Intellectual Property Transactions Outline

Transactional Intellectual Property – Kesan – Spring 2016
 
Introduction
Investment Stages
Angel Investors: small investments; usually < $250,000 Venture Capitalists: larger sums in exchange for some measure of control often compel hiring of VC-approved managers Government and Market Funding Comparisons Funding Source Ex Ante Ex Post Government Tax incentives; grants Prizes Market IP rights IP SSOs IP regimes are fundamentally market based because value of your IP right depends on the market Economic Primer for IP Three Revolutions with IP at the Heart information technology     IP vs. Real Property IP is inexhaustible - use does not diminish value IP is inexcludable in the absence of a regulatory regime IP regimes discourage "freeriding" Cost Structure High cost to create, low cost to replicate high fixed costs, low variable costs major costs are R&D; marginal cost is low                               Intellectual Property Regimes Patents Types utility, design, plant Requirements for patentability novelty, utility, non-obviousness Publication and Disclosure of Patent Examination Process public documentation for prior art, amendments, etc. Nature of Rights Conferred exclusive right to prevent others from using, not a right to use yourself Maintenance fees Maintenance fees at 4 years, 8 years, and 12 years after issuance 70% of the time, patentee does not pay third (12 yr) fee and allows early expiration in other countries, annuities instead of this structure Term of Patent 20 years from date of filing of application, subject to maintenance structure Patent Infringement   Patent Assignments employer-employee scenario International Patent Issues True international patent protection costs ~$250,000 Relief For Infringement damages (lost profits, reasonable royalty) injunctive relief Trade Secrets Elements economic value secrecy (and reasonable efforts to maintain) Action: Misappropriation of TS Defenses independent invention reverse engineering Patent or Trade Secret? cost/benefit analysis; TS great for processes, terrible for composition patents ISSUE: How does a financier determine the value of a trade secret? Arrow paradox - in determining the value of your TS, you may destroy it through disclosure Relationship between Patent and TS TS has: broadest subject matter ease of obtaining protection infinite term worse option for public policy (no disclosure) Patent has better mechanism for protection beneficial disclosure function Trademarks Characteristics of TM or SM source identifier - more about branding Items that can serve as a TM/SM just about anything, including names, colors, logos, sounds, etc. Registration ITU - intent to use application; must actually engage in "bona fide" use of the TM with a period after filing TM application - filing for protection of trademark in commercial use Role of the TM Office vigorous opposition process - TM application is published; parties have opportunity to dispute by filing an opposition Rejection of TM Application likelihood of confusion other grounds no use in interstate commerce, etc. Impact of Registration If reg'd & used for 5 years, mark becomes incontestable only limits grounds for challenging; can still be abandoned Causes of Action Trademark infringement: likelihood of confusion Dilution: available to famous markholders argue that something either blurs distinction with your famous mark, or tarnishes its image by association Transfer of Trademark Interests Li