Daniel A. Scola, Jr. With Hoffman & Baron

Intro: [00:00:04] Broadcasting live from the Business RadioX studios in Atlanta, Georgia. It’s time for High Velocity Radio.

Lee Kantor: [00:00:15] Lee Kantor here another episode of High Velocity Radio and this is going to be a good one. Today on the show we have Daniel Scola with Hoffman and Baron. Welcome, Dan.

Daniel Scola: [00:00:26] Thanks, Lee. Thanks for having me.

Lee Kantor: [00:00:28] I am so excited to learn what you’re up to. Tell us a little bit about Hoffman and Baron and how you serve in folks.

Daniel Scola: [00:00:33] Yeah, so we’re an intellectual property law firm, and that means we’re exclusively devoted to procuring, protecting and enforcing protection of ideas, creations and expressions of those ideas into intellectual property.

Lee Kantor: [00:00:50] Now, in today’s world, intellectual property seems to be an area there’s a lot of gray area in terms of what is my intellectual property, what is kind of the public’s intellectual property, how is it defined, number one? And number two, how can you possibly protect it?

Daniel Scola: [00:01:08] Well, there are very good vehicles for protecting it. And they go back to the constitutional mandate that if you exchange your ideas and teach the public how to do certain things, the government will in return give you a limited monopoly or monopoly for a short period of time. So, for example, there’s different vehicles that protect things like patents, protect inventions, for example, and you get 20 years of protection and then you’ve got the creation of expressions and ideas that go into brands and that’s covered by trademarks. And then you’ve got copyrights, which is protection of things that are reduced to a tangible form like like books, movies, dance steps and so forth and so on. And what actually happens is these rights become property rights just so just like real property, like you can sell real property. It’s an asset. You can, you could license it, you could, you could rent your, your, your land, for example. Same thing goes on with assets that are formed from these intangible ideas. You reduce them to a tangible form and they become property rights that you can license, you can sell, and they’re quite valuable.

Lee Kantor: [00:02:21] Now, the area where for me it gets gray and I was in Chicago the other day with my son and we were walking and there was a truck that was selling like a roofer or something. It was some manual labor vehicle. And on it they had pictures of all kinds of superheroes that are well known. And then my son made a comment about, Wow, how did they do that? And I’m like, something tells me they didn’t ask for permission to do that, that they just did that. And so how like is Marvel going to search these people out to try to tell them to stop doing this? Like it just seems like that in today’s world where there’s so much content just constantly being thrown around, it’s hard to defend your trademarks or your your marks in terms of everywhere that somebody is misusing it.

Daniel Scola: [00:03:16] Well, that’s a very good question, but there also is a very good answer to it. You know, normally what they would what most companies do who have like certainly the famous brands, for example, like the Marvel Comics, you know, all those action figures there, they have a a daily, weekly and a monthly program where they police their their marks and the use of their marks. So they hire people. Sometimes it’s outside law firms like ourselves. And we look to see, you know, on a constant ongoing basis, monitoring basis who is using something that is similar or identical because it’s not just using identical, it’s something that’s confusingly similar to the public. And so what happens then is they’ll get they’ll get a letter saying, you know, you either have to stop doing this or you have to have some discussions with us to allow us to develop maybe a license situation. And, you know, it’s just a way of policing it. So you really do have to to you know, one of the big advantages of having IP is that when you do get a copy copycat, you do have rights to to stop them from doing it. And I know that there’s a lot of content out there, but it’s also a lot easier to find the content these days so you can search and find lots of things it used to be, and they still do it to some extent.

Daniel Scola: [00:04:45] Used to be in the old days before social media became so prevalent, you could hear in a restaurant, for example, you could hear various songs that, you know, well known music being played in the background. Well, all those commercial establishments have licenses to play that music and they play they they they go through a a single source. Usually it’s it’s ASKAP. And they’re responsible for giving royalties to all of the performers and the people who have copyrights in the music. And they pay a limited amount for certain amount of plays that they’re you know, it’s sort of an average. And they go back and it’s a little bit on the honor system, but they do audit audited it. So all those restaurants that are playing commercially available music are paying license fees on those. So you can imagine how many restaurants out there and how many royalties are getting paid just for that, and that’s restaurants. It applies to any commercial situation. And yeah, you’re right. You’ve got to monitor it and police it and then you’ve got to get someone to to write the letter or actually follow up on on something like a lawsuit.

