What does Hangover Part II have to do with the Berne Convention?

Over the years, I have worked closely with half a dozen companies and entrepreneurs where IP protection has been a core tenet of the business and a crucial part of the strategy. I have learned that patience and good advisors are required.

When the party-going crew in “Hangover Part II” wakes up and Stu Price, the dentist, finds a tribal tattoo around his left eye, a now famous lawsuit swung into action. Victor Whitmill, the tattoo artist for Mike Tyson, former heavyweight world champion, felt that his design rights had been violated.

This is an amusing example of disputes about the rights over designs, inventions, and other property that is not REAL property, but is intangible. The legal term for this type of property is “indivisible,” which means that no matter how many times you copy the tattoo, it does not diminish in value. This is as opposed to, for example, a lease on a building, which you can only subdivide so many times until you have no more space left.

Although the early principles of protecting ideas, designs, and innovations were laid out in the “Statute of Monopolies” in 1624 in England, and later established more widely in the Paris Convention (1883) and the Berne Convention (1886), the whole idea of a global system of protections for rights and ideas is relatively new and is still evolving rapidly. It is also a system that pits rich countries against poor countries and big companies against small companies. Just think about patients’ access to medicines in impoverished countries, Internet users’ access to information, farmers’ access to seeds, programmers’ access to source codes, or students’ access to scientific articles.

“It is also a system that pits rich countries against poor countries and big companies against small companies.”

As with many concepts in law, it all started out with very good intentions. By definition, an invention is a solution to a specific technological problem. This invention may be a product or a process, and generally has to adhere to three main requirements: it has to be new, it cannot be obvious, and there needs to be an industrial application. To enrich the body of knowledge and stimulate innovation, it is the obligation of patent owners to disclose valuable information about their inventions to the public.

“To enrich the body of knowledge and stimulate innovation, it is the obligation of patent owners to disclose valuable information about their inventions to the public.”

So, by explaining the details of your invention to the public, you, as an inventor, get certain protections, typically for a duration of 10 or 20 years during which this invention should not be copied or used without your approval. Granting the use of your invention will, in many cases, result in a royalty payment for the particular use. In this way, the progress of innovation should be faster, to the benefit of all. Nice. Great intention.

The idea of protecting inventions is even outlined in Article 27 of the Universal Declaration of Human Rights, which enshrines “the right to benefit from the protection of moral and material interests resulting from authorship of scientific, literary or artistic productions.”

When we talk about IP, we tend to refer to patent, trademark, or copyright protections interchangeably. And while the regulation and enforcement of the different types of protections vary, the underlying principle remains the same.

Think of Lego bricks (I am Danish after all), the Swiss Army Knife, Champagne, Darjeeling Tea, Star Wars, the MP3 codec, the Beatles back catalogue, etc., etc. Over the years, I have worked closely with half a dozen companies and entrepreneurs where IP protection has been a core tenet of the business and a crucial part of the strategy. Some of these companies have been subject to inbound legal claims or have had to protect their own patents through outbound legal action.

In some cases the IP portfolio has enabled the sale of the business. However, relying on the IP portfolio alone rarely leads to a great outcome for either investors or management. The IP should be an enabler of a core product offering around which the company will scale sales and a long-term customer base.

“The IP should be an enabler of a core product offering around which the company will scale sales and a long-term customer base.”

In my experience, patent, trademark, and copyright protection should be an integral part of any business. As a first step, it is not for offensive reasons but is purely defensive. Remember that typically there are large, established players who have way more resources, money, time, and lawyers than you do. The better protections you have in place, the better your chances of fighting off an infringement lawsuit or unsolicited attacks on your business through threats of litigation.

“The better protections you have in place, the better your chances of fighting off an infringement lawsuit or unsolicited attacks on your business through threats of litigation.”

Building up this practice and culture is expensive and requires resources, dedication, and senior management engagement. If you need to get a “metaphorical” tattoo on your face, e.g., litigation, before you do anything, you are way too late. These protections, whether through trademarks, patents, or copyrights, are built up patiently over years. There is no immediate payback. All you’ll see are legal fees and time spent by employees learning how to file patent and copyright claims. It is one of those things where the compounding benefit over 5 or 7 years really pays off. Patience and good advisors are required.

“Building up this practice and culture is expensive and requires resources, dedication, and senior management engagement.”

And when a large incumbent player suddenly hits you over the head with a claim, or an “encouragement” to license their IP, the only answer is — find the best advisors in the industry. A response crafted by the IP team at Fish & Richardson or Quinn Emanuel Urquhart & Sullivan will signal to the counterparty that you are serious, and you believe that you can take the fight onto their court. Never engage in such communication without prior advice.

If you wondered about the tattoo, Warner Brothers settled the lawsuit with Victor Whitmill in 2011. No details were published about the nature of the settlement.