2. PART 1…..…………….The Roots of Intellectual Property
PART 2….……….……………Intellectual Property Law 101
PART 3.......Making Money from Intellectual Property
PART 4……..………………….Beyond Intellectual Property
PART 5………..………………………………………..IP Resources
6. This is key
because the most common mistake
entrepreneurs make is to be awed,
emotional, or self-righteous about IP,
when they should be Machiavellian
13. did not exist (*)
(*) OK, super IP geeks, give me a break on this one. I’s more exciting if I state it this way, and, despite Ancient China and Senor
Brunelleschi and all, it is true in the spirit of the argument
14. Today, IP policy has evolved from its
mercantile roots into a mechanism to
accelerate innovation (patents and
copyrights) and quality (trademarks)
16. If an inventor cannot reap the financial
rewards from inventing, because
someone else steals the ideas, the
inventor will not spend the blood,
sweat, and tears required to invent in
the first place, and the whole growth
machine grinds to a halt
(patents & copyrights)
17. If a pirate can pass themselves off as a
quality brand, while producing cheaply,
then there will be no incentive for the
quality brand to invest in a quality
product in the first place
(trademark)
18. So, to fend off future stagnation,
governments strike a societal balance
between the evils of monopoly and the
benefits of innovation & quality
19. At it’s core, modern IP is a legal
framework that grants inventors a
limited window of monopoly during
which they can enjoy economic benefit
20. Or in the words of the big dogs…
“The Congress shall have the power
to promote the progress of science
and useful arts, by securing for
limited times to authors and
inventors the exclusive right to their
respective writings and discoveries”
-Article I, Section 8 US Constitution
33. 1. Humanity was plenty inventive before 1600AD. The very
assumption that inventors won’t invent without cash may
be wrong from inception
2. The accelerated speed of invention prompted by the IP
system may be dangerous for society in a larger sense
3. It may not be fair that ideas built on thousands of years
of public domain are individually owned
4. IP enforcement is getting so hard that IP may be an
unenforceable right (e.g.: digital piracy, different legal
regimes from country to country, etc)
5. Given creativity & technology complexity and options, IP
is increasingly easy to innovate around
6. What about squeegie topics like patenting your genes
7. IP is easily abused by the powerful (e.g.: bio piracy, First
World wants versus Third World needs, etc…)
35. If you’re keen, you can join the rich
discussions online about why IP is evil
on your own
36. For now, let’s make sure that we
understand the IP regime, so that we
can legally manipulate it to our
maximum financial advantage as
entrepreneurs
42. Did you know
• By 1999, 75% of Fortune 100 total market cap
was represented in intangible assets
• Massive firm investments are required for IP
creation and protection
• We are living in a globalized knowledge
economy
• IP rights are key strategic and tactical levers in
Competitive Strategy that can make or break
firms
47. and, if your lawyers are truly bad ass…
they can even ask you tough, clarifying
questions, or give you ideas from what they've
learned in other cases
48. but the terms of the deals are for you, the
business, to define
53. Each of these assets wraps a specific
form of intangible value (like ideas or
brand image) into a legal form that can
be manipulated as any traditional,
physical form of property
54. In other words, IP turns the fluffy,
intangible value into a tangible economic
asset, that can be bought, sold,
transferred, administrated, & adjudicated
in a market place
55. Each of these 4 types of IP asset can be
understood in terms of 6 characteristics
56. 1. What can be protected
2. How long do you get the protection for
3. What constitutes infringement
4. How do you enforce your rights
5. How do you punish infringers
6. What is the process required to obtain
the asset, how long does it take, & how
much does it cost
58. PATENT COPYRIGHT TRADEMARK TRADE SECRET
Scope Product of process
Inventions that do
something new
FYI: Utility, Design,
and Plant Patents
cover a smaller
scope
Expression of an
original idea (not the
idea itself), whether in
words or an "artistic"
endeavor, 2-D or 3-D,
static or performance
Word, phrase, symbol or
design, or a combination
thereof, that identifies
and distinguishes the
source of the goods of
one party from those of
others.
