Chuck Yates Needs A Job

0:20 I was at the whammies in January of 2020, and that's Danny Harrison, Georgia's son. During the Grammys, he always rents out a club, calls his friends together, they play music all night and they

0:35 choose one band and they just cover songs, right? Right. For that band. And I don't even know if it's a fundraiser, he just does it for fun. But anyway, I get my dear friend, Jewel, kind of

0:47 has me as plus one, Hey, you want to come out to the whammy. So sure, I got to do that. And literally, you know, think the artists there were Perry Farrell, Lisa Loeb. I think I know where

0:59 this is going because this is not one of those type of people is what you're saying with this celebrity.

1:06 I mean, I'm like teeing you up here. I'm throwing a huge softball for you, but so anyway, so I go to the way, butch walkers, of the artists there, Richard Marks, you know, these are These are

1:19 the folks there and they're all playing cover songs and they're covering the traveling wheelberries. And so it gives you, you can go anywhere that any of those artists dig. Traveling wheelberries

1:33 were what? Tom Petty, who else? Roy Orbison. And Yellow. Yellow from Jefflin. then obviously, Door chairs, yeah. Yeah, and I think Dylan wasn't. Yeah, so anyway,

1:47 the star that night, like far and away the star, the person that crushed it, 'cause you've got all these talented artists, but they haven't rehearsed anything. So it's literally cover band level

2:00 stuff. The star that night was actually weird out Yankovic. And he got up there and he played it straight. He didn't, he did a Trevoi,

2:10 Trevoi, oh, what song.

2:15 Anyway, he did, I want back down. but Tom Petty. With or without the accordion? Without the accordion. Without the accordion. And I'm blanking the name of the Beatles song he did. Just crushed

2:28 it, was amazing. And so when I was in the green room with all the artists, I was like, hey, no, no. I'll do the to respect artists in this room. I'm so excited about seeing Weird Al. All the

2:41 artists in there wanted to see Weird Al. So he took a group photo with him and all that

2:46 So anyway, I saw him late in the night and I got mad. I did not know that my man crush could be any more on you than it is right now, but it just is. And he goes, you want to hug it out? And I

2:58 said, sure I did. I think you can flex though on that story. I do. I do have a Weird Al Yankovic celebrity encounter story. And I think it's the rare podcast where you get two of these. So yeah,

3:10 I went to law school at UCLA. And I think it was the spring of '93. It was one of our law school formals. Weird Al Yankovic was dating a law student at the time. And so Weird Al Yankovic was

3:20 actually at my law school formal in sometime in the early mid-90s. So yeah, it was also, I did not talk to Weird Al. It was not as bold as you were. But I did have an encounter with Weird Al

3:33 Yankovic going back 30 years now. Oh, see, I've conflated that into my head to

3:38 like your drinking buddies every weekend. That is what happens in Chuck's head, you know. It is a good story Yeah, so no, I think you outdid me on that story, but hey, we both got our Weird Al

3:51 Yankovic moments, so yeah. That's Savoid Truffle. That was the other song we did. I don't know why I was stumbling on it. I normally don't record this early in the morning. So

4:02 you went to UCLA Law School 'cause we met back at Rice. Correct, yeah. And I'm gonna start. Yeah, don't pop your hands. Don't.

4:11 But, no, so we met back at Rice Because you were brother Jay's. somehow roommate. You're younger than I am. I first knew of you because you were an orientation week advisor, but will rise. So I

4:24 was impressed with you. Okay, so you were that you were a sophomore and yeah, you were one of the week advisors and you were even then a little bit larger than life. So everybody kind of knew who

4:32 Chuck was. Yeah. I remember I had a freshman in my group that was 32 years old and she was a retired ballerina who was going to go back to college You know, she'd high school had a professional

4:48 ballerina career and I didn't I didn't know this but ballerinas have careers kind of on par with an NFL running back. You know, you got a good five, six years and that that's sort of it. And I

4:60 remember it was funny because I called her as you call all your freshmen. I'm like, Hey, you know, we're getting ready for this. And she goes, well, I'm not going to be there. I'm like married.

5:09 You know, I'm just showing up for classes. Oh, my God, but we really need somebody to be able to buy the beer in your age. For me too, yeah, for me too. I'm not 21 yet, so anyway, that was

5:20 great. But, no, so you end up going to law school real quick, tell, you know, normally my device in the podcast at this moment is, tell me about your background 'cause mom's listening. Mom

5:32 actually knows this. Right, hey Sally, I'm Keith, I was at your house for Thanksgiving a few times.

5:38 But walk me through kind of your career 'cause you're, 'cause where we're gonna go with this is, I've actually sent a couple of people to you and I wanna hear those stories 'cause I think it's

5:48 pretty interesting of the law you're doing. Right, so winter rice as an undergrad was an economics and sociology major actually, really until my senior year of college even debated about going to

6:02 sociology grad school. So I took the GRE and the LSAT, looked at both law schools and sociology grad schools. And back then when you were a sociology grad student, or PhD, you became a sociology

6:15 professor, And so the more I looked at those two things, I looked at law school and the coursework and law school. That really became more of an interest to me. Part of the reason I went out to LA

6:25 is I had heard somewhere that all the record executives were lawyers. So I kind of wanted to be a record executive. And I went out to, which is a good thing I didn't, 'cause there's really not

6:34 much of a record industry to speak of right now. So when I went out to LA and went to law school at UCLA, a funny thing happened is I ended up liking law school more than I thought I would I thought

6:45 it was just sort of a means to an end, but I ended up really enjoying it and just liking the practice of law or the study of law generally. And so

6:56 I had some summer back in Houston, had an offer for Baker Botts, Big Firm here in town, coming back to Houston. But I ended up getting a job my first year at law school with a appellate judge

