1. IP RELEVANCE TO STARTUP SUCCESS:
YOU CAN'T AFFORD TO IGNORE
YOUR COMPANY'S INTELLECTUAL PROPERTY!
HULSEY P.C.
William N. Hulsey III, Esq.
Principal, HULSEY PC
Fellow, IC2 Institute, UT Austin

2. The Audience
To whom does this
presentation pertain?

3. The Question
Is the global IP
system that has held
reasonably stable
for 50 years relevant
to your new growing
business?

5. Why IP Matters
• Intellectual assets now account for at
least half of GDP in many advanced
economies.
• Innovation is driven primarily not by
happenstance but rather by markets
and the expectation of profit from
securing the rights to new
technologies.

6. Why IP Matters
• IP rights also encourage the more rapid
and efficient transfer of knowledge
across firms and the allocation of
resources throughout the economy.
• Despite their grant of temporary
exclusivity, IP rights are actually the most
effective tool for knowledge-sharing and
technology transfer ever devised.

7. U.S. Patent System Problems
• Multi-Billion-Dollar Patent Wars
• Doubts about Patent Quality
• Decisions diminishing the availability
of patenting for new technologies and
processes, and
• Role of “Patent Trolls”

8. U.S. Patent System Problems
• Multi-Billion-Dollar Patent Wars
• Doubts about Patent Quality
• Decisions diminishing the availability
of patenting for new technologies and
processes, and
• Role of “Patent Trolls”

9. The Costs of Litigating
a Patent Lawsuit

11. U.S. Patent System Problems
• Multi-Billion-Dollar Patent Wars
• Doubts about Patent Quality
• Decisions diminishing the availability
of patenting for new technologies and
processes, and
• Role of “Patent Trolls”

12. Doubts about Patent Quality

13. Quality Problems at The USPTO
>2015 OIG Patent Office Report<
Four areas of concern:
• The USPTO’s performance appraisal plan and related
policies are ineffective at measuring whether examiners
are issuing high-quality patents.
• The USPTO’s official quality metrics may underrepresent
the true error rate.
• The USPTO is not collecting data that could improve
patent quality.
• The USPTO’s response to patent mortgaging may not
discourage abuse.

14. U.S. Patent System Problems
• Multi-Billion-Dollar Patent Wars
• Doubts about Patent Quality
• Decisions diminishing the availability
of patenting for new technologies and
processes, and
• Role of “Patent Trolls”

15. Alice Corporation Pty. Ltd.
v.
CLS Bank International, el al.
("Alice Corp. ")

16. • The Federal Circuit issued an extraordinarily brief
per curiam decision, which stated:
Upon consideration en banc, a majority of the
court affirms the district court’s holding that the
asserted method and computer-readable media
claims are not directed to eligible subject matter
under 35 U.S.C. § 101. An equally divided court
affirms the district court’s holding that the
asserted system claims are not directed to
eligible subject matter under that statute.
• Thus, all of the asserted claims were deemed to
be patent ineligible.
Alice Corporation Pty. Ltd. v.CLS Bank International, el al.
("Alice Corp. ")

17. • June 19, 2014: US Supreme Court unanimous
decision held that because the claims are drawn
to a patent-ineligible abstract idea, they are not
eligible for a patent under Section 101.
• An intellectually bankrupt decision that never
once used the word “software.”
• Failure to mention software a single time is
breathtaking, will render many hundreds of
thousands of software patents completely
useless.
• The holding is about software because each of
the ways software has been traditionally claimed
were ruled to result in patent ineligible claims.
Alice Corporation Pty. Ltd. v.CLS Bank International, el al.
("Alice Corp. ")

18. U.S. Patent System Problems
• Multi-Billion-Dollar Patent Wars
• Doubts about Patent Quality
• Decisions diminishing the availability
of patenting for new technologies and
processes, and
• Role of “Patent Trolls”

19. Role of “Patent Trolls”

20. Deep Challenges to IP System
• The very premises of our intellectual
property laws — the economic value of
the intellectual property system itself —
are now in deep dispute, not only in the
U.S., but also worldwide.
• Global anti-IP sentiment seems to be at
its highest level since the late 1860s,
when opponents of intellectual property
rights succeeded.

21. What Are The Challenges
• IP is “Intangible”
• Digitalization seems to allow everyone to
effortlessly make and use goods and
information.
• Making nearly, if not absolutely, perfect
copies, at near zero cost, has become a
reality.
• A generation has been raised to see
intellectual property as only an
impediment to their ability to get and
use these easily created copies.

