Jackie Hutter, MS, JD Jackie@TheHutterGroup.com What Innovators Need to Know about IP Protection: A Business-Focused Approach Jackie Hutter, MS, JD Jackie@TheHutterGroup.com

My Perspective 20 years as IP professional Law firm Prosecution and counseling Litigation Corporation Legal and innovation counsel Last 8 years as “IP Strategist” Put business issues before legal issues “Validate your business, not just mine” Truth telling, not risk mitigation Research scientist/inventor Insights from the trenches Also an entrepreneur I’ve made mistakes about lawyers, too   Copyright 2015

Protectable IP? Must Understand What “IP” Means Your Business’ Intangible Asset Value Patentable Inventions Trademarks Brand Equity Goodwill Business Processes Customer/ Suppliers Employees Others Specific to Business Model Copyright 2015

Is It Worth It to Protect Your IP? IP is only relevant when you demonstrate that customers exist for what you want to sell No reason to protect something that no one wants! Must validate business model before thinking about IP protection Customer discovery is key Copyright 2015

The Patent Protection Process Copyright 2015

Patent Types 1. Utility Patent: Patents on inventions which function in a new way or to provide a new result 2. Design Patent: Patents on the non-functional or ornamentation of something that already exists 3. Plant Patent: Patents on types of plants that may be reproduced by grafts and cuttings Copyright 2015

U.S. Utility Patent Applications provisional application Allow filling without any formal patent claims, oath or declaration or any information disclosure statement Less costly No real protection “Saves place in line” non-provisional application Contains at least a specification, all the drawing figures and at least one claim. Goes through examination Can be filed multiple times Copyright 2015

Where Can You Obtain a Patent? USPTO State Intellectual Property Office of China Japan Patent Office… National Patent Office International patent application office headquartered in Geneva, Switzerland Still must apply nationally WIPO Copyright 2015

US Utility Patent Application Process Invention Identified and Vetted for Filing Expense Application Drafted and Filed by Attorney $5,000-$50,000 Application Published 18 months Office Action 12-36 months Response by Attorney Amendment of Claims $3000-$10,000 Final Rejection Allowance $1500 Maintenance Fees 3.5, 7.0, 11.5 Years $900, $2300, $3800 Copyright 2015

What Patents Are (and Aren’t) Given by government for useful, new and unobvious inventions Recognition that invention meets the legal requirements for patentability Checklist of statutory obligations for both invention and way patent is written Only market determines business value of invention Copyright 2015

Utility Patent Features Exclusivity One patent per invention Can be slight variations between patents Without patent holder permission no one can make, market, use, import, etc the patented invention Otherwise, regarded as patent infringement Territory Patent limited to certain country No effect in other countries No such thing as an “International Patent” Time Term of a patent is limited 20 years from earliest non-provisional filing date Copyright: The Hutter Group 2015

Patents as a Property Right Not a monopoly A right to exclude Broader Can use Not use Keep others from doing what they would otherwise be free to do No right to practice the invention claimed Owner can be blocked by other’s patent rights Must ensure “freedom to operate” Copyright 2015

Important New US Option: “TrackOne” Can obtain patent < 1 year More expensive up front but Total process less expensive Issued patent could increase startup valuation Copyright 2015

Licensing/Monetization Perception that licensing/monetization viable outcome for protected IP “IP has value just because it exists” In reality, IP value is rare Patents cover novel and unobvious ideas People buy right to practice validated business models If the idea protected by the patent has no customers, then patent has no value Think of in context of exit value If customers protected by IP, then your IP has value independently of value of the business itself “Must have” If have customers, but IP doesn’t prevent those customers from being acquired, has less value “Nice to have” If IP has nothing to do with customers, IP not valuable “No asset value” Copyright 2015

Enforcement of IP IP litigation expense prohibitive for startups “If you’re thinking about litigation, you’ve lost.” Litigation is not a viable business model for startups. Even if money not concern, enforcement still difficult in some countries Use protection in local country to leverage knock-offs in foreign countries Combine other forms IP/intangible asset protection to reduce possibility that competitors will be able to provide same value to customers Make yourself the “go to” for customers Copyright 2015

Common “Do’s and Don’ts” for IP “Don’t believe the hype” The only person who needs a patent is a patent attorney Investors often “check boxes” File too early Validate business models first File too late Beware of public disclosures and offers for sale File too narrowly Focus on why customer cares vs. how you solve the problem Outsource process to patent attorney Legal vs. business Understand how IP can and will create value “Make it cheaper to go through you than around you” Learn to explain to investors etc. File as soon as possible after validation of business model Balance risks Abandon IP that no longer aligns with business model Understand IP protection is process, not an event Become IP strategist or integrate one onto team Copyright 2015

Copyright: The Hutter Group 2015 QUESTIONS? Jackie@TheHutterGroup.com http://ipassetmaximizerblog.com7770.580.0360 Copyright: The Hutter Group 2015