SBDC IP presentation

Intellectual Property and
Entrepreneurs
Presented by: Bill Adolfsen, Brian
McCall, & Lindsey Thompson
SBDC Presentation 10/30/2012

Overview
• Patents
• Copyright
• Trade secrets
• Trademarks

SBDC Presentation 10/30/2012 2

What is a patent?
• A patent grants the patent owner the
right to exclude others from:
– Making
– Using
– Selling or offering to sell
– Importing
• For 20 years from filing application
• Can patent “anything under the sun that
is made by man”

What is a patent?
• Common misunderstandings:
– A patent DOES NOT give you the right to
make or use your product
• Right to sue
• Patent litigation usually costs $2-25(+)M
– One patent does not necessarily cover an
entire product or process


I can’t use my patented invention?
Example:
•Someone else patents writing instruments
•You patent an improvement, the felt-
tipped pen
Result:
You need their permission to Your
patent
make your invention Their patent
coverage

Major Change to Patent Law
• Starting March 16, 2013: “First to file”
• Old: first inventor entitled to the patent
• New: first inventor that gets to the
patent office gets the patent
– Still need to file 1 year after disclosure
– Disclosure precludes international patents


Patent Application Process
• Types of patent applications:
– Provisional
– Non-provisional
– Design


Provisional Patent Applications
• Holds inventor’s place in line
• Not published, not examined
• Can put “patent pending” on products
• Only good for 12 months
• $125* fee for small entities
– *USPTO changes fees often


Non-Provisional Patent Applications
• Not required to file a provisional first
• Can “expedite” examination
• Initial claims almost always rejected
• Usually 2-5 years
• $25,000 - $75,000
• Small entity fees:
– $533 plus $885 when patent issues
– For entire life of patent: $5848


Small Business Patent Benefits
• VC money
• Protects their ideas from accidental or
malicious disclosure
• Licensing
• Negotiating power


L & E Clinic Client Services
• Freedom to operate (FTO) analysis
– Do any patents cover what inventor wants
to do?
– 20-40 hours
– Typically $5,000 – $200,000


• Patentability analysis
– Looks at everything
– Novelty and obviousness opinion
– 5-20 hours
– $5,000 - $50,000
– Not a legal requirement


• Patent “prosecution”
– Writing the application (40-60 hours)
– Office Actions (5-20 hours each)
– $25,000 - $75,000 total
• Law and Entrepreneurship clinic:
– 40 hours is 1-3 months
– Not best option if under time pressure


Copyright Basics for Small
Businesses


Copyright Requirements

• Original work of authorship fixed in a
tangible medium of expression
• Three requirements:
1) Original = author must use at least some minimum degree
of creativity
2) Work of authorship = include literary works, musical
works, graphical works etc.
3) Fixed = work must be fixed in something sufficiently
permanent (i.e. paper, canvas, hard drive, etc.)


Examples of Copyrightable Works
Copyright No Copyright
• Books • Facts
• Photographs • Ideas
• Advertisements • “Methods of Operation”
(consider patents)
• Movies
• Short phrases (consider
• Software trademark)
• Content of websites
• Music


Protecting Copyrighted Works

• Copyright exists from the moment the work
is “fixed.”
• Additional potential benefits of registering
copyright with the U.S. Copyright Office
– Must register before enforcing the copyright
– Statutory damages may be available if you
register the work on a timely basis


Copyright Duration

• Generally, copyright lasts for the life of
the author + 70 years
• For a “work made for hire”, copyright
lasts for 95 years from publication or 120
years from creation whichever is earlier


Copyright Ownership
• In general, the author(s) of the work own the
copyright
• “Work made for hire” exceptions
– Employers own the copyrights created by an
employee acting within the scope of their
employment
– A company owns the copyright in a work
created by an independent contractor IF THERE
IS A WRITTEN AGREEMENT STATING THEY DO


Common Copyright Mistakes
• Failing to have proper “work made for hire”
provisions in contracts with independent
contractors.
– For example – the company’s website or
software created for the company
– L & E clinic can review company’s third-party
contracts to ensure they are retaining the
appropriate IP rights
• Failing to observe the copyrights of others
– L & E clinic can advise clients on whether the
works of others are likely to be copyrighted


Trade Secret Basics for Small
Businesses


What is a Trade Secret?

