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Legal Issues Facing Start-Ups
Chapter 8 Section 1
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Protecting Ideas: Intellectual Property Law
Intellectual Property Law – group of laws that regulates the ownership and use of creative works. Patents – document that grants an inventor the right to exclude others from making, using, or selling an invention during the term of the patent Non-provisional patent is good for 20 years Provisional patent is good for 1 year Public Domain – allows people to use any aspect of an invention in their own invention free of charge Qualifications Must not contain prior art Must fit into one of five categories(machine, a process, articles of manufacture, composition, or new use from one of the other four categories) Must be unobvious: new and unexpected Must have utility: must be useful
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Protecting Ideas: Intellectual Property Law
Patents(Cont.) Patent Application: file a disclosure document with USPTO, describing your invention in detail Patent Pending: status of invention between the time the applications was filed and when it is issued or rejected. Patent Infringement: occurs when someone makes and sells a product that contains all elements of a patent claim. Trademark – a word, symbol, design, or color that a business uses to identify itself with something it sells. Followed by the symbol ™ before it is registered and ® after it is registered Service Mark: a word, symbol, design, or color that describes a service business. Can’t be registered until it is actually in use Can be held indefinitely unless it becomes common usage in the English language
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Protecting Ideas: Intellectual Property Law
Copyrights: legal device that protects original works of authors Exist for the life of the author plus 70 years Protects only the form in which the idea is presented, not the idea itself Law recommends 1st place a notice of copyright in a prominent location Should include symbol, first year of publication, and name of copyright holder 2nd register the work with the Copyright Office Uses the symbol © Trade Secrets: may consist of a formula, device, idea, process, pattern, or compilation of information that is not general knowledge to or accessible by other people Covered under the uniform Trade Secrets Act (UTSA) Includes anything not covered under patents, trademarks, or copyrights
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Laws that Affect Start-Ups
Permits & Licenses Permit: a legal document giving official permission to run a business License: a certification that shows you have the necessary education and training to do a job Contracts: binding legal agreement between two or more persons or parties. Oral contract: not in writing, exist for no more than 1 year Void contract: never existed, parties did not have the capacity to enter into the contract Valid contract: meets several important criteria
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Laws that Affect Start-Ups
Elements of a Contract Agreement: occurs when one party to a contract makes an offer or promises to do or refrain from doing something, and the other party accepts. Consideration: what is exchanged for the promise Capacity: the legal ability to enter into a binding agreement Those who CAN NOT enter Minors, intoxicated persons, those legally insane Legality: for a contract to be valid, it must be legal
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Laws that Affect Start-Ups
Location Zoning Laws Cities typically designate particular areas, or zones, for certain uses Specified as residential, commercial, industrial, or public Include environmental issues Building Codes: set standards for construction or modification of buildings Include strength of concrete, amount of insulation, and other structural requirements Lease: contract to use a facility or equipment for a specified period of time Lessee – the person who is leasing the building or equipment Lessor – the person who owns the building or equipment
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