The aim of this essay is to asses the “ttools” case study (Kellog School of Management, 2006) and decide what would be the best alternative for the Hazzards to rely on, considering these alternatives: competition, negotiation, litigation or other. In order of being able to asses this case, it is important to understand certain terms. These are:
Patent: “a set of exclusive rights granted by a state (national government) to an inventor or their assignee for a limited period of time in exchange for a public disclosure of an invention.”(1) A patent registration may only be approved if the invention is new, if it is an inventive step (something not obvious to a person skilled in the art) and it must be capable of industrial application, in other words, something that can’t be manufactured industrially will not be able to be patented (Adams, 2006). Depending on the subject matter, different types of patent agreements may be issued. The most relevant to this case are: a) Utility patent: may be approved for the invention of a new and useful process, machine, manufacture, or composition of matter, or a new and useful improvement thereof. Generally it allows the owner of the patent to prohibit others from making, using, or selling the invention for a period of up to twenty years from the date of the patent application filing. (U.S. Trademark and Patent Office, 2000) b) Design patent: may be granted for a new, original, and decorative design for an article of manufacture. It authorizes its owner to exclude others from making, using, or selling the design for a period of fourteen years from the date of patent grant. (U.S. Trademark and Patent Office, 2000)
Doctrine of equivalents: is an equitable doctrine established by the courts to protect patented inventions. It attempts to strike a balance between the two competing policies behind the enforcement of patent rights: a) to protect the inventor’s right to exclude others who might steal the product of his work, and b) to provide clear notice to the public of the invention’s boundaries. (Bay Area Intellectual Property Group, 2007)
Non-disclosure agreement: “a contract in which the parties promise to protect the confidentiality of secret information that is disclosed during employment or another type of business transaction.”(3) This agreements are usually signed when “two companies, individuals, or other entities are considering doing business and need to understand the processes used in each other’s business for the purpose of evaluating the potential business relationship.”(3) In addition to this, the use of nondisclosure agreements is very common in the fields of high-technology products and companies.
The ttools case (Kellog School of Management, 2006) describes a situation in which Tom Hazzard and his wife Tracy Leigh ( referred to as the Hazzards), had developedin 1998 a pen/stylus as an accessory to the Palm Pilot PDA touch screen. Tom asked Steve Holmes (his longtime patent attorney) to carry a prior art search (“it constitutes all information that has been made available to the public in any form before a given date that might be relevant to a patent's claims of originality.”)(4) The Hazzards were subsequently informed that the device created by them was unique. Before even having prepared a business plan, the Hazzards approached Palm (then owned by U.S Robotics) in order to present the pen/stylus to Palm staff. Tom made it clear that his patent attorney had drafted a non-disclosure agreement specifically for the meeting, and that he knew to have it signed by both the U.S Robotics representative and on behalf of U.S Robotics/Palm and any future assignee (“individual to whom a title, claim, property, interest, or right has been transferred.”)(5) Palm representative liked this novel device and invited Hazzard to advertise for free in Palm’s InSync Online monthly newsletter. In early 1998, Hazzards founded their company...