intellectual property 102
TRANSCRIPT
INTELLECTUAL PROPERTY 102
Sponsored by SmartUp®
Presented By Yuri L. Eliezer, Esq.
Intellectual Property Attorney
About Me• Georgia Tech Electrical Engineer
• Georgia State Lawyer
• Registered Patent Attorney
• Entrepreneur:• In Practice since 2005
• Co-Founded SmartUp®
• Partner at FOUNDERS LEGAL™ (Bekiares Eliezer LLP)
How This Presentation May Help You
• Know what steps to take to protect your rights when:
• Sharing your IP with others
• Partners in a Company
• Contractors you Hire
• Employees you Hire
• Investors in your Company
How This Presentation May Help You
In the process of starting your company, you will come across many people who contribute to your ideas/models/innovations/creations. It is important to share those rights equitably. The presentation will help you take the proper steps in determine how to approach things fairly and in accordance with the law.
Joint Inventorship / Joint Authorship
• Examples:• Music
• Computer Code
• General “Ideas”
• Technology
• Creative Copy
• NOTE: Not all of these are protectable in the first place!
• “Just because you contributed to my business model, doesn’t mean there are any intellectual property rights to be owned in the first place!”
• IP is not Abstract – you must be able to point to it in the Law!
Joint Inventorship / Joint Authorship
• Each Inventor/Author owns 100% of the rights!• What does that mean?
• Can use without restriction, but must have accounting.
• Prone to disputes!• No real way to divide/determine % of contribution
• Indivisible
• No real way to prevent from using your ‘portion’ of the IP
The Solution
• Solid IP Assignment and Transfer Agreements for Employees/Contractors
• Form an Entity in which all Contributors are owners
• Formal “Cross Licensing” Agreement between Contributors
Step 1. Entity Formation
• Aspects to Consider:• Contributions Coming In
• Holding Company?
• Proper Allocations
• Contributions Moving Forward
• Mandatory Assignment
• Mandatory Disclosure
• Non-Compete
• If you leave, can’t use our IP or Derivatives
• Grant Back Provision
• Dissolution
Step 1. Entity Formation
• LLC/S Corp/Corp/LLP
• Assign and Record your Rights to the Entity
• Pros• 1. Prevents From Piercing the Corporate Veil
• 2. Builds Valuation of Company (Investors want to see the IP owned by the Company that they invest in)
• 3. Public Notice
• Cons• Ownership belong in Company as a whole, in control in accordance to Corporate Governance Docs
• Ownership/Control may get Diluted as more shareholders come on board!
• Lose your rights as an individual
Holding Company Solution
• Pros:• Retain Control of the IP
• Subsidiary has no ownership of IP
• License to Subsidiaries
• Collect Royalties for Usage of IP
• Cons:• Hard to find Partners in Subsidiary
• Hard to find Investors in Subsidiary
Step 2. Operating In Your Entity
• Employment Agreements• Mandatory Non-Disclosure of Confidential Information/Secrets
• Mandatory Disclosure of Innovations/Derivative Works
• Mandatory Assignment (should meet at least one of the following factors)
• Within Scope of Company Business
• Within Scope of Employment
• Using Company Resources
• During Company Time
• Assignment is an Affirmative Action!
Step 2. Operating In Your Entity
• Contractor Agreements• Start with an NDA when you can!
• (not all contractors are willing to sign before making a deal)
• What a good NDA Should Have:
• Don’t Disclose
• Don’t USE
• - I own your contributions
• - I have interest in your derivations
Step 2. Operating In Your Entity
• Contractor Agreements• Contract Must be Clear as to Ownership!
• If the Contract is unclear, assume that the Contractor has retained the rights and is only providing you with a License to those rights.
• This means that the contractor can re-use your material for other clients!
• “Work for Hire” – only covers Copyrights!
• Patent Rights must be affirmatively Transferred after work is completed.
Step 2. Operating In Your Entity
• Contractor Agreements• Contract Must be Clear as to Ownership!
• If the Contract is unclear, assume that the Contractor has retained the rights and is only providing you with a License to those rights.
• This means that the contractor can re-use your material for other clients!
• “Work for Hire” – only covers Copyrights!
• Patent Rights must be affirmatively Transferred after work is completed.
Step 3. Filing for IP Protection
• You’ve accumulated all of this IP, now what do you do?
• Common Misconception: “I’m automatically Protected”• Requires Affirmative Steps, often time-sensitive.
