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PATENTS PRIMER
Patenting and IP Strategy for Startups

Dino Talic – 9 Dec 2011
Freelancer.com
Disclaimer



This does not constitute legal advice. Just a
quick intro to the basic concepts.
Forms of Intellectual Property                 Term
   Copy-
   right
                          Music, Art, etc   Life + 70 years



                                               14 years
    Industrial Property



                             Design

                             Patent            20 years



                          Trademark           10 years * X



                          Trade Secret             ∞
Forms of Intellectual Property                     Term
   Copy-
   right
                          Music, Art, etc      Life + 70 years



                                                   14 years
    Industrial Property



                             Design
                                            This presentation


                             Patent                20 years



                          Trademark               10 years * X



                          Trade Secret                 ∞
Patent
• Exclusive monopoly in exchange for disclosure of
 invention



                       Disclosure



                   Time-limited Monopoly
Patent Jurisdictions
• A patent is only valid in the jurisdiction in which it is
  granted
• World Intellectual Property Organization (WIPO)
  • Patent Cooperation Treaty (PCT)
  • Provides World filing for Patent Application
Criteria for Patentability
• Patentable subject matter
  • Some exclusions – e.g. Scientific discoveries, mathematical theories,
    etc.


• Useful
  • Invention must give rise to a specific, substantial and credible utility


• Novel
  • Not already known or previously disclosed


• Non-obvious
  • Must be inventive. Non-obvious to a person versed in the art.
  • Combination of prior art is not inventive – must be a distinct and non-
    obvious advantage
What can Typically be Patented

                    Not valuable
         Specific
         Product

                         Invention


                             Not patentable,
                             not enforceable
  General Concept
Valuable Patent

• Enforceable – obvious when a competitor is using
 patent and it will succeed in court



• Not easily avoidable – no obvious alternatives
Lifecycle of a patent



                                 Publication   Search and
Filing of Patent     Formal                                  Grant and      Opposition
                                     of        Substantive
  Application      Examination                               Publication   Proceedings
                                 Application   Examination
Lifecycle of a patent
Engineering involvement


                                  Publication   Search and
 Filing of Patent     Formal                                  Grant and      Opposition
                                      of        Substantive
   Application      Examination                               Publication   Proceedings
                                  Application   Examination




• Prior art search
• Patent Application draft
• Claim drafting (with aid
  of IP lawyer!)
Lifecycle of a patent
Engineering involvement


                                  Publication    Search and
 Filing of Patent     Formal                                   Grant and      Opposition
                                      of         Substantive
   Application      Examination                                Publication   Proceedings
                                  Application    Examination




                                                • Response to
                                                  Office Actions
Lifecycle of a patent
Engineering involvement


                                  Publication   Search and
 Filing of Patent     Formal                                  Grant and       Opposition
                                      of        Substantive
   Application      Examination                               Publication    Proceedings
                                  Application   Examination




                                                                            • Expert witness
                                                                              in litigation
Anatomy of a Patent
• Take as example US5579430


• Patent covering the MP3 format for audio compression


• Assigned to the Fraunhofer Institute


• Eventually lead to the development of the open source
 Ogg Vorbis file format as an alternative
Anatomy of a Patent
                      Patent #

   Title               Date
                      granted
 Inventors
                      Relevant
 Assignee             Prior Art
 (Owner)

  Priority
   Date               Abstract
Anatomy of a Patent
Anatomy of a Patent
Anatomy of a Patent – Detailed Description
Anatomy of a Patent - Claims
Reasons to file a Patent
• Protect competitive advantage - prevent competitors from
 using our inventive technology

• Prevent competitors from patenting similar technology


• Generate licensing revenue
Realities for a Startup
• Protect competitive advantage - prevent competitors from
 using our inventive technology

• Prevent competitors from patenting similar technology


• Generate licensing revenue




 Takes 4 – 6 years to get a patent granted. On average
 $3M US to enforce
Realities for a Startup
• Protect competitive advantage - prevent competitors from
 using our inventive technology

• Prevent competitors from patenting similar technology


• Generate licensing revenue




 Patents cost ~$50k each. Disclosure is free.
Realities for a Startup
• Protect competitive advantage - prevent competitors from
 using our inventive technology

• Prevent competitors from patenting similar technology


• Generate licensing revenue



Very costly and difficult to negotiate, especially for small
companies
Reasons a Startup should file a Patent
• Increase leverage over a partner


• Deter a patent lawsuit


• Increase attractiveness for investment or acquisition
Why does Freelancer care?
• Our competitors have patents


• We are worth suing


• Raising capital or selling company is difficult without IP


• Deter trolls
Patents – joint effort
• Think about what is potentially innovative in your work


• Can we patent something now what we are likely to do in
 the future

• Seek help:
  • Fleshing out a concept
  • Preliminary Prior Art search
  • If your idea goes through to filing you will be an inventor!
Controversies
• Particularly for software patents


• Non-tangible – should they be patentable:
  • US says YES
  • EU says NO



• Patent trolls – Intellectual Ventures
Further Reading
• Inventing the Future – An Introduction to Patents
   http://www.wipo.int/freepublications/en/sme/917/wipo_pub_
   917.pdf




• Patent Absurdity: How Software Patents broke
 the System
   http://patentabsurdity.com/
References
• What Do Startups Need to Know about Patent Law
 http://www.slideshare.net/JSchox/what-do-startups-need-to-know-about-
 patent-law


