IP for Entrepreneurs

Kirk Cesari Cesari & Reed, LLP September 17, 2013

PO Box 9669 AUSTIN, TX 512-‐921-‐9069

kcesari@cesari-‐reed.com

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Intellectual Property Myths �  Intellectual Property doesn’t matter to my business. �  I can use the same strategies as some other company is using.

�  Form contracts are great, I just plug in my business name and sign on the line.

�  Software is not patentable. � A big law firm can do it all, so I’ll just hire them for everything (self-‐promoting plug)

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IP for Entrepreneurs CESARI & REED, LLP

Why IP ma4ers… � You have a business and you have competitors

� You have a great idea and you don’t want someone else to exploit it

� You are trying to get funding for your start-‐up

� What should you do?

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How can you protect your IP? � Contracts

�  Employment and Independent Contractor Agreements � Non-‐Disclosure Agreements (NDAs) �  Exclusivity Agreements, Development Agreements, etc.

� Trademarks � Patents � Copyrights � Trade Secrets

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Do Trademarks, Copyrights, and Patents protect the same things?

�  No. Trademarks, copyrights, and patents protect different types of intellectual property. A trademark typically protects brand names and logos used on goods and services. A copyright protects an original artistic or literary work. A patent protects an invention.

�  For example, if you invent a new kind of vacuum cleaner, you would apply for a patent to protect the invention itself. You would apply to register a trademark to protect the brand name of the vacuum cleaner. And you might register a copyright for the TV commercial that you use to market the product.

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Why Get Patents? •  Benefits of a strong patent system:

- Rewards innovation - Protects capital investment - Promotes an “open society” (no guilds)

•  Benefits to Clients for patenting new technology:

- Defensive: cross-licensing opportunities to ensure continued access to technology of others,

documentation of R/D efforts, protects against infringement suits (via counterclaims of infringement) - Offensive: licensing and royalty potential, throws “tacks” in the

road for competitors to have to avoid

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What does a patent cover? •  Patent coverage is defined by the claims of the patent

•  The Title or Abstract does NOT define the coverage of a patent

•  Claims are one sentence descriptions of the patented invention that form the “metes and bounds” of the protected subject matter

•  Can be independent (stand alone), or dependent (include

all of the limitations of a previous claim, plus add at least one additional limitation)

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What is the Examination Process? �  File patent application with USPTO �  - Specification, Drawings, Claims, Abstract, Declaration

from inventor(s), Filing fee �  - Record assignment(s), if Client prefers

�  Publication of application at 18 months from priority date unless requested otherwise.

�  Examiner performs search, examines claims �  - Rejections (Office Actions) �  - Notice of Allowance �  - Administrative Appeal

�  Typical Time for a Patent Application to Issue: 2-4 years

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RealizaCon of value of a patent � The value of IP is realized when: �  …a patent is issued. This provides a competitive deterrent, while adding to the overall valuation of the company.

�  …it is used in a product. This provides freedom of action while allows Clients to achieve and maintain technology and market leadership.

�  …it generates revenue. The revenue may be obtained via a royalty-‐bearing license, when it allows Clients access to others’ IP or is sold to someone else.

�  …it is used to pursue infringers. This may be a source of revenue, but also acts as a competitive deterrent.

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What is a copyright? •  A form of protection granted (under 17 U.S.C in the U.S.) for “original works of authorship,” including literary, dramatic, musical, artistic, and certain other works, that are “fixed in any tangible medium of expression.” •  The 1976 Copyright Act generally gives the owner of a copyright the exclusive right to:

•  Reproduce the work, •  Prepare derivative works, •  Distribute copies, •  Perform the work publicly, and •  Display the work publicly

•  Computer Programs are protected by copyright, usually as a literary work.

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What is not protected by Copyright?

•  Works that have not been fixed in a tangible medium of expression •  Titles, Names, Short Phrases, and Slogans; familiar symbols

or designs; mere variations of typographical ornamentation, lettering, or coloring; mere listings of ingredients or contents

•  Ideas, procedures, methods, systems, processes, concepts, principles, discoveries, or devices

•  Works consisting entirely of information that is common property and containing no original authorship (such as alphabetical white page listings)

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What might be ConfidenCal InformaCon? � Confidential Information may include: �  any Company proprietary information, technical data, trade secrets or know-‐how

�  Such as: research, product plans, services, customer lists, markets, software, development, inventions, processes, …marketing, finances, or other business information.

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How can I Protect ConfidenCal InformaCon? �  Limit distribution and access to as small a group as practical

�  Label all confidential materials with the full classification of “Client” Confidential, including presentations, specifications, etc.

�  Dispose of all confidential material by shredding it �  Electronic/Fax transmissions should be marked with “Client” Confidential as well as with language concerning return of misdirected communication

�  Use another company’s confidential information only with the written consent of the other company

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IP for Entrepreneurs CESARI & REED, LLP 9/17/2013

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IP for Entrepreneurs