IP Strategies for IP Strategies for Start-Up CompaniesStart-Up Companies

Scott HerveyScott HerveyWeintraub Genshlea ChediakWeintraub Genshlea Chediak

Law CorporationLaw Corporation400 Capitol Mall, 11400 Capitol Mall, 11thth Floor Floor

Sacramento, CA 95814Sacramento, CA 95814www.weintraub.comwww.weintraub.com

shervey@weintraub.comshervey@weintraub.com(916) 558-6065 (direct dial)(916) 558-6065 (direct dial)

© Weintraub Genshlea Chediak 2007© Weintraub Genshlea Chediak 2007

What is Intellectual Property?What is Intellectual Property? The intangible assets The intangible assets

of a companyof a company– May comprise the May comprise the

majority of the value of a majority of the value of a start-up companystart-up company

– The competitive The competitive advantage of the advantage of the companycompany

– The reputation/goodwill The reputation/goodwill of the companyof the company

Types of Intellectual PropertyTypes of Intellectual Property

PatentsPatents– InventionsInventions– DesignsDesigns

TrademarksTrademarks– BrandsBrands– Trade namesTrade names– Trade dressTrade dress

CopyrightsCopyrights– PhotographsPhotographs– SoftwareSoftware– Web pagesWeb pages– DatabasesDatabases

Trade SecretsTrade Secrets– Secret InventionsSecret Inventions– MethodsMethods– Customer ListsCustomer Lists– ToolsTools

PatentsPatents

What are Patents?What are Patents? Invention protectionInvention protection

– Complete and operative ideaComplete and operative idea

A governmental grant of rights to exclude others for A governmental grant of rights to exclude others for period of yearsperiod of years

Public disclosure of ideaPublic disclosure of idea

Public policy to stimulate inventionPublic policy to stimulate invention– Legal monopolyLegal monopoly– Education of marketplaceEducation of marketplace

What are Patents?What are Patents?

U.S. grants 20 year rights to exclude others U.S. grants 20 year rights to exclude others

– 14 years for design patents14 years for design patents

– From filing dateFrom filing date

– To exclude others from being able to make, use, sell, To exclude others from being able to make, use, sell, offer to sell and import to the U.S.offer to sell and import to the U.S.

Types of PatentsTypes of Patents

Utility (most common)Utility (most common)– New, original, functional, inventionNew, original, functional, invention

DesignDesign– New, original, ornamental designs for articles of New, original, ornamental designs for articles of

manufacturemanufacture– Protects appearance not functionalityProtects appearance not functionality

PlantPlant– Distinct new varietiesDistinct new varieties

Requirements for Utility PatentsRequirements for Utility Patents Invention must:Invention must:

– Be usefulBe useful

– Novel and non-obviousNovel and non-obvious

Does not include inventions that:Does not include inventions that:

– Existed prior to date when inventor conceived the invention, Existed prior to date when inventor conceived the invention, if was diligent in reducing to practiceif was diligent in reducing to practice

– Were disclosed one year before the date of filingWere disclosed one year before the date of filing

Requirements for Utility PatentsRequirements for Utility Patents– Fall within one of five statutory subject mattersFall within one of five statutory subject matters

ProcessProcess

MachineMachine

Article of manufactureArticle of manufacture

Composition of matterComposition of matter

Improvement of inventionImprovement of invention

All patents are not equalAll patents are not equal– Consider claimsConsider claims

Patent ProcessPatent Process

FilingFiling– Patent attorney/Patent agentPatent attorney/Patent agent– Each inventor owns equal Each inventor owns equal andand undivided interest undivided interest– All inventors must sign oath or declaration All inventors must sign oath or declaration – Ownership rights may be assigned or licensedOwnership rights may be assigned or licensed

Provisional FilingsProvisional Filings– Establish early filing dateEstablish early filing date– 12 months to convert to regular filing12 months to convert to regular filing

TrademarksTrademarks

®®

™™

What is a Trademark?What is a Trademark?