7:08 named Charles Wiggins out of Reno. It was on the Ninth Circuit, one of the big court of appeals out there. And so I worked there for a year. And that was a great job. probably the best job I ever

7:17 had, don't tell my current employers, but I came back to Houston and I'd always wanted to do intellectual property law. And when you're intellectual property, a lot of most people means patents,

7:30 right? And so a lot of the big intellectual property firms, I do a lot of patent work and they said, wow, we really want somebody with a technical degree. I didn't have a technical degree. So I

7:41 started a big firm, started in the trial section, and you get in a big firm and they have a lot of big patent cases, especially back then. And I came and said I was interested in doing patent law

7:53 or patent litigation. They were like, oh, sure. Yeah, we'll let you work on patent cases. So about two weeks into my time there, I got sucked into a big patent case or two big patent cases

8:02 between Exxon and mobile when they were separate companies, one in the Eastern District of Virginia, which is known as the rocket docket It's about nine months from the start of the filing of a case

8:13 till you get to trial as compared to two or three years in most other places. And then there was another case here down in Texas. So did that for about 75 of the time and my first two years there

8:25 and just really got into patent litigation. And did a variety of other little things as well too. Oh, interesting. So the

8:37 thing I like whenever I mess with kind of patent litigation stuff or start thinking about it and the like is, the question's always just like, how messed up is it? I mean, it just, it seems like

8:54 anybody can file a patent for anything and nothing gets ruled on until there's an actual case about it. Is that right? I think it's probably better than you think it is. I don't think anybody can

9:09 get a patent on anything I think the, I think the patent office has gotten better about that. I think there are certainly frustrating patent examiners. I think I don't prosecute patents, not

9:19 having a technical degree. I'm not someone who gets patents for people, but I do litigate them. And I think it has gotten somewhat better.

9:28 But it does cost a lot of money to enforce them or to try to invalidate them. So that is probably the frustrating part of it for a lot of people who, other than lawyers, is that it does cost a lot

9:41 of money to enforce patents or to invalidate them if someone is asserting patents. I mean, there was more 10 to 20 years ago problems with what are known as patent trolls. People who would just,

9:54 like you said, file patents on minor things, especially in the early days of the internet. People would come up with sort of a broad concept of, Hey, do this, but on the internet. And there

10:03 were a lot of so-called patent trolls who held a lot of large companies up for ransom or for a lot of companies for 50 years. thousand dollars at a time and whatnot and did quite well. But I think

10:16 that's become less of a problem just because courts are more inclined to find that patents are invalid because they don't really cover a patentable invention or just

10:29 entertain some read judgment early on just because there's been so many of those cases that courts I think have gotten better at disposing of those cases more quickly So it was kind of court driven as

10:40 opposed to anything legislative driven. There were some legislative changes as far as jurisdictional issues, as far as where you can sue people. Some of

10:54 that was court driven as well too, but it's harder just to sue Microsoft, for instance, in some small, in the Eastern District of Texas, for instance, was a very active place for patent

11:04 litigation You have to the courts, through the interpretation of case law and also some efforts of of Congress, it's a little bit harder to just sue a company anywhere now. It has to be more where

11:18 they have a permanent place of business that you have to have to sue people. So did you did you ever know Steve Fowler? So Steve Fowler was Will Rice, but he's Steve left Rice before I got there.

11:31 So if I'm a year he's so he's he's got to be, you know, six, seven years. I know that. Yeah. He he started a company right when he so he left Rice, went to Oracle, when he left Oracle and

11:44 started his own company, he he operated under macro soft.

11:51 He didn't last long. Yeah. He gets threatening letters from macro macro soft all the time. He's right. What are you talking about? It's an a not a knife. Yeah. So and trademark law is another

12:03 thing I do now, which is a which is a real interesting area as well too. And that that that's something that evolved into my career over time and really in the last 10 years that I do as much of

12:12 that. is anything, 'cause after starting at the big firm, Baker Botts and being there for five years, then I went off to what was essentially a spin off of Baker Botts, a firm called First

12:23 Slusser and Frost and then Slusser Wilson and Partridge and did really just patent litigation for the next seven or eight years. I had previously at Baker Botts, I'd done some employment law, which

12:34 is how I kind of got into dealing with non-competes and non-solicitation agreements and confidentiality agreements and whatnot, and also did a little bit of antitrust. And so after I was at the

12:45 patent litigation boutique, then I went to a law firm called Patterson and Sheridan, and they did primarily patent prosecution and I kind of became the everything else department. I did a lot of

12:56 trademarks there, that's where I picked up a lot of trademark work. So how does Pat Riley trademark three people? I mean, that's a good question. He probably shouldn't have been able to, because

13:09 he wasn't really the person who created it in the first one. place, and it's really just descriptive of a thing happening as opposed to a brand. But the real answer is he did it, and nobody really

13:22 wanted to spend the money to challenge it. It's cheaper to license it from Pat Riley than it is to try to challenge it. But yeah, actually when I was at UCLA, a colleague or friend of mine

13:32 actually wrote a larvae article about why you shouldn't be able to trademark 3P because it's not really a, you know, he didn't, he hadn't really attached it to any goods or services at the time

13:44 that he trademarked it. And you really, that's really the key to getting a trademark. You can't just say, Hey, I have this great term. I want to trademark it so nobody else can use it. What you

13:52 actually have to do to get that to mature into a registration that you can then protect is attach it to, to goods and services and, and use it in connection with promoting those services That's,

14:04 that's, that's, that's, you guys provide podcast services or you have podcasts registered digital wildcatters as covering

14:17 the providing of podcasts for downloading on the internet as your trade. So

14:25 as the concept with Trademark similar to patent is we're going to spend money in effect on something we should be able to derive the right from that something and have some level of protection against

