Making Money From IdeasAn Overview of Patents, Trademarks, Copyrights, and

Licensing

Other Offices in Hong Kong and Bangkok

Presented by:

Eric A. HanscomManaging Attorney

2141 Palomar Airport Road, Suite 320Carlsbad, CA 92011

Phone: (760) 651 0142Email: info@iciplaw.com

Website: www.iciplaw.com

Warning: Do not discuss your invention in this class!

35 U.S.C. §102: You have 1 year from the time you first “publicly disclose” your invention until you have to file for patent protection.

Patents

• A right to exclude others from manufacturing, selling, or using your invention for a number of years.

Trademarks

• Any name, symbol, figure, letter, word, or mark adopted and used by a manufacturer or merchant in order to designate his or her goods or services and to distinguish them from those manufactured or sold by others.

Copyrights

• The legal right granted to an author, composer, playwright, publisher, or distributor to exclusive publication, production, sale, or distribution of a literary, musical, dramatic, or artistic work.

Trade Secrets

• A formula, process, device, or item of information used by a business that has economic value because it is not generally known or easily discovered by observation or examination and for which reasonable efforts to maintain secrecy have been made.

Protecting Your Ideas With…

Type of Intellectual Property

Protects

Average time until issue or

final rejection?

Expect to pay (attorney

fees + costs)*

Length of protection

Renew-able?

Practical examples in

business

Patent (Utility)

How something works 3 years$7,000 - 50,000

20 years from date of filing application*

NoDevices,

substances, business methods.

Patent (Provisional)

1 year grace period to file a utility patent

application1 year

$3,000 - $6,000

1 year "grace period"

NoDevices,

substances, business methods.

Patent (US Design)

How something looks 1 year $2,00014 years from date of issue

NoUnique shapes of

products

Patent (European

Design)How something looks 5 months

$3,000 - $5,000

Up to 25 years from

date of issueNo

Unique shapes of products

Trademark Name or logo related to business identity

10 months$1,000 - $5,000

Potentially Infinite w/ 10

year extensions

YesCompany names,

brand names, slogans.

Copyright Artistic creations 3 weeks $500 - $1,000Life of author plus 70 years

No

Websites, owner's

manuals, packaging, advertising materials.

* Certain Exceptions Apply

Who is going to pay for this?

Investors

Government Grant

FFF

You

• Venture Capitol• Hedge Funds

• Healthcare• Environment• Antiterrorism

• Friends• Family• Followers

• Never a good choice

Should You Protect Your Idea?

Legal Considerations

Protect your idea from theft

Barriers to protecting your

idea

Practical Considerations

Sell your idea

Finance your idea

Can You Patent Your Idea?

Can A Patent Protect Your Idea?(35

U.S.C §101)

•You must invent or discover something new and useful

•Only the following subject matter can be patented:•Processes•Manufactu

res (products)

•Compositions of matter (substances)

Did Someone Else Beat

You To It?(35

U.S.C. §102)

•Is there a patent, published paper (including published patent applications), or other public disclosure?

•Did it happen before your invention date or more than 1 year before the filing of the application?

•This is true even if you had no knowledge of the other public disclosure

Is Your Invent

ion Truly Uniqu

e?(35

U.S.C. §103)

•No patent if your invention is an “obvious improvement” over someone else’s public disclosure

•Usually the largest hurdle in obtaining a patent

•This is true even if you had no knowledge of the other public disclosure

How do You Know What Disclosures are Out There?

• Should I apply for a utility patent?

• Business decision based upon prior art references found and economic benefit of obtaining (or at least filing for) a patent

Analyze the Results

• Looks for issued patents, published patent applications, and products on the marketplace that are similar to yours

• Everything cannot be found

• Use a Prior Art Searching company that ONLY does prior art searches; Do NOT use invention submission companies who will give you a “package deal” that includes a prior art search and a patent application

Prior Art Search

Parts of a Utility Patent

Abstract

• Summary of 150 words or Less

DrawingsBackground

of the Invention

• A simple introduction to what your invention is. Describes the general field of the invention, and sets up why the prior art fails to solve the problem that your invention fixes.

Detailed Description

• This section describes exactly how the invention works by referring to the drawings. Describes in detail why your invention is not a mere “obvious improvement” over existing patented inventions.

Claims

• This is the section that protects your ideas

• It lays out the individual elements of your idea – basically what you “claim” as your invention.

Title Page

Infringement

A Patent gives

you’re the right to exclude others from

making, using, or selling

the invention.

A patent is good only in the country where you have the

patent.

To infringe a patent, you must infringe one claim of the

patent.

To infringe a claim,

you must infringe every

element of the claim.

4 Take-Away Items you should remember

Infringement

Claim 1: A Laptop

Comprising

A Scanner

A Copier

A Fax

A Printer

Claim 1: A Laptop

ComprisingA Scanner

Claim 2: A Laptop

Comprising A Copier

Claim 3: A Laptop

ComprisingA Fax

Claim 4: A Laptop

ComprisingA Printer

Patent 1: Narrow Claims

Patent 2: Broad Claims

The Competition

Hing Wong: A Hong Kong company importing into the

U.S. a laptop computer with a photocopier and a scanner

built into it.

Francoise’s Computer Center: In the U.S., he builds a laptop computer that contains a fax. He does not sell it in the U.S., but rather exports all of the

laptops to France.

Throckmorton V. Cox, III: 12-year old computer genius living in New York who has customized his laptop to

contain a scanner, fax, printer, and cell phone. He made it

himself, and has never sold it to anyone.

Your Invention

• A Laptop that includes

• A Scanner• A Copier• A Fax• A Printer

Infringement

What about Felipe

Santiago?

He is a Chilean businessman who makes laptops in

China.

