1. Patents and Trade Secrets
for Early-Stage Clean Tech Ventures
Peter Eng
Charles T. Graves
June 22, 2012

2. Why Care About Intellectual Property and Licensing?
• Secure Rights / Build
Value
• Avoid Misappropriation /
Infringement
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3. Intellectual Property Life Cycle
Additional M&A/Exit!
In-Licenses/
Acquisitions
University/
Former Products/
Employer Services
The Enterprise
Founders
(Assignment)
Out-Licenses
Employees
(Invent. Discl./
Confid. Agts.)
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4. Issues for Founding Team
• Conflict with Rights of Former Employers
• Assignment of Founders’ Rights into the Company
• Other Contributors?
• Third Party Rights
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5. Categories of Intellectual Property
• Trade Secrets
• Patents
• Trademarks
• Copyrights
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6. Trade Secrets
• Protect Secret Information
• Avoid Allegations of Misuse
• Take Care When Hiring
• Examples:
– Source Code
– Manufacturing Process
– Customer Lists
– Product Roadmap
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7. Trade Secrets: Maintenance of Secrecy
• Marking Documents
• Agreements
• Security Procedures – Sign-in, Badges,
Restricted Visitor Access, Employee
Exit Interviews
• Data Security
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8. Trade Secrets: Best Practices
• Risks: Injunctions and Damages
• Create a Policy for Employee Hiring and Departures
• Disclosure May Kill the Trade Secret
• Reverse Engineering and Independent Development
• General Knowledge and Skills of Employees - Cannot be
Owned
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9. Patents: Subject Matter
• Apparatus
• Process
• Business Methods A B
• Design Patents
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10. Patents: How Obtained
• File Application with Patent Office (PTO)
• Timeliness/Filing Date
PTO
• Patentability Requirements, E.g.:
– Novelty
– Nonobviousness
– Description
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11. Patents: Summary of Deadlines
U.S. Statutory Bars No Patent, if More Than One Year Prior to
Filing Date:
• Patented
• Printed Publication
• Public Use
• On Sale
Most Other Countries: Absolute novelty – file before invention
becoming public. No grace period. Use your US filing date for
priority if file within 1 year.
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12. Patent Tradeoffs
• Requires Application (High Cost)
• Right to Exclude/Not Right to Practice
• May Cover General Methods
• Independent Development May Infringe
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13. Government Generally Does Not Require
Ownership of Intellectual Property Rights
Bayh-Dole Act
Applies to broad categories of Government funding agreements.
Funding recipient generally has the ability to retain title to patent
rights.
• Waiver Requirement for Ownership
– Small businesses can retain ownership
– Large businesses need a waiver
• Disclosure and Filing Requirements
• Government’s Retained Rights - License back to practice “for or
on behalf of the United States.”
Continued…
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14. Government Generally Does Not Require
Ownership of Intellectual Property Rights (cont’d)
Bayh-Dole Act (continued)
• Preference for American Industry – but can be waived.
• “March-in Rights”
– Government has never exercised.
• Subcontractor Title Retention - Subcontractor’s inventions vest in
the subcontractor (to the exclusion of the funding recipient); can
be negotiated.
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15. Licensing
• Grounded in the Concept of Intellectual Property as an
“Exclusive Right”
• What are the Licensed Rights (e.g., patents, copyrighted works,
etc.)?
• What are the Licensed Products/Activities?
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16. Other Negotiated Terms
• Exclusivity
• Royalties
• Ownership
• Term
• Commercial Terms: Supply, Support, etc.
• Other
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17. Wilson Sonsini Goodrich & Rosati
650 Page Mill Rd
Palo Alto, CA 94301-1050
T: 650-493-9300
F: 650-493-6811
w: www.wsgr.com
Charles T. Graves Peter Eng
T: 415-947-2109 T: 650-320-4847
E: tgraves@wsgr.com E: peng@wsgr.com