14:37 it. You can't be macro soft It is similar. Yes. The thing about trademarks is they're a lot cheaper. I mean, you can usually get a trademark registration for 2, 000 to 3, 000 a patent usually

14:51 costs 20, 000 to 40, 000. The difference would be patents required novelty, something new compared to what's out there before. Trademarks, as you probably know, you can have a lot of the same

15:06 trademarks but covering different goods and services owned by different people. I can't think of any examples right now, but for instance, you know, if you had a, you could probably think of,

15:19 like Ford, for instance, Ford vehicles, I'm sure there's people have registrations for covering other kinds of goods and services and things like that, because the ultimate question in trademarks

15:28 is, is there likelihood, a likelihood of confusion between these two, these two uses of the trademark? So somebody, for instance, were to have Ford wine, would Ford Motor Company be able to

15:40 stop them from using that, probably not, because people are not gonna naturally assume that wine and cars are associated. Now, if you get into cars and auto mechanic services, then, well, those

15:54 are things that likely, you have those two kinds of people that might, you might have one provider that would provide those kinds of services and those goods, so it would create a likelihood of

16:05 confusion if those two different entities were able to use the same trademark.

16:11 You're doing litigation. Do you have a rant, and I have as much time as you want, but do you have a rant of what you would wanna tell CEOs at times zero? 'Cause my sense is you're dealing with

16:26 someone when they've been sued, or they need to sue someone, and you go back and go, God, why didn't you just for 2, 000 trademark nimble fatty? Or, you know, whatever Do you have kind of the

16:40 fireside chat you would want to give a CEO at time zero? For trademarks, trademarks it's pretty easy to avoid. Problem. So there is sometimes high stakes trademark litigations between two

16:50 companies who might come up with

16:56 similar marks at the same time, and neither of them wants to give, but trademark it's usually pretty easy to avoid getting to the point of expensive litigation because the usual step in, if you are

17:09 infringing someone's trademark. and what you're doing is too similar to what they're doing, you usually get a cease and desist letter. Right. And then you're at a crossroads. And oftentimes, if

17:18 my clients get those letters, maybe they have an application on file. It's been on file for four, six months. They haven't really spent a lot of money on the application. Their company is just

17:32 sort of getting going. Maybe they have a few customers, maybe they don't. And at that point, you're at a crossroads and it's, well, do I spend the money to fight this? Or do I just go ahead and

17:40 change my name? And how much value does your name really have at that point? And do you really think that what you're doing is different than what somebody else is doing, that your mark is

17:48 different? So usually you can avoid litigation at that point where you just change your name. I mean, now if you had

17:57 done your searches beforehand and made sure your name wasn't too similar to somebody else's or when I hadn't registered yours, then you wouldn't have had that issue because the real benefit of

18:08 registration is. If you, let's say you're in, you have an oil and gas product or service that you're promoting in the Permian Basin and you've got a name that you're using, let's just say quick

18:19 drill, just as an example. And then the real benefit of registering it is if you file your application at that point, you're presumed to have national use of that mark. Whereas if you don't

18:31 register it and you're using quick drill and Permian Basin and then somebody starts using it for a similar product that named quick drill for a similar product in Oklahoma, then you get into a

18:40 priority fight. So who came up with this first? Is there gonna, is somebody gonna naturally assume that someone in the Permian Basin is the same provider as someone in Oklahoma? Whereas you don't

18:51 have to worry about that if you have a trademark registration or application that leads to a registration because you are presumed to have national rights at this point. So that's what it really

18:59 saves you from is this fight over. Well, do I have to prove the geographical reach of my mark and that somebody in Oklahoma would naturally assume that I was somebody. Somebody using the market in

19:11 Oklahoma was associated with someone in the Permian Basin. You don't have to worry about that if you spend a couple thousand dollars to get your trademark registration early on. So is there a big

19:22 famous case where there are tons of dollars spent on trademark stuff? I mean, because I

19:31 started a company called True Tracker and went through all the trademark stuff and yeah, there was a True Tracker that did cat litter or something and you're like, okay, well, that's not an oil

19:43 product and the like, so I kind of get what you're saying. But now that you've laid it out, I can't really think that. I mean, the only case I can think of that was was when Southwest Airlines

19:54 just messed up on their frequent flyer program and literally took a name that was already in use and realized later oops, after they'd spent a ton of money, they made a mistake There are probably

20:08 not a lot, necessarily a lot of high-profile. file fights between big companies over day. Well, actually, the most recent one, I can give you an example of, there's a brewery in a California

20:20 called Stone Brewing, famous for IP aid. Maybe you've heard of them, but they're a big brewery called Stone, famous for their IPAs. Well, of course, of course, has keystone, right? And they

20:32 started to use,

20:35 relabeled their cans where the stone, the key was on one side of the can and the stone was very large on the other side of the can. So Stone Brewing sued them for trademark infringement, saying

20:46 they were using stone as a mark. I didn't think there was much merit to the case. I mean, there's not a lot of overlap between a craft brewer who makes an IPA and keystone light. There's not a lot

20:59 of confusion among those, among those drink, not a lot of cross pollination between those drinkers So I didn't think there was much to the case, but Stone ended up being successful in that case.

