created at the outset. Indeed, startups are
often founded to commercialize an innovative idea.
Therefore it is critical that a startup allocate a portion
of its limited resources to protect its most important
inventions via the patent process. If a patent applica-tion
is not timely filed, a startup may lose its ability
to later seek patent protection for its key inventions.
Additionally, such key inventive ideas may have
been created by a founder prior to the formation of
the startup, and it is vital that such inventive ideas
and other intellectual property are assigned to the
startup. If a startup is outsourcing work to contrac-tors,
it is essential that appropriate assignments are
executed to ensure that the startup has ownership of
the work.
Fraioli: Protect the IP like it is the Crown Jewels.
Identify the likely threats, make available signifi-cant
corporate resources for IP protection; actively
manage a comprehensive IP Protection Program —
24➼
Continued from page 20

5. OCTOBER 13, 2014 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 23
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6. 24 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL OCTOBER 13, 2014
INTELLECTUAL PROPERTY LAW ROUNDTABLE
put a C-Suite Executive in charge; constantly mon-itor
for threats and take active steps to thwart
them, including cease-and-desist letters and
actions for Declaratory Relief where warranted;
regularly re-assess your strategy and tactics. At the
same time, you must monetize your IP. Be equally
aggressive in seeking licenses and other monetiza-tion
opportunities. Focus; Execute; Re-assess; Re-focus.
Rinse; Repeat.
◆ With all of the data breach incidents being
reported, do businesses need Cyber-insur-ance?
What does it cover a business for, in
the event of a data breach? What if the busi-ness
in question is a professional firm, and
has client information? Does that make a dif-ference?
Fraioli: According to the Ponemon Institute, the
average cost of a data breach was approximately
$3.5 million in 2013. Stuart Pardau, noted privacy
expert and Ponemon Institute Fellow, believes the
cost is likely to continue to rise, especially if more
class action attorneys are successful in having class-es
certified, as in last year’s ComScore case, which
settled for $14 million. Attorneys continue to invest
in these cases, and Pardau believes these trends will
only accelerate. Increasingly, professional firms are
being targeted. They often hold essential subsets of
client information (the wheat without all the chaff)
and their security profile can be more lax. An issue
to review before a breach is that a firm’s professional
liability policy may cover its client’s information
but not the firm’s, and another policy may cover its
own information.
◆ What are the most important steps busi-nesses
in Los Angeles can/should take before,
during and after a data breach incident?
Ransom: The most important steps a business can
take are preventative. Good internal procedures
regarding safeguarding information – at time of col-lection,
use and disposal – are crucial. Just as impor-tant
is the establishment of data breach response
protocols and a trained team. Businesses may also
consider purchasing cyber insurance to offset costs
in the event of a data breach. Once a breach occurs,
a business must immediately implement its
response protocols, including stopping further data
loss, hiring a forensics team, and beginning any
required notification process – to law enforcement,
government entities, and customers. The business
will also need a plan for making public announce-ments,
particularly in the era of social media, where
brand reputations can suffer quickly. A good plan
will also address how to communicate with cus-tomers
regarding the breach, risks they may face,
steps to protect themselves, and the availability of
any credit monitoring or identity protection servic-es
provided by the company.
Fraioli: Form a Data Governance Team today: Risk
Management/Insurance, Attorneys (In-House and
Outside Counsel), IT/Security, Corporate
Communications. Build the Preparedness/Response
Plan. Use it throughout your Security Event Life
Cycle, the four stages of which are: Protect, Detect,
Respond, Recover. It is critical to engage the C-Suite
and the Board: Cybersecurity is a risk management
issue, not an IT matter. You must always know (by
regular reviews) what data you have, why you have
it, how you store it, how you secure it, and
why/whether you still need to keep it. You cannot
lose data that you don’t have. Risk cannot be man-aged
only after a breach occurs – panic and confusion
will have set in — chaos and denial will infiltrate
your statements to the outside world. Clear, effective
inquiries will lead to calm communication of facts,
showing a company in control of itself, its systems,
and the story.