• not generally known to the
public
• confers some sort of economic
benefit on its holder (benefit
must derive specifically from its
not being publically known, not
just from the value of the info)
• is the subject of reasonable
efforts to maintain its secrecy
Duration
(before asset
moves to public
domain)
20 years from filing
FYI: Various rules
about the period
between filing &
securing a patent
70 years after the
death of the author
(work-for-hire up to
120 years)
10 years In the words of Bono, "a secret is
something you tell one other
person"
Infringement Others may not
make, use, sell, or
import your
invention
Others may not
reproduce, prepare
derivatives, distribute,
perform or display in
public (fair use claim
possible)
Others may not use your
trade mark (pretend to be
you in the course of trade
with customers to your
detriment)
Others may not use what they have
learned unless as above for scope
Enforcement Patent Infringement
Action
Civil suit or criminal
misdemeanour /
felony
Lawsuit You may sue for Misappropriation
Remedies Varies Usually injunction to
stop infringing +
damages + forfeit of
remaining duplicates
Usually injunction to stop
infringing + damages
Varies
Process / Cost
(see the last slide of
this deck)
Quite complex and
potentially very
expensive
Easy and cheap You don't even need to
register, though you can.
None
60. despite international agreements like PCT,
TRIPs, the Berne Convention, etc., all 6
characteristics will vary from country to
country
61. lawyers can help you answer questions
about which laws apply where
62. but for the lawyer to do much more, you’ll
need to answer some fundamental
questions
63. 1. Where (in which countries) should I
register, given my short, mid and long-
term business/marketing plan
2. What is the right mix of protections to
invest in, given expected market
responses
3. How much should I (can I afford to)
spend on IP registration, protection, &
management given forecasted ROI and
risk
71. The most practical use for
IP is to legally/formally
establish an underlying
asset that can be sold,
borrowed, traded, or used
as the basis for some
economic transaction
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
72. And the legal mechanism
that underlies the economic
transaction involving IP is
called a
License Agreement
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
73. A License Agreement is a
contract between an IP
owner and an IP user
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
74. It defines the terms of the
transaction
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
75. • What can the buyer do (or
explicitly not do) with the asset
• How much will the buyer pay for
the asset and what are the terms
of that payment
• What other services come with
the transaction (like support)
• How long will the buyer enjoy
these rights before they need to
re-sign?
• In which territories will the rights
apply?
• Etc…
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
76. For example,
"for the agreed upon
consideration (let's say 59.99),
the user may download the
software onto a single PC and
use it for 3 years. She may also
enjoy up to 3 support requests
during the license term"
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
77. you know.
when you get that
Microsoft pop-up dialog
with that long stream of
blah-blah-blah text that you
ignore and then quickly
click "I agree"
Licensing
Valuation
Tactics
Branding
Incentives
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79. And you've just signed away
your first-born child by
clicking, "I accept"
Licensing
Valuation
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80. Finally, note that the terms
of a License Agreement can
be as varied as the
imaginations of the buyer
and seller
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
81. Don't feel restricted to any
template
Licensing
Valuation
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Incentives
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82. The License terms are just
your business model
masquerading as a legal
document
Licensing
Valuation
Tactics
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Incentives
Litigation
83. That's why License
Innovation can be as
profound as Product
Innovation
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
84. Consider the earthquakes
caused in the Software
Industry by the innovation
of the GNU General Public
License – which was not
technology
(http://www.gnu.org/licenses/gpl.html)
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
85. IP can also form the
underlying asset used to
increase a company's
valuation
Licensing
Valuation
Tactics
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Incentives
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86. Sometimes we refer to a
company's, "goodwill value"
Licensing
Valuation
Tactics
Branding
Incentives
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87. This "goodwill value" is the
hypothetical value of a
company's intangible assets
including reputation, brand,
Intellectual Property, etc
Licensing
Valuation
Tactics
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88. when valuing a company (in
the case of acquisition for
example), the goodwill
value is added to the hard
value of physical assets like
buildings or inventories and
the hard-ish value of
financial forecasts
Licensing
Valuation
Tactics
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Incentives
Litigation
89. The goodwill value can be
significant
Licensing
Valuation
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90. We already mentioned the
Fortune 500 stat earlier!
