IP Crash Course For Startups


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This a quick blast walk through patents, trademarks, and trade secrets (with only a little on copyright). Focused on the needs of startup entities. I just gave the presentation at CoCoMSP - a collaborative workspace in St. Paul - and previously gave at the Carlson School. Feel free to review/download. But please give attribution for other use. Comments welcome.

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IP Crash Course For Startups

  1. 1. ip crash course for startups: a practical approach ernest grumbles merchant & gould 1.27.2010
  2. 2. start with tacos
  3. 3. taco cabana…
  4. 4. signs…
  5. 5. inside the store…?
  6. 6. a taco patent…on a…
  7. 7. taco making machine…
  8. 8. a taco trademark
  9. 9. what is ip? <ul><li>Creations : </li></ul><ul><ul><li>technology/products </li></ul></ul><ul><ul><li>brands </li></ul></ul><ul><ul><li>writings/images/sound </li></ul></ul>
  10. 10. forms of protection <ul><li>technology </li></ul><ul><ul><li>patents </li></ul></ul><ul><ul><li>trade secrets </li></ul></ul><ul><li>brands </li></ul><ul><ul><li>trademarks </li></ul></ul><ul><ul><li>trade dress/shapes </li></ul></ul><ul><li>writings/images </li></ul><ul><ul><li>copyright </li></ul></ul>
  11. 11. 9 things about patents
  12. 12. patents-#1 what? <ul><li>exclude others from use of an invention. </li></ul><ul><li>reward inventors for a limited period </li></ul><ul><li>all countries have patent systems </li></ul>
  13. 13. patents-#2 why? <ul><li>market exclusivity </li></ul><ul><li>strategic tool against competitors </li></ul><ul><li>licensing revenue streams </li></ul><ul><li>build value in business – “patent pending” </li></ul><ul><li>set up company for investment, acquisition </li></ul>
  14. 14. patents-#3 examples
  15. 15. patents-#4 process <ul><li>identify inventions </li></ul><ul><li>maintain secrecy </li></ul><ul><li>gather information and prepare an application </li></ul><ul><li>file with the pto </li></ul><ul><li>hang on the wall </li></ul>
  16. 16. patents-#5 time to get <ul><li>18 months to 5 years from filing of application. </li></ul><ul><li>length varies by technology </li></ul><ul><ul><li>software patents – up to 5 years </li></ul></ul><ul><li>Claims may never issue. </li></ul>
  17. 17. patents-#6 cost <ul><li>$500 to $5000 for provisional application </li></ul><ul><li>$4000-$18,000 for non-provisional application </li></ul><ul><li>depends on technology, business goals and timing </li></ul>
  18. 18. patents-#7 duration <ul><li>20 years from filing </li></ul><ul><li>once it dies, it’s dead </li></ul><ul><li>but: </li></ul><ul><ul><li>continuation-in-part applications </li></ul></ul>
  19. 19. patents-#8 enforcement/defense <ul><li>search before new tech release </li></ul><ul><li>patent litigation ain’t cheap </li></ul><ul><li>$3 million in fees/costs would be a good deal for an active case </li></ul><ul><li>cases can last 2-5 years </li></ul>
  20. 20. patents-#9 best practices <ul><li>do you know your IP? </li></ul><ul><li>does the company own the ip?? </li></ul><ul><li>what tech drives revenue? </li></ul><ul><li>confidentiality </li></ul><ul><li>provisional = quick “patent pending” </li></ul><ul><li>periodically review R&D </li></ul>
  21. 21. 9 things about trade secrets
  22. 22. trade secrets-#1 what? <ul><li>confidential information that has value from not being generally known </li></ul><ul><li>has protection only as long as secret kept – like the Coke formula </li></ul><ul><li>protected by statute (like Uniform Trade Secrets Act) and contract </li></ul>
  23. 23. trade secrets-#2 why? <ul><li>build value in business – proprietary formulas/processes </li></ul><ul><li>preserve market advantage </li></ul><ul><ul><li>keep secret forever – can’t with patents </li></ul></ul><ul><li>preserve patentability of inventions </li></ul>
  25. 25. trade secrets-#4 process <ul><li>maintain secrecy of data </li></ul><ul><li>identify inventions </li></ul><ul><li>control access </li></ul><ul><li>consider a log </li></ul>
