1. IP Strategies for Start-Up Companies Scott Hervey Weintraub Genshlea Chediak Law Corporation 400 Capitol Mall, 11 th Floor Sacramento, CA 95814 www.weintraub.comshervey@weintraub.com (916) 558-6065 (direct dial) © Weintraub Genshlea Chediak 2007

2. What is Intellectual Property? The intangible assets of a company The intangible assets of a company –May comprise the majority of the value of a start-up company –The competitive advantage of the company –The reputation/goodwill of the company

3. Types of Intellectual Property Patents Patents –Inventions –Designs Trademarks Trademarks –Brands –Trade names –Trade dress Copyrights Copyrights –Photographs –Software –Web pages –Databases Trade Secrets Trade Secrets –Secret Inventions –Methods –Customer Lists –Tools

4. Patents

5. What are Patents? Invention protection Invention protection –Complete and operative idea A governmental grant of rights to exclude others for period of years A governmental grant of rights to exclude others for period of years Public disclosure of idea Public disclosure of idea Public policy to stimulate invention Public policy to stimulate invention –Legal monopoly –Education of marketplace

6. What are Patents? U.S. grants 20 year rights to exclude others U.S. grants 20 year rights to exclude others –14 years for design patents –From filing date –To exclude others from being able to make, use, sell, offer to sell and import to the U.S.

7. Types of Patents Utility (most common) Utility (most common) –New, original, functional, invention Design Design –New, original, ornamental designs for articles of manufacture –Protects appearance not functionality Plant Plant –Distinct new varieties

8. Requirements for Utility Patents Invention must: Invention must: –Be useful –Novel and non-obvious Does not include inventions that: Does not include inventions that: –Existed prior to date when inventor conceived the invention, if was diligent in reducing to practice –Were disclosed one year before the date of filing

9. Requirements for Utility Patents –Fall within one of five statutory subject matters Process Process Machine Machine Article of manufacture Article of manufacture Composition of matter Composition of matter Improvement of invention Improvement of invention All patents are not equal All patents are not equal –Consider claims

10. Patent Process Filing Filing –Patent attorney/Patent agent –Each inventor owns equal and undivided interest –All inventors must sign oath or declaration –Ownership rights may be assigned or licensed Provisional Filings Provisional Filings –Establish early filing date –12 months to convert to regular filing

11. Trademarks ®

12. What is a Trademark? Word, saying, logo, brand, sign, mark - even sound, color, or smell Word, saying, logo, brand, sign, mark - even sound, color, or smell Triggers association in the market with owner/source Triggers association in the market with owner/source

13. What is a Trademark? Means of protecting goodwill Means of protecting goodwill The exclusive right to use a brand (mark) for products or services The exclusive right to use a brand (mark) for products or services

14. Types of Marks Common Law Marks Common Law Marks –Arises from actual use –Protection in areas of use in commerce Registered Marks Registered Marks –Federal registration (presumed ownership throughout the nation) –State filing also available

15. Types of Marks Trademarks Trademarks Service Marks Service Marks Certification Marks Certification Marks Collective Marks Collective Marks Trade Dress Trade Dress Foreign filings Foreign filings

16. Strength of Trademark Strength of trademark depends on the nature of the mark: Strength of trademark depends on the nature of the mark: –Fanciful/coined (Kodak) –Arbitrary (Yahoo, Apple) –Suggestive (Roach Motel) Indicates nature quality or characteristic Indicates nature quality or characteristic –Descriptive (Tahoe Plumbing, Park N Fly) Directly related to meaning Directly related to meaning –Generic (Escalator) Common name Common name

17. Strength of Trademark Descriptive marks are generally not registrable unless develop secondary meaning (acquired distinctiveness) Descriptive marks are generally not registrable unless develop secondary meaning (acquired distinctiveness) Generic marks are not registrable Generic marks are not registrable Marks can become generic through usage (Aspirin, Jet Way) Marks can become generic through usage (Aspirin, Jet Way) Certain marks are denied protection (immoral, disparaging, State, etc.) Certain marks are denied protection (immoral, disparaging, State, etc.)

18. Protecting Trademarks Federal Registration Federal Registration –Constructive notice nationwide of the claim to ownership –Evidence of ownership and priority of use –Allows registration with US customs to prevent importation –Domain name disputes Application Application –Use or intent to use –Based on foreign application/registration

19. Protecting Trademarks Requirements for registration Requirements for registration –Must distinguish goods/services from others –Must not be merely descriptive –Must not conflict with other registered mark/cause confusion –Examiner will review

20. Protecting Trademarks TM and ® TM and ® Protecting against infringement/confusion Protecting against infringement/confusion –Strength of mark –Proximity of goods/services –Similarity of marks –Evidence of actual confusion –Marketing channels –Type of goods and purchaser care –Intent –Likelihood of expansion Famous marks Famous marks –Protection from dilution of distinctive quality of mark –Need not show presence of competition, likelihood of confusion, mistake or deception

21. Internet and Domain Names Internet use governed by same rules Internet use governed by same rules –Similarity of marks –Relatedness of goods –Simultaneous use of web as marketing tool Domain name registration does not establish trademark rights Domain name registration does not establish trademark rights –Must be commercial use –Not a mark registration

