Entrepreneurship Chap 8


Published on

  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • Examples: A good fishing place; where a Chinese potter finds the best kaolin; customer list. Script for sales spiel. A term paper. Personal letters.
  • Examples: A good fishing place; where a Chinese potter finds the best kaolin; customer list. Script for sales spiel. A term paper. Personal letters.
  • "Inventing" is often the easiest and cheapest part of the process. I have friends who can easily "invent five things before breakfast" if asked. And they will be good, potentially valuable things. One "rule" -- 1$ for RES, $10 for DEV, $100 for MFG and MKTG. Reason Haloid went to IBM, IBM went to ADL.
  • Lots of current activity. Court of Appeals has ruled that you can patent a "practical application of a mathematical algorithm, formula, or calculation". A few days later, Priceline announced that they would receive a patent on their way of doing business, the kind of inverse auction, one buyer, multiple sellers.
  • e-Commerce - an IBM TM
  • e-Commerce - an IBM TM
  • Can you guess why the on-line NY Times doesn't ordinarily include letters to the editor? OpEd? Copyright! The letter writer is presumed to own repro rights (all of them) without a contract to the contrary, and putting the letter on the net is already a violation! Can copyright a derivative work, subject to rights of underlying creator
  • No contract means that if I find it honestly, then you've lost it, unless we have a signed agreement.
  • No contract means that if I find it honestly, then you've lost it, unless we have a signed agreement.
  • No contract means that if I find it honestly, then you've lost it, unless we have a signed agreement.
  • Entrepreneurship Chap 8

    1. 1. 07/10/13 Copyright 2001 - Robert A. Myers1 Intellectual Property for Entrepreneurs Professor Robert Myers ramyers@thomaspublishing.com myers@frlicense.com
    2. 2. 07/10/13 Copyright 2001 - Robert A. Myers2 Developing Managing Protecting Exploiting Intellectual Property IS WHAT BUSINESS IS ABOUT
    3. 3. 07/10/13 Copyright 2001 - Robert A. Myers3 Intellectual Property - What Is It? Patents Copyrights Trademarks Trade secrets Other results of intellectual activity –Know-how –Chip (and other) designs –Plant designs –"Ways of doing"
    4. 4. 07/10/13 Copyright 2001 - Robert A. Myers4 Intellectual Property Is Property Has value Can be sold or licensed Can be stolen Can be protected Subject to much of property and contract law as well as to IP law
    5. 5. 07/10/13 Copyright 2001 - Robert A. Myers5 Commercializing IP The objective of the game Can demand most of the investment IP covers full gamut, from conception to operating business Transition is a huge challenge Various critical milestones Need a "scientific" management process Even if you are a start-up Especially if you are a start-up
    6. 6. 07/10/13 Copyright 2001 - Robert A. Myers6 Article I, Section 8: Congress shall have the power...to promote the progress of Science and useful Arts by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and discoveries The United States Constitution
    7. 7. 07/10/13 Copyright 2001 - Robert A. Myers7 Statutory Requirements for a US Patent Allowable scope? – Law of nature? Novelty –Prior art? Utility –Good for something? –Must be “operable” Non-obviousness –To one of ordinary skill in the art Full disclosure Reduction to practice not necessary
    8. 8. 07/10/13 Copyright 2001 - Robert A. Myers8 A Patent Only Enables You to Do One Thing You can prevent someone else -- anyone else -- from practicing what you have claimed in a jurisdiction (country) where you have a valid patent This is a legal monopoly Which antitrust law and legal precedents can prevent you from exercising if you have “market power” Or, you can license others to practice your invention You may nevertheless not be able to practice your own invention without licenses to patents owned by other parties
    9. 9. 07/10/13 Copyright 2001 - Robert A. Myers9 Key Points • A patent is an exclusionary monopoly • The monopoly is defined by the claims • Patent value is arrived at from a business case • A patent is virtually worthless if no one else wants to practice the invention • Lawyers are not optional
    10. 10. 07/10/13 Copyright 2001 - Robert A. Myers10 Criteria for Filing a Patent Application Size of market affected by invention Novelty of the technical field covered How central is the invention to expected products Scope of broadest claims Portfolio needs in the area of the invention How easily can use of the invention be detected How easy is it to avoid using the invention What percentage of companies in the field may use the invention Any value to current or anticipated alliance activity Any value to current or anticipated technology transfer activity Likely enhancement of your (or your organization’s) prestige