21:07 So that's an example of. It's not that they were just calling their beer stone. It's that the way they were portraying their mark, Keystone made it look like they were just saying their name was

21:16 stone. A lot of the big litigation is over, people just trying to get trademarks registered. Like for years, hotelscom had to fight to try to get the registration of hotelscom because what the

21:30 trademark office said is, that's just a generic mark. All you're saying hotelscom is just obviously a description of a website where you can make hotel reservations. But after they had, finally

21:42 after they had had enough years of using the mark, people associated hotelscom with that particular website, and they were able to register it. So that's sort of an example of some of these sort of

21:52 long-term trademark litigation. We could talk about Taco Cabana in two paces, if you wanted to. Oh, yeah. That's probably - So let's go old school. Right, right. So trade dress is kind of a

22:03 unique issue And I think you called me after I'd been on Fox News

22:09 the University of Houston getting a cease and desist letter from the NFL over there using wheelers, throwback jerseys at one of their, one of their games. So just for those who aren't familiar with

22:22 that. So the University of Houston, they used sort of the love you blue, light powder blue uniforms at one of their games. And they got a letter from the NFL saying, Hey, we don't want you to do

22:33 that anymore. Essentially you're threatening to sue. And so that relates to something called trade dress So trade dress is sort of a subset of trademarks where you can protect the look and feel of

22:48 your product or your color scheme. A famous example of that is Owens Corning, the pink insulation. They have a trademark over pink for insulation 'cause that's not a natural color for insulation.

22:58 So nobody other than them can make pink insulation. So years ago, about 30 years ago, there was a case that went all the way to the Supreme Court, which was Taco Cabana. versus two pesos. So

23:10 those of you who grew up in Houston in the 80s and 90s, might remember two pesos. If you don't think of Taco Cabana now, it was a very similar appearing restaurant to Taco Cabana. And fast food

23:24 mugs can step up from the Taco Cabana. Exactly, exactly. And Taco Cabana ended up suing two pesos for infringement of their trade dress. The colors weren't exactly the same, but sort of the

23:35 layout of the restaurant, the menu was similar, the color schemes were a similar sort of Miami style color scheme, I guess you would call it. And they were actually successful in that. Now in

23:46 that case, there were apparently a lot of bad facts. The guys who started two pesos had been associated with Taco Cabana, had some drawings. They were really too similar, but essentially the

23:56 Supreme Court upheld that and said, yes, you can protect a trade dress, this sort of color scheme, the look and feel of your restaurant or any other product for that matter. That's that's a

24:08 fairly famous case because that's something that went all the way to the Supreme Court. And it wasn't. It weren't restaurants that people were familiar with in California. So I was sort of an

24:17 expert on the history of Taco Cabana and two pesos. And we were talking about that in property class, my first year of law school. So you crushed it. And there was something weird about how the

24:29 resolution was ultimately Taco Cabana bought two pesos. Exactly. Yeah. Except for one unit. And the one unit was actually in the basement at Greenway Plaza, because it had been franchised. And

24:45 somehow the franchisee had changed it enough that he wasn't included in the. So for, I remember that location. About five to seven years after that, you could go get old school. Because I was a

24:59 bit of a snob. I thought two pesos was better to the 91 plate Yeah, exactly. Just like kind of a breakfast classic. Yeah. And their notches were great. Taco Cabana is good. I like Taco Cabana,

25:09 but yes, two pesos was a little bit better for old school people. One of the greatest things is, so when I joined Stevens in the summer of '94, their top recommended stock was Taco Cabana. And

25:24 all of the young analysts at Stevens were all loading up on this and they were buying call options and all this stuff. And anyway, it was one of these ridiculous things where the call options were

25:36 gonna expire like in 27 minutes and the stock jumped 15. So all these guys made like, you know, 35, but they all made money. And they were all talking about it that at the next kind of happy hour

25:50 he had. Man, that was a shrewd investment. That's 491

25:54 plates right there, so that's awesome. Exactly, so do you have kind of a lecture for on the IP side for a CEO,

26:05 kind of starting out a company. things they need to be thinking of. And then I'm gonna follow that up with, do you have kind of the same rant for an employee going to work for a technology company?

26:16 Sure, sure. So for the CEO, I mean, the thing to understand is you've got four basic areas of IP. You've got patents, you've got trademarks, you've got copyrights, and you've got trade secrets.

26:26 And what are your earlier episodes, the energy on trial? They did a great job of talking about trade secrets. So I won't repeat everything that they said there, but they did a really, so if you

26:35 all go back and look at the, listen to that episode, there's a really good discussion of trade secrets right there. So, you know, I think a lot, especially if you're a tech company, a lot of

26:44 people start with, well, yeah, tech's real important, let's do our patents. Let's file a lot of patent applications. That can be really expensive for a startup. You know, certainly if you've

26:54 got core technology, it's worth having one or two patent applications. You can save a little bit of money with patents by initially doing what's called a provisional patent, which is essentially,

27:05 that's a place saver where you. You're not sure you want to go full bore and spend all the money on a patent application, but you essentially have this core idea. You want to get that on file to

27:15 make sure you establish priority over anybody else who might try to file an application in the interim. And then within one year of that, you need to convert that to a regular patent application.

27:27 And so the thing about a provisional application, it can be really informal. I mean, people have filed like power points or just a couple of drawings with like a one page description of that patent.

27:38 So you can do that. The limiting factor on that is your priority over that invention only is as much as - it only covers the detail you put in that patent. So you can't just have like a one

27:52 paragraph description. And then one year later, have a 20 page patent application and say, oh, well, my priority goes back to the date of the provisional patent. It would only cover what you

28:00 actually disclose in that So that is a money-saving opportunity. is to start with a provisional patent. Don't spend as much money drafting it. You can say patent pending about when you're

28:11 referencing your technology, even if you only have a provisional patent. So that is a, there's some value there. And trademarks and copyrights, I think because they're relatively inexpensive, a

28:22 couple thousand dollars for a trademark application, assuming you don't conflict with somebody else's mark. I mean, maybe 500 for your first copyright application and

28:32 a couple hundred dollars. You've talked me into it. You need to go file nimble fatty. We need to trade work. We can do that. We can do that. We just need to figure out what your goods and