These laptops contain a fax,

scanner, printer, and photocopier.

He ships the laptops directly from China to

Germany.

Basics of the Patent Application Process

File Application

Allowance Issue

File Application

Office Action

Response

Allowance Issue

File Application Office Action Response

Final Office Action

Response Allowance Issue

File Application Office Action Response

Final Office Action

Abandon

File Continuation Application

Office Action Response Allowanc

e Issue

File Application

Office Action

Response

Allowance Issue

Trademarks v. Servicemarks

Trademarks (Products)

Servicemarks (Services)

Trademarks (45 Classes)

What can be Trademarked?

Preliminary Consideratio

ns

Is my name unique enough to get a

trademark? (The more fanciful the better. Nike, Xerox, Surf ‘n Sue v. San Diego Legal Services.

Colorful logos, tag lines, slogans are all good.

Should I pay for a trademark search?

Business Name, Logo

Slogan, Logo

Product Name

Color, Sound, Shape

Basics of the Trademark Application Process

File Application

Office Action Response

Allowance Publication

Trademark Issues

First renewal fees are due

between years 5 and 6, and year

9 and 10

Subsequent renewal fess are

due every 10 years

Opposition

Copyrights

• Websites• Brochures and other Advertising

Materials• Packaging• Owner’s Manuals

What should inventors consider

copyrighting?

• Loser usually has to pay some attorney’s fees and court costs

• Statutory Damages of up to $150,000 per infringement for knowing and willful infringement.

Copyright Lawsuits

Foreign Patents and Trademarks

Foreign Patents must be filed: •Directly in the foreign country•Buy yourself time with a Patent Cooperation Treaty (PCT) filing

Foreign Trademarks can be filed:•Directly in the foreign country•En masse through the Madrid Protocol

Key Factors:•Number of People in the Country•Average Income per Person•Geographic and/or Cultural Factors: Will they buy your product?

•Enforcement of Intellectual Property: Will that country enforce your IP?

USA

• 40 – 50% of world’s market for many goods

Other Buyers

• Europe, Japan, Australia, Canada

Manufactur-ing Sites

• China / Hong Kong, Taiwan, South Korea, Vietnam, Thailand

Defensive Patents /

Trademarks• China

Shipping Ports• Hong Kong,

Singapore

Key Countries

The Invention Game

Winners Losers

Thinking Outside the Box

(20% extra credit)

Good Invention (1/3)

Tenacity (1/3)

Good Luck (1/3)

Under Funded

•Poor Planning

•Not enough money spent on

IP

Spend Too Much Money

on IP

Too Scattered / Wait Too

Long

Inventor ParanoiaNever tell your idea to anyone and die happily, but without

having made any money off your idea, because you kept your

secret.

“There are 3 things every successful inventor needs to do:

1) trust some people, 2) take some chances, and 3) spend

some money”

Common Concern: “The Chinese will steal my idea so I won’t use

them for prototypes or production”

Fact: There is a security concern in overseas manufacturing, but I

have seen much more “copying of successful products” than

“stealing of ideas”.

“There are two types of inventors: the paranoid, and the more paranoid”

• Ron Reardon, President, National Association of Patent Practitioners (NAPP), NAPP Conference, 2009.

Scams

Patent Scams• Invention Promotion Companies. • “Package Offer”: Prior Art Search + marketing plan + production

plan + 3 trade show booths + prototype plan for $18,000, with a utility patent application for ONLY $2,000. Too good to be true? Yep.

• You are really paying $20,000 for a utility patent application being done without a decent prior art search.

Trademark Scams• Occur after you get a trademark.• Are mailed to the address on the trademark (so ask if you can

use your attorney’s office as the address).• Ask for money close to normal filing fees.• Read carefully, as after you get a trademark, you owe more

money after year 5, 15, 25, etc.

Making Money:Preliminary Considerations

Find Your Target Audience

• Warning to those who don’t like “selling”: you will have to “sell” your invention to someone

• If no one will buy it, probably won’t make money

Do Research

• Trade Shows• Visit Local Stores

Create a Prototype? Often not necessary• U.S.• Asia

Making / Selling it Yourself:

• Find a Factory, avoid front door and back door.

• Transportation to Dock• Shipping• Warehouse in Long Beach• Customs• Distribution• Sales• Charge-backs• Advertising• Allowances • Defective Policies• Accounting• Unforeseen Circumstances

Making Money From Your IP

License

• License is a “rental” of your IP

• “You have the rights to make and sell products covered by this patent in California for one year. I get $25,000 up front, and you pay me 3% of gross sales per year.

• Considerations:• Exclusive or Non-

exclusive• Territory• Royalties• Accounting Period• Audit Rights• Ending, Renewal, and

Termination of the License

Assignment (Selling Your IP)

• Assignment is a sale• “You give me $500,000,

I’ll give you the patent.”• Less common than

licensing because the assignee is less likely to pay a decent price with an unproven invention, and once you have “proven” the sales ability of the invention, you probably don’t want to sell it anyway.

Putting it all together

Prior Art Search -> Is it worth filing for a Utility Patent?

Yes -> Get “patent pending” (Utility or Provisional), then try to sell or license.

No -> Will patent laws change? Worth a Hail Mary application to get patent pending status for a few years?

In any case -> Would a Design Patent be useful?

In any case -> Trademarks and Copyrights.

Making Money From IdeasAn Overview of Patents, Trademarks, Copyrights, and

Licensing

Other Offices in Hong Kong and Bangkok

Presented by:

Eric A. HanscomManaging Attorney

One Carlsbad Research Building2382 Faraday Ave., Suite 310-CCarlsbad, CA 92008

Phone: (866) 890 6054 Fax: (760) 494-3014

Email: info@iciplaw.comWebsite: www.iciplaw.com