E-Commerce in Iowa Legal and Business Issues · 2015. 11. 23. · Size differential – 800lb...
Transcript of E-Commerce in Iowa Legal and Business Issues · 2015. 11. 23. · Size differential – 800lb...
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A Lot at Stake
Assets – Google TM - $32B
Lawsuits - Medtronic Licensing - $1.35B
Business - Formula for Coke = priceless
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Why Worry About IP?
IP is the most valuable asset of many of the world’s largest companies
Coke
Microsoft
Trademark alone can be >80% of company’s value
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Law
$ Bad Guy
Who is on the other side?
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Can They Go the Distance?
$50K?
$1M?
Will they?
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Size
Matters
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But it’s only $500 RIAA
Patent Holder
You are an easy win
Cut their nose off to spite their face
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Why?
Stifle competition – Fonzie factor
Size differential – 800lb gorilla
Revenue stream – Patent Troll
Company exists on single patent
A whole lot of other factors
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Lowsides and Highsides
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Lowsides
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Highsides
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Intellectual Property
1. What is Intellectual Property?
2. IP Infringement Lawsuits
3. Building a portfolio
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1. What is
Intellectual Property?
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Products
of the Mind
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Invention - Patents
Brands – Trademark
Authorship - Copyright
Secrets – Trade Secrets
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Patent
New
Useful
Not Obvious
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Not Patentable
Ideas
Obvious combos
Illegal items
Immoral items
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“Internet” Patents
State Street Bank – 1998
Allowed patenting a business method
In re Bilski – 2010
Some business methods are not patentable
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Business Method Applications
Amazon.Com -One-Click
AskJeeves.com - Plain English search
Lycos – Search engine technology
Cybergold – Paying to read ads
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Difficult to Get
Hard to get a business
method patent issued today
Will likely be even harder in the future
Requires changing and specialized drafting
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Mark used to identify source
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Types of Trademarks
Fanciful – Qwing
Arbitrary – Royal
Suggestive – NoDoze
Descriptive – red
Generic - apple
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Types of Trademarks
Color – pink for fiberglass
Sound – NBC chimes
Scent – floral scent for yarn
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Correct Usage
® only for federally registered
trademarks
TM or SM for any mark
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Incorrect Usage Loss of trademark
thermos
escalator
cellophane
yo-yo
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Types of TM Protection
Common law
State
Federal
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Original works of
authorship
Fixed in a tangible
medium
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Copyright ©
Copyright Protects
Books
Music
Plays
Films
Dances
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Exclusive Rights
Reproduce
Make derivatives
Distribute
Perform
Display
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How Long Does © Last?
70 years after author's death
95 years from publication
120 years from creation
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Copyright Does Not Protect
Federal
publications
Public Domain
Material
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Fair Use
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Fair Use
Your Purpose
Impact
Their Purpose
Amount
Fair Use
Usually ok Parody
Critical commentary
Usually not Commercial
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Fair Use
Very rarely applicable
Do Not rely on fair use protection
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Trade Secret
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Is It a Trade Secret?
Valuable
Secret
Difficult to ascertain
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Trade Secrets
Formula for Coca-Cola
Customer Lists
Vendor Information
Source Code
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2. IP Infringement Lawsuits
Expensive
Time consuming
Tarnish reputation
Unlikely to recoup costs
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Patent Infringement
Injunction
Lost Profits
Reasonable Royalty
Treble damages
Attorney fees
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Patent Do’s
Know your industry
Watch out for patent “trolls”
Obtain Field of Use opinion
Look for 7-digit patent numbers
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Patent Don’ts
Ignore cease and desist letters
Disclose before patent analysis
Assume patent means no infringement
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Trademark Infringement
Injunction
Damages and Infringer’s profits
Treble damages
Attorney fees
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Trademark Do’s
Choose unique trademarks
Grab domain name first
Use trademarks as adjectives
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Trademark Don’ts
Allow unauthorized use of trademarks
Use 3rd party trademarks
Use similar trademarks
Use trademarks as nouns
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Copyright Infringement
Damages + Infringer’s profit
Injunction
Statutory Damages
Attorney Fees
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Copyright Infringement
Statutory damages
$750-$30,000 per work
$150K if willful and malicious
Criminal
$500,000
5 years
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Copyright Do’s
Get an Assignment
From “author”
Payment not enough
Up front
Register valuable copyrights
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Copyright Don’ts
Do not assume “fair use”
Do not assume “public domain”
Do not use without permission
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Trade Secret Remedies
Injunction
Compensation
Punitive damages
Attorney fees
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Trade Secret Do’s
Have employees sign NDA
Incorporate into employee handbook
Devise security protocols
Incorporate NDA into contracts
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Trade Secret Don’ts
Disclose Trade Secrets (even once)
Post sensitive information online
Hire without checking NDA restrictions
Terminate without NDA confirmation
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3. Building a Portfolio
Adds value to company
Suitors may be able to leverage
Use as bargaining chip
Generate licensing income
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Value
Primary asset – All IT companies
Delays competitors
Provides potential revenue stream
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Value Marketing advantage
Increases the value of the company
Great bargaining chip in litigation
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Patent Cons
Expensive $5K-$20K
Slow 18-48+ months
No infringement protection
Expires 20 years
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Patents Pros
Difficult to design around
3x damages + attorney fees
Hinders reverse engineering
in terrorem effect
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Trademark Cons
Goods/services specific
Must show actual use
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Trademark Cons
Requires continuous renewal
No generic or descriptive marks
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Trademark Pros
Potentially infinite duration
Use = common law rights
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Trademark Pros
Federal registration provides
Treble Damages
Attorney Fees
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Copyright Cons
Registration required to bring suit
Does not protect functionality
Vesting of original ownership often
confusing
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Copyright Pros
Registration not required
Inexpensive
Protection automatically attaches
Attorney Fees
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Trade Secrets Cons
Could be gone tomorrow
Not if you can reverse engineer
Must try to prevent disclosure
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Trade Secret Pros
No need to disclose
Potentially infinite duration
Inexpensive
Covers Ideas
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Know the Issues
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