This is part of my set of notes from the Startup School 2006 sessions at Stanford.

There are two major sets of issues with intellectual property: avoiding liability, and creating value.

Major forms of Intellectual Property

• Trade secrets: Secret information, not only technology (could be business secrets) core to the product the business offers to customers
• Trademarks: Marks that serve the communication function of signaling the source of the good or service to the customers
• Copyrights: Cover original works of authorship, but not ideas. Cover things like book, music, etc.
• Patents

Protection v. cost

• In order of increasing protection v. cost: copyright, trade secret, trademark, patent
• Copyright does not protect against independent development of something that duplicates your work; only protects against out-and-out copying of the final product
• Patents are at the opposite end of the spectrum than copyrights

Patents

• Government granted right to monopoly
• Requires that you file an application, unlike some other forms of intellectual property protection
• Exclusive Right – Right to exclude, not right to practice. Patent is a right to sue someone
• Basic patent requirements: utility, novelty, non-obviousness, description

Timing

• Statutory bars: if you haven’t filed your patent within a year of printed publication, public use, offer for sale (even if confidential or not actually sold) it may not be patentable. In other countries, this is covered by the concept of absolute novelty – rule is that they’re generally stricter, have to get patent on file before the product ships or details published.

Patent Process

1. File application
2. Office actions: USPTO responds the application
3. Prosecution/amendment: Pushing the patent through the process, amending to address issues flagged by USPTO
4. Allowance
5. Issuance: Patent actually issued to the inventor
6. Not covered: Abandonment – abandoning the application may occur if you don’t respond in a timely fashion. Avoiding this is the responsibility of your patent attorney. You may also choose to abandon an application on purpose.

What to Patent?

• Look to core technology that will exist across versions of the product, a fundamental piece of technology that provides you with competitive advantage
• Note that in an ideal world, this technology may have applications in other fields
• Note that you can patent things that aren’t actually in your product – you can patent alternatives to you product. You don’t have to have implemented the technology, merely filed the patent. May be used to preemptively protect future enhancements you are planning to add to the product to block competitors.
• Walkthrough of Starbucks cupholder patent (#5,205,473) ; Noah’s Bagels patent on similar item (5,826,786) – note the citation of Starbucks patent as reference.
• It has been resolved that you can patent software, business methods
• Business process patent for Data Processing System for Hub and Spoke Financial Services Configuration (#5,193,056?)
• Secure method and system for communicating a list of credit card numbers over a non-secure network (#5,715,399)

Patent Strategy

• Patent clustering: For example – Razor blades have several patents, the blade, the packaging, the handle, the moisturizing strip. This allows you to block someone from entering.
• Patent bracketing: People patenting information around another patent held by the innovator to force cross licensing. Example: a telephone patent holder, and a long distance routing patent holder will need to cross license because you can’t do one without the other.