Word, saying, logo, Word, saying, logo, brand, sign, mark - even brand, sign, mark - even sound, color, or smellsound, color, or smell

Triggers association in Triggers association in the market with the market with owner/sourceowner/source

What is a Trademark?What is a Trademark?

Means of protecting Means of protecting goodwillgoodwill

The exclusive right to use The exclusive right to use a brand (mark) for a brand (mark) for products or servicesproducts or services

Types of MarksTypes of Marks

Common Law MarksCommon Law Marks– Arises from actual useArises from actual use– Protection in areas of use in Protection in areas of use in

commerce commerce

Registered MarksRegistered Marks– Federal registration Federal registration

(presumed ownership (presumed ownership throughout the nation)throughout the nation)

– State filing also availableState filing also available

Types of MarksTypes of Marks

TrademarksTrademarks Service MarksService Marks Certification MarksCertification Marks Collective MarksCollective Marks Trade Dress Trade Dress Foreign filingsForeign filings

Strength of TrademarkStrength of Trademark

Strength of trademark depends on the nature of Strength of trademark depends on the nature of the mark:the mark:– Fanciful/coined (Kodak)Fanciful/coined (Kodak)– Arbitrary (Yahoo, Apple)Arbitrary (Yahoo, Apple)– Suggestive (Roach Motel)Suggestive (Roach Motel)

Indicates nature quality or characteristicIndicates nature quality or characteristic

– Descriptive (Tahoe Plumbing, Park ‘N Fly)Descriptive (Tahoe Plumbing, Park ‘N Fly) Directly related to meaningDirectly related to meaning

– Generic (Escalator)Generic (Escalator) Common nameCommon name

Strength of TrademarkStrength of Trademark

Descriptive marks are generally not Descriptive marks are generally not registrable unless develop secondary registrable unless develop secondary meaning (acquired distinctiveness)meaning (acquired distinctiveness)

Generic marks are not registrableGeneric marks are not registrable Marks can become generic through usage Marks can become generic through usage

(Aspirin, Jet Way)(Aspirin, Jet Way) Certain marks are denied protection Certain marks are denied protection

(immoral, disparaging, State, etc.)(immoral, disparaging, State, etc.)

Protecting Trademarks Protecting Trademarks

Federal RegistrationFederal Registration– Constructive notice nationwide of the claim to ownershipConstructive notice nationwide of the claim to ownership– Evidence of ownership and priority of useEvidence of ownership and priority of use– Allows registration with US customs to prevent importationAllows registration with US customs to prevent importation– Domain name disputesDomain name disputes

ApplicationApplication– Use or intent to useUse or intent to use– Based on foreign application/registrationBased on foreign application/registration

Protecting Trademarks Protecting Trademarks

Requirements for registrationRequirements for registration

– Must distinguish goods/services from othersMust distinguish goods/services from others– Must not be merely descriptiveMust not be merely descriptive– Must not conflict with other registered mark/cause Must not conflict with other registered mark/cause

confusionconfusion– Examiner will reviewExaminer will review

Protecting TrademarksProtecting Trademarks TM and ® TM and ® Protecting against infringement/confusion Protecting against infringement/confusion

– Strength of markStrength of mark– Proximity of goods/servicesProximity of goods/services– Similarity of marksSimilarity of marks– Evidence of actual confusionEvidence of actual confusion– Marketing channelsMarketing channels– Type of goods and purchaser careType of goods and purchaser care– IntentIntent– Likelihood of expansionLikelihood of expansion

Famous marksFamous marks– Protection from dilution of distinctive quality of markProtection from dilution of distinctive quality of mark– Need not show presence of competition, likelihood of confusion, mistake or Need not show presence of competition, likelihood of confusion, mistake or

deceptiondeception

Internet and Domain NamesInternet and Domain Names

Internet use governed by Internet use governed by same rulessame rules– Similarity of marksSimilarity of marks– Relatedness of goodsRelatedness of goods– Simultaneous use of web as Simultaneous use of web as

marketing toolmarketing tool

Domain name registration Domain name registration

does not establish does not establish trademark rightstrademark rights– Must be commercial useMust be commercial use– Not a mark registrationNot a mark registration

Internet and Domain NamesInternet and Domain Names

““Cyber-squatting” and Cyber-squatting” and “typo-squatting” “typo-squatting” – ACPAACPA– ICANNICANN

CopyrightsCopyrights

What is a copyright?What is a copyright?