28:39 services are. Maybe a malt liquor or something on those lines. So yeah, we can we can figure that out. And well, again, the good thing about trademarks is you can file what's called an intent to

28:49 use application. It used to be in the US. You had to actually be using it before you could file a trademark application. But you can now file an intent to use application. I've got this name and

28:59 I'm going to it at some point in the future cover all of these products. When you see

29:06 celebrities filing for trademark protection for their name on a whole bunch of different things. And Travis Kelsey was like in the news recently, probably because he's dating Taylor Swift, but he

29:15 filed a bunch of trademark applications on all these products, the goods and products he was gonna cover with Travis Kelsey. He's not actually providing any of those now, but he's at some point has

29:25 a legitimate intent to at some point provide those products in the future so that you can file an intent to use application So that's a good way to start, even if you haven't started selling your

29:37 products or providing your services to file an intent to use trademark application. And then copyright can be really important for sometimes it's like web content, something as simple as web content.

29:48 A lot of times another startup will come along as a competitor and they'll copy your web content to describe what they do. And if you've got a copyright registration, then you can get statutory

29:60 damages for that. Source code is another thing you've got a really important bit of software for your company is you can essentially copyright your source code in which case is there anything there

30:11 to yes I want to protect it but to if I file this other people can see it great question so here's here's the issue with what you can do with copyrights is you for protecting your source code you only

30:26 need to file the first 20 pages in the last 20 pages of your source code you essentially generate a PDF file the first 20 pages last 20 pages. Furthermore you can redact out cover in black anything

30:38 that you consider a trade secret. So if you've got a real important algorithm that you don't want the public to know about you can you can cover that really all the copyright is about is essentially

30:47 notice of hey this software that I put together I have I have copyrighted and or I have a registration or copyright registration and it's not to give everybody through the whole world exactly what you

30:60 have covered it's just to say hey you know this this software called this that has this portion soft work in it, it is something that is covered. So yes, you can do that without revealing all your

31:12 secrets. But you raise another important point with regard to trade secrets and patents is sometimes the question is, in patents, you can't be secretive. You have to disclose to the public what

31:25 you're doing and the best way to do it. It's called best mode. It's something that you have to disclose in a patent application. So sometimes that's the issue as well Do we try to patent this or is

31:35 it only slightly different than what's out there before? So we might not even get a patent but it's secretive enough or good enough that we don't want to disclose it to the public so that they can

31:47 then just try to design around it and not know what we're doing. Tweak something a little bit, avoid our patent and essentially compete with us. So that's one of the things that you have to

31:57 consider when you're trying to protect your IPs Do I keep it secret? Or do I try to patent it so that I have the exclusive right? to use it for 20 years. And is this a fair statement that a lot of

32:11 times, and I'll throw digital wildcatters kind of under the bus, you as an entrepreneur get going on stuff and you look up and you've just done nothing. And then do you have to go back and

32:24 remediate or are you able? Right. So that can be an issue with patents. An issue is if you have sold or offered for sale your product for more than a year, then you're kind of out of luck and you

32:37 can't patent it. If you, it is important, it is better to try to file a patent application before you sell it at all. In the US, you've got essentially a one year grace period. You're out there

32:47 selling your product for six months. You file a patent application, no problem. But you couldn't patent it in Europe, for instance. And I think Japan as well too. So once you've sold your

32:58 product, you've kind of lost your opportunity to file a patent that would be - that would be - protect you in Europe, but you could still do it in the US. Trademark's not as much of an issue.

33:08 Copyright, not as much of an issue. You can kind of go back and cover those things after. Copyright, one of the things that people are realized is copyright, you actually have a copyright in any

33:19 content that you create from the moment you create. The only reason you need to register it is one, to give people notice so that they don't copy it. And two, if you want to sue in federal court

33:28 for infringement of your copyright, you do need to have it registered And the other benefit, too, is if you register it within three months of when you create that content, then if somebody copies

33:39 it, you can get what are called statutor damages. So, it could be 10, 000 per infringement, 100, 000 for infringement. So, if

33:46 somebody knocks off one of your podcasts, you've got it registered, and they - Clearly nuclear door city is

33:55 the - We need to get that one registered. Exactly, yeah, you would have, you know, 10, 000 if -

34:01 somebody distributed 10, 000 copies of it or sold 10, 000 copies of it, you could not only get their lost profits, but you could get statutory damages, which are 10, 000 per infringement. Now,

34:12 as a practical matter, you're not going to get 10 billion for a copyright case. But you don't have to prove your damages if you've got a copyright registration and somebody that infringes that. You

34:22 could potentially get just statutory damages based on the number of infringements Are Europe and Japan and let's just say the rest of the world and exclude China, obviously, because they don't have

34:35 any of this. But are they similar in that we'll give you exclusive rights for some period of time for patents? Is it the same kind of concept or? Things are more consistent than you would think

34:50 they are. And that does include China. And we have a lot of clients who file patents in China. I file a lot of trademark applications in China. So it actually is pretty uniform. For patents, you

35:00 have something called the patent cooperation treaty. I can't say that every country is in it, but over 100 countries are part of the patent cooperation treaty, which essentially it is pretty

35:10 standard. You can either file a

35:14 patent in the US first, or you could just file a patent cooperation treaty application with the World Intellectual Property Organization. And then you have a period of time. This one decision needs

35:26 to be made at about 18 months, then other decisions need to be made a little farther down the road. You have time then to decide what countries do I really want to go out to. So you can see how

35:36 your product grows, where your market is. And it's pretty consistent across all countries now that your patent coverage is 20 years from the time of your first application. It can expand a little

35:48 bit if the patent office takes too long to examine it, but generally speaking it's any, but you would need to file individual applications in all the countries, exception being there's a European

35:59 patent office, which covers most of Europe. There's a couple African treaties where you can cover multiple African countries. One is a lot of the French-speaking countries. One is a lot of the

36:10 English-speaking countries. But for the most part, you need to go to individual countries to file individual applications at some point after that PCT application to get coverage. Trademarks,

36:20 there's a similar treaty called the Madrid Protocol, where you can essentially file a trademark application either through the World Intellectual Property Organization to cover multiple countries.