Licensing
Valuation
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91. Since IP is one of a
company's intangible assets,
formalizing that IP through
patents, copyrights, or trade
marks can be helpful when
arguing for goodwill value
when your company is being
valued
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
93. Just having a patent does not
immediately raise your
valuation, as start-up
folklore might suggest
Licensing
Valuation
Tactics
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94. At the end of the day, you
still need to explain what
you are going to do with
your IP….how you will
convert the intangible value
into cold, hard cash
Licensing
Valuation
Tactics
Branding
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95. There are also lots of fun,
wonderfully-evil,
Machievellian / Sun Tzu
types of tactical games that
companies play with IP for
profit
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
96. Though, to be frank, these
are more interesting for big
companies rather than start-
ups
Licensing
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97. The most basic IP tactic is
the Pre-emptive strike
Licensing
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98. Which is basically…
Patent before someone else
does.
Licensing
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99. The thing is….
Even if you legitimately have the IP
first, you don't want to get bogged
down in a bunch of annoying
lawsuits because some joker files
and then starts causing trouble
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
100. Once you have the patent, you
proactively fend off potential
annoyance – like a bug spray
Licensing
Valuation
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101. By proactively patenting, you'll also
go through the Patent Search
process
Licensing
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102. This helps ensure that there
are no Submarine Patents or
other bugs lurking out there
that could come back to bite
you when you are rolling in
the dough
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
103. And these bugs can be VERY
annoying
Licensing
Valuation
Tactics
Branding
Incentives
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105. A Patent Troll is an
aggressive, opportunist
person /company that claims
patents, often with no
intention to manufacture or
market the product
AKA an A$$hole
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
106. The Patent Troll takes advantage of
the fact that the cost of defending
against a patent infringement suit,
as of 2004, is typically $1 million or
more before trial, and $2.5 million
for a complete defence, even if
successful
https://en.wikipedia.org/wiki/Patent_troll
Licensing
Valuation
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107. And worse yet, you never
know what might happen
when a jury is involved!
Licensing
Valuation
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Litigation
108. Trolls know that high costs &
risks mean that defendants
may settle even frivolous
suits (for hundreds of
thousands), just to swat the
mosquito
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
109. By the way, there is no
obligation to defend an unused
patent immediately
Licensing
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110. So the Patent Troll's target may
produce the patented product
for years before the Troll sues
them (Submarine Patent)
Licensing
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111. But aren't the costs of a pre-
emptive approach too high?
Licensing
Valuation
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112. You’ll have the legal costs of
course:
• Application support
• Search
• Registration
Licensing
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113. But you’ll also have the
internal costs
Licensing
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114. For example, you’ll be
taking your best engineers
and sticking them in front of
a Word document
composing product
specifications (which they
hate doing) when they could
be out inventing the next
product!
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
115. That's where Collective
Defensive Patent
Aggregation (DPA) comes
into play
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
116. With Collective DPA, companies
agree to share the insurance
cost of pre-emption by forming
a joint Patent Pool where they
co-purchase patents as a joint
defence
Licensing
Valuation
Tactics
Branding
Incentives
Litigation
117. This has a sneaky anti-
competition side effect as an
entry barrier to future
legitimate market actors
Licensing
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118. If 3-5 big players share the pool
of patents required to execute a
certain technology, they can
ensure that no future
competitors enter the market
because the licensing costs will
be too high
Licensing
Valuation
Tactics
Branding
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Litigation
119. Not naming any names, but
this works very well if you can
make it look like you are playing
nicely and helping to define an
industry standard (e.g.: IEEE)
Licensing
Valuation
Tactics
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120. Sometimes we call the resulting
pool a patent fence or thicket
(which can be created by a single,
rich firm as easily as it can by a
group)
Licensing
Valuation
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Litigation
121. A Patent Fence is, as wikipedia says,
“a dense web of overlapping or
dependent intellectual property
rights that a competitor must hack
its way through in order to actually
commercialize new technology.“
Licensing
Valuation
Tactics
Branding
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122. Alternatively an IP holder can build
a fence by patenting all mechanisms
to achieve the result – even if they
only actually use one of them in
practice
Licensing
Valuation
Tactics
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124. This is all great for the big boys
Licensing
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125. But crap for you and me
Licensing
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126. So what are the little guys, on
little budgets, to do?
