Intellectual Property for Technology Startups - Entrepreneurship 101

MaRS Discovery District Entrepreneurship 101

Wednesday January 18, 2012

ARSHIA TABRIZI

B.A.Sc. Computer Engineering (Hon) (UofT) Juris Doctor (Law) (UofT)

Member of Ontario & California Bars

www.tabrizilaw.com [email protected]

Copyright 2012 Tabrizi Law Office PC

¡  1990-‐1995 – UofT software/hardware engineering, IBM ¡  1995-‐1998 – joined the “dark side” – UofT law school ¡  1998 – back to “the force” – thesis on “University Spin-‐offs” ¡  1999-‐2001 – Wilson Sonsini Goodrich & Rosati PC (Palo Alto,

Silicon Valley) – incorporated Google, IPO’d Apple, 800+ lawyers ¡  2002 – Tabrizi Law Office -‐ full-‐service/exclusive start-‐up practice

§  Incorporation, Financing, IP, Trademark, Patents, Licensing, Web §  Strategic Partner with Clients – equity, relationships, 3-‐4/year

¡  Client list §  NeXJ Systems (founded by William Tatham, previously founder of

Janna Systems, acquired by Siebel for $1.7 b.) §  RedFlagDeals.com (acquired by Yellow Pages Group) §  WedSnap Inc. (acquired by The Knot Inc.) §  MMB Research (smart-‐energy platform, $1 m. angel round) §  CognoVision (acquired by Intel)


¡  NOT to become IP lawyers §  Your job is to build companies

¡  NOT to learn how to file a patent §  Patent agent

¡  NOT to learn how to file a trademark §  Trademark agent

¡  NOT to learn how to file a copyright §  Copyright office


¡  To learn 3 things: 1.  What is the big deal with IP? 2.  Why should you care about IP? 3.  What do you do about IP?


¡  Billions of dollars are at stake: §  Google acquisition of Motorola Mobility $12b. §  Apple using patents against Android §  Auction for Nortel patents §  i4i $240 m. against Microsoft §  BlackBerry loses BBX -‐ even BBM? § Winkelvoss twins against Facebook


¡  I read about it in Steve Jobs biography §  Steve Jobs had dozens of patents §  Apple lost copyright case on Windows ▪  Apple got GUI from Xerox PARC

§  Steve Jobs negotiated music rights §  Steve Jobs was secretive & controlling ▪  NOT lean start-‐up methodology


¡  3 reasons why IP is a big deal: 1.  IP is a legal fortress ▪  IP protects your valuable assets

2.  IP is a sword & shield §  IP attacks/defends against competitors

3.  IP is a money-‐making tool ▪  IP monetizes your business assets


¡  IP is a legal fortress §  Collect your assets ▪  Employment agreements – patents ▪  Consulting agreements – copyright

§  Protect your assets ▪  Invention – file a patent, trade secret ▪  Brand – file a trademark


¡  IP is a legal fortress §  Kinds of assets ▪  Ideas ▪  Business plans ▪  Inventions ▪  Names, brands ▪  Software ▪  Designs


¡  IP is a sword & shield ¡  Patents

§  Invention ▪  New, non-‐obvious, utility

§  20 year monopoly §  First-‐to-‐file system ▪  Not who invented first ▪  No good-‐guy defence


¡  Patents as Swords §  Offensive strategy §  Sue competitors ▪  You are stepping on my turf -‐ stop or pay up

§  i4i v Microsoft ▪  $4-‐5k to file, $15-‐20k+ to register ▪  $1m+ to enforce a patent ▪  Public, venture $$$, contingency


¡  Patents as Shields §  Defensive strategy §  Free to practice invention §  Deterrent -‐ counter-‐sue competitors §  Google acquisition of Motorola ▪  Globe & Mail -‐ http://bit.ly/q4CpQy


¡  Patents v Innovation §  Patents equal innovation §  Patents kill innovation

¡  Question §  How much innovation could Google have produced if it had spent $12b on product development instead of Motorola’s patents?


¡  Trademarks as Shields §  Ensure you are free to use ▪  Corporate registration not enough

§  Protect brands before investing ▪  Avoid RIM’s problems with BBX/BBM

§  Filing fees are affordable §  Short process ~ 6-‐12 months


¡  Trade Secrets as Swords §  “Secret sauce” §  “Confidential” ▪  Source code, algorithm, chemical formulation, business plan, customer or vendor list, pricing list

§  Non-‐disclosure agreements ▪  Limit use – only to evaluate our product ▪  Limit disclosure – only to employees

§  Sue if they exceed limited rights


¡  IP is a money-‐making tool §  Patent licensing ▪  Microsoft patents for Android mobile devices ▪  Hardware IP licensing (IP cores) ▪  Materials, biotech start-‐ups

§  Copyright licensing ▪  Foundation of software industry ▪  Music licensing (e.g. iTunes)

§  Trademark licensing ▪  Merchandise (e.g. Star Wars)


¡  IP is a Business Tool §  IP is not the goal §  IP is a means to an end §  IP is in service of business objectives §  IP works with other business tools §  IP is a part of your business strategy ▪  How do make money? ▪  How do maintain competitive advantage?


¡  Angel investor §  Patents – purpose (sword, shield) ▪  How does it fit with business strategy

§  Digital media start-‐up ▪  Trademark – logo, brand ▪  Copyright – content, software ▪  Patents – sometimes

§  Inventive technology ▪  Patents, trade secret


¡  List core business assets §  List intangible assets §  What is my business? ▪  Prioritize the assets

§  IP/start-‐up advice §  Strategic IP plan ▪  Customize ▪  Prioritize ▪  Timeline ▪  Budget ▪  Review


¡  Tabrizi Law Office P.C. §  www.tabrizilaw.com §  arshia_tabrizi §  [email protected] §  416.510.2600 x.306
