Ch 6 Intellectual Property and Other Legal Issues for the Entrepreneur by Shepherd Hisrich

7/21/2019 Ch 6 Intellectual Property and Other Legal Issues for the Entrepreneur by Shepherd Hisrich

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Intellectual Property and

Other e!al I""ue" #or the

Entrepreneur

McGraw-Hill/IrwinEntrepreneurship, 7/e Copyright 2008 The McGraw-Hill Companies, Inc. All rights resere!.

Chapter 6


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Entrepreneur"h%p &thEd%t%on

Author: Robert D Hisrich,

Micheal P Peters

Dean a !hepher"


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Sultan "alah ud d%n

M.A()al *aru+h Al%

A"%# Shah,ad


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Intellectual Property

Inclu"es: Patents

#ra"e$ar%s

Cop&ri'hts

#ra"e secrets

Represents i$portant assets to the

entrepreneur !houl" be un"erstoo" e(en be)ore en'a'in' the

ser(ices o) an attorne&


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Select%n! a ayer

*aw&er $a& wor% on a: Retainer basis

+ne-ti$e )ee

A 'oo" wor%in' relationship with a law&er:

Eases so$e o) the ris% in startin' a new business

Gi(es the entrepreneur necessar& con"ence

Entrepreneur can oer law&er stoc% in e.chan'e)or the ser(ices


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0ype" o# Patent"

Patent: 'rants hol"er protection )ro$ others$a%in', usin', or sellin' si$ilar i"ea issue" b& theP#+

0tilit& patent: 'rants owner protection )ro$ an&oneelse $a%in', usin', an"/or sellin' the i"entie"in(ention

Desi'n patent: pro(i"e in(entor with a ne'ati(e

ri'ht e.clu"in' others )ro$ $a%in', usin', or sellin'an article ha(in' the orna$ental appearance 'i(enin the "rawin's inclu"e" in the patent

Plant patent: 'i(en )or new (arieties o) plants,represent a li$ite" area o) interest


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Internat%onal Patent"

#he Patent Cooperation #reat& 1PC#2 was establishe"to pro(i"e r$s protection in 'lobal $ar%ets

Has o(er 344 participants

5acilitates patent lin's in $ultiple countries in one

o6ce A"$inistere" b& the orl" Intellectual Propert&

+r'ani8ation 1IP+2 in Gene(a, !wit8erlan"

Pro(i"es a preli$inar& search that assesses whetherlin' r$ will )ace in)rin'e$ents in an& countr&

!i'nicant "ierences $a& e.ists in patent laws ineach o) these countries


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0he %"clo"ure ocu)ent

!tate$ent to 0! Patent an" #ra"e$ar% +6ce b&in(entor "isclosin' intent to patent i"ea

Establish a "ate o) conception o) the in(ention

I$portant when two entrepreneurs le patents on

si$ilar in(entions Rele(ant when )orei'n co$panies are in(ol(e"

#o le a "isclosure "ocu$ent:

Prepare a clear an" concise "escription o) thein(ention

Inclu"e photo'raphs

Inclu"e a co(er letter an" a "uplicate with the

"escription


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0he Patent Appl%cat%on 41 o# 25

Intro"uction 9ac%'roun"

A"(anta'es o) the in(ention an" the nature o)proble$s that it o(erco$es

!tates how the in(ention "iers )ro$ e.istin'oerin's

Description o) in(ention Description o) the "rawin's that acco$pan& it

Detaile" "escription o) the in(ention


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0he Patent Appl%cat%on 42 o# 25

Clai$s !er(e to speci)& what the entrepreneur is tr&in'

to patent

Essential parts o) the in(ention shoul" be

"escribe" in broa" ter$s Clai$s $ust not be too 'eneral either

Application shoul" contain a "eclaration or oathsi'ne" b& the in(entor or in(entors


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Patent In#r%n!e)ent

Man& businesses, in(entions, or inno(ations areresults o) i$pro(e$ents on, or $o"ications o),e.istin' pro"ucts

Cop&in' an" i$pro(in' on a pro"uct:

Ma& be per)ectl& le'al

A 'oo" business strate'&

Pro"ucts can be license" )ro$ the patent hol"er A"(isable to hire a patent attorne& to ensure no

possibilit& o) patent in)rin'e$ent


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Chec+l%"t #or M%n%)%,%n! Patent %"+"

