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SBDC IP presentation


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SBDC Intro to IP issues for entrepreneurs

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SBDC IP presentation

  1. 1. Intellectual Property and EntrepreneursPresented by: Bill Adolfsen, Brian McCall, & Lindsey Thompson SBDC Presentation 10/30/2012
  2. 2. Overview• Patents• Copyright• Trade secrets• Trademarks SBDC Presentation 10/30/2012 2
  3. 3. What is a patent?• A patent grants the patent owner the right to exclude others from: – Making – Using – Selling or offering to sell – Importing• For 20 years from filing application• Can patent “anything under the sun that is made by man” SBDC Presentation 10/30/2012 3
  4. 4. What is a patent?• Common misunderstandings: – A patent DOES NOT give you the right to make or use your product • Right to sue • Patent litigation usually costs $2-25(+)M – One patent does not necessarily cover an entire product or process SBDC Presentation 10/30/2012 4
  5. 5. I can’t use my patented invention?Example:•Someone else patents writing instruments•You patent an improvement, the felt-tipped penResult:You need their permission to Your patentmake your invention Their patent coverage SBDC Presentation 10/30/2012 5
  6. 6. Major Change to Patent Law• Starting March 16, 2013: “First to file”• Old: first inventor entitled to the patent• New: first inventor that gets to the patent office gets the patent – Still need to file 1 year after disclosure – Disclosure precludes international patents SBDC Presentation 10/30/2012 6
  7. 7. Patent Application Process• Types of patent applications: – Provisional – Non-provisional – Design SBDC Presentation 10/30/2012 7
  8. 8. Provisional Patent Applications• Holds inventor’s place in line• Not published, not examined• Can put “patent pending” on products• Only good for 12 months• $125* fee for small entities – *USPTO changes fees often SBDC Presentation 10/30/2012 8
  9. 9. Non-Provisional Patent Applications• Not required to file a provisional first• Can “expedite” examination• Initial claims almost always rejected• Usually 2-5 years• $25,000 - $75,000• Small entity fees: – $533 plus $885 when patent issues – For entire life of patent: $5848 SBDC Presentation 10/30/2012 9
  10. 10. Small Business Patent Benefits• VC money• Protects their ideas from accidental or malicious disclosure• Licensing• Negotiating power SBDC Presentation 10/30/2012 10
  11. 11. L & E Clinic Client Services• Freedom to operate (FTO) analysis – Do any patents cover what inventor wants to do? – 20-40 hours – Typically $5,000 – $200,000 SBDC Presentation 10/30/2012 11
  12. 12. L & E Clinic Client Services• Patentability analysis – Looks at everything – Novelty and obviousness opinion – 5-20 hours – $5,000 - $50,000 – Not a legal requirement SBDC Presentation 10/30/2012 12
  13. 13. L & E Clinic Client Services• Patent “prosecution” – Writing the application (40-60 hours) – Office Actions (5-20 hours each) – $25,000 - $75,000 total• Law and Entrepreneurship clinic: – 40 hours is 1-3 months – Not best option if under time pressure SBDC Presentation 10/30/2012 13
  14. 14. Copyright Basics for Small Businesses SBDC Presentation 10/30/2012 14
  15. 15. Copyright Requirements• Original work of authorship fixed in a tangible medium of expression• Three requirements: 1) Original = author must use at least some minimum degree of creativity 2) Work of authorship = include literary works, musical works, graphical works etc. 3) Fixed = work must be fixed in something sufficiently permanent (i.e. paper, canvas, hard drive, etc.) SBDC Presentation 10/30/2012 15
  16. 16. Examples of Copyrightable Works Copyright No Copyright• Books • Facts• Photographs • Ideas• Advertisements • “Methods of Operation” (consider patents)• Movies • Short phrases (consider• Software trademark)• Content of websites• Music SBDC Presentation 10/30/2012 16
  17. 17. Protecting Copyrighted Works• Copyright exists from the moment the work is “fixed.”• Additional potential benefits of registering copyright with the U.S. Copyright Office – Must register before enforcing the copyright – Statutory damages may be available if you register the work on a timely basis SBDC Presentation 10/30/2012 17
  18. 18. Copyright Duration• Generally, copyright lasts for the life of the author + 70 years• For a “work made for hire”, copyright lasts for 95 years from publication or 120 years from creation whichever is earlier SBDC Presentation 10/30/2012 18
  19. 19. Copyright Ownership• In general, the author(s) of the work own the copyright• “Work made for hire” exceptions – Employers own the copyrights created by an employee acting within the scope of their employment – A company owns the copyright in a work created by an independent contractor IF THERE IS A WRITTEN AGREEMENT STATING THEY DO SBDC Presentation 10/30/2012 19
  20. 20. Common Copyright Mistakes• Failing to have proper “work made for hire” provisions in contracts with independent contractors. – For example – the company’s website or software created for the company – L & E clinic can review company’s third-party contracts to ensure they are retaining the appropriate IP rights• Failing to observe the copyrights of others – L & E clinic can advise clients on whether the works of others are likely to be copyrighted SBDC Presentation 10/30/2012 20
  21. 21. Trade Secret Basics for Small Businesses SBDC Presentation 10/30/2012 21