22. Internet and Domain Names Cyber-squatting and typo-squatting Cyber-squatting and typo-squatting –ACPA –ICANN

23. Copyrights

24. What is a copyright? Original work of authorship fixed in a tangible medium Original work of authorship fixed in a tangible medium –Articles, programs, web pages, multi-media No protection of functional aspects No protection of functional aspects Exclusive right to reproduce, derivative works, copy, perform, display, transmit Exclusive right to reproduce, derivative works, copy, perform, display, transmit –Exceptions such as fair use for criticism, comment, teaching, reporting

25. What is a copyright? Generally lasts for life of author plus 70 years Generally lasts for life of author plus 70 years Joint works are owned by both authors equally Joint works are owned by both authors equally Copyright notice Copyright notice –©, name, and year –Circled p for sound recordings Can register at later time Can register at later time Registration allows attorneys fee recovery, statutory damages, etc. Registration allows attorneys fee recovery, statutory damages, etc.

26. Copyrights and Employees/Agents Generally, author has ownership. Under Work for Hire doctrine: Generally, author has ownership. Under Work for Hire doctrine: –A copyrighted work prepared by an employee within the scope of employment is owned by the employer –Certain types of work commissioned from an independent contractor with a written agreement may be designated as work for hire owned by commissioning party –Other types of work may be assigned Need written assignment documentation with all employees/agents Need written assignment documentation with all employees/agents

27. Work for Hire Effect of relying on oral agreement or not using such language… Effect of relying on oral agreement or not using such language… –The contracting party owns nothing more than a copy of the work –Does NOT own the Copyright in the work.

28. Fair Use Fair use of a copyrighted work includes using the material for: Fair use of a copyrighted work includes using the material for: – criticism – comment – news reporting – teaching – scholarship – research

29. Fair Use Under 17 U.S.C. § 107, whether an act of use or copying of a work constitutes fair use is determined by the following four factors: Under 17 U.S.C. § 107, whether an act of use or copying of a work constitutes fair use is determined by the following four factors: –The nature of the use (commercial or nonprofit); –The nature of the work; –The amount and substantiality of the portions taken from the copyrighted work; –The effect on the potential market for the copyrighted work, as well as other actors under the rule of reason analysis. Parody may also be claimed as fair use, even if the parody is commercial Parody may also be claimed as fair use, even if the parody is commercial

30. Trade Secrets Trade Secrets

31. What is a Trade Secret? Various types of information (formula, pattern, compilation, program, device, method, techniques, process) Various types of information (formula, pattern, compilation, program, device, method, techniques, process) –derives independent economic value from not being generally known or readily ascertainable by proper means by persons who can derive economic value –reasonable efforts to maintain its secrecy A protected idea that provides a competitive advantage in a market A protected idea that provides a competitive advantage in a market More than one person may hold a trade secret More than one person may hold a trade secret

32. What is a Trade Secret? No prohibition on reverse engineering (if lawfully obtain product) No prohibition on reverse engineering (if lawfully obtain product) No prohibition on use or disclosure if gain access by proper means (invention, published literature, website) No prohibition on use or disclosure if gain access by proper means (invention, published literature, website) Can be alternative to patent protection Can be alternative to patent protection –Patent can be rejected or invalidated –Patent protection may not be available –May not want to disclose an idea and educate the competition –No time limit to protection –Funding availability may preclude patent protection

33. Trade Secret Misappropriation Acquisition by improper means (known or reason to know) or under circumstances with duty to maintain secrecy/limit use (may include acquired by accident or mistake) Acquisition by improper means (known or reason to know) or under circumstances with duty to maintain secrecy/limit use (may include acquired by accident or mistake) Disclosure or use without actual or implied consent Disclosure or use without actual or implied consent

34. Trade Secret Misappropriation Must use reasonable efforts under circumstances to protect Must use reasonable efforts under circumstances to protect –Non-disclosure agreements –Employee training –Disclose on a need to know basis –Limit access and availability –Other internal controls Policy of marking problematic if not followed Policy of marking problematic if not followed

35. Departing Employees Very significant area of trade secret disputes. Actions for injunction or special damages if show willful and malicious. Very significant area of trade secret disputes. Actions for injunction or special damages if show willful and malicious. –Customer lists Employer ownership of trade secrets Employer ownership of trade secrets –If relates to business of employer (for inventor) or developed on company time (other employees)

36. Departing Employees Public policies allowing competition Public policies allowing competition –California prohibition of employee covenants not to compete under B&P Code 16600 –Other states have varying levels of prohibitions

37. Features Trade Secret Patent (Utility) CopyrightTrademark Protected Interest Business Info. Functional Inventions Expression Embodied in Fixed Medium Consumer Recognition & Related Goodwill Requirements for Protection Not Known; Valuable; Maintained as Secret New, Useful, Non- obvious, Proper Subject Matter Originality Use in Commerce Disclosure Required NoYesYesYes Term of Protection Potentially Indefinite if Information Remains Secret 20 Years Form Application Date Generally Authors Life Plus 70 Years Potentially Indefinite if Mark is Used Properly Conduct Prohibited by Protection Misappropriation Making, Using, Selling, Offering to Sell, or Importing Invention Copying or Substantially Similar Works Creating a Likelihood of Confusion Independent Development Not Prohibited Prohibited May be Prohibited Prohibited Reverse Engineering Not Prohibited ProhibitedInapplicableInapplicable

38. Thank You Questions?