1. Legal Issues Facing Start-Ups
Chapter 8
Section 1

2. 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

3. 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

4. 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

5. 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

6. 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

7. 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