Licensing
Valuation
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127. Ultimately, if you are going to
play the IP game, you need to
find a hole in the patent fence
and innovate around patents
Licensing
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128. Here is how it might work in
simple terms
Licensing
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129. Let’s say that the original innovator
patents a product such as square,
connected to triangle, connected to
circle
Then they patent this
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130. Of course, despite the engineering,
the customer experiences the
product as the red outline
Licensing
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131. So the smart competitor delivers the
customer experience with a slightly
different design of 2 rectangles and 2
semi-circles
And patents the new solution
Licensing
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132. This can be achieved via reverse
engineering, or simply creative,
cheeky design
Licensing
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133. Of course, big companies with
valuable/complex IP portfolios, or in
industries where IP has a profound
impact, closely monitor new
patents & patent applications (here
come the lawyers again)
Licensing
Valuation
Tactics
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134. These firms will maintain a patent
map/landscape, which is a
graphical model of patent
visualisation and will constantly
scan all new patent applications in
their area
Licensing
Valuation
Tactics
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Incentives
Litigation
135. In the process, they can play fun
games like misdirection or
vapourware
Licensing
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138. A smart IP Holder can also send
threatening letters (regardless of
the legitimacy of their claim)
Licensing
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Litigation
139. For example, I’m an investor in a
company that was called Racerbook
Licensing
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140. Some months ago, Facebook sent us
a threatening letter claiming
Trademark violation
Licensing
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141. Despite the fact that we all felt
Facebook had no legal claim as the
businesses were very different…
Licensing
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142. We backed down and renamed the
company Racerlink
Licensing
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143. After all, who wants to fight
Facebook’s giant financial warchest
and their army of lawyers on staff,
who get paid salary no matter what
they do?!?!?!?!
Licensing
Valuation
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144. But big companies will not only
fence off their playing field with
product (engineering) patents.
They will also patent manufacturing
process or delivery mechanisms
(especially for drugs)
Licensing
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145. Further, companies may often buy
patents up & down the value chain
so that they cannot be held hostage
by suppliers who may use IP to
extract too much margin
Licensing
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146. Consider the effects of Nokia’s
patents on loudspeakers
documented on Wikipedia
Licensing
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147. Even though the company does not
engage in the production of cell-
phone components, it keeps a
handle on its suppliers by
maintaining control of key IP rights
in different segments of the value
chain
Licensing
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148. Nokia has such patents not in order
to squeeze suppliers but to forearm
against price increases in an
upstream segment where
competition is not too high as there
is only a handful of suppliers
Licensing
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159. So, with all that said, there is also a
case that you shouldn’t waste your
time, efforts, and money on IP
160. For one, IP, especially patents, is
incredibly expensive to obtain, maintain,
monitor & enforce
161. But, even after all that expense,
the protection may only offer weak,
unenforceable protection
Especially if you are a little guy
162. In addition, once you leave the
cosy confines of Trade Secret, your
IP will only have a limited lifespan
as registering it means eventually
giving it up to the public domain
163. Plus your competitors can start
working on the workaround the
minute your invention is published
for the patent application
164. Further, depending on your
industry’s speed of innovation, by
the time you prepare for, and
obtain, protection, the market
moment may be passed
168. But far more importantly, given
enforceability, the fact that IP must
flow into the public domain if it is to be
registered, and the exorbitant costs
associated with IP management, many
firms other than the big guys, may look
at the ROI and say….nah!
171. Wanna find out about Better Barriers
to Entry?
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173. Selling Wine without Bottles https://projects.eff.org/~barlow/EconomyOfIdeas.h
tml
What is the process for filing a
patent in the US?
http://www.uspto.gov/patents/process/ppo_texton
ly.jsp
What is the process for filing a
patent in Singapore?
http://www.ipos.gov.sg/AboutIP/TypesofIPWhatisIn
tellectualProperty/Whatisapatent/Applyingforapate
nt/ApplyingforapatentinSingapore.aspx
What do you do if someone
infringes your copyright?
http://www.copyright.gov/help/faq/faq-
infringement.html
What do you do if someone
infringes your patent?
http://www.beemlaw.com/video-gallery/what-if-
someone-is-infringing-your-patent
What do you do if someone
infringes your trademark?
http://en.wikipedia.org/wiki/Trademark_infringeme
nt
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Please note that all content & opinions
expressed in this deck are my own and
don’t necessarily represent the position of
my current, or any previous, employers