36:33 About half the countries are probably part of that treaty. Or if you can't use the Madrid Protocol application process, you can go to that country, file an application. And if you do it within six

36:46 months of your original application in the US, for instance, then they treat the filing date in that foreign country as the date of filing in the US So it's actually, there's actually more even

36:55 countries that we are. Not exactly friends with or have an economic interest with them, for the most part, parts of that treaty, and there is actually a lot of cooperation and consistency across

37:08 countries. Is it maybe just some force month that's different? It is. You know, at least the redneck Texan view of the world is China just steals our stuff. There

37:22 is, yes, it would be hard to enforce in China, but however we have found that there is a healthy fear of the US litigation system. So even if it is a company in China that you think is knocking

37:36 off your trademark or knocking off your product, maybe advertising on a website, there is a high level of efficacy from sending cease and desist letters to even Chinese based companies saying, Hey,

37:47 you're advertising this on the web. You need to knock it off or you need to stop using my trademark and those websites tend to go away Yeah, I mean there is a Fear that somehow they're going I mean

37:60 if they're trying to import it into the us. They can get called all into us courts But I'd say yeah, if it's solely Manufacturing infringement in China there is a I have I have not personally been

38:15 involved with those But I you there are some infringement suits that go on there as long as the Chinese government isn't one of the parties You're trying to sue. I think there are You know who knows

38:25 exactly how independent all these companies are over and over in China But there is actually patent litigation in China now There are places like Africa and Brazil just takes forever that you know as

38:36 a practical matter It would be hard to enforce of a but that China is not the it's probably not the hardest place to enforce interesting I never would have guessed that now so It sounds like to me

38:50 Listening to you talk If I'm an entrepreneur, I would have, like, go buy a beer. have lunch with an intellectual propertytrade mark type attorney just early days and at least get some sort of

39:06 advice on, Hey, you ought to be thinking about this, thinking about thinking about that sort of stuff. Absolutely. And you talked about employees, too, leading into my long answer with your

39:16 questions.

39:19 One thing you want to have early on is employment agreements with employees, especially if you have independent consultants, who aren't employees, you want to make sure that any IP that they create

39:28 is being assigned to the company. That essentially happens as a matter of default with employees, but it's still good to have those agreements. But if somebody's an

39:39 independent consultant,

39:43 one thing about the patent system is the person who invents something is presumed to be the owner of that invention. So unless that person is an independent consultant unless you have a formal

39:53 agreement with them that they are assigning what you're paying them to create to the company, then it's kind of ambiguous who the owner of that is. So yeah, early on having agreements with

40:04 employees and consultants indicating that they're gonna assign any IP, be it trademarks or copyrights or patents to you or anything else that they create and also protecting the secrecy of that

40:16 information. 'Cause that's really what you need to do to show that something is a trade secret. If you decide not to file patent application and just wanna protect your formulas or other inventions

40:28 or processes, then you really do want to show that you have formal agreements with your employees showing that they have an obligation of confidentiality to protect that information. Oh, that's

40:38 interesting. So that's, I mean, that's potentially just part of your onboarding. Absolutely. Yeah, you get onboarded, here you go.

40:46 Now let's flip it, where your employee hat, What do I need to be thinking? Um because practically speaking, at least my view of the world is big bad company with lots of money, lots of lawyers at

41:04 their disposal use these type of things to keep you from working certain other places. Right. So the first thing would be if you're leaving one employer and going to work for another employer, do

41:18 not take anything with you. Let me repeat that. Do not take anything with it. That is not your stuff I don't care if it was a great idea and you think of it as being yours. You don't want to just

41:30 put everything on a hard drive and say, Hey, well, this might be handed to you either, to use later. And, oh, by the way, they can see that you put it on a hard drive. Right, exactly. There

41:39 are forensic computer companies that will know exactly what you did. Don't email it to your home, email address, and say, Hey, this might be handy for later. You can talk to your boss. You can

41:50 get it in writing and say, Hey, it would really be nice if I could take this form. Or, Hey, I have this nice spreadsheet that I did that helps me convert metric to standard imperial measurements.

42:01 Or things like that, you can get permission to take things. But generally speaking, don't take stuff with you. And when you go to your new employer, one, they're probably going to have you sign

42:12 an employment agreement that's - that were in which you say, I have not taken anything with me, and I've not taken any trade secrets or confidential information from any previous employer. You will

42:22 - a lot of times in this industry, you will be asked to sign a confidentiality agreement, which is common, and those are fine. It may include a non-solicitation provision, which could include

42:34 both not soliciting customers, if you leave that employer and not soliciting other employees to come with you. And it might include a non-compete provision Now the good news is if for employees out

42:48 there is non-competes, as we know it, are probably going to go away by about April of next year, and that is because the FTC has taken an interest in non-compete agreements. This trend has been

43:02 happening for a while. There are certain states, for instance, that have started to adapt laws that say, well, you can't have non-competes for hourly workers The problem with non-competes is that

43:12 employers got greedy, and you started to have things like non-competes for nail salons and non-competes for people who were not in highly skilled areas or didn't have a lot of customer information or

43:22 whatnot. So some of the states have sort of been moving in the direction of raining in non-competes, and now the FTC has essentially started to sue companies for non-competitive activities because

43:35 they're trying to enforce non-competes that are overly broad And essentially, the FTC has already indicated that they're planning to ban all non-competes as they are related to employment

43:45 relationships. We can talk about, you know, if somebody sells a. company, you could still probably enforce a non-compete against that person. But as far as employment relationships are concerned,

43:55 as of about April, once the FTC is back to full strength and gets all the Republican spots filled along with the Democratic spots, they're going to be vote on it. There's still going to be a

44:06 Democratic majority and non-competes for employees. Any level of employees are probably going to go away. Now, they could still be constitutional challenges, but that's probably going to happen

44:16 Well, we fundamentally fought a war over that, and the good guys won that war. And so, it is kind of hard to justify the nail salon lady can't go next door for 25 cents more an hour. Exactly.

