Intellectual Property Issues for Startups

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Zheng Liu January 18, 2015

Intellectual Property Law For Startups

Agenda • Intellectual Property (IP) type breakdown: Patents, Copyrights, Trademarks, and Trade Secrets

• IP rights in a startup’s life cycle

• The dangers of not protecting IP and using other’s IP without securing rights

• Protecting one’s IP

• Securing IP rights through licensing and collaboration


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Why Care About Intellectual Property and Licensing? Offensive: Secure Rights and Build Value

Defensive: Avoid infringement, misappropriation and dispute


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Categories of Intellectual Property


Trade Secrets Trademarks

Copyrights Patents

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Trade Secrets : The Protection •  Information which is not generally known or reasonably ascertainable that allows a

business to obtain an advantage (usually economic) over competitors or others

•  A company can only protect is trade secret as long as it is kept confidential

•  Examples: formula, source code, manufacturing process, customer list


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Trade Secrets : The Limitation • Maintenance of secrecy (marking documents, implementing security procedures (sign-in, badges, firewalls)

• Reverse engineering and independent development

• General knowledge and skills of employees (residuals and know-how)

• Once disclosed the trade secret is no longer protected


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Copyrights: The Protection • Copyright is a form of protection grounded in the U.S. Constitution and granted by law for original works of authorship fixed in a tangible medium of expression. Copyright covers both published and unpublished works.

• Exclusive rights: to copy, sell, import or export, create derivative works (works that adapt the original work), perform or display

• Copyright may apply to a wide range of creative, intellectual, or artistic forms, or "works” such as plays, movies, audio recordings, photographs and software

• Deciding to register the copyright


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Copyrights: The Limitation • Copyright does not protect facts, ideas, systems, or methods of operation

• Independent creation

• Limited time for protection

• Changing technology and fair use exception


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Trademarks: The Protection • A trademark is a brand name.

• A trademark or service mark includes any word, name, symbol, device, or any combination, used or intended to be used to identify and distinguish the goods/services of one seller or provider from those of others, and to indicate the source of the goods/services.

• Although federal registration of a mark is not mandatory, it has several advantages, including notice to the public of the registrant's claim of ownership of the mark, legal presumption of ownership


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Trademarks: The Limitation • Loss of trademark, the generic problem

• Trade erosion

• Carving out industry specific trademarks

• Protection overseas


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Patents: The Protection • Subject matter: apparatus, process, methods, design patents

• How to obtain: file an application (provisional vs. non-provisional) with the USPTO

• Disclosure, statutory bars to patents, deadlines, timeliness, and filing date


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Patents: The Limitation •  Patent protection is the right to exclude not a right to practice

•  The importance of timing (when to file and how long it takes)

•  High cost to secure patent rights

•  Costs to enforce patent rights and difficulties in enforcing patent rights once the patents are granted

•  One patent may not be enough


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Intellectual Property Life Cycle and Issues • Founders (Assignments)

• Employees (Employment, assignment, non-compete)

• Consultants (Consulting agreements)

• University/Former Employers (Employment agreements)

• Products and services

• In-licenses, out-licenses and acquisitions


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•  Dangers of not protecting one’s IP »  Cannot operate

»  Losing money

•  Dangers of not securing IP rights »  Financial disputes

»  Criminal prosecution


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Zheng Liu (650) 614-7699

[email protected]

Questions?

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Documents

Intellectual Property Issues for Startups