Legal Issues in New

Ventures
Chapter 6: (Hirsch)

Session 6
Chapter Objectives
• Identify and distinguish intellectual property assets of a new
venture including software and website
• To understand nature of patents, rights they provide, and the filing
process.
• To understand purpose of trademark and procedure for filing
• To learn the purpose of copyrights and how to file for one.
• To understand value of venture to either expand a business or start
a new venture.
What is intellectual property?
• Includes; patent, trademarks, copyrights and trade secrets.
• Need for a lawyer: legal advise at different stages of start-up.
• How to select a lawyer?
• One time vs. continuous fees.
• Hire someone you can relate personally.
Patents
• It is a contract between government and inventor.
• Government grants inventor exclusivity for specified amount of
time. Negative rights to prevent anyone from making, using, and
selling invention.
• After specified time, government publish the invention and
became domain of public.
Patents
Utility Patents:
• Utility patents have term of 20 years.
• Filed at Patent and Trademark Office (PTO)
• It grants owner the protection from anyone else making, using
and/or selling invention.
• Inventions: new, useful, and/or unobvious processes.
• Example: film development, machines, chemical compound or
mixture, manufacturing units etc.
Patents
Design Patent:
• Any new, original, ornamental, and unobvious designs for articles
of manufacture.
• It reflects appearance of an object.
• These are granted for 14 years term.
• Examples: shoes like reebok, Nike, product container.
International Patents: Office of International patent cooperation is
USPTO.
Patents Infringement
• Modification and/or improvement in existing products are perfectly
legal.
• You may license the product from patent holder.
• Identify websites and online service who helps to searach existing
patents.
• Otherwise, hire patent attorney.
Trademarks
• Word, symbol, design, or some combination of such, or slogan, or
any particular sound that identifies a particular sponsorship or
product or service.
• It last for indefinite time till it is in commercial use.
• Usually issued 10 years term on renewal terms.
• Usually after five to six years, owner supposed to show in affidavit
the trademarks is still in commercial use to PTO.
Copyrights
• Protect original work of authorship.
• It does not protect the idea itself.
• examples: music, songs, books, scripts, articles, poems, models,
sculptures, printed materials, board games, data etc.
Trade Secrets and Noncompetition
agreement
• Make some idea or process confidential and license it as trade
secret.
• Employees working in such organization are required to sign an
agreement.
Licensing
• It is an agreement between two parties.
• It requires licensee to pay royalty.
• Licenser holds rights over some information, process or technology
protected by patent, trademarks, and copyrights.

Patent license Trademark License Copyright License

• Manufacture and/or • Franchising agreement. • Using celebrity/author
market the product under • Using trademarks and names
its label. operating a business. • Using streaming of music,
• Pay fees on basis of sales movies and tv shows.
End of Chapter.