!ee% a patent attorne& who has e.pertise in &our pro"uct line

#he entrepreneur shoul" consi"er a "esi'n patent to protect the pro"uct

"esi'n or pro"uct loo%

9e)ore $a%in' an e.ternal "isclosure o) an in(ention at a con)erence or

to the $e"ia, or be)ore settin' up a beta site, the entrepreneur shoul"

see% le'al counsel since this e.ternal "isclosure $a& ne'ate a

subseuent patent application E(aluate co$petitor patents to 'ain insi'ht into what the& $a& be

"e(elopin'

I) &ou thin% &our pro"uct in)rin'es on the patent o) another r$, see%

le'al counsel

;eri)& that all e$plo&$ent contracts with in"i(i"uals who $a& contribute

new pro"ucts ha(e clauses assi'nin' those in(entions or new pro"ucts to

the (enture

9e sure to properl& $ar% all pro"ucts 'rante" a patent


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Bu"%ne"" Method Patent"

Growth o) Internet use an" so)tware"e(elop$ent has 'i(en rise to use o) business$etho" patents

E' A$a8onco$

5ir$s that hol" these patents use the$ toassault co$petitors

!ubseuentl& pro(i"e a stea"& strea$ o) inco$e)ro$ ro&alties or licensin' )ees


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e!%"ter%n! the 0rade)ar+ 41 o# 25

5e"eral re'istration o) tra"e$ar%s = P#+ 5ilin' $ust $eet )our reuire$ents:

Co$pletion o) the written )or$

A "rawin' o) the $ar%

5i(e speci$ens showin' actual use o) the $ar%

#he )ee

Initial "eter$ination o) suitabilit& ta%es > $onths +b?ections $ust be raise within si. $onths, or

application is consi"ere" aban"one"

Ri'ht to appeal in case o) re)usal


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e!%"ter%n! the 0rade)ar+ 42 o# 25

+nce accepte", tra"e$ar% is publishe" in the#ra"e$ar% +6cial Ga8ette to allow an& part&:

>4 "a&s to oppose

Reuest an e.tension to oppose

Re'istration issue" i) no opposition is le"

Proce"ure ta%es about 3> $onths )ro$ initiallin'


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Bene#%t" o# a e!%"tered 0rade)ar+

!ee% a patent attorne& who has e.pertise in &our pro"uct line

It pro(i"es notice to e(er&one that &ou ha(e e.clusi(e ri'hts to the use

o) the $ar% throu'hout the territorial li$its o) the 0nite" !tates

It entitles &ou to sue in )e"eral court )or tra"e$ar% in)rin'e$ent, which

can result in reco(er& o) prots, "a$a'es, an" costs

It establishes incontestable ri'hts re'ar"in' the co$$ercial use o) the$ar%

It establishes the ri'ht to "eposit re'istration with custo$s to pre(ent

i$portation o) 'oo"s with a si$ilar $ar%

It entitles &ou to use the notice o) re'istration@

It pro(i"es a basis )or lin' tra"e$ar% application in )orei'n countries

Table 6.2


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Copyr%!ht"

Ri'ht 'i(en to pre(ent others )ro$ printin',cop&in', or publishin' an& ori'inal wor%s o)

authorship

Issues surroun"in' access to $aterial on the Internet

ha(e le" to $a?or le'al battles )or the entertain$entin"ustr&

E.a$ple:


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0rade Secret"

Protection a'ainst others re(ealin' or "isclosin'in)or$ation that coul" be "a$a'in' to business

Ha(e a li)e as lon' as the i"ea or process re$ainsa secret


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%cen"%n! 41 o# 25

Contractual a'ree$ent 'i(in' ri'hts to others touse intellectual propert& in return )or a ro&alt&or )ee #&pe o) licensin':

Patent license a'ree$ent: species how the

licensee woul" ha(e access to the patent#ra"e$ar%: in(ol(es a )ranchisin' a'ree$ent

Cop&ri'hts

*icensin' has beco$e a re(enue boo$ )or $an&5ortune 44 co$panies


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%cen"%n! 42 o# 25

Buestion to be consi"ere" b& an entrepreneur: ill custo$ers reco'ni8e license" propert&