Original work of authorship fixed in a Original work of authorship fixed in a tangible mediumtangible medium– Articles, programs, web pages, multi-mediaArticles, programs, web pages, multi-media

No protection of functional aspectsNo protection of functional aspects Exclusive right to reproduce, derivative Exclusive right to reproduce, derivative

works, copy, perform, display, transmit works, copy, perform, display, transmit – Exceptions such as fair use for criticism, Exceptions such as fair use for criticism,

comment, teaching, reportingcomment, teaching, reporting

What is a copyright?What is a copyright?

Generally lasts for life of author plus 70 yearsGenerally lasts for life of author plus 70 years Joint works are owned by both authors equallyJoint works are owned by both authors equally Copyright noticeCopyright notice

– ©, name, and year©, name, and year– Circled “p” for sound recordingsCircled “p” for sound recordings

Can register at later timeCan register at later time Registration allows attorney’s fee recovery, statutory Registration allows attorney’s fee recovery, statutory

damages, etc.damages, etc.

Copyrights and Employees/AgentsCopyrights and Employees/Agents

Generally, author has ownership. Under Work for Generally, author has ownership. Under Work for Hire doctrine:Hire doctrine:– A copyrighted work prepared by an employee within the A copyrighted work prepared by an employee within the

scope of employment is owned by the employerscope of employment is owned by the employer– Certain types of work commissioned from an Certain types of work commissioned from an

independent contractor with a written agreement may be independent contractor with a written agreement may be designated as “work for hire” owned by commissioning designated as “work for hire” owned by commissioning partyparty

– Other types of work may be assignedOther types of work may be assigned Need written assignment documentation with all Need written assignment documentation with all

employees/agentsemployees/agents

Work for Hire Work for Hire

Effect of relying on oral agreement or not Effect of relying on oral agreement or not using such language…using such language…– The contracting party owns nothing more than a The contracting party owns nothing more than a

copy of the workcopy of the work– Does Does NOTNOT own the Copyright in the work. own the Copyright in the work.

Fair UseFair Use

Fair use of a copyrighted work includes Fair use of a copyrighted work includes using the material for:using the material for:– criticismcriticism– commentcomment– news reportingnews reporting– teachingteaching– scholarshipscholarship– researchresearch

Fair UseFair Use

Under 17 U.S.C. § 107, whether an act of use or copying of Under 17 U.S.C. § 107, whether an act of use or copying of a work constitutes fair use is determined by the following a work constitutes fair use is determined by the following four factors:four factors:– The nature of the use (commercial or nonprofit);The nature of the use (commercial or nonprofit);– The nature of the work;The nature of the work;– The amount and substantiality of the portions taken from the The amount and substantiality of the portions taken from the

copyrighted work;copyrighted work;– The effect on the potential market for the copyrighted work, as well The effect on the potential market for the copyrighted work, as well

as other actors under the rule of reason analysis.as other actors under the rule of reason analysis. Parody may also be claimed as fair use, even if the parody Parody may also be claimed as fair use, even if the parody

is commercialis commercial

Trade SecretsTrade Secrets

What is a Trade Secret?What is a Trade Secret?

Various types of information (formula, pattern, Various types of information (formula, pattern, compilation, program, device, method, techniques, compilation, program, device, method, techniques, process)process)– derives independent economic value from not being derives independent economic value from not being

generally known or readily ascertainable by proper generally known or readily ascertainable by proper means by persons who can derive economic value means by persons who can derive economic value

– reasonable efforts to maintain its secrecyreasonable efforts to maintain its secrecy A protected idea that provides a competitive A protected idea that provides a competitive

advantage in a marketadvantage in a market More than one person may hold a trade secretMore than one person may hold a trade secret

What is a Trade Secret?What is a Trade Secret?