  26. 26. trade secrets-#5 time to get <ul><li>you own as soon as you create </li></ul><ul><li>no formal filing process </li></ul>
  27. 27. trade secrets-#6 cost <ul><li>cost of development </li></ul><ul><li>cost of maintaining secrecy </li></ul>
  28. 28. trade secrets-#7 duration <ul><li>perpetual – if it can be maintained as such </li></ul><ul><ul><li>coke formula </li></ul></ul><ul><li>the rabbit has to stay in the hat </li></ul>
  29. 29. trade secrets-#8 enforcement/defense <ul><li>when to sue? </li></ul><ul><li>complex litigation </li></ul><ul><li>often bundled with employee-related disputes (coke-pepsi) </li></ul><ul><li>injunctions…! </li></ul><ul><li>costs - $400k-$3 million </li></ul>
  30. 30. trade secrets-#9 best practices <ul><li>confidentiality policies (“CP’s”) </li></ul><ul><li>use NDA’s when possible </li></ul><ul><li>mark “confidential” materials as such </li></ul><ul><li>protect sensitive materials (or facilities) </li></ul>
  31. 31. 9 things about trademarks
  32. 32. trademarks-#1 what <ul><li>exclusive use of brand for specified goods or services </li></ul><ul><li>rights based on use in the marketplace </li></ul><ul><li>U.S. federal and state level (statutes and common law) </li></ul><ul><li>all countries have trademark systems </li></ul>
  33. 33. trademarks-#2 why <ul><li>market exclusivity for brands – unique association </li></ul><ul><li>promote customer loyalty (TONY THE TIGER) </li></ul><ul><li>prevent customer confusion </li></ul><ul><li>strategic tool against competitors </li></ul><ul><li>build value in business – ® </li></ul>
  34. 34. trademarks-#3 examples <ul><li>word mark: EXXON </li></ul><ul><li>stylized word mark: </li></ul><ul><li>design mark: TONY THE TIGER </li></ul><ul><li>color: yellow for sticky note pads (“Post-Its”) </li></ul><ul><li>product shape: the Coke bottle </li></ul>
  35. 35. trademarks-#4 process <ul><li>identify brands (incl. ones to be used) </li></ul><ul><li>evaluate market significance/strength of mark </li></ul><ul><li>search! </li></ul><ul><li>federal v. state </li></ul><ul><li>file application </li></ul><ul><li>prosecute to registration </li></ul>
  36. 36. trademarks-#5 time to get <ul><li>common law – rights upon use </li></ul><ul><li>federal registration process - can take 18 months </li></ul><ul><li>state registrations – much quicker </li></ul>
  37. 37. trademarks-#6 cost <ul><li>trademark search - ~$700 </li></ul><ul><li>U.S. tm app. - ~$1000 (single class). </li></ul><ul><li>up to $2K in additional prosecution costs </li></ul><ul><li>state tm’s – much cheaper </li></ul><ul><li>foreign applications - generally more </li></ul>
  38. 38. trademarks-#7 duration <ul><li>perpetual??? </li></ul><ul><li>registrations indefinitely renewable </li></ul><ul><li>STELLA ARTOIS – claims rights back to 1366 </li></ul><ul><li>when marks die – ASPIRIN, ZIPPER, DRY ICE, ESCALATOR (generic terms) </li></ul>
  39. 39. trademarks-#8 enforcement/defense <ul><li>sue for likelihood of confusion (similar mark on similar goods) </li></ul><ul><li>trademark litigation ~$400K-$2M. </li></ul><ul><li>most disputes settled </li></ul><ul><li>cases can last 1-3 years. </li></ul>
  40. 40. trademarks-#9 best practices <ul><li>communicate with marketing/product teams on brands </li></ul><ul><li>search before you sell! </li></ul><ul><li>prioritize revenue-driver brands </li></ul>
  41. 41. trademarks-#9 best practices <ul><li>file Intent to Use (ITU) applications for quick protection </li></ul><ul><li>maintain uniformity of use </li></ul><ul><li>enforce rights </li></ul>
  42. 42. copyrights <ul><li>protects writings/images/sounds </li></ul><ul><li>inexpensive to register </li></ul><ul><li>protection lasts over 100 years </li></ul><ul><li>register soon after public release </li></ul><ul><li>protected by U.S. statutes </li></ul><ul><li>good for company code, manuals, images </li></ul>
  43. 43. the end [email_address] www.ernestgrumbles.com 651.400.0629