◆ Increasingly, companies are choosing to let
their employees “Bring Your Own Device”
(BYOD), rather than buying everyone the
same device. What are the legal and practical
implications of this policy in California today,
when both mobile devices and data breaches
are so prevalent?
Fraioli: The real paradigm shift wrought by mobile
devices has been in employee attitudes towards data
and connectivity. It is now more likely that a depart-ing
employee will be able to obtain trade secret infor-mation
by accessing the network from remote loca-tions,
or sending or carrying information out.
Similarly, that employee is more likely to use social
media on this device, bring work home on it, text
colleagues on it – and to do so casually and recklessly
because it is a “personal” device. So, companies must
involve HR and employment counsel, not just IT, in
Mobile Device Management (MDM) and BYOD poli-cy.
Many large data breaches were caused when lap-tops
full of unencrypted PII were stolen from or for-gotten
by employees. The failure to encrypt covered
data on mobile devices, and the widespread, careless
use of one password across all of a user’s devices, are
common, ticking time bombs.
◆ Over the past year, the House Judiciary
Subcommittee on Courts, Intellectual
Property and the Internet has been undertak-ing
comprehensive review of the Copyright
Act. What are some areas that need to be
addressed in a future legislative revision of
the Act?
Moss: When the current Copyright Act was enacted,
consumers bought physical books and musical
recordings that could not be easily reproduced in
violation of the copyright owner’s exclusive rights.
At the same time, particular copies could be lawful-ly
resold or given away under the Act’s “first sale
doctrine.” Now that consumers obtain so much
entertainment media on digital sources, Congress
should discuss an appropriate compromise that will
allow copyright holders to protect their rights to
prevent duplicative copies, while at the same time
giving consumers some degree of property interest
in the particular digital copy they’ve obtained.
Notice I didn’t say “purchased,” because that’s real-ly
the question we need to figure out. Is it a pur-chase
or is it a license? And if it’s a license, do we
want to have a copyright law where nobody actual-ly
owns anything?
◆ Do the Privacy & Data Security laws apply
only to electronic records? Where can these
laws be found? Are there one federal and one
California privacy & data breach law?
Fraioli: No. Take HIPAA, for example. The HIPAA
Privacy Rule covers Protected Health Care
Information (PHI); the Security Rule covers electroni-cally
transmitted PHI (ePHI). Throwing a box of
patient records in a dumpster can be a significant
breach under HIPAA. Federally, there are myriad
other laws and agencies with their own statutes and
subject matter jurisdiction. The Federal Trade
Commission (FTC) has jurisdiction to enforce multi-ple
civil statutes; this is being challenged in the
Third Circuit in the Wyndham Hotels v. FTC case.
Currently, 47 states (and D.C.) have passed data
breach notification laws. California was first; it
recently amended Civil Code section 1798.82 to
specify what disclosures must be made following a
breach, and to require offering of “identity theft pre-vention
and mitigation services.” Section 1798.82
exempts entities covered by HIPAA, financial institu-tions,
and any business “…regulated by state or fed-eral
law providing greater protection to personal
information…”
◆ It seems that schools have a lot of very per-sonal
information about kids and their fami-lies.
Does California or federal law allow
schools to disclose a child’s personally identi-fiable
information to third parties without
the parent’s consent?
Fraioli: The Family Educational Rights and Privacy
Act (FERPA) was enacted forty years ago to safeguard
the privacy of student data. With social media,
schools can gather Personally Identifiable
Information (PII) of students that may be leaked,
stolen by hackers, or simply sold to advertisers by
vendors to whom the school has outsourced func-tions.
A loophole in FERPA protected these contrac-tors
from liability, so California passed SOPIPA – the
Student Online Personal Information Protection Act.
