We live in a technologically driven world where data is king. Most of us can’t read our morning email, check voice messages, or scan the scores to see how our favorite teams did without first having to divulge some bit of information about ourselves.

• Just to use our smartphones, most of us scan our faces or use a fingerprint (all forms of personal data).
• The web browsers we use to navigate the internet track what we read, what we buy, where we’ve been.
• Cameras surveil our movements at busy intersections, through public spaces, and in most business.
• Every ecommerce transaction requires some form of personal information, whether it’s a name, address, or credit card number.

“Our lives seemingly revolve around personal data and its dissemination, collection, and manipulation,” explains Eric Ludwig, founder and lawyer for Ludwig APC, a US-based full-service business, technology, and intellectual property law firm. “With so much information available, individuals and companies involved in the intellectual property space must become more aware of their rights, responsibilities, and obligations.”

Practically any business operating today encounters personal data, from the information it collects to fulfill the simplest of online purchases, to the aggregation of personal data in a database or retrieval system for banking, entertainment, healthcare, and other uses. It’s when a company uses its software, systems, and processes to transform the data that questions of intellectual property and personal data privacy arise.

Personal Protections

The European General Data Protection Regulation (GDPR) went into effect in May 2018 to expand the privacy rights of individuals in the EU, namely by regulating how companies could process and handle their personal information.

Essentially, the GDPR ensures transparency in what data companies can collect and what they can do with it. On the flipside, it allows individuals to see what data a company has collected, receive for digital copies, and even request its erasure.

While there’s not yet an equivalent to the GDPR in the United States (where privacy protections rely on numerous de-centralized state and federal regulations), any company that collects and processes the personal data of an individual located within the EU must comply, regardless of where the company is located.

Clearly, with the pervasive nature of the Internet all but doing away with the notion of geographic borders in relation to accessing information and engaging in ecommerce online, many US companies—even if they don’t actively do business in Europe—attract web traffic from individuals located in the EU, thus subjecting them to the provisions of the GDPR.

Restricted Access

GDPR and other privacy laws also affect the ability of IP owners to investigate potential infringement activities.

Gone are the days when a company could easily look up someone suspected of an IP infringement online through a domain registry service (such as WHOIS) or through the search of a social media profile or other directory. Access to much of that information is now private or restricted, which adds layers of complexity to investigation and enforcement efforts.

Questions of Ownership

While it’s generally understood that individuals are the ones who ultimately own or control their “personal data,” there are a great number of compelling arguments for the ownability of data that has been processed or manipulated in some proprietary way to add value to it (such as for market and political intelligence, entertainment purposes, the study of consumer habits, healthcare recommendations, and so on).

Certainly, the Facebooks and Googles of the world would contend that they “own” aspects of the data they collect and shape (and if not the actual data itself, at least access to it), as would any number of other individuals and companies involved in the upstream and downstream collection of and/or manipulation of personal data.

Where Do We Go from Here?

It’s December 2020 and we sit on the threshold of a new decade. With the advancement of robotics, artificial intelligence, facial recognition, and other yet-to-be-named technologies, it’s clear that questions about data privacy and data ownership rights will be with us for some time. No doubt, like all questions related to intellectual property, the answers will come down to finding a balance between individual rights and society’s desire to promote innovation and advancement.

Protect Your Product. Your Business. Your Dreams.

Contact Eric Ludwig today for a one-hour consultation to discuss whether you need to apply for copyright, patent, and/or trademark protection in the United States.
(619) 929-0873 | consultation@ludwigiplaw.com

We hear a lot about privacy these days, whether those privacy concerns relate to an individual’s health care, taxes and financials, personal information, or other proprietary data. From a business standpoint, privacy runs the gamut from legal, regulatory, governance, operational issues, plus (of course) intellectual property.

Some aspects of privacy as it relates to IP are a no-brainer, such as trade secrets, invention information, and pre-launch product information or prototypes. Other aspects, however, are not so intuitive, such as how a company handles the personal information of inventors involved in applying for patents or trademarks, or artists applying for copyright protections.

As individuals, what rights do writers, artists, or inventors have over the personal details necessary to file for a patent or copyright? What obligations do the companies have that employ them?

There’s No Single Privacy Law . . . Yet

“While a legal right to privacy is fundamental to the United States Constitution and the Bill of Rights, there is no single privacy law in the United States,” explains Eric Ludwig, founder and lawyer for Ludwig APC, a US-based full-service business, technology, and intellectual property law firm. “Instead, there are hundreds of state laws and dozens of federal laws that cover everything from who can access your personal data, children’s privacy, tracking online browsing history, the use of someone’s name or likeness, and a wide range of consumer privacy protections and business obligations.”

