It all starts with an epiphany. Every invention begins with a single “eureka moment” or some “brilliant revelation” that causes the inventor to take action.
These epiphanies become the idea seeds planted by inventors around the world. But we can only wish the process was as simple as adding water and fertilizer and waiting for the ideas to spring to life.
Inventions are not just patents to be hung on a wall. They are the starting point for a new business enterprise. So, not only does the inventor have to figure out how to create a working product or device, they also have to drive it forward, creating a business model that will enable it to survive. And that’s where we come in.
The Inventor Boot Camp will help you focus on what’s important. We will show you ways to leverage your time and resources, eliminate unnecessary work, and direct your energies towards driving your product forward. And most importantly, we will teach you what it takes to become successful.
Key Strategies to Learn
How to perform an early stage benefit/market analysis to decide in advance who your end customer will be. Once you fully understand who your customer is, only then can you begin to piece together your business model.
How to develop a profit-centric mindset, the same thinking used by most successful inventors, to maximize your odds of success.
How to decide if your invention needs to be patented. If it doesn’t, this can save you significant amounts of money.
Who you should be listening to. Advice will come from many sources, but not all of it will be good.
How to best position yourself for funding. Hear it directly from the people who have money to invest.
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Presentation Overview
• Demystify the different types of intellectual property
(IP) necessary to master your market in a knowledge
economy
• Learn about IP timing issues to best protect your
innovation before it slips into the public domain
• Explore strategies for protecting your innovation cost
effectively
• Top IP mistakes that will doom your company
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Business Value of Intellectual Property
• Economists estimate that two-thirds
of the value of large businesses in the
US is due to intangible or intellectual
property assets*
• The World Bank estimates that, on
average, 40% of company valuations
are from intellectual property*
• PriceWatershouseCoopers estimated
that as much as 90% of the value of
the world’s top 2000 enterprises
would consist of intellectual property*
• In 1978, IP accounted for 20% of
shareholder value, but has grown to
80% in 2007**
*Source: Patent Barista, April 2008
**Source: Brookings Institution and Ocean Tomo
80%73%46%20%
1978 1988 1998 2007
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Intellectual Capital: Intangible Ideas
Ideas
Business
Methods
Brands
Software
Product
Names Future
Products
Ideas
Promotions
Business
Relationships
Manufacturing
Processes
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Leveraging Intangibles to Create Intellectual
Property
• Intellectual capital is an intangible asset that must be protected like any other valuable
company asset
– As we move away from the industrial age and into the information age, leveraging intellectual capital
is paramount
• Trade Secrets, Copyrights, Patents, & Trademarks are the legal tools that convert some
intellectual capital into IP
– These legal tools are analogous to security measures to protect tangible assets
– Use of these tools prevents further loss of value and converts ideas into property
• A custom IP strategy should be developed to suit:
– Type of business
– Products
– Actions by competitors
– Litigiousness of industry
– Funding cycle
– Size of company
– Growth strategy
• High costs require customized solution for your business
• More money is lost pursuing the wrong strategy--no matter how inexpensively--than
pursuing the right strategy within the confines of a reasonable budget
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Securing Your Intellectual Capital as IP
Copyright
Trademark
Trade
Secret
Patent
Ideas
Bus iness
Methods
Brands
Software
Product
Names Future
Products
Ideas
Promotions
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Types of IP: Trade Secrets
• Definition: Any secret formula, pattern, device, or compilation of
information used by the company that gives it an advantage over
competitors
• Must not be in the public domain
• Company must take steps to protect their trade secrets
• No Expiration: Trade secret rights last forever if properly protected
• May loose some rights to a trade secret if someone else patents it
• Action: Trade Secret Program & reminder letters to employees who leave
SECRET
CONFIDENTIAL
PROPRIETARY
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Types of IP: Domain Names
• Definition: World Wide Web address for a domain