44:31 Those are hard to justify. The ones I think you can justify is, you know, high-end CFOs who knows where all the, you know, all has all the customer relationships, a guy who's in a particular

44:44 cutting edge technology area where you'd like him to not go to. competitor for a year immediately afterwards. Now that's why it's important to have trade secret protection and patent protection. So

44:54 he can go and compete, but not use exactly what you're doing and certainly not use trade secrets to go to a competitor. And those sort of trade secret violations will still be enforceable, but you

45:07 can't, you're probably not going to be able to prohibit somebody from completely going to work for a competitor. Now, Congress is starting to get involved Congress may take a more moderate approach

45:18 and perhaps allow non-competes for highly compensated executives or people in really highly technical areas, but they may not. I mean, it seems the trend is that non-competes are probably going to

45:30 go away. You could still potentially have non-solicitation of customer agreements, but that would really depend on how restrictive those agreements are. If you're talking about just two competitors

45:41 and you tried to say that someone could go and not solicit customers at the end. went to another company, well, that might effectively prohibit them from working for that other company. But if

45:52 you're talking about an industry where you've got 20 different competitors, and maybe the company you're leaving only has 5 of the market, well, you could go to a competitor and just not go after

46:01 those customers, so after the other 95, that wouldn't really be and effectively a non-compete. So those sorts of agreements might still be enforceable. So two things on non-compete. My favorite

46:10 non-compete story is April, whatever it was, 26, 27, 2020. Get on the phone call. Chuck, we're going to need to let you go, you know, because of performance and blah, blah, blah. Chuck, I

46:23 just want you to know we've had such a good partnership for 20 years. We're willing to wave any non-compete arrangements we have in place. We didn't even look at those. We just, we want you to be

46:36 able to go out and do your own thing, right? You know, as we are shutting down the world for COVID. So I said, well, I really appreciate that guys, just so you know. My starting place on the

46:47 negotiations is I'm willing to take a lifetime ban from the industry so

46:53 it's like it was like seriously. One other bit of advice and I want you to a pine on this and opine kind of legally but also just practically is this The biggest mistake I made at Kane Anderson is

47:08 the day I joined you know 20 some odd years before I signed an agreement that in effect talked about my severance etc when I left and just never gave it a second thought you know I mean here I was

47:22 running the group You know had fundraiser and all that and you know clearly if I'd been more self serving in my life at some point I would have said you know what the largest private equity funding

47:36 Kane's history is not going to get raised unless I'm here. Hey guys those severance provisions don't apply anymore here's the new game is what I should have done I just never thought. that way. And

47:45 certainly that's always an option. But that's my advice is you ought to be looking at that regularly. Even if you've been at a company 10 years, you never know when there's going to be a new CEO,

47:54 you never know when things are going to change. Any thoughts there? Yeah, I mean, that's something you can always look at. I mean, any time, and that's something the company will always look at

48:04 too. Any time you're given equity, there's probably going to be non-compete provisions in that in addition to your employment agreement. And that's something that people need to keep in mind when

48:13 they're leaving a company, is that even if they don't have a non-compete in their employment agreement, they might have one in their equity, any agreement related equity they were granted. And

48:22 those are likely to still be enforceable, even if the FTC changes the rule with regard to employees, because the idea there is, hey, you've got a stake in this company, you're an owner of this

48:31 company, and you going out and competing with this company, at least in the first year or two after you're there, that's going to be inconsistent with this, these benefits that this company has

48:40 given you to share in the benefit of the company. So those are the kinds of things that might still be enforceable. But absolutely from the employee standpoint, I mean, those sorts of things are

48:49 always potentially negotiable. With equity grants, there's usually a pretty standard non-compete provision.

48:56 But certainly severance provisions and amounts of severance are something that you could reconsider as you get higher up in the company if they really still want to keep you. Yeah, they obviously

49:07 didn't. It's kind of a backhanded compliment where they're like, Check, we're not really worried about your community to be honest with you. Let's just start there. No, that's.

49:20 So kind of close out on all this sort of stuff. Give me an anecdote, a story, a bit of advice, whatever, just crazy outside the box, like a case you worked on or just something

49:40 Yeah, I think there was one case I worked on Um, we'd had an employee leave and, and

49:51 our, our client had hired an employee who'd left another company and he took a bunch of drawings with it and, um, we, it was a bad situation and there was not, there was not something that it

50:02 made sense to fight for a year or two. And so we actually, as we dug deeper with this guy, he had this hard drive that had a lot of drawings on it. And so he's a company C now, he had left

50:15 company B recently. And on this hard drive, he also had a bunch of drawings from company A, the company he had been at before the company that had sued us. So that was a situation where we sat

50:25 down with the other side and we're like, Hey, we're going to come clean. You took a bunch of stuff with them. And it's really, really the best thing to do is if you're in a situation as a lawyer

50:34 or an employee and you've left and you realize you took a bunch of stuff with you even accidentally, sometimes people Don't realize that they have this stuff until they look back at their email and

50:43 they email themselves. something one or two years ago that they kind of forgot about, but that's still company property that if you get sued, that's gonna look bad. So in this situation, it just