• When do you do it?• Relatively Inexpensive, but not terribly time-sensitive:
• Filing Trademark Applications
• Filing Copyright Applications
• Expensive, and very time-sensitive
• Filing Patent Applications
When to File for Copyright Protection
• Anytime, really.
• Unlike any other IP, protection can be retroactive.
• But the sooner you file, the sooner you’ll be entitled to “statutory damages”!
When to File for Trademark Protection
• When you’ve solidified your Brand Name!• Before filing, you can use the ™ symbol
• Once registered, you can use the ® symbol
• When you’ve done your research, ensuring no one else is using the Brand Name! (Can Hire Attorney to do the Research)
• Actually using the mark in interstate commerce is required to obtain registration.
• If you’re not yet using the mark, you can put the mark on hold with a Section 1(B) Filing.
• Priority to the name is important! • Rebranding is a Pain!
When to File for Patent Protection
• ASAP!!• First to File Standard!
• Preferably before Public Disclosure
• In US, deadline to file is within 12 months of first Public Disclosure
• Note: International Rights are forfeited if public disclosure is made prior to filing.
• If you miss the deadline, your rights now belong to the public!
• Tooo many rules, tooo much technical and legal language convoluted to create a new language… DON’T TRY THIS AT HOME YOU WILL LOSE!
But it’s too Expensive to File for Patent, What Do I do?!
• Micro Entity Status Filings
• 75% reduction in Government Patent Filing Fees as of 2013!!!
• File a Provisional Patent!!
• Puts your patent rights on ‘hold’ (saves your spot in line for a patent) for a period of 1 year.
• Allows you to market your product as “Patent-Pending” during the one year period.
• Use the 1 year period to:
• Raise Money
• Continue Development
• Share your Idea knowing no one can patent it before you do!
• CATCH: Must file full patent application within 1 year or your patent priority is lost!
Enforcing your IP Rights
•Common Misconception: “I don’t need IP because I can’t afford to enforce it.”
•While it may be true that enforcing your rights is expensive, consider that your rights last for 20+ years! You may not be able to afford enforcement today, but if you don’t take the rights steps today, you won’t have anything to enforce when you can finally afford to do so!
Affordable Means to Enforcement
• Cease and Desist Letters• But be careful! Do your homework! You don’t want to involuntarily
drag yourself into litigation that you can’t afford!
• Letters must be very carefully crafted not to threaten any litigation – otherwise: Declatory Judgment!
• Study your Infringer to make sue they don’t have any counter-claims against you!
• Do you violate any of their IP?
• Can they invalidate any of your IP?
Put the Public on Notice
• Sending C&D Letters may not always be prudent, sometimes you just want to send a notice “Hey, you’re using my IP – please stop.. If you continue, I may not do anything now, but when I do…. You’ll regret it”
Licensing
• Rare for Startups.
• Granting a License (limited permission) to use your intellectual property• Can be limited in Scope
• Can be limited in Use
• Can be limited in Territory
• Can be limited in Time
• .. You control how others can use your IP!
• Can be a good revenue stream!
• Software companies do this all the time with subscription models and EULAs!
Who Owns the Rights?
• Scenario One
A first co-founder provides all of the ideas for the invention, and the second co-founder performs the steps in making the ideas into a developed app. Who can claim IP Ownership?
Who Owns the Rights?
• Scenario Two
A first co-founder provides all of the ideas for an artistic work, and the second co-founder creates the actual work. Who can claim IP Ownership?
Who Owns the Rights?
• Scenario Three
Both co-founders conceived of the ideas for the invention but hired employees/contractors to develop the idea… Who can claim IP Ownership?
Who Owns the Rights?
• Scenario Four
A contractor/employee provides an idea for a additional feature for a product, but his employer has developed the original product. The employer agrees to include the additional feature and provides the contractor/employee with all of the resources and financial support in adding the additional feature into the product.
Who should be considered a Inventor/Author?
Who Owns the Rights?
• Scenario Five
A company founder conceives of features A, B, and C for an app, and teams up with another co-founder who develops the application. During development, the developing co-founder contributes features D, E, and F.
Who can claim IP ownership?
What if not all features are entitled to IP in the first place?
My Contact InfoYuri Eliezer, Esq. [email protected]@Smartup_
ATLANTA TECH VILLAGE Suite 5553423 Piedmont Road, NEAtlanta, GA 30305
To schedule a consultation with me please visit SmartupLegal.com and click consult!