In the last decade, with the spread of the Internet to virtually every corner of the globe, the explosion of social media, and numerous instances of hackers breaching consumer and business data, the push for a comprehensive privacy law for the US has gained momentum. While that goal remains elusive, many states have passed (or are in the process of passing) comprehensive privacy legislation.

In the US, it’s the Federal Trade Commission (FTC), that has broad authority to handle privacy laws and take related enforcement actions. In Europe, in 2018 the European Union enacted the General Data Protection Regulation which, according to global data privacy firm Osano, “applies to all EU residents, regardless of the entity’s location that collects the personal data.” In other words, the GDPR has far reaching consequences beyond the borders of the EU’s 28 member countries.

Privacy Rights & Obligations

One area of particular interest is the GDPR’s impact on privacy concerns related to personal data used when applying for or registering patents, trademarks, copyrights, and similar protections. According to the American Bar Association article, “Practical Tips on GDPR for Intellectual Property Attorneys,” under the GDPR, IP attorneys “will need valid legal grounds to collect, keep, and communicate personal data about individuals and to share those data with anyone else” when applying for such IP protections.

This raises several issues related to an IP attorney’s rights and obligations when filing the necessary information with various applicable entities in the EU and elsewhere.

An inventor, it seems, would need to provide consent to the IP attorney for the use of his or her personal data to be included with any filings—consent that presumably could be withdrawn at any time. And what of the obligations of the companies who employ those who invent new technologies or processes? Must they also receive consent before beginning the process of filing for a patent or trademark?

Every Situation is Unique

“The answer to those questions, and many others, as is quite often the case when it comes to all things IP-related is ‘it depends,’” says Ludwig. “Each situation is unique with many factors and variables to consider.”

Ludwig also contends that the GDPR and other privacy laws have the potential to complicate patent and trademark enforcement.

“For example, when an infringement claim requires the disclosure of personal data for both the patent holder and the infringer, how exactly is one supposed to go about obtaining the information necessary to proceed without breaching the data privacy rights of one or more parties involved?” He asks. “My best advice is that when in doubt concerning privacy laws, you should seek clear compliance advice from an IP attorney who has experience dealing with privacy laws both in the United States and overseas.”

Protect Your Product. Your Business. Your Dreams.

Contact Eric Ludwig today for a one-hour consultation to discuss whether you need to apply for copyright, patent, and/or trademark protection in the United States.
(619) 929-0873 | consultation@ludwigiplaw.com

Intellectual Property (IP) is a complex topic in its own right, especially for business owners who are (rightfully) more interested in keeping their businesses running smoothly than they in understanding the finer points of IP. One of the biggest challenges business owners face is how to value their intangible IP assets—such as patents, trademarks, copyrights, brands, trade secrets, data sets, publicity rights, proprietary code, know-how, etc.—and then understanding how those assets contribute to their company’s financial performance and profits.

Assigning Value: No Easy Task

To illustrate, let’s take the case of a growing tech company that wants to understand how its brand assets (the IP in this example) help the business, and if those brand assets can be leveraged to improve financial performance. With few examples of brands assets being sold, there is little baseline transactional data we can use to assign actual value. Therefore, we must first quantify how this company’s brand assets connect to financial performance and then calculate the percent of cash flows attributable to those brand assets. This is no easy task.

The value of an IP asset, such as a company’s brand, can be derived from the economic benefits it creates. For example:

• Owning the rights to IP gives the owner a “monopoly” of sorts on that particular asset. This contributes to its value by creating barriers to entry and excluding others from being able to use the asset. This gives companies greater pricing power over that asset, drive sales volume, and ultimately profit margins.
• The potential for litigation should others infringe on a company’s IP rights represents value in the form of actual damages and awards, while the mere threat of litigation, which often is sufficient to prevent unauthorized use, represents value as well.
• Companies can sell the rights or permission to use their IP, which results in licensing revenue and royalties (recurring revenue), or can be sold outright to others.
• IP also has inherent value in that it signals innovation, uniqueness, source of origin to consumers. Think of companies such as Apple or Starbucks whose very names can drive sales, reduce the need to market, and affect margins—all of which has value to a business.

Word to the Wise

Unlike a company’s expected lifespan, which essentially can be perpetual if the enterprise is managed well, IP and the products that use IP have finite lifespans. Thus, companies can expect the financial benefits from IP to grow, peak, and then decline as other IP and other products take their place.

The lesson here is that companies cannot rest on their IP laurels, assuming the level IP contributes to financial performance today will remain in place in perpetuity. Present value and future value must be considered.

For decades, Kodak placed all of its eggs in the film photography IP basket—its core business—only to see that mode give way to digital technology (even though, ironically, Kodak was somewhat of a pioneer in the field). It’s not that Kodak was unable to transform or was unaware of what was coming, but rather they weren’t able to move quickly enough. They needed to start innovating and connecting their IP to customer needs earlier on.