Under new Education Code section 49073.6, schools
are prohibited from gathering such information
unless it pertains to school or student safety; stu-dents
must be given access to it; parents must be
‘Now that consumers obtain
so much entertainment
media on digital sources,
Congress should discuss an
appropriate compromise that
will allow copyright holders
to protect their rights to
prevent duplicative copies.’
AARON MOSS
‘A firm should help you pro-tect
it from harm with an IP
protection program, but also
can help you monetize it,
with an effective licensing
framework and tax-efficient
corporate planning and
litigation counseling.’
PATRICK A. FRAIOLI, JR.
Continued from page 22

7. OCTOBER 13, 2014 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 25
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notified of the program; outsourced vendors to
whom student data is provided are prohibited from
using that data for any purpose other than the con-tracted
purpose; and the information must be
destroyed within a year of the student turning 18 or
no longer being enrolled.
◆ Should California companies that hire
coders to develop software for the company
always use a “Work for Hire” Agreement, or
is there another way of securing the rights
to the software?
Moss: Software rights can also be transferred by
assignment, but because assignments are subject to
termination under the Copyright Act, work for hire
agreements are generally preferable. However,
California businesses need to take into account state
labor and unemployment insurance laws that deem
creators of works made for hire “employees” for pur-pose
of requiring employers to maintain workers
compensation and unemployment insurance for
these workers. One way around this is to enter into
agreements with contractor companies instead of
individuals, but it’s an important decision that needs
to be thought out carefully.
Weiss: If a company is employing an independent
contractor to code software, the company should use
an assignment clause, instead of or in addition to, a
work-for-hire clause, in order to ensure that the com-pany
obtains ownership of the software. With respect
to software, “Work for Hire” agreements are rarely
effective in granting the company ownership in soft-ware
developed by independent contractors. Even if
the company and the independent contractor con-tractually
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agree that the software is a “work-for-hire,”
it may not qualify as such as software does not gen-erally
fall into one of the eligible categories listed set
forth in the copyright laws.
◆ If a company makes software for adults,
does it still have to be concerned about liabili-ty
under the Child Online Privacy Protection
Act (COPPA)?
Fraioli: Yes. Just ask Yelp!. It is not a “kids’ site;” its
audience frequents restaurants, bars and other adult
activities. The Children’s Online Privacy Protection
Act (COPPA) – requires that companies collecting
information about children under 13 clearly disclose
how the information is used directly to parents and
seek verifiable parental consent before collecting any
information from children. Recently, the FTC filed a
Complaint against Yelp! alleging that from 2009-
2013, it collected personal information when such
children registered through its mobile app, providing
required birthdates, name, email, location, et al.
(Given the ubiquity of mobile devices, the FTC has
identified geo-location information as Personally
Identifying Information.) The birthdates demonstrat-ed
the kids were less than 13, but Yelp! collected
their information anyway without first notifying par-ents
and obtaining consent, even though Yelp!’s web-site
maintained a screen that prevented this from
occurring there. Yelp! settled with the FTC and paid a
$450,000 civil penalty.
◆ There is a lot in the news about Google and
the European Union’s “Right to Be Forgotten”
law; does California have any law like that
about which businesses need to be aware?
Fraioli: Yes, California’s controversial new “Internet
Eraser” law (B&P Code Sec. 22580-22582) will take
effect as of January 1, 2015. It will allow any minor
(user under 18) to allegedly “permanently erase”
photos, tweets, status updates and ill-advised rants
by requiring “the operator of an Internet Web site,
online service, online application or mobile applica-tion
to permit a minor who is a registered user of the
operator’s Internet Web site, online service, online
application, or mobile application, to remove, or to
obtain and request removal of, content or informa-tion
posted.” Thus, any business that is “connected”
and allows sharing or posting by anyone who may
be under 18 must be aware of the contours of this
new law. For example, the law requires that operators
honor requests only from posters themselves. So, if a
jerk posted a picture you wish you had never let him
take, and you ask the operator to erase it, the new
law will not apply.
