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8/4/2019 What Every Startup Needs to Know About IP
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WHAT EVERY STARTUP
NEEDS TO KNOW ABOUT IP
Jack Waddey
Waddey & PattersonAugust 22, 2011
A Presentation for CO.LAB Entrepreneurs:
1999-2011 Waddey & Patterson, P.C.
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What is Intellectual Property? Patents
Trademarks Service Marks
Copyrights
Trade Secrets Confidential Information
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What is a Patent?
The right to exclude others from making,
using, selling, offering to sell or importing
the patented invention.
The right extends for 20 years from the date
of filing the application.
Some or all of the rights can be sold orlicensed to others.
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What Computer and Internet
Technologies are Covered bythe U.S. Patent System?
Hardware, Systems, and Networks.
Methods, Processes, and Applied
Algorithms Implemented in Software. E-Commerce and other Business Methods
Implemented Over the Internet.
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1 5,949,875 Parallel data network billing and collection system
2 5,949,044 Method and apparatus for funds and credit line transfers
3 5,947,747 Method and apparatus for computer-based educational testing
4 5,945,653 System and method for establishing and executing functions toaffect credit card accounts and transactions
5 5,884,274 System and method for generating and executing insurance
policies for foreign exchange losses
6 5,884,272 Method and system for establishing and maintaining user-
controlled anonymous communications7 5,884,270 Method and system for facilitating an employment search
incorporating user-controlled anonymous communications
Patents on Business Methods and
E-Commerce Applications
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Patents on Business Methods
and E-Commerce Applications
8 5,862,223 Method and apparatus for a cryptographically-assisted commercial
network system designed to facilitate and support expert-based commerce
9 5,798,508 Postpaid traveler's checks
10 5,794,207 Method and apparatus for a cryptographically assisted
commercial network system designed to facilitate buyer-driven conditional
purchase offers
11 5,779,549 Database driven online distributed tournament system
12 5,768,382 Remote-auditing of computer generated outcomes and
authenticated billing and access control system using cryptographic and otherprotocols
13 5,737,414 900 number billing and collection system and method for on-line
computer services
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Priceline.Com Patent
A data processing apparatus for determining a price of an option to purchase an
airline ticket, comprising:
a central controller including a CPU and a memory operatively connected to said
CPU;
at least one terminal, adapted for communicating with said central controller, fortransmitting to said central controller option pricing information including
departure location criteria, destination location criteria, and travel criteria;
said memory in said central controller containing a program, adapted to be
executed by said CPU, for calculating a price of an option to purchase within afuture period, for a particular ticket price, an airline ticket satisfying the departure
location criteria, destination location criteria, and travel criteria;
wherein said central controller receives said criteria from said terminal and
calculates the option price based upon the criteria.
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Strategic Considerations in
Choosing the Patent System
Can the invention be copied or reverse
engineered?
Are competitors likely to copy/reverseengineer or is there another approach that is
equally valuable?
Is the product likely to be successful?
Would licensing generate meaningful
revenue?
Will patent pending status generate
market share?
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Strategic Considerations in
Choosing the Patent System
What is the expected length of the product
cycle?
Is innovative technology the primary assetof the business?
Will a patent portfolio increase the value of
the company as perceived by investors or
lenders?
Will a patent portfolio provide negotiating
leverage in disputes with others?
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Strategic Considerations in
Choosing the Patent System
Will the patent restrict entry into the market
by others?
If you dont patent it, will someone else?
Is there money in the budget (or should
there be)?
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Who Owns Patent Rights? There must be an inventor involved.
Employers own the rights in inventions
made by R&D employees.
If the inventor is a consultant, there must be
a transfer of rights.
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What Are the Legal Tests of
Patentability?
The invention is useful.
The invention is novel.
The invention is non-obvious.
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Essentials of the Invention and
Patent Process
Some important points to remember.
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Before You Get Too Far-- You have a great idea and you cant find anyone whos doing it
Hey, lets get started, engineer a design, build a model, burn through
some $$$$
Oops, did anyone check to see if this has been patented?
Remember, first things first; before you spend a lot of money, do some
searching of the patent system.
www.freepatentsonline.com
www.google.com/patents
Use key words, search the abstracts (ABST/) Do it again
Do it again
You dont want to spend all that time, energy and money to find out
later that the idea is already patented.
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Priority of Invention is
Important
In the U.S., a patent is awarded to the first toinvent a useful, novel and non-obvious device,
system, process, or method.