How well "oes the license" propert& co$ple$ent $&pro"ucts or ser(ices

How $uch e.perience "o I ha(e with the license"propert&

hat is the lon'-ter$ outloo% )or the license"propert&

hat %in" o) protection "oes the licensin' a'ree$entpro(i"e

hat co$$it$ent "o I ha(e in ter$s o) pa&$ent o)ro&alties, sales uotas, an" so on

Are renewal options possible an" un"er what ter$s


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Product Sa#ety and %a7%l%ty 41 o# 25

Responsibilit& o) a co$pan& to $eet an& le'alspecications re'ar"in' a new pro"uct co(ere"b& the Consu$er Pro"uct !a)et& Act

5irst passe" in 37

Create" a (e-$e$ber co$$ission with: Power to prescribe sa)et& stan"ar"s

Responsibilit& an" power to i"enti)& substantial ha8ar"san" bar pro"ucts it consi"ers unsa)e

Act was a$en"e" an" si'ne" into law in 34 Establishes stricter 'ui"elines )or reportin'

pro"uct "e)ects an" an& in?ur& or "eath resultin')ro$ such "e)ects


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Product Sa#ety and %a7%l%ty 42 o# 25

Clai$s re'ar"in' pro"uct liabilit& usuall& )allun"er one o) the )ollowin' cate'ories:


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In"urance

Pro(i"es a $eans o) $ana'in' ris% in the newbusiness

Entrepreneurs usuall& ha(e li$ite" resources inthe be'innin'

!o$e insurances are reuire" b& law an" cannotbe a(oi"e"

+ther insurances are not reuire" but $a& benecessar& to protect the nancial net worth o) the(enture


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0ype" o# In"urance and Po""%7le Co8era!e


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Sar7ane"-O9ley Act 41 o# $5

Con'ress passe" the Act in 44 Has pro(i"e" a $echanis$ )or 'reater control

o(er the nancial acti(ities o) public co$panies

Has create" so$e "i6culties )or start-ups an"

s$aller co$panies 0n"er this law:

CE+s nee" to (ouch )or nancial state$entsthrou'h a series o) internal control $echanis$s

an" reports

Directors $ust $eet bac%'roun", len'th o)ser(ice, an" responsibilities reuire$entsre'ar"in' internal au"itin' an" control


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Sar7ane"-O9ley Act 42 o# $5

Atte$pt to inFuence the au"itor or i$pe"e theinternal au"itin' process is consi"ere" a cri$inalact

*aw co(ers ban% )rau"

Passa'e o) this law has been o) so$e concern "ueto:

Interpretation o) this law

!ubseuent "irectors liabilit&

5orei'n co$panies that tra"e on 0! stoc%e.chan'es o)ten "elist


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Sar7ane"-O9ley Act 4$ o# $5

#hou'h pri(ate co$panies are not inclu"e",the& are sub?ect to control i):

#he& consult with a public co$pan&

InFuence that public co$pan& in an& wron'"oin'

establishe" b& the !arbanes-+.le& Act

Entrepreneurs can set up a boar" o) a"(isorsinstea" o) an e.ten"e" boar" o) "irectors


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Contract" 41 o# 25

A le'all& bin"in' a'ree$ent between two parties

9usiness "eals are conclu"e" with a han"sha%e,but in case o) "isa'ree$ents, entrepreneurs:

Ma& n" that there is no "eal

Ma& be liable )or so$ethin' ne(er inten"e"

Rule is to not to rel& on a han"sha%e i) "ealcannot be co$plete" within one &ear

Courts insist on a written contract )or alltransactions o(er 44


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Contract" 42 o# 25

5our essential ite$s in an a'ree$ent to pro(i"ethe best le'al protection:

All parties in(ol(e" shoul" be na$e" an" specicroles in the transaction specie"

#ransaction shoul" be "escribe" in "etail E.act (alue o) the transaction shoul" be

specie"

!i'nature1s2 o) the person1s2 in(ol(e" in the "eal

shoul" be obtaine"

Ch 6 Intellectual Property and Other Legal Issues for the Entrepreneur by Shepherd Hisrich

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Transcript of Ch 6 Intellectual Property and Other Legal Issues for the Entrepreneur by Shepherd Hisrich