◆ What criteria should be used in deciding
what inventions to patent?
Weiss: Companies should identify inventions that are
core to their business and revenue streams, rather
than simply patent technically clever inventions that
may not significantly enhance revenues or provide a
significant competitive advantage.
◆ What are the risks in filing provisional
patent applications?
Weiss: Provisional patent applications are often filed
to save on costs and to get something on file quickly.
However, to gain the benefit of a provisional patent
application, a non-provisional patent application
26➼
INTELLECTUAL PROPERTY LAW ROUNDTABLE

8. 26 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL OCTOBER 13, 2014
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Continued from page 25
must be filed within 12 months, and the
filing date of the non-provisional patent
application will then be deemed to be
the filing date of the earlier filed provi-sional
patent application, but only with
respect to what was actually disclosed in
the provisional patent application.
Failure to adequately describe important
features in the provisional patent appli-cation
may result in the loss of patent
28➼
protection for those features.
◆ What are the timing constraints
in filing a patent application?
Weiss: The United States now has a first
to file regime. Thus, the first inventor
to file a patent application on an
invention will generally be entitled to
patent protection over a second inven-tor
who later files a patent application.
This creates a rush to the patent office.
Because generally the race goes to the
swiftest it is imperative to be diligent in
timely filing patent applications. In any
case, in the United States, inventors
have a one-year grace period after a
public disclosure of an invention by
the inventor to file a patent application
describing their invention. However,
disclosures by third parties who inde-pendently
come up with the invention
prior to the inventor filing his/her
application may destroy patentability.
◆ Should companies take advan-tage
of the Track One Prioritized
Examination option to speed up
the examination of their patent
applications?
Weiss: For a relatively low fee ($2000 for
small business entities, $4000 for large
business entities) Prioritized
Examination enables business to greatly
speed up the process of obtaining a
patent. The Patent Office will provide a
final disposition from the USPTO within
twelve months from the grant-priori-tized
status. The average time from filing
an application and obtaining Prioritized
Examination authorization to final dis-position
(an allowance or final
Rejection) is about eight months, as
compared to more than three years for
many types of applications under regu-lar
examination. Thus, companies that
can benefit from quickly gaining patent
protection for their products or services
should seriously consider taking advan-tage
of the Track One Prioritized
Examination option.
◆ Do patent trolls still present a
risk to traditional businesses, and
what is happening that may affect
the future of trolls?
Ransom: There has been a great deal of
activity in this area. On the judicial
front, the Supreme Court has eased the
standard for a prevailing party to obtain
fees in patent litigation. This may have
some deterrent effect on so-called
“trolls,” given the substantial cost of liti-gation
and the increased downside risk
of unsuccessful prosecution. The FTC
has also stepped into the action, con-ducting
a study of the tactics and busi-ness
models of patent assertion entities
and investigating at least one alleged
troll for deceptive trade practices. On
the legislative front, bills directed at
curbing abusive litigation practices have
failed to achieve sufficient support to
advance. Among other things, members

9. OCTOBER 13, 2014 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 27

10. 28 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL OCTOBER 13, 2014
INTELLECTUAL PROPERTY LAW ROUNDTABLE
of Congress have disagreed on the fundamental
question of how to define “trolls,” including whether
and how to exempt universities and other research
institutes, garage inventors, and various other non-practicing
entities.
Weiss: The number of patent suits instituted by non-practicing
entities (sometimes referred to as patent
trolls) has continuously increased. Defending against
such suits consumes business’s financial resources
and is a source of great distraction. Congress has
attempted, but failed multiple times to bring a meas-ure
intended to curb non-practicing entities to a
vote. The courts have been more successful in
addressing the sometimes insubstantial cases brought
by certain non-practicing entities. In the past term,
the Supreme Court limited the eligibility for patent
protection of certain software inventions, has made
it more difficult to find a party libel for indirect
infringement, has made it easier to invalidate patents
for indefiniteness, and has made it easier for prevail-ing
parties in patent litigation to be awarded attor-ney
fees. The Federal Circuit has made it hard to col-lect
huge damage awards. Under the new procedures
for challenging patents in the U.S. Patent Office, a
high percentage of patents that have been undergone
such procedures have been invalidated.
