Slide deck on IP for Entrepreneurs presented by attorney Liz Wiley of the Wiley Group in Austin, Texas on September 17, 2013 at the Austin Chamber of Commerce. The presentation was part of the Texas State SBDC's Spectrum Knowledge Transfer Series.

1.
IP
For
Entrepreneurs
September
17,
2013
Liz
Wiley,
The
Wiley
Firm
PC

2. ¡ 1836
§ US
patent
number
1
¡ 1911
§ US
patent
number
1,000,000
¡ 16
August
2011
§ US
patent
number
8,000,000
http://www.uspto.gov/news/Millions_of_Patents.jsp

3. The
Harvard
Business
Review
estimates
$1
trillion
in
potential
revenue
is
hidden
and
unrealized
in
the
patent
portfolios
of
companies,
universities,
and
government
institutions.
Investors
and
shareholders
are
demanding
greater
ROI
from
the
patent
portfolio
(mostly
for
struggling
companies).

4. ¡ Internet
pioneer
¡ Revenue
of
over
$2
billion
per
year
§ Down
73%
since
2006,
when
revenues
were
$7.8
billion
§ Earnings
declined
from
$1.4
billion
in
2007
to
$13
million
in
2011
–
with
two
years
of
losses
totaling
over
$2
billion
in
between
¡ After
its
deal
to
sell
800
patents
to
Microsoft
for
just
over
a
billion
dollars,
AOL
saw
its
stock
price
rise
by
62%

5. ¡
Lost
market
force:
slow
to
react
§ Forced
into
bankruptcy
after
131
years
in
business
as
dominant
force
¡
1,100
patents
it
deems
important
(digital
imaging),
(over)valued
at
up
to
$2.6
billion
§ Citigroup
provided
Kodak
with
almost
a
billion
dollars
in
financing
(DIP),
secured
by
all
of
Kodak’s
assets,
including
its
intellectual
property
§ Selling
these
patents
would
allow
Kodak
to
pay
off
its
debts
and
gain
enough
operating
cash
to
fund
new
businesses
¡
A
failure
to
monetize
the
patents
could
force
the
company
to
liquidate,
putting
its
17,000
employees
out
of
work

6. AGAINST
¡
¡
¡
“Patent
trolls
hold
patents
and
then
enforce
them
when
they
find
evidence
suggesting
that
the
patents
have
been
infringed—even
though
the
holder
has
no
intention
of
making
any
product
using
the
patent’s
contents.”
This
practice
subverts
the
purpose
of
patents
–
and
intellectual
property.
Acts
as
a
“tax”
on
innovation.
FOR
¡
¡
¡
Patents
are
assets
that
have
inherent
value
Value
should
be/can
be
generated
by
pursuing
legal
claims
in
furtherance
of
that
value
Patents
are
like
any
other
asset
that
can
be
financialized
(”monetized”)
and
assembled
into
a
portfolio
http://wallstcheatsheet.com/trading/these-­‐big-­‐companies-­‐invest-­‐
in-­‐patent-­‐trolls.html/

7. Shortly after his return from England in 1849, Howe inspected some of the
new sewing machines that were now on sale and he concluded that they
infringed his 1846 patent.
Regardless of what other features these new sewing machines may have
exhibited, they used…the central elements claimed in Howe’s patent. …
Since he was destitute, Howe required an investor to finance his patent
infringement lawsuits, and he at last convinced George W. Bliss to invest in
his litigation strategy (as well as purchase a one-half interest in Howe‘s
patent from a previous financial backer, George Fisher, who had not realized
any return on his investment).* At this point, Howe was ready to undertake ―
his main preoccupation — indeed, his main occupation—for the next several
years: namely, suing the infringers of his patent for royalties.
*In exchange for a partial ownership interest in his 1846 patent, Fisher provided Howe with
approximately $2000. … Fisher thus sold his one-half interest to Bliss for approximately $3500.
Adam
Mossoff,
The
Rise
and
Fall
of
the
First
American
Patent
Thicket:
The
Sewing
Machine
War
of
the
1850s
,
53
Ariz.
L.
Rev.
165,
183
(2009)
(emphasis
added).

8. Texas
Trade
Secret
Law

9. ¡
What
it
can
be
§ “[A]ny
formula,
pattern,
device
or
compilation
of
information
…
used
in
one's
business
and
presents
an
opportunity
to
obtain
an
advantage
over
competitors
who
do
not
know
or
use
it”
¡
Examples
§ Customer
lists,
pricing
information,
client
information,
customer
preferences,
buyer
contacts,
blueprints,
market
strategies,
drawings,
seismic
data,
in-­‐house
study
on
oil
and
gas
reserves

10. “It
is
not
possible
to
state
precise
criteria
for
determining
the
existence
of
a
trade
secret.
The
status
of
information
claimed
as
a
trade
secret
must
be
ascertained
through
a
comparative
evaluation
of
all
the
relevant
factors,
including
the
value,
secrecy,
and
definiteness
of
the
information
as
well
as
the
nature
of
the
defendant's
misconduct.”
In
re
Bass,
113
S.W.3d
735,
739
(Tex.
2003)
(emphasis
added).