They Make Experts for That

If this all sounds a bit complicated, don’t get discouraged. IP valuation is complicated. But just as there are IP rights and litigation experts like Eric Ludwig out there to help business owners and managers protect their IP rights, there are intellectual property valuation and damages experts who can help business leaders determine the economic benefits of their IP and other intangibles.

Your IP valuation expert should be able to . . .

Value Total Operations of the Business

• Perform a business valuation
• Forecast future economic benefits, discount to present value
• Value of business = value of 100% of assets and resources used by the business

Forecast Each Source of Revenue

• Examine all revenue and benefit-generating products and services
• Group and bundle similar revenue sources
• Create forecasts for each

Identify Key Assets and Resources

• Identify all assets and resources used by the business
• Group as tangible assets, IP, intangible assets, and other resources

Develop Apportionment Rates

• Identify most important/least important assets or resources to each revenue source
• Detail products/services rely on each identified asset

Value the Forecast Apportion Rates

• Total the forecast period rates calculated for each asset or resource
• Discount each asset’s total rates to a present value

Check Results

• Apply the concept of equal values: value of business = value of all revenue sources = value of all assets & resources

Looking for More Information?

Let’s Talk! Brian Buss, CFA, is an intellectual property valuation and damages expert whose San Diego-based firm calculates and communicates the financial impact of trademarks, copyrights, patents, brands, and intangible assets to C-level executives and others in the IP community.

Nevium Intellectual Property Consultants |   858 255 4361, x2 | www.nevium.com

Is technology the answer to the COVID-19 pandemic or a threat to privacy? Developers are working on creating apps to track the spread of COVID-19 in hopes that it will help stem the flood of the pandemic in the United States. However, this also raises serious privacy concerns.

These apps range from hands-off with data protections in place to downright invasive.  China’s COVID-19 tracking system, for example, tracks data far beyond location—including identity and online payment history. This allows local police to watch for those who break quarantine rules, notes the MIT Technology Review. 

Google and Apple—who normally compete rather than collaborate in the tech market—have teamed up to work on a COVID-19 tracking app for the United States. These apps will allow Android and IOS devices to automatically track your interactions without any action from either party. These track-and-trace methods aim to keep infection levels low, but it also begs the question of how this information will be used.

Intellectual property lawyer Eric Ludwig notes that these apps may infringe on the Health Information Privacy Protection Act (HIPPA).

“We’re allowing tech companies like Samsung, software makers like Apple and Google, or even companies like Facebook access to information concerning individuals who have tested positive for COVID-19,” says Ludwig. “I have to ask what data is going to be collected and how it’s going to be used. How do you ensure that the identity of the patient is secure when the whole goal is to go and identify those who have been in contact with the patients and lock them down to too?”

In California, they are actively doing contact tracing to limit the spread of COVID-19. While those efforts currently focus on reports from medical professionals, they will likely involve apps in the future.

“People in the government and other parties reach out to individuals who test positive to get ahold of their contacts, friends, and family. They’ll also get a list of all the places the COVID-19 positive person visited. Now suddenly every COVID patient is revealed as being positive to the entire world, and there’s nothing private about that health information, which I think is a violation,” adds Ludwig.

In addition to raising privacy concerns, the inexact methods of tracking proximity call into question the efficacy of the apps. The apps evaluate the kind of interaction to assess the level of risk using Bluetooth signal strength to estimate the distance between two people. However, according to Science Magazine, the signal’s strength can be influenced by things that have nothing to do with distance. 

Researchers at Trinity College Dublin found that the signal strength sometimes behaved in predictable ways, such as being stronger if the phones were set on a table rather than in a person’s pocket. In other cases, it was less predictable. For example, the strength of the signal increased as people moved farther apart, which was potentially caused by reflection off of metal surfaces such as supermarket shelves. This creates worries that the apps will fail to alert people to interactions that could lead to infection while also flooding them with false alarms.

Other countries are already utilizing the software with varying degrees of success, but this doesn’t mean they aren’t considering the privacy effects. Norway has halted the use of their coronavirus contact tracing app, Smittestopp, after criticism from the Norwegian Data Protection Authority. 

While Google and Apple have announced an approach to the app that seems to mitigate the privacy risks,  there are still concerns about the way apps will be used in the United States. The chances of a false positive results from apps compound worries.

“It seems like you’re smearing and targeting people with COVID and almost discriminating against them,” adds Ludwig. “I think could have a reverse effect of causing people not to get tested and not to reveal their identities—not to come forward for fear of embarrassing others or inconveniencing family or friends with interrogation and possible quarantine efforts.”

Protect Your Product. Your Business. Your Dreams.

Contact Eric Ludwig today for a one-hour consultation to discuss whether you need to apply for copyright, patent, and/or trademark protection in the United States or elsewhere. 
(619) 929-0873 | consultation@ludwigiplaw.com