Lee Kantor: [00:06:03] And if you don’t follow up, are you at risk of losing your marks?

Daniel Scola: [00:06:09] Well, you do have some risks if you don’t follow up. So, for example, in the trademark situation, if you allow someone to exist so long, it becomes more difficult to to make the argument that the coexistence is creating an issue for you, even though there’s infringement. I mean, you can still get them off. But it’s always almost like, for example, in patents, the patent area, if you have an invention and you have a patent on it and you know there’s infringement and you don’t follow up on that for a period of time, usually it’s a six year period of time. There’s a doctrine called latches, which means you basically sat on your rights, you didn’t enforce them, and now you can’t enforce them. So, yeah, you have to pay if you’re going to have an asset. It’s very much like if I have a house sitting empty on a lot and I do nothing with it and I just let whoever wants to go live there, you know, I’m sitting on my rights. I have the right to charge them rent, but I’m not not a good thing to do in any field.

Daniel Scola: [00:07:15] And also the IP field is the same way. Can’t do it. So you really should pay attention. Look, it’s an asset. You know, these are valuable, valuable assets. They’re property. They can be licensed, they can be sold. They they increase the value of your company. And and by the way, whenever you’re looking for money for an investment, IP is is right at the forefront. They’ll say, okay, what is your product or what are your services? And then is it protected by IP because IP represents a barrier to the public getting in. So normally you would be you would say, I have IP and here’s here’s what it is. And they would do an evaluation. They say, oh, well, you know, the people shouldn’t be able to get to where you are easily. They have to redesign something and that’s going to cost them money and that’s going to take time. So you’ll be out there for a while first in the market will invest in you. And that’s sort of the thought process.

Lee Kantor: [00:08:17] Now is the recommendation for a, you know, maybe a startup or a new firm, even a professional service or consulting firm to develop some IP that is uniquely theirs. Will that help them in the long run, maybe get more value down the road if and when they sell?

Daniel Scola: [00:08:37] Absolutely. You know, IP always increases the value. Sometimes it’s exponential. I can tell you many examples of situations where startup companies have come to me and to my firm and we’ve worked with them to develop an IP portfolio. So it becomes a thicket of of little think of them as little land masses where people have to figure out how to walk in between these land masses so they don’t step on your IP because they don’t want to infringe. And and nobody wants infringement, right. But you know that you can enforce it if you if someone does. So it’s a real barrier and they have to redesign spend the money and sometimes they just go it’s it’s too expensive, it’s too difficult. I will just take a license from them and I’ll just compete with them. But I’ll I’ll make mine a different name. So I’ll call it a different brand and I’ll work on my brand and just try to develop that as opposed to the product and the patent behind it. But but no, you know, almost all investors look very heavily at the market and how they can prevent others from getting into the market if they invest in this in this particular asset. So if a company has a good portfolio of of IP assets or a dominant position in that technology area in terms of patents and a dominant position in terms of trademark, which is the awareness, the goodwill associated with the name and everybody knows it’s that company that sells that name, you know, then, you know, they really feel much more comfortable and they do a lot of due diligence before they put, you know, hundreds of thousands or even millions of dollars in in investments.

Lee Kantor: [00:10:32] Now, if somebody is thinking about protecting their IP, when you’re working with an IP attorney, is their job just kind of just kind of going through the process of protecting it and defending it or is a good relationship with an IP attorney, one in which maybe your brainstorming together and you’re saying, you know what the IP attorney maybe is making recommendations of, hey, you should think about protecting this, or if you did this a little differently than that might be protectable. Like, is it is it kind of more of a partnership or is it more of a kind of person that’s executing some tasks?