◆ How should companies change their patent
filing strategies in view of the American
Invents Act first-to-file regime?
Weiss: The United States now has a first to file
regime. Thus, the first inventor to file a patent appli-cation
on an invention will generally be entitled to
patent protection over a second inventor who later
files a patent application. This creates a rush to the
patent office. Because generally the race goes to the
swiftest, it is imperative to be diligent in filing
patent applications.
◆ How important is foreign patent protection?
Weiss: The foreign patent process can be very expen-sive.
If foreign markets are critical to a business, then
it may be essential to invest in foreign patent protec-tion
despite the costs. However, if a company does
not realistically have the resources to market its
products in foreign markets, then it may make more
sense to invest into expanding their patent protec-tion
in their primary market, the United States. In
addition, certain types of inventions, such as non-technical
business method inventions, may not be
patentable in certain foreign markets, such as Europe
and China.
◆ Are software inventions still patentable?
Weiss: The Supreme Court has delivered a blow to
certain types of software patents. In Alice Corp. Pty.
Ltd. vs. CLS Bank Int’l, in finding the claims of a
software patent to be invalid, the Supreme Court
held that “the claims at issue are drawn to the
abstract idea … and that merely requiring generic
computer implementation fails to transform that
abstract idea into a patent-eligible invention.”
However, the court also stated that “there is no
dispute that many computer-implemented claims
are formally addressed to patent-eligible subject
matter.” The Patent Office continues to issue
patents for software-related inventions, taking the
position that certain software inventions are still
eligible for patenting. However, the boundaries of
patent eligibility for software inventions are
unclear, and it will take future court decision to
clarify those boundaries.
◆ What is driving the popularity of patent
grant reviews of patents?
Weiss: Post-grant proceedings offer certain advan-tages
for challenging the validity of a patent as com-pared
to litigation in the courts because the burden
of proof on invalidity is lower in the Patent Office
than in district court (“preponderance of the evi-dence”
rather than “clear and convincing”) and the
Patent Office interprets patent claims more broadly
than the courts, making patent claims easier to inval-idate.
In addition, many allege that the Patent Office
review process demonstrates an anti-patent bias and
Federal Circuit Chief Judge Rader (now retired)
labeled the Patent Office review board a patent
“death squad.”
◆ What is a Business Associate Agreement,
and are businesses in violation of any federal
or California laws if they do not have one?
Fraioli: Under HIPAA, a Covered Entity (Health Care
Provider, Health Plan or Clearing House) has direct
liability for violation of the accounting, privacy and
security provisions. Previously, Business Associates —
those who receive Protected Health Information
(PHI) from Covered Entities – (eg., transcription serv-ices,
law firms) did not have direct liability. Instead,
the Covered Entity was required to obtain from a
Business Associate “documentation” providing “satis-factory
assurances” it was safeguarding the PHI. The
HITECH Act has now made Business Associates direct-ly
liable under HIPAA, whether or not they and the
Covered Entity have entered into a Business
Associate Agreement, and expanded the definition of
Business Associate to include a Business Associate’s
subcontractors. Thus, to avoid direct liability,
Business Associates now need a Business Asssociate
Agreement with subcontractors that handle PHI.
Penalties for knowing violation, or “willful neglect,”
can be severe.
◆ What should a business look for when
selecting a law firm to represent their IP
interests?
Ransom: Clearly, identifying a firm with highly
qualified IP lawyers is key. But beyond that, it is
essential that a law firm have both the ability and
the willingness to work as a strategic partner with
the client, and to understand how IP issues fit into
the client’s overall business and to respond accord-ingly.