No prohibition on reverse engineering (if lawfully obtain No prohibition on reverse engineering (if lawfully obtain product)product)

No prohibition on use or disclosure if gain access by proper No prohibition on use or disclosure if gain access by proper means (invention, published literature, website)means (invention, published literature, website)

Can be alternative to patent protectionCan be alternative to patent protection– Patent can be rejected or invalidatedPatent can be rejected or invalidated– Patent protection may not be availablePatent protection may not be available– May not want to disclose an idea and educate the competitionMay not want to disclose an idea and educate the competition– No time limit to protectionNo time limit to protection– Funding availability may preclude patent protectionFunding availability may preclude patent protection

Trade Secret MisappropriationTrade Secret Misappropriation

Acquisition by improper means (known or reason to know) Acquisition by improper means (known or reason to know) or under circumstances with duty to maintain secrecy/limit or under circumstances with duty to maintain secrecy/limit use (may include acquired by accident or mistake)use (may include acquired by accident or mistake)

Disclosure or use without actual or implied consentDisclosure or use without actual or implied consent

Trade Secret MisappropriationTrade Secret Misappropriation

Must use reasonable efforts under circumstances Must use reasonable efforts under circumstances to protectto protect– Non-disclosure agreementsNon-disclosure agreements– Employee trainingEmployee training– Disclose on a need to know basisDisclose on a need to know basis– Limit access and availabilityLimit access and availability– Other internal controlsOther internal controls

Policy of marking problematic if not followedPolicy of marking problematic if not followed

Departing EmployeesDeparting Employees

Very significant area of trade secret Very significant area of trade secret disputes. Actions for injunction or special disputes. Actions for injunction or special damages if show willful and malicious.damages if show willful and malicious.– Customer listsCustomer lists

Employer ownership of trade secretsEmployer ownership of trade secrets– If relates to business of employer (for inventor) If relates to business of employer (for inventor)

or developed on company time (other or developed on company time (other employees)employees)

Departing EmployeesDeparting Employees

Public policies allowing competitionPublic policies allowing competition

– California prohibition of employee covenants not California prohibition of employee covenants not to compete under B&P Code 16600to compete under B&P Code 16600

– Other states have varying levels of prohibitionsOther states have varying levels of prohibitions

FeaturesFeatures Trade SecretTrade Secret Patent (Utility)Patent (Utility) CopyrightCopyright TrademarkTrademark

Protected InterestProtected Interest Business Info.Business Info. Functional Functional InventionsInventions

Expression Expression Embodied in Embodied in Fixed MediumFixed Medium

Consumer Consumer Recognition & Recognition & Related GoodwillRelated Goodwill

Requirements for Requirements for ProtectionProtection

Not Known; Not Known; Valuable; Valuable; Maintained as Maintained as SecretSecret

New, Useful, Non-New, Useful, Non-obvious, Proper obvious, Proper Subject MatterSubject Matter

OriginalityOriginality Use in Use in CommerceCommerce

Disclosure Disclosure RequiredRequired

NoNo YesYes YesYes YesYes

Term of Term of ProtectionProtection

Potentially Potentially Indefinite if Indefinite if Information Information Remains SecretRemains Secret

20 Years Form 20 Years Form Application DateApplication Date

Generally Generally Author’s Life Plus Author’s Life Plus 70 Years70 Years

Potentially Potentially Indefinite if Mark Indefinite if Mark is Used Properlyis Used Properly

Conduct Conduct Prohibited by Prohibited by ProtectionProtection

MisappropriationMisappropriation Making, Using, Making, Using, Selling, Offering to Selling, Offering to Sell, or Importing Sell, or Importing InventionInvention

Copying or Copying or Substantially Substantially Similar WorksSimilar Works

Creating a Creating a Likelihood of Likelihood of ConfusionConfusion

Independent Independent Development Development

Not Prohibited Not Prohibited Prohibited Prohibited May be May be ProhibitedProhibited

ProhibitedProhibited

Reverse Reverse EngineeringEngineering

Not ProhibitedNot Prohibited ProhibitedProhibited InapplicableInapplicable InapplicableInapplicable

Thank YouThank You

Questions?Questions?