Intro to Intellectual Property 05/13/2015

Exponential Inventor Intro to Intellectual Property 05/13/2015 Why is IP Important? Everyone makes a big deal out of IP, why? When people discuss IP, they’re referring to Intellectual Property. Investors want to know an early company has a unique competitive advantage An established company wants to protect the domain in which it operates Maybe there are revenue streams which can be generated with little to no work (licensing) Establishing a brand is costly. IP can help secure your investments in your brand Founders, startups, and exponential organizations should be uniquely aware of IP when making decisions. IP is a key to a successful startup and essential for exponential organizations.

Exponential Inventor Intro to Intellectual Property 05/13/2015 Why is IP Important? Why is IP important for an exponential organization? “Creative monopolies aren’t just good for the rest of society; they’re powerful engines for making it better. Even the government knows this: that’s why one of it’s departments works hard to create monopolies (by granting patents to new inventions)...” – Peter Thiel, Zero to One

Exponential Inventor Intro to Intellectual Property 05/13/2015 The Four Forms of IP PatentsCopyright TrademarkTrade Secret

Exponential Inventor Intro to Intellectual Property 05/13/2015 Patents Patent Rights Patent rights in the United States are Constitutionally protected rights. They are property rights and, as such, can be thought of with real property analogues. They do not guarantee you the absolute right to make, use or sell, but like a fence can be used to exclude others. Also, like a fence, the patent claims define the boundaries of the patent (“the name of the game is the claim”) Are limited in duration (20 years for a utility and plant, 14 years for a design) There are four broad categories of patents: process, machine, method of manufacture, or composition of matter. Broadly, to obtain a patent, the invention must be useful, novel, and non- obvious.

Exponential Inventor Intro to Intellectual Property 05/13/2015 Patents Patent Forms

Exponential Inventor Intro to Intellectual Property 05/13/2015 Copyright Copyright in the United States are also Constitutionally protected rights (same as patent clause). Similar to patents, a copyright can be used to: Prevent others from making or selling your work Are limited in duration (for an individual lifetime + 70, if “work for hire” 95 years from publication or 120 years from creation) Music (written or recorded), books, computer code, etc Cannot be utilitarian, a fact, or short title Prevents derivative works as well Independent creation as a defense and fair use doctrine Requires notice (Copyright Year Author) Registration of a copyright is not necessary, but provides some benefits, such as statutory damages and a registered date. Otherwise, Copyright is automatic on “fixation”, i.e. when the work is fixed in some tangible media.

Exponential Inventor Intro to Intellectual Property 05/13/2015 Trademark Trademark / Trade Dress Trademark or trade dress protects the mark as associated with commerce. Unlike patents and copyright, TM arises from common law (not from the Constitution). Serves to distinguish your company as unique Protection of the mark is via infringement suits Since it is tied to a specific market, there can be similar marks in different markets (e.g. Coca-Cola bicycles would not cause confusion) Genericide is a threat to TM rights (Xerox) Can TM colors, smells (like Whole Foods), sounds (Harley-Davidson) Can protect the packaging of a product Can protect the look and feel of an establishment Lasts as long as the product is used in commerce Somewhat like Copyright, TM doesn’t require registration. However, it is possible to register with the USPTO. Registration of a TM provides a presumption of ownership and a right to bring the action in a Federal court.

Exponential Inventor Intro to Intellectual Property 05/13/2015 Trademark Trademark / Trade Dress

Exponential Inventor Intro to Intellectual Property 05/13/2015 Trade Secret You can always choose to enforce secrecy around your product or method. This is generally known as trade secret and is enforced through contacts with your employees and other entities which are privy to the secret. Keep your competitive advantage by not sharing your secret No protection from independent creation (unlike patents) Lasts as long as you are able to keep a secret Think about the formula for Coca-Cola, recipes, source code that cannot be decompiled, a special method, etc Enforced through breach of contract claims

Exponential Inventor Intro to Intellectual Property 05/13/2015 Monetization Monetizing IP Think about patents, copyright, and TM like real property: You can keep people out. This adds value to your property! You can sell your property (Assignment) You can lease your property (License) Field of Use (restrict to one application of your tech) Geographic Territory (restrict to only one country or area) Exclusive / Non-Exclusive Term Royalty Rate Initialization Milestone payments Royalty rates, IP assignment value, and other terms are specific to the technology or industry, so make sure to do research about your technology before structuring any deals.

Exponential Inventor Intro to Intellectual Property 05/13/2015 Monetization Monetizing IP Can also be used as a tool to drive innovation in an innovation competition: “In general, there are four variants worth considering: 1.Philanthropic. Winner retains IP 2.Philanthropic. IP is put into open domain 3.Commercial. IP is owned by the prize sponsor 4.Commercial. IP is licensed (or shared) by the prize sponsor” - Peter Diamanis, BOLD

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