Are Your Ideas Safe?

As an executive in the speech technology industry, you know that your company's intellectual property (IP) serves as the corporate crown jewels. Insuring these jewels and keeping them safe from theft is critical to your company's survival, yet many companies don't have plans in place for protection against IP infringement.

As your company works to develop the latest advancements in speech technology, you need to be aware of the possibility of patent infringement, copyright and trademark disputes and trade secret misappropriation. Both purposeful interference, such as trade secrets stolen by a competitor, or accidental infringement, where someone else may be coming up with very similar ideas around the same time, are very real possibilities.

How can you establish the groundwork to protect your company from these types of infringement? And how do you prove infringement in court if it has occurred? This article will discuss these issues and, because being proactive is always the better position in which to find yourself, it will outline the steps to take to safeguard your company and protect your ideas .


What is IP Infringements?

Intellectual property involves the creative ideas and expressions of the human mind that have commercial value and receive the legal protection of a property right. The major legal mechanisms for protecting intellectual property rights are copyrights, patents and trademarks. 1

Infringement is defined as an invasion of an exclusive right of intellectual property. The party that infringes does so without permission, and when the infringement is purposeful, it is done with the intent to deceive, confuse, or mislead others or to induce the observer to purchase one thing supposing it to be another. 2


The Offense and Defense of Protecting IP

Patents, copyrights and trademarks, along with trade secrets, are the primary ways to put offensive measures in place to protect your company's intellectual property. (See sidebar for definitions.)


How do you substantiate your claim that you were the first to develop a certain technology, and how do you prove that a competitor is infringing on your IP, rather than the other way around? That's when the defensive support needs to come into play.


An excellent way to confirm that a technology existed in a certain form, at a certain time is with the use of a technology escrow account managed by an independent third-party. This will enable the litigation team to accurately trace the genealogy, or audit trail, of your technology developments.


Putting Real Strength Behind Patents, Copyrights, Trademarks and Trade Secrets

Tying together the offense and defense of IP protection may be easier than you think. Quite often advances in the speech technology industry are in the form of software developments that can be documented through deposits of software source code.


As a software developer, you may already have technology escrow accounts in place, and make regular deposits of your software source code into these accounts. The traditional use of technology escrow for developers is to assure your customers that they will be able to gain access to your software source code in case anything ever happens to your business. In fact, more than three fourths of the Fortune 500 and 97 percent of the Software 100 companies protect their software source code through technology escrow. 4 This includes most of the major players in the speech technology industry who use technology escrow as standard practice - a best practice methodology that smaller companies may want to consider emulating.


But, these technology escrow agreements also have a hidden benefit of acting as a defensive measure in the protection against IP infringement. An escrow agreement tracks the genealogy of a depositor's products or ideas and establishes a technology audit trail provided that you don't replace materials with each deposit, but instead keep past deposits as a historical record.


By filing early versions of their source code with a neutral third party and continuing deposits on a regular basis, many software developers have created evidence of their software development that could later be submitted in court to back up offensive IP protection measures. It is this kind of precaution that can make the difference in ultimately protecting copyrighted or patented material, and it substantiates the due diligence and protection claim needed to validate a trade secret. A more detailed description on how escrow can strengthen each of these methods follows:


Patent Protection

At present, software patents have become quite controversial with opponents saying that they impede innovation, and the European nations considering a ban on software patents altogether. However, a vast number of software patents still exist as a method to protect IP. Intellectual property legal experts say that in the area of software patents, what is often litigated is the issue of when an idea is conceptualized. This means that a person whose patent is challenged may have to show when his idea was conceived, and, in some cases, when it was put into use, and that requires documentation. With regular and complete deposits into an escrow account, the escrow agent can easily provide the courts such pertinent information.


Copyright and Trademark Protection

Much of the same is true in protecting software vendors in copyright or trademark disputes. One of the key copyright law controversies in the software industry is how the technology was created — that is, whether the building blocks of the software in question were simply borrowed from an existing program or created from "whole cloth" without using the proprietary knowledge of another.


In order to register a copyright with the U.S. Copyright office, the first and last 25 pages of source code must be deposited with them as proof of the original work. Most companies do not deposit the entire source code because, theoretically, anyone can go into the Copyright office and view the material (although they cannot remove it or make copies).


To fully demonstrate that the source code was independently developed and to document the progress achieved along the way, deposits into an independent escrow account are advisable. With an escrow account, the agent will date and time-stamp all deposits and keep deposited materials separate so that the integrity of older versions already in escrow is maintained. This way, a genealogy of the product is kept on record with an independent third party, who can then testify to its legitimacy if need be.


The Offensive Line Up: 3
A patent is a declaration from a government that an invention or process is new or innovative enough to be granted the exclusive ability to manufacture or otherwise use the invention for a set period of time. A patent may be issued for a broad variety of purposes such as new drugs, a new technology for producing a certain item, a methodology for software or a new distinctive product. A software patent is a patent on an invention implemented in software.

A copyright provides its holder the right to restrict unauthorized copying and reproduction of an original expression. Copyright stands in contrast to other forms of intellectual property, such as patents, which grant a monopoly right to the use of an invention, because it is not a monopoly right to do something, merely a right to prevent others doing it.

A trademark is a name, symbol, or other device identifying a product, officially registered and legally restricted to the use of the owner or manufacturer.

A trade secret is a formula, process, or device used in a business that is not published or divulged and that thereby gives an advantage over competitors.

Defensive Support:
Technology escrow, also known as source code escrow, is an arrangement where some source code is held in trust or "escrow" by a third party as long as it is supported by the vendors per the terms of a license agreement, but should certain conditions be met, it becomes the property of the purchasers so that they can arrange for its continued maintenance.

