Intellectual Property in Startups
I continue the cycle.
Start here
This time about intellectual property. Like last time - in abbreviated form.
Since in the last article I copied, I ask you to copy and paste this time, even with a link to my blog - dennydov.livejournal.com
actually famously, steal an article about intellectual property :)
So let's go.
This part was helped by Gena Vinokur, an expert in intellectual property from Boston (another technological cluster, after Silicon Valley), who helped me to write. His comments are marked **
Intellectual property.
')
Very often, the technology business is called IP Based Business. IP is the expression Intellectual Property. This means that the company is based on the commercialization of intellectual property.
It is said that the first example of such commercialization was a pencil with a rubber band on the second end. The person who invented this received a patent and successfully licensed the rights to use it to several companies producing pencils. For the price of about 1 cent per thousand pencils. This is just one of the ways to commercialize intellectual property. Technology companies typically develop and sell a product based on a unique technology that gives such a product a strong competitive advantage. Such an advantage should provide a large share of the existing market or the formation of fundamentally new markets and leadership in them.
To the intellectual property we assign:
- ideas, inventions
- know how
- trade marks
- texts, drawings and other works
We will not dwell on why it is necessary to protect intellectual property. We will pay attention to the following points:
The presence of the described and protected intellectual property allows it to dispose. In the agreement on its use, one of the items is a clear definition of objects and subjects of intellectual property and property rights. A non-formalized idea cannot be transferred in this way to third parties, and therefore it is not possible to make a profit out of it.
Intellectual property should be protected on certain wounds. Markets should be described geographically (it is necessary to protect each country separately) and by segment.
Consider the basic ways to protect intellectual property.
Patents
A patent is a document issued by a special body of a country that defines an exclusive right (use, make, sale, or import), authorship and priority of an invention, or industrial design for a certain time (depends on the country) and in a certain territory (in the field of legislative field).
Patents allow
- neutralize competitors (create a monopoly).
- protect the market before entering it.
- getting pianos.
- protect your invention from reverse engineering,
- * protect functionality. A patent allows you to protect not only what we do, but also how we do it.
Disadvantages of patents:
- the disclosure of the claims. Thus, the public becomes clear the essence of the invention. Thus, competitors are pushed to find a solution for a market that would not violate the patent. Thus, we see that the narrower a patent, the more it closes the field of application. Recall the classic example with 17 degrees.
- patent infringement is difficult to detect.
- to get a patent is expensive. The cost of obtaining a patent ranges from 5k to 100k dollars. Depending on the subject of patenting, industry and geography.
- Courts of patent infringement. We will talk about patent wars separately below.
- limited time.
Conditions of patentability:
- novelty. Such an invention should not already be known.
- to have an inventive step. Those. it should not obviously flow from existing inventions or technical solutions.
- to be industrially applicable. The invention could be applied in practice in any industry.
Obtaining a patent.
Since obtaining a patent is an expensive procedure. The cost of obtaining a patent consists of the preparation of a patent application, mandatory payments and possible filing of appeals against refusal.
Most often, inventors cannot independently obtain a patent (this is sometimes connected with insufficient legal literacy, but the main problem is that the patent must protect in certain markets, and such an application is already more difficult to issue) and then patent attorneys are hired (we still have an institute patent attorneys). The total costs of obtaining a patent can range from 3 thousand to 20 thousand US dollars (very rarely, amounts can reach up to 100 thousand US dollars). It is clear that not all start-up entrepreneurs, inventors and engineers can afford such expenses. If we work in the framework of the technology business, then we can hope that our company will be financed by investors in the foreseeable future. So you can use other methods of obtaining a patent, which allows you not to spend a lot of money right away, stretch spending. This method includes provisional (provisional) application.
Provisional application is submitted in any form in any language. This can be done via the Internet and it costs just over $ 100. I highly recommend doing two things:
- preliminary search in open sources. If the leading search engines and patent search on Google did not find anything, then there is a very high probability that the field is clean. * The truth is, there is still the possibility that you were not looking for it correctly *. It is better to spend several hundred dollars and hire a patent lawyer for this, who also have their own bases.
