Given its broad scope, intellectual property is not a topic that lends itself well to an overview. Yet providing such a summary was the task facing Jason Haislmaier, Adjunct Professor of Law at CU’s Law School and a partner at Holme Roberts and Owen, for Wednesday’s Silicon Flatirons’ Crash Course. What Haislmaier provided the 100 in attendance in just over two hours was a strong introduction to the relevant IP concerns facing businesses and entrepreneurs.
Haislmaier’s key takeaway for entrepreneurs was to use IP strategically to support business goals, rather than viewing IP as a one-size-fits-all blunt instrument. Strategic IP protection allows a company to grant different levels of access to different people (e.g. vendors, investors, competitors) to enable optimized commercialization. Haislmaier compared IP to a toolbox with a variety of tools beyond just patents, and a business must consider how and when to employ the different IP tools available. A brief overview of each of the four main IP tools follows. For more detailed information, Haislmaier has posted the slides on his blog.
Trade secrets are not generally known, have independent economic value and reasonable efforts must be made to maintain the secrecy. Secrecy is the key component and once this is lost so is the trade secret. No registration process exists for trade secrets. The main method of creating and enforcing trade secrets is through the use of non-disclosure agreements (NDAs). Haislmaier warned against simply pulling an NDA off the web, as the agreement must be tailored to the specific purpose. NDAs should be implemented with any party coming into contact with trade secrets including contractors, employees (probably as part of a larger employment agreement), vendors, and investors. It is oft noted that venture capital firms refuse to sign NDAs before hearing a pitch; in this instance Haislmaier recommended a “tiered approach” to disclosure giving investors “something to wet their appetite” with full disclosure reserved until an NDA can be implemented. His secondary advice was to “listen to your gut” on whether or not to extend trust.
A patent grants the right to a legal monopoly in exchange for full disclosure of an invention. The true grant of a patent is the right to exclude others from making, using or selling the patented product, not the rights to make, use or sell the product. To be patentable, an invention must be new, useful and non-obvious. Patents exist only in registered form. The registration process is relatively costly requiring the help of a lawyer to file a patent application that then is reviewed by an examiner at The Patent and Trademark office (PTO). The scope of a patent may be limited based on existing art, or other similar technologies that already exist. Before filing a patent application, it is essential to do a patent search (at the PTO or on Google) as well as engaging an attorney to do the same to understand preexisting patented territories. Patents are granted by country with the US rules differing (first to invent) from those in most other countries (first to file).
Copyrights protect an original work of authorship on a tangible medium. For a work to be eligible for copyright it must have some element of creativity. A copyright grants the holder five rights: to reproduce, to produce derivative works, to distribute, to perform and to display. Copyrights may be registered or unregistered, meaning that your gangbuster sonnet is protected even if you don’t file paperwork or put the circled letter c at the bottom of the page. But copyrights are relatively simple to register on the government’s website (usually without the help of an attorney) with filing fees in the neighborhood of $50. Registered copyrights grant the holder several legal advantages if the copyright is infringed including shifting the burden of proof, access to federal courts, and statutory damages.
A final note on copyrights relates to the Digital Millennium Copyright Act (DMCA) enacted in 1998. The DMCA contains provisions to protect against circumventing protection measures made against copying, but likely more important is the safe harbor provision provided to online service providers (OSP). This provision protects OSPs from being charged with copyright infringement for content posted by users (e.g. comments in a forum) as long as the OSP:
- Designates an agent for service under the DMCA (who should be contacted)
- Complies with the “notice and takedown” procedures in the DMCA
Trademarks are marks that represent the source or origin of goods and services. Trademarks can be registered at the PTO for a cost of $250 per class, or the industry segment in which the product or service is available. The application requires that the mark be in use or that the filer has the intent to use it within the next two years. Whether a logo or name can be trademarked depends on how the mark or name relates to the product or service. In order of increasing opportunity for trademark protection from none to very strong marks can be categorized as:
- Generic (e.g. facial tissue, cellophane) – no protection
- Descriptive – stating what the product is (e.g. World Poker Tour)
- Suggestive – relates to the product (e.g. Coppertone)
- Arbitrary – actual words but no relation to product (e.g. GoDaddy, Apple)
- Fanciful – have no meaning outside the company (e.g. Xerox)
Haislmaier noted that cases for trademark protection often come down to attorneys arguing that a mark is “suggestive and not descriptive.” Infringement of a trademark occurs when someone uses a mark that is likely to cause confusion, mistake or deception with the trademark.
Readers who have further interest in the topic are encouraged to view the slides Haislmaier has made available on his blog, as this summary only scratches the surface of the material covered during the Crash Course.
Silicon Flatirons, in administering the CU New Venture Challenge (CUNVC), will be hosting a number of programs, crash courses and workshops leading up to the final challenge to be held the week of April 13 to 17. Teams must submit intent to compete by March 20th. To qualify, a team must have at least one team member with a CU ID. Programming continues in January with a workshop and crash course on marketing on January 15th and January 27th respectively. Registration for these events can be found here.
