SBDC IP presentation

SBDC Presentation 10/30/2012

Intellectual Property and Entrepreneurs

Presented by: Bill Adolfsen, Brian McCall, & Lindsey Thompson


Overview

• Patents• Copyright• Trade secrets• Trademarks

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What is a patent?

• A patent grants the patent owner the right to exclude others from:– Making– Using– Selling or offering to sell– Importing

• For 20 years from filing application• Can patent “anything under the sun that

is made by man”3


What is a patent?

• Common misunderstandings: – A patent DOES NOT give you the right to

make or use your product• Right to sue• Patent litigation usually costs $2-25(+)M

– One patent does not necessarily cover an entire product or process

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I can’t use my patented invention?

Example: •Someone else patents writing instruments•You patent an improvement, the felt-tipped penResult:You need their permission tomake your invention Their patent

coverage

Your patent

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Major Change to Patent Law

• Starting March 16, 2013: “First to file”• Old: first inventor entitled to the patent• New: first inventor that gets to the

patent office gets the patent– Still need to file 1 year after disclosure– Disclosure precludes international patents

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Patent Application Process

• Types of patent applications:– Provisional– Non-provisional– Design

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Provisional Patent Applications

• Holds inventor’s place in line• Not published, not examined• Can put “patent pending” on products• Only good for 12 months • $125* fee for small entities

– *USPTO changes fees often

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Non-Provisional Patent Applications

• Not required to file a provisional first• Can “expedite” examination • Initial claims almost always rejected • Usually 2-5 years• $25,000 - $75,000• Small entity fees:

– $533 plus $885 when patent issues– For entire life of patent: $5848

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Small Business Patent Benefits

• VC money• Protects their ideas from accidental or

malicious disclosure• Licensing• Negotiating power

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L & E Clinic Client Services

• Freedom to operate (FTO) analysis– Do any patents cover what inventor wants

to do?– 20-40 hours– Typically $5,000 – $200,000

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• Patentability analysis– Looks at everything– Novelty and obviousness opinion– 5-20 hours– $5,000 - $50,000– Not a legal requirement

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• Patent “prosecution”– Writing the application (40-60 hours)– Office Actions (5-20 hours each)– $25,000 - $75,000 total

• Law and Entrepreneurship clinic:– 40 hours is 1-3 months – Not best option if under time pressure

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Copyright Basics for Small Businesses

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Copyright Requirements

• Original work of authorship fixed in a tangible medium of expression

• Three requirements:1) Original = author must use at least some minimum degree

of creativity2) Work of authorship = include literary works, musical

works, graphical works etc.3) Fixed = work must be fixed in something sufficiently

permanent (i.e. paper, canvas, hard drive, etc.)

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Examples of Copyrightable Works

Copyright No Copyright

• Books

• Photographs

• Advertisements

• Movies

• Software

• Content of websites

• Music

• Facts

• Ideas

• “Methods of Operation” (consider patents)

• Short phrases (consider trademark)

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Protecting Copyrighted Works

• Copyright exists from the moment the work is “fixed.”

• Additional potential benefits of registering copyright with the U.S. Copyright Office– Must register before enforcing the copyright– Statutory damages may be available if you

register the work on a timely basis

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Copyright Duration

• Generally, copyright lasts for the life of the author + 70 years

• For a “work made for hire”, copyright lasts for 95 years from publication or 120 years from creation whichever is earlier

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Copyright Ownership

• In general, the author(s) of the work own the copyright

• “Work made for hire” exceptions– Employers own the copyrights created by an

employee acting within the scope of their employment

– A company owns the copyright in a work created by an independent contractor IF THERE IS A WRITTEN AGREEMENT STATING THEY DO

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Common Copyright Mistakes• Failing to have proper “work made for hire”

provisions in contracts with independent contractors.– For example – the company’s website or

software created for the company– L & E clinic can review company’s third-party

contracts to ensure they are retaining the appropriate IP rights

• Failing to observe the copyrights of others– L & E clinic can advise clients on whether the

works of others are likely to be copyrighted

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Trade Secret Basics for Small Businesses

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What is a Trade Secret?