11. “[T]the
party
claiming
a
trade
secret
should
not
be
required
to
satisfy
all
six
factors
because
trade
secrets
do
not
fit
neatly
into
each
factor
every
time.
We
additionally
recognize
that
other
circumstances
could
also
be
relevant
to
the
trade
secret
analysis.
Thus,
we
will
weigh
the
factors
in
the
context
of
the
surrounding
circumstances
to
determine
whether
geological
seismic
data
qualify
as
trade
secrets.
In
re
Bass,
113
S.W.3d
735,
740
(Tex.
2003)
(emphasis
added).

12. ¡
¡
¡
¡
¡
¡
Extent
to
which
the
information
is
known
outside
the
company’s
business;
Extent
to
which
the
information
is
known
by
employees
and
others
involved
in
the
business;
Extent
of
the
measures
taken
to
guard
the
secrecy
of
the
information;
Value
of
the
information
to
the
company
and
to
its
competitors;
Amount
of
effort
or
money
expended
developing
the
information;
Ease
or
difficulty
with
which
the
information
could
be
properly
acquired
or
duplicated
by
others.

13. ¡
Effective
September
1,
2013
¡
Broad
definition
of
“trade
secret”:
a
formula,
pattern,
compilation,
program,
device,
method,
technique,
process,
financial
data,
or
list
of
actual
or
potential
customers
or
suppliers,
that:
§ Derives
independent
economic
value,
actual
or
potential,
from
not
being
generally
known
to,
and
not
being
readily
ascertainable
by
proper
means
by,
other
persons
who
can
obtain
economic
value
from
its
disclosure
or
use;
and
is
the
subject
of
efforts
that
are
reasonable
under
the
circumstances
to
maintain
its
secrecy.

14. ¡ Injunctive
relief
beyond
life
of
trade
secret
¡ Damages
for
actual
loss
caused
by
the
misappropriation
or
unjust
enrichment
¡ Royalty
for
unauthorized
disclosure
or
use.
¡ Exemplary
(punitive)
damages
if
willful
¡ Attorneys’
fees
if
willful
¡ Attorneys’
fees
available
to
defendant
if
claim
of
trade
secret
misappropriation
made
in
bad
faith

17. ¡
¡
Slip
of
paper
in
a
vault
somewhere
in
Atlanta,
Georgia
listing
17-­‐18
ingredients
Only
a
few
corporate
executives
know
the
exact
recipe;
each
bound
by
oath
not
to
reveal
contents
§ When
one
of
these
individuals
dies,
the
others
approve
a
successor
§ The
“keepers
of
the
recipe”
travel
separately
to
ensure
that
a
single
accident
won't
eliminate
all
of
them

19. ¡
¡
¡
Harland
Sanders
used
to
carry
around
the
secret
recipe
of
"11
herbs
and
spices"
in
his
car.
Today
the
recipe
lies
in
an
undisclosed
vault
in
a
bank
in
Louisville,
Kentucky.
Only
a
select
handful
of
individuals
know
the
exact
recipe;
each
individual
is
contractually
obligated
to
secrecy.

20. ¡
No
single
company
is
allowed
to
mix
all
the
ingredients.
¡
The
herbs
and
spices
are
mixed
by
two
different
companies
in
two
different
locations
and
then
combined
elsewhere
in
a
third,
separate
location.
¡
To
mix
the
final
formula,
a
computer
processing
system
is
used
to
blend
the
mixtures
together
and
ensure
that
no
one
outside
KFC
has
the
complete
recipe.

21. ¡ Litigation
may
decide
whether
is
trade
secret
¡ Defending
and
establishing:
§ Confidentiality
agreements
§ Non-­‐competes
(consult
an
employment
law
attorney)
§ Documentation
of
limited
employee
access
§ Not
widely
known
–
but
ok
if
public
information
incorporated
into
in-­‐house
market
study
§ Proof
of
actually
following
in-­‐house
policies

22.
Liz
Wiley
State
Bar
of
Texas
Board
Certified
Civil
Appellate
Law,
Texas
State
Board
of
Legal
Specialization
The
Wiley
Firm
PC
tel.
512.560.3480
|
fax
512.551.0028
skype
liz.wiley1
lizwiley@wileyfirmpc.com