Protecting & Selling
or Licensing your Innovation

Intellectual Property defined

in•tel•lec•tu•al prop•er•ty

  • a work or invention that is the result of creativity, to which one has rights and for which one may apply for a patent, copyright, trademark, etc.

The scope of Intellectual Property

IP Protection – Excludes others from: 

  • Trademark: excludes use of a “mark” in a way likely to confuse customers
  • Copyright: excludes others from using your creative work
  • Trade secrets: excludes use of secret ideas or other business information wrongfully obtained 
  • Patent: excludes use of an invention
  • Does not give you the right to practice your innovation

Trademark – ™ ℠ ®

  • Why Trademark

Although federal registration of a mark is not mandatory, it has several advantages, including: 

  • Notice to the public of the registrant’s claim of ownership of the mark, 
  • Legal presumption of ownership nationwide
  • Exclusive right to use the mark on or in connection with the goods/services listed in the registration.

Trademark

  • What is a Trademark
  • A trademark is a word, phrase, symbol or design, or a combination of words, phrases, symbols or designs, that identifies and distinguishes the source of the goods of one party from those of others.
  • A service mark is the same as a trademark, except that it identifies and distinguishes the source of a service rather than a product. 

Trademark Process

  • Determine whether you should hire a trademark attorney.  
  • Identify your mark format: a standard character mark, a stylized/design mark, or a sound mark.
  • Identify clearly the precise goods and/or services to which the mark will apply.
  • Search the USPTO database to determine whether anyone is already claiming trademark rights in a particular mark through a federal registration.  
  • Identify the proper “basis” for filing a trademark application. (“use in commerce” or “intent to use,”
  • File the application online through the Trademark Electronic Application System. 

Copyright

  • What is a Copyright
  • Protects original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture. 

Copyright

  • Copyright Process
  • No formal process is required, however
  • Registration with copyright.gov; makes public record, if infringement suit, 
  • And, for protection against importation
    (also filed with US Customs Service)
  • Author’s life plus 70 years (47 to 120 years)

Trade secret

  • What is a Trade Secret
  • A trade secret is a formula, practice, process, design, instrument, pattern, or compilation of information which is not generally known or reasonably ascertainable, by which a business can obtain an economic advantage over competitors or customers.

Trade secret process

  • Non-Disclosure agreements
  • Employee agreements
  • Vendor agreements 

Patent

  • Memorialize invention
  • You want to tell others how to do it, yet restrict them from doing it
  • You don’t mind the costs or time period
  • 15K – 20K: not small business
  • 7k-10K for small, independent or nonprofits-50%-reduction 
  • 3.5K-5K for micro-75% reduction 
  • 2 – 4 yrs. to prosecute patent
  • Term: exclude others 14-20 years from filing date
  • Does not give you the right to practice

Patent

  • What can be patented:
  • Compositions/materials/
  • Methods
  • Of making
  • Of using
  • Systems/apparatus/equipment
  • Devices
  • Structures
  • Performance/properties

An innovation must be:
Novel, Non-obvious, useful

  • Novel or Novelty:
  • Cannot have been in use or knowledge by the public prior to applicant’s filing date 
  • (exception- 1 yr in use – however, prevents international patent)
  • Cannot have any public knowledge, use, sale, publication (foreign or domestic), etc. prior to applicant’s filing

An innovation must be:
Novel, Non-obvious, useful

  • Prevent yourself from making it non-novel
  • Do not use enabling descriptions
  • Use Non-Disclosure Agreements (NDA)
  • Be sure web and email communications do not enable innovation.  

An innovation must be:
Novel, Non-obvious, useful

  • Non-Obviousness:
  • Would invention (as claimed) have been obvious to someone skilled in the art?
  •  Improvements over “nearly the same” prior art will be determined as obvious
  • Useful
  • Does it have utility in the trade

Types of patents

  • Utility patents (20 yrs) may be granted to anyone who invents or discovers any new and useful process, machine, article of manufacture, or composition of matter, or any new and useful improvement thereof;
  • Provisional – sets a 12-month dependency period 
  • Nonprovisional – application is examined by a patent examiner
  • Plant patents (20 yrs) may be granted to anyone who invents or discovers and asexually reproduces any distinct and new variety of plant.
  • Provisional – sets a 12-month dependency period 
  • Nonprovisional – application is examined by a patent examiner
  • Design patents (14 yrs) may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture;
  • nonprovisional only