• Right to name purchased from domain name registry
• Must be renewed periodically
• Various gTLD and ccTLD have different rules
• Cyber-squatters diligently prey on lax registration by
companies
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Types of IP: Service Marks and Trademarks
• Definition: Words, symbols, designs, colors & sounds used to
identify the source of one’s products or services to consumers
• A mark indicates the source of the product/service
• Mark must distinctively identify product/service to avoid
customer confusion
• Local rights accrue in the US based upon use
• Federal Registration “®” enhances rights and damages
• Never expire so long as used
• TM for products and SM for services
• Similar to trade dress
• More Info: www.USPTO.gov
®
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Types of IP: Patents
• Definition: Confers the inventor the right to exclude others from making,
using, manufacturing, importing the invention
• A patent does not give you the right to practice your invention, just the
right to exclude others from practicing your invention
• Protects Invention for 20 years from filing
• “Anything under the sun made by man”—Supreme Court
– Software, Business Methods, Genes, Man-made Organisms
• Exchange Government Monopoly for Full Disclosure of Invention
• Doesn’t require infringer to be exposed to idea like trade secrets or
copyrights
• Invention must be novel and non-obvious
• Cannot be publicly known or offered for sale (one year grace period in US)
• Inventor-based system in US so must get assignment from inventor
• More Info: www.USPTO.gov
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SECRET
CONFIDENTIAL
PROPRIETARY
Trade Secret Timing Issues
• Definition: Any secret formula, pattern, device, or compilation of
information used by the company that gives it an advantage over
competitors and is actively protected
• Timing Issues
– Must keep secret
– Never expire if kept secret
– Train new employees to avoid use of trade secrets or IP from prior employer
• Action Items
– Employment/Contractor agreements addressing confidentiality of IP
– Non-Disclosure agreements with vendors and partners
– Identify trade secrets (e.g., “PROPRIETARY”) and take action to protect (e.g.,
computer, e-mail, document control, security)
– Consider publication policy that requires review prior to technical journal
publications, participation in standards boards and presentation at technical
symposia
– Remind workers of confidentiality in exit interviews
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Domain Name Timing Issues
• Definition: World Wide Web address for a domain of computers
that serve content on the Internet
• Timing Issues
– First come first served for registration
– Renewals are performed annually
– Be prepared to purchase when domains are search to avoid cybersquatters
who monitor searches
• Action Items
– Register all potential trademarks and consider different marks if someone else
owns the mark
– Organize all registrations to ease administration and automate renewals
– Standardize contact information on position/title rather than individual
– Register domains that are likely to be used by typo squatters
– Consider action against cybersquatters using current marks
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Service Mark and Trademark Timing Issues
• Definition: Words, symbols, designs, colors & sounds used to identify the source of
one’s products or services to consumers
• Timing Issues
– Search once potential mark(s) are chosen as it will only get more difficult to change
– Consider Federal Registration prior to use if mark will ultimately be used in interstate
commerce
– Choose foreign filings to match product footprint
– Use not required prior to filing, but use should be expected in the next 4 years or so to
avoid abandonment of your issued registration for failure to show use
– Trademark rights never expire so long as used continuously
• Action Items
– Encourage clients to pick several possible names to chose from after search results
indicate those cheapest to adopt
– Properly label marks with “TM” or “®” to enhances rights and damages
– Set-up marking guidelines that the organization follows to avoid self-inflicted damage to
marks
– Watch for and remedy any infringement/dilution/genericide of mark
®
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Patent Timing Issues
• Definition: Confers the inventor the right to exclude others from making, using,
manufacturing, importing the invention
• Timing Issues
– Protects invention for 20 years from filing
– Patent rights go to the first to invent, not the first to file
– Cannot be publicly known before filing to preserve foreign rights
– Cannot be publicly known or offered for sale more than one year before filing to preserve US rights
• Action Items
– Consider way to capture your technical staff inventing first such as an inventor notebook program