Daniel Scola: [00:11:10] You’ve you’ve hit on a very important point. It’s actually the latter. It’s a person who is in a partnership with the client and has added value in terms of creativity, where to step, where not to step, how to take an idea which might be somewhat narrow and say, listen, we can develop this into a little broader concept and still not be within the scope of other people’s property. And you know, you do you do searches, you do patent searches, you hire specialized patent search firms, you do an analysis. You say, you know what, there’s a range of competitors or we’re doing something similar, it’s yours is distinguishable, but it’s going to narrow the scope of your protection. Do you still want to go forward with this? Or we can redesign this to actually broaden it out in another aspect which goes away from those competitors? What do you think? It really is a partnership and and a good IP attorney who is thinking ahead also has to add creativity to it to really be. And so what does that mean? It means a lot of times you have to know or learn something about the technology because, I mean, we do everything from complex immunology to, you know, in engineering, industrial engineering, chemistry, I.T. computer business methods is a whole array of technology. So, you know, you have a lot of specialists. So you hire people who have you know, the attorneys have electrical backgrounds or they have I.T. backgrounds, or they might be a biological guy or a chemical guy. And it’s sometimes you get a team and the same thing goes when you’re enforcing it. You know, you have that whole litigation aspect to it, which is more more than just protecting it. It’s defending it. So, yeah, it’s an excellent question. It’s really a partnership.

Lee Kantor: [00:13:05] And when you’re in your firm, when you’re working with clients as your client, maybe the business owner, or sometimes are you working with like private equity firms or venture capitalists who might have a portfolio of clients that it might be more efficient to work with one IP attorney firm in order to help my whole portfolio of clients rather than, you know, one at a time.

Daniel Scola: [00:13:30] Well, you know, it’s it’s the the the portfolio management like with with investors, what we’re looking to do is work with investor groups who need an evaluation of all their IP, because we have we have different departments which can handle that. But the idea is you want a consistent source of, of judgment in the evaluating of the IP. So we we work with we do diligent diligence for investment companies, but we also do a lot of work for eight universities, large companies, small companies, startups. I love startups because and I love the due diligence, which comes when investors are looking to put money into startups because that’s where I feel I can be particularly creative and add value. And and I have a lot of experience judging when something is going to be too close to for comfort and that you need to change something so you don’t get into a situation which is uncomfortable, you know, maybe a litigation or maybe someone saying the product isn’t differential enough. And, you know, but we work with all kinds of and all levels of people, including some individuals and professors and inside guys, the business guys are fun to work with. Sometimes it’s a small company and the top business guy will come and, you know, if they’re a really sharp entrepreneur, it’s a pleasure to work with them because they understand what it means to take prudent risks. They also they also know when they see creativity, they they latch on to it. So it’s it’s really it’s a fun area to practice. And I have to say, and you have to be able to to trust experts. And so this is our expertise. But when we talk to inventors, for example, or marketing people, you know, they’re experts at what they do. So it’s a nice integration of expertise coming together. When you when you work together, like in a partnership like that.

Lee Kantor: [00:15:42] Now, can you share a story? Don’t name the name, but explain maybe the challenge they had or where the opportunity was. Were you able to add value, maybe make a recommendation that that took their business or their idea to a new level?

Daniel Scola: [00:15:56] Sure. Actually, I won’t name the name, but it’s a it’s a company that was a one person startup and now it’s a public company and it is a leader in its field and it’s in the pharmaceutical area. They came to me with an idea of how to make a particular dosage form for a drug. And the idea was it came from watching the way California pulp manufacturers dried dried fruit. And they said, Gosh, that’s a cool process. I wonder if I can take certain pieces of that and adapt it into a new process and make something that will be useful to deliver drugs, which no one has done before. So in evaluating that, I found that there was an awful it was just a terrible amount of a huge amount of prior art. But in other words, patents and and disclosures in different publications which talked about, you know, this particular delivery system that this this client wanted to make, but they never described how they went about to make it. They would describe what we have a product and here’s what the product is made of X, Y and Z. But the process of getting there was never described. So what I had suggested to them is focus on that process piece, because if you can dominate a process of making it, nobody else has that. And then they all have to go through your patent to do it. And that’s exactly what happened. We got coverage on the particular and it had to do with the uniformity of content. So when you go to make a dosage form, the FDA wants to make sure the public is getting whatever the label says. If it says ten milligrams of a certain drug, you want to make sure that there’s ten milligrams in there with a small variation one way or the other, plus or minus.