    11. 11. 07/10/13 Copyright 2001 - Robert A. Myers11 Kinds of Claims Structure Process Method Use Combination Form of matter Software Form of life (gene, plant...) A single patent can have many claims, of different types May be different in different countries
    12. 12. 07/10/13 Copyright 2001 - Robert A. Myers12 Software Patents Currently are being (very!) freely granted Critical difference from copyright: – Copyright protects form of presentation – Patent protects essential idea Software patent must meet same statutory requirements as any other patent – Useful – Novel – Non-obvious Value still being established – Reluctance to pay for license (although some companies are paying) – No useful court decisions other than “Hub and Spoke” – No proven infringements It’s a jungle
    13. 13. 07/10/13 Copyright 2001 - Robert A. Myers13 Patents on "Ways of Doing" Business Can make incredibly powerful patents Need very little "technical" substance Emerging and important trend Particularly financial instruments E-commerce and Internet Opportunity for clever "inventors" to stake out huge claim Need to meet statutory requirements "Obviousness" seems less a problem Various examples Freeny: Delivery of goods mediated by network Often, Patent Examiner lets a questionable one through Only courts can remedy USPTO White Paper: www.uspto.gov/web/menu/busmethp
    14. 14. 07/10/13 Copyright 2001 - Robert A. Myers14 Some Statistics • 2500 “Business Method” patents as of 1/1/00 • Leader: Pitney Bowes! • Jay Walker (Walker Digital) has “patent factory”, hundreds of patent applications • 2500 “Business Method S/W” applications per year • In 1999, ~1000 issued patents with “Internet” in patent
    15. 15. 07/10/13 Copyright 2001 - Robert A. Myers15 The Internet and e-Commerce Just because it's there, it may not be free Internet creators advertise they are free spirits –Intellectual property is free as the air Downloading software or content creates big exposures, such as –Use of the material infringes a patent –The material is copyright –The license terms are restrictive –The protected material will be inadvertently incorporated in a product –Posting material may limit owner's rights –Posting material may reveal owner's missteps
    16. 16. 07/10/13 Copyright 2001 - Robert A. Myers16 The “Single Click” Claim A method of placing an order for an item comprising: • under control of a client system, • displaying information identifying the item; and • in response to only a single action being performed, sending a request to order the item along with an identifier of a purchaser of the item to a server system; • under control of a single-action ordering component of the server system, • receiving the request; • retrieving additional information previously stored for the purchaser identified by the identifier in the received request; and • generating an order to purchase the requested item for the purchaser identified by the identifier in the received request using the retrieved additional information; and • fulfilling the generated order to complete purchase of the item whereby the item is ordered without using a shopping cart ordering model.
    17. 17. 07/10/13 Copyright 2001 - Robert A. Myers17 Protecting IP on the Internet The “Millennium Copyright Law” Responds to fundamental Internet technology: Moving information around the Net creates all kinds of copies which were, prior to this law, illegal Does not provide a whole lot of protection apart from this Bar the door! Encryption License agreements Secure download technology Contract with your staff Be brave -- Don’t hesitate to assert your rights The fundamental issues Unless you are a content owner, the barriers to entry are porous Even if you’re a content owner, the technical barriers to theft are flimsy
    18. 18. 07/10/13 Copyright 2001 - Robert A. Myers18 Legal Action • Amazon.com sued Barnesandnoble.com for infringing its "single click" patent. • Priceline.com (Jay Walker’s flagship company) sued Expedia.com (a.k.a. Microsoft) for infringing its "on-line auction" patent. • Tom Woolston (a.k.a. MercExchange) filed to have Priceline's patent declared invalid, claiming he invented it first. • Sightsound.com sued MP3.com and CDNow.com for infringing its patent, claiming it holds the patent on the entire concept of downloading music. • Audiohighway.com says their patent covers Internet music. • Ebay has been sued by Network Engineering Software for infringing their patent covering an “automated on-line information service and directory, particularly for the Web” • Ebay have sued Bidders Edge for violating their copyrights, among other assertions, for posting listings taken from the ebay site.
