Workbar Presentation - June 12, 2015 - Copy

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Workbar BostonJune 12, 2015

IntellectualProperty For Startups

Todd Basile – Patent & Trademark [email protected]

IP Strategies for Attracting Investment & Avoiding Common IP Pitfalls

Greenberg Traurig, LLP | gtlaw.com

Topics for Today’s WorkshopWorkbar Boston

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> Key Takeaways

> IP Basics (quick overview)

> Reasons Startups Should Make IP a Priority

> Strategies for Spending Your IP Dollars

> Top IP Mistakes Startups Make


Key Takeaways If you take anything away from today, it should be this…

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> Early‐stage companies should think of IP as an asset as much as a protection

> Quality of portfolio is key to its value

> Take advantage of creative approaches to maximize value and minimize cost

> “Protect first, talk later”

> Address ownership issues early and often


Intellectual Property Basics

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Trademarks: Branding (e.g., words, logos, slogans)

Utility Patents: Functionality (e.g., chips, firmware, architecture)

Design Patents: Look and feel (e.g., shape, icon placement)

Copyright: Works of authorship (e.g., videos, music, code)

Trade Secrets: Proprietary info(e.g., business relationships, search algorithms)


Reasons Startups Should Make IP a Priority

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> Statistically greater likelihood of startup “success”

Success premium over no patents


Reasons Startups Should Make IP a PriorityCritical Short‐Term Value for Startups

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> Attract investor funding

– Investors love assets and barriers to entry

– Can also lead to higher valuation

> Marketing

– “Patent Pending” and “Patented” offer legitimacy

> Building your brand

– Focus brand development

– Avoid false starts, conflicts, wasted money on unusable marks


Reasons Startups Should Make IP a PriorityLong‐term Value

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> Protect your investment

– Time, money, energy

– Deter others from entering your space

– Prevent others from undercutting cost

> Make money

– License or sell your IP (or even your company)

– Negotiate partnerships, supplier/distributor agreements

– Cross‐licenses


Strategies for Spending Your IP DollarsMaximizing Value and Avoiding Waste

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> Top 3 questions

– How much?

– What to focus on?

– When?

> IP can be expensive

U.S.

Foreign*

* Assumes U.S. application already prepared


Strategies for Spending Your IP DollarsPatents

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> Patentability searches

> Provisional patent applications

> Aggressive prosecution

– A bird in the hand (i.e., issued patent) is better than two in the bush (i.e., pending application)

– Accelerated examination; First action interviews


Strategies for Spending Your IP DollarsPatentability Search

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> Scope of search:

– U.S. & foreign patent databases for similar patents / apps

– Technical publications and articles

> Cost savings:

– (Short‐term) Don’t waste $10k+ on application prep

– (Long‐term) Reduced prosecution costs

– (Long‐term) Higher likelihood of patentability and strength


Strategies for Spending Your IP DollarsProvisional Patent Application

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> Cheaper and quicker to file than utility application

– No formal requirements

– Still need adequate disclosure of invention

> Must convert into non‐provisional (i.e., regular) patent application within one year (or else abandon)

> Can roll multiple, related provisionals into one conversion

> Allows you to advertise as “patent pending”

> Often not an additive cost


Strategies for Spending Your IP DollarsTrademarks

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> Use ™ symbol until you’re ready to apply for federal protection

> Focus on your timeline– Trademarks are use‐based

– Weight benefits of early filing versus waiting

> Trademark Search– (short‐term) Avoid scrapping initial marketing and labeling

– (short/long‐term) Avoid opportunity cost of rebranding

– (long‐term) Negotiate co‐existence agreement or purchase of mark before opposer can hold mark hostage


Navigating IP Ownership IssuesWho really owns “your” IP?

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> Situations that could raise questions as to who owns IP– IP developed before company formation

– Employee leaves

– Investor and customer pitches

– Use of vendors

> “An ounce of prevention is worth a pound of cure”– Ownership issues are far easier to address beforehand

– Avoid most issues by setting policies and sticking to them

– Forms are your friend

– Joint development

– Customer feedback

– Use of OSS


Navigating IP Ownership IssuesWho really owns “your” IP? (cont’d)

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> Employment Agreement

– Common for employees to conceive of protectable IP

– Have all employees sign an employment agreement

> Non‐Disclosure Agreement (NDA)

– Prevents (in theory) others from stealing /sharing confidential info

– Ask investors, vendors/suppliers, customers to sign before sharing

– “Protect first, talk later” – best to file patent app before disclosure

More of a deterrent than an NDA

Obviates questions concerning public disclosure



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> Work‐For‐Hire Contract

– Use with 3rd party service providers like software development and prototyping companies

– Ensures that your company owns IP developed by the contractor when performing the commissioned services

> Universities

– Common for startups to be built from university research

– Likely need license from university, even if it was your research while in school

– Tech transfer offices eager to license tech to make money



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> Customer Feedback

– Ownership vests in the inventor

– Have agreement in place before customer input and submissions

> Shop Rights

– Others may have claim to IP if you use their facilities/know‐how

> Open‐Source Software

– Valuable tool when developing software

– Beware: OSS license may affect ownership of derivative works

– Comes up in investor due diligence and in M&A deals all the time


Key Takeaways Circling back…

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> Early‐stage companies should think of IP as an asset as much as a protection

> Quality of portfolio is key to its value

> Take advantage of creative approaches to maximize value and minimize cost

> “Protect first, talk later”

> Address ownership issues early and often


Questions?

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Workbar Presentation - June 12, 2015 - Copy

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