Daniel Scola: [00:18:02] But when you’re doing that particular dosage form happened to be a film, like a small film, I mean, years ago. Give you an idea of what a small film is. It’s like a one inch by one inch very thin film you put on your tongue and that’s how you got your dosage form. They were making Listerine pocket parts. If you remember, Listerine used to sell a little thin strip. You could pull out and put it in your mouth. If you saw some years ago. Yeah, well, it was similar to that. Only they had to have uniformity of content. So the drug in each one of those strips had to be the same amount of drug that it’s that they said it was in it and each one of the strips had to have that. Now when you go to make they’re not making individual one by one strips. They’re making hundreds of thousands of yards of film and then cutting it. So how do you make sure that every every one by one inch film cut has the right drug in it, the right amount that you’re saying it does? So that was their invention. So when I saw that, I said, don’t worry about the compositional nature of it. Go and try to get the best coverage we can get. And sure enough, they have several hundred patents on it. They’re a public company. We still represent them. And that’s that’s an idea. I’ll give you another quick one, very quick, if you like, on Super Glue. That’s that was a patent one I just gave you. This will be a trademark example. So you’re familiar with the trademark super glue?

Lee Kantor: [00:19:33] Sure.

Daniel Scola: [00:19:34] Yeah. Most people, they know Super Glue. Well, when I was a fledgling attorney with, you know, I had maybe a couple of months experience, I was on the ground floor when the guy who came up with the name Super Glue came in to me and of course I was assigned to him. So he came in and he was a big marketing guy and he was he was herald to be this this real marketing genius. So I was a little intimidated by the guy at the time because I was just brand new and he was asking me all these questions. But the one question that he asked me was, What do you think of the name Super Glue as a trademark? And I knew this much. I said, I think it’s great from a marketing perspective, but I don’t think it’s protectable. And he said, Why not? He said, I said, Well, you know, to be protectable, it has to be something that doesn’t it can’t be generic, right? Because no one can own the rights to a generic name like glue. Glue is a generic name, and it has to be something that’s fanciful that doesn’t describe the product. That’s what most people get confused. Trademarks should not describe the product.

Daniel Scola: [00:20:45] They’re really adjectives, but they don’t describe the product per se. And Super Glue Super was just saying, Well, it’s kind of a laudatory thing, saying it’s pretty good glue and you know, you would not get that that trademark through. So I said to him, I don’t think you’re it’s very protectable. He goes, Well, I don’t care. I’m putting $10 Million into this program. And we’ll just beat them on the market side. So, you know, we’ll do our best from the legal side, but I think it’s going to be difficult. So he didn’t listen to me. But he did listen to me. And the reason I said he didn’t, because he launched the product was very, very successful. The reason I said he did listen to me is because very shortly after that, he left the company and he started his own company called the Superglue Corporation. And and we sued him. And we we basically lost because it’s a terrible trademark. Trademarks. Look at look at the word tide. That’s a pretty famous trademark, right? It doesn’t describe what the product is. It’s a great mark. It’s very fanciful. It’s like, well, you know, it gives you the connotation of suds.

Daniel Scola: [00:22:03] You know, like when you see the ocean waves come in. They look like, you know, the tides come in. It gives you that sort of foamy action. And so they named their detergent that way. And everyone knows Procter and Gamble makes Tide. And you’ve got to enforce it. And going back to your other question real quickly there, you know, Velcro is a very well known mark, and it was almost in, you know, going generic because of misuse. People would refer to say, give me a I’d like to buy some Velcro. It really it’s it’s a hook and loop structure and the brand is Velcro. So people were identifying it like Velcro is a noun. And if you said Velcro brand, fine. Ibm went through this when with I’m sorry, I’m sorry Xerox went through this with photocopying. Everyone would say, make a Xerox copy of this. Well, you know, there’s a lot of different copying machines out there. So Xerox put a whole marketing program together saying don’t misuse our trademark. If you misuse the trademark and you let people do it long enough, you will use it. Lose it. So. So did you know that escalator was a trademark that went generic?

Lee Kantor: [00:23:18] I didn’t I didn’t know escalator. I imagine Kleenex was one Kleenex.

Daniel Scola: [00:23:23] Right. Kleenex. I’m not sure if Kleenex still. Kleenex still may be. I’m not sure it’s generic. I’ll tell you what really is surprising. It was surprising to me when I learned it. Adrenaline was a trademark. In fact, it was it was a trademark of a company I once worked for, which was the Warner-Lambert Company. Adrenaline was the trademark for epinephrine. So and everyone uses adrenaline now to get your adrenaline going. Well, you know, drink some, drink some coffee, and you’ll get your adrenaline going.

