Getting Started as an Entrepreneur/Opportunity/Your Intellectual Property

From Wikibooks, open books for an open world
< Getting Started as an Entrepreneur
Jump to: navigation, search

Your Intellectual Property[edit]

Intellectual property defined
Once you and your team have a great, well-evaluated idea, you need to make sure no one steals it before you can get it to market. Unfortunately, the only way to keep your idea totally safe is to keep it locked up inside your brain. Probably the best approach is somewhere between total secrecy and publicly broadcasting your idea. As ex-Apple evangelist Guy Kawasaki puts it, if it's really a good idea, lots of people have probably already thought of it. To turn your idea into a commercially viable product, you'll need to judiciously share it with others.

A note on lawyers
Intellectual property lawyers are specialists. If you're serious about patenting an idea, you probably need one. They're generally not cheap, but they do focus on particular scientific disciplines, making it worth your while to find a good one. You also need a general business lawyer or corporate counsel who can advise you on everything from incorporation to sales contracts

Knowledge is power
Naturally, you want to take whatever steps you can to protect your ideas. The following definitions will help you understand the differences between various types of intellectual property protection.

The patent
When you patent a product or an idea in the US, the government prohibits others from making your invention for up to twenty years. To get a patent, you have to file an application that describes your invention thoroughly, and explains why it should be considered novel. If the patent is granted, your invention is made public, so only the law prevents others from copying it. Patents can only be granted to inventors (not companies), so companies usually require their employees to sign over patent rights when they take up employment.

Patenting isn't the ideal solution for every product-it can be complicated and expensive. Sometimes it's a better decision just to keep your idea or formula as secret as possible. An intellectual property attorney can advise you on whether filing for a patent is the best approach for protecting your idea.

Copyrights
Copyrights protect written materials of all kinds, including software. They don't protect trade secrets. For example, if you publish information about your product, and the information that you publish is copyrighted, only the expression of the information, or the particular phrasing you choose, is protected-not the information itself. Once again, seek the advice of an intellectual property attorney regarding the correct procedure for copyrighting your work under federal law.

Trademarks
Trademarks are words or design elements, registered with the US Patent and Trademark Office, that represent a company or product. They must be registered to be protected. Usually before you can register a trademark, you need to conduct a search-both through the USPTO and among unregistered usage-to see if any other company is already using it. Talk to your intellectual property attorney!

Trade secrets
Coca-Cola is an example of a company that uses trade secrets rather than a patent to protect its secret formula. If the Coke formula had been patented, the information would have been made public, and the patent would have protected the product for only twenty years. A company that uses trade secret protection has to make efforts to prevent disclosure of its important ideas-once ideas have leaked, nothing will prevent other companies from using them. Companies keeping trade secrets require employees and investors to sign confidentiality agreements. Trade secret laws and protections vary from state to state. You need to know the limits of trade secret law within your state-again, an intellectual property lawyer can help.

Keep a journal
The major patent systems in use worldwide include those of the US, the EU, and now China and India. Although the systems are getting closer, there is still one key difference between the US system and the others: the US awards a patent to the "first to invent" while the others award it to the "first to file." "First to invent" means that even if someone files with the USPTO before you do, you can still be granted the patent if you can prove that you came up with the idea first. Thus, in the US you need to keep bound notebooks recording the substance and date/time of your daily work, and make sure the pages are signed and kept in a safe place. A number of other things to remember: don't publish a paper and forget to file a patent application within a year; don't talk about the specifics of your invention in a meeting without having the attendees sign confidential disclosure agreements; don't show the embodiment of the invention (e.g., a prototype) at a trade show before filing a patent application. A discussion with an IP attorney, a mentor or faculty member, or with the technology transfer office at your university can provide additional details.

Our source for these and many other useful definitions is http://www.growco.com.


Adventures in IP
Professional inventor Bob Shomo knows IP troubles. In the 1970s, Shomo developed and patented a vibration-free tennis racket. Wilson, the largest US manufacturer of tennis rackets, was interested. Shomo met with Wilson representatives in Chicago, giving them full know-how, engineering and test data, and a dozen rackets. They settled on a royalty rate, and scheduled a final meeting.

Then the meeting was cancelled. Wilson went through a major management shakeup, and when things settled down, Shomo got back in touch with his only contact left. "Yes, Wilson's still interested. Yes, they still have his data and his rackets."

After several months of trying to prod Wilson into action, they said, "Well, our patent attorney thinks you have a weak patent-we're going to go ahead and do our own version." That version came on the market as the Wilson Air-Shell. Wilson's design was identical, except that they used one piece for the handle, whereas Shomo's racket used two pieces. Technically, they weren't infringing his patent.

From "Inventor Paranoia," by Ed Zimmer, TEN Magazine, 1994. http://TENonline.org/art/9405.html


Protecting your intellectual property
Protecting your intellectual property can get complex-and expensive. You probably don't want to spend endless hours sorting through legalisms with attorneys and paying huge fees to do so. On the other hand, you certainly don't want to leave yourself legally exposed or squander a competitive advantage because you didn't do what was legally necessary. So here are some tips for maximizing your protection at the lowest possible cost.

Patent only what is important. If patent office examiners or competing individuals or companies challenge your patent, the legal fees can soar. You must conclude first that you need the protection, and second that you will recover much more than your expenditure in additional long-term sales.

Get the best trademark protection as early as possible. Registering a trademark is a much simpler procedure than getting a patent. A trademark search can usually be done for a few hundred dollars.

Choose the right form of protection. Don't assume that because copyright protection is cheaper to obtain than patent protection you should automatically go the less expensive route. Spend the $200 or $300 it might cost to get sound legal advice.

Warn potential violators that you are serious. You should warn everyone who has access to important information that the nondisclosure and other agreements they sign are not just a formality. If someone does violate your IP, be prepared to take legal action to set an example that will become known to others.

Plan for information protection. In the start-up phase, be prepared to make various disclosures of important information. That information may be contained in a business plan, lists of prospects, supplier names, production specifications, and various other data essential to starting your business.

From "How to Really Start Your Own Business," by David E. Gumpert, Inc. Magazine, 1999. http://www.inc.com/articles/1999/11/15345.html

<< Evaluate_Your_Idea Profile: A Sense of Success >>