– Assess patent landscape when entering a new area with different competitors
– Consider freedom to operate clearance study prior to investment in a specific product, and work
through any design arounds to avoid redesign
– Monitor design reviews, trade show plans, proposed technical papers, or any other investment in
product development for ideas suitable for patenting
– Consider patent committee to champion filings and patent reward program to incentivize inventors
– File patents on improvements to keep products always covered by patents
– Confirm proper marking of products to not patent pending or issued patents
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Patent Strategies
• Offensive Strategy “Sword”
– Pursuit of Licensing Revenue
– Litigating Patents
– Use as “Stick” in Negotiations
• Defensive Strategy “Shield”
– Portfolio Building
– Avoiding Patent Litigation
– Avoiding Willful Infringement
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Offensive Patent Strategy “Sword”
• Pursuit of Licensing Revenue cognizant of the risk the
party approached will sue us on their patents
• Litigating patents where parties decline to license
• Use as “Stick” in negotiations, for example,
extracting favorable terms when negotiating a
contract
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Defensive Patent Strategy “Shield”
• Goal: Have a patent portfolio equal to any party who might
assert a patent
• Equal portfolios are measured by their ability extract equal
damages from the other side if litigated
• Smart & focused portfolio building
• Accentuates expertise to competitors and customers
• “If you have one bad patent, you have one bad patent. If you
have five bad patents, you have a licensing program.”
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Portfolio Building
• Tie patent expenditures to where you add value in
marketplace (Market driven versus innovation driven)
• Decide level of commitment to patents necessary to reduce
risk of pre-emptive suit by competition
• Monitor design reviews, trade show plans, proposed technical
papers, or any other investment in product development for
ideas suitable for patenting
• Consider patent committee to champion filings and patent
reward program to incentivize inventors
• File patents on improvements to keep products always
covered by unexpired patents
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Top IP mistakes that will doom your company
• Employees/contractors don’t assign patent, copyrights &
trade secrets before leaving
• Employees take trade secrets with them or introduce other’s
IP to your products
• Immediate registration of domain names
• Picking the wrong name—search marks before adoption
• Prompt registration of marks before use & copyrights at
release
• Not patenting technology that gives marketing advantage
• Giving up patent rights through your own actions with public
disclosure or an offer for sale—remember NDAs
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Thomas Franklin, Partner
tdfranklin@townsend.com
– Tom Franklin is a partner in the full service intellectual property (IP) firm
of Townsend and Townsend and Crew ("Townsend"). Townsend is one of
the largest firms specializing in IP with a 150 year history and nearly 200
lawyers in eight different offices. Mr. Franklin supports a national
practice where he splits his time between the Townsend offices in Denver
and San Diego. Tom Franklin uses IP protection to assist large companies
maintaining their dominance and assist startups vying to dominate.
– With over a dozen years in private practice, Mr. Franklin specializes in
strong patent protection for high tech companies in the electronic and
software fields. He regularly performs due diligence, patent portfolio
development, expedited patent protection, and other techniques to
efficiently achieve his clients goals.
– Mr. Franklin received his law degree from University of San Diego after a
B.S. in Electrical and Computer Engineering from San Diego State
University (Class of 1990), summa cum laude. Prior to practicing law, Mr.
Franklin spent eight years as an engineer with Hughes Electronics and a
senior engineer with L3 Communications and Lockheed Martin.
Practice Area
Electronics & Software
Denver Office
1200 Seventeenth Street
Suite 2700
Denver, CO 80202
dir 720.258.6588
fax 303.571.4321
San Diego Office
12730 High Bluff Drive
Suite 400
San Diego, CA 92130
dir 858.764.0577
fax 858.350.6111
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Web Resources
• Patent and Trademark Offices
– Searchable databases of patents, publications, and
trade/service marks
– US: http://www.uspto.gov or http://google.com/patents
– Europe: http://ep.espacenet.com
– Japan: http://www.jpo.go.jp
• US Copyright Office
– http://www.copyright.gov
• Townsend and Townsend and Crew
– http://www.townsend.com