Patents and Trade Secretsfor Early-Stage Clean Tech Ventures                           Peter Eng                    Charle...
Why Care About Intellectual Property and Licensing?    • Secure Rights / Build      Value    • Avoid Misappropriation /   ...
Intellectual Property Life Cycle                                                                        Additional        ...
Issues for Founding Team    • Conflict with Rights of Former Employers    • Assignment of Founders’ Rights into the Compan...
Categories of Intellectual Property    • Trade Secrets                                                                    ...
Trade Secrets    • Protect Secret Information    • Avoid Allegations of Misuse    • Take Care When Hiring    • Examples:  ...
Trade Secrets: Maintenance of Secrecy    • Marking Documents                        • Agreements    • Security Procedures ...
Trade Secrets: Best Practices    • Risks: Injunctions and Damages    • Create a Policy for Employee Hiring and Departures ...
Patents: Subject Matter     • Apparatus                                           • Process     • Business Methods        ...
Patents: How Obtained • File Application with Patent Office (PTO) • Timeliness/Filing Date                                ...
Patents: Summary of Deadlines U.S. Statutory Bars No Patent, if More Than One Year Prior to  Filing Date: • Patented • Pri...
Patent Tradeoffs • Requires Application (High Cost) • Right to Exclude/Not Right to Practice • May Cover General Methods •...
Government Generally Does Not Require Ownership of Intellectual Property Rights Bayh-Dole Act   Applies to broad categorie...
Government Generally Does Not Require Ownership of Intellectual Property Rights (cont’d) Bayh-Dole Act (continued) • Prefe...
Licensing • Grounded in the Concept of Intellectual Property as an   “Exclusive Right” • What are the Licensed Rights (e.g...
Other Negotiated Terms • Exclusivity • Royalties • Ownership • Term • Commercial Terms: Supply, Support, etc. • Other16 Cl...
Wilson Sonsini Goodrich & Rosati                          650 Page Mill Rd                      Palo Alto, CA 94301-1050  ...
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Patents trade secrets_eng_graves_cleantech_open_academy_2012

  1. 1. Patents and Trade Secretsfor Early-Stage Clean Tech Ventures Peter Eng Charles T. Graves June 22, 2012
  2. 2. Why Care About Intellectual Property and Licensing? • Secure Rights / Build Value • Avoid Misappropriation / Infringement2 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  3. 3. Intellectual Property Life Cycle Additional M&A/Exit! In-Licenses/ Acquisitions University/ Former Products/ Employer Services The Enterprise Founders (Assignment) Out-Licenses Employees (Invent. Discl./ Confid. Agts.)3 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  4. 4. Issues for Founding Team • Conflict with Rights of Former Employers • Assignment of Founders’ Rights into the Company • Other Contributors? • Third Party Rights4 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  5. 5. Categories of Intellectual Property • Trade Secrets • Patents • Trademarks • Copyrights5 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  6. 6. Trade Secrets • Protect Secret Information • Avoid Allegations of Misuse • Take Care When Hiring • Examples: – Source Code – Manufacturing Process – Customer Lists – Product Roadmap6 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  7. 7. Trade Secrets: Maintenance of Secrecy • Marking Documents • Agreements • Security Procedures – Sign-in, Badges, Restricted Visitor Access, Employee Exit Interviews • Data Security7 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  8. 8. Trade Secrets: Best Practices • Risks: Injunctions and Damages • Create a Policy for Employee Hiring and Departures • Disclosure May Kill the Trade Secret • Reverse Engineering and Independent Development • General Knowledge and Skills of Employees - Cannot be Owned8 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  9. 9. Patents: Subject Matter • Apparatus • Process • Business Methods A B • Design Patents9 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  10. 10. Patents: How Obtained • File Application with Patent Office (PTO) • Timeliness/Filing Date PTO • Patentability Requirements, E.g.: – Novelty – Nonobviousness – Description10 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  11. 11. Patents: Summary of Deadlines U.S. Statutory Bars No Patent, if More Than One Year Prior to Filing Date: • Patented • Printed Publication • Public Use • On Sale Most Other Countries: Absolute novelty – file before invention becoming public. No grace period. Use your US filing date for priority if file within 1 year.11 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  12. 12. Patent Tradeoffs • Requires Application (High Cost) • Right to Exclude/Not Right to Practice • May Cover General Methods • Independent Development May Infringe12 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  13. 13. Government Generally Does Not Require Ownership of Intellectual Property Rights Bayh-Dole Act Applies to broad categories of Government funding agreements. Funding recipient generally has the ability to retain title to patent rights. • Waiver Requirement for Ownership – Small businesses can retain ownership – Large businesses need a waiver • Disclosure and Filing Requirements • Government’s Retained Rights - License back to practice “for or on behalf of the United States.” Continued…13 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  14. 14. Government Generally Does Not Require Ownership of Intellectual Property Rights (cont’d) Bayh-Dole Act (continued) • Preference for American Industry – but can be waived. • “March-in Rights” – Government has never exercised. • Subcontractor Title Retention - Subcontractor’s inventions vest in the subcontractor (to the exclusion of the funding recipient); can be negotiated.14 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  15. 15. Licensing • Grounded in the Concept of Intellectual Property as an “Exclusive Right” • What are the Licensed Rights (e.g., patents, copyrighted works, etc.)? • What are the Licensed Products/Activities?15 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  16. 16. Other Negotiated Terms • Exclusivity • Royalties • Ownership • Term • Commercial Terms: Supply, Support, etc. • Other16 Cleantech Open Academy 2011 | S J | California an ose Cleantech Open Confidential Information – All Rights Reserved
  17. 17. Wilson Sonsini Goodrich & Rosati 650 Page Mill Rd Palo Alto, CA 94301-1050 T: 650-493-9300 F: 650-493-6811 w: www.wsgr.com Charles T. Graves Peter Eng T: 415-947-2109 T: 650-320-4847E: tgraves@wsgr.com E: peng@wsgr.com
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