Lee Kantor: [00:23:54] So they created their own word. That’s now just that’s.

Daniel Scola: [00:24:01] That’s amazing. In that’s what trademarks are great on you be be creative. You know, you can come up with some great names and I’m guessing that adrenaline came from the adrenal glands, right? Right. But they called it for it was for a shot that contained epinephrine. And that’s that’s what they named it. So, you know, it’s these these trademarks can be extremely valuable. I mean, you know, and sold. I remember when when Johnson and Johnson bought the Mylanta name, they bought it. In fact, I was involved in the sale and. My lanta was a it’s. It had a distinct color on the bottle. It has a distinct name and so forth. And they even the color of the bottle in combination with the name was a protectable thing under trade dress. It’s part of the trademark genre of protection. So IP can really be a fun place to be if you’re if you create. And the one thing that entrepreneurs don’t do usually early enough is get their IP, because once they disclose their idea, if that’s not under a non disclosure, it’s gone. You can’t protect it anywhere. I mean, you get it, you get a little time in the States, they give you a little grace period. But you know, you always have to file first if you’re going to get the best out of your IP because you never know if you’re going to misstep. Otherwise, it’s just very much safer. So what do you do if you don’t have the money? You have to have the money early enough. You’ve got to get some money to get some IP early enough or you will you will really be sorry later. And there are many stories I could tell you where people come and there’s not a lot you can do with the early stage stuff they had now, which was excellent but now can be copied. So it’s just a lesson, you know, for entrepreneurs.

Lee Kantor: [00:26:08] So now who is the ideal client for you and your firm? What is that, that perfect fit client for you?

Daniel Scola: [00:26:16] Well, I think, you know, between companies where they’re they’re really technology driven and that’s really independent of the size and they really have a lot that they want to do in the IP side. That’s the kind of client because that’s where you can you can have the most room for being creative. I love the due diligence aspects. I love evaluating IP and creating it. So investment firms like large companies that that large investment companies that that are looking to buy and companies that are looking to get new IP, it could be there could be small firms, it could be medium sized firms, they could do large firms. And we have all of those small investors, big investors. You know, a lot of times people think, well, patent patent firms, they really just, you know, deal with single inventors who come in, who have got a better way to slice bread. That’s not really the bulk of the work that we do. We certainly do some of that because there are investors. I mean, it takes a little bit of money to get some patents going. So, you know, you can’t think you’re going to get have a patent with that’s going to cover anything for a small amount of money. This doesn’t happen. You have to know you’re in for it for the long haul. You’re getting a monopoly. So you’ve got to pay for a monopoly. Monopoly? It’s not it’s not a free thing.

Lee Kantor: [00:27:49] Right. So but these larger entities, like a VC firm, private equity firm, a university where they they have a lot of intellectual property or potentially could have a lot that’s a good fit for you to have conversations with.

Daniel Scola: [00:28:02] Absolutely. Yeah.

Lee Kantor: [00:28:04] Now, if somebody wants to connect with you or your firm, is there a website?

Daniel Scola: [00:28:08] There is. You know, it’s it’s the Hoffman and Barron website. W. W w h. B ip locked. Or you could put in Hoffman and Baron, and you’ll see it come up on any of the search engines. And the firm number is is, is on there as well. So.

Lee Kantor: [00:28:32] And you’re open. If they go to the website they can find information to connect with you, maybe learn some things.

Daniel Scola: [00:28:39] Absolutely. Yeah, absolutely. You know, you can go and do some there’s a blog page where you might be able to there’s there’s I know that we have some basics on why should I get a pad and what should I do, you know, when is it a good time? And then if they just want to give a call or an email, I can answer them. Or we can get people, other attorneys who might specialize in that particular question.

Lee Kantor: [00:29:06] Well, Dan, thank you so much for sharing your story today. You’re doing such important work and we appreciate you.

Daniel Scola: [00:29:12] Well, thank you, Lee. It was a pleasure to be on.

Lee Kantor: [00:29:14] All right. This is Lee Kantor. We’ll see you next time on High Velocity Radio.