• Inventing the Future – An Introduction to
 Patenhttp://www.wipo.int/freepublications/en/sme/917/wipo_pub_917.pdf

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Patents Primer - Filing patents in starups

  • 1. PATENTS PRIMER Patenting and IP Strategy for Startups Dino Talic – 9 Dec 2011 Freelancer.com
  • 2. Disclaimer This does not constitute legal advice. Just a quick intro to the basic concepts.
  • 3. Forms of Intellectual Property Term Copy- right Music, Art, etc Life + 70 years 14 years Industrial Property Design Patent 20 years Trademark 10 years * X Trade Secret ∞
  • 4. Forms of Intellectual Property Term Copy- right Music, Art, etc Life + 70 years 14 years Industrial Property Design This presentation Patent 20 years Trademark 10 years * X Trade Secret ∞
  • 5. Patent • Exclusive monopoly in exchange for disclosure of invention Disclosure Time-limited Monopoly
  • 6. Patent Jurisdictions • A patent is only valid in the jurisdiction in which it is granted • World Intellectual Property Organization (WIPO) • Patent Cooperation Treaty (PCT) • Provides World filing for Patent Application
  • 7. Criteria for Patentability • Patentable subject matter • Some exclusions – e.g. Scientific discoveries, mathematical theories, etc. • Useful • Invention must give rise to a specific, substantial and credible utility • Novel • Not already known or previously disclosed • Non-obvious • Must be inventive. Non-obvious to a person versed in the art. • Combination of prior art is not inventive – must be a distinct and non- obvious advantage
  • 8. What can Typically be Patented Not valuable Specific Product Invention Not patentable, not enforceable General Concept
  • 9. Valuable Patent • Enforceable – obvious when a competitor is using patent and it will succeed in court • Not easily avoidable – no obvious alternatives
  • 10. Lifecycle of a patent Publication Search and Filing of Patent Formal Grant and Opposition of Substantive Application Examination Publication Proceedings Application Examination
  • 11. Lifecycle of a patent Engineering involvement Publication Search and Filing of Patent Formal Grant and Opposition of Substantive Application Examination Publication Proceedings Application Examination • Prior art search • Patent Application draft • Claim drafting (with aid of IP lawyer!)
  • 12. Lifecycle of a patent Engineering involvement Publication Search and Filing of Patent Formal Grant and Opposition of Substantive Application Examination Publication Proceedings Application Examination • Response to Office Actions
  • 13. Lifecycle of a patent Engineering involvement Publication Search and Filing of Patent Formal Grant and Opposition of Substantive Application Examination Publication Proceedings Application Examination • Expert witness in litigation
  • 14. Anatomy of a Patent • Take as example US5579430 • Patent covering the MP3 format for audio compression • Assigned to the Fraunhofer Institute • Eventually lead to the development of the open source Ogg Vorbis file format as an alternative
  • 15. Anatomy of a Patent Patent # Title Date granted Inventors Relevant Assignee Prior Art (Owner) Priority Date Abstract
  • 16. Anatomy of a Patent
  • 17. Anatomy of a Patent
  • 18. Anatomy of a Patent – Detailed Description
  • 19. Anatomy of a Patent - Claims
  • 20. Reasons to file a Patent • Protect competitive advantage - prevent competitors from using our inventive technology • Prevent competitors from patenting similar technology • Generate licensing revenue
  • 21. Realities for a Startup • Protect competitive advantage - prevent competitors from using our inventive technology • Prevent competitors from patenting similar technology • Generate licensing revenue Takes 4 – 6 years to get a patent granted. On average $3M US to enforce
  • 22. Realities for a Startup • Protect competitive advantage - prevent competitors from using our inventive technology • Prevent competitors from patenting similar technology • Generate licensing revenue Patents cost ~$50k each. Disclosure is free.
  • 23. Realities for a Startup • Protect competitive advantage - prevent competitors from using our inventive technology • Prevent competitors from patenting similar technology • Generate licensing revenue Very costly and difficult to negotiate, especially for small companies
  • 24. Reasons a Startup should file a Patent • Increase leverage over a partner • Deter a patent lawsuit • Increase attractiveness for investment or acquisition
  • 25. Why does Freelancer care? • Our competitors have patents • We are worth suing • Raising capital or selling company is difficult without IP • Deter trolls
  • 26. Patents – joint effort • Think about what is potentially innovative in your work • Can we patent something now what we are likely to do in the future • Seek help: • Fleshing out a concept • Preliminary Prior Art search • If your idea goes through to filing you will be an inventor!
  • 27. Controversies • Particularly for software patents • Non-tangible – should they be patentable: • US says YES • EU says NO • Patent trolls – Intellectual Ventures
  • 28. Further Reading • Inventing the Future – An Introduction to Patents http://www.wipo.int/freepublications/en/sme/917/wipo_pub_ 917.pdf • Patent Absurdity: How Software Patents broke the System http://patentabsurdity.com/
  • 29. References • What Do Startups Need to Know about Patent Law http://www.slideshare.net/JSchox/what-do-startups-need-to-know-about- patent-law • Inventing the Future – An Introduction to Patenhttp://www.wipo.int/freepublications/en/sme/917/wipo_pub_917.pdf