This escrow account also establishes a technology audit trail that can easily be used to support other methods of protection against IP infringement.

Trade Secret Protection

In trade secret cases, plaintiffs must show that they did, indeed, treat the technology as proprietary. This can be done, for example, by requiring former employees to sign exit forms. These forms restrict them from sharing any of their proprietary knowledge with a competitor. In addition, an employer should implement security measures to limit access to the proprietary technology and escrow all sensitive work documents. Prudent legal counsel will recommend project documents be copied, including all associated materials, such as written code, flowcharts, letters and memos. When an escrow agent accepts those materials and keeps a record of their contents and processes them into an escrow account, it reinforces the confidential status of the information.


Speech Technology Companies Speak Out

In the speech technology industry IP infringement has become a serious issue. Merger and acquisition activity, technical employees changing jobs within the industry, and even corporate espionage can trigger lawsuits claiming infringement.


ScanSoft Inc., a supplier of speech and imaging solutions, has filed a patent infringement lawsuit against ART Advanced Recognition Technologies Inc. and Voice Signal Technologies claiming that both companies have infringed on a patent that covers voice-activated dialing for mobile telephones.


Jo-Anne Sinclair, vice president and general counsel for ScanSoft states, "ScanSoft has an obligation to its stakeholders to protect its intellectual property and patent portfolio. Since its founding, ScanSoft has invested significant costs and resources to develop and acquire leading technologies, techniques and associated intellectual property that differentiate us from the competition. Those inventions, and the intellectual property protecting those inventions, are a cornerstone of our business. We take great pride in and place significant value on our patents and will aggressively protect our intellectual property rights through all available means."


Jordan Cohen, CTO of Voice Signal Technologies, a developer of speech solutions for consumer products and mobile devices, comments that his company also carefully protects their IP. "We explicitly manage software through our engineering system, including a thorough check-in and check-out process."


"It's a curious time in the speech technology industry," continues Cohen. "For a long time there was an unspoken agreement amongst the industry players to work cooperatively and not to get mired in lawsuits over IP infringement. However, today, that is no longer the case. The amount of litigation in the high technology industry puts everyone on pins and needles."


Steps You Can Take to Start Protecting Your IP Today

When an IP infringement case goes to court, it's up to the legal system to decide who came up with an idea first. If proof of ownership can be determined, the infringing company may be forced to pay millions of dollars in damages to the company that originated the technology, in addition to hefty legal fees.


Infringement cases are won or lost on physical evidence. By establishing an ongoing audit trail of your technology development with technology escrow, you are in possession of a record of how your intellectual property was created. Because this record is built with your regular deposits, and a neutral escrow agent time and datestamps each deposit and stores it in a secure, off-site location, your technology development has third-party validation and cannot be tampered with. The independent escrow agent can also appear in court on your behalf to testify that the technology, in the form of software source code for example, was deposited into an escrow account on a certain date as proof of intellectual property ownership.


So, how can you take steps to start protecting your intellectual property from infringement? Think of it from an evidence standpoint. The more evidence you have to back up your claims, the better off you would fare in a court case. In addition, with the right protections in place, you may be able to avoid going to court in the first place.


Some key points to remember when creating an IP protection strategy for your company:


  • Hire the right lawyers.
    Get references of counsel who are familiar and experienced with the importance of IP protection and check them
  • Put both offensive and defensive protection methods in place.
    Back up patents, copyrights, trademarks and trade secrets with technology escrow
  • How ironclad is your evidence?
    Evidence is most convincing when it is both tangible and independent
  • What do you have to prove or disprove?
    A technology development audit trail cannot only help prove what was developed, but also when and how
Additional Resources

Visit http://www.dsiescrow.com/speech to learn more about:

  • Intellectual Property Technology Protection Agreements
  • The Controversy Over Software Patents
  • U.S. Copyright Office
  • When Escrow Is a Valid Option
  • Electronic Discovery Services


The impact of innovation and technology on our civilization is unmistakable and new speech technologies will continue to grow, prosper and penetrate our existence. They will create better technology, newer processes and increased demand. Speech technology companies should protect and defend what is theirs: their ideas, their processes and their end results.

Technology escrow is not the only solution for protecting intellectual property assets against infringement, but taken together with patents, copyrights, trademarks and trade secrets, it is an excellent defense to support your offensive measures.

John Boruvka, executive vice president for DSI, has been involved in the technology escrow field for more than 17 years. His main focus is helping companies create solutions relating to protecting intellectual property assets. Mr. Boruvka is considered an authority in the field of IP protection, and has authored several articles and presented at numerous conferences on this topic.

DSI Technology Escrow Services is an Iron Mountain Company, the world's leading provider of records and information management solutions. DSI has provided unmatched intellectual property protection services since 1982. More than three-fourths of the Fortune 500 and 97 percent of the Software 100 trust DSI to protect their most valuable technology assets. More information on DSI is available at www.dsiescrow.com .

Visit www.dsiescrow.com for more information on using technology escrow to supplement IP infringement protection methods. If you would like to receive pertinent information on protecting intellectual property, send an email to: info@dsiescrow.com and reference "Speech Technology magazine" in the subject line.



1 As defined by "Glossary of Intellectual Property Terms" at US Info State Government. See: http://usinfo.state.gov/products/pubs/intelprp/glossary.htm

2 As defined by "Glossary of Intellectual Property Terms" at US Info State Government. See: http://usinfo.state.gov/products/pubs/intelprp/glossary.htm

3 Definitions from http://www.dictionary.com/

4 Statistic based on DSI Technology Escrow Services' customer base. DSI is the industry leader in technology escrow.


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