Overview of the process

  • Hire or review with patent attorney
  • Review prior art at USPTO, internet, trade publications, scientific literature, trademarks, copyrights,  etc
  • Confirm your ownership of the IP and the data which you used to create your IP
  • File provisional patent application – Features of provisional:
  • 12 mo dependency, US patent filing date, “Patent Pending” , commercial promotion, USPTO certified copies, may add inventor names, no formal patent claim/declaration/disclosure (prior art) statement.  
  • File Non-provisional within 1 yr of provisional to claim priority (within US)
  • Or, 
  • File PCT (Patent Cooperation Treaty) for International priority

Triggers filing a patent?

  • Planned public disclosure
  • abstracts, posters, papers, discussions, grant proposals, etc
  • Research based (incremental to maintain priority)
  • Desire to commercialize
  • Other Considerations
  • Can the invention be thoroughly described
  • What is the cost to file or not to file? Which is least risky?
  • Can you commercialize or license within one year (if provisional application)

But Should You file for a Patent?

  • Create IP plan
  • Confirm Patentability
  • Confirm commercial potential
  • Create a commercialization plan

Confirm Patentability

  • Verify public disclosure dates (confirm novelty)
  • Verify non-obviousness
  • Is it useful (does it have utility in the trade)
  • Do you have the funds to prosecute the patent 
  • 15K – 20K: not small business
  • 7k-10K for small, independent or nonprofits (50%-reduction)
  • 3.5K-5K for micro (75% reduction)

Confirm Commercialization Potential

Assess/test the market

  • Analysis of assumptions regarding:
  •  Market opportunity
  • Cost assumptions (for production, developing market)
  • Test hypothesis
  • Seek feedback
  • Assemble what you know, make (semi) intelligent predictions

Sell Or License Your Technology

  • Create a public disclosure plan
  • USPTO databases 
  • Technology hubs & assistance centers
  • Trade shows, Conferences
  • Broker?
  • Non-Confidential
  • Pitch & Overview
  • Estimate of market value

Sell or License Your Technology

  • Prior to First Contact
  • Research: 
  • Company portfolio
  • Their Strategy
  • Their Budget cycle
  • At First Contact
  • Deliver Pitch 
  • Make your objectives known (if mutual interest)
  • Provide overview and estimate of market value
  • Early discussions with a potential company
  • Do not insist on face-to-face meeting
  • Identify your point person and stakeholders
  • Be transparent about state of innovation, IP restrictions, investors
  • Seek information on strategic focus and priorities
  • Describe commercial applications
  • Seek input from potential licensee on technical viability, potential value, prospect and timing for commercialization

Sell Or License Your Technology

  • Negotiations with a potential licensee
  • Define your key objectives/needs early 
  • Seek to understand the company’s key priorities
  • Build trust to make agreement a win-win
  • If cooperative research is sought, include staff with skills in industry and research
  • Define milestones-clarify roles and accountability
  • Be flexible on deal structure, but be clear on cash/capital requirements to ensure success

Determining Value

  • Cost approach
  • Estimate of obtaining technology from a different source. (create features of innovation through alternate methods, time delays, research costs, etc)
  • Income approach 
  • Analysis of additional profit a company will receive by incorporating the technology into their product mix
  • Market approach
  • Valuing the technology based on other products of similar features in the market

Negotiating A Payment

  • Payment methodologies
  • Lump sum – one-time, based on specific event
  • Performance based on milestones
  • Time based
  • Royalties
  • Rate is paid based on units produced or sold
  • Rate may vary depending on negotiated terms
  • Minimum royalty amount per time period

Negotiating Other Aspects

Inflation

Financial Administration

Infringement

Product Liability

Representations and Warranties

Licensor and Licensee Obligations

Waiver (of rights)

Anti-competitive practices

Government regulations

Disputes

Implementation of the agreement

Expiration and Termination

Performance clause

Exclusivity

Geographic limitations

Transferability

Insolvency terminates license

The Last Word

  • Seek legal advice 
  • Be responsive to questions
  • Seek agreement on development/implementation timeline and possible delays

Resources

  • http://www.wipo.int/export/sites/www/sme/en/documents/pdf/technology_licensing.pdf
  • www.uspto.gov
  • www.copyright.gov