IP and legal issues Super-project.eu

Intellectual property (IP) IP, in simple words, can be defined as the creations of the mind, such as inventions, literary and artistic works, and symbols, names and images used in commerce (Evers et al., 2014). Several examples of IP from business practice: electronic circuits, product prototypes, manufacturing processes, documented ideas, computation techniques, business methods, literary creations, publications and presentations, software, diagnostic techniques, unique names, or artistic expressions. IP rights are different protections granted to the creators of IP

IP audit IP audit - entrepreneurs should identify the IP critical to the new business and its expected performance. There is a range of comprehensive methodologies – however, it could be as simple as making a list of intangible assets using the checklist below (Evers et al., 2014, adapted from EC, 2003): Human capital: skills, education, training; knowledge and know how; experience and competency; know-who Structural capital: patents, trade secrets, trademarks, copyright, design; licenses and franchises; manuals, processes and procedures; invention disclosures, proprietary software, publications Market capital: brand, customer and client list, goodwill; collaborations and networks; quality assurance; independent technology validation

IP strategies for startups IP strategy = determines how the start-up identifies and protects significant innovations and generates revenues from its IP portfolio Practical steps when considering an IP strategy are (Evers et al., 2014): Building awareness of the IP importance, Searching for existing solutions before starting a new project, Capturing all current and potential IP and using it to add value to start-up’s products, creating a culture of best practice in IP creation and capture, Maintaining confidentiality until professional advice is provided, Conducting competitor analysis to avoid infringement of their IP, Plan and routinely revise start-up’s IP portfolio. Expert help is advised in case of no experience in the field of IP

IP protection Different types of IP rights that start-ups may utilize to protect their intellectual property are for example (Evers et al., 2014): Patents for inventions (new technologies having potential for industrial application or for turning into new products) Designs for products (appearance, contours, colours, shape, texture) Trademarks for brand identity of goods and services, Copyright for material (e.g. literary, artistic, music, films, sound or multimedia)

Trade secret Unlike other types of IP, trade secrets are not registered - the information simply has to be kept confidential Once a trade secret is disclosed to the public, legal protection ends Trade secret protects proprietary information of commercial value that A) provide the owner with a competitive advantage in the marketplace, and B) prevent the public or competitors from learning about it other than through improper acquisition or theft. Examples: market research, business plans, personnel databases, customer databases, formulas, ingredients etc.

IP valuation A very comprehensive and constantly developing issue Needs to undergo valuation in number of context-specific situations - sale, merger, joint venture or similar commercial transaction; divorce (be it personal or business related); bankruptcy; estate planning; licensing IP; and litigation Three standard methodologies: Cost approach – uses historical costs to develop an asset Income approach - calculates the present value of future income streams Market approach - comparing the subject asset to publicly available transactions Hybrid methodology - relief from royalty approach

Revenue generation Several ways to generate revenues from your IP portfolio: Licensing - giving someone the right to use a patent or a copyright in a certain area or for a particular group of customers, in exchange for royalties Franchising - allowing someone else to set up and run their own business under your brand name Selling - If you are not able to exploit the entire IP portfolio or if building a product based on the IP would require huge resources that you cannot / don’t want to invest Selling + leasing back - the buyer will purchase e.g. patents of a start-up and provide a “lease back” license

Legal issues – legal forms Start-ups can choose different legal forms when setting a legal entity One of the most important decisions when starting a business - consequences related to taxes or liability Start-up should choose a legal form corresponding to the nature of its business activities, aspirations in terms of size or complexity of the business, or plans to take investors on board Specific modifications of legal forms of business in different countries, but general forms are quite common: Sole trading Private limited company Public limited companies

Legal issues – Terms of service Also labelled as terms of use, or general terms and conditions Often part of websites, applications or software Terms of service usually cover: Privacy policy, personal data treatment User’s obligations Claims policy Terms of payment Liability for damage Prohibitions and limitations It is necessary to ensure user’s acceptation by clicking on the website/during installation (as there is usually no legal contract with the user)

Legal issues - NDA NDA = non-disclosure agreement Type of business agreement that you can use to legally protect your start-up/business idea Can be used in business conversations with prospective employees or investors An NDA will specify: What constitutes a confidential information How a confidential information should be handled Who owns the information (i.e. the start-up) The time period for which the information will be disclosed The time period confidentiality will be maintained

Thank You ! www.themegallery.com