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.

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. Trademarks, Trade names and Copyright: Protecting Branding.
® Trademarks – Protect
source identifiers
* Trade Names – The
Name of a Business
© Copyright - protects
creative authorship
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3. Trademarks & Trade Names
TM
-or -
®
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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.  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.
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© Copyrights
©

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.
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


6. Copyright Basics
Why Register?
 Necessary for enforcement.
 In order to file a lawsuit
 Statutory damages
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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.
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STOP!

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.
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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.
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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.
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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”
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Motorola, Inc.
v.
Lemko Corp.,
609 F.Supp.2d 760
(N.D. Ill., 2009)

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
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#$%&%$#!!

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
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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
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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).
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