Identifying Intellectual Property Issues in Startups 2014

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Do you work with start-up companies and need a basic understanding of the various intellectual property issues that can arise? This Presentaion will help you:

*Understand the trademark and copyright problems one may encounter with branding;
*Learn how to protect branding once established;
*Understand trade secrets and the importance of non-disclosure and confidentiality agreements;
*Establish a proactive approach toward intellectual property ownership between co-founders, employees, and vendors;
*Understand business names, domain names, promotional issues, and website content concerns.

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Identifying Intellectual Property Issues in Startups 2014

  1. 1. IDENTIFYING INTELLECTUAL PROPERTY ISSUES IN START‐UPS Presentation to Illinois State Bar Association May 27, 2014 9:00 am – 10:30 am Presented by David M. Adler, Esq. Adler Law Group www.adler-law.com
  2. 2. Trademarks, Trade names and Copyright: Protecting Branding. ® Trademarks – Protect source identifiers * Trade Names – The Name of a Business © Copyright - protects creative authorship June 5, 2014Adler Law Group | Safeguarding Ideas Relationships & Talent® adler-law.com 3
  3. 3. Trademarks & Trade Names TM -or - ® June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 4 Any word, name, symbol, or device, or any combination, used, or intended to be used, in commerce to identify and distinguish the goods of one manufacturer or seller from others, and to indicate the source of the goods. 15 U.S.C. 1127 In short, a trademark is a brand name. Registration not required Benefits:  Presumption that registrant is exclusive owner  Entitled to use the mark nationwide Illinois: Trademark Registration and Protection Act 765 ILCS 1036
  4. 4.  Source: Article I, Section 8 of the US Constitution  Protects Creative expression:  literary, dramatic, and musical works;  pantomimes and dance;  pictorial, graphic and sculptural works;  audio-visual works; sound recordings; and  architectural works.  Fixation  Protected as soon as it is expressed.  Tangible form includes the electronic medium: e.g. a graphic file saved to disk; a web page saved as a .html file.  Most items on the Internet are protectable: the text of web pages, contents of email and Usenet messages, sound files, graphics, etc. June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 5 © Copyrights ©
  5. 5. Copyright Basics What is NOT protectable?  Ideas  Facts  Titles  Names  Short phrases/Blank forms “Work Made For Hire?”  Either:  prepared by an employee within the scope of his or her employment, or  a work specially ordered or commissioned by express written agreement  The employer is the author of a work made for hire. June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 6  
  6. 6. Copyright Basics Why Register?  Necessary for enforcement.  In order to file a lawsuit  Statutory damages June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 7 
  7. 7. Trademarks & Service marks  Knock-out Search:  search before you file an application  confusingly similar marks in the same category are not likely to be approved USPTO  Neither are generic or descriptive marks.  NOTE: Get help from a seasoned trademark lawyer  Registered trademark owners may seek protection of federal trademark laws  Section 32 of the Lanham Act 15 U.S.C. Sec. 1114 for trademark infringement;  Section 43(a) of the Lanham Act 15 U.S.C. Sec. 1125(a) for dilution or unfair competition; or (c) under state unfair competition laws. June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 8 STOP!
  8. 8. Trademarks & Domain Names  Every web page has its address similar to a street address commonly referred to as the "domain name.”  Sometimes, a web user will assume that the web address is "trademark.com.” Beverly v. Network Solutions, Inc. No. 98-0337 1998 WL 320829 at 1 (N.D. Cal. June 12, 1998).  Must functions as a source identifier.  Specimens must display domain name in a manner that will be perceived by potential purchasers as indicating source and not as merely a web site address.  In In Re Eilberg, a term that only serves to identify a domain name (Internet address) but does not separately identify applicant's services, does not function as a service mark. June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 9
  9. 9. Trade Secrets  ITSA 765 ILCS 1065/2(d).  Information (data, a formula, pattern, compilation, program, device, method, technique, drawing, process, etc.)  (1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and  (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality.  Axiomatic: in today’s technology-driven business world, largest driver of business value = intangible assets, and among those, trade secrets often confer an immeasurable competitive advantage. June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 10
  10. 10. Trade Secrets  ITSA 765 ILCS 1065/2(d).  Information (data, a formula, pattern, compilation, program, device, method, technique, drawing, process, etc.)  (1) is sufficiently secret to derive economic value, actual or potential, from not being generally known to other persons who can obtain economic value from its disclosure or use; and  (2) is the subject of efforts that are reasonable under the circumstances to maintain its secrecy or confidentiality.  Axiomatic: in today’s technology-driven business world, largest driver of business value = intangible assets, and among those, trade secrets often confer an immeasurable competitive advantage. June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 11
  11. 11. Trade Secrets 10 Trade Secret Protection Tips to take from this case: 1.Identify Trade Secrets Early. 2.Treat them like secrets! 3.Have a policy. 4.Use Non-Disclosure Agreements. 5.Provide Employee Training. 6.Classify. 7.Control Access. 8.Computer Device Security (BYOD). 9.Network / IT Security. 10.Have a Plan “B” June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 12 Motorola, Inc. v. Lemko Corp., 609 F.Supp.2d 760 (N.D. Ill., 2009)
  12. 12. Intellectual Property Ownership & Management Tips One thing I have learned: my clients should have consulted me first! Identify and document IP and the relationships of those who come into contact with it it is imperative to: • Identify your intangible assets early • Protect your intangible assets through registration and contracts • Leverage your intangible assets strategically June 5, 2014Adler Law Group | Safeguarding Ideas Relationships & Talent® adler-law.com 13 #$%&%$#!!
  13. 13. Intellectual Property Ownership & Management Tips 1. IP Audit – Locate & Identify your IP! Once intellectual property rights have been identified assure that these rights are properly registered and correctly used. 2. Trade Secrets - Protect them or lose them! Mark all materials “CONFIDENTIAL” Shred/destroy Lock up your outside trash Guests: sign in & wear “visitor” badges Enforce computer passwords, cover revealing labels, restrict visitor tours, and lock drawers Use Confidentiality Agreements with anyone who has access to trade secret info June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 14
  14. 14. Intellectual Property Ownership & Management Tips 3. Be VERY Specific When Drafting! There are no rights in “intellectual property.” Energy Recovery, Inc. v. Hauge, No. 2013-1515 (Fed. Cir. March 20, 2014). Use Covenants Not to Compete/Solicit Use “Work-made-for-hire” Language for employees, contractors Don’t be afraid to use liquidated damages clauses Term, Termination & Breach June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 15
  15. 15. Intellectual Property Ownership & Management Tips 3. Be VERY Specific When Drafting! (Cont.) Understand Warranties and indemnification obligations  Indemnify  Defend  Hold Harmless Express language or statutory authority is required for attorney‘s fees to be included as part of the indemnification clause. Downs v. Rosenthal Collins Group, LLC,385 Ill. App. 3d 47, 50 (2008). An indemnitor generally has no duty to defend, unless the contract or relevant statute specifically requires such defense. CSX Transp. v. Chicago & N. W. Transp. Co., 62 F.3d 185, 191-192 (7th Cir. 1995). June 5, 2014 Adler Law Group | Safeguarding Ideas Relationships & Talent® adler- law.com 16

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