- very carefully think about the text and wording.
Usually this procedure in Silicon Valley costs from 600 to 1000 dollars. And the price depends on how much your patent attorney’s hour costs. All this together (the lawyer will take some time to check this order for possible conflicts of interest with its current clients) up to two weeks.
Thus, the application gives you a year to find funding and prepare a patent application.
Separately worth the PCT (Patent Cooperation Treaty) - Patent Cooperation Treaty. Such an application is issued as a full-fledged patent, but gives priority to the 127 countries of the world that have signed the contract. True, this means that within 30 months it is necessary to file patent applications in each of the countries in which you want to protect yourself.
Usually, technology startups enter the US markets and get a patent there. There are several reasons for this:
- a huge market in itself, receptive to innovation and solvent
- homogeneous.
Separately, searching for patents: such a search gives a startup invaluable information:
- what is already in this subject area.
- what are my competitors doing?
In the US, you can patent business models (* Truth is more and more difficult *). Sometimes an innovative way to generate income can be a very strong competitive advantage.
In fact, a patent is not so easy to get. When the inventor invented something and decided to file a patent application, it turns out that someone had once received a patent for the same invention or a very close one. So, everything is simple with a patent only if you have invented something really new and revolutionary.
Trade secrets:
In this case, the invention or new idea is simply kept secret. By keeping technology a secret, we mean a set of activities that includes:
- restriction of access to parts of the technology containing industrial secrets
- NDA
- development of a protection and disclosure policy
- Attentive check of people whom we recruit for work.
This method of protection has several advantages:
- the essence of the secret is not disclosed publicly, it is very important in the case when competitors do not even know which side to approach to solving the problem
- unlimited validity. Unlike a patent, which has a validity period, an industrial secret can be stored indefinitely. So, for example, Coca-Cola does not disclose the formula of the drink. She knows only a few people in the world. More than a dozen years
- low cost. This is actually very conditional, by the fact, the preservation of an industrial secret in general can be quite expensive (starting from lawyers who draw up contracts and ending up with information security service as part of a company)
Like any method, this one has its drawbacks.
- in case of violation of the NDA - nothing will save
- competitors may receive a secret when reverce engineering. In this case, no one can stop competitors from using technology.
- there is no protection against development from “0”, having invested a sufficient amount of resources in the development, there is a non-zero probability that competitors will get a similar result.
- and if you keep a secret for more than a year, then it’s impossible to apply for a patent
Neither the patent nor the preservation of technology in secret is 100% intellectual property protection. Based on my experience, I can say that the maximum protection is provided by a combination of a secret and a patent.
Copyright
Copyright is the protection of the rights to:
- artworks (printed, paintings, music, etc.)
- software
In our aspect, it is interesting that two key points can be protected by copyright:
- software source code
- interface, program or site design
- content (articles on the site, music content and more)
This is how leading media companies are protected from pirates.
The term of such protection: the author’s lifetime is + 20-50 years (depending on the country). After the death of the author, the heirs of the author receive income that generates intellectual property protected by copyright.
* Mandatory payments in this case in the USA amount to 50 USD, the work of a lawyer may cost another 250 USD *.
The disadvantages of this method include only two:
- this method cannot provide comprehensive protection of intellectual property. (censored)
- It’s difficult to track copyright infringement, which is why pirates spread unlicensed software, video and music all over the world with impunity.
- it is impossible to protect the functionality of the program
- if someone repeated the product without copying, then the copyright no longer works.
