15. WHAT IS INTELLECTUAL PROPERTY?
IP
IP Rights
Intangible
Technology
Tangible
Purely Legal
Rights
Trademarks
Patents
Copyrights/Mask Work Rights
Trade Secrets
Costless/Unlimited Copying:
Software, Documents
Expensive/Limited Copying:
Hardware, Equipment, Prototypes
16. IP IN THE CORPORATE LIFE CYCLE
Founders
Spins/Parents/
Universities
EXIT
IPO
Merger/Sale
Acquisitions
Open
Source
Licenses
Internal
Dev
JVs
GROWTHFORMATION
17. IP STRATEGY FOR START-UPS
• Goals: Protect enterprise value & avoid infringement
• Addressing common start-up issues
– Secure IP assignments from founders, employees, and
consultants
– Employees & consultants
– Internal development (build vs. buy)
– Adopt sound practices for protecting confidential
information
– Understand implications of using open source software
– Manage source code carefully
– Limit or avoid material business restrictions
• Good hygiene for IP due diligence
19. EMPLOYEES & CONSULTANTS
• Benefits of employee development
– Employees within scope of employment
– Work for hire doctrine (copyright only)
– Employee agreements
• Risks of employee development
– Non-competes (outside CA)
– Former employer IP issues
• Consultants
– Need formal agreement (work for hire does not apply)
20. BUY/LICENSE VS INTERNAL DEVELOPMENT
• Cost to buy vs build
• Benefits of ownership
• Time to market
• Restrictions on license scope
• Transferability
22. OPEN SOURCE SOFTWARE
• Copyleft licenses
• Risks of noncompliance
• Policies and procedures for
compliance
• Increasing importance in M&A and
IPO due diligence
24. MATERIAL BUSINESS RESTRICTIONS
(CHILLING EFFECTS)
• Freedom to assign key contracts
• Trojans
• Triggers on change of control
• Non-competes
• Rights of first refusal/negotiation
• Exclusivity