50:54 didn't make any sense for us to just fight, fight, fight, but the kind of the good thing is we'd realize that this employee had not only drawings from his previous employer, but the employer

51:05 before that. So we essentially sat down with the lawyers and said, yeah, I think we've both got a problem here because this goes back and this is all gonna come out if we get into litigation. And

51:14 so that's just a case that got resolved because it was, you know, this was a guy who truly thought everything you worked on was his. And so it went back, it probably frankly went back two

51:23 companies before that. And so that was just a situation that is just, sometimes it's just better to sit down and talk than it is to just fight. I spent a lot of times talking with clients about

51:38 look, I'm in a business where you pay me to litigate things, right? That's how I make my money. That's how I send my kids to college. So if I am telling you not to do something, you should

51:47 listen to me seriously,

51:50 because it's not in my self interest to do so. So it's like, look, here is why we should figure out a way to resolve this, 'cause this looks bad. And what I say in trade seeker cases is there's

51:59 always something, right? No matter what side you're on, there's always something that the defendant has forgotten about, or they took with them, 'cause they didn't really think it was, they

52:09 thought it was their stuff, or they didn't really think of it as being confidential, or they emailed themselves something, or they've got an old laptop that still has a bunch of stuff left on it.

52:17 So if you get in one of these trade seeker cases and you think, oh, well, my employee told me I'm completely, he's completely clean, he didn't take anything with him, he's probably got something,

52:26 he or she'd probably have something somewhere. So it's, you know, if there is an inkling of something that somebody did bad, there are probably more things out there that they've forgotten about

52:37 that are going to look bad as you get deeper into litigation. So as my attorney, I will come clean on this when, uh, so, you know, they, they call up, they fire me and COVID hits and we're in

52:50 lockdown, all that. And so it probably took me about eight months before I cleaned out my office, just because everyone was scared. And, and, uh, I got along really well with the, the general

53:01 counsel at Ken Anderson Jarvis Hollingsworth. Great dude. Anyway, I was just texting with him. I'm like, Hey, when can I come down and get my stuff? And he said, he said, Hey, you know, and

53:13 he said, any chance to Saturday works and I go, yeah, no, it actually worked great. He goes, I'm going to be down there all day because technically I kind of have to be around, not that we're

53:22 worried about anything, but you know, I need to be around. So great. So I go down there and I'll walk into Jarvis's office and I go, Jarvis, I know you're going to have doubts about this, but

53:33 the snake skinned covered chair in my office, I'm taking that. And he goes, Well, okay, you're more than welcome to it. I go. No, I actually paid for it. Here's my expensive, Danny wouldn't,

53:46 Danny paid for all my office furniture, but they drew the line that the snake covered. So I took that, and then the other thing I just themed is we had signed a letter of intent with Aubrey

53:58 McClendon on a deal, and

54:01 I just stole it. Gotcha. I just flat out. It's an Aubrey signature, and I stole it. For a souvenir. Sure. For a souvenir, they could come after me So, well, Keith, you were cool to come on

54:11 and talk about all this stuff. Well, thanks, yeah, thanks for having me. How do people reach you? So, the firm I met now, I've been there for about 10 years, is Ewing and Jones. It's

54:19 EwingJonescom. If you want to

54:23 just go, my last name is spelled Jasma, J-A-A-S-M-A. If you go to jasmacom, that goes right to my firm website, or right to my page on my firm website, or you can email me at K-J-A-A-S-M-A at

54:37 EwingJonescom I'm always happy to talk about trademarks, copyrights, patents. what have you always, always happy to help out. And I can, I can tell you about the, I can tell you some chuck

54:47 anecdote. If you're nice to me. Or if you're mean to. Or some early days of the podcast anecdotes. No, the one thing I will say I'll give you, I'll give you props for this is I've had several

54:59 people that have called with situations of trying to untangle themselves and all have come back raving about your help. Well, appreciate it And we do a lot of things like negotiating exits of

55:13 executives from corporations and companies like that, things like that. So a lot of the employment we stuff we do is, we do a lot of employer side stuff, but also executives and negotiating

55:24 severance packages and things like that.

55:29 Anything we didn't cover that you'd want to?

55:33 No, I just, well, I just wanna apologize for one statistic I helped put out there in the ethera. In the ether, I think when you were talking about starting this podcast, I told you that I gave

55:47 you a statistic that I don't know whether it's true or not, but I had heard it somewhere else that of nine out of

55:55 10 podcasts don't make it past 10 episodes. So I just wanna congratulate you on making it well past 10. And I've heard that repeated as gospel on this website. Yes, yes. So we celebrated number

56:05 11 Well, I'm not sure we, not sure we titled it nah, nah, nah, Keith, look at this. Well, so I'm just honored to be back here on a very special 138th episode after all this time that I'm happy

56:20 to be here for this anniversary episode. It was great. I'm in this breakfast club that got started 20 some odd years ago and these guys got together and the whole concept of, let's get a bunch of

56:32 people that we normally, like if we're lawyers, let's get some bankers, let's get some other folks cross-section alive. and let's just grow old together. And one of the founders was Ben Hertzog,

56:45 and

56:47 they were going, okay, who are we gonna invite as the initial class into the Breakfast Club? So they invite all these people. Three years later, Ben invites his best friend. And we go like, why

56:56 did it take three years for your best friend to be invited in? I mean, I thought, you know, there was the best friend, there was the priest. I thought it was like episode nine or 10. Chuck's

57:07 gonna run out of content. Now, I'm sure I'll get that call any day, but you know, then I appear on Fox Morning News one morning and Chuck's like, Hey, you should come on the podcast. So that's

57:15 all it takes. You get in the big media and then Chuck finds you worthy to come on his podcast