Brand protection
A word, name, symbol of a device, or a combination of them, adapted for use by someone to manufacture and / or sell products or services in order to distance it from other manufacturers or sellers. All brands are built on recognition and reputation. The lack of protection of the brand allows you to:
- successfully move the products of competitors who forge products using your brand, in whose recognition you have invested a lot of money
- damage your brand by selling substandard products using it
Basic schemes in dealing with intellectual property include:
- licensing (censored)
- joint development (censored)
- cross-licensing (censored)
- custom development (censored)
Typical parts of the license agreement:
- ownership of intellectual property (which is why it is important to protect intellectual property with a patent or copyright - this is me being a documented proof of ownership)
- rights to use intellectual property
- payment schemes
- royalty
- license fees
- consulting payments
- support
- responsibility of the parties
- terms
- termination of the agreement
Patent trolls
Patent trolls are individuals or organizations that purchase exclusive rights to someone else's intellectual property for the purpose of its further licensing. At the same time, they themselves are not engaged in the organization of business, but are waiting for it to come from companies that use technology or an idea in their business, to earn enough money to sue them. From the point of view of legislation, they work in the legal field and their business is completely legal. In terms of ethics, such activities raise many questions.
Patent war
Patent wars are when companies are suing for patent infringement. They are usually sued for suspected patent infringement and are a good way to attack competitors. Such courts usually cost much, last a long time and often end in an out-of-court settlement of the matter. In the case of startups, this is a very good way to get rid of a competitor. If one of the big companies suddenly “suspected” a start-up in violation of a patent, then there is a very high probability that a startup simply does not have enough money to conduct a long and expensive litigation and it will go bankrupt, even if it did not violate any patents.
Intellectual property disposal.
There are two intellectual property rights - copyright and property rights. Copyright is inalienable - copyright means that a person came up with this work or idea. It is possible to deprive such a right only if it is possible to prove in court that the person did not participate in the development. Well, for example, when the boss makes the development team write his name in the patent. In this case, the court can challenge its copyright, though it is not easy.
Property rights are rights to dispose of the right to receive income from intellectual property. This right is alienable. If there are several authors, they all have the same intellectual property rights and can dispose of it independently of each other. That is why almost always together with the received patent, the authors enter into an agreement in which they prescribe mutual obligations in the disposal of such intellectual property.
It is on the property right that the technology business is built.
Start here
This time about intellectual property. Like last time - in abbreviated form.
Since in the last article I copied, I ask you to copy and paste this time, even with a link to my blog - dennydov.livejournal.com
actually famously, steal an article about intellectual property :)
So let's go.
This part was helped by Gena Vinokur, an expert in intellectual property from Boston (another technological cluster, after Silicon Valley), who helped me to write. His comments are marked **
Intellectual property.
')
Very often, the technology business is called IP Based Business. IP is the expression Intellectual Property. This means that the company is based on the commercialization of intellectual property.
It is said that the first example of such commercialization was a pencil with a rubber band on the second end. The person who invented this received a patent and successfully licensed the rights to use it to several companies producing pencils. For the price of about 1 cent per thousand pencils. This is just one of the ways to commercialize intellectual property. Technology companies typically develop and sell a product based on a unique technology that gives such a product a strong competitive advantage. Such an advantage should provide a large share of the existing market or the formation of fundamentally new markets and leadership in them.
To the intellectual property we assign:
- ideas, inventions
- know how
- trade marks
- texts, drawings and other works
We will not dwell on why it is necessary to protect intellectual property. We will pay attention to the following points:
The presence of the described and protected intellectual property allows it to dispose. In the agreement on its use, one of the items is a clear definition of objects and subjects of intellectual property and property rights. A non-formalized idea cannot be transferred in this way to third parties, and therefore it is not possible to make a profit out of it.
Intellectual property should be protected on certain wounds. Markets should be described geographically (it is necessary to protect each country separately) and by segment.
Consider the basic ways to protect intellectual property.
Patents
A patent is a document issued by a special body of a country that defines an exclusive right (use, make, sale, or import), authorship and priority of an invention, or industrial design for a certain time (depends on the country) and in a certain territory (in the field of legislative field).
Patents allow
- neutralize competitors (create a monopoly).
- protect the market before entering it.
- getting pianos.
- protect your invention from reverse engineering,
- * protect functionality. A patent allows you to protect not only what we do, but also how we do it.