22. Today's Patent Challenges
• Outsourcing and the growing separation of
R&D from manufacturing pose challenges.
• Loss of public confidence in the patent
system.
• A new “best practice” in legal circles also
contributing to a growing disrespect for IP
rights.
• Public confidence eroded because licensing
can be so constricted by high transaction
costs and legal risks may exclude small and
mid-sized businesses.

23. Today's Patent Challenges
• Small and mid-sized businesses in the U.S.
see patents as ticking time bombs of
perceived infringement.
• These companies feel unable to access the
2.3 million active U.S. patents to improve
their products and services.
• The patent system was expressly designed to
foster technological disclosure, yet few
companies actually encourage their engineers
and R&D managers to read and apply the
knowledge contained in patents.

24. Conclusion: We must
develop a much more robust
set of education efforts to
explain the powerful role
played in today’s knowledge
economy by intellectual
assets, including IP.
In 2013, the WEF held
dialogues among
stakeholders in two
markets—the United
Kingdom and Indonesia—to
understand concrete
dynamics and contextualize
the debate on intellectual
property.

25. Rethinking IP in the Digital Age:
Agreed Principles
• Foster and reward creativity
• Build an ecosystem for innovation
• Expand access to content
• Inform users about ownership rights
• Give creators and rights owners
control and choice
• Enable people to be creators
• Strengthen global collaboration

26. Patent Reform 2015
Senate Bill S. 1137
The PATENT Act
House Bill HR. 9
The Innovation Act

27. Patent Reform 2015
• Sens. Grassley, Leahy, Cornyn, Schumer, Lee, Hatch, and
Klobuchar, sponsored the"Protecting American Talent
and Entrepreneurship Act of 2015" ("PATENT Act ") (S.
1137)
• The legislation has already cleared markup in the Senate
Judiciary Committee and has a clear path to a floor vote
in a Republican-controlled Senate.
• Rep. Goodlatte reintroduced the Innovation Act (H.R. 9)
on February 5, 2015. The bill has 19 co-sponsors, made
up of 10 Democrats and 9 Republicans. The bill was
reported out of committee and a floor vote is likely by
the fall.
• Patent reform has loud detractors of all stripes, but it
also enjoys overwhelming support on both the left and
right.
• The Electronic Frontier Foundation supports its passage.

28. IC2-Hulsey
IP Lunch & Learn
• Panel Discussion on Patent Reform
Issues involved and what they mean to
emerging growth technology
companies
– IC2 Institute, 2815 San Gabriel, Austin
– September 10, 2015, 11:30 to 1:00 p.m.

30. Why Should You Protect Your IP:
Provisional Protection
• You can apply precaution to the patent process.
• Learn if you can successfully take your
invention to market.
• A provisional patent – an abridged application
that safeguards the filing date but allows one
year to file the full non-provisional application.
• The provisional application provides time to
research the market and prepare a full
application.
• It allows you to decide if it’s worth the
investment to seek a full patent.

31. • Many small companies don't seek IP
protection due to perceived significant
costs.
• Microentity status and electronic filing
systems help lower costs and expedite
the process.
• The U.S. system has shifted from “first-
to-invent” to “ first inventor-to-file” in
an attempt to reward entrepreneurs for
protecting IP.
Why Should You Protect Your IP:
It’s never been easier.

32. • Why leave your intellectual accomplishments
unclaimed?
• The law is designed to protect your right to
exclusively control your ideas and intangible
assets.
• This helps ensure that you will profit from
your work with reduced fears of exploitation
by competitors or inadvertent copycats.
• Trademarks, copyrights, trade dress (a
product’s look and feel), and even website
addresses also are part of your intellectual
property portfolio.
Why Should You Protect Your IP:
Claim Your Accomplishments!

33. • Globalization has made it critically important for
small businesses to pursue and protect their IP
rights, both domestically and abroad.
• You can file separate, simultaneous applications
in every country you want to protect your
invention.
• For some countries, regional patents are
available.
• You also have the option to file through the
Patent Cooperation Treaty (PCT) to electronically
file one simple, streamlined international
application and simultaneously seek legal
protection for an invention in 148 countries.
Why Should You Protect Your IP:
America is 4% of The World

34. • Competition – legitimate or predatory—
rewards the “first to file” and may strip
your ability to profit from the invention
in question.
• You need to take control of your great
idea and own it outright.
• Just as your insure important assets,
such as your home, business, and health,
it’s equally important to protect your
ideas.
Why Should You Protect Your IP:
Our Competitive,
Entrepreneurial World

35. Conclusion
• There are domestic and global
pressures on today's IP systems.
• There are changes afoot in Congress
to address some of the most
concerning issues re: patent trolls
• Strong reasons exist for protecting
your company's IP
• Protecting your company's IP is highly
relevant to your current and planned
operations and success.