Finally, in an increasingly competitive legal
environment, firms need to be nimble and flexible
in responding to clients’ needs for predictability in
legal fees, and to look for ways to add value to the
client above and beyond the raw provisioning of
legal services. Law firms should aim to exceed their
clients’ expectations.
Fraioli: Find a smart lawyer at a good firm who is
excited about your business. Not just getting your
business, but your actual, underlying business.
Coming from an immigrant family, I genuinely
like and admire people who make things. A com-pany
thinks about its IP the way a family views
its child. It wants to protect it, help it grow, and
find it a good-paying job. A firm should help you
protect it from harm with an IP protection pro-gram,
but also can help you monetize it, with an
effective licensing framework and tax-efficient
corporate planning and litigation counseling.
Your business, by necessity, is about more than
just IP; your lawyers should help you see the
whole field from the start.
Moss: Because the lines between technology and
entertainment are blurring so rapidly, I think that
any company in the content business, broadly
defined, would benefit from using a law firm that
has a strong entertainment/media presence in addi-tion
to a strong IP presence. It doesn’t really matter
whether you’re streaming video, publishing a new
social media app, or delivering advertisements in
unique ways – you’re primarily dealing in content,
not just technology. It’s also important to make sure
you understand and are comfortable with the
lawyers who will actually be doing your work. Some
clients hire a law firm because one of its lawyers has
a big name, which is fine – if that lawyer is actually
the one who’s going to be doing your work. If not, I
think prospective clients should interview the team
that will actually be doing the work, not just the
lead partner.
Weiss: Look for a firm that has a great reputation, an
extensive practice in intellectual property, and that
has expertise in your particular area of interest.
Intellectual property includes a large range of legal
issues, including patent law, copyright law, trade-mark
law, litigation, and entertainment law. Assess
your needs in selecting a law firm. If you are seeking
patent protection, look for a firm that has a deep
bench of attorneys with a suitable technical back-ground.
For example, someone with a mechanical
engineering background may not be suitable to han-dle
an electrical engineering invention.
‘With respect to soft-ware,
“Work for Hire”
agreements are rarely
effective in granting
the company owner-ship
in software devel-oped
by independent
contractors.’
DAVID WEISS
‘Once a breach occurs, a business
must immediately implement its
response protocols, including
stopping further data loss, hiring a
forensics team, and beginning any
required notification process – to
law enforcement, government
entities, and customers.’
ROLLIN RANSOM
Continued from page 26

11. OCTOBER 13, 2014 AN ADVERTISING SUPPLEMENT TO THE LOS ANGELES BUSINESS JOURNAL 29
2014
PATRICK SOONSHIONG INNOVATION AWARDS
PRESENTING SPONSORS
SAVE THE DATE
PLATINUM SPONSORS
GOLD SPONSORS
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UCLA Health
LOS ANGELES BUSINESS JOURNAL pprreesseennttss
The Los Angeles Business Journal is excited to host the Inaugural
Patrick Soon-Shiong Innovation Symposium and Awards.
Building off of the success and popularity of the Patrick
Soon-Shiong Innovation Awards held for the past four years, this
year the Business Journal will introduce a half-day symposium
that will begin with breakfast and progress through a series of
nine guest speakers. Our attendees will have an opportunity to be
inspired by local innovators sharing their expertise on innovation
in California. The evening portion of the event will be highlighted
by the Patrick Soon-Shiong Innovation Awards dinner, where
we honor and acknowledge the people and organizations that
continue to stretch the boundaries and have proven to be leaders
in innovation. We are proud to have a partner in Dr. Soon-Shiong
who shares our vision and who himself, is a true innovator.
TUESDAY, NOVEMBER 18
BREAKFAST SYMPOSIUM: 8:00  11:00AM
AWARDS DINNER: 6:00  9:30PM
BEVERLY WILSHIRE HOTEL at BEVERLY HILLS
For more information, contact Breanne Kamai
at (323) 549-5225 ext. 203
or e-mail bkamai@socalbusinessjournals.com.