Technology Ventures: From Idea to EnterpriseChapter 10: Summary What early decisions should an...

Technology Ventures: From Idea to EnterpriseChapter 10: Summary

What early decisions should an entrepreneur make about legal and intellectual property issues?

The choice of a legal form, name, logo, and other formal elements are critical to a successful future.

Summary

When one door closes, another door opens; but we often look so long and so regretfully upon the closed door that we do not see the ones which open for us.

Alexander Graham Bell

Legal Formation and Intellectual PropertyLegal Formation and Intellectual Property

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Chapter 10: Figure 10.1

The First Steps of Establishing A New Firm

Select Business Attorney

Choose Legal Form

Choose State of Incorporation

File Incorporation Papers

Name Directors and Hold Meeting

Prepare Plan for Ownership Shares (%)

Founder Investments and Issue Shares

Choose Accounting Firm

Choose a Bank

Act to File for Patents, Copyrights, and Other IP

Select Intellectual Property Attorney

Develop IP Plan

Choose Name and Logo

Secure Trademark

Choose Founding Team

Choose Board and Officers

START


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Technology Ventures: From Idea to Enterprise

Chapter 10: Table 10.2

The Key Elements of the Five Types of Legal Firm for a New Business

Factors

Sole Proprietorship

Partnership

Regular C Corporation

S Corporation

LLC

Owners Personal Liability

Unlimited Unlimited Limited Limited Limited

Taxation Proprietor's Personal Tax Forms

Partner's Personal Tax Forms

Profits Taxed at Corporation and Owner's Pay Tax on Distributions

Profits or Losses Flow Through to owners

Profits or Losses Flow Through to owners

Continuity of Business

Terminated by Proprietor

Dissolved by Partners

Perpetual Perpetual Limited to Fixed Number of Years

Cost of Formation

Very Low Low Moderate Moderate Moderate

Ability to Raise Capital

Low Moderate High Moderate High


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Chapter 10: concept

Company Name:

• Memorable

• Related to the product

• Attractive


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Chapter 10: Exercise

Your team is planning for a new short distance, regional, low cost airline. Choose a legal form and a company name that fits your plan.


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Chapter 10: concept

• A patent grants inventors the right to exclude others from making, using, or selling their invention for a limited period of time.

• Utility patents are issued for the protection of new, useful, non-obvious, and adequately specified processes, machines, and manufacturing processes for a period of 17 years.


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Chapter 10: concept continued

• Design patents are issued for new original, ornamental, and non-obvious designs for articles of manufacture for a period of 14 years.

• Plant patents are issued for a term of 17 years for certain new varieties of plants that have been asexually reproduced.

• A business method patent is actually a type of a utility patent and involves the creation and ownership of a process or method.


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Chapter 10: Table 10.5 (Fenwick & West LLP, R.P. Patel)

Developing a Patent Strategy

1.Identify the Goals of a Patent Portfolio

2.Identify the intellectual assets and gather supporting documents

3.Identify those assets most suitable for patent applications

4.Draft invention disclosures and patent applications

5.Develop a plan for licensing, enforcing and enhancing patents


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Chapter 10: concept

• A trademark is any distinctive word, name, symbol, slogan, shape, sound, or logo that identifies the source of a product or service.

• A copyright is a right of an author to prevent others from printing, copying, or publishing any of his or her original works.


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Chapter 10: concept

Licensing is a contractual method of exploiting intellectual property by transferring rights to other firms without a transfer of ownership.


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Chapter 10: Table 10.7

Ten Mistakes with Legal Matters

Failing to secure legal assistance

Delaying the handling of legal issues

Delaying the intellectual property management process

I ssuing founder shares without vesting provisions

Failing to incorporate early

Disclosing intellectual property without a nondisclosure agreement

Starting a business while employed by a potential competitor

Overpromising and exaggerating claims in the business plan

Failing to register the name and logo of the firm early in the startup process

Failing to develop confidentiality, non-disclosure and non-compete agreements


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Chapter 10: Principle

The name, logo, and intellectual property of a new venture can provide a proprietary advantage leading to a temporary monopoly in the marketplace.


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Chapter 10: Exercise

Your research and development team has one member who has devised a new method of making photovoltaic solar panels at a significantly lower cost than existing methods.

Discuss the idea of using patents vs. trade secrets for this new method. The potential for this new technology is great. Describe your strategy for protecting the intellectual property.


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Chapter 10: Venture Challenge

VENTURE CHALLENGE

1) Describe the venture’s legal form and provide its company name.

2) Go to the State of Delaware’s website (http://www.state.de.us/corp/forms.shtml) and download the “How to Incorporate” packet. Determine what type of incorporation best fits your venture and fill out the appropriate form(s).

3) Create a company logo.

4) What are the key elements of the intellectual property of your firm?


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http://www.state.de.us/corp/forms.shtml

Chapter 10: DVD Video

DVD Video

“The Sarbanes-Oxley Act”

Karen Richardson (E.piphany)


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