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Published byCecilia Price Modified over 9 years ago
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Technology-Business-Legal Some Critical Intersections Getting Started Legally IP Protection Licensing Mark J. Sever, Jr., Esquire Deborah A. Hays, Esquire Archer & Greiner, P.C.
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Getting Started Great idea, technology, products, marketing, and management team are key ingredients for success. Establishing your venture as a distinct legal entity is also important.
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3 Major Types of For-Profit Organizations S Corporation Limited Liability Company (LLC) C Corporation The C-Corp structure is the usual choice for those that aspire to be large, high-growth businesses (e.g. more than 100 shareholders) or to attract VC funding.
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Obtain All Necessary Licenses, Permits and Approvals Entity formation Tax (employer ID no., sales and use tax, S-status, etc.) Qualification to do business in appropriate jurisdictions Environmental
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Properly Document All Key Relationships Equity owners Start-up funding –Gift ? –Loan ? –Equity ? Employees Vendors Customers No. 1 mistake made by all new business owners
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Intellectual Property (Creations of the Mind) Inventions Literary and artistic works Company and product names Product designs Commercially valuable, secret business information
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Types of Intellectual Property Patents Trade secrets Copyrights Trademarks
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What is a Patent? In the U.S., a registration granted to the owner of an invention that meets the following requirements: Useful Novelty / New Non-obvious A U.S. patent grants the inventor the right to exclude others from making, using, offering for sale or selling the invention in the U.S. or importing the invention to the U.S. Examples of patentable subject matter: Machines/devices Business methods
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Common Patent Mistake Patents must be applied for in the United States within one year of publication (i.e., public disclosure) Patents must be applied for in most other countries prior to publication Solution: Provisional patent applications Inexpensive Preserve rights for up to one year, after which must be converted
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What is a Trade Secret? Any formula, pattern, physical device, idea, process or compilation of information that both: Provides a competitive advantage in the market place Is treated by the owner in a way that can reasonably be expected to prevent the public or competitors from learning about it Examples of information protectable as trade secrets: Engineering technology Customer lists Novel laboratory processes
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Common Trade Secret Mistake Failure to take precautions to ensure secrecy Solutions: Confidentiality agreements –Business partners –Employees/consultants Physical measures to ensure secrecy –Computer system security –Segregation of secret information –Limited disclosure of secret information
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What is a Copyright? Protects certain works that meet the following requirements: Original Sufficiently creative “Fixed in a tangible medium of expression” Grants “author” of the work the exclusive right to: –Make copies –Make changes to –Distribute –Publicly perform (e.g., choreographic works) –Publicly display (e.g., sculptural works) Examples of copyrightable works include: Literary works, musical works, sound recordings, motion pictures, sculptures, paintings
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Common Copyright Mistake “Work for Hire” Doctrine - Absent agreement to the contrary: Copyright in work created by an employee within scope of employment is owned by employer Copyright in work created by a third party is owned by the third party Solution: Written agreements confirming copyright ownership Website developers Marketing/PR Agency Software/technology developers
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What is a Trademark? An indicator of the source of goods (trademarks) or services (service mark) “Any word, name, symbol, or device, or any combination that is used to identify and distinguish the goods of one seller from goods manufactured or sold by others, and to indicate the source of the goods.” Examples of trademarks: Archer & Greiner Coca-Cola ExxonMobil
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Common Trademark Mistakes Registration of a corporate name or domain name does not mean the name does not infringe a third party’s trademark rights Existence of third party using same trademark in connection with different goods and services does not necessarily preclude use of trademark Solutions:. Trademark availability search. –Review of registered and unregistered marks Trademark registration. –Helpful but not necessary for protection. (like copyrights).
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Licensing Powerful strategic tool Outward licensing –Source of income –Ability to exploit unfamiliar markets Inward licensing –Source of technology –Ability to expand within your market faster and/or more thoroughly than you could on your own
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Key Terms in License Agreements License Grant (what is being licensed) –Exclusive/non-exclusive –Specific rights/uses –Territory –Duration –Sublicense –Transferable/non-transferable
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Key Terms in License Agreements Payment terms –Initial payment –Royalties/fixed fee –Minimums Confidentiality provision Ownership of developments Representations/warranties/disclaimers –How will the licensed material perform –Non-infringement Liability limitations (remedies in the event of a dispute) Indemnities Termination provisions –For convenience –For breach/failure to meet royalty minimums
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Conclusion Questions? Thank you.
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