1. Start-Up Company IP Overview
November 2, 2017
Chris Regan

2. Why IP?
Typically a small or start-up business cannot successfully enter and remain in a market on a low cost basis, as low cost is usually associated with large capital resources and resulting economies of scale.
A start-up business usually attempts to define a niche or differentiate its products and services from others.
Any competitive edge gained by differentiation is desirably sustained so that the business can provide an adequate financial return and continue to grow.

3. Why IP?
Several key reasons why start-up and small businesses desirably invest money and effort in acquiring intellectual property rights are:
to deter competitors,
learn of competitors' intellectual property rights,
attract funding, and
attract development partners.
Intellectual property rights typically are among the most important assets of a start-up business and serve as collateral for investors.

4. Why IP?
Awareness and respect for the valid intellectual property rights of others may also be significant to a start-up business.
For example, intellectual property litigation, and especially unexpected litigation, can significantly disrupt a small or start-up business.
Resources in a start-up business may be better allocated if the business is aware of the intellectual property rights of others and can plan its development projects accordingly.

5. From the Verge July 27, 2012
Apple has purchased Authentec, a company which provides security hardware and software for PCs and mobile devices. Authentec's current customers include Cisco, Fujitsu, HBO, HP, Lenovo, LG, Motorola, Nokia, Orange, Samsung, Sky, and Texas Instruments. The security firm was trading at $5.07 at market close last night, but Reuters reports that Apple will pay $8 a share, making the total purchase price $356 million. Authentec has an extensive range of patents, with over 200 filed and issued in the US. Its patent portfolio ranges from biometric fingerprint sensor technology to embedded security devices.

6. PTO Cheat Sheet

7. Copyright
Exclusive rights for creator of original work  including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture.
Protection is at the moment of creation in tangible form perceptible directly or with the aid of a machine.
Registration is required to bring a lawsuit, then statutory damages(between $750-$30K per work) and attorneys fees possible.
Term – life of author plus 70 years; work for hire is 95 years from publication or 120 years from creation.
Copyrights are reciprocal with a number of other countries.

8. Trade Secret
Trade secret" means business or technical information, including but not limited to a formula, pattern, program, device, compilation of information, method, technique, or process that:
a.         Derives independent actual or potential commercial value from not being generally known or readily ascertainable through independent development or reverse engineering by persons who can obtain economic value from its disclosure or use; and
b.         Is the subject of efforts that are reasonable under the circumstances to maintain its secrecy.
Actual damages or unjust enrichment
Punitive damages available
Attorneys fees available
Injunction available
Federal law version – Defend Trade Secrets Act (Ex parte seizure, whistleblower immunity)
Term is forever, as long as maintained in secrecy

9. Trademarks
A trademark is generally a 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.
Examination is based on “likelihood of confusion” with other mark(s)
Federal trademark registration on the Principal Register provides a number of significant advantages over common law rights alone, including:
A legal presumption of your ownership of the mark and your exclusive right to use the mark nationwide on or in connection with the goods/services listed in the registration (whereas a state registration only provides rights within the borders of that one state, and common law rights exist only for the specific area where the mark is used);
Public notice of your claim of ownership of the mark;
Listing in the USPTO’s online databases;
The ability to record the U.S. registration with U.S. Customs and Border Protection to prevent importation of infringing foreign goods;
The right to use the federal registration symbol “®”;
The ability to bring an action concerning the mark in federal court; and
The use of the U.S. registration as a basis to obtain registration in foreign countries.

10. Design Patent
“any new, original and ornamental design for an article of manufacture”
“shall be liable to the owner to the extent of his total profit, but not less than $250”
“The term ‘article of manufacture,’ [] encompasses both a product sold to a consumer and a component of that product.” Apple v. Samsung
"[I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other."
Term is 15 years after grant (if filed after May 13, 2015)

11. Example Design Patent

12. Example Design Patent

13. PTO Cheat Sheet

14. Patent Issues for Start-up:
Awareness of Patentable Inventions
Record Keeping and Timing of Disclosures
Ownership, Inventorship and Employee Issues

15. PTO Cheat Sheet

16. IP Minefield It takes a company-wide culture to avoid the traps

17. High Level View of Patent System
Actors: PTO, Congress, Courts, large users…, patent bar
Goal: Encourage innovation, by giving predictable return on investment
What is required of patent system:
Ability to obtain patent (time, cost, scope)
Certainty of ability to enforce (validity, further PTO challenges)
Ability to enforce patent (time, cost, remedies) through litigation
No injunction – efficient infringement; Attorney fees; Enhanced damages
Weak/Strong U.S. patent system competes with other countries

18. PTO Cheat Sheet

19. PTO Cheat Sheet

26. Requirements to obtain a patent:
Invention must be within statutory subject matter: “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof”
Invention must be novel (different than individual prior art reference)
Invention must be nonobvious (even in view of combination of prior art references)
Invention must be described and permit others to practice the invention
Claims must define the scope of the invention with reasonable certainty

27. Parts of a patent: Cover Page Drawings Background Summary
Brief Description of the Drawings
Detailed Description
Claims

28. PTO Cheat Sheet

29. PTO Cheat Sheet

30. Pigs get fat, hogs get slaughtered

31. Patent Examination Model

34. Claim 1 of ‘337 Application

35. Office Action

36. Office Action

37. Interview

38. Response – claim amendments

39. Response - Arguments

40. Notice of Allowance

43. Claim 1 of ‘319 Patent

46. Claim 1 of ‘829 Patent

47. PTO Cheat Sheet

48. Unfavorable Happenings
No longer automatic injunction
Alice decision – more difficult test for patentability of software
Ex parte reexamination
Inter Partes Reexamination
Reduced design patent damages
Efficient infringement strategies, but more flexibility for judge to enhance damages and aware attorney fees

49. End Special thanks to the USPTO’s West Coast Regional Office in Silicon Valley for slides designated PTO Cheat Sheets