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A Lot at Stake

Assets – Google TM - $32B

Lawsuits - Medtronic Licensing - $1.35B

Business - Formula for Coke = priceless

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Why Worry About IP?

IP is the most valuable asset of many of the world’s largest companies

Google

Coke

Microsoft

Trademark alone can be >80% of company’s value

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Law

$ Bad Guy

Who is on the other side?

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Can They Go the Distance?

$50K?

$1M?

Will they?

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Size

Matters

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But it’s only $500 RIAA

Patent Holder

You are an easy win

Cut their nose off to spite their face

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Why?

Stifle competition – Fonzie factor

Size differential – 800lb gorilla

Revenue stream – Patent Troll

Company exists on single patent

A whole lot of other factors

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Lowsides and Highsides

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Lowsides

bretttrout.com Photo by Gordon Fraser

Highsides

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Intellectual Property

1. What is Intellectual Property?

2. IP Infringement Lawsuits

3. Building a portfolio

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1. What is

Intellectual Property?

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Products

of the Mind

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Invention - Patents

Brands – Trademark

Authorship - Copyright

Secrets – Trade Secrets

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Patent

New

Useful

Not Obvious

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Not Patentable

Ideas

Obvious combos

Illegal items

Immoral items

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“Internet” Patents

State Street Bank – 1998

Allowed patenting a business method

In re Bilski – 2010

Some business methods are not patentable

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Business Method Applications

Amazon.Com -One-Click

AskJeeves.com - Plain English search

Lycos – Search engine technology

Cybergold – Paying to read ads

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Difficult to Get

Hard to get a business

method patent issued today

Will likely be even harder in the future

Requires changing and specialized drafting

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Mark used to identify source

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Types of Trademarks

Fanciful – Qwing

Arbitrary – Royal

Suggestive – NoDoze

Descriptive – red

Generic - apple

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Types of Trademarks

Color – pink for fiberglass

Sound – NBC chimes

Scent – floral scent for yarn

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Correct Usage

® only for federally registered

trademarks

TM or SM for any mark

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Incorrect Usage Loss of trademark

thermos

escalator

cellophane

yo-yo

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Types of TM Protection

Common law

State

Federal

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Original works of

authorship

Fixed in a tangible

medium

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Copyright ©

Copyright Protects

Books

Music

Plays

Films

Dances

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Exclusive Rights

Reproduce

Make derivatives

Distribute

Perform

Display

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How Long Does © Last?

70 years after author's death

95 years from publication

120 years from creation

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Copyright Does Not Protect

Federal

publications

Public Domain

Material

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Fair Use

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Fair Use

Your Purpose

Impact

Their Purpose

Amount

Fair Use

Usually ok Parody

Critical commentary

Usually not Commercial

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Fair Use

Very rarely applicable

Do Not rely on fair use protection

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Trade Secret

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Is It a Trade Secret?

Valuable

Secret

Difficult to ascertain

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Trade Secrets

Formula for Coca-Cola

Customer Lists

Vendor Information

Source Code

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2. IP Infringement Lawsuits

Expensive

Time consuming

Tarnish reputation

Unlikely to recoup costs

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Patent Infringement

Injunction

Lost Profits

Reasonable Royalty

Treble damages

Attorney fees

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Patent Do’s

Know your industry

Watch out for patent “trolls”

Obtain Field of Use opinion

Look for 7-digit patent numbers

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Patent Don’ts

Ignore cease and desist letters

Disclose before patent analysis

Assume patent means no infringement

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Trademark Infringement

Injunction

Damages and Infringer’s profits

Treble damages

Attorney fees

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Trademark Do’s

Choose unique trademarks

Grab domain name first

Use trademarks as adjectives

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Trademark Don’ts

Allow unauthorized use of trademarks

Use 3rd party trademarks

Use similar trademarks

Use trademarks as nouns

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Copyright Infringement

Damages + Infringer’s profit

Injunction

Statutory Damages

Attorney Fees

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Copyright Infringement

Statutory damages

$750-$30,000 per work

$150K if willful and malicious

Criminal

$500,000

5 years

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Copyright Do’s

Get an Assignment

From “author”

Payment not enough

Up front

Register valuable copyrights

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Copyright Don’ts

Do not assume “fair use”

Do not assume “public domain”

Do not use without permission

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Trade Secret Remedies

Injunction

Compensation

Punitive damages

Attorney fees

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Trade Secret Do’s

Have employees sign NDA

Incorporate into employee handbook

Devise security protocols

Incorporate NDA into contracts

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Trade Secret Don’ts

Disclose Trade Secrets (even once)

Post sensitive information online

Hire without checking NDA restrictions

Terminate without NDA confirmation

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3. Building a Portfolio

Adds value to company

Suitors may be able to leverage

Use as bargaining chip

Generate licensing income

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Value

Primary asset – All IT companies

Delays competitors

Provides potential revenue stream

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Value Marketing advantage

Increases the value of the company

Great bargaining chip in litigation

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Patent Cons

Expensive $5K-$20K

Slow 18-48+ months

No infringement protection

Expires 20 years

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Patents Pros

Difficult to design around

3x damages + attorney fees

Hinders reverse engineering

in terrorem effect

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Trademark Cons

Goods/services specific

Must show actual use

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Trademark Cons

Requires continuous renewal

No generic or descriptive marks

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Trademark Pros

Potentially infinite duration

Use = common law rights

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Trademark Pros

Federal registration provides

Treble Damages

Attorney Fees

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Copyright Cons

Registration required to bring suit

Does not protect functionality

Vesting of original ownership often

confusing

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Copyright Pros

Registration not required

Inexpensive

Protection automatically attaches

Attorney Fees

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Trade Secrets Cons

Could be gone tomorrow

Not if you can reverse engineer

Must try to prevent disclosure

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Trade Secret Pros

No need to disclose

Potentially infinite duration

Inexpensive

Covers Ideas

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Know the Issues

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