• A trade secret is any formula, process, or other
information
• That is an economically valuable secret (not generally
known & not readily ascertainable) AND
• Is the subject of efforts to maintain its secrecy

• Examples - Recipes for Coca-Cola, Big Mac
Special Sauce, WD-40, Google search algorithm


Protecting Trade Secrets
• No registration required – Company just needs
an economically valuable secret and must take
proper steps to ensure its secrecy
– 1) Workplace policies to ensure the secret is only
accessible to employees that “need to know”
– 2) Appropriate contracts with employees and
potential business partners (i.e. CDA, NDA, non-
compete agreements)
• Trade Secret is perpetual (as long as it meets
the requirements of a trade secret)


Trade Secret Rights
• Right to sue others for improperly
appropriating the trade secret
• No right to prevent reverse engineering


Common Trade Secret Mistakes
• Failing to use nondisclosure agreements
with employees and potential business
partners
– L & E clinic can draft and review
nondisclosure agreements


Trademarks

Trademark Basics for Small
Businesses


Trademarks

• word(s) • fragrance
• name • color
• symbol (logo) • device
• design • or any combination
• sounds thereof
used in commerce to indicate the source of the
goods. Meant to identify and distinguish the goods of
one manufacturer or seller from those of another.

15 U.S.C. § 1127.

Trademarks
Trademarks:
• IKEA (furniture)
Service marks:
• FedEx (delivery services)

IP protection can also apply to Trade dress
• TGI Friday’s or
• the way Tiffany’s packages their jewelry


Trademarks

• Requirements for TM:
–Use in Interstate Commerce
• (or intent to use it in interstate
commerce)

–Distinctiveness


Trademarks
• Why should a mark be distinctive?
– Prevents Consumer Confusion


Trademarks
Descriptive
• only protectable as trademark if it has
acquired a secondary meaning in the minds
of the consumers.
Generic
• never eligible for trademark protection
• A mark may be generic from the start and
refused registration, or it may become generic
over time through use
– This is why Band-Aid uses “Band-Aid brand”


Trademarks
Descriptive marks go on Supplemental Register:
– May use the ® symbol;
– Protected against a confusingly similar mark; and
– May bring suit for infringement in federal court.

After 5 years of exclusive use gains presumption
of secondary meaning.
– may require showing other evidence (market
research, affidavits, marketing expenditures, etc)

Then, new application may be filed for Principal
Register.

Trademarks
Registration is not necessarily required for
protection

Unregistered marks:
• Can protect under unfair competition law
• Some States also provide for State registration
of Trademarks, others do not.
–WI has state registration of TMs


Trademarks
Federal Registration:
– Nationwide constructive notice of ownership & use
– Protection against foreign imports using the mark
– Mark may achieve incontestable status after 5
years of continuous use
• Eliminates some defenses to infringement.
• Petition for cancellation of registration must be
filed within 5 years after a trademark has been
registered with the USPTO


Trademarks
TM application procedure:
1. Prepare application
showing existing use in commerce (can do on USPTO website)
2. The USPTO reviews:
 approves the application
 or Office Action outlining their decision on the trademark.
~ 6 months.
3. Respond to any Office Action from USPTO
You may take up to 6 months.
4. If Principal Register unsuccessful, application may be
amended to be on Supplemental Register instead.


Trademarks
Things to Remember:
• Search both the state and federal trademark
databases
• Mark must be used in interstate commerce
– Between states and not wholly within one state.
• You will still be solely responsible for taking
legal action to protect your brand.
– Potential reimbursement for successful legal case.


Trademarks
Many companies choose to register their
company name, logos(s), slogan(s), and even color
schemes.

Ultimately, it comes down to a business decision:
– What is it worth to protect something with TM?
• Filing fees- $275 per mark
• $100 if you need to file a statement of use
(only if registered as intent-to-use)


Trademarks

Registering
word /name Vs. symbol /logo

BUBBIES


Trademarks

Registering

BUBBIES
DUBBIES
BUDDIES

Trademarks

Registering

BUBBIES


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