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An Invention is Conceived
Before it is Made
For purposes of priority in the U.S. patentsystem, the date ofinvention occurs on the date
ofconception, which requires identification of
the problem and creation of a workable and
complete solution to the problem.
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An Invention Date Must be
Proven
In the event of a dispute as to the date of
conception, the inventor must supply evidence(documentation and/or hardware) that: (1) fully
describes or embodies the invention; (2) can be
date verified; and (3) can be corroborated by
someone who understands the technology butdoes not have an interest in the invention.
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An Invention Must be
Reduced to Practice
The invention must be actually or constructively reduced to practice by
construction of a working prototype or by filing
a patent application that fully enables an actual
reduction to practice of the invention.
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The Correct Inventors Must be
Identified
An inventor is one who contributes to the
conception of the invention, not merely to the
reduction to practice. There can be multiple
inventors and sometimes the true inventors
cannot be determined until the patent claims
are drafted.
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Delay Can be Costly
Priority of invention can be lost by failing
either to commercialize the invention or to filea patent application.
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Delayed Filing Can Destroy
U.S. Patent Rights
U.S. patent rights can be lost by an offer to sell,
a publication, or a public use of the invention
more than one year prior to filing a patent
application.
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Foreign Patent Rights Can Be
Lost by Premature Disclosure
Foreign patent rights can be lost by publicationor commercialization of the invention at any
time prior to filing of a patent application.
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Other Resources: www.iplawgroup.com
U.S. Patent and Trademark Office
www.uspto.gov
Software Patent Institute www.spi.org
SoftwarePatents.com
www.freepatentsonline.com
www.google.com/patents
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Trademarks Common Law (unregistered) Trademarks:
e.g. CHOCK-O-LOT Drink Mix
Common Law (unregistered) Service Marks
e.g. LIGHTNING Print Services
Registered Trademarks:
e.g. ADTRAN
Registered Service Marks:
e.g. GRAND OLE OPRY
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Registration of Marks - Benefits Costs approx. $875 to file in one class
(including attorneys fees)
Registered Marks last forever if you dont
allow them to go unprotected and if you
renew them
Registration is NOTICE to the world ofyour ownership of the mark
Registrations in foreign countries - valuable
and comparatively cheap
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What Can Serve as a Mark? Any word, symbol, device used to identify
the goods or services of a party and
distinguish them from the goods or serviceof another
Examples: AMSOUTH, BEATLES
(Compare to Beetles), the color PINK forinsulation, musical notes (e.g., NBC
chimes, Bob Hopes Thanks for the
Memories), Sound of Harley-Davidson
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Other types of Marks Logos,
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Things that cannot Serve as Marks Primarily merely a surnames: WADDEY
Scandalous phrases
Marks that falsely suggest connection with
persons, living or dead (e.g.RINGO drums),
institutions, etc..
Geographically mis-descriptive phrases(e.g., GEORGIA peaches from Florida)
A mark too similar to another registered
mark (To avoid this problem, do a search)
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Other Prohibitions on Marks U.S. Flags
Primarily merely descriptive marks:
CORNER MARKET Grocery store
TOLL FREE DIALING phone services
BEAUTIFUL Flowers
QUALITY SERVICE Any business
NASHVILLE PLUMBING COMPANY
WEST NASHVILLE WRECKER SERVICE
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Ordinary Words for Different
Products are OK APPLE Computers
ARROW Shirts
JOCKEY Underwear
MUSTANG car
BANTAM Books CAMEL Tobacco products
TARGET Department Stores
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Slogans Its Our Money, Not TheIRS
WHERE THERES LIFE THERES BUD
WHERE THERES LIFE THERES BUGS
DONT GET LEFT OUT OF THE COLD
ITS MILLER TIME BUILT FORD TOUGH
HIS MASTERS VOICE
GET MET. IT PAYS.
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Trademarks are ADJECTIVES Always use a trademark or service mark as
an adjective which is followed by a noun
BELLSOUTH Telephone Services
GRAND OLE OPRY Musical show
HARTMANN Luggage
SONY Televisions
Avoid possessive: BAYERS pain relief
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Marks can be lost Aspirin
Cellophane
Escalator
Harmonica
kerosene Thermos
Zipper
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Close calls XEROX
BAND-AID
KOOL-AID
FEDERAL EXPRESS
VELCRO
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For More Information:Waddey & Patterson, P.C.
1600 Division Street, Suite 500
Nashville, TN 37203
615-242-2400www.iplawgroup.com
A Good RelationshipWorks in Both Directions
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