Disadvantages of patents:
- the disclosure of the claims. Thus, the public becomes clear the essence of the invention. Thus, competitors are pushed to find a solution for a market that would not violate the patent. Thus, we see that the narrower a patent, the more it closes the field of application. Recall the classic example with 17 degrees.
- patent infringement is difficult to detect.
- to get a patent is expensive. The cost of obtaining a patent ranges from 5k to 100k dollars. Depending on the subject of patenting, industry and geography.
- Courts of patent infringement. We will talk about patent wars separately below.
- limited time.
Conditions of patentability:
- novelty. Such an invention should not already be known.
- to have an inventive step. Those. it should not obviously flow from existing inventions or technical solutions.
- to be industrially applicable. The invention could be applied in practice in any industry.
Obtaining a patent.
Since obtaining a patent is an expensive procedure. The cost of obtaining a patent consists of the preparation of a patent application, mandatory payments and possible filing of appeals against refusal.
Most often, inventors cannot independently obtain a patent (this is sometimes connected with insufficient legal literacy, but the main problem is that the patent must protect in certain markets, and such an application is already more difficult to issue) and then patent attorneys are hired (we still have an institute patent attorneys). The total costs of obtaining a patent can range from 3 thousand to 20 thousand US dollars (very rarely, amounts can reach up to 100 thousand US dollars). It is clear that not all start-up entrepreneurs, inventors and engineers can afford such expenses. If we work in the framework of the technology business, then we can hope that our company will be financed by investors in the foreseeable future. So you can use other methods of obtaining a patent, which allows you not to spend a lot of money right away, stretch spending. This method includes provisional (provisional) application.
Provisional application is submitted in any form in any language. This can be done via the Internet and it costs just over $ 100. I highly recommend doing two things:
- preliminary search in open sources. If the leading search engines and patent search on Google did not find anything, then there is a very high probability that the field is clean. * The truth is, there is still the possibility that you were not looking for it correctly *. It is better to spend several hundred dollars and hire a patent lawyer for this, who also have their own bases.
- very carefully think about the text and wording.
Usually this procedure in Silicon Valley costs from 600 to 1000 dollars. And the price depends on how much your patent attorney’s hour costs. All this together (the lawyer will take some time to check this order for possible conflicts of interest with its current clients) up to two weeks.
Thus, the application gives you a year to find funding and prepare a patent application.
Separately worth the PCT (Patent Cooperation Treaty) - Patent Cooperation Treaty. Such an application is issued as a full-fledged patent, but gives priority to the 127 countries of the world that have signed the contract. True, this means that within 30 months it is necessary to file patent applications in each of the countries in which you want to protect yourself.
Usually, technology startups enter the US markets and get a patent there. There are several reasons for this:
- a huge market in itself, receptive to innovation and solvent
- homogeneous.
Separately, searching for patents: such a search gives a startup invaluable information:
- what is already in this subject area.
- what are my competitors doing?
In the US, you can patent business models (* Truth is more and more difficult *). Sometimes an innovative way to generate income can be a very strong competitive advantage.
In fact, a patent is not so easy to get. When the inventor invented something and decided to file a patent application, it turns out that someone had once received a patent for the same invention or a very close one. So, everything is simple with a patent only if you have invented something really new and revolutionary.
Trade secrets:
In this case, the invention or new idea is simply kept secret. By keeping technology a secret, we mean a set of activities that includes:
- restriction of access to parts of the technology containing industrial secrets
- NDA
- development of a protection and disclosure policy
- Attentive check of people whom we recruit for work.
This method of protection has several advantages:
- the essence of the secret is not disclosed publicly, it is very important in the case when competitors do not even know which side to approach to solving the problem
- unlimited validity. Unlike a patent, which has a validity period, an industrial secret can be stored indefinitely. So, for example, Coca-Cola does not disclose the formula of the drink. She knows only a few people in the world. More than a dozen years
- low cost. This is actually very conditional, by the fact, the preservation of an industrial secret in general can be quite expensive (starting from lawyers who draw up contracts and ending up with information security service as part of a company)
Like any method, this one has its drawbacks.