  22. 22. What is a Trade Secret?• A trade secret is any formula, process, or other information • That is an economically valuable secret (not generally known & not readily ascertainable) AND • Is the subject of efforts to maintain its secrecy• Examples - Recipes for Coca-Cola, Big Mac Special Sauce, WD-40, Google search algorithm SBDC Presentation 10/30/2012 22
  23. 23. Protecting Trade Secrets• No registration required – Company just needs an economically valuable secret and must take proper steps to ensure its secrecy – 1) Workplace policies to ensure the secret is only accessible to employees that “need to know” – 2) Appropriate contracts with employees and potential business partners (i.e. CDA, NDA, non- compete agreements)• Trade Secret is perpetual (as long as it meets the requirements of a trade secret) SBDC Presentation 10/30/2012 23
  24. 24. Trade Secret Rights• Right to sue others for improperly appropriating the trade secret• No right to prevent reverse engineering SBDC Presentation 10/30/2012 24
  25. 25. Common Trade Secret Mistakes• Failing to use nondisclosure agreements with employees and potential business partners – L & E clinic can draft and review nondisclosure agreements SBDC Presentation 10/30/2012 25
  26. 26. TrademarksTrademark Basics for Small Businesses SBDC Presentation 10/30/2012 26
  27. 27. Trademarks• word(s) • fragrance• name • color• symbol (logo) • device• design • or any combination• sounds thereof used in commerce to indicate the source of the goods. Meant to identify and distinguish the goods of one manufacturer or seller from those of another. 15 U.S.C. § 1127. SBDC Presentation 10/30/2012 27
  28. 28. TrademarksTrademarks: • IKEA (furniture)Service marks: • FedEx (delivery services)IP protection can also apply to Trade dress • TGI Friday’s or • the way Tiffany’s packages their jewelry SBDC Presentation 10/30/2012 28
  29. 29. Trademarks• Requirements for TM: –Use in Interstate Commerce • (or intent to use it in interstate commerce) –Distinctiveness SBDC Presentation 10/30/2012 29
  30. 30. Trademarks• Why should a mark be distinctive? – Prevents Consumer Confusion SBDC Presentation 10/30/2012 30
  31. 31. TrademarksDescriptive• only protectable as trademark if it has acquired a secondary meaning in the minds of the consumers.Generic• never eligible for trademark protection• A mark may be generic from the start and refused registration, or it may become generic over time through use – This is why Band-Aid uses “Band-Aid brand” SBDC Presentation 10/30/2012 31
  32. 32. TrademarksDescriptive marks go on Supplemental Register: – May use the ® symbol; – Protected against a confusingly similar mark; and – May bring suit for infringement in federal court.After 5 years of exclusive use gains presumptionof secondary meaning. – may require showing other evidence (market research, affidavits, marketing expenditures, etc)Then, new application may be filed for Principal Register. SBDC Presentation 10/30/2012 32
  33. 33. TrademarksRegistration is not necessarily required for protectionUnregistered marks:• Can protect under unfair competition law• Some States also provide for State registration of Trademarks, others do not. –WI has state registration of TMs SBDC Presentation 10/30/2012 33
  34. 34. TrademarksFederal Registration:– Nationwide constructive notice of ownership & use– Protection against foreign imports using the mark– Mark may achieve incontestable status after 5 years of continuous use • Eliminates some defenses to infringement. • Petition for cancellation of registration must be filed within 5 years after a trademark has been registered with the USPTO SBDC Presentation 10/30/2012 34
  35. 35. TrademarksTM application procedure:1. Prepare application showing existing use in commerce (can do on USPTO website)2. The USPTO reviews:  approves the application  or Office Action outlining their decision on the trademark. ~ 6 months.3. Respond to any Office Action from USPTO You may take up to 6 months.4. If Principal Register unsuccessful, application may be amended to be on Supplemental Register instead. SBDC Presentation 10/30/2012 35
  36. 36. TrademarksThings to Remember:• Search both the state and federal trademark databases• Mark must be used in interstate commerce – Between states and not wholly within one state.• You will still be solely responsible for taking legal action to protect your brand. – Potential reimbursement for successful legal case. SBDC Presentation 10/30/2012 36
  37. 37. TrademarksMany companies choose to register theircompany name, logos(s), slogan(s), and even colorschemes.Ultimately, it comes down to a business decision: – What is it worth to protect something with TM? • Filing fees- $275 per mark • $100 if you need to file a statement of use (only if registered as intent-to-use) SBDC Presentation 10/30/2012 37
  38. 38. TrademarksRegistering word /name Vs. symbol /logo BUBBIES SBDC Presentation 10/30/2012 38
  39. 39. TrademarksRegistering word /name Vs. symbol /logo BUBBIES DUBBIES BUDDIES SBDC Presentation 10/30/2012 39
  40. 40. TrademarksRegistering word /name Vs. symbol /logo BUBBIES DUBBIES BUDDIES SBDC Presentation 10/30/2012 40
  41. 41. TrademarksRegistering word /name Vs. symbol /logo BUBBIES SBDC Presentation 10/30/2012 41
  42. 42. TrademarksRegistering word /name Vs. symbol /logo BUBBIES SBDC Presentation 10/30/2012 42
  43. 43. TrademarksRegistering word /name Vs. symbol /logo BUBBIES SBDC Presentation 10/30/2012 43
  44. 44. TrademarksRegistering word /name Vs. symbol /logo BUBBIES SBDC Presentation 10/30/2012 44
  45. 45. TrademarksRegistering word /name Vs. symbol /logo BUBBIES SBDC Presentation 10/30/2012 45
  46. 46. TrademarksRegistering word /name Vs. symbol /logo BUBBIES SBDC Presentation 10/30/2012 46