Intellectual Property Considerations in Forming and Scaling a Business

Intellectual Property Primer

Copyrights Protect works of art Books, maps, charts, prints, musical compositions, dramatic works, photographs, paintings, drawings, sculptures, screen prints, computer programs, movies, sound recordings, dances, and architectural works. Last for life of the author plus 70 years. A “Fair Use” of copyrights is allowed. Fair use allows a limited copying of a work. Teachers use portions of textbooks for teaching purposes under the Fair use doctrine.

Trademarks Any word, name, symbol, or device used to identify and distinguish goods from those manufactured or sold by others. A trademark is valid for as long as it is used by the Organization. Service Marks are a form of a Trademark and are used to identify the source of a service.

Trademarks continued…

What Protection Do Trademarks Offer? A Registered Federal Trademark protects against any confusingly similar uses by a third party within the United States. Strong marks are entitled to protection across a large spectrum of goods and services. E.g. McDonalds Hotel would be a trademark infringement of McDonalds marks. Weaker marks are entitled to protection amongst confusingly similar goods and services. E.g. Deer Park Printing Services would not likely be an infringement of Deer Park Water’s Trademark, but Deer Park Refreshing Wine Coolers likely would be an infringement.

Trade Secrets Confidential information that is closely held within a company may be subject to trade secret protection. This is important when an employee with confidential information leaves to join a competitor. In this case, the Courts may enjoin the employee from taking the new job. Trade Secrets are very difficult to establish and win on in Court.

Trade Dress Applies to the visual appearance of a product or packaging. Only protects nonfunctional aspects of the design.

What is a Patent? • a government grant, in exchange for disclosing your invention • examined and issued by the U.S. Patent & Trademark Office • 2-3 (or more) years to obtain • expires 20 years from filing date • provides a right to exclude, not a right to use

Patents Patents are a government granted monopoly on new, nonobvious, and useful inventions. There are two types of patents in the United States- Utility and Design. Utility patents protect the utility and function of something. Design patents protect the look of something.

Patents continued Design patents last for 15 years from date of issuance. Utility patents last for 20 years from date of filing.

Patents continued Patents give you the right to exclude others from making, using, selling, or offering to sell a patented product. Exclude meaning stop someone else from using or selling the patented product. In practice, courts are hesitant to actually exclude companies and instead will look to financial settlements.

Rubber Meeting the Road

Types of Agreements In Business Employment agreement: Non-compete, non-disclosure, IP rights assignment Non-disclosure agreement between parties Joint Venture agreement Licensing agreements Distribution agreements Franchise agreements

What IP Considerations will Sink a Business Infringing on someone else’ patents or other IP Not having ownership of IP Not protecting your own IP Failure to continue innovating Cannibalizing your own product!