- in case of violation of the NDA - nothing will save
- competitors may receive a secret when reverce engineering. In this case, no one can stop competitors from using technology.
- there is no protection against development from “0”, having invested a sufficient amount of resources in the development, there is a non-zero probability that competitors will get a similar result.
- and if you keep a secret for more than a year, then it’s impossible to apply for a patent
Neither the patent nor the preservation of technology in secret is 100% intellectual property protection. Based on my experience, I can say that the maximum protection is provided by a combination of a secret and a patent.
Copyright
Copyright is the protection of the rights to:
- artworks (printed, paintings, music, etc.)
- software
In our aspect, it is interesting that two key points can be protected by copyright:
- software source code
- interface, program or site design
- content (articles on the site, music content and more)
This is how leading media companies are protected from pirates.
The term of such protection: the author’s lifetime is + 20-50 years (depending on the country). After the death of the author, the heirs of the author receive income that generates intellectual property protected by copyright.
* Mandatory payments in this case in the USA amount to 50 USD, the work of a lawyer may cost another 250 USD *.
The disadvantages of this method include only two:
- this method cannot provide comprehensive protection of intellectual property. (censored)
- It’s difficult to track copyright infringement, which is why pirates spread unlicensed software, video and music all over the world with impunity.
- it is impossible to protect the functionality of the program
- if someone repeated the product without copying, then the copyright no longer works.
Brand protection
A word, name, symbol of a device, or a combination of them, adapted for use by someone to manufacture and / or sell products or services in order to distance it from other manufacturers or sellers. All brands are built on recognition and reputation. The lack of protection of the brand allows you to:
- successfully move the products of competitors who forge products using your brand, in whose recognition you have invested a lot of money
- damage your brand by selling substandard products using it
Basic schemes in dealing with intellectual property include:
- licensing (censored)
- joint development (censored)
- cross-licensing (censored)
- custom development (censored)
Typical parts of the license agreement:
- ownership of intellectual property (which is why it is important to protect intellectual property with a patent or copyright - this is me being a documented proof of ownership)
- rights to use intellectual property
- payment schemes
- royalty
- license fees
- consulting payments
- support
- responsibility of the parties
- terms
- termination of the agreement
Patent trolls
Patent trolls are individuals or organizations that purchase exclusive rights to someone else's intellectual property for the purpose of its further licensing. At the same time, they themselves are not engaged in the organization of business, but are waiting for it to come from companies that use technology or an idea in their business, to earn enough money to sue them. From the point of view of legislation, they work in the legal field and their business is completely legal. In terms of ethics, such activities raise many questions.
Patent war
Patent wars are when companies are suing for patent infringement. They are usually sued for suspected patent infringement and are a good way to attack competitors. Such courts usually cost much, last a long time and often end in an out-of-court settlement of the matter. In the case of startups, this is a very good way to get rid of a competitor. If one of the big companies suddenly “suspected” a start-up in violation of a patent, then there is a very high probability that a startup simply does not have enough money to conduct a long and expensive litigation and it will go bankrupt, even if it did not violate any patents.
Intellectual property disposal.
There are two intellectual property rights - copyright and property rights. Copyright is inalienable - copyright means that a person came up with this work or idea. It is possible to deprive such a right only if it is possible to prove in court that the person did not participate in the development. Well, for example, when the boss makes the development team write his name in the patent. In this case, the court can challenge its copyright, though it is not easy.
Property rights are rights to dispose of the right to receive income from intellectual property. This right is alienable. If there are several authors, they all have the same intellectual property rights and can dispose of it independently of each other. That is why almost always together with the received patent, the authors enter into an agreement in which they prescribe mutual obligations in the disposal of such intellectual property.
It is on the property right that the technology business is built.
Source: https://habr.com/ru/post/53672/
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