    19. 19. 07/10/13 Copyright 2001 - Robert A. Myers19 Courts Have Ruled... • Software patents are valid • Business method patents (“ways of doing”) are valid • Algorithm Patents (“ways of calculating”) are valid
    20. 20. 07/10/13 Copyright 2001 - Robert A. Myers20 Copyrights The exclusive privilege of an author or proprietor to make multiple copies of literary, artistic or intellectual productions and license others to do so –The right to copy Protects the form, not the underlying idea The work must be original -- but may be a derivative work It is created -- and therefore subject to copyright -- when it is fixed so it may be perceived, reproduced or otherwise communicated Notice optional Registration optional -- necessary for statutory damages –Otherwise, only actual damages
    21. 21. 07/10/13 Copyright 2001 - Robert A. Myers21 Copyrights Exclusive rights –Reproduce –Prepare derivative works –Distribute copies –Perform –Display –Each can be assigned separately Fair use allows some exceptions First sale allows subsequent transfer Proof of infringement not always easy –Insert bogus elements, lines of code, addresses, etc.
    22. 22. 07/10/13 Copyright 2001 - Robert A. Myers22 Copyrights First strategy for protecting computer programs Patent Office refused patent protection Copyright easy and inexpensive –Shrink wrap license Limited protection from infringement –Modifications –Proof needed Only in recent years has USPTO made software patents easier to get –Still difficult to enforce –S/W culture negative –Discovery a challenge Many (most) programs are not patentable
    23. 23. 07/10/13 Copyright 2001 - Robert A. Myers23 Key Elements of US Law "Original" works of authorship –Not necessarily "novel" "fixed in a tangible medium" –Such as film, tape, disk... –An unrecorded game or performance not protected "...of expression" –Limits protection to "expression", not "idea" –Separation of "expression" from "idea" no easy matter How much change is necessary to create a "new" work? –Not much
    24. 24. 07/10/13 Copyright 2001 - Robert A. Myers24 Trade Secrets ...A secret formula or process, unpatented, known to a limited number of individuals who use it, to competitive advantage, in the manufacture of an article of trade having commercial value..." Relevant factors –How widely known –How protected –How valuable –How hard to develop independently Can only be disclosed under confidential agreement Do not exist without a contract Can be licensed as IP Lasts forever -- unless no longer secret May be preferable to patent -- may not
    25. 25. 07/10/13 Copyright 2001 - Robert A. Myers25 How to Protect Your Intellectual Property Burglary is illegal, but you still lock your doors Patents provide very strong protection and offer real sanctions Patent if you can Enforce your patents Find a good IP lawyer! Register your copyrights and trademarks Keep it a trade secret if necessary Have a non-disclosure agreement (NDA) handy and don’t hesitate to use it Contracts are key
    26. 26. 07/10/13 Copyright 2001 - Robert A. Myers26 Q and A Cost of a patent: Think “$thousands”, usually less than ten Cost of suing to protect your patent: Think “$million”, at least one A decision will take years If you’re lucky, you might get an injunction Expect to settle -- everyone tries to Time to get a patent: About two years from file date It’s a secret while in the USPTO But you have no other protection until it issues Life of a patent: Twenty years from date of file (very contentious) Life of a copyright: Life of creator plus 75 years “Mickey Mouse extension” Life of a trade secret: As long as it stays secret
    27. 27. 07/10/13 Copyright 2001 - Robert A. Myers27 Internet Sources IBM Patent Server: http://www.patents.ibm.com US Patent and Trademark Office: http://www.uspto.gov Copyright Resources On-Line: http://www.library.yale.edu/%7Eokerson/copyproj.html IPWorldwide: http://www.ipworldwide.com Inventors resource homepage: http://www.gibbsgroup.com Hoover’s Corporate Information: http://www.hoovers.com Thomas Register of American Manufacturers: http://www.thomasregister.com Licensing Executives Society: http://www.les.org Everything you want to know about SEC filings: http://www.10Kwizard.com American Intellectual Property Law Association: http://www.aipla.org Franklin Pierce Law Center: http://www.fplc.edu