• A trade secret is any formula, process, or other information

• That is an economically valuable secret (not generally known & not readily ascertainable) AND

• Is the subject of efforts to maintain its secrecy

• Examples - Recipes for Coca-Cola, Big Mac Special Sauce, WD-40, Google search algorithm

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Protecting Trade Secrets

• No registration required – Company just needs an economically valuable secret and must take proper steps to ensure its secrecy– 1) Workplace policies to ensure the secret is only

accessible to employees that “need to know”– 2) Appropriate contracts with employees and

potential business partners (i.e. CDA, NDA, non-compete agreements)

• Trade Secret is perpetual (as long as it meets the requirements of a trade secret)

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Trade Secret Rights

• Right to sue others for improperly appropriating the trade secret

• No right to prevent reverse engineering

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Common Trade Secret Mistakes

• Failing to use nondisclosure agreements with employees and potential business partners– L & E clinic can draft and review

nondisclosure agreements

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Trademarks

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Trademark Basics for Small Businesses


Trademarks

• word(s)• name• symbol (logo)• design• sounds

• fragrance• color• device• or any combination

thereof used in commerce to indicate the source of thegoods. Meant to identify and distinguish the goods ofone manufacturer or seller from those of another.

15 U.S.C. § 1127.

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Trademarks

Trademarks:• IKEA (furniture)

Service marks:• FedEx (delivery services)

IP protection can also apply to Trade dress • TGI Friday’s or • the way Tiffany’s packages their jewelry

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Trademarks

• Requirements for TM:–Use in Interstate Commerce

• (or intent to use it in interstate commerce)

–Distinctiveness

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Trademarks

• Why should a mark be distinctive?– Prevents Consumer Confusion

Generic Descriptive Suggestive Arbitrary Fanciful

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Trademarks

Descriptive• only protectable as trademark if it has

acquired a secondary meaning in the minds of the consumers.

Generic • never eligible for trademark protection• A mark may be generic from the start and

refused registration, or it may become generic over time through use – This is why Band-Aid uses “Band-Aid brand”

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Trademarks Descriptive marks go on Supplemental Register:

– May use the ® symbol;– Protected against a confusingly similar mark; and– May bring suit for infringement in federal court.

After 5 years of exclusive use gains presumption of secondary meaning.

– may require showing other evidence (market research, affidavits, marketing expenditures, etc)

Then, new application may be filed for Principal Register.

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Trademarks

Registration is not necessarily required for protection

Unregistered marks:• Can protect under unfair competition law• Some States also provide for State registration

of Trademarks, others do not.

–WI has state registration of TMs

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Trademarks

Federal Registration:– Nationwide constructive notice of ownership & use– Protection against foreign imports using the mark– Mark may achieve incontestable status after 5

years of continuous use

• Eliminates some defenses to infringement.• Petition for cancellation of registration must be

filed within 5 years after a trademark has been registered with the USPTO

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TM application procedure:1. Prepare application

showing existing use in commerce (can do on USPTO website)

2. The USPTO reviews: approves the application or Office Action outlining their decision on the trademark.

~ 6 months.

3. Respond to any Office Action from USPTOYou may take up to 6 months.

4. If Principal Register unsuccessful, application may be amended to be on Supplemental Register instead.

Trademarks

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Things to Remember:

• Search both the state and federal trademark databases

• Mark must be used in interstate commerce– Between states and not wholly within one state.

• You will still be solely responsible for taking legal action to protect your brand. – Potential reimbursement for successful legal case.

Trademarks

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Many companies choose to register their company name, logos(s), slogan(s), and even color schemes. Ultimately, it comes down to a business decision:

– What is it worth to protect something with TM?• Filing fees- $275 per mark • $100 if you need to file a statement of use

(only if registered as intent-to-use)

Trademarks

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Trademarks

Registeringword /name Vs. symbol /logo

BUBBIES

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Trademarks


BUBBIES

DUBBIESBUDDIES

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Trademarks


BUBBIES

DUBBIESBUDDIES

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Trademarks


BUBBIES

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Trademarks


BUBBIES

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Trademarks


BUBBIES

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Trademarks


BUBBIES

ProbablyInfringing44


Trademarks


BUBBIES

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Trademarks


BUBBIES

NOTInfringing

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